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/raid1/www/Hosts/bankrupt/TCR_Public/040927.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, September 27, 2004, Vol. 8, No. 208 Headlines ACCLAIM ENTERTAINMENT: Trustee Hires LaMonica Herbst as Counsel ADEPT TECHNOLOGY: Board Authorizes Reverse Stock Split AIR CANADA: ACE Aviation Shares to Start Trading on TSX on Oct. 4 ARMSTRONG WORLD: Plan Filing Exclusivity Extended to April 4, 2005 BAR OCHO LLC: Case Summary & 14 Largest Unsecured Creditors CALPINE CORPORATION: Offering $600M Unsecured Convertible Notes CALPINE CORPORATION: Offering $785 Million Senior Secured Notes CALPINE CORP: S&P Assigns B+ Rating to $785M Senior Secured Notes CATHOLIC CHURCH: Tucson Wants to Hire Gust Rosenfeld as Counsel CE GENERATION: Fitch Affirms BB Rating on $100M Secured Bonds CENDANT MORTGAGE: Fitch Places Low-B Ratings on Classes B-4 & B-5 CHOICE ONE: Says Chapter 11 Prepack Proceeding Remains on Track DII/KBR: KBR Shifts to Two New Divisions & Names Management DLJ MORTGAGE: Fitch Puts BB+ Rating on Four Certificate Classes ELANTIC TELECOM: U.S. Trustee Amends Creditor Committee Membership ENDURANCE SPECIALTY: Expands Into Agribusiness Reinsurance Market ENRON CORP: Court OKs $2.4 Bil. CrossCountry Sale to CCE Holdings ENTERPRISE PRODUCTS: Prices $2 Bil. Senior Debt Private Offering FAIR GROUNDS: Court Approves $47 Mil. Churchill Downs Acquisition FEDERAL-MOGUL: Asks Court to Extend Removal Period to February 1 FRANK'S NURSERY: U.S. Trustee Picks 7-Member Creditors Committee GRAPHIC PACKAGING: Moody's Puts B1 Rating on $1.256B Senior Notes HANOVER DIRECT: Appoints Hallie Sturgill as VP & Controller IMPERIAL SCHRADE: Hires Hancock Estabrook as Bankruptcy Counsel INDIANA PHOENIX: Case Summary & 20 Largest Unsecured Creditors LAWNMASTER SERVICES: Case Summary & 17 Largest Unsecured Creditors MERRILL LYNCH: Fitch Assigns Low-B Ratings to Two Cert. Classes METALDYNE CORP: Reports Preliminary Financial Information MIRANT CORP: Asks Court to Lift Stay to Allow 3 Suits to Proceed MIRANT CORP: Wyandotte City Asks Court for Tax Collection Help MUELLER HOLDINGS: Extends Sr. Debt Exchange Offer Until Wednesday NATIONAL CENTURY: Court Refuses to Quash July CSFB Subpoena NORTEL NETWORKS: Declares Preferred Share Dividends NORTHERN KENTUCKY: Committee Wants Ulmer & Berne as Counsel OAKWOOD LIVING: Files a Consensual Plan With GMAC Commercial OGLEBAY NORTON: Judge Denies Appointment of Toxic Tort Committee OXFORD IND: Will Report 2005 First Quarter Results on Thursday PACIFIC GAS: To Redeem $500 Million in Mortgage Bonds Due 2006 PARMALAT: Farmland Gets Court OK to Pay Benefit Plan Obligations POINT WEST: Files Chapter 7 Petition in N.D. California POINT WEST CAPITAL: Voluntary Chapter 7 Case Summary PRICELINE.COM INC: S&P Puts B Rating on Convertible Senior Notes QUIGLEY COMPANY: U.S. Trustee Picks 7-Member Creditors Committee RAILAMERICA INC: S&P Assigns BB Rating to $450M Senior Facilities RELIANT ENERGY: Offering Competitive Electricity Supply in W. Pa. RIVERSIDE FOREST: Board Says Tolko's Hostile Bid Still Inadequate SAMSONITE CORPORATION: Extends Exchange Offer Until October 1 SI CORP: S&P Places B Rating on Planned $230M Senior Secured Notes SOLECTRON CORP: To Webcast 4th Qtr. Financial Results Tomorrow SOLUTIA INCORPORATED: Asks Court to Approve Deferral Agreement SOUTHWEST HOSPITAL: Wants to Hire J.H. Cohn as Financial Advisor TANGO INC: Subsidiary Shows Signs of Success in September TITAN ENERGY: Case Summary & 20 Largest Unsecured Creditors TRANSMONTAIGNE: S&P Places BB- Corp. Credit Rating on CreditWatch TRUMP HOTELS: Ends Talks with DLJ Merchant on Equity Investment UAL CORP: Wants to Assume & Assign Leases to CenterPoint UAL CORP: Inks Settlement Agreement with ACI & XL Insurance UNITED AUBURN: S&P Upgrades Corporate Credit Rating to BB+ US AIRWAYS: U.S. Trustee Appoints Unsecured Creditors' Committee US AIRWAYS: Wants to Honor Interline & Eight Other Agreements US AIRWAYS: Wants to Pay Postpetition Pension Obligations VANGUARD HEALTH: Blackstone Group Completes Major Investment WHITING PETROLEUM: Buys 17 W. Texas & New Mexico Fields for $345M WINROCK GRASS: Case Summary & 21 Largest Unsecured Creditors WISCONSIN REALTY: Case Summary & 19 Largest Unsecured Creditors WORLDCOM INC: Asks Court to Bar Teleserve Systems' $7.5M Claims * FTI Consulting Welcomes Dennis Shaughnessy as Chairman * Gordon & Glickson Expands IT Practice with Three New Attorneys * BOND PRICING: For the week of September 27 - October 1, 2004 ********* ACCLAIM ENTERTAINMENT: Trustee Hires LaMonica Herbst as Counsel --------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of New York gave Allan B. Mendelsohn, Esq., the Chapter 7 Trustee of the estate of Acclaim Entertainment, Inc., permission to employ LaMonica Herbst & Maniscalco, LLP, as his counsel. Lamonica Herbst will: a) assist the Trustee in the negotiations with General Motors Acceptance Corp., which has asserted a first and senior security interest in all of the Debtor's various assets, regarding the sale and liquidation of the Debtor's assets; b) prepare all of the applications and motions in connection with the various asset sales that the Trustee anticipates will be brought before the Bankruptcy Court; c) assist the Trustee in the investigation of the Debtor's financial affairs to determine if any claims and causes of actions exist under Sections 542, 544, 546, 547, 548, and 550 of the Bankruptcy Code and under the relevant provisions of New York law; and d) assist and represent the Trustee in the wind down and liquidation of the Debtor's estate. The Bankruptcy Court orders that no compensation shall be paid to LaMonica Herbst for professional services rendered to the Trustee, except upon further order of the Court. LaMonica Herbst does not have any interest adverse to the Debtor or its estate. Headquartered in Glen Cove, New York, Acclaim Entertainment is a worldwide developer, publisher and mass marketer of software for use with interactive entertainment game consoles including those manufactured by Nintendo, Sony Computer Entertainment and Microsoft Corporation as well as personal computer hardware systems. The Company filed a chapter 7 petition on September 1, 2004 (Bankr. E.D.N.Y Case No. 04-85595). Jeff J. Friedman at Katten Muchin Zavis Rosenman represents the Debtor. When the Company filed for bankruptcy, it listed $47,338,000 in total assets and $145,321,000 in total debts. ADEPT TECHNOLOGY: Board Authorizes Reverse Stock Split ------------------------------------------------------ Adept Technology, Inc. (OTCBB:ADTK), a leading manufacturer of robotic systems, motion control and machine vision technology, said its board of directors has authorized a reverse stock split, to be effected at a ratio of not less than one-for-four (1:4) and not more than one-for-seven (1:7), subject to approval by the Company's shareholders at its annual shareholders meeting scheduled for November 4, 2004. The record date for determination of stockholders entitled to vote at the meeting is September 24, 2004. If approved, the board would have the authority to determine the final split ratio within the proposed range, and to complete the reverse split not later than February 28, 2005. On a pre-split basis, Adept currently has approximately 30 million common shares outstanding. "The reverse stock split should ultimately help improve trading liquidity in Adept's common stock," said Robert Bucher, chairman and chief executive officer. "Shareholders are expected to benefit from lower transaction costs for a higher priced stock, and a higher price may meet investing guidelines for certain institutional investors and investment funds," Mr. Bucher added. "The reverse split is also expected to move us closer to qualifying for relisting on the NASDAQ National Market, and we currently intend to apply for relisting once we have satisfied the remaining requirements." Adept will file a preliminary proxy statement with the Securities and Exchange Commission regarding the reverse stock split proposal shortly, and will mail a definitive proxy statement to its stockholders regarding the proposal. Adept stockholders are urged to read the definitive proxy statement when it becomes available because it will contain important information about Adept and the reverse stock split proposal. The proxy statement and other relevant materials (when they become available), as well as any other documents filed by Adept with the SEC, may be obtained at the SEC's web site, http://www.sec.gov/ About the Company Adept Technology designs, manufactures and markets robotic systems, motion control and machine vision technology for the telecommunications, electronics, semiconductor, automotive, lab automation, and biomedical industries throughout the world. Adept's robots, controllers, and software products are used for small parts assembly, material handling and packaging. Adept's intelligent automation product lines include industrial robots, configurable linear modules, machine controllers for robot mechanisms and other flexible automation equipment, machine vision, systems and software, and application software. Founded in 1983, Adept Technology is America's largest manufacturer of industrial robots. More information is available at http://www.adept.com/ * * * Liquidity and Capital Resources In its latest Form 10-Q for the quarterly period ended March 27, 2004, filed with the Securities and Exchange Commission, Adept Technology reported that it has experienced declining revenue in each of the last two fiscal years and incurred net losses in the first three quarters of fiscal 2004 and each of the last four fiscal years. During this period, the Company has consumed significant cash and other financial resources. In response to these conditions, Adept reduced operating costs and employee headcount, and restructured certain operating lease commitments in each of fiscal 2002 and fiscal 2003. It recorded additional restructuring charges in the third quarter of fiscal 2004 related to the departure of Messrs. Carlisle and Shimano, pursuant to the Severance Agreements entered into between Adept and each of them. These adjustments to its operations have significantly reduced its rate of cash consumption. It also completed an equity financing with net proceeds of approximately $9.4 million in November 2003. As of March 27, 2004, the Company had working capital of approximately $12.7 million, including $5.7 million in cash, cash equivalents and short-term investments, and a short-term receivables financing credit facility of $1.75 million net, of which $0.5 million was outstanding and $1.3 million remained available under this facility. On April 22, 2004, this facility was amended and now permits the Company to borrow up to $4.0 million. Adept has limited cash resources, and because of certain regulatory restrictions on its ability to move certain cash reserves from its foreign operations to its U.S. operations, it may have limited access to a portion of its existing cash balances. In addition to the proceeds of its 2003 financing, the Company currently depend on funds generated from operating revenue and the funds available through its amended loan facility to meet its operating requirements. As a result, if any of its assumptions are incorrect, it may have difficulty satisfying its obligations in a timely manner. "We expect our cash ending balance to be between approximately $5.0 and $5.5 million at June 30, 2004. Our ability to effectively operate and grow our business is predicated upon certain assumptions, including: (i) that our restructuring efforts effectively reduce operating costs as estimated by management and do not impair our ability to generate revenue, (ii) that we will not incur additional unplanned capital expenditures for the next twelve months, (iii) that we will continue to receive funds under our existing accounts receivable financing arrangement or a new credit facility, (iv) that we will receive continued timely receipt of payment of outstanding receivables, and not otherwise experience severe cyclical swings in our receipts resulting in a shortfall of cash available for our disbursements during any given quarter, and (v) that we will not incur unexpected significant cash outlays during any quarter." AIR CANADA: ACE Aviation Shares to Start Trading on TSX on Oct. 4 ----------------------------------------------------------------- Air Canada provided an update on the airline's restructuring under the Companies' Creditors Arrangement Act. ACE Aviation Holdings, Inc., received conditional approval from The Toronto Stock Exchange for the listing of its voting shares, trading symbol ACE.B., and its variable voting shares, trading symbol ACE.RV, conditional upon satisfying the requirements of the TSX including the Consolidated Plan of Reorganization, Compromise and Arrangement involving Air Canada, ACE and certain of Air Canada subsidiaries being implemented on September 30, 2004. It is expected that the voting shares and the variable voting shares of ACE will be listed on the TSX at the close of business on September 29, 2004 and will start trading on October 4, 2004. 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 filed a Section 304 petition in the U.S. Bankruptcy Court for the Southern District of New York (Case No. 03-11971). Mr. Justice Farley sanctioned Air Canada's CCAA restructuring plan on Aug. 23, 2004. Air Canada intends to emerge from CCAA protection on September 30, 2004. Sean F. Dunphy, Esq., and Ashley John Taylor, Esq., at Stikeman Elliott LLP, in Toronto, serve as Canadian Counsel to the carrier. 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. ARMSTRONG WORLD: Plan Filing Exclusivity Extended to April 4, 2005 ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware extended the period within which Armstrong World Industries, Inc., and its debtor-affiliates have the exclusive right to file a Chapter 11 plan through April 4, 2005. The Court also extended the period within which the Debtors have the exclusive right to solicit acceptances for their Plan through and including June 6, 2005. As reported in the Troubled Company Reporter on August 31, 2004, Rebecca L. Booth, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, reminded the Bankruptcy Court that Armstrong World Industries, Inc.'s Fourth Amended Plan of Reorganization filed on May 23, 2003, was confirmed by Judge Newsome. The Company is waiting for the United States District Court for the District of Delaware to affirm the plan pursuant to 11 U.S.C. Sec. 524(g). On June 16, 2004, by designation order, AWI's Chapter 11 cases were assigned to District Court Judge Eduardo C. Robreno. Judge Robreno entered a case management order requiring AWI and other interested parties in AWI's Chapter 11 cases to submit status reports on pending matters. The reports were submitted on July 28, 2004. Following his review of those reports, Judge Robreno will set a date for a status conference before him to address the resolution of the pending matters before him, including the Plan's confirmation. Accordingly, the timing and terms of confirmation and implementation of the Plan and resolution of AWI's Chapter 11 cases remain uncertain. In view of the substantial progress that has been made to date in furtherance of the reorganization process and the unexpected circumstances that have delayed the Plan's confirmation, the Debtors believe that ample cause exists for the extension of their exclusive periods to file a Plan and to solicit acceptances for that Plan. Ms. Booth asserts that the Debtors invested a substantial amount of time and effort to file and ultimately confirm the Plan. The filing of competing reorganization plans by other parties-in-interest will necessarily result in the disruption and dislocation of a plan process that is clearly well under way. The extension of the Exclusive Periods will avoid this disruption and dislocation, and will enable the Debtors to confirm the Plan in the manner contemplated by Chapter 11 of the Bankruptcy Code. 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. 67; Bankruptcy Creditors' Service, Inc., 215/945-7000) BAR OCHO LLC: Case Summary & 14 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Bar Ocho, LLC 2801 Western # E Seattle, Washington 98121 Bankruptcy Case No.: 04-22490 Type of Business: The Debtor operates a restaurant. Chapter 11 Petition Date: September 23, 2004 Court: Western District of Washington (Seattle) Judge: Philip H. Brandt Debtor's Counsel: Larry B. Feinstein, Esq. Vortman & Feinstein 500 Union Street #500 Seattle, WA 98101 Tel: 206-223-9595 Total Assets: $1,377,198 Total Debts: $212,900 Debtor's 14 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Enviromech $45,000 Law Offices of Michael Riley $32,500 iDine $30,000 Justin Evans $20,000 Commercial Real Estate Leasing $18,000 Ewing & Clark Incorporated DJ Electric, Inc. $15,000 Leathers $12,500 Nick Riley, LLC $12,000 Mazzer & Son Carpentry, Inc. $8,000 Sysco Seattle $3,000 Jones Glassworks $2,000 RPI $1,500 Burgess Enterprises $1,000 DPA Signs $400 CALPINE CORPORATION: Offering $600M Unsecured Convertible Notes --------------------------------------------------------------- Calpine Corporation (NYSE: CPN) intends to commence an offering of approximately $600 million of new unsecured convertible notes due 2014. The final principal amount and pricing will be determined by market conditions. Deutsche Bank Securities, Inc., is the sole book-running manager of the offering. Calpine intends to grant Deutsche Bank the option to purchase up to$90 million of additional notes to cover over-allotments. Concurrent with this offering, Calpine also intends to do the following: -- Utilize cash on-hand to repurchase approximately $266 million principal amount of its existing 4 3/4% unsecured convertible notes due 2023 from Deutsche Bank; -- Call the remaining $198.5 million principal amount of its 5-3/4% HIGH TIDES I preferred securities and also call the remaining $285 million principal amount of its 5-1/2% HIGH TIDES II preferred securities; -- In order to facilitate the offering of the new unsecured convertible notes, Calpine intends to enter into a 10-year Share Lending Agreement with Deutsche Bank, as borrower, covering up to 89 million shares of Calpine's common stock. Calpine will offer to the public the shares borrowed by Deutsche Bank under Calpine's shelf registration statement. Calpine will not receive any proceeds of the registered offering of common stock. Instead, Calpine expects that Deutsche Bank will use those proceeds to enable the purchasers of the new unsecured convertible notes to hedge their investments in the notes through short sales or privately negotiated derivative transactions. Calpine does not expect the borrowed shares to be considered issued or outstanding from an accounting standpoint and accordingly does not expect the borrowed shares to have a dilutive impact on the company's earnings per share. Calpine expects to use the net proceeds from the convertible notes offering to redeem HIGH TIDES I and HIGH TIDES II, to redeem or repurchase other existing indebtedness through open-market purchases, and as otherwise permitted by its indentures. Calpine Corporation is a North American power company dedicated to providing electric power to customers from clean, efficient, natural gas-fired and geothermal power plants. 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 Corporation, is a 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/ * * * Calpine's junk-rated: * 7.750% notes due April 15, 2009; * 8.500% notes due February 15, 2011; and * 8.625% notes due August 15, 2010. are trading in the high-50s and low 60s. As reported in the Troubled Company Reporter on August 18, 2004, Calpine Corp.'s outstanding $5.5 billion senior unsecured notes are affirmed at 'B-' by Fitch Ratings. In addition, CPN's outstanding $2.9 billion second priority senior secured notes are affirmed at 'BB-' and its $1.1 billion outstanding convertible preferred securities/high TIDES at 'CCC'. The Rating Outlook for CPN is Stable. CPN's ratings reflect its highly leveraged financial profile and exposure to cyclical commodity market conditions, which continue to reduce realized returns on the unhedged portion of CPN's generating portfolio. In addition, CPN's remaining plant construction program will continue to place near-term pressure on the company's credit profile as cash inflows and earnings tend to lag investment expenditures. For the twelve-month period ended March 31, 2004, lease adjusted debt to EBITDAR exceeded 10.0 times (x). CPN continues to pursue the sale of some of its more liquid assets, including the planned sale of approximately 230 billion cubic feet equivalent (Bcfe) of Canadian-based natural gas reserves and ongoing monetization of above-market power sales contracts, further reducing financial flexibility. CALPINE CORPORATION: Offering $785 Million Senior Secured Notes --------------------------------------------------------------- Calpine Corporation (NYSE: CPN) intends to commence an offering of approximately $785 million of first-priority senior secured notes due 2014. The final principal amount and pricing will be determined by market conditions. These notes will be secured, directly and indirectly, by substantially all of the assets owned by Calpine, including its natural gas and power assets and the stock of Calpine Energy Services and other subsidiaries. Net proceeds from this offering are ultimately expected to be used to redeem or repurchase existing indebtedness through open-market purchases, and as otherwise permitted by the company's indentures. The secured notes will be offered in a private placement under Rule 144A, have not been registered under the Securities Act of 1933, and may not be offered in the United States absent registration or an applicable exemption from registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy. Securities laws applicable to private placements under Rule 144A limit the extent of information that can be provided at this time. Calpine Corporation -- http://www.calpine.com--is a 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. * * * As reported in the Troubled Company Reporter today, Standard & Poor's Ratings Services assigned its 'B+' rating to Calpine Corp.'s $785 million first-priority senior secured notes due in 2014, which is one notch higher than the company's corporate credit rating. Standard & Poor's also assigned its '1' recovery rating to the notes, indicating a high expectation of full recovery of principal if a default occurs. Calpine's junk-rated: * 7.750% notes due April 15, 2009; * 8.500% notes due February 15, 2011; and * 8.625% notes due August 15, 2010. are trading in the high-50s and low 60s. As reported in the Troubled Company Reporter on August 18, 2004, Calpine Corp.'s outstanding $5.5 billion senior unsecured notes are affirmed at 'B-' by Fitch Ratings. In addition, CPN's outstanding $2.9 billion second priority senior secured notes are affirmed at 'BB-' and its $1.1 billion outstanding convertible preferred securities/high TIDES at 'CCC'. The Rating Outlook for CPN is Stable. CPN's ratings reflect its highly leveraged financial profile and exposure to cyclical commodity market conditions, which continue to reduce realized returns on the unhedged portion of CPN's generating portfolio. In addition, CPN's remaining plant construction program will continue to place near-term pressure on the company's credit profile as cash inflows and earnings tend to lag investment expenditures. For the twelve-month period ended March 31, 2004, lease adjusted debt to EBITDAR exceeded 10.0 times (x). CPN continues to pursue the sale of some of its more liquid assets, including the planned sale of approximately 230 billion cubic feet equivalent (Bcfe) of Canadian-based natural gas reserves and ongoing monetization of above-market power sales contracts, further reducing financial flexibility. CALPINE CORP: S&P Assigns B+ Rating to $785M Senior Secured Notes ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' rating to Calpine Corp.'s $785 million first-priority senior secured notes due in 2014, which is one notch higher than the company's corporate credit rating. Standard & Poor's also assigned its '1' recovery rating to the notes, indicating a high expectation of full recovery of principal if a default occurs. The rating on Calpine (B/Negative/--), a San Jose, California- based corporation engaged in the development, acquisition, ownership, and operation of power generation facilities, reflects Calpine's credit statistics are weak. For example, adjusted funds from operations -- FFO -- interest coverage was low at 0.7x on a 12-month rolling period ending June 30, 2004. In addition, Standard & Poor's expectation over the next five years is that minimum and average adjusted FFO interest coverage ratios will not exceed 1.3x and 1.9x, respectively, assuming no additional development. However, Standard & Poor's expects FFO interest coverage to remain near 1.0x, even under stress scenarios. Overall business risks have increased. Calpine's monetization of contractual revenue and sales of its gas assets and assets with contractual revenues will increase cash flow volatility because merchant power revenues and higher gas expenses will make up a larger portion of available cash. Calpine has limited opportunities to reduce its debt burden and has taken on more debt to fund its construction program. Calpine's target of 65% debt leverage makes the company vulnerable to electricity price volatility and capital-market access. Calpine's inability to access the equity markets has led to debt levels over 70%. Adjusted debt levels are expected to remain above 70% over the next five years. Calpine's contractual revenue base offsets some of the cash flow volatility caused by merchant power sales. The contracts, which are mostly with utilities and other load-serving entities, have a seven-year average life and a weighted average credit rating of 'BBB+'. Calpine has proven its ability to efficiently operate its power plants, with average availabilities of more than 90% for the six months ended June 30, 2004, including multiple, newly constructed units. Calpine has proven its ability to manage and build multiple plants in a timely and efficient manner. Calpine has successfully built its projects on time and within budget. Calpine can standardize its plants' designs and achieve economies of scale in design and maintenance because most of the new plants are combined-cycle facilities, using F-turbine technology. Highly efficient gas turbines increasingly make up a larger percentage of Calpine's fleet, which should ensure a higher level of dispatch compared with the older plants that Calpine's competitors have purchased over the past few years. The negative outlook reflects Calpine's weak financial ratios. The ratings could be lowered if Calpine's FFO interest coverage remains substantially below 1x or if Calpine cannot refinance the $1 billion of High Tides in a timely manner. CATHOLIC CHURCH: Tucson Wants to Hire Gust Rosenfeld as Counsel --------------------------------------------------------------- Gust Rosenfeld P.L.C. is a general practice law firm of 47 lawyers whose specialty practice areas include, among other things, bankruptcy, banking, commercial finance, insurance defense, corporations, education, estates and trusts, labor and employment, litigation, and real estate. Gust Rosenfeld is familiar with the general practices and workings of the Roman Catholic Church of the Diocese of Tucson, Arizona. Specifically, Reverend Gerald F. Kicanas, D.D., the Bishop of the Diocese of Tucson, tells Judge Marlar that Gus Rosenfeld is highly qualified to provide the legal services needed by the Diocese in its corporate, religious, real estate and general operational matters. The Diocese, hence, seeks the Arizona Bankruptcy Court's authority to employ Gust Rosenfeld as its general business and corporate counsel, nunc pro tunc to September 20, 2004. As the lead attorney, Gerard R. O'Meara, Esq., is paid $150 per hour. Work performed by paralegals will be paid at $75 per hour. Any costs incurred will be paid in addition to the fees. Mr. O'Meara assures the Court that his firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code, and does not hold any interest adverse to the Diocese's estate. The Roman Catholic Church of the Diocese of Tucson filed for chapter 11 protection (Bankr. D. Ariz. Case No. 04-04721) on September 20, 2004, and delivered a plan of reorganization to the Court on the same day. Susan G. Boswell, Esq., Kasey C. Nye, Esq., at Quarles & Brady Streich Lang LLP, represent the Tucson Diocese. 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 Portland Archdiocese in its restructuring efforts. Portland's Schedules of Assets and Liabilities filed with the Court on July 30, 2004, the Portland Archdiocese reports $19,251,558 in assets and $373,015,566 in liabilities. (Catholic Church Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 215/945-7000) CE GENERATION: Fitch Affirms BB Rating on $100M Secured Bonds ------------------------------------------------------------- Fitch Ratings has affirmed the 'BB' rating of CE Generation LLC's $400 million secured bonds due 2018 and removed the Rating Watch status. The bonds were previously placed on Rating Watch Positive due to the improved credit quality of Southern California Edison, the purchaser of a significant portion of CE Generation's output. The rating affirmation is the result of a full review of CE Generation's financial and operating performance. Overall, CE Generation's cash flow is meaningfully below original projections, primarily as a result of increased operating costs at the geothermal facilities. Additionally, the receipt of distributions from the geothermal facilities is less certain as debt service coverage ratios are approaching distribution thresholds in the project-level loan agreements. The current rating reflects CE Generation's credit quality on a stand-alone basis, absent counterparty constraints. Furthermore, the assigned rating reflects CE Generation's credit quality in the long term. Fitch believes that CE Generation's credit fundamentals in the near term are stronger than typical for the rating category. CE Generation is a portfolio of ownership interests in 10 geothermal and three natural gas fired generation facilities. The 10 geothermal facilities -- Salton Sea Funding -- are separately encumbered with project-level debt as is one natural gas fired facility -- Saranac. The two remaining facilities are unencumbered at the project level. CE Generation also receives fees for providing operating services to the Saranac facility. The project-level debt is structurally senior to the CE Generation debt, leaving CE Generation vulnerable to distribution tests in the project-level loan agreements. Prior to the expiration of Saranac's contracts and debt in 2009, approximately 60% of CE Generation's annual cash flow is derived from Saranac and 35% from Salton Sea Funding. Fitch believes it is unlikely that distributions from Saranac will be trapped at the project, as debt service coverage ratios are significantly above the distribution threshold. However, due to increased operating costs at the geothermal facilities, there is greater potential for a temporary interruption in distributions from Salton Sea Funding. Accordingly, Fitch views CE Generation's credit profile in the near term as analogous to the subordinate debt of Saranac, enhanced by potential distributions from Salton Sea Funding. However, in the long term, Salton Sea Funding replaces Saranac as the driver of CE Generation's credit quality. Fitch expects that distributions from Salton Sea Funding will eventually constitute the vast majority of CE Generation's cash flow as it is uncertain to what extent the natural gas fired facilities will be profitable. Accordingly, Fitch views CE Generation's long-term credit profile as analogous to the subordinate debt of Salton Sea Funding. Favorably, Salton Sea Funding's credit quality appears stronger in the long term than at present, as declining annual debt service leads to increasing debt service coverage ratios after 2009. The primary long-term credit concern is short-run-avoided-cost -- SRAC -- pricing for energy delivered under eight contracts with Southern California. SRAC is a regulatory energy price currently indexed to the prevailing natural gas price. While debt service coverage ratios range from 1.4 times (x) to 2.3x under the current SRAC regime, sensitivity analysis shows a vulnerability to low SRAC prices. Furthermore, Southern California has recently filed requests with the California PUC to modify the SRAC formula, and such changes could exacerbate CE Generation's exposure to volatile natural gas prices. Factors that could improve future credit quality include: -- A reversal of the increase in chemical and waste disposal costs at the geothermal facilities; -- Stability in SRAC energy pricing; -- The sale of currently uncommitted output under long term contracts on favorable terms. CENDANT MORTGAGE: Fitch Places Low-B Ratings on Classes B-4 & B-5 ----------------------------------------------------------------- Fitch Ratings has taken rating actions on these Cendant Mortgage Corporation mortgage pass-through certificates: Series 2002-8 -- Class A affirmed at 'AAA'; -- Class B-1 upgraded to 'AAA' from 'AA'; -- Class B-2 upgraded to 'AA' from 'A'; -- Class B-3 upgraded to 'A' from 'BBB'; -- Class B-4 upgraded to 'BBB' from 'BB'; -- Class B-5 upgraded to 'BB' from 'B'. Series 2003-1 -- Class A affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'; -- Class B-4 affirmed at 'BB'; -- Class B-5 affirmed at 'B'. The upgrades reflect an increase in credit enhancement relative to future loss expectations and affect $6,671,910 of outstanding certificates detailed above. The affirmations reflect credit enhancement consistent with future loss expectations and affect $239,678,654 of outstanding certificates detailed above. The mortgage pool in the series 2002-8 transaction consists of one-to-four family conventional, fixed-rate mortgage loans secured by first liens on residential mortgage properties. As of the August 2004 distribution date, the current credit enhancement levels for all classes in this transaction have more than doubled from the original credit enhancement levels (at the closing date of Oct. 30, 2002): * classes A-1 through A-11, P, X, R-I, and R-II certificates (senior certificates) currently benefit from 8.23% subordination provided by the subordinate classes (originally 2.90%); * class B-1 benefits from 3.97% subordination (originally 1.40%); * class B-2 benefits from 2.27% subordination (originally 0.80%); * class B-3 benefits from 1.42% subordination (originally 0.50%); * class B-4 benefits from 0.85% subordination (originally 0.30%); and * class B-5 benefits from 0.43% subordination (originally 0.15%). As of the August 2004 distribution date, the pool factor (current mortgage loans outstanding as a percentage of the initial pool) for the series 2002-8 transaction is 34%, and there have been no losses in the pool. There are no loans currently in the 90 plus delinquency, bankruptcy, foreclosure or REO buckets. The mortgage pool in the series 2003-1 transaction consists of one-to-four family conventional, fixed-rate mortgage loans secured by first liens on residential mortgage properties. As of the August 2004 distribution date, the current credit enhancement levels for all classes in this transaction are: * classes A-1 through A-10, P, X, and R (senior certificates) currently benefit from 9.79% subordination provided by the subordinate classes (originally 6.00%); * class B-1 benefits from 2.45% subordination (originally 1.50%); * class B-2 benefits from 1.63% subordination (originally 1.00%); * class B-3 benefits from 0.90% subordination (originally 0.55%); * class B-4 benefits from 0.57% subordination (originally 0.35%); and * class B-5 benefits from 0.33% subordination (originally 0.20%). As of the August 2004 distribution date, the pool factor for the series 2003-1 transaction is 60%, and there have been no losses on the pool. There is currently only one loan, with $681,291 outstanding, in the 90 plus delinquency bucket (0.41% of the pool), and there are no loans in the bankruptcy, foreclosure, or REO buckets. All of the mortgage loans in both transactions were either originated or acquired in accordance with the underwriting guidelines established by Cendant Mortgage Corporation. Any mortgage loan with an original loan to value in excess of 80% is required to have a primary mortgage insurance policy. Approximately 0.78% (in series 2002-8) and 2.64% (in series 2003-1) of the mortgage loans are referred to as 'additional collateral loans' and are secured by a security interest, normally in securities owned by the borrower (generally not exceeding 30% of the loan amount). Furthermore, Ambac Assurance Corporation provides a limited purpose surety bond, which guarantees that the trust receives certain shortfalls and proceeds realized from the liquidation of the additional collateral, up to 30% of the original principal amount of that additional collateral loan. Cendant Mortgage Corporation, rated 'RPS1' by Fitch Ratings, is the master servicer, and Citibank N.A. is the trustee for both transactions. CHOICE ONE: Says Chapter 11 Prepack Proceeding Remains on Track --------------------------------------------------------------- Choice One Communications (OTCBB: CWON), an Integrated Communications Provider offering facilities-based voice and data telecommunications services, including Internet solutions, to clients in 29 Northeast and Midwest markets, reported a series of operational actions to reduce costs and enhance the efficiency of its back-office and sales operations. The actions do not affect either client service personnel or client services, which continue without interruption. The Company believes that as a result of the operational actions, and of the Company's planned financial restructuring, Choice One will be well-positioned strategically, operationally and financially for long-term strength and success. The Company said that its previously announced plans to pursue a financial restructuring through a "prepackaged" chapter 11 proceeding remain on track, with the filing expected to occur later this month or in early October and to be completed by year end. As indicated in the Company's August 2 announcement, Choice One expects its financial restructuring to substantially reduce the Company's debt, strengthen its balance sheet, and increase its liquidity. "We are determined to take the steps necessary to enable Choice One to remain a premier provider of telecommunications services both operational and financially," said Steve Dubnik, Chairman and Chief Executive Officer. "The actions we are taking will significantly improve our operational efficiency while enhancing our ability to continue to provide outstanding service to our clients." Among the steps taken are the following: -- The implementation, companywide, of a more efficient, team- based provisioning process to reduce the interval between new client orders and the initiation of service, increase accuracy, and reduce costs. Reflecting the operating efficiencies created by this new provisioning process, which Choice One has successfully tested over the past two months, a limited number of back-office positions will be eliminated, and it is anticipated that certain back-office staff currently located in the Company's regional headquarters in Grand Rapids, Michigan, will be moved to the Company's headquarters in Rochester, New York. -- A shift in marketing model, in seven of the Company's 29 markets, from direct sales by Choice One personnel to the use of independent sales agents and the associated elimination of Company-owned sales offices. The markets involved include Columbus, Oh., Evansville, Ind., Hartford, Conn., New Haven, Conn., Indianapolis, In., Kalamazoo, Mich., and Springfield, Mass. There, as elsewhere, Choice One will continue to provide service to both existing and new clients exactly as before. Beyond the sales positions eliminated in these seven markets, the Company expects to eliminate few if any sales positions in the 22 other Choice One markets. No changes are currently planned for the Company's regional headquarters in Green Bay, Wis., which is primarily a call center responding to client inquiries across all of its markets. The operational actions announced are expected to result in an approximately 14 percent reduction in the Company's staffing level organization-wide, to approximately 1,200 from a total of approximately 1,400 colleagues as of June 30, 2004. As a result of planned job transfers from Grand Rapids to Rochester, however, it is anticipated that staff levels at the Company's corporate headquarters in Rochester may increase. "After an intensive operational review process in preparation for our planned financial restructuring, we have aggressively and comprehensively pursued the operational actions announced. I am confident that the operational steps we have taken, combined with the financial restructuring we are in the process of implementing, will make us a stronger and better company," Mr. Dubnik said. About Choice One Communications Headquartered in Rochester, New York, Choice One Communications Inc. (OTCBB: CWON) is a leading Integrated Communications Provider offering voice and data services including Internet solutions, to businesses in 29 metropolitan areas (markets) across 12 Northeast and Midwest states. Choice One reported $323 million of revenue in 2003, and provides services to more than 100,000 clients. Choice One's markets include: Hartford and New Haven, Connecticut; Rockford, Illinois; Bloomington/Evansville, Fort Wayne, Indianapolis, South Bend/Elkhart, Indiana; Springfield and Worcester, Massachusetts; Portland/Augusta, Maine; Grand Rapids and Kalamazoo, Michigan; Manchester/Portsmouth, New Hampshire; Albany, Buffalo, Rochester and Syracuse (including Binghamton, Elmira and Watertown), New York; Akron (including Youngstown), Columbus and Dayton, Ohio; Allentown, Erie, Harrisburg, Pittsburgh and Wilkes-Barre/Scranton, Pennsylvania; Providence, Rhode Island; Green Bay (including Appleton and Oshkosh), Madison and Milwaukee, Wisconsin. At June 30, 2004, Choice One Communications Inc.'s balance sheet showed a $723,667,000 stockholders' deficit, compared to a $644,995,000 deficit at December 31, 2003. DII/KBR: KBR Shifts to Two New Divisions & Names Management ----------------------------------------------------------- KBR, the engineering and construction subsidiary of Halliburton (NYSE:HAL), will move from five product lines to two distinct divisions, the energy and chemicals division and the government and infrastructure division. Lou Pucher has been named senior vice president, energy and chemicals division, and Bruce Stanski has been named senior vice president, government and infrastructure division. Both appointments are effective October 1, 2004. "This is a new KBR. We will be a streamlined, efficient and more profitable organization," said Andrew Lane, president and chief executive officer, KBR. "KBR's strength is in engineering and project management and with this new alignment we plan to further capitalize on our core company strengths and capabilities. KBR has had a strong historical position in LNG and oil and gas for many years and is a leading government services contractor as well." Both divisions will have the necessary resources to successfully compete, and will be supported by a small corporate function. "Improved profitability is the cornerstone of the new organization," added Mr. Lane. The energy and chemicals division will provide a world-class engineering, procurement, construction and technology capability focused on upstream and downstream markets. The government and infrastructure division is the largest government logistics and services contractor with premier worldwide civil infrastructure capabilities. KBR is a global engineering, construction, technology and services company. Whether designing an LNG facility, serving as a defense industry contractor or providing capital construction, KBR delivers world-class service and performance. KBR employs 83,000 people in 43 countries around the world. Halliburton, founded in 1919, is one of the world's largest providers of products and services to the petroleum and energy industries. The company serves its customers with a broad range of products and services through its Energy Services and Engineering and Construction Groups. The company's World Wide Web site can be accessed at http://www.halliburton.com/ Headquartered in Houston, Texas, Kellogg, Brown & Root is engaged in the engineering and construction business, providing a wide range of services to energy and industrial customers and government entities in over 100 countries. DII has no business operations. The Company filed for chapter 11 protection on December 16, 2003 (Bankr. W.D. Pa. Case No. 02-12152). Jeffrey N. Rich, Esq., Michael G. Zanic, Esq., and Eric T. Moser, Esq., at Kirkpatrick & Lockhart LLP, represent the Debtors in their restructuring efforts. DLJ MORTGAGE: Fitch Puts BB+ Rating on Four Certificate Classes --------------------------------------------------------------- DLJ Mortgage Acceptance Corp., commercial mortgage pass-through certificates, series 1997-CF1, are upgraded as follows: -- $24.7 million class A-2 to 'AAA' from 'AA+'; -- $31.3 million class A-3 to 'AA-' from 'A'. These classes are also affirmed by Fitch: -- $200.1 million class A-1B at 'AAA'; -- Interest-only class S at 'AAA'; -- $26.9 million class B-1 at 'BB+'. -- Classes B-2, B-3, B-4 and C are not rated by Fitch. Class A-1A has been paid in full. The upgrades are due to an increase in credit enhancement to the investment-grade classes since issuance due to pay-down. As of the September 2004 distribution date, the pool's aggregate certificate balance has been reduced 48.2% to $232.0 million from $448.0 million at issuance. GMAC Commercial Mortgage Corp., as master servicer, collected year-end 2003 operating statements for 89% of the remaining loans by balance. The YE 2003 weighted-average debt service coverage ratio -- WADSCR -- for comparable loans improved to 1.38 times (x), compared with 1.21x at issuance. Fitch is concerned with the high number of loans (14.7%), which reported YE 2003 DSCRs below 1.0x. Three loans (3.8%) are in special servicing. The largest specially serviced loan is Cypress Pointe Apartments (1.8%), a multifamily property located in Dallas, Texas, currently 90 days delinquent. The borrower is trying to refinance the property and is currently in negotiations with the special servicer to bring the loan current. The second largest specially serviced loan is the Holiday Inn Beaufort (1.2%), a hotel property located in Beaufort, South Carolina. The property is real estate owned and is currently listed for sale. ELANTIC TELECOM: U.S. Trustee Amends Creditor Committee Membership ------------------------------------------------------------------ Level 3 Communications represented by Risa Lynn Wolf-Smith, Esq., resigned from the Official Committee of Unsecured Creditors in Elantic Telecom, Inc.'s chapter 11 case. Level 3 did not state its reason for resigning. The U.S. Trustee advises that these five creditors now serve on the Official Committee: 1. Adelphia Communications Corp. Attn: Stephen Martin 5619 DTC Parkway, Suite 800 Greenwood Village, Colorado 80111 Tel: 303-268-6433, Fax: 303-268-6222 2. De-Tech, Inc. Attn: Edward W. Phaup, Jr. 3404 Hermitage Rd. Richmond, Virginia 23227 Tel: 804-268-6433, Fax: 303-268-6222 3. Telcove, Inc. Attn: Jim Means, Secretary 121 Champion Way Canonsburg, Pennsylvania 15317 Tel: 724-743-9566, Fax: 724-743-9791 4. Cox Communications Attn: Clarke Armentrout 225 Clearfield Avenue Virginia Beach, Virginia 23462 Tel: 757-222-8588, Fax: 757-369-4500 5. Colo Properties Atlanta, LLC Successor to Marietta Street Partners, LLC Attn: Todd Raymond, Esq. c/o The Telx Group, Inc. 17 State Street, 33rd Floor New York, New York 10004 Tel: 212-480-3300, Fax: 212-480-8384 Headquartered in Richmond, Virginia, Elantic Telecom, Inc. -- http://www.elantictelecom.com/-- provides wholesale fiber bandwidth and carrier services to long-distance, international wireless carriers and competitive local exchange carriers across its fiber optic network. The Company filed for chapter 11 protection (Bankr. E.D. Va. Case No. 04-36897) on July 19, 2004. When the Debtor filed for protection from its creditors, it listed $19,844,000 in assets and $24,372,000 in liabilities. ENDURANCE SPECIALTY: Expands Into Agribusiness Reinsurance Market ----------------------------------------------------------------- Endurance Specialty Holdings Ltd. (NYSE:ENH) said its U.S. subsidiary has formed a new underwriting unit specializing in agribusiness reinsurance. The new Agribusiness Unit will provide traditional reinsurance for crops and livestock, and focus on the development of specialty yield and revenue products for the agricultural industry. Roger Heckman, formerly of Converium, will lead this Unit. The Agribusiness Unit will also include Catherine Besselman, Gregg Evans, William Fischer and Bin Zhang. William M. Jewett, President of Endurance Reinsurance Corporation of America, commented, "Roger Heckman and his team are recognized leaders in the development of innovative risk transfer products for the agricultural industry, and they bring to Endurance a wealth of experience and market knowledge. Their specialized approach to the business and their continuous focus on the changing needs of the marketplace fit exceptionally well with our overall strategy. This new specialty business unit will be an excellent complement to our existing businesses." Mr. Heckman, who joins Endurance's U.S. platform as a Senior Vice President, stated, "We are committed to establishing a leadership position in the development of risk transfer products within the agricultural industry. We plan to position ourselves as a responsive, creative, and innovative market. Endurance's commitment to market specialization and focus on the development of superior analytical capabilities are fully consistent with what is critical to achieving success in this segment. Our strategy and ability to execute, combined with the financial strength of Endurance, will serve our clients and brokers very well." 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 (Excellent) from A.M. Best, A2 by Moody's 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: Court OKs $2.4 Bil. CrossCountry Sale to CCE Holdings ----------------------------------------------------------------- As reported in the Troubled Company Reporter on September 2, Enron has reached an agreement with CCE Holdings, LLC, a joint venture of Southern Union Company and GE Commercial Finance Energy Financial Services, for the sale of CrossCountry Energy, LLC for $2.45 billion in cash, including the assumption of debt. The sale price represents an increase of $100 million over the CCE Holdings stalking horse contract entered into in June. Following review of two written proposals submitted in the process outlined by the Bankruptcy Court, Enron and the Official Unsecured Creditors' Committee determined that a revised CCE Holdings contract would be in the best interest of the estate and its creditors. Enron and the Committee considered the risks associated with the competing proposals as well as the advantages provided by the revised purchase agreement, including, among other things, the enhanced purchase price and that the purchaser has obtained all material state regulatory approvals and federal antitrust clearance. Court Approves Sale to CCE Holdings Judge Gonzalez approves the Purchase Agreement between: -- Debtor Enron Corp., -- Debtor Enron Operations Services, LLC, -- Debtor Enron Transportation Services, LLC, and -- non-debtor EOC Preferred, LLC; and -- CCE Holdings, LLC. All objections, not withdrawn or settled, are overruled. The Debtors will sell of all of the issued and outstanding membership interests in CrossCountry, LLC, free and clear of all liens and claims, to CCE Holdings for an amount equal to: -- $2,450,000,000 less the Transwestern Debt Amount, plus -- an amount to be calculated. Headquartered in Houston, Texas, Enron Corporation is in the midst of restructuring various businesses for distribution as ongoing companies to its creditors and liquidating its remaining operations. 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 on December 2, 2001 (Bankr. S.D.N.Y. Case No. 01- 16033). Judge Gonzalez confirmed the Company's Modified Fifth Amended Plan on July 15, 2004, and numerous appeals followed. Martin J. Bienenstock, Esq., and Brian S. Rosen, Esq., at Weil, Gotshal & Manges, LLP, represent the Debtors in their restructuring efforts. (Enron Bankruptcy News, Issue No. 125; Bankruptcy Creditors' Service, Inc., 15/945-7000) ENTERPRISE PRODUCTS: Prices $2 Bil. Senior Debt Private Offering ---------------------------------------------------------------- Enterprise Products Operating L.P., the principal operating subsidiary of Enterprise Products Partners L.P. (NYSE:EPD), has priced the private placement of $2 billion of senior unsecured notes. Proceeds from the sale of the notes will be used to fund Enterprise Operating's pending cash tender offers for GulfTerra Energy Partners, L.P.'s outstanding senior and senior subordinated notes and to refinance a portion of GulfTerra's other outstanding debt. If the merger with GulfTerra closes prior to the closing of this offering, the net proceeds will be used to repay debt Enterprise Operating will incur under its revolving credit facilities for the same purposes. The $2 billion of debt securities are offered in four separate series: Principal Issue Fixed-Rate Amount Price Coupon Maturity ------ ----- ------ -------- $500 million 99.922% 4.000% October 15, 2007 $500 million 99.719% 4.625% October 15, 2009 $650 million 99.914% 5.600% October 15, 2014 $350 million 99.674% 6.650% October 15, 2034 Enterprise will guarantee the notes through an unsecured and unsubordinated guarantee. These notes, which include registration rights, have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration under the Securities Act. Enterprise Operating may redeem some or all of the notes of any series at any time at the applicable redemption prices, which include a make-whole premium. The notes are subject to a special mandatory redemption at 101% of the principal amount, plus accrued and unpaid interest, if the merger agreement between Enterprise and GulfTerra terminates, Enterprise abandons the merger transaction or the merger does not otherwise occur on or before December 31, 2004. Enterprise is the second largest publicly traded midstream energy partnership with an enterprise value of over $7 billion. Enterprise is a leading North American provider of midstream energy services to producers and consumers of natural gas and natural gas liquids. The Company's services include natural gas transportation, processing and storage and NGL fractionation (or separation), transportation, storage and import/export terminaling. * * * As reported in the Troubled Company Reporter on September 24, Standard & Poor's Rating Services affirmed its 'BB+' corporate credit rating on Enterprise Products Partners L.P. At the same time, Standard & Poor's assigned its 'BB+' senior unsecured rating to Enterprise Products' subsidiary Enterprise Products Operating L.P.'s proposed (in aggregate) $2.0 billion note issues. The notes will be issued in four tranches, due 2007, 2009, 2014 and 2034. The outlook is stable. As of June 30, 2004, the Houston, Texas- based company had about $4.2 billion of debt outstanding, pro forma for the proposed and other recent financings. Proceeds from the issuances will be used to permanently finance acquisition-related bank debt related to Enterprise Products' pending merger with GulfTerra Energy Partners L.P. The $6.1 billion merger (total consideration, including GulfTerra's debt) is expected to close on or near Sept. 30, 2004. The rating on Enterprise Products reflects its integrated energy midstream operations, which benefit from a considerable amount of fee-based revenue from pipeline operations, favorable asset positioning, and a long-standing strategic alliance with Shell Oil Co. Offsetting these positive attributes are the high cash flow volatility the partnership faces stemming from its sizeable natural gas processing and fractionation operations. Enterprise Products does not issue debt but does guarantee the debt of Enterprise Products Operating, therefore Enterprise Products carries the same rating as Enterprise Products Operating. "The stable outlook reflects the expectation that Enterprise Products will not engage in significant merger and acquisition activity until it has sufficiently integrated the operations of GulfTerra, should its merger proceed as expected," said Standard & Poor's credit analyst John Thieroff. "In the longer term, an upgrade to investment grade will depend on successful integration, a demonstrated reduction in earnings volatility, and continued deleveraging," continued Mr. Thieroff. FAIR GROUNDS: Court Approves $47 Mil. Churchill Downs Acquisition ----------------------------------------------------------------- The U.S. Bankruptcy Court, Eastern District of Louisiana, approved Churchill Downs Incorporated's (Nasdaq: CHDN) $47 million acquisition of the Fair Grounds Race Course. CDI, the Fair Grounds Corporation, the Louisiana Horseman's Benevolent and Protective Association and other parties involved are expected to close the transaction on or before Oct. 15, 2004. Thomas H. Meeker, CDI's president and chief executive officer, called the court's ruling "a welcome ending to a lengthy process and the advent of a new era for the Fair Grounds, CDI and the New Orleans community." "The bankruptcy court's ruling brought us one step closer to achieving what we believe is an excellent strategic fit between Fair Grounds and CDI and an ideal entree for our Company into a city and state with such a rich racing heritage," said Mr. Meeker. "The Fair Grounds' tradition, quality racing and winter-race schedule are well complemented by CDI's operational expertise, industry-leading brand and simulcast network. "Going forward, we will now turn our focus on closing the transaction, immersing ourselves into the New Orleans community and supporting the Fair Grounds staff in delivering an outstanding 2004-2005 meet," Mr. Meeker continued. "We will look to the continued guidance and involvement of Fair Grounds management as we undertake this important transition process and begin building what we believe will be a long and prosperous partnership with employees, patrons, horsemen and the community at large." Should the acquisition close successfully on or before Oct. 15, 2004, Fair Grounds and its 10 off-track betting facilities would become the seventh racetrack operation owned by CDI. Fair Grounds' upcoming 82-day meet will run from Nov. 25, 2004, through March 27, 2005. About Churchill Downs Churchill Downs Incorporated, headquartered in Louisville, Kentucky, owns and operates world-renowned horseracing venues throughout the United States. The Company's racetracks in California, Florida, Illinois, Indiana and Kentucky host 114 graded-stakes events and many of North America's most prestigious races, including the Kentucky Derby and Kentucky Oaks, Hollywood Gold Cup and Arlington Million. CDI racetracks have hosted nine Breeders' Cup World Thoroughbred Championships -- more than any other North American racing company. CDI also owns off-track betting facilities and has interests in various television production, telecommunications and racing services companies that support CDI's network of simulcasting and racing operations. CDI trades on the Nasdaq National Market under the symbol CHDN and can be found on the Internet at http://www.churchilldownsincorporated.com/ About Fair Grounds Race Course Headquartered in New Orleans, Louisiana, Fair Grounds, filed for chapter 11 protection on August 15, 2003 (Bankr. E.D. La. Case No. 03-16222). Clayton T. Huff, Esq., Greta M. Brouphy, Esq., et al., at Heller, Draper, Hayden, Patrick & Horn represent the Debtor in its restructuring efforts. When the Debtor filed for protection it listed above $10 million in estimated assets and debts. Fair Grounds filed its Third Amended Plan of Reorganization with the Bankruptcy Court on September 8, 2004. FEDERAL-MOGUL: Asks Court to Extend Removal Period to February 1 ---------------------------------------------------------------- Federal-Mogul Corporation and its debtor-affiliates are still evaluating certain actions to determine which might be suitable for removal. With respect to the actions unrelated to asbestos, the Debtors believe that the analysis is largely complete. However, the Debtors want to preserve whatever ability they may have to remove claims against them, including asbestos claims for contribution, indemnity and subrogation to the Bankruptcy Court. Pursuant to Rule 9006(b) of the Federal Rules of Bankruptcy Procedure, the Debtors and the Official Committee of Unsecured Creditors ask the U.S. Bankruptcy Court for the District of Delaware to further extend the time by which the Debtors may file notices to remove civil actions pending as of the Petition Date, through and including February 1, 2005. Judge Lyons will convene a hearing on October 22, 2004, at 10:00 a.m., to consider the Debtors' request. Pursuant to Del. Bankr. LR 9006-2, the Debtors' Removal Period is automatically extended through the conclusion of that hearing. Headquartered in Southfield, Michigan, Federal-Mogul Corporation -- http://www.federal-mogul.com/-- is one of the world's largest automotive parts companies with worldwide revenue of some $6 billion. The Company filed for chapter 11 protection on Oct. 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan, Esq., James F. Conlan, Esq., and Kevin T. Lantry, Esq., at Sidley Austin Brown & Wood and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from its creditors, they listed $10.15 billion in assets and $8.86 billion in liabilities. (Federal-Mogul Bankruptcy News, Issue No. 64; Bankruptcy Creditors' Service, Inc., 215/945-7000) FRANK'S NURSERY: U.S. Trustee Picks 7-Member Creditors Committee ---------------------------------------------------------------- The U.S. Trustee for Region 2 appointed seven creditors to serve as an Official Committee of Unsecured Creditors in Frank's Nursery & Crafts, Inc. chapter 11 case: 1. Abacus Advisors Group, LLC Attn: Alan Cohen 745 Fifth Avenue, Suite 1506 New York, New York 10151 Phone: 212-751-9150 2. Simon Property Group Attn: Ronald M. Tucker, Vice President 115 Washington Street Indianapolis, Indiana 46204 Phone: 317-263-2346 3. Monrovia Growers Attn: William Kaye 18331 E. Foothill Boulevard P.O. Box 1385 Azuza, California 91702 Phone: 800-999-9321 4. Keen Limited Attn: Joseph E. Myers Avenida Xian Hai Edificio Zhu Kuan 7 Andar C, Macau 5. American Greetings Attn: Art Turtle, Executive Director One American Road Cleveland, Ohio 44144-2398 Phone: 216-252-7300 6. Lebanon Seaboard Corporation Attn: Lena F. Stagg, Customer Service Manager 1600 East Cumberland Street Lebanon, Pennsylvania 17042 Phone: 800-532-0090 ext. 171 7. Ferry Morse Seed Company Attn: Trevor Huist, CFO 600 Stephen Beale Drive Fulton, Kentucky 42041 Phone: 270-472-3400 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 Troy, Michigan, Frank's Nursery & Crafts, Inc. -- http://www.franks.com/-- specializes in nursery products, lawn and garden hardlines, floral decor, custom bows & floral arrangements, and Christmas merchandise. Frank's Nursery and its parent company, FNC Holdings, Inc., each filed a voluntary chapter 11 petition in the U.S. Bankruptcy Court for the District of Maryland on February 19, 2001. The companies emerged under a confirmed chapter 11 plan in May 2002. Frank's Nursery filed another chapter 11 petition on September 8, 2004 (Bankr. S.D.N.Y. Case No. 04-15826). In the company's second bankruptcy filing, it listed $123,829,000 in total assets and $140,460,000 in total debts. GRAPHIC PACKAGING: Moody's Puts B1 Rating on $1.256B Senior Notes ----------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to Graphic Packaging International, Inc.'s $1.256 billion senior secured term loan C. In addition, these rating actions were taken by Moody's: Rating Assigned: * $1.265 billion Term loan C, due 2010, Rated B1 Ratings affirmed: * Senior implied rated B1 * Issuer rating rated B2 * $325 million revolving credit facility, due 2009, rated B1 * $425 million senior unsecured notes, due 2011, rated B2 * $425 million senior subordinated notes, due 2013, rated B3 * $1.125 billion Term loan B, due 2010, Rated B1 * $150 million Term loan A, due 2009, rated B1 * Speculative Grade Liquidity rating of SGL-2 Outlook is stable. The ratings affirmation reflects: (i) Graphic's sizeable market position, (ii) strong operating margins in various product segments, and (iii) increased selling opportunities with regards to long standing customer relationships and geographic extension of existing products. The ratings also reflect Moody's expectation: (i) that there will be a continued focus on cost containment over and above anticipated cost synergies, (ii) that credit metrics will improve over the near term, and (iii) that the company will maintain good liquidity. Graphic has a leading position in folding consumer cartons and a leading position in coated unbleached kraft paperboard -- CUK. Due to the favorable structural characteristics of CUK and the limited number of competitors for this product, operating margins for this segment should remain relatively high, however consolidated margins will be considerably less when incorporating lower margin products such as folding cartons. Extensive customer relationships should lend itself to sizeable cross selling opportunities and extend the sales of existing items, such as microwave products, outside of the United States. Given the effort to eliminate cost historically we expect to see a continued focus on cost improvements over and above expected synergies. However, the ratings also incorporate: (i) Graphic's high leverage, (ii) increased competition, (iii) higher input costs, and (iv) continued integration challenges. As of June 30, 2004, leverage remained high for the current ratings with debt to LTM EBITDA of about six times. In part, the credit statistics reflect the difficult operating environment over the past several quarters as a result of merger related challenges, higher input costs, and increased pricing pressures due in part to greater competition. The SGL-2 rating reflects Moody's view that Graphic possesses good liquidity. Over the next twelve months, Moody's believes: (i) Graphic will be able to cover all cash requirements from internal sources except for extraordinary capital spending and seasonal working capital needs, (ii) maintain adequate financial cushion under its bank covenants, and (iii) maintain reasonable liquidity with access to its revolving credit facility. However, the ratings also reflect our view that alternate sources of liquidity will be limited. The stable outlook incorporates Moody's view that the company will be able to capitalize on expected operating benefits, cost synergies, and cross-selling opportunities while maintaining reasonable liquidity. Factors that could positively impact the ratings and outlook would be a sustained improvement in operating performance and a subsequent strengthening in credit statistics over the near term with an expectation of leverage moderating towards 4.0x, with coverage exceeding 2.5x, and retained cash flow (before working capital) to total debt surpassing 10%. Whereas, an inability to improve credit metrics or deterioration in liquidity from current levels, due in part to poor pricing, increased competition, or the loss of significant customers could negatively impact the outlook and/or ratings. Proceeds from the offering of the term loan C will be used to repay the term loan A and term loan B. Graphic Packaging International, Inc., located in Marietta, Georgia, is a provider of paperboard packaging solutions. HANOVER DIRECT: Appoints Hallie Sturgill as VP & Controller ----------------------------------------------------------- Hanover Direct, Inc., (Amex: HNV) appointed Hallie Sturgill as Vice President and Controller effective September 22, 2004. Ms. Sturgill will replace William C. Kingsford, Senior Vice President - Treasury and Control, who has resigned to pursue other opportunities. Ms. Sturgill joined the Company in 1989 and has been the Company's Assistant Controller since May of 1997. Prior to joining the Company in 1989, Ms. Sturgill was with the public accounting firm of KPMG LLP. Ms. Sturgill earned her Bachelor of Science degree in accounting from Elizabethtown College and her MBA from Mount Saint Mary's University and is also a certified public accountant. Ms. Sturgill will report to Charles E. Blue, Senior Vice President and Chief Financial Officer, and will assume responsibility for all financial accounting functions. About Hanover Direct, Inc. Hanover Direct, Inc., (Amex: HNV) -- http://www.hanoverdirect.com/ -- and its business units provide quality, branded merchandise through a portfolio of catalogs and e-commerce platforms to consumers, as well as a comprehensive range of Internet, e- commerce, and fulfillment services to businesses. The Company's catalog and Internet portfolio of home fashions, apparel and gift brands include Domestications, The Company Store, Company Kids, Silhouettes, International Mall, Scandia Down, and Gump's By Mail. The Company owns Gump's, a retail store based in San Francisco. Each brand can be accessed on the Internet individually by name. Keystone Internet Services, LLC -- http://www.keystoneinternet.com/--, the Company's third party fulfillment operation, also provides the logistical, IT and fulfillment needs of the Company's catalogs and web sites. At June 26, 2004, Hanover Direct's balance sheet showed a $46,503,000 stockholders' deficit, compared to a $47,629,000 deficit at December 27, 2003. IMPERIAL SCHRADE: Hires Hancock Estabrook as Bankruptcy Counsel --------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of New York gave Imperial Schrade Corp. permission to employ Hancock & Estabrook, LLP, as its bankruptcy counsel. Hancock & Estabrook will: a) prepare the petitions, schedules and statements of financial affairs; b) negotiate with all creditors and examine all liens against real and personal property; c) negotiate with taxing authorities if necessary; d) advise the Debtor with respect to the restructuring or the refinancing of its debt; e) prepare and file on behalf of the Debtor, as debtor-in- possession, all necessary applications, motions, orders, reports, complaints, answers and other pleadings and documents in the administration of the estate; f) take all necessary actions to protect and preserve the Debtor's estate, including: (i) the prosecution of actions on the Debtor's behalf, (ii) the defense of any actions commenced against the Debtor, (iii) the negotiations in connection with any litigation in which the Debtor is involved, and (iv) the objections to claims filed against the Debtor's estate; g) advise the Debtor concerning the assisting in the negotiation and documentation of cash collateral orders and related documents; h) develop, negotiate and draft a disclosure statement and Chapter 11 plan of reorganization; and i) perform all other pertinent and required representation in connection with the provisions of Title 11, U.S.C. Charles J. Sullivan, Esq., is the lead attorney in Imperial Schrade's restructuring. Mr. Sullivan discloses that the Debtor paid a $100,300.71 retainer. Mr. Sullivan reports Hancock & Estabrook's professionals bill: Designation Hourly Rate ----------- ----------- Senior Partner $ 310 Junior Associate 155 Hancock & Estabrook does not have any interest adverse to the Debtor or its estate. Headquartered in Ellenville, New York, Imperial Schrade Corp. -- http://www.schradeknives.com/-- manufactures and designs knives and tools. The Company filed for Chapter 11 protection on September 10, 2004 (Bankr. N.D.N.Y. Case No. 04-15877). When the Debtor filed for protection from its creditors, it estimated more than $10 million in assets and debts. INDIANA PHOENIX: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Indiana Phoenix, Inc. 200 Dekko Drive Avilla, Indiana 46710 Bankruptcy Case No.: 04-14335 Type of Business: The Debtor assembles and sells front-end discharge cement mixer trucks, installs cement mixer truck front-end discharge conversion packages for used mixer trucks, and sells parts. Chapter 11 Petition Date: September 24, 2004 Court: Northern District of Indiana (Fort Wayne Division) Debtor's Counsel: Daniel J. Skekloff, Esq. Skekloff, Adelsperger & Kleven, LLP 927 South Harrison Street Fort Wayne, IN 46802 Tel: 260-407-7000 Fax: 260-407-7137 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 ------ --------------- ------------ Macallister Machinery Trade Debt $346,405 Company P.O. Box 660200 Indianapolis, IN 46266 McLaughlin Body Company Trade Debt $176,111 243o River Dr. Moline, IL 61265 Unlimited Services, Inc. Trade Debt $123,931 170 Evergreen Road Oconto, WI 54153 Shumaker Industries Inc. Trade Debt $94,908 Hendrickson Truck Suspension Trade Debt $89,533 J.O. Mory Inc. Trade Debt $74,656 Meritor Wabco Trade Debt $72,690 Meritor Automotive Trade Debt $70,362 Modine Manufacturing Company Trade Debt $67,776 Power Train of Fort Wayne Trade Debt $61,939 Beede Electrical Instr. Co. Trade Debt $55,586 Douglas Autotech Corp. Trade Debt $51,453 McMahon Tire, Inc. Trade Debt $45,964 Quality Brand Products Trade Debt $45,064 Hendrickson Auxilliary Axle Trade Debt $35,334 Cummins Mid-States Power Trade Debt $33,221 KMS, Inc. Trade Debt $32,050 Transmission & Fluid Eqp. Trade Debt $30,319 Beckman Lawson, LLP Professional $25,486 Services rendered Bendix Commercial Vehicle Trade Debt $25,038 Sys. LAWNMASTER SERVICES: Case Summary & 17 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Lawnmaster Services, Inc. 431 New State Road Manchester, Connecticut 06040 Bankruptcy Case No.: 04-22791 Type of Business: The Debtor is engaged in commercial landscaping and snow removal services. Chapter 11 Petition Date: September 21, 2004 Court: District of Connecticut (Hartford) Judge: Robert L. Krechevsky Debtor's Counsel: Patrick W. Boatman, Esq. Boatman, Boscarino, Grasso & Twachtman 628 Hebron Avenue, Building 3 Glastonbury, CT 06033 Tel: 860-659-5657 Total Assets: $1,065,530 Total Debts: $565,753 Debtor's 17 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Devcon-Freshwater, LLC $165,000 Internal Revenue Service $155,000 Winterberry Irrigation $56,266 Department of Revenue Services $16,000 Green Cycle $8,000 Town of Manchester $7,200 William Thorion $4,800 Capitol Equipment $4,200 Attorney Michael Clinton $4,000 Department of Labor $3,100 Unifirst Corporation $2,400 Zurich Insurance Co. $2,300 Pioneer Law Sprinklers $2,300 Firestone Store $2,300 Waste Management of CT $1,809 Opal Ventures/Buckland Mobil $1,800 Bobeat of Connecticut $992 MERRILL LYNCH: Fitch Assigns Low-B Ratings to Two Cert. Classes --------------------------------------------------------------- Fitch rates Merrill Lynch Mortgage Investors, Inc.'s $1.096 billion mortgage pass-through certificates, series MLCC 2004-E, as follows: -- $1.07 billion class A-1, A-2A, A-2B, A-2C, A-2D, X-A, and A- R certificates (senior certificates) 'AAA'; -- $11.0 million class B-1 certificates 'AA'; -- $8.8 million class B-2 certificates 'A+'; -- $4.95 million class B-3 certificates 'BBB+'; -- $2.75 million privately offered class B-4 certificates 'BB+'; -- $2.2 million privately offered class B-5 certificates 'B+'. The 'AAA' rating on the senior certificates reflects the 3.05% subordination provided by the 1.00% class B-1, the 0.80% class B- 2, the 0.45% class B-3, the 0.25% privately offered class B-4, the 0.20% privately offered class B-5, and the 0.35% privately offered class B-6 (which is not rated by Fitch) certificates. Classes B-1, B-2, B-3, B-4, and B-5 are rated 'AA', 'A+', 'BBB+', 'BB+', and 'B+' based on their respective subordination. Fitch believes the credit enhancement will be adequate to cover credit losses. In addition, the ratings also reflect the quality of the underlying mortgage collateral, strength of the legal and financial structures, and the primary servicing capabilities of Cendant Mortgage Corporation, which is rated 'RPS1' by Fitch. Generally, with certain limited exceptions, distributions to the class A-1 and A-R certificates (and to the component of the class X-A certificates related to pool: 1) will be solely derived from collections on the pool 1 mortgage loans and distributions to the class A-2 certificates (and to the component of the class X-A certificates related to pool, 2) will be solely derived from collections on the pool 2 mortgage loans. Aggregate collections from both pools of mortgage loans will be available to make distributions on the class X-B and B certificates. When a pool experiences either rapid prepayments or disproportionately high realized losses, principal and interest collections from one pool may be applied to pay principal or interest, or both, to the senior certificates of the other pool. The aggregate trust consists of 3,150 conventional, fully amortizing, primarily 25-year adjustable-rate mortgage loans secured by first liens on one-to-four family residential properties with an aggregate principal balance of $1,100,001,139 as of the cut-off date (Sept. 1, 2004). Group 1 consists of 1,237 loans with an aggregate principal balance of $501,092,253 as of the cut-off date. Each of the mortgage loans are indexed off the one-month LIBOR or six-month LIBOR, and all of the loans pay interest only for a period of 10 years following the origination of the mortgage loan. The average unpaid principal balance as of the cut-off-date is $405,087. The weighted average original loan- to-value ratio -- LTV -- is 71.96%. The weighted average effective LTV is 67.15%. The weighted average FICO is 735. Cash- out refinance loans represent 28.34% of the loan pool. The three states that represent the largest portion of the mortgage loans are: * California (20.24%), * New York (11.24%), and * Virginia (7.42%). Group 2 consists of 1,913 loans with an aggregate principal balance of $598,908,886 as of the cut-off date. Each of the mortgage loans are indexed off the six-month LIBOR, and all of the loans pay interest only for a period of 10 years following the origination of the mortgage loan. The average unpaid principal balance as of the cut-off-date is $313,073. The weighted average original loan-to-value ratio -- LTV -- is 70.75%. The weighted average effective LTV is 66.34%. The weighted average FICO is 733. Cash-out refinance loans represent 41.06% of the loan pool. The three states that represent the largest portion of the mortgage loans are: * California (19.51%), * New York (10.06%), and * Florida (5.70%). All of the mortgage loans were either originated by Merrill Lynch Credit Corporation pursuant to a private label relationship with Cendant Mortgage Corporation or acquired by Merrill Lynch Credit in the course of its correspondent lending activities and underwritten in accordance with Merrill Lynch Credit underwriting guidelines. Any mortgage loan with an OLTV in excess of 80% is required to have a primary mortgage insurance policy. 'Additional collateral loans' included in the trust are secured by a security interest in the borrower's assets, which does not exceed 30% of the loan amount. Ambac Assurance Corporation provides a limited purpose surety bond that covers any losses in proceeds realized from the liquidation of the additional collateral. None of the mortgage loans are 'high cost' loans as defined under any local, state, or federal laws. For additional information on Fitch's rating criteria regarding predatory lending legislation, see the press release 'Fitch Revises Rating Criteria in Wake of Predatory Lending Legislation' dated May 1, 2003, available on the Fitch Ratings web site at http://www.fitchratings.com/ Merrill Lynch Mortgage, the depositor, will assign all its interest in the mortgage loans to the trustee for the benefit of certificate-holders. For federal income tax purposes, an election will be made to treat the trust fund as multiple real estate mortgage investment conduits -- REMICS. Wells Fargo Bank Minnesota, National Association will act as trustee. METALDYNE CORP: Reports Preliminary Financial Information --------------------------------------------------------- Metaldyne Corporation reported preliminary financial information for the fourth quarter of 2003 and the first two quarters of 2004. It also provided a summary of an anticipated restatement of financial results for 2001 and 2002 and the first three quarters of 2003 arising from a previously announced investigation into various accounting matters. This investigation has just been concluded and is the subject of a separate announcement by the Company. The Company is in the process of completing the restatement and expects to make appropriate filings with the Securities and Exchange Commission of its restated results and previously unfiled Securities Exchange Act reports as soon as practicable. The information being released by the Company is subject to its continuing review, as well as all necessary review by its current and former independent auditors and others. Accordingly, all such information is preliminary and subject to further change. Greater detail concerning recent results and the restatement will be made available as soon as the review of these periods is complete and the Company is in a position to make filings under the Securities Exchange Act. Once the restatements are completed, the Company intends to hold a conference call for its debt securityholders to discuss its recent results, the accounting investigation and the restatement. Summary The following table summarizes preliminary financial information announced by the Company today (note that the table excludes the 2002 results from our former TriMas subsidiary that was divested in June 2002): (in millions) Six Months Ended June, Fiscal Year Ended, 2004 2003 2003 2002 Unaudited Unaudited Unaudited Unaudited Restated Restated ----------- --------- ---------- ---------- Net Sales $1,002 $772 $1,508 $1,465 Operating Profit $38 $30 $20 $63 Depreciation & Amortization $64 $54 $107 $96 Restructuring Activities $2 $4 $13 $4 Asset Impairments & Fixed Asset Disposals $8 $2 $18 $1 Preliminary First Six Months of 2004 as Compared to Restated First Six Months of 2003 On a preliminary basis, the Company announced that its net sales for the first six months of 2004 were $1,002 million versus $772 million for the first six months of 2003, primarily as a result of the Company's New Castle acquisition in January 2004, which contributed $212 million in the first six months of 2004. In addition, the Company had approximately $37 million in additional volume related to new product launches and ramp up of existing programs as well as a $17 million benefit from foreign exchange movements. However, these increases were partially offset by approximately $32 million related to the divestiture of two aluminum die casting facilities within the Company's Driveline segment, and a 2.9% decrease in North American vehicle production by the Company's three largest customers (Ford, General Motors and DaimlerChrysler). The Company announced, on a preliminary basis, that its operating profit was approximately $38 million, or 3.8% of net sales, for the first six months of 2004 compared to $30 million, or 3.9% of net sales, for the same period in 2003. Excluding an $8 million asset impairment charge relating to a divestiture of two aluminum die casting operations in the Company's Driveline segment, operating profit would have been $46 million, or 4.6% of net sales. The increase in 2004 is principally explained by a $14 million increase from the New Castle acquisition. These gains were partially offset by approximately $6 million in fees and expenses relating to the just completed accounting investigation. The Company is facing significant increases in the cost to procure certain materials utilized in its manufacturing processes such as steel, energy, Molybdenum and nickel. In general, steel prices have recently risen by as much as 60-100% and have thus created significant tension between steel producers, suppliers and end customers. Based on current prices, our steel costs could increase approximately $50 million in 2004. However, the Company anticipates several initiatives such as steel scrap sales, steel resourcing efforts, contractual steel surcharge pass through agreements with selected customers, and reducing or eliminating 2004 scheduled price downs to its customers will offset approximately $30 million of these increased costs. Additionally, the Company is actively working with its customers to: 1) obtain additional business to help offset these prices through better utilization of its capacity, 2) negotiate a surcharge to reflect the increased material costs, and/or 3) resource certain of its products made unprofitable by these increases in material costs. The Company will actively work to mitigate the effect of these steel increases throughout 2004. The Company reported that its depreciation and amortization expense increased from approximately $54 million in the first six months of 2003 to approximately $64 million in 2004. The net increase in depreciation and amortization of approximately $10 million is principally explained by $9 million of depreciation and amortization expense associated with the New Castle acquisition. In addition, for the past several years capital spending has been in excess of depreciation expense. Accordingly, the additional capital spending accounts for the remaining increase in depreciation expense. The Company incurred approximately $2 million of restructuring charges in the first six months of 2004 versus a charge of approximately $4 million in the same period in 2003. The 2004 charge is primarily related to restructuring activities initiated in 2003 and costs associated with the closure of a Driveline segment facility located in Europe. In connection with the sale of two aluminum die casting facilities, the Company incurred an $8 million charge in the first six months of 2004. In connection with the sale of these same two facilities, the Company also recorded an impairment charge of $5 million in late 2003 in accordance with SFAS No. 144, "Accounting for the Impairment or Disposal of Long- Lived Assets." Subsequent to December 28, 2003, these two facilities were sold to an independent third party. The sales price to this third party was used to determine the fair market value of the facilities for the SFAS No. 144 impairment analysis. At June 27, 2004, the Company had approximately $861 million in debt outstanding and approximately $47 million outstanding on its accounts receivable securitization facility. At this date, the Company also had approximately $87 million and $52 million of undrawn and available commitments from its revolving credit facility and accounts receivable facility, respectively. At June 27, 2004, the Company was contingently liable under standby letters of credit totaling $61 million issued for the Company's behalf by financial institutions. These letters of credit are used for a variety of purposes, including meeting requirements to self- insure workers' compensation claims. The Company's senior credit facility contains various affirmative and negative covenants, including a financial covenant requirement for an EBITDA to cash interest expense coverage ratio to exceed 2.25:1.00 through July 3, 2005; and a debt to EBITDA leverage ratio not to exceed 5.00 through June 27, 2004, decreasing to 4.75:1.00 for the quarter ending October 3, 2004. The accounts receivable facility balance is included in computing debt for the purposes of these covenant calculations. The Company was in compliance with the preceding financial covenants at June 27, 2004 and, as previously announced, had previously obtained waivers associated with its inability to submit financial statements and associated representations and warranties through September 30, 2004. As announced by the Company, the Company is seeking to extend this waiver pending completion of its restatement. Preliminary Full 2003 Results as Compared to Restated 2002 Results The Company's preliminary results for the full year 2003 reflect certain anticipated restatement adjustments for the first three quarters of 2003 and other matters which remain under continuing review. In reviewing the information as compared with the restated 2002 results, it should be noted that information is not comparable due to the divestiture of the Company's former TriMas subsidiary in June 2002. References to the Automotive Group below eliminate the results of the TriMas subsidiary for 2002. The Company's reported preliminary results for its Automotive Group increased from $1,465 million in 2002 to approximately $1,508 million in 2003. Despite a 6.4% decrease in NAFTA production, sales increased $42 million, but were essentially flat after adjusting for a $44 million impact of exchange rate movement. The Company reported operating profit was approximately $20 million for 2003 compared to approximately $63 million in 2002 after excluding TriMas. The $43 million reduction in operating profit is the result of several factors, including approximately $30 million in non-cash charges relating to a $5 million asset impairment charge related to the aluminum die casting facilities noted above, a $14 million in fixed asset disposals, and an $11 million increase in depreciation and amortization. In addition, operating profit in 2003 was impacted by an approximately $10 million increase in restructuring charges and a $7 million increase in the cost to procure steel, the Company's largest raw material. The Company's depreciation and amortization expense increased from approximately $96 million in 2002 to approximately $107 million in 2003 for its Automotive Group. The net increase of approximately $11 million is due to depreciation expense recorded on capital expenditures of approximately $130 million for 2003 and $115 million for 2002. As discussed, the Company's higher capital spending in recent years accounts for the increase in depreciation expense. In 2003, the Company entered into several restructuring arrangements whereby it incurred approximately $13 million of costs associated with severance and facility closure. In addition, as discussed, the Company recorded a $5 million charge as a result of an impairment analysis relating to two plants with negative operating performance. Anticipated Financial Restatement The anticipated restatement adjustments, which are expected to result from the completed investigation described in a separate announcement regarding the announcement of the completion of the independent accounting investigation, relate principally to adjustments to correct overstated balances for property, plant and equipment and recognize lower related depreciation expense, recognize the continuing effect of adjustments made in prior periods on previously reported balances of accounts payable and accounts receivable. The Company is in the process of preparing the restatement and expects to make appropriate filings with the Securities and Exchange Commission of its restated results and previously unfiled Securities Exchange Act reports as soon as practicable. As discussed, the information being released by the Company is subject to its continuing review, as well as all necessary review by its current and former independent auditors and others, and is subject to further change. In addition, prior to the announcement of the investigation, the Commission provided the Company with comments on its filings under the Securities Exchange Act of 1934 in the ordinary course and the Company expects to respond to the Staff concerning those comments prior to filing definitive Forms 10-K and 10-Q's for the relevant periods. It is possible that disclosure may change as a result of that review. In addition, the Company is seeking relief from certain disclosure requirements in the Form 10-K relating to pre-acquisition periods and the Company may be delayed in filing definitive documents pending receipt of that relief or if such relief is not obtained. Extension of Waivers Sought The Company is in the process of seeking an extension of waivers received from its senior lenders, receivables financing providers and certain lessors with respect to its financial reporting, pending completion of the restatement. Current waivers expire on September 30, 2004. The Company presently anticipates that the extended waiver now being sought will provide it with adequate time to complete the necessary restatement and prepare financial statements for recent unreported periods. In the event that certain waivers expire or are not obtained or notices of default are delivered in respect of the Company's debt securities, the Company could be materially and adversely affected and lose access to its revolving credit and accounts receivable securitization facilities. About Metaldyne Metaldyne is a leading global designer and supplier of metal-based components, assemblies and modules for the automotive industry. Through its Chassis, Driveline and Engine groups, the Company supplies a wide range of products for powertrain and chassis applications for engines, transmission/transfer cases, wheel-ends and suspension systems, axles and driveline systems. Metaldyne is also a globally recognized leader in noise and vibration control products. MIRANT CORP: Asks Court to Lift Stay to Allow 3 Suits to Proceed ---------------------------------------------------------------- On September 9, 2004, Mirant Corporation, along with Mirant Americas, Inc., Mirant California Investments, Inc., Mirant California, LLC, Mirant Americas Development, Inc., Mirant Americas Energy Marketing, LP, Mirant Delta, LLC, and Mirant Potrero, LLC, were effectively served with a complaint styled People of the State of California ex rel. Bill Lockyer v. Mirant Corporation, et al., Case No. CGC-04-433922. The Complaint alleged that Mirant engaged in unlawful, unfair, fraudulent and manipulative trading schemes to the detriment of the People of the State of California. The California Attorney General seeks restitution, disgorgement, damages, civil penalties, and injunction. Michelle C. Campbell, Esq., at White & Case, LLP, in Miami, Florida, tells the Court that the Mirant Defendants are in the process of removing the California Action to the United States District Court for the Northern District of California and will file a motion to dismiss that action. The California Action is similar to these three other actions also filed by the California Attorney General against some of these Mirant Defendants, all of which are, or were, before Chief Judge Vaughn R. Walker in the United States District Court for the Northern District of California: * People of the State of California, et al. v. Mirant Corporation, et al., N.D. Cal., No. C-02-1787 VRW -- Clayton Act Action; * People of the State of California v. Mirant Corporation, et al., N.D. Cal., No. C-02-2207 VRW -- Unfiled Rate Action; and * People of the State of California, et al. v. Mirant Corporation, et al., N.D. Cal., No. C-02-1914 VRW -- Ancillary Services Action. The complaint in the Clayton Act Action alleges violations of section 7 of the Clayton Act, 15 U.S.C. Section 18, and a corollary claim under the Unfair Competition Law. In an Order dated March 25, 2003, Judge Walker dismissed the claims under the Unfair Competition Law. The Antitrust Action is currently stayed pursuant to an order issued by Judge Walker. The California Attorney General appealed the order to the Ninth Circuit. Oral argument before a Ninth Circuit panel on the stay order took place on September 14, 2004. The complaint in the Unfiled Rate Action alleges two separate claims under the Unfair Competition Law: (1) the defendants failed to file rate schedules as required by the Federal Power Act, 18 U.S.C. Section 824 et seq.; and (2) the defendants charged unjust and unreasonable rates, as determined by the Federal Energy Regulatory Commission. The district court dismissed the Unfiled Rate Action in an Order dated March 25, 2003. The California Attorney General appealed the Order to the United States Court of Appeals for the Ninth Circuit. Oral argument was heard before a Ninth Circuit panel on June 14, 2004, and the appeal is pending. The complaint in the Ancillary Services Action alleges violations of the Unfair Competition Law in connection with ancillary services defendants contracted to provide the California Independent System Operator. The district court also dismissed the Ancillary Services Action in Judge Walker's Order of March 25, 2003. The California Attorney General appealed the dismissal of the Ancillary Services Action to the United States Court of Appeals for the Ninth Circuit. On July 6, 2004, the Ninth Circuit affirmed Judge Walker's dismissal. The California Attorney General filed a petition for panel rehearing and rehearing en banc on July 24, 2004. The Debtors ask Judge Lynn to modify the automatic stay of Section 362(a) of the Bankruptcy Code for the sole and limited purpose of allowing the Mirant Defendants to file a Motion to Dismiss in the California Action in order to resolve those issues. The Debtors expect to prevail on the Motion to Dismiss. For the avoidance of doubt, the Debtors believe that the automatic stay applies to the California Attorney General's action and the California Attorney General filed it in violation of the automatic stay. The Debtors reserve all rights to seek sanctions against the California Attorney General for the willful stay violation. Ms. Campbell asserts that the substance of the California Attorney General's most recent action is devoid of merit. 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. Case No. 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. 45; Bankruptcy Creditors' Service, Inc., 215/945-7000) MIRANT CORP: Wyandotte City Asks Court for Tax Collection Help -------------------------------------------------------------- On December 21, 2000, the City of Wyandotte, Michigan and Tenaska Michigan Partners, LP, signed a Lease Agreement for certain parcels of property the City owned. The Lease allows Tenaska to develop an electrical generating facility on the leased premises. On January 24, 2001, Mirant Michigan Investments, Inc., acquired 100% of the ownership interests in Tenaska Michigan Partners, LLC. Wyandotte Michigan, LLC, is the legal successor to both Tenaska LP and Tenaska LLC. Based on the schedules Wyandotte filed, it appears that $203,000,000 in net book value was invested in work- in-progress on the Leased Premises. The Lease requires prompt payment of taxes. Mark E. MacDonald, Esq., at MacDonald + MacDonald, PC, in Dallas, Texas, relates that the Debtors' primary obligation under the Lease, beyond the $5,000 nominal rent, are taxes and other governmental charges. According to Mr. MacDonald, the Lease did not contemplate that the property would remain vacant and undeveloped but expressly contemplated that it would be developed, improved and used for operation of an electrical generation facility. The Lease expressly contemplated that there would be business activities conducted on the Leased Premises. The Lease expressly contemplated that taxes would accrue on assets brought to the leasehold premises, located on those premises, and from operation of the generating facility to be constructed on those premises. The broad definition of taxes is "all taxes" including: (1) ad valorem taxes from valuable tangible property brought "on" the premises; (2) taxation of intangibles like franchise, gross receipts, license, stamp or other taxes, which would be "accruing on" the Leased Premises; and (3) taxes reflecting operations like payroll, withholding, social security, occupation and employment taxes. All of these taxes accrue "on" the Leased Premises from its development and contemplated use. Mr. MacDonald informs the Court that these ad valorem taxes relating to the Leased Premises have not been paid as required by Section 365(d)(3) of the Bankruptcy Code: (a) $313,721 that became payable on August 1, 2003; (b) $301,655 that became payable on December 1, 2003; and (c) $714,501 that became payable on August 1, 2004. The taxes were levied on the Debtors' project improvements on the leased premises. Mr. MacDonald contends that pursuant to Section 365(d)(3) of the Bankruptcy Code, the Debtors had and have an obligation to timely perform all obligations under the Lease. Thus, when taxes became payable, the Debtors were obligated under Section 365(d)(3) to pay them. Mirant Services, LLC, is liable within the Mirant company structure to pay taxes including those owed to the City of Wyandotte. Although local taxes are an operating expense incurred postpetition in the ordinary course, which should have been paid in the ordinary course, no postpetition tax payments have been made to Wyandotte. Mr. MacDonald notes that the Debtors made no timely assertion of defense to the taxes. Even if there had been a timely contest, it would in no way have modified the Debtors' monetary obligations under Section 365(d)(3) since the Lease expressly provides that in the event the Debtors had a good faith dispute with respect to the taxes, it was nonetheless required to pay the taxes and seek a refund. "During the period from the filing through May 2004 when Mirant Services was not paying the lawfully assessed tax bills to Wyandotte, Mirant Services actually paid more than $70 million dollars in fees to professionals, which should have no greater priority in right to payment than Wyandotte," Mr. MacDonald remarks. "Payment of professionals is appropriate, however, so is payment of school teachers and municipal expenses in municipalities in which debtors such as Mirant have chosen to establish large production facilities." It is unclear whether or not Wyandotte would be entitled to assert an administrative expense claim for the full amount of the 2003 taxes or some prorated amount. Wyandotte contends that the Court is not required, and should not, reach that issue at this time. Vindication of Wyandotte's rights under Section 365(d)(3) will lead to a superior result for it than the classification of the sums as an administrative expense. Under applicable Michigan law, the taxes constitute a lien against all real and personal property at the Leased Premises. The lien is first and paramount in priority. Thus, to the extent the sums remain unpaid, Wyandotte reserves the right to object to any sale or disposition of the property, which does not protect Wyandotte's lien right. In addition, if the Debtors do not pay 2003 Taxes prior to December 1, 2004, there is substantial risk that the Debtors will lose the remaining benefit of the Renaissance Zone Designation under applicable Michigan law. Accordingly, Wyandotte asks the Court to compel the Debtors to pay the Taxes and all interest and penalties accrued on the 2003 Taxes. 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. Case No. 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. 44; Bankruptcy Creditors' Service, Inc., 215/945-7000) MUELLER HOLDINGS: Extends Sr. Debt Exchange Offer Until Wednesday ----------------------------------------------------------------- Mueller Holdings (N.A.), Inc., extended its offer to exchange up to $233,000,000 aggregate principal amount of its 14-3/4% Senior Discount Exchange Notes due 2014 for up to $233,000,000 of its existing Senior Discount Notes due 2014. A Registration Statement under the Securities Act of 1933 with respect to the Senior Exchange Notes was declared effective by the Securities and Exchange Commission on August 10, 2004. The Company extended the expiration date of the exchange offer until 5:00 p.m., New York time, on Wednesday, September 29, 2004. As of the close of business on September 24, 2004, the Company was advised by the exchange agent for the exchange offer that an aggregate principal amount of $222,700,000 Senior Restricted Notes had been tendered in exchange for an equivalent amount of Senior Exchange Notes. The terms and conditions of the exchange offer are set forth in the Company's Prospectus, dated August 17, 2004, and the accompanying Letter of Transmittal and other attachments. Subject to applicable law, the Company may, in its sole discretion, waive any condition applicable to the exchange offer at any time prior to the expiration date or extend or otherwise amend the exchange offer. Copies of the Prospectus and related documents may be obtained from Law Debenture Trust Company at (212) 750-6474. All other questions should be directed to Investor Relations at the Company at 217-425-7320. About Mueller Holdings (N.A.), Inc. Mueller Holdings (N.A.), Inc. is a leading North American manufacturer of a broad range of flow control products for use in water distribution networks, water and wastewater treatment facilities, gas distribution systems and piping systems. It has manufactured industry-leading products for almost 150 years and currently operates thirty manufacturing facilities located in the United States, Canada, and China. * * * As reported in the Troubled Company Reporter on April 27, 2004, Standard & Poor's Ratings Services assigned its 'B+' corporate credit and 'B-' senior unsecured debt ratings to Mueller Holdings (N.A.) Inc.'s $110 million senior discount notes due 2014. Interest will be noncash payable in kind for the first five years and cash pay thereafter. Proceeds from this offering will be used to pay a distribution to shareholders. The outlook is stable. At the same time, Standard & Poor's affirmed its outstanding ratings on wholly owned subsidiary Mueller Group, Inc., (B+/Stable/--). Mueller's pro forma total debt (including consolidated parent company obligations and operating leases) outstanding at December 31, 2003, is about $1.07 billion. NATIONAL CENTURY: Court Refuses to Quash July CSFB Subpoena ----------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Ohio denied the request of Credit Suisse First Boston to quash the subpoena served by the Unencumbered Assets Trust, the successor-in-interest to certain rights and assets of National Century Financial Enterprises, Inc., and its debtor-affiliates. Judge Calhoun reached that decision after the Debtors argued that CSFB's request is "utterly devoid of any specific objections" to the Debtors' subpoena. Sydney Ballesteros, Esq., at Gibbs & Bruns, in Houston, Texas, contends that the burden is on CSFB to explain to the court why the topics for deposition -- in the context of an enormous bankruptcy and in the course of broad Rule 2004 discovery -- are so unreasonable or overbroad as to warrant its motion to quash. Ms. Ballesteros emphasizes that it is not the Debtors' duty to come forward with arguments to justify the topics presented. That there are 27 topics relating specifically to CSFB's involvement with National Century Financial Enterprises, Inc., is simply not prima facie unreasonable where the Debtors are attempting to understand complex relationships between NCFE and the key parties to the bankruptcy. The numerosity of the topics simply cannot be helped in a bankruptcy of National Century's magnitude where the Debtors have attempted to painstakingly set out the topics of inquiry with the specificity demanded by CSFB. Ms. Ballesteros reiterates that the topics all clearly contemplate actions taken by CSFB relating to their positions at and relationship with NCFE, and are wholly relevant to the Debtors' ongoing attempts to untangle the alleged fraud at NCFE. As reported in the Troubled Company Reporter on August 30, 2004, Sherri Blank Lazear, Esq., at Baker & Hostetler, in Columbus, Ohio, relates that Gibbs & Bruns, LLP, as counsel for both the Unencumbered Assets Trust, the successor-in-interest to certain rights and assets of National Century Financial Enterprises, Inc., and its debtor-affiliates, and for most of the plaintiffs in a multidistrict litigation, sought testimony of Credit Suisse First Boston, LLC, under a Rule 2004 examination. According to Ms. Lazear, Gibbs & Bruns actually sought that testimony for purposes of pursuing its clients' claims in the MDL proceeding, Ms. Lazear remarks. In so doing, G&B defied the discovery stay imposed by Judge Graham in the MDL proceeding. As reported in the Troubled Company Reporter on Sept. 23 and 24, the Court also denied the separate requests of JP Morgan Chase Bank and Bank One to quash the subpoenas served on them by the Trust. Headquartered in Dublin, Ohio, National Century Financial Enterprises, Inc. -- http://www.ncfe.com/-- is the market leader in healthcare finance focused on providing medical accounts receivable financing to middle market healthcare providers. The Company filed for Chapter 11 protection on November 18, 2002 (Bankr. S.D. Ohio Case No. 02-65235). The healthcare finance company prosecuted its Fourth Amended Plan of Liquidation to confirmation on April 16, 2004. Paul E. Harner, Esq., at Jones Day represents the Debtors. (National Century Bankruptcy News, Issue No. 46; Bankruptcy Creditors' Service, Inc., 215/945-7000) NORTEL NETWORKS: Declares Preferred Share Dividends --------------------------------------------------- The board of directors of Nortel Networks Limited declared a dividend on each of the outstanding Cumulative Redeemable Class A Preferred Shares Series 5 (TSX:NTL.PR.F) and the outstanding Non-cumulative Redeemable Class A Preferred Shares Series 7 (TSX:NTL.PR.G). The dividend amount for each series is calculated in accordance with the terms and conditions applicable to each respective series, as set out in the Company's articles. The annual dividend rate for each series floats in relation to changes in the average of the prime rate of Royal Bank of Canada and The Toronto-Dominion Bank during the preceding month and is adjusted upwards or downwards on a monthly basis by an adjustment factor which is based on the weighted average daily trading price of each of the series for the preceding month, respectively. The maximum monthly adjustment for changes in the weighted average daily trading price of each of the series will be plus or minus 4.0% of Prime. The annual floating dividend rate applicable for a month will in no event be less than 50% of Prime or greater than Prime. The dividend on each series is payable on Nov. 12, 2004 to shareholders of record of the series at the close of business on October 29, 2004. Nortel Networks offers converged multimedia networks that eliminate the boundaries among voice, data and video. These networks use innovative packet, wireless, voice and optical technologies and are underpinned by high standards of security and reliability. For both carriers and enterprises, these networks help to drive increased profitability and productivity by reducing costs and enabling new business and consumer services opportunities. Nortel Networks does business in more than 150 countries. For more information, visit Nortel Networks on the Web at http://www.nortelnetworks.comor http://www.nortelnetworks.com/media_center. * * * As reported in the Troubled Company Reporter on Sept. 17, 2004, Moody's Investors Service placed the ratings of Nortel Networks Lease Pass-Through Trust, Pass-Through Trust Certificates, Series 2001-1 on review for possible downgrade. The Certificates are currently rated B3. The review is in response to Moody's placing the corporate ratings of Nortel Networks Limited on review for possible downgrade in response to Nortel's announcement that the previous CEO, CFO and Controller have all been terminated for cause. As reported in the Troubled Company Reporter on August 18, 2004, the Integrated Market Enforcement Team of the Royal Canadian Mounted Police recently advised Nortel that it will commence a criminal investigation into the Company's financial accounting situation. As reported in the Troubled Company Reporter on August 12, 2004, Nortel's directors and officers, and certain former directors and officers are facing allegations from certain shareholders in the U.S. District Court for the Southern District of New York that the directors and officers breached fiduciary duties owed to the Company during the period from 2000 to 2003. NORTHERN KENTUCKY: Committee Wants Ulmer & Berne as Counsel ----------------------------------------------------------- The Official Committee of Unsecured Creditors of Northern Kentucky Professional Baseball, LLC, asks the U.S. Bankruptcy Court for the Eastern District of Kentucky for permission to employ Ulmer & Berne LLP, as its counsel. Ulmer & Berne will: a) advise the Committee with respect to its powers and duties in the chapter 11 case; b) assist the Committee in its investigation of the acts, conducts, assets, liabilities and financial condition of the Debtor and the Debtor's affiliates; c) review the operation of the Debtor's business and other matters relevant to the case; d) participate with the Committee in the formulation and confirmation of a plan or reorganization and a disclosure statement; and e) perform all other legal services for the Committee as may be required or necessary and in the interests of the unsecured creditors involved in the case. The Committee discloses that the Debtor will pay all fees and expenses of the counsel. Richard G. Hardy, Esq., and Reuel D. Ash, Esq., are the lead attorneys rendering services to the Committee. Mr. Hardy will bill the Debtor $300 per hour while Mr. Ash will bill the Debtor $225 per hour. Ulmer & Berne does not hold any interest adverse to the Committee, and the Debtor or its estate. Headquartered in North Bend, Ohio, Northern Kentucky Professional Baseball, LLC, operates a professional baseball club. The company filed for chapter 11 protection on September 3, 2004 (Bankr. E.D. Ky. Case No. 04-22256). John A. Schuh, Esq., at Schuh & Goldberg, LLP, represents the Company in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $9,353,870 in total assets and $9,485,394 in total debts. OAKWOOD LIVING: Files a Consensual Plan With GMAC Commercial ------------------------------------------------------------ Oakwood Living Centers, Inc., along with its debtor-affiliates and its primary secured creditor, GMAC Commercial Mortgage Corporation, filed a Second Amended Consensual Plan of Reorganization with the U.S. Bankruptcy Court for the District of Delaware. A full-text copy of the Plan is available for a fee at: http://www.researcharchives.com/download?id=040812020022 The Plan provides for the substantive consolidation of each of the Debtors' estates into one consolidated estate. The Plan groups claims and interests in six classes and describes the treatment of each: Class Treatment ----- --------- 1 - Other Secured Claims Unimpaired. At the option of the Oakwood Secured Creditor Trustee, the holder of a Class 1 claim will receive in full satisfaction: a) cash equal to the value of the Other Secured Claimholder's interest in the property of the estates which constitutes collateral for such claim; b) the surrender to the holder of such claim, the property of the estates which constitutes collateral for such claim; or c) such other treatment as to which the Oakwood Secured Creditor Trustee and the holder of such claim have agreed upon in writing. All valid and enforceable prepetition liens will survive the Effective Date and continue in accordance with the contractual terms of the agreements. 2 - GMACCM Claim Impaired. On the Effective Date, GMACCM will receive, on account of the allowed claim against the Debtors' estates, the proceeds of the radius sale and any cash and accounts receivable remaining in the Debtors' estates after: a) payment of Administrative Claims, including DIP Facility Claim and Professional Claims; b) payment of Priority Claims; c) payment of the Omega Claim Settlement; and d) the funding of the Unsecured Creditor Fund. 3 - Omega Claim Impaired. On the Effective Date, will receive an account of the Allowed Omega Secured Claim against the Debtors' estates. In consideration for receipt of the Omega Claim settlement, Omega agrees to waive all other claims it has or may have against the Debtors, their estates and assets. 4 - Priority Claims Unimpaired. Each holder will be paid in accordance with section 1129(a)(9) of the Bankruptcy Code. 5 - General Unsecured Claims Impaired. On account of the impaired status of Class 2 and Class 3, holders of this Class are not entitled to receive any distribution on account of their Claims outside of their entitlement to a pro rata share of the proceeds of the Avoidance Claims. GMACCCM has agreed to carve out an Unsecured Creditor Fund from its Allowed Claim for distribution if Class 5 votes to confirm the Plan. 6 - Interests Impaired. Will be cancelled upon the consummation of the merger of Oakwood and Oakwood Massachusetts. Headquartered in Wilson, Wyoming, Oakwood Living Centers, Inc., is a nursing facility. The Company along with its debtor-affiliates filed for chapter 11 protection on (Bankr. Del. Case No. 03-11822). Jeremy W. Ryan, Esq., at Saul Ewing LLP represents the Debtors in their restructuring efforts. When the Company filed for protection it estimated below $50,000 in assets with more than $50,000 in debts. OGLEBAY NORTON: Judge Denies Appointment of Toxic Tort Committee ---------------------------------------------------------------- The Honorable Joel B. Rosenthal of the U.S. Bankruptcy Court for the District of Delaware denies the appointment of an Official Committee of Toxic Tort Personal Injury Claimants in the bankruptcy cases of Oglebay Norton Company and its debtor-affiliates. The toxic tort personal injury claimants are represented by Maritime Asbestos Legal Clinic, Kelley & Ferraro, LLP, Bevan Associates, LPA, Inc., Baron & Budd, PC., Silber Pearlman, LLP, and Campbell & Levine, LLC. The claimants sought appointment of an Official Committee to represent their specific interests. They claim that the present Official Committee of Unsecured Creditors does not and cannot adequately represent the toxic tort personal injury claims which are numerous in number. The Committee members have no real interest or experience in dealing with the difficult issues of claims allowance and liquidation with regard to this type of claims or the establishment of a trust to process said claims. Up until this case, it has been the well-settled practice of the United States Trustees Office in Region 3 to appoint separate committees to represent asbestos-related tort claimants in Chapter 11 reorganizations of companies with asbestos liabilities. Tort Claims Don't Like the Plan Either The tort claimants complain that during the bankruptcy proceedings, they are largely ignored as a legitimate constituency with serious issues that need to be addressed. Further, the claimants say that the Plan Oglebay's filed provides generic "pass-through" treatment for the asbestos and silica tort claims, rather than a concrete, supportable proposal to resolve and pay these claims. The claimants point out that in the Plan, the Debtors classify the Tort Claimants as unimpaired but placed them in the general class of unsecured creditors who will get no cash on the Effective Date. The Debtors tried to bury the Tort Claims with Trade Creditors yet deny them the same 100 percent payout. The Debtors, they claim, want to streamline the confirmation process and silence dissent by declaring in the Plan that the tort claimants are unimpaired. The Tort Claimants urge the Court to reject the Plan. Headquartered in Cleveland, Ohio, Oglebay Norton Company, mines, processes, transports and markets industrial minerals for a broad range of applications in the building materials, environmental, energy and industrial market. The Company and its debtor- affiliates filed for chapter 11 protection on February 23, 2004 (Bankr. D. Del. Case Nos. 04-10559 through 04-10560). The Debtors filed a chapter 11 Joint Plan of Reorganization on April 27, 2004. Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger represents the Debtors in their restructuring efforts. When the Debtor filed for protection from its creditors, it listed $650,307,959 in total assets and $561,274,523 in total debts. OXFORD IND: Will Report 2005 First Quarter Results on Thursday -------------------------------------------------------------- Oxford Industries, Inc., (NYSE: OXM) will report its fiscal first quarter 2005 financial results on Thursday, September 30, 2004 after the market close. The company will also hold a conference call with senior management to discuss the financial results in detail at 4:30 p.m. ET/1:30 p.m. PT. A live Webcast of the conference call will be available on the Company's Web site at http://www.oxfordinc.com. Visit the Web site at least 15 minutes early to register for the teleconference Webcast and download any necessary software. A replay of the call will be available from September 30, 2004 through October 14, 2004. To access the telephone replay, domestic participants should dial (877) 519-4471 and international participants should dial (973) 341-3080. The access code for the replay is 5215497. A replay of the Webcast will also be available following the conference call on Oxford Industries' corporate Website. About Oxford Oxford Industries, Inc. (S&P, BB- Long-Term Corporate Credit Rating, Stable) is a leading producer and marketer of branded and private label apparel for men, women and children. Oxford provides retailers and consumers with a wide variety of apparel products and services to suit their individual needs. Oxford's brands include Tommy Bahama(R), Indigo Palms(TM), Island Soft(TM), Ely & Walker(R) and Oxford Golf(R). The Company also holds exclusive licenses to produce and sell certain product categories under the Tommy Hilfiger(R), Nautica(R), Geoffrey Beene(R), Slates(R), Dockers(R) and Oscar de la Renta(R) labels. Oxford's customers are found in every major channel of distribution including national chains, specialty catalogs, mass merchants, department stores, specialty stores and Internet retailers. The Company's common stock has traded on the NYSE since 1964 under the symbol OXM. For more information, visit its Web site at http://www.oxfordinc.com/ PACIFIC GAS: To Redeem $500 Million in Mortgage Bonds Due 2006 -------------------------------------------------------------- Dinyar B. Mistry, PG&E's Vice President and Controller, relates in a filing with the Securities and Exchange Commission that on August 30, 2004, Pacific Gas and Electric Company notified the trustee of its $1,600,000,000 aggregate principal amount of Floating Rate First Mortgage Bonds due 2006 that it will redeem bonds in the aggregate principal amount of $500,000,000 on October 3, 2004. The bonds to be redeemed will be selected from all Floating Rate First Mortgage Bonds due 2006 in accordance with the procedures of The Depository Trust Company. Headquartered in San Francisco, California, Pacific Gas and Electric Company -- http://www.pge.com/-- a wholly owned subsidiary of PG&E Corporation (NYSE:PCG), is one of the largest combination natural gas and electric utilities in the United States. The Company filed for Chapter 11 protection on April 6, 2001 (Bankr. N.D. Calif. Case No. 01-30923). James L. Lopes, Esq., William J. Lafferty, Esq., and Jeffrey L. Schaffer, Esq., at Howard, Rice, Nemerovski, Canady, Falk & Rabkin represent the Debtors in their restructuring efforts. On June 30, 2001, the Company listed $23,216,000,000 in assets and $22,152,000,000 in debts. Pacific Gas and Electric emerged from chapter 11 protection on April 12, 2004, paying all creditors 100 cents-on- the-dollar plus post-petition interest. (Pacific Gas Bankruptcy News, Issue No. 83; Bankruptcy Creditors' Service, Inc., 215/945-7000) PARMALAT: Farmland Gets Court OK to Pay Benefit Plan Obligations ---------------------------------------------------------------- Farmland Dairies, LLC, a Parmalat USA Corporation debtor- affiliate, has been the sponsor of five defined benefit plans, which are governed by the Employee Retirement Income Security Act of 1974, the Internal Revenue Code of 1986, and regulations of Pension Benefit Guaranty Corporation. Farmland estimates the assets and number of union and non-union participants of each Pension Plan to be: ______________________________________________________________ | | | | Union- | | Plan | Assets | Participants | Represented | | | | | Participants | |_________________|______________|______________|______________| | | | | | | Sunnydale Farms | $14,134,383 | 430 | 306 | | Pension Plan | | | | |_________________|______________|______________|______________| | | | | | | Clinton Milk Co.| $905,160 | 14 | 0 | | Employees' | | | | | Pension Plan | | | | |_________________|______________|______________|______________| | | | | | | Clinton Milk Co.| $985,314 | 88 | 88 | | Local 680 | | | | | Pension Plan | | | | |_________________|______________|______________|______________| | | | | | | Parmalat New | $302,563 | 92 | 92 | | Atlanta Dairies | | | | |Union Retirement | | | | | Income Plan | | | | |_________________|______________|______________|______________| | | | | | | Farmland Dairies| $5,800,679 | 254 | 254 | | Local 680 | | | | | Pension Plan | | | | |_________________|______________|______________|______________| Under relevant provisions of ERISA and the Tax Code, a pension plan sponsor is required to make minimum funding contributions to its defined benefit pension plans each year. Although Section 412(a) of the Tax Code and Section 302 of ERISA prescribe minimum funding rules for pension plans, there are limits on how much a plan sponsor can contribute to a pension plan, including limits on deductibility under Section 404 of the Tax Code, and the full funding limitation under Section 412(c)(7) of the Tax Code. Because of the interplay among the statutory provisions and the performance of plan-related investments, in addition to many other factors, pension plans are not always fully funded such that they could be immediately terminated without further contributions. Farmland estimates the under-funding applicable to each pension plan, and the minimum funding contributions due during calendar year 2004 to be: ______________________________________________________________ | | | | | | (Under) or | Aggregate Minimum | | Plan | Over-funding | Funding Contributions | |___________________|________________|_________________________| | | | | | Sunnydale Plan | ($10,004,506) | $1,441,581 | | Clinton Plan | ($2,290,467) | $98,769 | | Clinton 680 Plan | ($175,085) | 0 | | New Atlanta Plan | $12,533 | 0 | | Farmland Plan | $328,010 | $119,367 | |___________________|________________|_________________________| 2004 Pension Funding Obligations On September 15, 2004, Farmland owed minimum funding contributions of: (i) $1,441,000 due to be paid pursuant to the Sunnydale Plan; and (ii) $98,769 due on the Clinton Plan. Farmland estimates owing a $119,367 minimum funding contribution to the Farmland Pension Plan. Marcia L. Goldstein, Esq., at Weil, Gotshal & Manges, LLP, in New York, tells Judge Drain that the majority of the Minimum Funding Contributions represent $1,084,679 of payments that amortize the cost of liabilities accrued before the Petition Date. The balance of the Minimum Funding Contributions represent the "normal cost portion" of the cost to amortize benefit liabilities, which could be paid by Farmland in the ordinary course as an administrative expense equal to around $455,000. In addition to the Minimum Funding Contributions, there are other amounts due with respect to the Pension Plans relating to both the prepetition and postpetition periods, including payments to PBGC for premiums under 29 U.S.C. Section 1307, and obligations to the parties who provide actuarial, accounting and record-keeping services to the Pension Plans. During 2004, and without regard to ongoing obligations that may come due during future years, Farmland has two upcoming PBGC Premium payments aggregating $171,582, of which $27,648 is due on September 15, 2004 and $143,934 is due on October 15, 2004. Farmland estimates that the PBGC Premiums and other obligations will not exceed $300,000. Farmland Needs to Make Pension Contributions Farmland believes that it is appropriate to continue to maintain the Pension Plans and, in its discretion, to continue to make payments in respect of the Pension Obligations. By timely making the Minimum Funding Contributions, Farmland's estate will avoid the imposition of the Excise Tax. Farmland estimates that the Excise Tax associated with a failure to pay the Minimum Funding Contributions will be $153,977. Farmland is protected from the immediate payment of the Excise Tax in full, both by the automatic stay and applicable law that would treat the Excise Tax not as a priority claim, but, at best, as a general unsecured claim. Nevertheless, following an emergence from bankruptcy, the Excise Tax would become due and payable in full by Reorganized Farmland, unless the Pension Plans were terminated prior to emergence, which Farmland does not currently intend. Similarly, the failure to pay the PBGC Premiums results in penalties and interest that could be asserted jointly and severally against Farmland and its affiliates. Furthermore, if Farmland were to fail to continue to make payments to the third party services providers for the Pension Plans, no one would be able to continue to administer the Pension Plans or to make benefit payments to participants. PBGC Lies in Wait Ms. Goldstein informs the Court that PBGC is a significant contingent creditor in Farmland's Chapter 11 cases. On August 23, 2004, PBGC filed proofs of claim against Farmland and its two Debtor-affiliates. Twenty-seven of these claims contained liquidated values for the unfunded benefit liability, while the remaining claims are unliquidated claims for PBGC premiums and minimum funding contributions. The aggregate liquidated unfunded benefit claim value against the U.S. Debtors is $111,230,901 -- consisting of $37,076,967 in liquidated claims against Farmland. Based on this liquidated claim, PBGC could assert that it should be allowed to vote on Farmland's reorganization plan, and, therefore, its claims would exceed Farmland's estimate of the aggregate value of unsecured claims held by all other general unsecured creditors. In the event the Pension Plans are terminated during Farmland's Chapter 11 cases, while under-funded, PBGC's contingent claims may mature and become liquidated. According to Ms. Goldstein, unlike other Farmland creditors, ERISA provides that PBGC's claims apply jointly and severally to all of the debtor and non-debtor affiliates, which are trades or businesses under common control with the plan sponsor. Under Sections 4062(a)-(b) of ERISA, each trade or business under common control with Farmland would become jointly and severally liable to PBGC for the total amount of the Pension Plans' unfunded benefits and interest at a reasonable rate from the termination date, if the plans were terminated while under-funded. Termination is More Costly Farmland seeks the Court's authority to pay its Pension Plan Obligations and to continue to exercise its discretion in making payments in respect of these obligations that may arise during the course of its Chapter 11 case. Ms. Goldstein contends that terminating the Pension Plans is more costly than assuming them. Moreover, Farmland estimates that 100%, or close to 100%, of the costs of termination would come out of the recovery to its general unsecured creditors. Given these reasons, Farmland currently intends to assume the Pension Plans. Because Farmland estimates that the Pension Plans are under- funded, unless it were to fully fund the unfunded benefit liabilities under the Pension Plans in accordance with ERISA, Farmland would be denied the ability to seek a standard termination by statute, Ms. Goldstein states. Farmland estimates that the full funding Pension Plans would require the payment of approximately $12,000,000. Seeking a standard termination of the Pension Plans at this time would result in a significant immediate cost to the estate, as opposed to the continued maintenance of the Pension Plans as Farmland requests the authority to do. While it is possible for Farmland to seek a voluntary "distress termination" pursuant to 29 U.S.C. Section 1342(c) and terminate the Pension Plans while under-funded, the provisions regarding the termination require a showing that Farmland and each member of its controlled group of corporations satisfy ERISA's requirements for financial distress. It is far from certain whether Farmland could make the requisite showing of financial distress at this time because certain members of Farmland's controlled group of corporations include entities that are not debtors. After the termination of the Pension Plans in a 'distress termination,' Farmland and each of the members of its controlled group of corporations would become liable to PBGC for the unfunded benefit liabilities. If Farmland decides to assume the Pension Plans as part of its reorganization, it is likely that PBGC will not permit it to do so before it "cures" any missed current obligations and provides some assurances that Farmland will continue to maintain the Pension Plans in accordance with applicable law after the effective date of its reorganization plan. The remainder of Farmland's obligations under the Pension Plan in this scenario, including the under-funding amount, would be made up over time. Alternatively, there are two methods by which Farmland can terminate the Pension Plans: * voluntary standard termination; or * voluntary distress termination. Under either method, termination would require approval of the Court and of the unions whose employees are participants in the relevant Pension Plan. Ms. Goldstein also points out that under any of the termination scenarios, based on estimates received from the actuary for the Pension Plans, Farmland estimates that it would owe between $10,000,000 and $12,000,000 to the Sunnydale Plan or PBGC, and $2,700,000 to the Clinton Plan or PBGC -- depending on whether the termination is standard or distressed. Furthermore, Farmland estimates that negotiations with its unions to obtain their approval of the termination would be lengthy and costly. Because of the pending requirement to make the Minimum Funding Contributions, Farmland has devoted its resources to analyzing the Clinton Plan and the Sunnydale Plan. Farmland is continuing to analyze the remainder of its Pension Plans. Although Farmland believes that the majority of PBGC's claims in the event of a termination of the Pension Plans would be general unsecured claims. Farmland also believes that, due to the joint and several nature of claims for unfunded pension liability, PBGC would recover against each of the U.S. Debtors and would likely receive payment of its claims in full, and that the cost of the payments will be borne through reduced recoveries to Farmland's remaining general unsecured creditors. This is because PBGC is entitled to seek payment of its claims from the plan sponsor and each of its control group affiliates. Thus, to the extent the assets in Farmland's estate were insufficient to pay PBGC 100% of its claims, PBGC would have claims against, and be able to collect against, the other U.S. Debtors' assets. Farmland's employees consider continued benefit accruals under the Pension Plans and the financial viability of those Pension Plans important to their employment relationship with the company. In light of recent events, employees have begun questioning the financial viability and future of the Pension Plans. Farmland maintains that paying some of the Pension Obligations will have a positive effect on the morale of its employees, thus assisting with the retention of and improving the productivity of the employees, who are critical to its reorganization efforts. Moreover, failure to pay the Pension Obligations threatens Farmland's ability to negotiate modifications and extensions of its collective bargaining agreements with its unions. Without an agreement with its unions, Farmland is vulnerable to strikes that could halt its ability to do business. PBGC Says Farmland Owes More Pension Benefit Guaranty Corporation does not object to Farmland's request to fund its pension plans. "[S]uch authorization would be entirely consistent with the debtors' existing legal obligations," PBGC attorney Vicente Matias Murrell says. However, PBGC complains that Farmland's request is not entirely clear about the extent of its obligations. PBGC disagrees with Farmland on certain points raised. PBGC believes that Farmland may owe the pension plans over three times as much money as Farmland intends to contribute. PBGC estimates that as of September 15, 2004, the U.S. Debtors owe their six Pension Plans almost $4,000,000. Of this amount, the Debtors owe the Sunnydale Pension Plan $3,950,000 in unpaid minimum funding contributions. PBGC also estimates that the total aggregate termination liability with respect to the Plans as of April 16, 2004, is $37,076,0967. Mr. Murrell tells Judge Drain that Farmland's characterization of the proposed payments as "discretionary" is wrong. Mr. Murrell points out that ERISA and the Internal Revenue Code unequivocally mandate the Debtors to continue funding the pension plans unless: (a) the Pension Plans are terminated in the manner prescribed in Title IV of ERISA; or (b) the Debtors receive from the Internal Revenue Service a waiver of the minimum funding obligations. * * * Judge Drain authorizes Farmland to make payments due under its Pension Plans, including payments of prepetition obligations. Farmland is not deemed to assume the Pension Plans. 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. 31; Bankruptcy Creditors' Service, Inc., 215/945-7000) POINT WEST: Files Chapter 7 Petition in N.D. California ------------------------------------------------------- Point West Capital Corporation (OTC BB:PWCC) and its related entities, Allegiance Capital, LLC, Allegiance Funding I, LLC, Allegiance Management Corporation and Point West Venture Management, LLC, filed for Chapter 7 in United States Bankruptcy Court Northern District of California. The cases were assigned case numbers 04-32709, 04-32711, 04-32712 04-32713, 04-32710 respectively. E. Lynn Schoenmann was appointed as Bankruptcy Trustee for Point West Capital Corporation and its related entities. Headquartered in San Francisco, California, Point West Capital Corporation provides loans to owners of funeral homes and cemeteries. The Company and four of its debtor-affiliates filed for chapter 7 protection on September 24, 2004 (Bankr. N.D. Cal. Case No. 04-32709). Michael St. James, Esq., at St. James Law represents the Debtors in their liquidation efforts. When the Company filed for bankruptcy petition, it listed $46,621 in total assets and $19,417 in total debts. POINT WEST CAPITAL: Voluntary Chapter 7 Case Summary ---------------------------------------------------- Lead Debtor: Point West Capital Corporation 1750 Montgomery Street San Francisco, California 94111 Bankruptcy Case No.: 04-32709 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Point West Ventures Management, LLC 04-32710 Allegiance Capital, LLC 04-32711 Allegiance Funding I, LLC 04-32712 Allegiance Management Corp. 04-32713 Type of Business: The Debtor provides loans to owners of funeral homes and cemeteries. Chapter 7 Petition Date: September 24, 2004 Court: Northern District of California (San Francisco) Judge: Thomas E. Carlson Debtors' Counsel: Michael St. James, Esq. St. James Law 155 Montgomery Street #1004 San Francisco, CA 94104 Tel: 415-391-7566 Total Assets Total Debts ------------ ----------- Point West Capital Corporation $46,621 $19,417 Point West Ventures Management, LLC $0 1,149 Allegiance Capital, LLC $128,904 $11,511 Allegiance Funding I, LLC $497 $1,218 Allegiance Management Corp. $442 $925 The Debtor did not file a list of its largest creditors. PRICELINE.COM INC: S&P Puts B Rating on Convertible Senior Notes ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to online travel agency Priceline.com Inc. At the same time, Standard & Poor's assigned its 'B' rating to the company's two convertible senior notes due 2010 and 2025. The outlook is stable. As of June 30, 2004, Priceline.com had total debt outstanding of $223.4 million. "The ratings reflect Priceline.com's significant supplier concentration in airlines and hotels, low profit margins, acquisition-driven growth strategy, and participation in the highly competitive online travel market," said Standard & Poor's credit analyst Andy Liu. "These factors are only partially offset by the company's leading position in the consumer bid-based travel business and its good cash balances, which provide some cushion," he added. Norwalk, Connecticut-based Priceline.com is a provider of bid- based and retail travel services in the areas of airline tickets, hotel rooms, rental cars, vacation packages, cruises and travel insurance. Besides www.priceline.com, the company operates several travel-related Web sites, including http://www.lowestfare.com,http://www.travelweb.com,and http://www.rentalcars.com. Priceline.com pioneered the opaque travel business with its "Name Your Own Price" model for airline tickets, hotel rooms, and rental cars, for which the Priceline.com does not disclose to the consumer its cost or target price. Its retail travel business only started near the end of 2003. The opaque airline ticket business has been under some pressure. The availability of discounted airline tickets has been squeezed by the high load factors that traditional airlines are enjoying. Furthermore, the proliferation of discount airlines and the significant price reductions instituted by traditional airlines have reduced the potential savings to consumers through opaque airline ticket services. These two factors will likely limit the future growth of the opaque airline ticket business. In 2003-2004, the decline has been largely offset by the growth of retail airline ticket sales. The retail travel business, including airline tickets and hotel rooms, will become a more significant part of Priceline.com's revenues. Nonetheless, margin expansion opportunities will be limited by the presence of significantly larger and better-capitalized competitors such as Expedia, Travelocity, and Orbitz. QUIGLEY COMPANY: U.S. Trustee Picks 7-Member Creditors Committee ---------------------------------------------------------------- The U.S. Trustee for Region 2 appointed seven creditors to serve as an Official Committee of Unsecured Creditors in Quigley Company, Inc.'s Chapter 11 case: 1. Kathleen LoPresti 27981 N. Woodland Road Pepper Pike, Ohio 44124 Phone: 216-765-0552 2. Thomas Geoffrey Langved 1204 West Boulevard, Apt. 2 Rapid City, South Dakota 57701 Phone: 701-641-3460 3. Lyle Lewis 715 South Kihei Road, #252 Kihei, Hawaii 96753 Phone: 808-874-5633 4. Thomas Bailey 4110 Alabama Street P.O. Box 113 Hobart, Indiana 46342 Phone: 219-942-3975 5. Ricardo Whitehead 3935 W. 19th Street, Apt. 5 Chicago, Illinois 60623 Phone: 773-762-4558 6. James Brennan 86-28 54th Avenue Elmhurst, New York 11373 7. T.J. Littlefield 8595 Broussard Beaumont, Texas 77713 Phone: 409-892-7696 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 Manhattan, Quigley Company is a subsidiary of Pfizer Inc which used to produce and market a broad range of refractories and related products to customers in the iron, steel, glass and other industries. The Company filed for chapter 11 protection on September 3, 2004 (Bankr. S.D.N.Y. Case No. 04-15739) to resolve legacy asbestos-related liability. When the Debtor filed for protection from its creditors, it listed assets of $155,187,000 and debts of $141,933,0000. Pfizer has agreed to contribute $405 million to an Asbestos Claims Settlement Trust over 40 years through a note, contribute approximately $100 million in insurance and forgive a $30 million loan to Quigley. Michael L. Cook, Esq., at Schulte Roth & Zabel LLP, represents the Company in its restructuring efforts. RAILAMERICA INC: S&P Assigns BB Rating to $450M Senior Facilities ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' secured debt rating and '1' recovery rating to short-line freight railroad RailAmerica Inc.'s proposed $450 million amended and restated senior secured facilities, which consist of a $100 million revolving credit facility maturing in 2010 and a $350 million term loan maturing in 2011. The $450 million credit facilities are rated one notch above the corporate credit rating, with a recovery rating of '1', indicating a high expectation of full recovery of principal in the event of a default or bankruptcy. Standard & Poor's used its discrete asset methodology to analyze lenders' recovery prospects because the credit facilities are secured by specific collateral. "The outlook revision reflects RailAmerica's improving financial profile and the potential for an upgrade if the company pursues a disciplined approach to acquisitions and maintains a less leveraged capital structure," said Standard & Poor's credit analyst Lisa Jenkins. Pro forma for financing activities under way, the Boca-Raton, Florida-based freight railroad has about $460 million of lease-adjusted debt. Ratings reflect RailAmerica's aggressive (albeit moderating) debt leverage and the potential for debt-financed acquisitions, partly offset by its position as the largest owner and operator of short- line (regional and local) freight railroads in North America and the favorable risk characteristics of the U.S. freight railroad industry. RailAmerica operates a diverse network of rail operations in North America, consisting of 46 rail properties and 8,700 miles of track. The company previously owned operations in Chile and Australia. RailAmerica sold its Chilean operations in February 2004 and its Australian operations in August 2004. RailAmerica announced its plans to exit from international markets and focus on the North American market in October 2003. RailAmerica is the largest customer of the large Class 1 railroads in North America. About 82% of its rail traffic interchanges with Class 1 railroads. Typically, a RailAmerica line is the only rail carrier directly serving its customers, usually under contracts specifying the rate per carload (indexed for inflation) and the number of carloads to be hauled in a given period. Competition, which varies significantly, is primarily with trucks and, to a lesser extent, barges. RailAmerica benefits from the operating flexibility of its mostly nonunion workforce. Diverse commodities are hauled, with modest concentrations in coal, forest products, agricultural products, and chemicals. Despite the substantial dispersion of rail properties, management has achieved respectable efficiencies. The rating could be raised, if RailAmerica: * continues to generate solid operating results, * maintains a disciplined approach to financing acquisitions, and * sustains its strong track record of successfully integrating acquisitions. RELIANT ENERGY: Offering Competitive Electricity Supply in W. Pa. ----------------------------------------------------------------- Reliant Energy plans to offer competitively priced electric service to large commercial, industrial and institutional customers in Western Pennsylvania. Marketing activities will begin later this fall for service starting in January. Reliant's decision to enter the market was prompted by the Pennsylvania Public Utility Commission's August 23 order in the Duquesne Light case. This order approves a market design that removes barriers and allows competition to develop in the area. Of particular importance was the PUC's decision not to allow Duquesne's regulated provider of last resort service to become the only choice in the market. "Put simply, competitive energy markets work," said Jim Ajello, senior vice president and general manager, Commercial and Industrial Marketing, Reliant Energy. "Competition ensures the lowest possible commodity prices and a variety of innovative product and service options." As the company that purchased and now operates the electric generation facilities originally owned by Duquesne Light, Reliant Energy has a sizeable financial investment in the Commonwealth. The company has its regional headquarters in Pittsburgh, owns approximately 5,500 megawatts of power generating assets in the state and employs approximately 1,400 Pennsylvanians, the majority of whom are located in the Pittsburgh area. "It's important to note that large commercial and industrial customers have options and are not forced to take the sometimes volatile, hourly-priced default rate that Duquesne must make available," Mr. Ajello explained. "We offer our customers fixed and indexed pricing as well as products that incorporate combinations of both. We tailor these products to meet the needs of individual businesses." Reliant Energy currently offers similar products and services in Maryland, New Jersey, the District of Columbia and Texas with a total electrical load of approximately 8,500 megawatts. The company's marketing activities in the Duquesne Light territory will focus on manufacturing, health care, government institutions and large retail stores. Reliant Energy, Inc. (NYSE: RRI) based in Houston, Texas, provides electricity and energy services to retail and wholesale customers in the U.S. The company provides a complete suite of energy products and services to more than 1.8 million electricity customers in Texas, ranging from residences and small businesses to large commercial, industrial and institutional customers. Reliant also serves commercial and industrial customers in the PJM (Pennsylvania, New Jersey, Maryland) Interconnection. The company has approximately 19,000 megawatts of power generation capacity in operation, under construction or under contract in the U.S. For more information, visit our Website at http://www.reliant.com/corporate * * * As reported in the Troubled Company Reporter on Sept. 20, Fitch Ratings affirmed Reliant Energy, Inc.'s outstanding credit ratings as follows: * $1.1 billion outstanding senior secured notes at 'B+'; * $275 million outstanding convertible senior subordinated notes at 'B-'; and * indicative senior unsecured debt at 'B'. The Rating Outlook is revised to Positive from Stable. The Positive Rating Outlook reflects Reliant Energy's good prospects for deleveraging and gradual credit quality improvement over the next 12-18 months. In Fitch's view, Reliant Energy has adopted a constructive plan to improve its financial condition ahead of its next major corporate level debt maturity in March 2007. Recognizing the cyclical nature of its merchant energy business, Reliant Energy has streamlined its corporate structure and redesigned systems and processes with the goal of trimming annual costs by an additional $200 million by 2006. In addition, Reliant Energy chose not to exercise its option to acquire an 81% interest in Texas Genco, instead utilizing $917 million of cash proceeds raised from prior asset sales to reduce its bank credit facility. Reliant Energy continues to pursue asset sales, which are accretive to credit quality, the most recent being the agreement to sell 770 megawatts of New York upstate generating capacity for $900 million in cash. From an operational standpoint, Reliant Energy has taken measures to stabilize the performance of its wholesale merchant power segment, which remains exposed to weak market fundamentals across most U.S. regions. In contrast to prior strategies, Reliant Energy has become more focused on reducing the volatility associated with its merchant generating fleet by locking in a greater percentage of capacity over a two to three year time horizon, including the forward sale of in the money coal-fired capacity through 2006. While this approach tends to cap potential earnings upside, it should result in a more predictable cash flow stream over the next several years. In addition, Reliant Energy's retrenchment from speculative energy trading activities has further stabilized wholesale segment results. A credit concern is the potential shrinkage of the high profits and cash flow contributed by Reliant Energy's Texas retail electric business. Since the implementation of Texas electric deregulation in January 2002, retail operations have performed as designed, providing a partial hedge against wholesale earnings volatility. In particular, retail margins have benefited from Reliant Energy's ability to lock in favorable wholesale gas and power prices. In addition, customer loss has generally been lower than originally anticipated. However, the sustainability of this business could be impaired over time by increased competition and less favorable wholesale power pricing dynamics. In addition, the pending Texas true-up proceedings could trigger a near-term reduction in Reliant Energy's Houston in-territory gross margins in January 2005. Fitch expects Reliant Energy's consolidated leverage measures to gradually strengthen through 2006, even under a scenario that assumes limited recovery in current wholesale power market conditions and lower levels of retail energy cash flow performance. The ratio of consolidated debt (adjusted to include off-balance sheet debt and certain nonrecourse project financings) to EBITDAR could approach the mid 4.0x range by year-end 2005 versus 5.7x as of Dec. 31, 2003. In addition, Reliant Energy is required to apply the net cash proceeds from the pending upstate New York asset sale to reduce the Orion Power -- ORN -- New York/Midwest term loan facilities ($1.1 billion [net of restricted cash] outstanding as of June 30, 2004) scheduled to mature in October 2005. Early retirement of this debt would substantially improve Reliant Energy's ability to extract excess cash generated by ORN for debt service at the corporate level. Fitch notes that Reliant Energy has made substantial progress in resolving outstanding litigation and regulatory investigations, including the recent settlement of a March 2003 show cause order issued by the Federal Energy Regulatory Commission -- FERC -- related to Reliant Energy's Western energy trading activities. Remaining items of significance include the April 2004 criminal indictment of Reliant Energy's wholly owned subsidiary Reliant Energy Services and various civil and shareholder class action cases. Reliant Energy's current ratings and outlook reflects Fitch's expectation that these issues will ultimately be settled in a manner that will not have a substantially adverse near-term impact on overall liquidity. RIVERSIDE FOREST: Board Says Tolko's Hostile Bid Still Inadequate ----------------------------------------------------------------- Riverside Forest Products Limited (TSX: RFP) responded to Tolko's announcement that it will amend the minimum tender condition of its offer to acquire all of the outstanding common shares of Riverside it does not already own at a price of C$29.00 per share. Gordon W. Steele, Riverside Chairman, President and Chief Executive Officer, said: "In adjusting the terms of one of the many conditions to its offer, Tolko has done nothing to address the fundamental fact of the matter, which is that its offer is financially inadequate. We have been very pleased by the amount of interest we have received from a significant number of parties through the strategic review process and expect to be in a position to present Riverside shareholders with a compelling alternative to the Tolko bid in due course." As of the close of trading Wednesday, September 22, 2004, Tolko was offering Riverside shareholders $5.50 per share, or 16%, less than the public market price of Riverside shares. About Tolko Industries Ltd. Founded in 1961, Tolko is a privately owned forest products company employing over 2,400 people. Tolko has ten manufacturing divisions in British Columbia, Alberta, Saskatchewan and Manitoba, and produces dimension lumber, specialty kraft paper, plywood, oriented strand board, wood chips and engineered wood products which are sold to world markets. Tolko has been a shareholder of Riverside since 2000. Tolko is amalgamated under the Canada Business Corporations Act. Its head office is located at 3203-30th Avenue, Vernon, British Columbia, (PO Box 39) V1T 2C6. Tolko's telephone number is 250- 545-4411 and website is http://www.tolko.com/ About Riverside Forest Riverside Forest Products Limited is the fourth largest lumber producer in British Columbia with over 1.0 Bbf of annual capacity and an annual allowable cut of 3.1 million cubic metres. The company is also the second largest plywood and veneer producer in Canada. As reported in the Troubled Company Reporter on September 24, Tolko Industries Ltd. intends to vary its August 31, 2004 offer to acquire all of the outstanding common shares of Riverside Forest Products Limited by reducing the minimum tender condition currently contained in the offer from 75% to 51%. Under the terms of the varied offer, Tolko's obligation to take up and pay for shares will be subject to sufficient shares being tendered to the offer and not withdrawn so that, when combined with the 18.6% Tolko and its affiliates already own, Tolko would own at least 51% of Riverside's common shares, on a fully diluted basis. All other terms and conditions of the offer remain unchanged. Tolko has decided to reduce the minimum tender condition in response to comments made in Riverside's directors' circular which indicated that Tolko would be unable to complete its offer under the existing terms as directors and senior officers of Riverside holding 28.5% of the shares had advised the board of Riverside that they do not intend to tender their shares to Tolko's offer. Tolko expects to file and deliver a formal notice of variation today. The offer will continue to expire at 9:00 pm (Vancouver time) on October 6, 2004, unless extended or withdrawn prior to that time. SAMSONITE CORPORATION: Extends Exchange Offer Until October 1 ------------------------------------------------------------- Samsonite Corporation (OTC Bulletin Board: SAMC) extended its offer to exchange: (i) new Floating Rate Senior Notes due 2010 that have been registered under the Securities Act of 1933, as amended, for all of its outstanding Floating Rate Senior Notes due 2010; and (ii) new 8-7/8% Senior Subordinated Notes due 2011 that have been registered under the Securities Act of 1933, as amended, for all of its outstanding 8-7/8% Senior Subordinated Notes due 2011. The Exchange Offer, scheduled to expire at 5:00 p.m., New York City time, on September 23, 2004, will now expire at 5:00 p.m., New York City time, on October 1, 2004, unless further extended by Samsonite. All other terms, provisions and conditions of the exchange offer will remain in full force and effect. The terms of the new notes are substantially identical to the terms of the outstanding notes for which they are being exchanged, except that the new notes are not subject to the transfer restrictions and registration rights provisions applicable to the outstanding notes. Samsonite was informed by the exchange agent that, as of 5:00 p.m., New York City time, on September 23, 2004, approximately $204,815,000 aggregate principal amount of the outstanding 8-7/8% Senior Subordinated Notes had been tendered and approximately euro 89,500,000 aggregate principal amount of the outstanding Floating Rate Senior Notes had been tendered. The Bank of New York has been appointed as exchange agent for both the outstanding Floating Rate Senior Notes and the outstanding 8-7/8% Senior Subordinated Notes. Copies of the prospectus and other information relating to the Exchange Offer, including transmittal materials, may be obtained from the exchange agent. For the Floating Rate Senior Notes, contact: The Bank of New York 30 Canon Street Lower Ground Floor London, EC4M 6XH Attention: Ms. Julie McCarthy Telephone: (+44) 20 7964 7294 For the 8-7/8% Senior Subordinated Notes, contact: The Bank of New York Corporate Trust Operations Reorganization Unit 101 Barclay Street-7 East New York, NY 10286 Attention: Mr. Duong Nguyen Telephone: (212) 815-3687 Samsonite Corporation is one of the world's largest manufacturers and distributors of luggage and markets luggage, casual bags, backpacks, business cases and travel-related products under brands such as SAMSONITE(R), AMERICAN TOURISTER(R), LARK(R), HEDGREN(R) and SAMSONITE(R) black label. * * * As reported in the Troubled Company Reporter on May 6, 2004, Standard & Poor's Ratings Services assigned its 'B+' senior unsecured debt and 'B-' subordinated debt ratings to Samsonite Corp.'s proposed $325 million offering of euro-denominated floating-rate senior notes due 2011 and dollar-denominated senior subordinated notes due 2012. At the same time, Standard & Poor's raised all its outstanding ratings on luggage and travel-related products manufacturer Samsonite, including the corporate credit rating, which was raised to 'B+' from 'B'. The outlook is stable. SI CORP: S&P Places B Rating on Planned $230M Senior Secured Notes ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Chattanooga, Tennessee-based SI Corp. At the same time, Standard & Poor's assigned a 'B' rating to SI's proposed $230 million senior secured notes due October 2012. The rating on the notes, which will be secured by a first-priority lien on assets including property, plant and equipment, is one notch below the corporate credit rating, reflecting recovery prospects that are limited by the priority claims of lenders under a $100 million unrated asset-backed revolving credit facility. This facility is supported by a first-priority pledge of accounts receivable and inventory. The outlook is stable. Pro forma for the refinancing transaction, SI will have $261 million in total debt outstanding. "The ratings reflect SI's below-average business risk profile, a very aggressive financial position that is characterized by a heavy debt burden, and operating results that are vulnerable because of substantial customer concentration and exposure to volatile raw-material costs," said Standard & Poor's credit analyst George Williams. These factors are somewhat mitigated by a strong market share within the large flooring solutions unit, improved focus on product quality and efficiency, and an increased emphasis on product innovation and line extensions. With about $430 million in sales, SI is a well-established manufacturer of support and stabilization products for niche markets within the furnishing and construction materials business. Its product line consists of polypropylene-based industrial textiles used in a range of applications, including carpet backing for residential and commercial segments, furniture construction, liquid filtration, and construction projects. SOLECTRON CORP: To Webcast 4th Qtr. Financial Results Tomorrow -------------------------------------------------------------- Solectron Corporation (NYSE:SLR), a leading provider of electronics manufacturing and integrated supply chain services, will announce its financial results for the fourth quarter and fiscal 2004 shortly after 4 p.m. (EDT) tomorrow, Sept. 28. You are invited to listen to the company's regularly scheduled conference call at 4:30 p.m., live on the Internet. The news release and market-specific information about the company's earnings will be posted by 4:15 p.m. on the company's Web site at http://www.solectron.com/ To listen live over the Internet, log on via the Web address above to access the Webcast. You may register for the call on this Web site anytime prior to the start of the call. The call will be archived at http://www.solectron.com/investor/events.htm/ An audio replay will also be available from two hours after the conclusion of the call through Oct. 8. To access the replay, call (800) 642-1687 from within the United States, or (706) 645-9291 from outside the United States, and specify passcode 8711083. About the Company Solectron -- http://www.solectron.com/-- provides a full range of worldwide manufacturing and integrated supply chain services to the world's premier high-tech electronics companies. Solectron's offerings include new-product design and introduction services, materials management, product manufacturing, and product warranty and end-of-life support. The company is based in Milpitas, Calif., and had sales from continuing operations of $9.8 billion in fiscal 2003. * * * As reported in the Troubled Company Reporter on Sept. 1, 2004, Standard & Poor's Ratings Services assigned its 'B+' bank loan rating and its '2' recovery rating to Milpitas, California-based Solectron Corp.'s $500 million senior secured revolving credit facility due 2007. "The bank loan rating--which is rated the same as the company's corporate credit rating--and the company's recovery rating reflect Standard & Poor's expectation for substantial recovery of principal (80%-100%) by lenders in the event of a default or bankruptcy," said Standard & Poor's credit analyst Emile Courtney. At the same time, Standard & Poor's affirmed Solectron's corporate credit and other ratings. The outlook is positive. SOLUTIA INCORPORATED: Asks Court to Approve Deferral Agreement -------------------------------------------------------------- On April 29, 1999, Solutia, Inc., and FMC Corporation entered into a joint venture agreement to form Astaris, LLC, a Delaware limited liability company headquartered in St. Louis, Missouri. Astaris manufactures and sells phosphorus chemicals, phosphoric acid and phosphate salts used in foods, cleaners, water treatment and pharmaceuticals. In connection with Astaris' formation, Solutia and FMC each contributed its phosphorus chemicals business and facilities to Astaris in exchange for a 50% equity interest in the company. Solutia and FMC are equal members of Astaris. On April 1, 2000, concurrently with Solutia's and FMC's contributions to Astaris, Solutia and FMC independently entered into a Master Lease and Operating Agreement with Astaris. Pursuant to the Agreement, Solutia and FMC agreed to operate the facilities contributed to Astaris in exchange for payments by Astaris to them on account of the operating services rendered. Before the Petition Date, to reduce Astaris' cash flow deficits due to its operating restructuring, Astaris asked Solutia and FMC to modify the payment terms under the Joint Venture Agreement, the Operating Agreements and two related agreements so that it could defer payment of certain charges that are due and payable during the 24 consecutive calendar months beginning in October 2003 and ending in September 2005. On September 19, 2003, Solutia and FMC agreed to defer, on an equal basis, a portion of the fees and charges payable by Astaris during the Deferral Period, up to $27,000,000 each. Beginning in October 2003, Astaris started deferring payments. The Deferral Agreement Although Astaris, Solutia and FMC had agreed to the Deferral before the Petition Date, the parties had neither documented the terms and conditions of the Deferral nor set a specific time for Astaris' payment of the deferred fees and charges. Solutia wants to document the Deferral to clarify the time frame under which the Deferral would be paid and confirm the right of payment. Solutia believes that this would settle any disputes with respect to the Deferral, because it appeared that a legitimate dispute could exist, in particular as to the payment terms. To memorialize the Deferral, and finalize and settle the open terms and conditions, Solutia, Astaris and FMC have negotiated a deferral agreement. Pursuant to the parties' Deferral Agreement, Solutia and FMC will issue Astaris monthly invoices for services rendered or goods delivered under the Member Agreements and separately identify on their invoices the charges which are eligible for deferral and charges which are not subject to deferral. The Eligible Charges include: (a) amounts payable to Solutia or FMC under the Operating Agreements; (b) OPEB payments due to either Solutia or FMC in August 2004 and August 2005 under the Joint Venture Agreement; (c) amounts payable to FMC under the Pocatello Shutdown Agreement; and (d) amounts payable to FMC under the FMC Supply Agreement, other than payments for product supplied by FMC, which is produced by Solvay. Solutia and FMC have agreed that during the Deferral Period, Astaris may defer payment of Eligible Charges up to $27,000,000 payable to each of Solutia and FMC, but must pay any Non-Deferred Charges in accordance with the payment terms of the Member Agreements. To ensure that, as nearly as practicable, the agreed deferrals accrue equally and are paid equally to Solutia and FMC in view of their 50/50 ownership of Astaris, the Deferral Agreement provides that Astaris will pay to the Member with the highest total Eligible Charges for each month an amount that is equal to the difference between the higher and lower of the Members' total Eligible Charges invoiced for the month. Astaris' obligation to make an Equalizing Payment is subject to: -- adjustments for disputed invoices; -- the short-term deferral of any Equalizing Payment if Astaris' cash flow projections for the following three calendar months show that Total Free Liquidity, and after giving effect to the Equalizing Payment, would fall below $7,000,000 for any week during the forecast period; and -- the obligation to pay outstanding Short-Term Deferred Charges from prior periods before making any Equalizing Payment. In addition, if the total Eligible Charges invoiced by Solutia and FMC are equal in any given amount, the entire amount of each of Solutia's and FMC's Eligible Charges will be deferred. Astaris will maintain separate accounts for each of Solutia and FMC to track the amounts of charges deferred. If either Solutia's Deferred Charges Account or FMC's Deferred Charges Account reaches $27,000,000, Astaris may not defer any further Eligible Charges with respect to that Member until its Deferred Charges Account is reduced below $27,000,000. The parties agree that as of December 31, 2003, each of the Deferred Charges Accounts had a $2,171,351 balance, none of which consisted of Short-Term Deferred Charges. Ultimately, Astaris must pay the entire outstanding balance of the Deferred Charges Account for Solutia and FMC on or before September 30, 2005. Neither Solutia nor FMC will charge interest on any portion of its Deferred Charges Account except that each of Solutia and FMC reserve the right to seek interest from Astaris in the event of a payment default. Moreover, in the event that the balance in one Member's Deferred Charges Account exceeds the balance in the other Member's Deferred Charges Account by $500,000 or more for a 30-day period, Astaris will pay interest on the amount of the Account Imbalance in excess of $500,000. The parties acknowledge that nothing in the Deferral Agreement will constitute an assumption of any of the Member Agreements or affect Solutia's rights to reject or assume the Member Agreements. Accordingly, Solutia asks the Court to authorize and approve the Deferral Agreement. 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 Debtors 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. 23; Bankruptcy Creditors' Service, Inc., 215/945-7000) SOUTHWEST HOSPITAL: Wants to Hire J.H. Cohn as Financial Advisor ---------------------------------------------------------------- Southwest Hospital and Medical Center, Inc., asks the U.S. Bankruptcy Court for the Northern District of Georgia for permission to employ J.H. Cohn LLP as its accountant and financial advisor. J.H. Cohn will: a) advise and assist the Debtor in the preparation of financial information, including the Statement of Financial Affairs, monthly operating reports and other information that may be required by the Bankruptcy Court, the U.S. Trustee, and the Debtor's creditors and other parties in interest; b) assist the Debtor in preparing and analyzing cash collateral projections, financial statements, long-term cashflow projections, employee retention and incentive programs, other special projects or reports and provide expert testimony on them; c) attend meetings with parties in interest and their respective advisors; d) advise and assist the Debtor in identifying potential new lenders; e) advise and assist the Debtor in identifying restructuring alternatives, and the preparation and negotiation of a plan of reorganization, including advising the Debtor on the timing, nature and terms of the Debtor's modification alternatives to its existing debts; f) analyze creditor claims and prepare and evaluate litigation and claim objections, including providing expert testimony; and g) perform other accounting and financial consulting services requested by the Debtor and its counsel. Clifford A. Zucker, Certified Public Accountant, at J.H. Cohn, reports that the firm's professionals bill: Designation Hourly Rate ----------- ----------- Senior Partner $495 Partner 425 Director 385 Senior Manager & Sr. Consultant 330 Manager 300 Supervisor 275 Senior Accountant 230 Staff Accountant 175 Paraprofessional 120 J.H. Cohn does not have any interest adverse to the Debtor or its estate. Headquartered in Atlanta, Georgia, Southwest Hospital and Medical Center, Inc., operates a hospital. The Company filed for protection on September 9, 2004 (Bankr. N.D. Ga. Case No. 04-74967). G. Frank Nason, IV, Esq., at Lamberth, Cifelli, Stokes & Stout, PA, represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $10 million in assets and more than $10 million in debts. TANGO INC: Subsidiary Shows Signs of Success in September --------------------------------------------------------- Tango Pacific, a subsidiary of Tango Incorporated (OTCBB:TNGO), has been achieving the objectives as laid out by its management. Overall production is on target, shipping and billings have been running successfully, the installation of its new software is underway and the launch of Long Hard Ride has taken place. "I believe the company is on target to achieve its objective of generating $6.5 million in revenue for the next year, and the cost efficiencies from the second shift are beginning to filter into our cash flow by reducing our payroll costs. I am delighted with our overall success," said Todd Violette, Chairman and COO. About Tango Tango Incorporated is a leading garment manufacturing and distribution company, with a goal of becoming a dominant leader in the industry. Tango pursues opportunities, both domestically and internationally. Tango provides major branded apparel the ability to produce the highest quality merchandise, while protecting the integrity of their brand. Tango serves as a trusted ally, providing them with quality production and on-time delivery, with maximum efficiency and reliability. Tango becomes a business partner by providing economic solutions for development of their brand. Tango provides a work environment that is rewarding to its employees and at the same time has an aggressive plan for growth. Tango is currently producing for many major brands, including Nike, Nike Jordan and RocaWear. In its Form 10-QSB for the quarterly period ended April 30, 2004, filed with the Securities and Exchange Commission, Tango Inc. reported that, as of April 31, 2003 and 2004, its auditors expressed substantial doubt about the company's ability to continue as a going concern in light of continued net losses and working capital deficits. TITAN ENERGY: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Titan Energy Inc. P.O. Box 8146 Newport Beach, California 92658 Bankruptcy Case No.: 04-15889 Chapter 11 Petition Date: September 21, 2004 Court: Central District of California (Santa Ana) Judge: Robert W. Alberts Debtor's Counsel: John B. Laing, Esq. 10550 Sepulveda Boulevard, #104 Mission Hills, CA 91345 Tel: 818-837-1212 Total Assets: $1,793,200 Total Debts: $8,451,238 Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Western GECO $284,650 1001 Richmond Ave. Houston, TX 77252 John Montfort $161,974 29 Elm Street Fishkill, NY 12524 Kimball Family Trust $161,974 1329 Hwy. 395, Ste. 10 Gardenville, NV 84910 RPI Publishing, Inc. $161,974 Gemtech, Inc. $161,974 John C. Bult, TTEE $161,974 Charles Kovaleski $153,875 Fedhake & August $132,590 Mendelson Charitable $121,480 First Trust Corp. $95,564 Nancy Korpi $89,085 First Trust Corp. $85,846 The George and Elizabeth Gibbs Family $80,987 Limited Partnership Jack A. Kanz $80,987 L. Franklin Kemp $80,987 First Trust Corp. $80,987 Greeley Ortho. Center $80,987 First Trust Corp. $80,987 Trappe and Dusseault $80,987 Stephen Wischmeier $80,987 TRANSMONTAIGNE: S&P Places BB- Corp. Credit Rating on CreditWatch ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'BB-' corporate credit rating on TransMontaigne, Inc., on CreditWatch with developing implications. The rating action follows the announcement that TransMontaigne's board of directors approved the formation of a master limited partnership for certain of its assets (primarily assets from the company's terminal, pipeline, tug and barge businesses) and TransMontaigne would be the general partner and retain the distribution and marketing business. The CreditWatch listing with developing implications reflects the possibility of positive or negative rating actions based on an analysis of TransMontaigne's new corporate structure and business profile. "The formation of an MLP could lead TransMontaigne to concentrate its operations in activities with an improved risk profile and reduce the volatility of its cash flow," said Standard & Poor's credit analyst Paul Harvey. "However, a continued pursuit of trading activities within the MLP or at a closely related affiliate or subsidiary could lead to a lower rating given the limited tolerance for earnings variability of an MLP," continued Mr. Harvey. Standard & Poor's also said that it plans to meet with management in the near term and evaluate the impact of the proposed MLP structure as well as TransMontaigne's future business strategies. TRUMP HOTELS: Ends Talks with DLJ Merchant on Equity Investment --------------------------------------------------------------- By mutual agreement, Trump Hotels & Casino Resorts, Inc., (OTCBB: DJTC.OB) and DLJ Merchant Banking Partners III, L.P., terminated discussions regarding a potential equity investment by DLJ Merchant in the Company in connection with a potential restructuring of the debt securities of the Company's subsidiaries. The Company is now pursuing with its bondholders alternatives with respect to a potential restructuring of the debt securities of the Company's subsidiaries and a recapitalization of the Company. In addition, Donald J. Trump (a 56.4% beneficial owner of the Company's common stock) indicated that he may pursue a potential privatization of the Company. About the Company Through its subsidiaries, Trump Hotels & Casino owns and operates four properties and manages one property under the Trump brand name. Trump Hotels & Casino's owned assets include Trump Taj Mahal Casino Resort and Trump Plaza Hotel and Casino, located on the Boardwalk in Atlantic City, New Jersey, Trump Marina Hotel Casino, located in Atlantic City's Marina District, and the Trump Casino Hotel, a riverboat casino located in Gary, Indiana. In addition, the Company manages Trump 29 Casino, a Native American owned facility located near Palms Springs, California. Together, the properties comprise approximately 451,280 square feet of gaming space and 3,180 hotel rooms and suites. The Company is the sole vehicle through which Donald J. Trump conducts gaming activities and strives to provide customers with outstanding casino resort and entertainment experiences consistent with the Donald J. Trump standard of excellence. Trump Hotels & Casino is separate and distinct from Mr. Trump's real estate and other holdings. * * * As reported in the Troubled Company Reporter on August 11, 2004, Trump Hotels, Donald J. Trump and DLJ Merchant Banking Partners III, L.P., a private equity fund of Credit Suisse First Boston, reached an agreement in principle with a significant portion of noteholders of the Company's largest series of bonds to restructure the Company's public indebtedness and to recapitalize the Company. As part of the Recapitalization Plan, Mr. Trump and CSFB private equity would co-invest $400 million of equity into the recapitalized Company. Mr. Trump's investment in the recapitalized Company is intended to be approximately $70.9 million, $55 million of which would be in the form of a co-investment with CSFB private equity and the remainder of which would be invested through Mr. Trump's contribution of approximately $15.9 million principal amount of his Trump Casino Holdings' 17.625% Second Priority Mortgage Notes due 2010 and the granting to the recapitalized Company a new license agreement. Mr. Trump's beneficial ownership of the recapitalized Company's common stock is expected to be approximately 25%, on a fully diluted basis. Given the large number of noteholders, the Company intends to effect the transactions in a chapter 11 proceeding pursuant to a pre-negotiated plan of reorganization in order to implement the Recapitalization Plan in an efficient and timely manner. The Company intends to commence its chapter 11 case by the end of September 2004 and expects the Recapitalization Plan to be consummated in the first quarter of 2005. The consummation of the Recapitalization Plan is subject to a variety of conditions discussed below. The Company intends to maintain its current level of operations during the pendency of the proceedings, expects that its patrons and vendors would experience no change in the way the Company does business with them, and anticipates that the proposed plan of reorganization would not impair trade creditor claims. The Company intends to arrange for up to $100 million debtor-in- possession financing during the proceedings. UBS Investment Bank has been serving as the Company's financial advisors in connection with the Recapitalization Plan. UAL CORP: Wants to Assume & Assign Leases to CenterPoint -------------------------------------------------------- CenterPoint Properties Trust and UAL Corporation and its debtor- affiliates are parties to a Facilities Underlease dated Nov. 1, 2002. Pursuant to the Lease, CenterPoint constructed and leased to the Debtors a new parts storage warehouse and office headquarters building located at 10801 W. Irving Park Road, in Chicago, Illinois. The Debtors want to assume and assign to CenterPoint Properties Trust certain unexpired leases and a sublease of non-residential real property related to the Premises located at Seymour Avenue and Fleetwood Avenue, in Chicago, Illinois. The Debtors also want to settle and compromise certain controversies with CenterPoint relating to the leases and subleases. The Debtors are party to four unexpired leases: a) a Ground Lease with the City of Chicago; b) a Ground Sublease, with United Air Lines, Inc., as landlord and CenterPoint as subtenant, for 14 acres upon which CenterPoint has constructed a 185,280-square foot industrial office/warehouse facility; c) a Facility Underlease with CenterPoint as landlord and the Debtors as subtenant; and d) a Letter Agreement with the Debtors as landlord and AirLiance Materials, LLC, as subtenant. James H.M. Sprayregen, Esq., at Kirkland & Ellis, informs the Court that in the past months, CenterPoint and the Debtors have engaged in extensive and vigorous negotiations to resolve issues with the Leases. As a result, the Debtors and CenterPoint have entered into a confidential Term Sheet which provides that: 1) the Debtors will assume and assign the Leases to CenterPoint or its designee; 2) the Debtors will cure defaults under the Ground Lease, not to exceed $10,000. CenterPoint will cure other defaults; 3) CenterPoint will assume the Debtors' obligations under the Leases after an undisclosed date; 4) CenterPoint will pay the Debtors $100,000; 5) CenterPoint will pay the Debtors an additional $100,000 upon development and lease of four acres of undeveloped land on the Premises; 6) CenterPoint withdraws with prejudice its request for payment of administrative claim; and 7) the Debtors and CenterPoint mutually release one another for all claims under the Leases, except CenterPoint's general unsecured claim. Mr. Sprayregen tells the Court that the parties' agreement will allow the Debtors to avoid substantial continuing obligations under the Leases. It resolves CenterPoint's request for Administrative Expense Payment in a manner favorable to the Debtors. The Debtors also remove the threat of lease rejection claims and sidestep potential cure costs. Headquartered in Chicago, Illinois, UAL Corporation -- http://www.united.com/-- through United Air Lines, Inc., is the holding company for United Airlines -- the world's second largest air carrier. The Company filed for chapter 11 protection on December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $24,190,000,000 in assets and $22,787,000,000 in debts. (United Airlines Bankruptcy News, Issue No. 60; Bankruptcy Creditors' Service, Inc., 215/945-7000) UAL CORP: Inks Settlement Agreement with ACI & XL Insurance ----------------------------------------------------------- ACI Environmental, Inc., is an environmental contractor that specializes in asbestos removal, surface preparation and demolition services. Under terms of Contract No. 139473, dated November 17, 1997, the Debtors hired ACI to conduct asbestos abatement on portions of the first and second floors of the North Building at their World Headquarters. On August 11, 1999, a fire broke out at the North Building, where ACI was working, interrupting the Debtors' business. On August 8, 2003, the Debtors filed a civil lawsuit against ACI, among others, alleging that the damages caused by the fire were a result of ACI's negligent conduct. Winterthur International American Insurance Company, now known as XL Insurance America, Inc., provided coverage to the Debtors for property damage and business interruption losses. Pursuant to the Policy, XL Insurance paid the Debtors, minus the deductible, to repair the damaged property. As a result, XL Insurance became subrogated to the rights of United to the extent of the payments. The Debtors continue to pursue the Lawsuit against ACI, primarily on behalf of XL Insurance as their subrogee. James H.M. Sprayegen, Esq., at Kirkland & Ellis, says that ACI denies causing the fire. ACI argues that it is impossible to prove causation. ACI asserts that the risk of loss was borne by the Debtors and XL Insurance because the Debtors were contractually responsible to carry fire insurance to cover ACI's work. ACI also insists that XL Insurance waived its subrogation rights. In response, ACI filed a request to dismiss most of the counts in the Lawsuit on these grounds. The Debtors and XL Insurance believe that they can establish a causal relation between the damages and ACI's negligence. However, it is possible that the trial court would dismiss with prejudice the Debtors' complaint based on the contractual waiver provisions. Therefore, to avoid further expense and the potential for a litigation setback, the Debtors, XL Insurance and ACI have reached a Settlement Agreement that requires: a) ACI to pay the Debtors and XL Insurance $1,250,000, with $80,000 going to the Debtors for reimbursement of the deductible; and b) the Debtors and XL Insurance to release ACI and its insurers for any and all claims resulting from the fire. Mr. Sprayregen informs the Court that there are still two remaining defendants against which the Debtors and XL Insurance can pursue damages. Headquartered in Chicago, Illinois, UAL Corporation -- http://www.united.com/-- through United Air Lines, Inc., is the holding company for United Airlines -- the world's second largest air carrier. The Company filed for chapter 11 protection on December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $24,190,000,000 in assets and $22,787,000,000 in debts. (United Airlines Bankruptcy News, Issue No. 60; Bankruptcy Creditors' Service, Inc., 215/945-7000) UNITED AUBURN: S&P Upgrades Corporate Credit Rating to BB+ ---------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on the United Auburn Indian Community, including its corporate credit rating to 'BB+' from 'BB'. The outlook is stable. "The upgrade reflects our assessment that operating results at the United Auburn Indian's Thunder Valley Casino continue to be good, resulting in credit measures that are solid for the new rating," said Standard & Poor's credit analyst. Standard & Poor's expects that this trend will continue in the near term. Mr. Scerbo added, "Additionally, pursuant to the new compact with the state of California, we expect that the Tribe has installed additional slot machines at Thunder Valley, which is likely to further enhance operating results, despite increased costs associated withpayments to the state." The ratings on Auburn, Calfornia-based United Auburn Indian reflect its reliance on a single source of cash flow and an evolving competitive landscape. In addition, the Tribe's new compact with the state of California includes a revenue sharing arrangement, which modestly raises its cost structure. These factors are offset by the continued strong performance of the property, its high quality, good market demographics, and limited near-term competition in its surrounding area. Standard & Poor's expects that Thunder Valley's operating performance will continue to be solid given the quality of the facility, its limited direct competition and good market demographics. As a result, credit measures are expected to remain good for the rating. US AIRWAYS: U.S. Trustee Appoints Unsecured Creditors' Committee ---------------------------------------------------------------- Pursuant to Section 1102 of the Bankruptcy Code, Dennis J. Early, Assistant United States Trustee for Region 4, appoints 13 claimants to the Official Committee of Unsecured Creditors in US Airways' Chapter 11 cases: (1) Airbus North American Holdings, Inc. Attn: R. Douglas Greco, Senior Director, Sales Finance 198 Van Buren Street, Suite 300 Herndon, Virginia 20170-5335 E-Mail: Doug.greco@airbus.com (2) Air Line Pilots Association Attn: Kim Allen Snider 153 Maple Drive Warrendale, Pennsylvania 15086 E-Mail: kasnider@connettime.net (3) Electronic Data Systems Corporation Attn: Kevin O'Shaughnessy, Account Executive 2345 Crystal Drive, Suite H-285 Arlington, Virginia 2227 E-mail: kevin.oshaughnessy@eds.com (4) Wachovia Bank N.A. Attn: Robert L. Bice, II, Vice-President, Structured Finance Trust Services 401 S. Tryon St., NC1179 Charlotte, North Carolina 28117 E-mail: bob.bice@wachovia.com (5) International Association of Machinists and Aerospace Workers Attn: Jay R. Cronk, Asst. Transportation Coordinator 9000 Machinists Place Upper Marlboro, Maryland 20772-2687 E-mail: jcronk@iamaw.org (6) Association of Flight Attendants Attn: Perry Hayes, MEC Pres. 200 Marshall Drive Carapolis, Pennsylvania 15108 (7) LSG Sky Chefs, Inc. Attn: Janice L. Kiraly, Global Director-Credit & Collections 6191 North State Hwy. 161 Irving, Texas 75038 E-mail: Janice.kiraly@lsgskychefs.com (8) Pension Benefit Guaranty Corporation Attn: Andreas Wilkinson, Senior Financial Analyst 1200 K Street, NW, Suite 270 Washington, DC 20005-4026 E-Mail: Wilkinson.andreas@pbgc.gov (9) U. S. Bank National Association Attn: Robert Butzier One Federal Street - 3rd Floor Boston, Massachusetts 02111 E-mail: Robert.butzier@usbank.com (10) Sabre, Inc. Attn: Christine Vincenti-Potosky, Esq. 3150 Sabre Drive South Lake, Texas 76092 E-Mail: Christine.vincenti-potosky@sabre-holding.com (11) Bombardier Aerospace Attn: Francois Ouellette, VP Legal Services P.O. Box 6087, Station Centre-ville Montreal, Quebec, Canada H3C 3G9 E-Mail: Francois.oullette@notes.canadair.ca (12) Communications Workers of America, AFL-CIO Attn: Rick Braswell 501 Third Street, NW Washington, DC 20001 E-Mail: rickb@cwa-union.org (13) General Electric Attn: Eric M. Dull 120 Long Ridge Road Stamford, Connecticut 06927 E-Mail: Eric.dull@ge.com Headquartered in Arlington, Virginia, US Airways' primary business activity is the ownership of the common stock of: * US Airways, Inc., * Allegheny Airlines, Inc., * Piedmont Airlines, Inc., * PSA Airlines, Inc., * MidAtlantic Airways, Inc., * US Airways Leasing and Sales, Inc., * Material Services Company, Inc., and * Airways Assurance Limited, LLC. Under a chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another chapter 11 petition on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in its restructuring efforts. In the Company's second bankruptcy filing, it lists $8,805,972,000 in total assets and $8,702,437,000 in total debts. (US Airways Bankruptcy News, Issue No. 65; Bankruptcy Creditors' Service, Inc., 215/945-7000) US AIRWAYS: Wants to Honor Interline & Eight Other Agreements ------------------------------------------------------------- US Airways, Inc., and its debtor-affiliates ask Judge Mitchell of the U.S. Bankruptcy Court for the Eastern District of Virginia for permission to perform all their obligations under certain agreements that are essential to preserve their goodwill and to maintain public confidence in US Airways' services. Specifically, the Debtors want to honor their obligations under: -- the Bilateral Interline Agreements, -- the Alliance Agreements, -- the Code Share Agreements, -- the Global Distribution (Reservation) Systems Agreements, -- the Service Agreements, -- the Travel Agency Agreements, -- the Online Services Agreements, -- the Dividend Miles Agreements, and -- the Cargo Agreements. Bilateral Interline Agreements "Most, if not all, major air carriers participate in some form of bilateral interline agreement with other air carriers and industry service providers because of the tremendous operating efficiencies obtained through their usage," according to Lawrence E. Rifken, Esq., at McGuireWoods, LLP, in McLean, Virginia. Pursuant to Bilateral Interline Agreements, airlines agree to accept each other's tickets for transportation over another carrier's system. These agreements enable carriers and travel agents to issue a single ticket having flight coupons for travel on more than one airline. These agreements also provide customers with the comfort of knowing that if they miss a flight or if the flight they intended to take is late or is canceled, they can use their ticket with another carrier for a substitute flight. Bilateral Interline Agreements also facilitate the purchase of tickets involving multiple carriers and allow travel agents and airlines to write tickets with itineraries that involve more than one carrier. Mr. Rifken explains that the Bilateral Interline Agreements and related agreements are also the mechanism by which passengers' luggage is transferred from one airline to another. "If there were no such agreement in place, a US Airways passenger connecting to a United Airlines flight in Chicago, Illinois, would have to retrieve his luggage at the US Airways terminal in Chicago, bring it to United Airline's Chicago terminal and check it in there." Obviously, Mr. Rifken says, this would be an inefficient and time- consuming process for passengers. Bilateral Interline Agreements permit, among other things, the airlines to accomplish the transfer of luggage without unduly burdening passengers. Airlines and other industry service providers also agree to provide ground handling, special maintenance, skycap, and other passenger services for each other pursuant to the Bilateral Interline Agreements and related agreements. The reciprocal exchange of those services is efficient because airlines do not have to provide ground handling and special maintenance personnel and facilities at each airport to which the carrier flies. Similarly, airlines and other industry service providers agree to provide ground handling and other cargo related services for each other pursuant to these agreements and related agreements. These arrangements obviate extraneous cargo handling and the need to have separate personnel and facilities devoted to cargo at each airport to which the carrier services. The Debtors' inability to preserve these agreements would make it impossible to serve ticketed passengers on other carriers where the trip was comprised of one or more segments not flown by the Debtors. Similarly, other carriers would be unable to ticket passengers on a segment flown by the Debtors. Under Bilateral Interline Agreements, two carriers typically contract directly for interline and other services and provide for regular periodic settlement of their accounts, either directly or through a clearinghouse. Under these agreements, each party, among other things, is authorized to issue tickets for transportation of passengers and baggage over the lines of the other party. These agreements are normally in effect for one calendar month at a time, but for established carriers like US Airways, the normal practice is that these agreements are automatically renewed and remain in place unless and until they are affirmatively terminated. The Bilateral Interline Agreements typically refer to the multilateral interline agreements for most of the contract conditions, so the primary difference between the multilateral and Bilateral Interline Agreements is in the term and termination provisions. The Debtors also have bilateral interline relationships with a small number of carriers that do not settle accounts through either of the Clearinghouses. These airlines are directly billed by the Debtors each month. Alliance Agreements and Code Share Agreements Before the Petition Date, the Debtors entered into a series of bilateral and multilateral agreements with 14 carriers for cooperative marketing efforts. Additional airline carriers are expected to join the Star Alliance by the end of March 2005. The Star Alliance Agreements provide numerous benefits to the Debtors and their customers, including among others, significantly easier access to destinations served solely by the Star Alliance Airlines, streamlined ticketing baggage handling and check-in procedures, the ability for customers of the Debtors and the Star Alliance Airlines to earn frequent flyer miles on flights of the Debtors or the Star Alliance Airlines and reciprocal airport lounge access. The Debtors officially joined the Star Alliance on May 4, 2004. The Debtors also entered into marketing agreements and alliance expansion agreements with their Star Alliance partners. The Debtors expect to generate substantial revenue as a result of being a member airline of the Star Alliance. The Debtors also have a code share agreement and comprehensive marketing agreement with Star Alliance partner United Air Lines, Inc., and other subsidiaries or affiliates of UAL Corporation. Expanding beyond the benefits of membership in the Star Alliance, code share agreements allow the participating airlines to code share and provide single ticket and baggage check handling. Code share agreements also enable wider distribution of interline connections. The Debtors generate a substantial amount of incremental revenue as a result of the United Code Share Agreement. The Debtors have a similar code share agreement and comprehensive marketing agreement with other Star Alliance partners Lufthansa German Airlines and its subsidiaries and affiliates, Spanair and British Midland. The Debtors also have regional code share agreements with non-Star Alliance carriers, including certain carriers marketed under the US Airways' "GoCaribbean" brand like, Caribbean Sun Airways, Windward Island Airways, doing business as Winair and Bahamasair. The Debtors continue to actively develop similar code share agreements and comprehensive marketing agreements with other Star Alliance, non-Star Alliance, and regional airlines. As a direct result of the Alliance Agreements, the Debtors generate substantial amount of incremental revenue. Furthermore, the Alliance Agreements provide numerous other benefits to the Debtors and their customers, including, among others, significantly easier access to destinations served solely by Alliance Airlines, streamlined ticketing, baggage handling and check-in procedures, the ability for customers of the Debtors or the Alliance Airlines, to earn frequent flyer miles on flights of the Debtors or the Alliance Airlines and reciprocal airport lounge access. The Debtors expect that the Alliance Agreements will significantly increase the Debtors' revenues by allowing the Debtors access to more markets -- approximately 500 additional incremental airports -- and enabling the Debtors to offer their customers increased choices and convenience. Historically, the Debtors have been at a competitive disadvantage relative to other airlines due to their limited domestic and international scope. However, the Debtors believe that the Alliance Agreements will alleviate these disadvantages by giving them and their customers access to the Alliance Airlines' vast network of domestic and international destinations. The Debtors expect that the Alliance Agreements will lead to more passengers, higher load factors and a significant increase in revenues. Service Agreements The Debtors have air service agreements with certain commuter and other airlines, including, but not limited to, Air Midwest, Inc., Chautauqua Airlines, Inc., Colgan Air, Inc., Mesa Airlines, Inc., and Mesa Air Group, Inc., Shuttle America Corp. and Trans States Airlines, Inc., whereby these airlines offer air transportation of passengers and cargo between certain "feeder" airports and the Debtors' hub airports. In return, the Debtors provide certain of the Affiliate Airlines with various marketing, ground support and computer reservations services, which enable these Affiliate Airlines to continue operations. These carriers generally operate as US Airways Express and carried 7.3 million passengers in 2003, approximately 13% of the Debtors' passengers. These flights include many connections to the Debtors' hubs and many flights to smaller airports, which do not have alternative air service. Global Distribution (Reservation) Systems and Travel Agency Agreements In the course of their business, the Debtors use multiple Global Distribution Systems. A GDS is a computer system that operates through terminals located in travel agencies and stores information about available passenger air transportation. The GDS enables the travel agents to accept and record bookings of those services from remote locations. In addition to storing information, the GDSs also allow travel agents to make and confirm reservations, print and issue tickets automatically and perform the travel agency's internal accounting tasks. The GDSs are also used extensively by online travel agencies, like Travelocity, Expedia and Orbitz to gather travel and flight information and are therefore a key component to maintaining the Debtors' competitive position in the online travel market. Airline Carriers, including the Debtors, have agreements pursuant to which their flight schedules, fare information and seat availability are included in the databases of the GDSs. Nearly all travel agents in the United States utilize GDSs. The Debtors are parties to GDS Agreements covering many major GDSs, including, but not limited to, Amadeus Global Travel Distribution, Galileo, Sabre, and Worldspan. Sales made through travel agents, including online Web sites, comprise approximately 75% of the Debtors' revenues generated from air passenger transportation bookings, and comprise approximately 67% of the number of tickets sold. The Debtors are parties to numerous agreements related to their travel agency network. In the past, the Debtors incentivized travel agents primarily through a commission-based system, whereby a travel agent would receive a payment for each ticket sold based on a percentage of the ticket price up to a pre-set maximum amount. However, these payments have been eliminated, and the Debtors have moved toward a system based upon backend performance-based payments. This change is expected to result in significant cost savings to the Debtors. The Debtors estimate that less than 1% of the travel agencies with which the Debtors have agreements are potentially entitled to certain bonus payments. The Time-of-Ticketing Bonuses are normally in addition to the backend performance-based payments and are not memorialized in written contractual arrangements. These bonuses are normally provided only for specific origination and destination pairings and are provided to certain travel agencies based upon the geographic market in which the specific travel agency operates. These agreements are for a limited duration, normally less than six months. The Time-of-Ticketing Bonuses provide for commissions of between 3% and 10% and those payments are targeted in order to achieve certain goals, like improving the Debtors' performance on underperforming routes. In addition, the Debtors also maintain certain commission arrangements with certain travel agents located in Europe, Mexico and the Caribbean. The commissions provided under the International Commission Arrangements vary between 1% and 9%, and are generally decreasing due to competitive levels. The Debtors further incentivize certain travel agencies, including travel agencies not a party to Backend Performance Agreements or Time of-Ticketing Bonuses, through the provision of unique, soft- dollar arrangements. These non-contractual arrangements entitle the incentivized travel agencies to certain benefits from the Debtors, like travel certificates, subject to a service charge, or US Airways Club passes. The Debtors also have agreements pursuant to which certain travel agencies and other parties have the right to sell blocks of US Airways seats on certain flights. These parties fall into four general categories: (a) cruise line operators; (b) group travel providers; (c) European tour operators; and (d) charter flight groups. The Debtors also have agreements with various persons and entities known as general sales agents under which the Debtors have agreed to specially incentivize the GSAs for sales in a certain geographic region. The purpose of the GSA Agreements is to allow the Debtors to sell tickets in foreign locations that are not normally serviced by the Debtors. The GSAs normally sell tickets on the Debtors' flights to both travel agents and customers located within their geographic location and the services of the GSAs allow the Debtors to realize ticket sales through the issuance of multi-carrier itineraries. Thus, the GSA Agreements are critical to the Debtors' international marketing efforts. The Debtors also have agreements with certain counterparties, similar to their travel agents, to sell the Debtors' cargo services. The Cargo Agents are normally entitled to a commission or similar compensation on account of their services. Online Services Agreements The Debtors currently have an agreement with TRX, a World Travel Partners Company, whereby TRX current provides customer support for the Debtors' Web site, usairways.com, which is scheduled to terminate on September 30, 2004; however, the Debtors are in the process of transitioning their contractual relationship for these services to another provider effective October 1, 2004. Pursuant to the Online Services Agreements, the counterparties provide services including, without limitation, telephone support, refund/reissue support, help desk support, documentation, confirmation and customer communications. Cargo Agreements From September 1, 2004, the Debtors and Lufthansa Cargo AG have begun implementing a contract whereby Lufthansa provides certain sales and marketing functions for air cargo carried by the Debtors between Europe and the United States. As a result of the LH Cargo Contract, the Debtors expect to reduce its European air cargo expenses through the elimination of certain sales and marketing and support infrastructure. Also, as an integral part of the carriage of cargo, the Debtors routinely contract with freight-forwarders, truckers, couriers and other entities to transport cargo between the aircraft and/or the airport and the origin/destination address. In order for the Debtors to continue to serve current and future cargo customers, the Debtors need the ability to continue to honor all of their obligations under the Cargo Agreements in the ordinary course of business. Dividend Miles Agreements The Debtors are also parties to and beneficiaries of certain joint agreements related to their frequent flyer program, Dividend Miles, the frequent flyer programs of other airlines and the loyalty programs of other travel-related and non-travel-related vendors. * * * The Court authorizes the Debtors to continue honoring, performing, and exercising their rights and obligations in the ordinary course of business and in accordance with the terms of the Contracts; provided, however, that the honoring, performing, or exercising of those rights and obligations will not give rise to administrative claims solely as a result of the entry of the Order. Judge Mitchell lifts the automatic stay to permit the counterparties to the Contracts to participate in the routine billings and settlements in accordance with the terms of those contracts in the ordinary course of business. If no objections are timely filed, the Order will become final. Headquartered in Arlington, Virginia, US Airways' primary business activity is the ownership of the common stock of: * US Airways, Inc., * Allegheny Airlines, Inc., * Piedmont Airlines, Inc., * PSA Airlines, Inc., * MidAtlantic Airways, Inc., * US Airways Leasing and Sales, Inc., * Material Services Company, Inc., and * Airways Assurance Limited, LLC. Under a chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another chapter 11 petition on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq. at McGuireWoods LLP represent the Debtors in its restructuring efforts. In the Company's second bankruptcy filing, it lists $8,805,972,000 in total assets and $8,702,437,000 in total debts. (US Airways Bankruptcy News, Issue No. 65; Bankruptcy Creditors' Service, Inc., 215/945-7000) US AIRWAYS: Wants to Pay Postpetition Pension Obligations --------------------------------------------------------- US Airways, Inc., and its debtor-affiliates and subsidiaries asked the U.S. Bankruptcy Court for the Eastern District of Virginia for authority to make contributions to, and payments under, the employee pension plans attributable to work performed by US Airways' employees after the Petition Date. The contributions will constitute administrative expenses of US Airways' estate, whether or not they constitute ordinary course payments. US Airways believes that the pension obligations attributable to postpetition labor are administrative expense claims pursuant to Section 503(b) of the Bankruptcy Code. The postpetition accruals arise from postpetition work that benefits the estate. Brian P. Leitch, Esq., at Arnold & Porter, in Denver, Colorado, notes that under the Bankruptcy Code, the Debtors have authority to make administrative expense payments at the time of plan confirmation, but US Airways intends to pay the pension obligations arising from postpetition labor when they are otherwise due. US Airways does not intend to pay any contributions to or any benefits under the Pension Plans that are attributable to prepetition work by the Plan participants, including Prepetition Service Obligations that are not due until after the Petition Date. The Defined Benefit Plans The largest defined benefit plans sponsored by US Airways are the Pension Plan for Employees of US Airways, Inc., Who Are Represented by the International Association of Machinists and Aerospace Workers and the Retirement Plan for Flight Attendants in the Service of US Airways, Inc. As of January 1, 2004, the IAM Plan had 11,618 participants and the AFA Plan had 13,311 participants. For US Airways' bankruptcy filing, the Internal Revenue Code and the Employee Retirement Income Security Act require US Airways to make: (a) $110,500,000 in minimum funding contributions to the IAM Plan and the AFA Plan on September 15, 2004; and (b) $14,500,000 in minimum funding installment payments on October 15, 2004, and January 15, 2005. The September 15 contributions are attributable to services performed by plan participants before the Petition Date. The October 15, 2004, and January 15, 2005, contributions are minimum funding installment payments for the IAM Plan and AFA Plan for their 2004 plan years, a portion of which occurs prepetition. US Airways' estimated minimum funding contributions to the IAM Plan and the AFA Plan based on various actuarial and other assumptions for plan years 2005 through 2009, not taking into account any non-payment of the September 15, 2004, minimum funding contributions and assuming the plans are not frozen or terminated, would be: Year AFA Plan IAM Plan Total ---- ------------ ------------ ------------ 2005 $21,000,000 $55,200,000 $76,200,000 2006 50,800,000 77,800,000 128,600,000 2007 84,300,000 88,500,000 172,800,000 2008 43,900,000 58,600,000 102,500,000 2009 20,300,000 30,600,000 50,900,000 ---- ------------ ------------ ------------ Total $220,300,000 $310,700,000 $531,000,000 Defined Contribution Plans The largest defined contribution plans sponsored by US Airways are the Retirement Savings Plan for Pilots of US Airways, Inc., the US Airways, Inc. Employee Pension Plan, the US Airways, Inc., 401(k) Savings Plan and the US Airways, Inc. Employee Savings Plan. As of January 1, 2004, the Pilots Savings Plan had 3,804 participants, the Employee Pension Plan had 19,502 participants, the 401(k) Plan had 29,767 participants, and the Savings Plan had 18,830 participants. For US Airways' bankruptcy filing, the airline would be required during September through November 2004 to make $19,200,000 in aggregate contributions to the Pilots Savings Plan that arise from prepetition services by employees. Contributions to the other defined contribution plans for prepetition services also would be required during the postpetition period. Nonqualified Plans US Airways maintains nonqualified plans for various groups of employees. Under the nonqualified plans, US Airways credits benefit accruals to bookkeeping accounts established in the participants' names or makes contributions to a nonqualified trust on behalf of the participants. The nonqualified plans include the US Airways Funded Executive Defined Contribution Plan, the US Airways Unfunded Executive Defined Contribution Plan and the Nonqualified Plan for Pilots of US Airways, Inc. US Airways' prepetition service obligations under the nonqualified plans exceed $65,000,000. Multi-employer Plan Pursuant to collective bargaining agreements with the International Association of Machinists, US Airways makes contributions to the IAM National Pension Fund, which is a multi- employer plan as defined in Section 3(37) of ERISA. In general, US Airways' required contributions to the plan are in excess of $500,000 each month. Mr. Leitch discloses that US Airways is considering whether to freeze or initiate a distress termination of the IAM Plan and the AFA Plan later in the case. Substantial modifications will be made to other Pension Plans. Judge Mitchell will convene a hearing on October 7, 2004, to consider US Airways' request. Headquartered in Arlington, Virginia, US Airways' primary business activity is the ownership of the common stock of: * US Airways, Inc., * Allegheny Airlines, Inc., * Piedmont Airlines, Inc., * PSA Airlines, Inc., * MidAtlantic Airways, Inc., * US Airways Leasing and Sales, Inc., * Material Services Company, Inc., and * Airways Assurance Limited, LLC. Under a chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another chapter 11 petition on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq. at McGuireWoods LLP represent the Debtors in its restructuring efforts. In the Company's second bankruptcy filing, it lists $8,805,972,000 in total assets and $8,702,437,000 in total debts. (US Airways Bankruptcy News, Issue No. 64; Bankruptcy Creditors' Service, Inc., 215/945-7000) VANGUARD HEALTH: Blackstone Group Completes Major Investment ------------------------------------------------------------ The Blackstone Group, a private equity firm, have purchased a majority equity interest in Vanguard Health Systems, Inc., in a transaction valued at approximately $1.75 billion pursuant to a previously announced merger agreement. As a result of the merger transaction, Vanguard has a new parent company, VHS Holdings LLC. Vanguard, formed in 1997 by management and Morgan Stanley Capital Partners, owns and operates acute care hospitals and complementary healthcare facilities and services in urban and suburban markets. In connection with the transaction, both management (along with certain other existing shareholders) and Morgan Stanley Capital Partners reinvested in Holdings, together owning approximately 34%. Stephen A. Schwarzman, President and Chief Executive Officer of The Blackstone Group, said, "We are very pleased to partner with the Vanguard management team who have proven their ability to provide high quality patient care to communities across the United States. We look forward to helping them achieve their strategic growth plans." Charles N. Martin, Jr., Chairman and Chief Executive Officer of Vanguard, said, "The completion of this transaction provides Vanguard the ability to further invest in and improve the quality of care provided at our facilities. We welcome Blackstone as our newest partner and look forward to building and growing Vanguard together. We are also very pleased that our longstanding relationship with Morgan Stanley Capital Partners will continue." Howard I. Hoffen, Chairman and Chief Executive Officer of Morgan Stanley Capital Partners, said, "We are delighted to be able to continue as a significant investor in Vanguard and look forward to working together with Vanguard management and Blackstone to support Vanguard in its future endeavors." Banc of America Securities LLC and Citigroup Global Markets Inc. advised the Company in connection with the transaction. Bear Stearns & Co., Inc. advised Blackstone. Blackstone financed its equity investment with cash, and the transaction included a $475 million term loan under the Company's new credit facility and the private placement of $575 million aggregate principal amount of 9% Senior Subordinated Notes due 2014 and $216 million aggregate principal amount at maturity ($124.7 million in gross proceeds) of 11-1/4% Senior Discount Notes due 2015. In connection with the transaction, the Company repurchased substantially all of its 9-3/4% Senior Subordinated Notes due 2011 ($300 million principal amount). The Company's new credit facility includes a seven-year term loan facility in the aggregate principal amount of $800 million (of which $475 million was funded at closing) and a six-year $250 million revolving credit facility. About The Blackstone Group The Blackstone Group, a private investment and advisory firm with offices in New York, Atlanta, Boston, London and Hamburg, was founded in 1985. The firm has raised a total of approximately $32 billion for alternative asset investing since its formation. Over $14 billion of that has been for private equity investing, including Blackstone Capital Partners IV, the largest institutional private equity fund ever raised at $6.45 billion, and Blackstone Communications Partners I, the largest dedicated communications and media fund at over $2.0 billion. In addition to Private Equity Investing, The Blackstone Group's core businesses are Private Real Estate Investing, Corporate Debt Investing, Marketable Alternative Asset Management, Corporate Advisory, and Restructuring and Reorganization Advisory. About Morgan Stanley Capital Partners Morgan Stanley Capital Partners has invested over $7 billion of equity capital across a broad range of industries during its 19- year history. Morgan Stanley has announced that it has entered into definitive agreements under which Metalmark Capital LLC, an independent private equity firm established by the principals of Morgan Stanley Capital Partners, will, subject to certain customary closing conditions, manage the existing Morgan Stanley Capital Partners funds (comprising over $3 billion of private equity investments). Metalmark Capital LLC is expected to begin managing the Morgan Stanley Capital Partners funds in September, and to make new private equity investments across a broad range of industries, including its focus sectors of industrials, healthcare, consumer products and energy. About Vanguard Health Systems Vanguard Health Systems, Inc. owns and operates 16 acute care hospitals and complementary facilities and services in Chicago, Illinois; Phoenix, Arizona; Orange County, California and San Antonio, Texas. The Company's strategy is to develop locally branded, comprehensive healthcare delivery networks in urban markets. Vanguard will pursue acquisitions where there are opportunities to partner with leading delivery systems in new urban markets. Upon acquiring a facility or network of facilities, Vanguard implements strategic and operational improvement initiatives, including expanding services, strengthening relationships with physicians and managed care organizations, recruiting new physicians and upgrading information systems and other capital equipment. These strategies improve quality and network coverage in a cost effective and accessible manner for the communities we serve. * * * As reported in the Troubled Company Reporter on August 13, 2004, Standard & Poor's Ratings Services assigned its 'B' rating and its recovery rating of '3' to the proposed $1.05 billion senior secured bank credit facility of Vanguard Health Holding Co. II LLC and Vanguard Holding Co. II Inc. -- the co-borrowers. The facility is due in 2011. Vanguard Holding Co. II Inc. is a newly formed wholly owned subsidiary of Vanguard Health Holding Co. II LLC. The latter, in turn, is a newly formed wholly owned subsidiary of a new holding company that will be 100% owned by Vanguard Health Systems Inc. The new facility is rated the same as Vanguard Health Systems Inc.'s corporate credit rating; this and the '3' recovery rating mean that lenders are unlikely to realize full recovery of principal in the event of a bankruptcy, though meaningful recovery is likely (50%-80%). At the same time, Standard & Poor's assigned its 'CCC+' rating to $560 million in senior subordinated notes due 2014 that are obligations of the same co-borrowers as the bank credit facilities. A 'CCC+' rating has been assigned to $140 million in senior discount notes due 2015, issued by Vanguard Health Holding Co. I LLC and Vanguard Holding Co. I Inc. -- the co-borrowers. Standard & Poor's also lowered its corporate credit rating on hospital operator Vanguard Health Systems Inc. to 'B' from 'B+' and removed it from CreditWatch where it was placed on July 26, 2004. The CreditWatch listing followed the announcement that The Blackstone Group, a private equity firm, would acquire Vanguard Health Systems in a transaction estimated to be about $1.75 billion. As of June 30, 2004, Vanguard's total debt outstanding was $623 million. However, pro forma for the transaction, the debt will increase to approximately $1.2 billion. The outlook is stable. Upon completion of the Blackstone buyout, the ratings on Vanguard Health Systems' existing senior secured credit facility and subordinated notes will be withdrawn. "The downgrade reflects the significant increase in Vanguard's debt leverage pro forma for the Blackstone transaction and Standard & Poor's concern that the company's aggressive business policies will prevent it from soon earning a return consistent with a higher level of credit quality," said Standard & Poor's credit analyst David Peknay. WHITING PETROLEUM: Buys 17 W. Texas & New Mexico Fields for $345M ----------------------------------------------------------------- Whiting Petroleum Corporation (NYSE: WLL) reported the closing of its previously announced acquisition of interests in 17 fields in the Permian Basin of West Texas and Southeast New Mexico for $345 million in cash. The effective date of the acquisition is July 1, 2004. Concurrent with the closing, Whiting entered into a new credit facility with a syndicate of banks, which expires in four years and that increases Whiting's borrowing base to $480 million from $195 million under its prior credit facility. Whiting borrowed $400 million under the new credit facility in connection with the property acquisition described above and to refinance the debt outstanding under the prior credit facility. About Whiting Petroleum Whiting Petroleum Corporation -- http://www.whiting.com-- is a holding company for Whiting Oil and Gas Corporation and Equity Oil Company. Whiting Oil and Gas Corporation is a growing energy company based in Denver, Colorado that is engaged in oil and natural gas acquisition, exploitation, exploration and production activities primarily in the Gulf Coast/Permian Basin, Rocky Mountains, Michigan and Mid-Continent regions of the United States. The Company trades publicly under the symbol WLL on the New York Stock Exchange. * * * As reported in the Troubled Company Reporter on Sept. 07, 2004, Moody's placed Whiting Petroleum's ratings on review for downgrade upon its most recent debt funded acquisition, pending Whiting's review of its near-term funding plan. The $345 million purchase of 41.9 mmboe of oil and gas reserves (60% proven developed, or PD) in seventeen fields in the Permian Basin will, at least initially, be funded with bank debt. This sharply escalates leverage. Whiting had already completed three smaller all-debt funded acquisitions, totaling $98.5 million, since June 30, 2004, and would need to complete a substantial common equity offering before the end of the rating review to retain its ratings. If downgraded, the ratings would be reduced by one rating notch. Standard & Poor's Ratings Services also affirmed its 'B+' corporate credit rating on Whiting Petroleum Corp. and revised its outlook on the company to stable from positive. The rating action follows the company's announcement that it will acquire oil and gas properties in the Permian Basin for a total cash cost of about $345 million. The transaction will be funded entirely by draws under the company's revolving credit facility. "The outlook revision is based on concerns about the company's increased leverage, which weakens credit measures and constrains liquidity," said Standard & Poor's credit analyst Kimberly Stokes. "The stable outlook hinges on the success of Whiting's deleveraging program and the company's ability to achieve a more moderate financial profile." WINROCK GRASS: Case Summary & 21 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Winrock Grass Farm Inc. P.O. Box 3437 Little Rock, Arkansas 72203 Bankruptcy Case No.: 04-21283 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- FBW, LC 04-21288 Firethorne, LLC 04-21307 Belle Meade, LLC 04-21308 The Garders, LLC 04-21310 Type of Business: The Debtor produces and markets Meyer Z-52 Zoysiagrass in the United States. See http://www.winrockgrass.com/ Chapter 11 Petition Date: September 22, 2004 Court: Eastern District of Arkansas (Little Rock) Judge: James G. Mixon Debtors' Counsel: Charles Darwin Davidson, Sr., Esq. Stephen L. Gershner, Esq. Davidson Law Firm P.O. Box 1300 Little Rock, AR 72203-1300 Tel: 501-374-9977 Estimated Assets Estimated Debts ---------------- --------------- Winrock Grass Farm Inc. $10 M to $50 M $1 M to $10 M FBW, LC $500,000 to $1 M $100,000-$500,000 Firethorne, LLC $100,000-$500,000 [Unstated] Belle Meade, LLC $100,000-$500,000 $1 M to $10 M The Garders, LLC $100,000-$500,000 [Unstated] A. Winrock Grass Farm Inc.'s 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Signature Life Insurance Co. $3,900,000 P.O. Bos 3437 Little Rock, AR 72203 Bank of Little Rock $457,850 State Street Little Rock, AR 72201 Capital Bank $110,894 Castillo Fabrics $13,478 Capital Equipment, Inc. $13,298 AR Sports Entertainment $12,000 MHC Truck Leasing $11,287 Cit Group $10,181 Ryder Transportation $9,609 Aristotle $7,150 At Home Arkansas $7,140 Alliance One (John Deere Credit) $6,257 BKD $6,000 Today's THV $5,640 Arent, Fox, Kintner $5,432 GE Capital Modular Space $4,661 Alliance One (Farm Plan) $3,850 National Lift of Ark. $3,749 CNA Insurance Company $3,659 UPS $3,380 B. FBW, LC's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Quattlebaum, Grooms and Tull $13,000 WISCONSIN REALTY: Case Summary & 19 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Wisconsin Realty Ventures, LLC 699 Lakehurst Road Waukegan, Illinois 60085 Bankruptcy Case No.: 04-34976 Chapter 11 Petition Date: September 21, 2004 Court: Northern District of Illinois (Chicago) Judge: Eugene R. Wedoff Debtor's Counsel: Chester H. Foster, Jr., Esq. Foster & Kallen 3825 West 192nd Street Homewood, Illinois 60430 Tel: 708-799-6300 Fax: 708-799-6339 Total Assets: $1 Million to $10 Million Total Debts: $1 Million to $10 Million Debtor's 19 largest unsecured creditors: Entity Claim Amount ------ ------------ Martin Tuohy & Associates, Inc. $80,000 Payne & Dolan, Inc. $49,839 Kaelber Company $25,000 G. Mann Painting $20,000 Flannery Fire Protection, Inc. $16,197 Circle Concrete, Inc. $14,844 Wisconsin Department of Revenue $13,325 National Asset Management Enterprises, I Ultimate Drywall, Inc. $12,000 Landscapes by Gary Weiss $11,000 Richards, Ralph & Schwab, Chtd. $10,000 Greater Midwest Builders, Inc. $5,000 Dam, Snell & Taveime, Ltd. $2,725 JW Property Management, Inc. $900 The Hartford $640 Grow Rite Landscape Management LLC $600 WE Energies $600 Jamie White Real Estate $300 Pleasant Prairie Utilities $270 JCB Building Maintenance Repair $200 WORLDCOM INC: Asks Court to Bar Teleserve Systems' $7.5M Claims --------------------------------------------------------------- On January 9, 2003, Teleserve Systems, Inc., filed Claim Nos. 9449 and 9450 against Debtors MCI WorldCom Network Services, Inc., and Teleconnect Long Distance Services and Systems Co. Teleserve asserts $7,573,089 in prepetition claims for damages in connection with the Debtors' purported breach of the parties' Operator Services Agency Agreements. The Debtors allegedly underpaid commissions due Teleserve for commissionable calls made during the terms of the Agreements. Teleserve initially brought the claims before a judicially selected three-person arbitration panel in March 2000 pursuant to the American Arbitration Association's Rules for Commercial Dispute Resolution Procedures and the AAA's Supplementary Procedures for Large, Complex Disputes. Teleserve's Arbitration Statement sought "in excess of $100 Million" in damages, including requests for compensatory damages, lost profits, statutory interest, attorneys' fees, and punitive damages. In July 2000, the Debtors filed a Response and Counterclaim. In addition to denying liability for any of Teleserve's claims, the Debtors also sought judgment on Teleserve's negligence claims and on all claims for relief barred by the parties' Agreements, including lost profits, punitive damages, and attorneys' fees. On July 25, 2000, the Panel dismissed Teleserve's claim for punitive damages and deferred ruling on the remainder of the Debtors' request for judgment on Teleserve's claims. The Panel bifurcated the parties' arbitration proceeding into two phases -- liability and damages. On March 7, 2001, after extensive discovery, the parties commenced the hearing on the liability phase of Teleserve's claims. In June 2001, the Panel found that the Debtors breached the parties' Agreements by failing to commission Teleserve for commissionable operator service calls made during the period of the parties' contract. The Panel found in the Debtors' favor on all four of Teleserve's remaining claims. Following additional discovery, the damages phase of the parties' arbitration hearing commenced in late October 2001. Teleserve sought $67 million in damages plus 9% statutory interest. Teleserve also sought over $1.3 million in attorneys' fees. The Debtors sought judgment at the close of Teleserve's damages case-in-chief on the ground that Teleserve had not met its burden of proving legally recoverable damages. The Debtors offered evidence demonstrating that Teleserve's damages were in the range of $450,000 to $825,000. On July 1, 2002, the Panel issued its decision and awarded Teleserve $6,028,631 in damages and $1,262,022 in statutory interest. The Panel denied Teleserve's request for attorney's fees. Teleserve asked a New York state court to confirm the Panel's liability and damages awards and to reduce the awards to judgment against the Debtors. On July 8, 2002, the Debtors filed an application with the Panel to correct computational errors in the Panel's calculation of the damages award. The Debtors asserted that correction of the Panel's miscalculations substantially decreased Teleserve's damages from $6,028,631 to $1,331,627. The Debtors also filed in New York state court an opposition to Teleserve's request to confirm the arbitration awards. The Debtors argued that the request was premature because, based on the Panel's computational errors, the damages award was not final. On July 10, 2002, the New York state court adjourned Teleserve's request pending a final determination by the Panel on the matters relating to the damages award. Teleserve filed its own application for correction of the Panel's damages award. Teleserve argued that the corrections of the Panel's alleged miscalculations would increase Teleserve's damages from $6,028,631 plus statutory interest to $8,831,000 plus $3,929,326 in interest. Both the Debtors' and Teleserve's applications were pending with the Panel on the Petition Date. Against this backdrop, the Debtors ask Judge Gonzalez to disallow Teleserve's Claims to the extent Teleserve seeks recovery for the Debtors' conduct that allegedly occurred before November 21, 1994, the time the parties executed the Agreements. According to Andrew A. Jacobson, Esq., at Jenner & Block, in Chicago, Illinois, the broad release and merger clause of the parties' Agreements bar the Claims. The Agreements' release and merger provision is not limited to Breach of Contract Claims and precludes recovery for "all claims," including those sounding in tort and those Teleserve was unaware of at the time it executed the release. The Debtors also assert that at the time Teleserve executed the parties' Agreements, Teleserve either was directly aware of, or on alert for, all of the alleged problems underlying its Breach of Contract Claims against the Debtors, and therefore assumed the risk of the problems. Mr. Jacobson says Teleserve failed to carry its burden of proving by a preponderance of credible, competent evidence at the liability phase of the parties' arbitration proceeding each and every element of its Breach of Contract Claim. Teleserve did not demonstrate that the Debtors failed to properly commission Teleserve for commissionable, operator services calls made during the period of the Agreements. Teleserve alleges that the Debtors failed to disclose information to Teleserve. Under applicable law, Mr. Jacobson informs the Bankruptcy Court that the Debtors' disclosure decisions were protected by the business judgment rule. Furthermore, under the express terms of the parties' Agreements, Teleserve was an independent contractor of the Debtors. Under New York law, the Debtors had no duty to disclose to an independent contractor. Teleserve alleges that the Debtors breached the Agreements' implied duties of good faith and fair dealing. Mr. Jacobson contends that New York courts repeatedly have held that a breach of the implied duty of good faith and fair dealing claim that simply mirrors an accompanying breach of contract claim "cannot stand alone," "is subsumed within," or "is duplicative of" the breach of contract claim. Although Teleserve sought to rely on the testimony of its damages expert, Anthony Dannible, during the liability phase of the arbitration proceeding, Teleserve has refused to produce the data on which Mr. Dannible purportedly relied in reaching his conclusions. Mr. Jacobson also notes that Teleserve's claims are based on the liability phase testimony of Kenneth Niemo, one of its liability phase expert witnesses. Mr. Niemo, who testified that Teleserve should have received commissions from the Debtors for a certain number of commissionable calls per telephone per month, admitted that he: -- had not read the parties' Agreements; -- did not know what types of calls were commissionable under the parties' Agreements; and -- was unable to testify whether his calls per month estimate reflected calls that were commissionable under the Agreements. Mr. Niemo's testimony failed to meet the requirements of admissible expert testimony under New York law. Mr. Jacobson also argues that the Panel's damages decision either failed to enforce or was inconsistent with the terms of the parties' Agreements, including the Agreements' exclusive remedy provision. The Panel's damages decision was unsupported by or was in conflict with the evidence and market realities. At the damages phase of the arbitration hearing, Teleserve failed to meet its burden of proving legally and with reasonable certainty recoverable damages. For this reason, Teleserve was entitled to, at most, an award of nominal damages. The Agreements contained an express limitation of liability provision that barred Teleserve's recovery of any indirect, special, incidental, consequential, or punitive loss or damage of any kind, including lost profits. On the damages phase testimony, Mr. Dannible improperly advocated on Teleserve's behalf and failed to present testimony consistent with an objective evaluator of evidence. Mr. Dannible's damages phase testimony was not credible and was based on assumptions unsupported by or in conflict with the evidence and market realities. The Debtors believe that there are grounds for them to challenge or seek to vacate the Panel's liability and damages decisions pursuant to applicable law and the Commercial Rules of the AAA. The Panel's damages phase decision was based on computational errors that improperly inflated Teleserve's damages award. The Debtors also object to Teleserve's Claims to the extent Teleserve seeks to collect interest on its damage claims that allegedly accrued or matured after the Petition Date. Headquartered in Clinton, Mississippi, WorldCom, Inc., now known as MCI -- http://www.worldcom.com/-- is a pre-eminent global communications provider, operating in more than 65 countries and maintaining one of the most expansive IP networks in the world. The Company filed for chapter 11 protection on July 21, 2002 (Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, the Debtors listed $103,803,000,000 in assets and $45,897,000,000 in debts. The Bankruptcy Court confirmed WorldCom's Plan on October 31, 2003, and on April 20, 2004, the company formally emerged from U.S. Chapter 11 protection as MCI, Inc. (Worldcom Bankruptcy News, Issue No. 61; Bankruptcy Creditors' Service, Inc., 215/945-7000) * FTI Consulting Welcomes Dennis Shaughnessy as Chairman -------------------------------------------------------- Jack Dunn, Chairman, President and Chief Executive Officer of FTI Consulting, Inc. (NYSE: FCN), said that Board Member Dennis Shaughnessy would join the company as full-time executive Chairman of the Board effective October 18, 2004. FTI also announced that it had extended Mr. Dunn's contract with renewal options through 2010. Commenting on Mr. Shaughnessy, Mr. Dunn said, "I recently recommended to our Board that FTI separate the offices of Chairman of the Board and Chief Executive Officer. Happily, this recommendation coincided with the availability and enthusiastic interest of an exceptional candidate, Dennis Shaughnessy, to fill the role of executive Chairman." Mr. Shaughnessy joins FTI from Grotech Capital Group, a venture capital/merchant banking firm with approximately $1 billion under management. At Grotech, he was General Partner in charge of the Traditional Industries Group and participated in all phases of investment banking/corporate finance, from the identification of investments to financing to operational improvement to harvesting. Prior to Grotech, Mr. Shaughnessy was the Chief Executive Officer of a multinational oil services company with operations in Europe and Asia. While there, he built the company from $6 million in revenues to in excess of $125 million, took hands-on responsibility for management of operations abroad, and managed the successful sale of the company to Shell Oil. Mr. Dunn continued, "The opportunities that lie in front of FTI include potential acquisitions, expansion abroad, the integration of our practices into a mature and cohesive culture and, above all, the continued expansion of our intellectual capital base through the hiring and retention of the brilliant, highly skilled, highly valued, and highly sought after professionals that serve to distinguish our Company and its results from the rest of the pack. Based on his exceptional skills, credentials, accomplishments and contacts, not to mention a more than 10-year history as a director with our Company, I can't imagine a better person to help build FTI's strategic vision and capitalize on those opportunities than Dennis. In addition, teamed with Chief Operating Officer Dom DiNapoli, they constitute an exceptional combination of strategic and operational excellence that will be the envy of our industry and stand FTI in good stead for many years to come. On a personal note, I very much appreciate the Board's continued confidence in me and especially the opportunity to work with Dennis, Dom and the rest of my great fellow employees over the next several years." About FTI Consulting FTI is the premier provider of corporate finance/restructuring, forensic and litigation consulting, and economic consulting. Strategically located in 24 of the major US cities and London, FTI's total workforce of approximately 1,000 employees includes numerous PhDs, MBA's, CPAs, CIRAs and CFEs who are committed to delivering the highest level of service to clients. These clients include the world's largest corporations, financial institutions and law firms in matters involving financial and operational improvement and major litigation. * Gordon & Glickson Expands IT Practice with Three New Attorneys ---------------------------------------------------------------- Information technology law firm, Gordon & Glickson LLC, announced the addition of three attorneys to its Commercial IT Practice -- Naris Apichai, James Kovacs, and Brad Salmon. "We are very pleased to announce that Naris Apichai, James Kovacs, and Brad Salmon have joined us," Mark L. Gordon, Managing Partner, said. "These are great moves for us. As we enter our 25th year of commitment to the information technology practice, we continue to add to our breadth and depth of talent and these three experienced individuals are poised to make immediate contributions," Gordon concluded. Naris Apichai is experienced in the negotiation of complex outsourcing agreements and has represented clients in the sourcing of their data processing, IT infrastructure and business process functions. He advises clients on domestic and international information technology law involving data protection, privacy and regulatory issues and is experienced in the preparation of licensing, reseller, distribution, and service level agreements. Prior to joining our firm, Naris was an associate at Baker & McKenzie in Chicago. He received his J.D. from Northwestern University in 2001, and his B.S.B.A. from Washington University in 1997. James Kovacs, recently of Mayer, Brown, Rowe & Maw LLP, is experienced in drafting and negotiating contracts regarding complex technology and business process outsourcing, software development and licensing, consulting services agreements, alliance agreements and website hosting. He also represents clients in various technology, data privacy and electronic commerce issues. James received his J.D. from Harvard Law School in 2000, and his B.A., with high honors, from the University of Michigan in 1997. Brad Salmon advises clients in connection with the outsourcing of their data processing, IT infrastructure and business process functions. He is also experienced in drafting and negotiating consulting services agreements and agreements for the purchase, license and sale of software, hardware and related intellectual property. Prior to joining Gordon & Glickson, Brad was an associate with Mayer, Brown, Rowe & Maw LLP. He received his J.D., with honors, from The Ohio State University College of Law in 2000, and his B.A., Magna Cum Laude with Honors in the Liberal Arts, from The Ohio State University in 1996. About Gordon & Glickson Gordon & Glickson's professionals practice exclusively in the area of information technology law. This signature practice, which has gained international recognition for its success in addressing the complex issues that arise from the convergence of business and technology, is built on a foundation of conventional legal disciplines -- corporate, commercial, finance, intellectual property, and litigation. For more information about Gordon & Glickson, please visit http://www.ggtech.com/ * BOND PRICING: For the week of September 27 - October 1, 2004 -------------------------------------------------------------- Issuer Coupon Maturity Price ------ ------ -------- ----- American & Foreign Power 5.000% 03/01/30 72 AMR Corp. 9.000% 09/15/16 66 Burlington Northern 3.200% 01/01/45 58 Comcast Corp. 2.000% 10/15/29 43 Inland Fiber 9.625% 11/15/07 48 Missouri Pacific RR 4.750% 01/01/30 75 National Vision 12.000% 03/30/09 65 Northern Pacific Railway 3.000% 01/01/47 57 ********* 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, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Jazel P. Laureno, Cherry Soriano-Baaclo, Marjorie Sabijon, Terence Patrick F. Casquejo 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 ***