/raid1/www/Hosts/bankrupt/TCR_Public/041230.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, December 30, 2004, Vol. 8, No. 287
Headlines
A.C.E. ELEVATOR: Taps Rattet Pasternak as Bankruptcy Counsel
A.C.E. ELEVATOR: Look for Bankruptcy Schedules Jan. 20
ACTUANT CORP: Acquires Key Components & Closes Equity Offering
AIRNET COMMUNICATIONS: Meets Nasdaq Minimum Bid Price Requirement
AMCAST INDUSTRIAL: U.S. Trustee Picks 9-Member Creditors Committee
AMCAST INDUSTRIAL: Section 341(a) Meeting Slated for Jan. 19
AMERICAN RESIDENTIAL: Begins Trading Over the Counter
AMETEK INC: Moody's Reviews Ba1 Ratings for Possible Upgrade
ANY MOUNTAIN: Section 341(a) Meeting Slated for Jan. 21
ARI NETWORK: Updates Shareholders on Growth Strategies
ATA AIRLINES: Can Use ATSB Lenders' Cash Collateral Until Jan. 10
ATA AIRLINES: Gets Lease Decision Period Extended Until Jan. 4
ATHLETES FOOT: Hires Retail Consulting for 100-Store Lease Auction
CATHOLIC CHURCH: Counsel to Tucson Unknown Claimants' Rep. Resigns
CSK AUTO: Third Quarter Net Income Down to $14.4 Mil. from 2003
COEUR D'ALENE: Gets Record of Decision for Kensington Project
CORONET FOODS: U.S. Trustee Picks 7-Member Creditors Committee
CORONET FOODS: Nadler Nadler Approved as Committee Counsel
COTT CORP: Releases Sales, EBITDA & Earnings Guidance for 2005
COVANTA ENERGY: Bankr. Court Allows Lake County's Claim for $4.4 M
COVANTA ENERGY: Settles Dispute with SMG Allowing $6.4M Claim
COVANTA ENERGY: Amends Credit Pacts with Lenders Until Mar. 10
DELUXE CORPORATION: Extends 3-1/2% & 5-1/8% Senior Debt Swap
DII/KBR: Resolves Barracuda-Caratinga Issues with Petrobras
DII/KBR: Chairman R. Randall Harl will Retire in January 2005
ELARIO OLIVEIRA: Ruskin Moscou Approved as Bankruptcy Counsel
ELARIO OLIVEIRA: U.S. Trustee Picks 7-Member Creditors Committee
ENRON: District Court Affirms Denial of PBGC Ballot Correction
FEDERAL-MOGUL: Senior VP D. Sherbin & VP William Quigley to Resign
FIRST UNION: Fitch Affirms Class B Series 1997-3 at 'BB'
FOOTSTAR: Judge Hardin Confirms Amended Disclosure Statement
HERBALIFE LTD: Closes Sale of Common Shares & Pays Dividend
IMMUNE RESPONSE: Expands Multiple Sclerosis Clinical Program
INTEGRATED ELECTRICAL: Files Fiscal 2004 Financial Results
INTERSTATE BAKERIES: Creditors Panel Retains Kutak as Co-Counsel
KRAMONT REALTY: Names Brian Finnegan Senior Leasing Associate
MARINER HEALTH: Accepts Tendered 8-1/4% Notes for Purchase
NALCO HOLDING: Completes IPO-Related Debt Reduction
NAVIGATOR GAS: Judge Blackshear Allows Committee to Modify Plan
NETWORK INSTALLATION: Gets IT Project Order from Insurance Co.
NRG ENERGY: Files Certificate of Designations of Preferred Stock
PACIFIC GAS: Names Donna Jacobs Nuclear Services Vice President
PRICELINE.COM: SEC Declares Registration Statement Effective
PROSOFTTRAINING: Posts $340,000 Net Loss in First Quarter
QWEST COMMS: Launches Expanded Nationwide VoIP Service for Biz
RCN CORPORATION: Welcomes James Mooney as Board Chairman
RCN CORP: National Cable Objects to Debtors' Assumption of Pact
RCN CORP: Inks Pact Paving Way for Liberty Contract Assumption
RED BARN RESTAURANT: Case Summary & 89 Largest Unsecured Creditors
RITE AID: 3rd Qtr. Same Store Sales Climb 0.2% from Prior Year
SCHUFF INTERNATIONAL: Extends Consent Solicitation Until Jan. 7
STEWART ENTERPRISES: Earns $8.8 Million in Fourth Quarter
TODD MCFARLANE: Wants to Access Lender's Cash Collateral
TRESTLE HOLDINGS: Closes First Tranche of $3.5MM Private Offering
UAL CORP: Moves to Place 1997A Bond Funds into Escrow
ULTIMATE ELECTRONICS: Form 10-Q Discloses Bankruptcy Warning
URSTADT BIDDLE: Posts $18.6 Million Net Income in Fourth Quarter
WESTPOINT: Wants to Reject Panda Supply Agreement & Lease
WESTPOINT STEVENS: Will File T-Ink License Agreement Under Seal
WET SEAL: Expects to Close 150 Underperforming Stores in Feb.
* Lazard & Signatura Link to Expand Services in Brazil
* O'Melveny & Myers LLP Announces Partnership Class for 2005
* Sheppard Mullin Adds Two New Attorneys to Growing Practice
*********
A.C.E. ELEVATOR: Taps Rattet Pasternak as Bankruptcy Counsel
------------------------------------------------------------
A.C.E. Elevator Co., Inc., asks the U.S. Bankruptcy Court for the
Southern District of New York for permission to employ Rattet,
Pasternak & Gordon Oliver, LLP, as its bankruptcy counsel.
Rattet Pasternak will:
a) give the Debtor advice with respect to its powers and
duties as debtor-in-possession in the continued
management of its property and affairs;
b) negotiate with creditors and work out a plan of
reorganization and take the necessary legal steps in
order to effectuate such a plan including, if need be,
negotiations with the creditors and other parties in
interest;
c) prepare the necessary answers, orders, reports and other
legal papers that are required in this proceeding;
d) appear before the Court to protect the interests of the
Debtor and to represent the Debtor in all matters
pending before the Court; and
e) perform all other legal services for the Debtor which
may be necessary for the preservation of the Debtor's
estate and to promote the best interests of Debtor, its
creditors and its estate.
Jonathan S. Pasternak, Esq., is the lead attorney in this chapter
11 proceeding. Mr. Pasternak discloses his Firm's professionals'
current hourly rates:
Professional Rate
Robert L. Rattet $475
Jonathan S. Pasternak 395
Richard J. Rubin 375
James B. Glucksman 335
Arlene Gordon Oliver 350
Marisa Falero 220
Joseph C. Corneau 195
Julie A. Cvek 140
Paralegals 100
To the best of the Debtor's knowledge, Rattet Pasternak is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
Headquartered in New York, New York, A.C.E. Elevator Co., Inc., is
in the business of elevator and escalator maintenance, repairs,
construction and modernization. The Company filed for chapter 11
protection on Dec. 21, 2004 (Bankr. S.D.N.Y. Case No. 04-17994).
Jonathan S. Pasternak, Esq., at Rattet, Pasternak & Gordon Oliver,
LLP, represents the Debtor in its restructuring efforts. When the
Debtor filed for protection from its creditors, it listed
$5,285,000 in total assets and $7,700,000 in total debts.
A.C.E. ELEVATOR: Look for Bankruptcy Schedules Jan. 20
------------------------------------------------------
A.C.E. Elevator Co., Inc., asks the U.S. Bankruptcy Court for the
Southern District of New York for an extension, until Jan. 20,
2005, of the deadline to file their Schedules of Assets and
Liabilities and Statements of Financial Affairs.
According to A.C.E., the extension is necessary since its books
and records are being reviewed and updated in order to accurately
complete its schedules and statements.
Headquartered in New York, New York, A.C.E. Elevator Co., Inc., is
in the business of elevator and escalator maintenance, repairs,
construction and modernization. The Company filed for chapter 11
protection on Dec. 21, 2004 (Bankr. S.D.N.Y. Case No. 04-17994).
Jonathan S. Pasternak, Esq., at Rattet, Pasternak & Gordon Oliver,
LLP, represents the Debtor in its restructuring efforts. When the
Debtor filed for protection from its creditors, it listed
$5,285,000 in total assets and $7,700,000 in total debts.
ACTUANT CORP: Acquires Key Components & Closes Equity Offering
--------------------------------------------------------------
Actuant Corporation (NYSE:ATU) completed its acquisition of Key
Components, Inc. on December 27, 2004, and its public equity
offering on December 28, 2004. The company issued 2,875,000
shares of Class A common stock in the offering at a price of
$49.50 per share, which included 375,000 shares to cover
underwriter over-allotments. Immediately following the offering,
the company had approximately 26,900,000 Class A common shares
outstanding. Wachovia Securities served as sole book runner,
JPMorgan and UBS Investment Bank served as joint lead managers,
and Robert W. Baird & Co. and Bear, Stearns & Co. Inc. served as
co-managers for this offering.
Total consideration paid for the previously announced KCI
acquisition was approximately $315 million, including the
assumption of $80 million of KCI's 10.5% senior notes. The cash
portion of the KCI acquisition was funded with proceeds from $250
million of newly issued term loans under the company's senior
credit facility, which was amended concurrently with the closing
of the KCI acquisition. Actuant has initiated actions to redeem
all of the KCI Notes, and expects to complete the redemption in
January 2005. Cash proceeds from the equity offering, net of
underwriting discounts and expenses, were approximately $134
million and will be used to fund the KCI Notes redemption and
reduce revolving credit borrowings.
A copy of the final prospectus supplement and prospectus relating
to the offering may be obtained from:
Wachovia Securities
Attn: Equity Syndicate Desk
7 St. Paul Street, First Floor
Baltimore, Maryland 21202
These documents may also be obtained from the Securities and
Exchange Commission and over the Internet at the SEC's web site at
http://www.sec.gov/ Wachovia Securities is a trade name for
Wachovia Capital Markets, LLC.
Actuant, headquartered in Milwaukee, Wisconsin, is a diversified
industrial company with operations in over 20 countries. The
Actuant businesses are market leaders in highly engineered
position and motion control systems and branded hydraulic and
electrical tools. Products are offered under such established
brand names as A.W. Sperry, Dresco, Enerpac, Gardner Bender, Kopp,
Kwikee, Milwaukee Cylinder, Nielsen Sessions, Power-Packer, Power
Gear and Yvel. For further information on Actuant and its
business units, visit the Company's website at
http://www.actuant.com/
* * *
As reported in the Troubled Company Reporter on Nov. 12, 2004,
Standard & Poor's Ratings Services revised its outlook on Actuant
Corp. to positive from stable. At the same time, S&P affirmed its
rating on the Milwaukee, Wisconsin-based company.
As reported in the Troubled Company Reporter on May 5, 2004,
Standard & Poor's Ratings Services assigned its 'BB' rating to the
$250 million senior revolving credit facility of Actuant Corp.
AIRNET COMMUNICATIONS: Meets Nasdaq Minimum Bid Price Requirement
-----------------------------------------------------------------
AirNet Communications Corporation (NASDAQ:ANCCD) announced that it
has received notification from the Nasdaq Listing Qualifications
Department that AirNet has regained compliance with the minimum
bid price requirements for continued listing on the Nasdaq
National Market under Marketplace Rule 4450(a)(5).
On June 30, 2004, AirNet was notified that its common stock had
closed below the minimum bid price of $1.00 for a period of 30
consecutive business days, creating a condition of non-compliance
with the Marketplace Rules of The NASDAQ Stock Market. Since
then, the closing bid price of AirNet's common stock has been at
$1.00 per share or greater for at least 10 consecutive business
days. On December 23, 2004, Nasdaq advised AirNet that it has
regained compliance and the matter is now closed.
On December 28, 2004, SCP Private Equity Partners II, L.P.,
converted $2 million in principal amount of its senior secured
convertible note into 1,910,689 shares of AirNet's common stock.
In addition, on December 28, 2004, TECORE, Inc., converted $1
million in accrued interest on its senior secured convertible note
into 955,345 shares of AirNet's common stock. Both of these
conversions were voluntary and will assist AirNet in complying
with the stockholders' equity requirement set forth in continued
listing standard #1 described in Nasdaq Marketplace Rule 4450(a).
About AirNet
AirNet Communications Corporation is a leader in wireless base
stations and other telecommunications equipment that allow service
operators to cost-effectively and simultaneously offer high-speed
wireless data and voice services to mobile subscribers. AirNet's
patented broadband, software-defined AdaptaCell(R)
SuperCapacity(TM) adaptive array base station solution provides a
high-capacity base station with a software upgrade path to high-
speed data. The Company's AirSite(R) Backhaul Free(TM) base
station carries wireless voice and data signals back to the
wireline network, eliminating the need for a physical backhaul
link, thus reducing operating costs. The Company's RapidCell(TM)
base station provides government and military communications users
with up to 96 voice and data channels in a compact, rapidly
deployable design capable of processing multiple GSM protocols
simultaneously. AirNet has 69 patents issued or filed and has
received the coveted World Award for Best Technical Innovation
from the GSM Association, representing over 400 operators around
the world. More information about AirNet may be obtained by
visiting the AirNet Web site at http://www.airnetcom.com/
* * *
In its Form 10-Q for the quarterly period ended Sept. 30, 2004,
filed with the Securities and Exchange Commission, Airnet
Communications raised substantial doubt about its ability to
continue as a going concern.
"We have experienced net operating losses and negative cash flows
since inception and, as of September 30, 2004, had an accumulated
deficit of $262.4 million," the Company said in its SEC filing.
"Cash used in operating activities for the nine months ended
September 30, 2004, was $4.9 million. We expect to have a net
operating loss for at least the next five quarters. At Sept. 30,
2004, our principal source of liquidity was $9.0 million of cash
and cash equivalents and the commitment of two additional $1
million quarterly installment payments pursuant to the Securities
Purchase Agreement payable to us and accounts receivable totaling
$4.8 million. As of October 20, 2004, we had approximately
$5.5 million in revenue backlog. Our current 2004 operating plan,
discussed in more detail below, projects that cash generated from
planned revenue of $24 million combined with the $9.0 million on
hand at Sept. 30, 2004, and the future payments payable by TECORE
pursuant to the Purchase Agreement would be adequate to defer the
requirement for additional funding through the first quarter of
2005; however, there can be no assurance that proceeds from the
Purchase Agreement and future revenues will be adequate to sustain
operations through the first quarter of 2005."
AMCAST INDUSTRIAL: U.S. Trustee Picks 9-Member Creditors Committee
------------------------------------------------------------------
The United States Trustee for Region 9 appointed nine creditors
to serve on the Official Committee of Unsecured Creditors in
Amcast Industrial Corporation and its debtor-affiliates' chapter
11 cases:
1. Akzo Nobel
Attn: Stacey Draper
4150 E. 56th Street
Cleveland, Ohio 44105
Phone: 216-750-7484
2. Beck Aluminum Corporation
Attn: Bryan Beck
300 Allen Bradley Drive
Mayfield Heights, Ohio 44124
Phone: 216-861-4455 ext. 235
3. D&R Industries, Inc.
Attn: David Borkowski, Sr.
901 Seville Road
Wadsworth, Ohio 44281
Phone: 330-336-2631
4. I. Schumann & Co.
Attn: Scott Schumann
22500 Alexander Road
Bedford, Ohio 44146
Phone: 440-439-2300 ext. 3013
5. Kuntz Electroplating, Inc.
Attn: Terry Reider
851 Wilson Avenue
Kitchener, Ontario
Canada N2C 1J1
Phone: 519-893-1284 ext.3043
6. Lb Mold, Inc.
Attn: John D. Bondine
1031 S. Main Street
Edinburgh, Indiana 46124
Phone: 812-526-2030
7. John H. Shuey
8832 Muirfield Drive
Naples, Florida 34109
Phone: 239-254-9315
8. Lacks Wheel Trim Systems, LLC
Attn: Donald G. Burmeister
5460 Cascade Road SE
Grand Rapids, Michigan 49546
Phone: 616-956-7217
9. Pension Benefit Guaranty Corporation
Attn: Ajit Gadre
1200 K. Street N.W.
Washington, D.C. 20005
Phone: 202-326-4020 Ext. 3881
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 Dayton, Ohio, Amcast Industrial Corporation --
http://www.amcast.com/-- is a manufacturer and distributor of
technology-intensive metal products to end-users and supplier in
the automotive and plumbing industry. The Company and its debtor-
affiliates filed for chapter 11 protection on Nov. 30, 2004
(Bankr. S.D. Ohio Case No. 04-40504). Jennifer L. Maffett, Esq.,
at Thompson Hine LLP, represents the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed total assets of $104,968,000 and
total debts of $165,221,000.
AMCAST INDUSTRIAL: Section 341(a) Meeting Slated for Jan. 19
------------------------------------------------------------
The U.S. Trustee for Region 21 will convene a meeting of Amcast
Industrial Corporation and its debtor-affiliate's creditors at
1:30 p.m., on Jan. 19, 2004, at Suite 309, U.S. Bankruptcy Court,
120 West Third Street, Dayton, Ohio 45402. This is the first of
creditors required under U.S.C. Sec. 341(a) in all bankruptcy
cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Headquartered in Dayton, Ohio, Amcast Industrial Corporation --
http://www.amcast.com/-- is a manufacturer and distributor of
technology-intensive metal products to end-users and supplier in
the automotive and plumbing industry. The Company and its debtor-
affiliates filed for chapter 11 protection on Nov. 30, 2004
(Bankr. S.D. Ohio Case No. 04-40504). Jennifer L. Maffett, Esq.,
at Thompson Hine LLP, represents the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed total assets of $104,968,000 and
total debts of $165,221,000.
AMERICAN RESIDENTIAL: Begins Trading Over the Counter
-----------------------------------------------------
Vincent Rinehart, President & CEO of American Residential Funding,
Inc., (Pink Sheets:ARFG), a nationwide mortgage banking and
brokerage firm, has begun trading as a publicly held company.
Mr. Rinehart stated: "We are extremely pleased to begin this new
chapter of growth and expansion for AMRES. This new public market
opportunity will strengthen AMRES' business opportunities in
mortgage banking."
"AMRES is taking advantage of their years in the mortgage
industry. Currently closing over $1.5 Billion annually in home
loans as a broker, AMRES Mortgage Banking (a division of AMRES)
will first be expanding their banking services to their own branch
network"' said Rinehart. After the first of January, AMRES will
roll out a wholesale loan program to other mortgage brokers.
AMRES is a nationwide mortgage banker and broker licensed to
originate loans in over 30 states from over 100 branch locations.
They are entering their eighth year in business.
AMRES will remain a majority owned subsidiary of Anza Capital,
Inc. (AZAC.OB)
* * *
As reported in the Troubled Company Reporter on Nov. 18, 2004,
Fitch Ratings has taken rating actions on these American
Residential HELT 1998-1:
* Series 1998-1
-- Class M-1 affirmed at 'AA';
-- Class M-2 downgraded to 'A-' from 'A' and removed from
Rating Watch Negative;
-- Class B remains at 'CCC'.
The affirmation reflects credit enhancement consistent with future
loss expectations and affects $2,737,396 of outstanding
certificates.
The negative rating action on class M-2 relates to concerns
regarding the adequacy of credit enhancement in the light of
declining collateral performance. The downgrade affects $198,938
of outstanding certificates.
Since the class M-2 was placed on Rating Watch Negative in May of
2004, the credit enhancement -- in the form of subordination and
overcollateralization -- has increased from 13.31% to 15.85%.
However, the percentage of delinquent loans has increased from
28.53% to 36% and there have been two months in which losses have
exceeded excess spread. Furthermore, OC remains below target.
Currently OC stands at $100,263 compared with a target of
$490,904.
The pool factor (outstanding loan principal as a percentage of the
initial loan pool) is currently 23%.
AMETEK INC: Moody's Reviews Ba1 Ratings for Possible Upgrade
------------------------------------------------------------
Moody's Investors Service has put the ratings of Ametek Inc. on
review for possible upgrade.
Ratings under review for possible upgrade:
-- Ba1 $225 million 7.2% senior notes, due 2008,
-- Ba1 senior implied rating,
-- Ba1 senior unsecured issuer rating
The rating review reflects the company's improving credit profile
and will focus on:
1) the sustainability of revenue growth and operating margin
expansion,
2) the company's ability to generate free cash flow to meet
investment requirements,
3) evaluating the company's strategic plan and financial policy
to determine whether consistent and stable financial
performance can be sustained in highly cyclical and
competitive industrial end-markets, and
4) the company's appetite for shareholder enhancing activities.
During the LTM period ending September 30 2004, Ametek generated
about $110 million of free cash flow (operational cash flow minus
capex and dividends), which represents 23% of total debt. EBIT-to-
interest coverage improved to a solid 6.7x. Despite fully priced
2004 acquisitions that totaled $143 million through the first nine
months, the company's liquidity condition remained good. As of
September 30, 2004, about $184 million was available under its
$300 million committed unsecured revolver that has been amended to
extend its expiration date to 2009 from 2006.
Ametek Inc., headquartered in Paoli, Pennsylvania, is a leading
global manufacturer of electronic instruments and electric motors.
The company generated revenues of $1.091billion and EBITDA of $191
million in 2003.
ANY MOUNTAIN: Section 341(a) Meeting Slated for Jan. 21
-------------------------------------------------------
The United States Trustee for Region 17 will convene a meeting of
Any Mountain Ltd.'s creditors at 2:00 p.m., on Jan. 21, 2005, at
the Office of the U.S. Trustee located in 777 Sonoma Avenue,
Number 116 in Santa Rosa, California. This is the first meeting
of creditors required under 11 U.S.C. Sec. 341(a) in all
bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Headquartered in Corte Madera, California, Any Mountain Ltd,
operates ten specialty outdoor stores throughout the San Francisco
Bay Area. The Company filed for chapter 11 protection on Dec. 23,
2004 (Bankr. N.D. Calif. Case No. 04-12989). Michael C. Fallon,
Esq., of Santa Rosa, California represents the Debtor in its
restructuring efforts. When the Debtor filed for protection from
its creditors, it listed below $50,000 in assets and more than $1
million in debts.
ARI NETWORK: Updates Shareholders on Growth Strategies
------------------------------------------------------
ARI Network (OTCBB: ARIS), a leading provider of electronic
catalogs and related technology and services to increase sales and
profits for dealers in the manufactured equipment markets, updated
shareholders on its future growth strategies at its recent Annual
Meeting of Shareholders. At the meeting, Richard Weening and Bill
Mortimore were elected to serve on the Company's Board of
Directors for three years, and Wipfli, LLC was ratified as the
Company's external auditors for FY 2005.
In his annual "State of the Business" presentation, Brian E.
Dearing, chairman and chief executive officer of ARI, told
shareholders, "Our goal is to grow the business to $100 million in
sales over the next five years. Our strategies to accomplish this
include organic growth through expanding our relationships with
our strong base of over 28,000 manufactured equipment dealers and
developing new products, along with additional growth through
acquisitions."
"Our focus will continue to be on our primary customer base of
manufactured equipment dealers. We believe there are excellent
opportunities for ARI to build on our core electronic catalog
business by expanding into adjacent areas, such as integrated
marketing services, that will help dealers to better manage their
businesses. Over the last year, we've conducted one-on-one
interviews with dealers to find out what additional products and
services they would like ARI to offer. Our dealers told us that
they want ARI to help them increase their sales, profits and
productivity. We plan to expand our relationships with existing
dealers and attract new dealers by offering a broader product
suite that meets their needs," said Mr. Dearing.
Mr. Dearing said the Company's recent enhancements to
WebsiteSmart(TM) and introduction of ARI MailSmart(TM) are the
first steps in providing integrated marketing solutions for
dealers. The company also recently introduced ARI
ServiceSmart(TM), a fleet maintenance management solution for a
related customer base -- equipment owners. "Additional new
products for our markets are under development. As part of this
initiative, we recently invested $400,000 to acquire software that
will serve as the basis for a new ARI offering that will be
released later this winter," said Mr. Dearing.
"Our goal is that about half of our growth will come from
acquisitions. We have an active business development program that
seeks acquisitions that will help grow the company in a
combination of three ways: increasing our customer base, enhancing
our product portfolio and/or bringing talented people to our
organization. Our acquisition criteria include requirements that
they be a good fit with our existing business and be rapidly
accretive to earnings, cash flow, and revenue per share. We have
significantly strengthened our financial position over the past
few years and are happy to be back in the acquisition mode again,"
Mr. Dearing said.
Mr. Dearing said the Company also plans to grow its European
operations. "We have invested in new products and staffing for
this business and plan to convert this organization to the dealer-
centric model that has been so successful for us in the U.S. We
look forward to building on the established base we already have
in this market," Mr. Dearing added.
Mr. Dearing said he expected profit, cash flow and earnings before
interest, taxes, depreciation and amortization (EBITDA) to remain
strong in 2005, with overall revenue growth in the low-to mid-
single digits for the year.
A replay of the audio and a copy of Mr. Dearing's slide
presentation is available on ARI's website --
http://www.arinet.com/ To access the Webcast and/or the slide
presentation, click on the Investor Relations tab on the Company's
home page.
About ARI
ARI Network -- http://www.arinet.com/-- is a leading provider of
electronic parts catalogs and related technology and services to
increase sales and profits for dealers in the manufactured
equipment markets. ARI currently provides approximately 78 parts
catalogs (many of which contain multiple lines of equipment) for
approximately 65 equipment manufacturers in the U.S. and Europe.
More than 88,000 catalog subscriptions are provided through ARI to
more than 28,000 dealers and distributors in more than 120
countries in a dozen segments of the worldwide equipment market
including outdoor power, power sports, ag equipment, recreation
vehicle, floor maintenance, auto and truck parts aftermarket,
marine and construction. The Company builds and supports a full
suite of multi-media electronic catalog publishing and viewing
software for the Web or CD and provides expert catalog publishing
and consulting services. ARI also provides dealer marketing
services, including technology-enabled direct mail and a template-
based dealer website service that makes it quick and easy for an
equipment dealer to have a professional and attractive website. In
addition, ARI e-Catalog systems support a variety of electronic
pathways for parts orders, warranty claims and other transactions
between manufacturers and their networks of sales and service
points. ARI currently operates three offices in the United States
and one in Europe and has sales and service agents in England and
France providing marketing and support of its products and
services.
At Oct. 31, 2004, ARI Network's balance sheet showed a $6,054,000
stockholder's deficit, compared to a $6,551,000 deficit at
July 31, 2004.
ATA AIRLINES: Can Use ATSB Lenders' Cash Collateral Until Jan. 10
-----------------------------------------------------------------
ATA Airlines, its debtor-affiliates and Air Transportation and
Stabilization Board Lenders stipulate that the Debtors may use the
ATSB Lenders' cash collateral and other collateral through the
close of business on January 10, 2004.
In contemplation of the DIP financing facility to be entered into
between certain of the Debtors and Southwest Airlines Co., the
Debtors and the ATSB Lenders agree that:
(1) any and all events of default under the terms of the
Southwest DIP financing, or an order approving the
Southwest DIP financing, will be events of default under
the Final Cash Collateral Order; and
(2) any default under the Southwest DIP financing, or an order
approving the Southwest DIP financing, will constitute an
event of default under the Final Order.
The Debtors covenant with the ATSB Lenders to maintain:
(1) at least $29,815,904 in Available Cash during the
Extension Period;
(2) at least 80% of the Available Cash amount forecasted at
each weekend, with the applicable figures to be used
depending on whether the Debtors have received the
proceeds from the sale of the gates at Midway Airport to
Southwest Airlines:
Week Ending Available Cash 80% of Available Cash
----------- -------------- ---------------------
12/24/04 $43,702,504 $34,962,003
12/31/04 97,808,405 78,246,724
01/07/05 93,104,353 74,483,483
01/14/05 95,624,680 76,499,744
Accordingly, Judge Lorch approves the parties' Stipulation.
Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA
Holdings Corp. -- http://www.ata.com/-- is the nation's 10th
largest passenger carrier (based on revenue passenger miles) and
one of the nation's largest low-fare carriers. ATA has one of the
youngest, most fuel-efficient fleets among the major carriers,
featuring the new Boeing 737-800 and 757-300 aircraft. The
airline operates significant scheduled service from Chicago-
Midway, Hawaii, Indianapolis, New York and San Francisco to over
40 business and vacation destinations. Stock of parent company,
ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. The
Company and its debtor-affiliates filed for chapter 11 protection
on Oct. 26, 2004 (Bankr. S.D. Ind. Case No. 04-19866, 04-19868
through 04-19874). Terry E. Hall, Esq., at Baker & Daniels,
represents the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they listed
$745,159,000 in total assets and $940,521,000 in total debts.
(ATA Airlines Bankruptcy News, Issue No. 10; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
ATA AIRLINES: Gets Lease Decision Period Extended Until Jan. 4
--------------------------------------------------------------
Jeffrey Nelson, Esq., at Baker & Daniels, in Indianapolis,
Indiana, relates that ATA Airlines and its debtor-affiliates were
lessees or sublessees with respect to a number of unexpired non-
residential real property leases.
In this regard, Mr. Nelson tells the United States Bankruptcy
Court for the Southern District of Indiana that the Debtors are
unable to make a fully informed decision with regard to the Leases
within the initial 60-day period provided by Section 365(d)(4) of
the Bankruptcy Code.
As part of their restructuring efforts, the Debtors are in the
process of evaluating the property covered by the Leases. The
Debtors' decision with respect to each Lease depends in large part
on whether the location will play a future role under the Debtors'
plan or reorganization. Whether each Lease is assumed, assumed
and assigned, or rejected will depend, most significantly, on
whether the Debtors will continue operations at the location once
a plan of reorganization is implemented.
At this early stage in the Chapter 11 cases, Mr. Nelson submits
that the Debtors do not know the exact contours of their Plan and
which of the Leases the Plan will necessitate the Debtors to
assume, assume and assign, or reject.
Accordingly, the Debtors ask the Court to extend the time within
which they may assume, assume and assign, or reject unexpired non-
residential real property leases, to and including the earlier of
February 25, 2005, or the date on which a Plan is confirmed.
Mr. Nelson asserts that without the extension of the 60-day period
to address the Leases the Debtors:
(a) may be forced to assume liabilities under the Leases or
forego benefits under the Leases without sufficient
information; and
(b) will have less time to determine what impact the results
of the sale of their assets at Chicago Midway Airport may
have on their decisions regarding the Leases.
* * *
Judge Lorch extends the Debtors' Lease Decision Deadline, on an
interim basis, until January 4, 2005. The Court will consider the
entry of a further interim order or final order on the Debtors'
request at a hearing to be held on January 4.
Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA
Holdings Corp. -- http://www.ata.com/-- is the nation's 10th
largest passenger carrier (based on revenue passenger miles) and
one of the nation's largest low-fare carriers. ATA has one of the
youngest, most fuel-efficient fleets among the major carriers,
featuring the new Boeing 737-800 and 757-300 aircraft. The
airline operates significant scheduled service from Chicago-
Midway, Hawaii, Indianapolis, New York and San Francisco to over
40 business and vacation destinations. Stock of parent company,
ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. The
Company and its debtor-affiliates filed for chapter 11 protection
on Oct. 26, 2004 (Bankr. S.D. Ind. Case No. 04-19866, 04-19868
through 04-19874). Terry E. Hall, Esq., at Baker & Daniels,
represents the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they listed
$745,159,000 in total assets and $940,521,000 in total debts.
(ATA Airlines Bankruptcy News, Issue No. 10; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
ATHLETES FOOT: Hires Retail Consulting for 100-Store Lease Auction
------------------------------------------------------------------
Retail Consulting Services, Inc. has been retained by The Athletes
Foot Stores, a debtor in a Chapter 11 bankruptcy case in the
Southern District of New York, as the Debtor's Real Estate
Consultant.
Retail Consulting Services will be marketing over 100 retail store
leases nationwide that are set for auction on January 13, 2005.
Bids are due on January 11, 2005.
For more information or to see a list of stores or bid procedures,
please go to their web site at http://www.retailc.com/or contact
Spence Mehl or Warren Kiersh at 212. 239.1100.
Retail Consulting Services specializes in restructuring, valuation
and disposition of leased and fee owned properties for national
retailers. In addition to the real estate services, they are also
well known for their overall bankruptcy expertise and financial
advisory services. RCS has been involved with the restructuring
or sale of more than 150,000,000 square feet involving over 20,000
properties and leases. They have saved their clients over One
Billion Dollars in rental obligations.
Headquartered in New York, New York, Athlete's Foot Stores, LLC,
-- http://www.theathletesfoot.com/-- operates approximately
125 athletic footwear specialty retail stores in 25 states. The
Company and its debtor-affiliate filed for chapter 11 protection
on December 9, 2004 (Bankr. S.D.N.Y. Case No. 04-17779). Bonnie
Lynn Pollack, Esq., and John Howard Drucker, Esq., at Angel &
Frankel, P.C. represents the Debtors in their restructuring
efforts. When the Company filed for protection from its
creditors, it listed total assets of $33,672,000 and total debts
of $39,452,000.
CATHOLIC CHURCH: Counsel to Tucson Unknown Claimants' Rep. Resigns
------------------------------------------------------------------
To recall, A. Bates Butler, III, the Unknown Claims Representative
in the Diocese of Tucson's Chapter 11 case, sought and obtained
Judge Marlar's permission to retain Fennemore Craig, PC, as his
counsel, effective as of October 27, 2004.
Mr. Butler needs the assistance of counsel to properly perform his
responsibilities. Mr. Butler selected Fennemore Craig because the
firm has reasonable experience and is well qualified to represent
him in Tucson's Chapter 11 proceedings
Fennemore Craig Withdraws as Counsel
Cathy L. Reece, Esq., at Fennemore Craig, in Phoenix, Arizona,
advises that Catherine M. Woods, an associate at Fennemore
Craig's Phoenix office, had worked with the MacBan Law Offices
before her employment with Fennemore Craig on January 1, 2003.
During her stay at the MacBan Law Offices, Ms. Woods represented
the Diocese of Tucson and possibly other defendants in the sexual
abuse cases that led up to the 2002 sexual abuse settlement
referred to in Tucson's Disclosure Statement.
Although Fennemore Craig conducted an exhaustive conflict check at
the outset of its representation of A. Bates Butler III, the
Unknown Claims Representative in Tucson's Chapter 11 case, because
Fennemore Craig did not represent Tucson or have any involvement
in the 2002 Cases, the conflict system did not pick up Ms. Woods'
representation at her prior firm.
Promptly upon learning of Ms. Woods' prior representation,
Fennemore Craig established procedures to screen Ms. Woods from
any participation in the matter, or from having any contact with
Mr. Butler or any of the bankruptcy lawyers of Fennemore Craig
who, to date, have provided legal advice to Mr. Butler. Before
this procedure was established, Ms. Woods had not shared any
confidential information from her prior representation with
attorneys at Fennemore Craig.
Tucson and its counsel are aware of Ms. Woods' current employment
with Fennemore Craig, and have agreed and consented to Mr. Butler
continuing to serve as the Unknown Claims Representative.
Fennemore Craig believes that Ms. Woods' prior representation does
not in any way pose a conflict of interest or bankruptcy issue
that would interfere with the firm's continued representation of
Mr. Butler. However, in an abundance of caution and to avoid any
appearance of impropriety as well as to provide additional
screening of Ms. Woods from Mr. Butler, Fennemore Craig and Mr.
Butler have agreed that the firm will withdraw as counsel in the
matter.
Fennemore Craig will be filing a final fee application for the
services rendered to date and Ms. Reece and Mr. Butler will both
supplement their Verified Statements.
Mr. Butler has consented to the firm's withdrawal and will not be
prejudiced by the withdrawal at this time.
Consequently, Judge Marlar authorizes Fennemore Craig to withdraw
as Mr. Butler's counsel.
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., at Sussman
Shank LLP, represent the Portland Archdiocese in its restructuring
efforts. In its 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.
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., and Kasey C. Nye,
Esq., at Quarles & Brady Streich Lang LLP, represent the Tucson
Diocese.
The Roman Catholic Church of the Diocese of Spokane filed for
chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on
Dec. 6, 2004. Michael J. Paukert, Esq., at Paine, Hamblen,
Coffin, Brooke & Miller, LLP, represents the Spokane Archdiocese
in its restructuring efforts. When the Debtor filed for
protection from its creditors, it listed $11,162,938 in total
assets and $81,364,055 in total debts. (Catholic Church Bankruptcy
News, Issue No. 13; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
CSK AUTO: Third Quarter Net Income Down to $14.4 Mil. from 2003
---------------------------------------------------------------
CSK Auto Corp. (NYSE: CAO), the parent company of CSK Auto Inc., a
specialty retailer in the automotive aftermarket, reported its
financial results for the third quarter of fiscal 2004.
Financial Results
Thirteen Weeks Ended Oct. 31, 2004
Net sales for the 13 weeks ended Oct. 31, 2004 were $401.5
million, compared to $409.8 million for the 13 weeks ended Nov. 2,
2003. Same store sales decreased 3.2% in the third quarter of
fiscal 2004 as compared to the third quarter of fiscal 2003.
Gross profit was $190.9 million, or 47.5% of net sales, in the
third quarter of fiscal 2004 as compared to $192.2 million, or
46.9% of net sales, in the third quarter of fiscal 2003. Gross
profit, as a percent to sales, increased over the third quarter of
fiscal 2003 due to lower product acquisition costs on selected
items, improvements in our balance of sales through enhanced
category management, and our continued reduction in store
inventory shrinkage as a result of improved store procedures and
enhanced inventory control systems.
Operating profit for the third quarter of fiscal 2004 was $31.5
million compared to $36.9 million for the third quarter of fiscal
2003. The decrease in operating profit relates primarily to lower
sales, slightly higher advertising expenditures and benefit-
related expenses.
Interest expense for the third quarter of fiscal 2004 declined by
$4.6 million to $7.8 million from $12.4 million in the third
quarter of fiscal 2003 due to lower interest expense achieved as a
result of our refinancing completed in January 2004.
Net income for the third quarter of fiscal 2004 was $14.4 million,
compared to net income of $15.0 million for the third quarter of
fiscal 2003. Net income for the third quarter of fiscal 2003 was
negatively impacted by $0.2 million of costs related to a
secondary stock offering.
"Our financial performance for the third quarter, although
consistent with our prior guidance, continued to be adversely
impacted by a difficult sales environment," said Maynard Jenkins,
chairman and chief executive officer of CSK Auto Corp. "Since the
beginning of our second quarter, we have experienced lower than
anticipated sales. We believe our sales have been negatively
impacted by higher gas prices and general economic conditions.
Although we are not satisfied with our current sales performance,
our gross margin rate continued to improve due to lower product
acquisition costs and improved store inventory shrinkage results.
Additionally, we generated in excess of $73 million in operating
cash flow for the first three quarters of the year. We are focused
on our long-term objectives of maximizing the productivity within
our existing stores, debt reduction, and acceleration of our new
store growth, which will allow us to further leverage our fixed
expenses. We remain positive about the strength and growth
potential of the retail automotive aftermarket industry."
Thirty-nine Weeks Ended Oct. 31, 2004
Net sales for the 39 weeks ended Oct. 31, 2004 (the "39 weeks of
fiscal 2004") were $1,207.6 million, compared to $1,205.7 million
for the 39 weeks ended Nov. 2, 2003. Same store sales were flat
as compared to the 39 weeks of fiscal 2003.
Gross profit was $570.8 million, or 47.3% of net sales, in the 39
weeks of fiscal 2004, as compared to $560.9 million, or 46.5% of
net sales, in the 39 weeks of fiscal 2003. The improvement in
gross margin rates year over year has resulted from lower product
acquisition costs on selected items, improvements in our balance
of sales through enhanced category management, and reduced store
inventory shrinkage as a result of improved store procedures and
enhanced inventory control systems.
Operating profit for the 39 weeks of fiscal 2004 totaled $91.3
million, or 7.6% of net sales, compared to $98.3 million, or 8.2%
of net sales, for the 39 weeks of fiscal 2003. The decrease in
operating profit is primarily the result of higher advertising
expenditures and payroll and benefit-related expenses.
Interest expense for the 39 weeks of fiscal 2004 decreased to
$23.7 million from $39.6 million in the 39 weeks of fiscal 2003
due primarily to lower interest expense achieved as a result of
our refinancing completed in January 2004.
Net income for the 39 weeks of fiscal 2004 was $41.2 million, or
$0.89 per diluted share, compared to net income of $33.4 million,
or $0.73 per diluted share, for the 39 weeks of fiscal 2003. Net
income for the 39 weeks of fiscal 2003 was negatively impacted by
$4.3 million of costs related to debt retirement and $0.2 million
of costs associated with a secondary stock offering.
Outlook
Based on our third quarter sales performance and the strong 7.5%
same store sales increase in the fourth quarter of fiscal 2003, we
now expect same store sales to decline between 1.5% and 3.5%
during the fourth quarter. Assuming these results, we expect
fourth quarter net income of between $9.5 million and $12.0
million, or approximately $0.21 to $0.26 per diluted share, and
full-year net income of between $50.7 million to $53.2 million, or
$1.11 to $1.16 per diluted share (assuming approximately 46
million diluted shares outstanding), excluding any costs
associated with the planned redemption this month of the
approximately $15 million remaining balance of our 12% Senior
Notes. We also now expect free cash flow (a non-GAAP measure,
defined and described further below) for fiscal 2004 of
approximately $70 million.
* * *
As reported in the Troubled Company Reporter on Sept. 28, 2004,
Standard & Poor's Ratings Services revised the outlook on CSK
Auto, Inc., to stable from positive due to weaker-than-anticipated
second quarter comparable sales results and expectations that
sales will continue to be soft.
At the same time, Standard & Poor's affirmed its ratings on the
Phoenix, Arizona-based automotive parts and accessories retailer,
including its 'B+' corporate credit rating.
While operating performance improved over the past two years with
same-store sales increases of 7% and 6% for its 2003 and 2004
fiscal years (ended February), recent trends are deteriorating.
Comparable sales declined 2.5% in the second quarter, after 5%
growth in the first quarter. Although some of the decline
reflects a drop in hot weather-related replacement products (such
as air conditioning, cooling accessories, batteries, and starters)
due to a cool summer, prospects for the balance of the year are
not good. Management anticipates that same store sales will
decline 2.0% to 3.5% in the third quarter and be flat to negative
in the fourth quarter of 2004. Operating profit was also
negatively affected in the second quarter as expenses were not cut
in time to offset the lower revenues. "Hence, the anticipated
improvement in credit measures is not likely, rather, they are
expected to remain at levels consistent with current ratings over
the next year," said Standard & Poor's credit analyst Stella
Kapur.
COEUR D'ALENE: Gets Record of Decision for Kensington Project
-------------------------------------------------------------
Coeur d'Alene Mines Corporation (NYSE: CDE) has received the Final
Supplemental Environmental Impact Statement (FSEIS) and Record of
Decision (ROD) from the U.S. Forest Service for the Kensington
Gold Project in Alaska.
The issuance of the Final SEIS and ROD, which will be published in
the Federal Register December 23, now allows all other federal and
state permits to be completed. This is expected to occur in the
first quarter of 2005, with construction startup as soon as March.
"The issuance of the Final SEIS and Record of Decision is the
culmination of nearly three years of dedicated work by Coeur and
the various regulatory agencies to re-permit Kensington in its
currently optimized design," said Dennis E. Wheeler, Chairman and
Chief Executive Officer. "We are now in position to move ahead
with the most environmentally sound design and economically
practicable project."
"We appreciate the efforts of the Forest Service, Alaska Governor
Frank Murkowski and his Administration, and the City and Borough
of Juneau in completing their analysis of the project. We are
confident this project will demonstrate Coeur's leading approach
to sound environmental stewardship and resource development, one
we will all be proud of for many years to come. In addition, we
look forward to working cooperatively and timely with the Corps
of Engineers, EPA and the National Marine Fisheries Service as
they can now complete their permitting processes," Mr. Wheeler
added.
With initial production expected in 2006, Kensington is currently
designed to produce approximately 100,000 ounces of gold annually,
a 76% increase in Coeur's gold production over current levels,
with a mine life of ten years. Capital cost for Kensington is
anticipated to be $91.5 million, with per ounce operating costs of
approximately $220.
About the Company
Coeur d'Alene Mines Corporation is the world's largest primary
silver producer, as well as a significant, low-cost producer of
gold. The Company has mining interests in Nevada, Idaho, Alaska,
Argentina, Chile and Bolivia.
* * *
As reported in the Troubled Company Reporter on Oct. 4, 2004,
Standard & Poor's Ratings Services affirmed its 'B-' corporate
credit and senior unsecured debt ratings on Coeur D'Alene Mines
Corporation and removed the ratings from CreditWatch, where they
were placed on June 1, 2004, with positive implications.
The outlook is stable. Coeur D'Alene, an Idaho-based silver and
gold mining company, currently has about $180 million in debt.
CORONET FOODS: U.S. Trustee Picks 7-Member Creditors Committee
--------------------------------------------------------------
The United States Trustee for Region 4 appointed seven creditors
to serve on the Official Committee of Unsecured Creditors in
Coronet Foods, Inc.'s chapter 11 case:
1. AIM Dedicated Logistics
Attn: Rick Russo
1500 Trumbull Ave.
Girard, Ohio 44420
Phone: 330-759-4327 Ext. 112, Fax: 330-759-5528
2. Manpower Temporary Services
Attn: Aaron J. Rizer
48 First Street NE
Massillon, Ohio 44646
Phone: 330-830-8686 Ext. 215, Fax: 330-832-0444
3. International Paper/Box USA
Attn: Matthew Kreider
4049 Willow Lake Blvd.
Memphis, Tennessee 38118
Phone: 901-418-1064, Fax: 901-419-1236
4. Drifting Sunshine Enterprises
Attn: R. Edward Pierce
111 E. High Street
Liberty, Indiana 47353
Phone: 765-458-5165, Fax: 765-458-5526
5. Total Quality Logistics
Attn: Joe Hardiman
P.O. Box 799
Milford, Ohio 45150-0799
Phone: 513-831-2600 Ext. 2208, Fax: 513-965-5880
6. Henderson Trucking Co.
Attn: Josh Kaburick
#1 Industrial Park
Phone: 618-548-4667, Fax: 618-548-6204
7. Delta Express, Inc.
Attn: Robert W. Rollins
2520 East Outer Road North
Scott City, Missouri 63780
Phone: 573-334-6040 Ext. 30, Fax: 573-334-5998
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 Wheeling, West Virginia, Coronet Foods, Inc. --
http://www.coronetfoods.com/-- supplies fresh-cut products
to chain restaurants and retailers. The Company filed for chapter
11 protection on October 29, 2004 (Bankr. N.D. W.Va. Case No.
04-03822). Charles J. Kaiser Jr., Esq., and Denise Knouse-Snyder,
Esq., at Phillips, Gardill, Kaiser & Altmeyer, PLLC, represent the
Debtor in its restructuring. When the Debtor filed for protection
from its creditors, it listed estimated assets of $1 million to
$10 million and estimated debts of $10 million to $50 million.
CORONET FOODS: Nadler Nadler Approved as Committee Counsel
----------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of West
Virginia gave the Official Committee of Unsecured Creditors of
Coronet Foods, Inc., permission to employ Nadler Nadler & Burman
Co., L.P.A., as its counsel.
Nadler Nadler will:
a) assist the Committee in the exercise of oversight with
respect to the Debtor's affairs including all issues
impacting the Debtor in its chapter 11 case;
b) prepare on behalf of the Committee all necessary
applications, motions, orders, reports and other legal
papers;
c) appear in Court and at statutory meeting of creditors to
represent the interests of the Committee;
d) assist the Committee in the negotiation, formulation,
drafting and confirmation of a proposed plan of
reorganization and its related matters;
e) assist the Committee in the exercise of oversight with
respect to any transfer, pledge, conveyance, sale or other
liquidation of the Debtor's assets;
f) assist the Committee in its investigation of the assets,
liabilities, financial condition and operating issues of the
Debtor;
g) perform all other legal services to the Committee that are
appropriate and necessary for its interest.
Timothy M. Reardon, Esq., Michael A. Gallo, Esq., and Joseph C.
Lucci, Esq., are the lead attorneys for the Committee. Mr. Reardon
discloses that the Firm received a $50,000 retainer.
Mr. Reardon will charge at $210 per hour, while Mr. Gallo will
charge at $310 per hour and Mr. Lucci at $210 per hour. Mr.
Reardon relates that other attorneys who will perform services to
the Committee will charge from $150 to $310 per hour.
Nadler Nadler assures the Court that it does not represent any
interest adverse to the Committee, the Debtor or its estate.
Headquartered in Wheeling, West Virginia, Coronet Foods, Inc. --
http://www.coronetfoods.com/-- supplies fresh-cut products
to chain restaurants and retailers. The Company filed for chapter
11 protection on October 29, 2004 (Bankr. N.D. W.Va. Case No.
04-03822). Charles J. Kaiser Jr., Esq., and Denise Knouse-Snyder,
Esq., at Phillips, Gardill, Kaiser & Altmeyer, PLLC, represent the
Debtor in its restructuring. When the Debtor filed for protection
from its creditors, it listed estimated assets of $1 million to
$10 million and estimated debts of $10 million to $50 million.
COTT CORP: Releases Sales, EBITDA & Earnings Guidance for 2005
--------------------------------------------------------------
Cott Corporation (NYSE:COT; TSX:BCB), disclosed guidance for 2005.
Sales for 2005 are expected to grow 8 - 10%, EBITDA is anticipated
to be between $230 and $240 million. Earnings per diluted share
are projected to be in the range of $1.21 - $1.25. Capital
spending is estimated to be $95 million.
"We anticipate continued retailer brand growth in 2005, building
on the strong sales gains of this year," said John K. Sheppard,
Cott's President and CEO. "Our capacity action plan is on track
to deliver 52 million additional cases next year to support the US
business and our customers' needs," he added. Sheppard also noted
that start-up and other costs associated with the new plant being
built in Texas are expected to amount to approximately 3 cents
per share and are included in the EPS estimate of $1.21 to $1.25.
2004 Outlook
For the full year 2004 the company said it now anticipates that
results will be at the low end of current guidance, or slightly
below, as raw material costs have continued to exceed projections.
Current guidance is that sales for 2004 will grow in the range of
16% to 19%, EBITDA is expected to be between $210 and $215 million
and EPS in the range of $1.15 to $1.19. CAPEX is anticipated to be
$65 million for the year. Final results for 2004 will be
announced on January 28, 2005.
About the Company
Cott Corporation is the world's largest retailer brand soft drink
supplier, with the leading take home carbonated soft drink market
shares in this segment in its core markets of the United States,
Canada and the United Kingdom.
* * *
As reported in the Troubled Company Reporter on Sept. 2, 2004,
Standard & Poor's Rating Services revised its outlook for Cott
Corp. to positive from stable. At the same time, Standard &
Poor's affirmed its 'BB' long-term corporate credit and 'B+'
subordinated debt ratings on Toronto, Ontario-based Cott Corp.
Total debt outstanding was about US$362 million at July 3, 2004.
As reported in the Troubled Company Reporter on Aug. 23, 2004,
Moody's Investors Service upgraded the ratings for Cott
Corporation recognizing the company's strong and consistent
financial and operating performance throughout the recent past and
affirming Moody's expectation of continued success over the
ratings horizon.
COVANTA ENERGY: Bankr. Court Allows Lake County's Claim for $4.4 M
------------------------------------------------------------------
On June 20, 2003, Covanta Lake, Inc., commenced an adversary
proceeding against Lake County seeking monetary damages and the
disallowance of the Lake Tax Claim as an offset against amounts
the Debtor alleged were otherwise owed to the Debtor by Lake
County under a service agreement between them.
Under the confirmed Plan of Reorganization, as well as the
Settlement Agreement entered into between Lake County and the
Debtor, all disputes between them are being resolved, and the
Adversary Proceeding will be dismissed. The Plan further provides
that all allowed claims asserted by the Lake County Tax Collector
will be paid in full, in cash, on or after the Effective Date of
the Plan.
Subsequent to the filing of the Lake Tax Claim, the Lake County
Tax Assessor assessed additional postpetition taxes against the
Debtor. The Lake County Tax Assessor asserts that the Debtor now
owes, calculated through December 31, 2004, prepetition and
postpetition taxes, interest and penalties with respect to the
taxes totaling in excess of $6 million.
The Debtor does not object to the principal amount of the taxes
sought by the Lake County Tax Collector. However, it opposes the
interest rates used by the Lake County Tax Collector and any
penalties sought to be assessed.
Covanta Lake II asks the Court to reduce and fix the amount of the
Asserted Claim, including the Lake Tax Claim to:
2001 - $1,265,410
2002 - 1,232,601
2003 - 1,134,083
2004 - 828,634
----------
Total: $4,460,728
The Debtor further asks the Court to allow the Asserted Claim for
$4,460,728.
* * *
Judge Blackshear sustains Covanta Lake II's objection and allows
the Lake County Tax Collector's claim for $4,460,728, which
includes all principal and accrued interest through December 31,
2004, in full and complete satisfaction of all claims of the Lake
County Tax Collector.
Headquartered in Fairfield, New Jersey, Covanta Energy Corporation
-- http://www.covantaenergy.com/-- is a publicly traded holding
company whose subsidiaries develop, own or operate power
generation facilities and water and wastewater facilities in the
United States and abroad. The Company filed for Chapter 11
protection on April 1, 2002 (Bankr. S.D.N.Y. Case No. 02-40826).
Deborah M. Buell, Esq., and James L. Bromley, Esq., at Cleary,
Gottlieb, Steen & Hamilton represent the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed $3,280,378,000 in assets and
$3,031,462,000 in liabilities. On March 10, 2004, Covanta Energy
Corporation and its core subsidiaries emerged from chapter 11 as a
wholly owned subsidiary of Danielson Holding Corporation. Some of
Covanta's non-core subsidiaries have liquidated under separate
chapter 11 plans. (Covanta Bankruptcy News, Issue No. 72;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
COVANTA ENERGY: Settles Dispute with SMG Allowing $6.4M Claim
-------------------------------------------------------------
On March 29, 2000, Aramark Corporation and Covanta Energy
Corporation, formerly known as Ogden Corporation, entered into an
Ogden Food & Beverage Concessions & Venue Management Acquisition
Agreement.
Under the Agreement, Aramark purchased all of the assets of Ogden
Entertainment, Inc., from Covanta, through the purchase of all
issued and outstanding capital stock. Ogden Entertainment held
all of Covanta Energy Corp.'s rights and interests in certain of
its food and beverage concession and venue management businesses.
The Agreement contemplated that certain of Ogden Entertainment's
venue management-related assets would concurrently be sold by
Aramark to SMG, a third-party beneficiary of the Agreement.
Accordingly, Aramark sold to SMG certain of Ogden Entertainment's
venue management-related assets.
The Agreement also provided for certain post-closing adjustments
to the purchase price, as well as indemnification for any breaches
of the representations, warranties and covenants set forth in the
Agreement, and for certain retained liabilities.
Subsequently, SMG filed four claims against Covanta Energy Corp.:
-- Claim No. 2704 for $3,132,204 for a purchase price
adjustment under the Agreement;
-- Claim No. 2706 in an unliquidated amount for
indemnification under the Agreement; and
-- Claim No. 2705, amended by Claim No. 2988, for losses
related to excluded liabilities under the Agreement.
To avoid further litigation, Covanta Energy Corp. and SMG
stipulate and agree that:
(1) the claims are allowed and fixed in these amounts:
-- $670,000 for Claim No. 2704;
-- $105,000 for Claim No. 2988; and
-- $5,625,000 for Claim No. 2706;
(2) Claim No. 2705 is disallowed in full and expunged as
amended and superceded by Claim No. 2988; and
(3) Covanta's request to subordinate SMG's claims is
withdrawn, and SMG's claims will not be subordinated.
Judge Blackshear approves the stipulation in its entirety.
Headquartered in Fairfield, New Jersey, Covanta Energy Corporation
-- http://www.covantaenergy.com/-- is a publicly traded holding
company whose subsidiaries develop, own or operate power
generation facilities and water and wastewater facilities in the
United States and abroad. The Company filed for Chapter 11
protection on April 1, 2002 (Bankr. S.D.N.Y. Case No. 02-40826).
Deborah M. Buell, Esq., and James L. Bromley, Esq., at Cleary,
Gottlieb, Steen & Hamilton represent the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed $3,280,378,000 in assets and
$3,031,462,000 in liabilities. On March 10, 2004, Covanta Energy
Corporation and its core subsidiaries emerged from chapter 11 as a
wholly owned subsidiary of Danielson Holding Corporation. Some of
Covanta's non-core subsidiaries have liquidated under separate
chapter 11 plans. (Covanta Bankruptcy News, Issue No. 72;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
COVANTA ENERGY: Amends Credit Pacts with Lenders Until Mar. 10
--------------------------------------------------------------
Timothy J. Simpson, Senior Vice President, General Counsel and
Secretary of Covanta Energy Corporation informs the Securities and
Exchange Commission that on December 15, 2004, Covanta Energy
Corporation, together with certain of its subsidiaries, entered
into a First Amendment to Credit Agreement with certain lenders,
Bank of America, N.A., as Administrative Agent, and Deutsche Bank
Securities, Inc., as Documentation Agent. The Amendment modified
the terms of the Credit Agreement, dated as of March 10, 2004, by
and among the parties.
Also on December 15, 2004, Covanta Energy Corp., together with its
borrower subsidiaries, entered into a First Amendment to
Credit Agreement with certain lenders and Bank One, N.A., as
Administrative Agent. The Amendment modified the terms of the
Credit Agreement, dated as of March 10, 2004, by and among the
parties.
The Amendments each modified the minimum consolidated net worth
covenant of Covanta and its subsidiaries set forth in the Credit
Agreements. In addition, both Amendments revised the Credit
Agreements to permit Covanta Energy Corp. and its subsidiaries to
terminate, sell and assign obligations relating to certain
landfill gas and wastewater projects, and to restructure the
organization of certain biomass facilities.
A full-text copy of the First Lien Amendment is available at no
charge at:
http://www.sec.gov/Archives/edgar/data/73902/000095013704011188/c90556exv10w1.txt
A full-text copy of the Second Lien Amendment is available at no
charge at:
http://www.sec.gov/Archives/edgar/data/73902/000095013704011188/c90556exv10w2.txt
Headquartered in Fairfield, New Jersey, Covanta Energy Corporation
-- http://www.covantaenergy.com/-- is a publicly traded holding
company whose subsidiaries develop, own or operate power
generation facilities and water and wastewater facilities in the
United States and abroad. The Company filed for Chapter 11
protection on April 1, 2002 (Bankr. S.D.N.Y. Case No. 02-40826).
Deborah M. Buell, Esq., and James L. Bromley, Esq., at Cleary,
Gottlieb, Steen & Hamilton represent the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed $3,280,378,000 in assets and
$3,031,462,000 in liabilities. On March 10, 2004, Covanta Energy
Corporation and its core subsidiaries emerged from chapter 11 as a
wholly owned subsidiary of Danielson Holding Corporation. Some of
Covanta's non-core subsidiaries have liquidated under separate
chapter 11 plans. (Covanta Bankruptcy News, Issue No. 72;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
DELUXE CORPORATION: Extends 3-1/2% & 5-1/8% Senior Debt Swap
------------------------------------------------------------
Deluxe Corporation (NYSE: DLX) announced that it has extended its
offer to exchange up to $325 million aggregate principal amount of
its 3-1/2% Senior Notes due 2007, Series B, and up to $275 million
aggregate principal of its 5-1/8% Senior Notes due 2014, Series B,
that have been registered under the Securities Act of 1933, for a
like principal amount of its issued and outstanding 3-1/2% Senior
Notes due 2007 and 5-1/8% Senior Notes due 2014, respectively,
which have not been registered under the Securities Act of 1933
(the "Old 2007 Notes" and the "Old 2014 Notes," respectively).
The Exchange Offer, which was originally scheduled to expire at
5:00 p.m. New York City time on December 27, 2004, will now expire
at 5:00 p.m. New York City time on January 7, 2005, unless further
extended.
As of 5:00 p.m. New York City time on December 27, 2004,
approximately $324,750,000 aggregate principal amount of the Old
2007 Notes had been tendered for exchange, representing
approximately 99% of the total outstanding principal amount of the
Old 2007 Notes, and approximately $244,750,000 aggregate principal
amount of the Old 2014 Notes had been tendered for exchange,
representing approximately 89% of the total outstanding principal
amount of the Old 2014 Notes.
This announcement is not an offer to exchange, or the solicitation
of an offer to exchange, with respect to the Old 2007 Notes and
the Old 2014 Notes. The Exchange Offer is being made solely by a
prospectus dated September 28, 2004, and the Exchange Offer, as
extended hereby, remains subject to the terms and conditions
stated therein.
About Deluxe
Deluxe Corporation, through its industry-leading businesses and
brands, helps financial institutions and small businesses better
manage, promote, and grow their businesses. The Company uses
direct marketing, distributors, and a North American sales force
to provide a wide range of customized products and services:
* personalized printed items (checks, forms, business cards,
stationery, greeting cards, labels, and shipping/packaging
supplies),
* promotional products and merchandising materials,
* fraud prevention services, and
* customer retention programs.
The Company also sells personalized checks and accessories
directly to consumers. For more information about Deluxe, visit
http://www.deluxe.com/
At Sept. 30, 2004, Deluxe Corporation's balance sheet showed a
$213,777,000 stockholders' deficit, compared to a $298,083,000 at
Dec. 31, 2003.
DII/KBR: Resolves Barracuda-Caratinga Issues with Petrobras
-----------------------------------------------------------
Halliburton (NYSE:HAL) announced that its KBR subsidiary has
finalized an agreement with Petrobras that resolves all
outstanding issues regarding the Barracuda-Caratinga project.
"We are very happy to have this issue behind us and look forward
to the sail away of the Caratinga vessel," said Andrew Lane,
Halliburton's chief operating officer. "We take great pride in
the fact that Halliburton has contributed to the transformation
and rebirth of the offshore and marine industry in Brazil."
The terms of the agreement confirming the previously announced
non-binding agreement in October 2004 include the release of all
claims of all parties and the settlement of change orders and
revisions of some project milestones.
KBR was awarded the $2.5 billion contract by Barracuda & Caratinga
Leasing Company (BCLC) on a full engineering, procurement,
installation and construction (EPIC) basis, including construction
of 54 wells, fabrication and installation of flow lines and
risers, construction and installation of the two FPSOs, and the
commissioning, start-up and operations support for both fields.
All project management services have been executed from KBR's
project office in Rio de Janeiro.
KBR is a global engineering, construction, technology and services
company. Whether designing an LNG facility, serving as a defense
industry contractor, or providing small capital construction, KBR
delivers world-class service and performance. KBR employs more
than 60,000 people in 43 countries around the world.
Currently celebrating its 85th anniversary, Halliburton 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, DII Industries, LLC, is the
direct or indirect parent of BPM Minerals, LLC, Kellogg Brown &
Root, Inc., Mid-Valley, Inc., KBR Technical Services, Inc.,
Kellogg Brown & Root Engineering Corporation, Kellogg Brown & Root
International, Inc., (Delaware), and Kellogg Brown & Root
International, Inc., (Panama). KBR and its subsidiaries provide a
wide range of services to energy and industrial customers and
government entities in over 100 countries. DII has no business
operations. DII and its debtor-affiliates filed a prepackaged
chapter 11 petition 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. On June 30, 2004, the
Debtors listed $6.255 billion in total assets and $5.295 billion
in total liabilities. (DII & KBR Bankruptcy News, Issue No. 24;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
DII/KBR: Chairman R. Randall Harl will Retire in January 2005
-------------------------------------------------------------
Halliburton recently disclosed in a regulatory filing with the
Securities and Exchange Commission that R. Randall Harl, 54, will
be leaving his position as Kellogg, Brown & Root, Inc.'s
Chairman. Mr. Harl will be taking an early retirement effective
January 1, 2005.
Headquartered in Houston, Texas, DII Industries, LLC, is the
direct or indirect parent of BPM Minerals, LLC, Kellogg Brown &
Root, Inc., Mid-Valley, Inc., KBR Technical Services, Inc.,
Kellogg Brown & Root Engineering Corporation, Kellogg Brown & Root
International, Inc., (Delaware), and Kellogg Brown & Root
International, Inc., (Panama). KBR and its subsidiaries provide a
wide range of services to energy and industrial customers and
government entities in over 100 countries. DII has no business
operations. DII and its debtor-affiliates filed a prepackaged
chapter 11 petition 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. On June 30, 2004, the
Debtors listed $6.255 billion in total assets and $5.295 billion
in total liabilities. (DII & KBR Bankruptcy News, Issue No. 24;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
ELARIO OLIVEIRA: Ruskin Moscou Approved as Bankruptcy Counsel
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of New York
gave Elario Oliveira Construction, Inc., permission to employ
Ruskin Moscou Faltischek P.C., as its general bankruptcy counsel.
Ruskin Moscou will:
a) provide the Debtor with legal advise in connection with the
operation of its business in its chapter 11 case;
b) represent the Debtor in all court proceedings and all
proceedings before the U.S. Trustee as required under the
rules of the Bankruptcy Code;
c) prepare on behalf of the Debtor all necessary petitions,
pleadings, orders, reports and other legal papers;
d) examine the Debtor's liens and preferences and bring
necessary proceedings in connection with those liens and
preferences;
e) perform all other legal services for the Debtor that may be
necessary and appropriate in its chapter 11 case.
Harold S. Berzow, Esq., a Member at Ruskin Moscou, discloses that
the Firm received a $25,000 retainer.
Mr. Berzow reports Ruskin Moscou's professionals bill:
Designation Hourly Rate
----------- -----------
Partners $275 - 475
Associates 160 - 285
Paralegals 135 - 140
Ruskin Moscou assures the Court that it does not represent any
interest adverse to the Debtor or its estate.
Headquartered in Westbury, New York, Elario Oliveira Construction,
Inc., is a construction company. The Company filed for chapter 11
protection on October 26, 2004 (Bankr. E.D.N.Y. Case No. 04-
86846). When the Debtor filed for protection from its creditors,
it listed total assets of $6,654,966 and total debts of
$6,885,416.
ELARIO OLIVEIRA: U.S. Trustee Picks 7-Member Creditors Committee
----------------------------------------------------------------
The United States Trustee for Region 2 appointed seven creditors
to serve on the Official Committee of Unsecured Creditors in
Elario Oliveira Construction, Inc.'s chapter 11 case:
1. St. Paul Guardian Insurance Co.
599 Thormail Street
Edison, New Jersey 08837
2. Cement & Concrete Workers
District Council 6A, 18A & 20
35-30 Frances Lewis Blvd.
Flushing, New York 11358
3. Merrick Utility Associates
91 Marine Street
Farmingdale, New York 11735
4. Empire Transit Mix Inc.
430 Maspeth Avenue
Brooklyn, New York 11211
5. Triboro Hardware
150 Theodore Conrad Drive
Jersey City, New Jersey 07305
6. Munley Management Corporation
P.O. Box 386
East Setauket, New York 11733
7. Our Rental Corporation
165 Sherwood Avenue
Farmingdale, New York
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 Westbury, New York, Elario Oliveira Construction,
Inc., is a construction company. The Company filed for chapter 11
protection on October 26, 2004 (Bankr. E.D.N.Y. Case No. 04-
86846). Jeffrey A Wurst, Esq., at Ruskin Moscou Faltischek P.C.,
represents the Debtor in its restructuring. When the Debtor filed
for protection from its creditors, it listed total assets of
$6,654,966 and total debts of $6,885,416.
ENRON: District Court Affirms Denial of PBGC Ballot Correction
--------------------------------------------------------------
In May 2004, Pension Benefit Guaranty Corporation asked the
Bankruptcy Court to direct Enron Corporation and its debtor-
affiliates and their agents to rectify any inconsistencies in the
claims database so as to accurately reflect PBGC's 2,700 claims --
15 proofs of claim x 180 debtors = 2,700 claims. Specifically,
PBGC argued that the 15 separate proofs of claim apply against
both Enron and Debtor Subsidiaries in accordance with joint and
several liability.
After a review, Judge Gonzalez rejected PBGC's request. Judge
Gonzalez stated that "the Voting Procedures Order specifically
provides how all claims, including the PBGC's claims will be
treated for voting purposes." Relying on the Voting Procedures
Order, Judge Gonzalez limited PBGC's claim for voting purposes to
those only against Enron, because "the PBGC's claims assert one
set of claims against Enron Corp. that are then asserted against
multiple debtors." PBGC was limited to vote 15 claims, one for
each distinct proof of claim, and only against Enron. Judge
Gonzalez noted that "the burden of proof in that context was not
established by PBGC to allow the votes in the other debtors."
The PBGC appealed Judge Gonzalez's ruling to the U.S. District
Court for the Southern District of New York on three grounds:
(1) The Bankruptcy Court's interpretation of its own order was
procedurally flawed because PBGC was not provided adequate
opportunity to object to the Voting Procedures Order.
(2) PBGC maintains that courts recognize joint and several
liability, and by limiting PBGC to voting only on the
Enron reorganization, the Bankruptcy Court inequitably
limited PBGC's claims.
(3) PBGC argues that the Ballot Order artificially deflated
PBGC's voting presence in contravention of the Bankruptcy
Code, which, it claims, authorizes the holder of a
permissible joint and several claim the right to vote on
each debtor's proposed plan.
District Court Judge Harold Baer, Jr., notes that the Bankruptcy
Court acted well within its power to craft and interpret the
Voting Procedure Order and ensure that PBGC would be limited to
voting its full economic stake and no more. As part of the
Voting Procedures Order, parties were provided with an agenda for
objecting to the treatment of claims for voting purposes and
ballot correction procedures. While PBGC filed an objection to
the Plan Proposal Motion, its objection was withdrawn. Absent
any objection by PBGC to the Plan Proposal Motion, it was
implemented in a reasonable manner. Accordingly, the District
Court denies PBGC's procedural objection.
Moreover, absent termination of the Defined Benefit Plans, Judge
Baer says, the Bankruptcy Court correctly denied PBGC's efforts
to assert joint and several liability where no such liability had
yet been triggered. As provided by 29 U.S.C. Section 1362, it is
only after PBGC terminates the Defined Benefit Plans that joint
and several liability for the PBGC claims arises among the Debtor
Subsidiaries.
Judge Baer also finds that Judge Gonzalez's decision to limit the
number of total voting claims to 15 did not impermissibly deny
PBGC joint and several liability. The Voting Procedures Order
properly allocated voting rights to PBGC and failed to affect
PBGC's claims for other purposes, like distribution. "Judge
Gonzalez's decision, more importantly, only limited the voting
strength of PBGC, not the fundamental right to vote, and was
designed to prevent PBGC from taking over the reorganization
process," Judge Baer notes. "Judge Gonzalez reasonably
interpreted the Voting Procedures Order to ensure that, when
voting on the Enron Chapter 11 reorganization, PBGC was limited
to $321.8 million in claims."
Accordingly, Judge Baer affirms the Bankruptcy Court Order
regarding PBGC's Motion for Ballot Correction.
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.
Enron 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.
FEDERAL-MOGUL: Senior VP D. Sherbin & VP William Quigley to Resign
------------------------------------------------------------------
Federal-Mogul Corporation, Inc., disclosed in a recent regulatory
filing with the Securities and Exchange Commission that William
G. Quigley III, Vice President, Controller and Chief Accounting
Officer, will resign effective as of December 30, 2004. David M.
Sherbin, the Company's Senior Vice President, General Counsel and
Secretary, will also leave his post effective as of December 31,
2004. Mr. Quigley and Mr. Sherbin will assume positions with
other companies.
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
October 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 their creditors, they listed $10.15 billion in
assets and $8.86 billion in liabilities. (Federal-Mogul
Bankruptcy News, Issue No. 69; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
FIRST UNION: Fitch Affirms Class B Series 1997-3 at 'BB'
--------------------------------------------------------
Fitch Ratings has affirmed First Union Home Equity Loan (HEL)
Trust issue:
Series 1997-3:
-- Class B affirmed at 'BB'.
The affirmation on the above class reflects credit enhancement
consistent with future loss expectations and affect $42,705,114 of
certificates.
The credit enhancement levels for the above class has increased
from the original levels, and collateral performance has been in
line with our expectations. The mortgage pool has 11% of the
original collateral remaining in the pool balance.
The underlying collateral for the transaction consists of sub-
prime quality adjustable-rate mortgage loans and balloons secured
by residential properties.
Further information regarding current delinquency, loss, and
credit enhancement statistics is available on the Fitch Ratings
web site at http://www.fitchratings.com/
FOOTSTAR: Judge Hardin Confirms Amended Disclosure Statement
------------------------------------------------------------
The Honorable Adlai S. Hardin Jr., of the U.S. Bankruptcy Court
for the Southern District of New York entered an order on
December 15, 2004, approving:
a) on an interim basis, the adequacy of the Amended Disclosure
Statement explaining the Amended Joint Plan of
Reorganization filed by Footstar, Inc., and its debtor-
affiliates on December 6, 2004; and
b) the procedures by which the Debtors may further amend their
Disclosure Statement.
The Court orders that the amendment procedures for the Debtors'
Disclosure Statement depends on whether it issues a favorable
ruling to the Debtors' estate with respect to the assumability of
the Kmart Agreement that the Kmart Corporation is presently
objecting before the Court.
Under the amendment procedures approved by the Court, if the Court
issues a favorable ruling to the Debtors regarding the Kmart
Agreement, the Debtors will consult with their Creditors
Committee, the Equity Committee, and the attorneys for the agent
of the Debtors' postpetition lenders to further amend the
Disclosure Statement with these proposed amendments:
a) summarization of the Court's Kmart Agreement Ruling;
b) disclosures of any other significant developments in the
Debtor's bankruptcy cases occurring between the date of the
interim confirmation order and the date of the Kmart Ruling;
and
c) any other aspects of the Disclosure Statement in which its
accuracy and completeness is implicated by the Kmart Ruling.
As reported in the Trouble Company Reporter on November 24, 2004,
the two-option Plan contemplates either a reorganization
transaction on a stand-alone basis or a sale transaction.
Footstar's enterprise value as estimated in the Plan in the range
of $113 to $139 million.
Should there be a sale transaction, the Plan provides for the
establishment of a Liquidating Trust or the appointment of a Plan
Administrator who will take charge of the distributions to
creditors and interest holders.
The Amended Disclosure Statement states that Kmart Corp. has
shareholder agreements relating to its 49% equity interest in
certain Shoemart Subsidiaries. Kmart may object to a Sale
Transaction as being not appropriate in light of the shareholder
agreements and the anti-assignment provisions contained in the
shareholder agreements. If Kmart objects to a sale transaction,
there could be no assumption that the Bankruptcy Court will
approve the sale transaction.
A full text copy of the Amended Disclosure Statement and Amended
Plan is available for a fee at:
http://www.researcharchives.com/download?id=040812020022
Headquartered in West Nyack, New York, Footstar Inc., retails
family and athletic footwear. As of August 28, 2004, the Company
operated 2,373 Meldisco licensed footwear departments nationwide
in Kmart, Rite Aid and Federated Department Stores. The Company
also distributes its own Thom McAn brand of quality leather
footwear through Kmart, Wal-Mart and Shoe Zone stores.The Company
and its debtor-affiliates filed for chapter 11 protection on March
3, 2004 (Bankr. S.D.N.Y. Case No. 04-22350). Paul M. Basta, Esq.,
at Weil Gotshal & Manges represents the Debtors in their
restructuring efforts. When the Debtor filed for protection, it
listed $762,500,000 in total assets and $302,200,000 in total
debts.
HERBALIFE LTD: Closes Sale of Common Shares & Pays Dividend
-----------------------------------------------------------
Herbalife Ltd., formerly known as WH Holdings (Cayman Islands)
Ltd. (NYSE:HLF), closed the sale of an additional 2,175,000 of its
common shares at a price of $13.02 per share, net of underwriting
discount, in connection with the full exercise of the
underwriters' over-allotment option in connection with Herbalife's
recently completed initial public offering. Herbalife's common
shares were initially priced at $14.00 per share on Dec. 15, 2004,
and began trading on the New York Stock Exchange on Dec. 16, 2004.
Herbalife's common shares closed Tuesday, Dec. 28, at $15.98 per
share on the New York Stock Exchange.
As previously planned, Herbalife also announced the payment of a
one-time special cash dividend of $139.7 million to its
shareholders of record as of Dec. 14, 2004.
The offering was made through an underwriting syndicate led by
Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan
Stanley & Co. Incorporated, who acted as joint book-running
managers. Banc of America Securities LLC, Credit Suisse First
Boston LLC, and Citigroup Global Markets Inc. acted as co-
managers. A copy of the prospectus relating to Herbalife's
initial public offering of common shares may be obtained from:
Merrill Lynch & Co.
4 World Financial Center
New York, New York 10080
Tel. No.: 212-449-1000
-- or --
Morgan Stanley
Attn: Prospectus Department
1585 Broadway
New York, New York 10036
Tel. No.: 212-761-4000
A registration statement relating to Herbalife's initial public
offering of common shares has been filed with and declared
effective by the Securities and Exchange Commission. This press
release is for informational purposes only and is not an offer to
sell or a solicitation of an offer to purchase.
About the Company
Herbalife is a global network marketing company offering a range
of science-based weight management products, nutritional
supplements and personal care products intended to support weight
loss and a healthy lifestyle.
* * *
As reported in the Troubled Company Reporter on Nov. 11, 2004,
Standard & Poor's Ratings Services assigned its 'BB-' bank loan
rating to Herbalife International Inc.'s proposed $225 million
credit facility. A recovery rating of '2' was also assigned to
the loan, indicating an expectation for a substantial (80%-100%)
recovery of principal in the event of a default.
Subsequently, all ratings on Herbalife and parent WH Holdings
Ltd., including the 'BB-' corporate credit rating, were placed on
CreditWatch with positive implications. The CreditWatch placement
is based on Herbalife's proposed recapitalization, which is
expected to result in a strengthened financial profile. Upon
completion of the proposed recap transactions, Standard & Poor's
expects to raise the company's corporate credit rating by one
notch to 'BB' with a stable outlook.
IMMUNE RESPONSE: Expands Multiple Sclerosis Clinical Program
------------------------------------------------------------
The Immune Response Corporation (Nasdaq:IMNR), a biopharmaceutical
company dedicated to becoming a leading immune-based therapy
company in HIV and multiple sclerosis (MS), discloses the
expansion of its MS clinical development program.
"Based on the preliminary NeuroVax(TM) data, demonstrating a 94
percent immune response rate, presented at the AAN meeting earlier
this year, we have made the business decision to refocus resources
to expand and accelerate our MS development program, including
hiring of additional staff to support it," said John N. Bonfiglio,
Ph.D., President and Chief Executive Officer of The Immune
Response Corporation. "Last week's Board of Directors' meeting
confirmed this strategy and it is our intent to balance our
product portfolio to include a more aggressive MS development
program while continuing to rapidly advance our HIV program."
"Outside research seems to show that immune responses equate to a
clinical benefit for the patient. This encourages us to advance
NeuroVax(TM) development as quickly as possible," said Georgia
Theofan, Ph.D., Vice President of Clinical Development at The
Immune Response Corporation. "Despite new treatment options, MS
remains a debilitating and devastating disease affecting almost
half a million people in the US alone. NeuroVax(TM) is an immune-
based therapy targeting an immune system disease, and we are
looking forward to reviewing the new data next year."
The strategy for the development of the MS area includes the
expansion and completion of the current ongoing Phase II trial,
the initiation of a larger new trial designed to examine the
clinical benefit of NeuroVax(TM), and the search for a corporate
partner to help the Company take this program to
commercialization.
In addition, the Company has submitted an application for a
National Institutes of Health (NIH) grant to support additional
NeuroVax(TM)studies and analyses. Additional grants and outside
funding will be sought to supplement the Company's resources to
continue an aggressive timeline without compromising scientific
integrity or other clinical programs.
The Company will establish a new scientific advisory board (SAB)
of MS experts to help guide the clinical research, protocol
development, and maximize the potential of NeuroVax(TM). The SAB
will convene in early 2005 for the first time and meet regularly
to review data and advise the Company.
About MS and NeuroVax(TM)
Multiple sclerosis (MS) is an autoimmune disease in which the
immune system, the body's principal defense against foreign
substances such as bacteria, mistakenly attacks normal tissues of
the central nervous system. It afflicts approximately 400,000
people in the United States and more than 2.5 million worldwide.
Specifically, the disease results in damage to a fatty tissue
called myelin that surrounds and protects nerve fibers, creating
scarring (sclerosis) that interferes with the normal transmission
of nerve impulses. This damage, in turn, leads to a variety of
chronic and highly individual and unpredictable neurological
symptoms, ranging from movement and balance problems to vision
impairment. The disease is largely caused by activation of a
specific subset of the patient's own white blood cells, T-cells,
that then attack the myelin and are largely responsible for
disease progression. The Company postulates that TCR peptides with
Incomplete Freund's Adjuvant (IFA) stimulate regulatory T-cells
capable of suppressing these autoreactive pathogenic T-cells.
NeuroVax(TM), which combines three TCR peptides with IFA, was
designed to increase the likelihood of this immune reaction.
NeuroVax(TM) is in Phase II development by The Immune Response
Corporation and is not approved by any regulatory agencies in any
country at this time.
About The Immune Response Corporation
The Immune Response Corporation (Nasdaq:IMNR) --
http://www.imnr.com/--is a biopharmaceutical company dedicated to
becoming a leading immune-based therapy company in HIV and
multiple sclerosis (MS). The Company's HIV products are based on
its patented whole-killed virus technology, co-invented by Company
founder Dr. Jonas Salk, to stimulate HIV immune responses.
REMUNE(R), currently in Phase II clinical trials, is being
developed as a first-line treatment for people with early-stage
HIV. We have initiated development of a new immune-based therapy,
IR103, which incorporates a second-generation immunostimulatory
oligonucleotide adjuvant and is currently in Phase I/II clinical
trials in Canada and the United Kingdom.
The Immune Response Corporation is also developing an immune-based
therapy for MS, NeuroVax(TM), which is currently in Phase II and
has shown potential therapeutic value for this difficult-to-treat
disease.
* * *
Going Concern Doubt
The Immune Response Corporation's former independent certified
public accountants, BDO Seidman, LLP, indicated in their report on
the 2003 consolidated financial statements that there is
substantial doubt about the Company's ability to continue as a
going concern.
The Company has incurred net losses since inception and has an
accumulated deficit of $323,494,000 as of September 30, 2004. The
Company says it will not generate meaningful revenues in the
foreseeable future. These factors, among others, raised
substantial doubt about the Company's ability to continue as a
going concern.
INTEGRATED ELECTRICAL: Files Fiscal 2004 Financial Results
----------------------------------------------------------
Integrated Electrical Services, Inc. (NYSE: IES) reported results
for its fiscal 2004 third quarter ended June 30, 2004, and fiscal
2004 fourth quarter and year ended September 30, 2004. A summary
of recent events includes:
-- Filed 10-Q and 10-K with the SEC;
-- Raised $36.0 million in convertible debt offering;
-- Amended senior secured credit facility;
-- Sold three business units as part of strategic realignment
for $11.5 million;
-- Settled recent lawsuit for $8.0 million; and
-- Restated fiscal years 2002, 2003 and six months ended
March 31, 2004, which reduced net income by $1.7 million,
$1.0 million and $3.0 million, respectively.
Roddy Allen, IES' chief executive officer, stated, "I am very
pleased to be able to report IES' financial results. The past
several months have been difficult for IES as well as our
investors and others interested in our success. I appreciate your
patience and support as we worked through our issues.
"We were profitable for fiscal year 2004 prior to one-time charges
and generated positive free cash flow from operations. Including
the one-time charges IES reported a loss of $3.23 per share. We
have provided a reconciliation of our financial results prior to
these charges in the supplemental data section of this release.
"Our results are presented in a slightly different format in this
release due to the multiple periods covered. Both our Form 10-Q
for the fiscal third quarter ended June 30, 2004 and our Form 10-K
for the fiscal year ended September 30, 2004 have been filed with
the Securities and Exchange Commission.
"Our 2004 results were below our year ago expectations and plans;
however, we have successfully worked through a number of
challenging issues and can resume our focus on operations. We
have implemented several procedures to address the matters at two
business units, which we disclosed during the summer of 2004.
Additionally, after exhaustive internal and external reviews, we
determined that those matters were not widespread. However, the
process of delaying our financial filings as a result of these
items was very time consuming and distracting from our operations.
The process included having to obtain waivers from our credit
facility participants and bondholders, as well as spending
considerable additional time and expense for the audit and
internal review processes. The effects of these distractions are
reflected in our 2004 fourth quarter results.
"During the last several months, we have been working to provide
IES with a fresh start in several respects. As a result of our
previously announced strategic review process, a number of
commercial / industrial business units will be divested. We
assessed our business units based on consistency of profitability;
return on capital, including capital employed for bonding;
construction spending and growth trends; and management strength.
The star performers continue to be our units that perform
residential work. This segment reported another record breaking
year in terms of profits, growth and capital efficiency, with $310
million in revenue and nearly $60 million in gross profit.
"As a result of our strategic review, we now view our business
units in three broad categories: Core, Under Review and Planned
Divestitures. The Core units, which include our residential
units, form a solid operating group that produced 2004 revenues of
$830.8 million and operating income of $44.8 million. The units
Under Review are businesses that are still being evaluated and we
may elect to dispose of some of these when that evaluation is
complete. These units produced 2004 revenues of $357.2 million
and operating income of $12.4 million. The Planned Divestiture
group, disclosed in an October 28, 2004 press release, produced
$289.9 million in 2004 revenues and lost $13.5 million from
operations. We have already sold three of the Planned Divestiture
units for total cash consideration of $11.5 million.
Additionally, we improved our liquidity with the recent $36
million senior convertible notes issuance, successfully amended
our senior secured credit facility, and are in compliance with all
of our covenant requirements," added Mr. Allen.
Full Year Results
Revenues for 2004 were $1,424.1 million, or 1.6% below prior year
revenues of $1,447.8 million. Gross profits for 2004 fell by $32.5
million or 15.7%, from $206.4 million in 2003 to $173.9 million in
2004, due to a reduction in commercial and industrial revenues and
increases in commodity prices, which affected our longer term
projects where the company was not able to recover these added
costs. Selling, general and administrative expenses for 2004 were
$158.9 million, including a charge for litigation settlement of
$8.0 million, compared to $153.7 million in 2003. Income from
operations for 2004, including a goodwill impairment charge of
$99.8 million and the litigation settlement charge, was a loss of
$84.8 million, compared to income of $52.8 million in 2003.
Fiscal 2004 segment revenues for commercial/industrial were
$1,114.1 million compared to $1,171.6 million in fiscal 2003.
Residential revenues for fiscal 2004 were $310.0 million compared
to $276.2 million in fiscal 2003. Gross profits from the
commercial/industrial segment of $114.1 million were adversely
affected by higher job costs compared to 2003, primarily
associated with the business units that the company plans to
divest as well as increases in commodity prices that IES was not
able to recover from its customers. IES' residential segment gross
profits of $59.8 million were over 19% of segment revenues and
exceeded the prior year segment gross profits by $1.8 million.
Fourth Quarter Results
Revenues for the fourth quarter of 2004 were $356.9 million, down
6.3% from $380.9 million in 2003. The decline is primarily due to
weaker performance in the commercial and industrial segment.
Gross profit was $37.2 million in the fiscal fourth quarter of
2004 versus $52.7 million in 2003. This decline was a result of
poor performance during 2004 of the units to be divested, reduced
revenues in the commercial and industrial segment, as well as the
continued effects of the increase in commodity prices experienced
in the second and third fiscal quarter that we were unable to
recover from our customers. Additionally, the recent internal and
external reviews distracted the remaining business units,
resulting in lower earnings compared to the prior year quarter.
Income from operations, including the goodwill impairment and the
settlement of the previously disclosed lawsuit, was a loss of
$111.6 million in 2004 compared to income of $13.3 million in the
year ago quarter.
Fourth quarter segment revenues for commercial/industrial were
$275.4 million in fiscal 2004 compared to $309.7 million in fiscal
2003. Residential revenues for the fourth quarter of fiscal 2004
were $81.5 million compared to $71.1 million in fiscal 2003.
Gross profits from the commercial/industrial segment were
adversely affected by higher job costs, primarily associated with
the business units that the company plans to divest. IES'
residential segment gross profits were nearly 19% of segment
revenues and exceeded the prior year quarter by $1.4 million.
Revenues for the third quarter of fiscal 2004 were $367.0 million
compared to revenues of $375.3 million for the third quarter a
year ago. Gross profit was $42.8 million in the fiscal third
quarter of 2004 versus $53.4 million in 2003. Operating income
for the third quarter of fiscal 2004 was $4.3 million versus
income of $15.2 million in the same quarter of fiscal 2003. The
negative variance is due in part to the previously disclosed
charges at two business units, as well as the continued volatility
in copper, steel and gasoline prices, which negatively impacted
third quarter results by approximately $3.4 million.
Third quarter segment revenues for the commercial/industrial
segment were $280.2 million in fiscal 2004 compared to $305.6
million in fiscal 2003. Residential revenues for the third
quarter of fiscal 2004 were $83.1 million compared to $69.7
million in fiscal 2003.
Backlog and Bonding
IES' backlog was $662 million as of September 30, 2004, $46
million less than the year ago backlog due to a decrease in work
that requires surety bonding. The amount of work in backlog that
doesn't require surety bonding increased year over year by
approximately 3%. During 2004, IES has completed several large
projects that were included in last year's backlog that have not
been replaced with similar sized projects. Additionally, as a
result of having fewer larger and longer-term jobs, the average
size and duration of IES' projects have decreased slightly.
Bonded projects represented approximately 34% of the September 30,
2004 backlog compared to 40% last year.
IES has issued performance bonds totaling approximately $62
million during the last 120 days, including $2.3 million in new
bonds that did not require additional surety collateral. The
fourth amendment to the company's senior secured credit agreement
permits the company, under certain conditions, to utilize the
bonded accounts receivables, which were approximately $53 million
as of October 31, 2004, for the purpose of obtaining new surety
bonds with its current or new surety providers. IES is encouraged
by this development and believes that additional surety bond
capacity may be possible as a result.
Cash Flow, Debt and Liquidity
The company generated cash flow from operations of $6.3 million
for the fiscal year ended 2004 versus $39.3 million in fiscal
2003. The shortfall in operating cash flows is due to poor
performance of units that are in the Planned Divestiture group;
posting cash collateral with its surety provider; and legal and
accounting costs and expenses related to addressing the previously
discussed matters at two business units and obtaining required
waivers and amendments from its lenders.
As of September 30, 2004, total debt was $230.8 million, excluding
$25.8 million in outstanding letters of credit which are compared
to the prior year of $248.1 million, excluding $27.4 million in
letters of credit, subject to a reimbursement obligation of IES if
they are drawn. As of December 14, 2004, IES' total debt was
$241.2 million, excluding letters of credit. Cash and availability
on its revolving credit line totaled $76.0 million.
Additionally, IES has posted with its surety provider cash
collateral of $17.5 million which is subject to refund to IES as
long as IES' surety does not incur costs associated with such
bonded projects.
Interest expense for 2004 was $23.2 million, or $2.6 million less
than the prior year, mainly as a result of a reduction in
subordinated debt during 2004.
Restatement of Prior Periods
During the fiscal year ended September 30, 2004, the Company
determined that the recognition of revenue and costs on certain of
its long-term construction contracts accounted for under the
percentage-of-completion method of accounting and that the
accounting for one of its investments warranted revision to the
reported results for the six months ended March 31, 2004 and the
years ended September 30, 2002 and 2003.
The revisions to the recognition of revenues and costs on certain
construction contracts relate to errors in recording revenues
associated with change orders, costs charged to certain contracts,
and the estimates of costs to complete on certain contracts.
Additionally, the Company determined that one of its investments
that was previously accounted for under the cost method of
accounting for investments beginning in the year ended September
30, 2002 should have been accounted for under the equity method of
accounting for investments. The equity method of accounting for
investments requires investors to record their proportionate share
of the investees' profits and losses into their financial
statements. The cost method of accounting for investments does not
require this treatment. The net effect on net income as a result
of these restatements is a $3.0 million reduction for the six
months ended March 31, 2004; a $1.0 million reduction for fiscal
2003; and a $1.7 million reduction for fiscal 2002. Included in
the above restatement amounts are reductions in net income related
to the investment that should have been accounted for under the
equity method of accounting for investments of $0.9 million for
the six months ended March 31, 2004; $0.8 million for fiscal 2003;
and $1.7 million for fiscal 2002. The total effects of all
revisions to reported results for the six months ended March 31,
2004 and the years ended September 30, 2003 and 2002 are reflected
in the tables that follow later in this press release.
Goodwill Impairment
Effective October 1, 2001, the company adopted SFAS No. 142,
"Goodwill and Other Intangible Assets." Upon adoption in fiscal
2002, the company recognized a charge of $283.3 million and has
performed impairment tests in accordance with SFAS No. 142 each
year thereafter. During 2004, the Company performed impairment
tests as required by SFAS No. 142 and determined that the carrying
value of goodwill had been impaired and required adjustment. The
amount of the adjustment was approximately $99.8 million.
Outlook
IES is not providing specific financial guidance for its current
fiscal year or any of the upcoming quarters, including the first
fiscal quarter. Other sources of information may exist in the
public domain related to various third party forecasts of 2005
commercial and residential construction spending levels. Actual
2005 construction spending in IES' markets will impact our future
results.
IES plans to complete its previously announced divestiture program
during 2005 and reduce debt with the net sales proceeds.
Management expects that SG&A spending will be reduced as these
units are sold and the professional costs and expenses associated
with recent events diminish. Furthermore, IES will work to improve
its operating results with a renewed focus on bidding and
estimating disciplines, project pricing, cost controls, regular
monitoring of projects and execution.
About the Company
Integrated Electrical Services, Inc. is a leading national
provider of electrical solutions to the commercial and industrial,
residential and service markets. The company offers electrical
system design and installation, contract maintenance and service
to large and small customers, including general contractors,
developers and corporations of all sizes.
* * *
As reported in the Troubled Company Reporter on Dec. 23, 2004,
Moody's Investors Service has downgraded the ratings of Integrated
Electrical Services, Inc., and assigned a stable outlook to the
company's debt ratings. The downgrade reflects the company's
weakened financial performance for 2004 and the expectation that
2005 will include various significant challenges that will
constrain the company's financial and operating performance. The
downgrade also reflects the challenges that the company is
anticipated to encounter as it seeks to improve its portfolio of
companies. Additionally, Integrated Electrical has had:
(1) challenges related to commercial margin improvement;
(2) difficulty in timely filing its June 2004 financials;
(3) large goodwill charges; and
(4) challenges accessing the surety bonding market.
The company also has had various additional negative announcements
that affected its reputation, including the loss of two Chief
Financial Officers. This concludes the review of Integrated
Electrical's rating action.
Moody's has downgraded these ratings:
* Senior Implied, downgraded to B2 from B1;
* Senior Unsecured Issuer Rating, downgraded to B3 from B2;
* $173 million (remaining balance) of 9.375% senior
subordinated notes due 2009 (in two series), downgraded to
Caa1 from B3.
The ratings outlook is stable.
INTERSTATE BAKERIES: Creditors Panel Retains Kutak as Co-Counsel
----------------------------------------------------------------
The Honorable Jerry W. Venters of the U.S. Bankruptcy Court for
the Western District of Missouri gave Interstate Bakeries
Corporation and its debtor-affiliates' Official Committee of
Unsecured Creditors permission to retain Kutak Rock, LLP,
effective as of Sept. 30, 2004, as its co-counsel with regard to
the Debtors' Chapter 11 cases.
As co-counsel for the Committee, Kutak Rock will:
(a) advise the Committee with respect to its powers and
duties under Section 1103 of the Bankruptcy Code;
(b) take all necessary action to preserve, protect and
maximize the value of the Debtors' estate for the benefit
of the Debtors' unsecured creditors, including, but not
limited to, investigating the acts, conduct, assets,
liabilities, and financial condition of the Debtors, the
operation of the Debtors' businesses and the desirability
of the continuance of the business, and any other matters
relevant to the Debtors' bankruptcy cases or to the
formulation of a plan;
(c) prepare, on the Committee's behalf, motions,
applications, answers, orders, reports and papers that
may be necessary to the Committee's interests in the
Debtors' cases;
(d) participate in the formulation of a plan as may be in
the best interests of the Committee and the unsecured
creditors of the Debtors' estates;
(e) advise the Committee in connection with any sales or
proposed sales of the Debtors' assets;
(f) appear before the Court, any appellate court, and the
United States Trustee to protect the Committee's
interests and the value of the Debtors' estates before
the courts and the United States Trustee;
(g) consult with the Debtors' counsel, on the Committee's
behalf, regarding tax, intellectual property, labor and
employment, real estate, corporate and litigation
matters, and general business operational issues; and
(h) provide any and all other necessary legal advice to the
Committee in connection with the Debtors' cases.
Kutak Rock will be paid these hourly rates:
Professional Rate per hour
------------ -------------
Partners and Of Counsel $220-325
Associates 135-200
Paralegals 80-125
Paul D. Sinclair, a partner at Kutak Rock, assures the Court that
the firm does not hold or represent any interest adverse to the
Debtors' estates or to the Committee.
Headquartered in Kansas City, Missouri, Interstate Bakeries
Corporation is a wholesale baker and distributor of fresh baked
bread and sweet goods, under various national brand names,
including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R),
Merita(R) and Drake's(R). The Company employs approximately
32,000 in 54 bakeries, more than 1,000 distribution centers and
1,200 thrift stores throughout the U.S.
The Company and seven of its debtor-affiliates filed for chapter
11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No.
04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at
Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in
their restructuring efforts. When the Debtors filed for
protection from their creditors, they listed $1,626,425,000 in
total assets and $1,321,713,000 (excluding the $100,000,000 issue
of 6.0% senior subordinated convertible notes due August 15, 2014,
on August 12, 2004) in total debts.
KRAMONT REALTY: Names Brian Finnegan Senior Leasing Associate
-------------------------------------------------------------
Kramont Realty Trust (NYSE:KRT) has appointed Brian Finnegan as
senior leasing associate for its properties in Maryland, North
Carolina and Virginia.
Mr. Finnegan comes to Kramont from Legend Properties, Inc., where
he served as national real estate broker for Amazon Cafe and
worked as both a tenant and landlord representative.
Mr. Finnegan holds a Bachelor of Arts degree in Corporate
Communications from Duquesne University and will be located in
Kramont's regional office in Woodbridge, Va.
Kramont Realty Trust -- http://www.kramont.com/-- is a self-
administered, self-managed equity real estate investment trust
specializing in neighborhood and community shopping center
acquisitions, leasing, development and management. The company
owns, operates, manages and has under development 93 properties
encompassing nearly 12.6 million square feet of leasable space in
16 states. Nearly 80 percent of Kramont's centers are grocery,
drug or value retail anchored.
* * *
As reported in the Troubled Company Reporter on Dec. 23, 2004,
Moody's Investors Service placed its B3 preferred stock rating of
Kramont Realty Trust under review for upgrade due to the
announcement that Kramont agreed to merge into Centro Watt America
REIT III LLC, an affiliate of Melbourne, Australia-based Centro
Properties Limited (ASX: CNP), a property trust. Simultaneously,
other affiliates of Centro will be merged into Kramont. The
transaction is expected to close during the first quarter of 2005.
During its review, Moody's will review the pro forma financial and
strategic structure of Centro and its US affiliates, and the
disposition of the Kramont preferred stock. The review for
upgrade reflects Centro's status as a larger, more diverse and
seemingly more financially robust company than Kramont. Moody's
does not rate Centro.
MARINER HEALTH: Accepts Tendered 8-1/4% Notes for Purchase
----------------------------------------------------------
Mariner Health Care, Inc. (OTC Bulletin Board: MHCA) reported that
on December 10, 2004, it accepted for purchase all of its
outstanding 8-1/4% Senior Subordinated Notes due 2013 tendered in
the tender offer and consent solicitation. Mariner received
tenders and consents for one hundred percent of the outstanding
Notes.
Mariner will pay tender offer consideration of $1,176.46 for each
$1,000 principal amount of Notes purchased in the tender offer as
well as a consent payment of $20 for each $1,000 principal amount
of Notes purchased, resulting in total consideration of $1,196.46
for each $1,000 principal amount of Notes tendered, plus accrued
and unpaid interest to (but not including) December 13, 2004, the
payment date for the Notes.
On December 10, 2004, Mariner deposited an amount equal to the
total consideration and accrued and unpaid interest payable on the
Notes with U.S. Bank National Association, the Depositary for the
tender offer and consent solicitation, for payment to the holders
of the Notes in accordance with the Offer to Purchase and Consent
Solicitation Statement and related Consent and Letter of
Transmittal dated November 2, 2004.
Mariner has retained Credit Suisse First Boston LLC to serve as
the exclusive Dealer Manager and Solicitation Agent for the tender
offer and consent solicitation. Requests for documents may be
directed to Morrow & Co., Inc., the Information Agent, by
telephone at (800) 607-0088 (toll-free).
Questions regarding the tender offer may be directed to
Credit Suisse First Boston LLC at (800) 820-1653 (toll-free) or
(212) 538-0652 (collect).
Mariner Post-Acute Network, Inc., Mariner Health Group, Inc., and
scores of debtor-affiliates filed for chapter 11 protection on
January 18, 2000 (Bankr. D. Del. Case Nos. 00-113 through 00-301).
Mark D. Collins, Esq., at Richards, Layton & Finger, P.A.,
represents the Reorganized Debtors, which emerged from bankruptcy
under the terms of their Second Amended Joint Plan of
Reorganization declared effective on May 13, 2002. (Mariner
Bankruptcy News, Issue No. 65; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
NALCO HOLDING: Completes IPO-Related Debt Reduction
---------------------------------------------------
Nalco Finance Holdings LLC and Nalco Finance Holdings Inc.
completed their previously announced $176.9 million redemption of
a portion of 9.0 percent senior discount notes due 2014. This
payment redeems just over one third of the present accreted value
of the notes and was made from proceeds raised by parent company
Nalco Holding Company as part of its Nov. 11, 2004 initial public
offering.
"Nalco remains committed to proper management of our debt," noted
Executive Vice President and Chief Financial Officer Brad Bell.
"Through the first three quarters of 2004 we have paid down
$210 million in structural debt, in addition to Monday's
redemption. Nalco also recently obtained a 50 basis point
interest rate reduction on our $1.1 billion term loan B facility.
This drops the facility's interest rate from 250 basis points over
LIBOR (London Interbank Offer Rate) to 200 basis points over
LIBOR."
About the Company
Nalco (NYSE:NLC) is the leading provider of integrated water
treatment and process improvement services, chemicals and
equipment programs for industrial and institutional applications.
The company currently serves more than 60,000 customer locations
representing a broad range of end markets. It has established a
global presence with over 10,000 employees operating in 130
countries, supported by a comprehensive network of manufacturing
facilities, sales offices and research centers. In 2003, Nalco
achieved sales of $2.8 billion.
* * *
As reported in the Troubled Company Reporter on Dec. 10, 2004,
Fitch Ratings has initiated ratings on Nalco Company's senior
unsecured debt at 'B'. Fitch has also assigned a rating to
Nalco's senior secured credit facility at 'B+' and assigned a
'CCC+' to Nalco's senior subordinated notes. The senior discount
notes held at Nalco Finance Holdings LLC are rated 'CCC+'.
The Rating Outlook is Stable. The ratings were initiated by Fitch
as a service to users of our ratings and are based on public
information.
The Stable Rating Outlook reflects the improvement in Nalco's
businesses and the strengthening of the economies around the
world. Margins have declined slightly in 2004 due to higher raw
material and transportation costs but are expected to strengthen
as price increases take effect and as the market fundamentals
strengthen. Fitch remains moderately concerned about the
sustainability of the economic recovery with increasing energy
costs and the overall effect of high raw material prices on
demand.
NAVIGATOR GAS: Judge Blackshear Allows Committee to Modify Plan
---------------------------------------------------------------
The Official Committee of Unsecured Creditors of Navigator Gas
Transport PLC and its debtor-affiliates' chapter 11 cases obtained
the approval of The Honorable Cornelius Blackshear of the U.S.
Bankruptcy Court for the Southern District of New York to amend
its confirmed Plan of Reorganization by allowing the Committee to
commence and wind up the Debtors' operations in the Isle of Man.
The winding up proceedings will result in the transfer of shares
from the Debtors to their creditors as contemplated by the
Committee's Plan.
After the Plan confirmation in March, the majority shareholder of
the Debtor -- Cambridge Gas Transport Corp. -- filed an objection
with the High Court of Justice of the Isle of Man (Manx Court)
against the implementation of the plan claiming that it did not
receive proper notice of the Debtors' chapter 11 cases and further
claimed that the New York Bankruptcy Court has no jurisdiction to
transfer the shares of the Debtors to their creditors. As a
result, the US Bankruptcy Court imposed monetary sanctions of
$1.140 million each to Cambridge Gas and its directors Shaun
Fergusson Cairns, Giovanni Mahler and Apostolos-Michael Tziras for
committing civil contempt in direct violation of the confirmation
order.
In October 14, Deemster Kerruish of the Manx Court released his
decision and agreed that the U.S. Bankruptcy Court lacks
jurisdiction to transfer the shares but, he encouraged the
Committee to wind up the proceedings in the Isle of Man through
which the Manx Court could directly order for the shares to be
transferred from the Debtors to their creditors.
Headquartered in Castletown, Isle of Man, Navigator Gas Transport
PLC, transports liquefied petroleum gases and petrochemical gases
between ports throughout the world. The Company along with its
debtor-affiliates filed for chapter 11 protection on Jan. 27,
2003(Bankr. S.D.N.Y. Case No. 03-10471). Adam L. Shiff, Esq., at
Kasowitz, Benson, Torres & Friedman LLP represents the Debtors in
the United States. When the Company filed for protection, it
listed $197,243,082 in total assets and $384,314,744 in total
debts.
NETWORK INSTALLATION: Gets IT Project Order from Insurance Co.
--------------------------------------------------------------
Network Installation Corp. (OTC Bulletin Board: NWKI) received an
IT project order from insurance conglomerate St. Paul Travelers.
The project entails the installation of networking infrastructure
in the company's Orange, Calif. facility.
Network Installation CEO Michael Cummings stated, "We are pleased
to have won this project order from St. Paul Travelers.
Traditional networking remains one of our core competencies. As
we progress ahead we will continue to strengthen our presence
within the Fortune 1000 IT marketplace and further position
ourselves in developing many opportunities which exist here for
offering additional peripheral services such as wireless and
telecom."
About St. Paul Travelers
St. Paul Travelers -- http://www.stpaultravelers.com/--is
headquartered in Saint Paul, Minn., with significant operations in
Hartford, Conn., and provides commercial property-casualty
insurance, personal property-casualty insurance and asset
management services. St. Paul Travelers was formed by the
combination of Travelers Property Casualty Corp. and The St. Paul
Companies on April 1, 2004. On a combined basis, the companies
reported 2003 revenue from continuing operations of $24 billion
and total assets of $107 billion. The merger created the nation's
second largest property-casualty insurer and one of the largest
financial services firms.
About the Company
Network Installation Corp. provides communications solutions to
the Fortune 1000, Government Agencies, Municipalities, K-12 and
Universities and Multiple Property Owners. These solutions
include the design, installation and deployment of data, voice and
video networks as well as wireless networks including Wi-Fi and
Wi-Max applications and integrated telecommunications solutions
including Voice over Internet Protocol applications.
At Sept. 30, 2004, Network Installation's balance sheet showed
a $213,146 equity deficit.
NRG ENERGY: Files Certificate of Designations of Preferred Stock
----------------------------------------------------------------
On December 20, 2004, NRG Energy, Inc., filed with the Secretary
of State of the State of Delaware the Certificate of Designations
of its 4.0% Convertible Perpetual Preferred Stock, or the
Preferred Stock.
A full-text copy of the Certificate of Designations is available
at no charge at:
http://sec.gov/Archives/edgar/data/1013871/000095012304015232/x04068exv3w1.htm
Timothy W. J. O'Brien, NRG Vice President, Secretary and General
Counsel, discloses to the Securities and Exchange Commission that
the Preferred Stock has a liquidation preference of $1,000 per
share of Preferred Stock. Holders of Preferred Stock are
entitled to receive, when, as and if declared by the Company's
Board of Directors, out of funds legally available, cash
dividends at the rate of 4% per annum, payable quarterly in
arrears on March 15, June 15, September 15 and December 15 of
each year, commencing on March 15, 2005. The Preferred Stock is
convertible, at the option of the holder, at any time into shares
of the Company's common stock at an initial conversion price of
$40.00 per share, which is equal to an approximate conversion
rate of 25 shares of common stock per share of Preferred Stock,
subject to specified adjustments. On or after December 20, 2009,
the Company may redeem, subject to certain limitations, some or
all of the Preferred Stock with cash at a redemption price equal
to 100% of the liquidation preference, plus accumulated but
unpaid dividends, including liquidated damages, if any, to the
redemption date.
If the Company is subject to a fundamental change, each holder of
shares of Preferred Stock will have the right, subject to certain
limitations, to require the Company to purchase any or all of its
shares of Preferred Stock at a purchase price equal to 100% of
the liquidation preference, plus accumulated and unpaid
dividends, including liquidated damages, if any, to the date of
purchase.
According to Mr. O'Brien, each holder of Preferred Stock will
have one vote for each share of Preferred Stock held by the
holder on all matters voted upon by the holders of the Company's
common stock, as well as voting rights specifically provided for
in the Company's amended and restated certificate of
incorporation or as otherwise from time to time required by law.
In addition, whenever:
(1) dividends on the Preferred Stock or any other class or
series of stock ranking on a parity with the Preferred
Stock with respect to the payment of dividends are in
arrears for dividend periods, whether or not consecutive,
containing in the aggregate a number of days equivalent to
six calendar quarters, or
(2) the Company fails to pay the redemption price on the date
shares of Preferred Stock are called for redemption or the
purchase price on the purchase date for shares of
Preferred Stock following a fundamental change,
then, in each case, the holders of Preferred Stock -- voting
separately as a class with all other series of preferred stock
upon which like voting rights have been conferred and are
exercisable -- will be entitled to vote for the election of two
of the authorized number of the Company's directors at the next
annual meeting of stockholders and at each subsequent meeting
until all dividends accumulated or the redemption price on the
Preferred Stock have been fully paid or set apart for payment.
The term of office of all directors elected by holders of the
Preferred Stock will terminate immediately upon the termination
of the rights of the holders of the Preferred Stock to vote for
directors. Upon election of any additional directors, the number
of directors that comprise the Company's Board of Directors will
be increased by the number of those additional directors.
Mr. O'Brien explains that the Preferred Stock will be, with
respect to dividend rights and rights upon liquidation, winding
up or dissolution:
-- junior to all of the Company's existing and future debt
obligations;
-- junior to each other class or series of the Company's
capital stock other than:
(1) the Company's common stock and any other class or
series of the Company's capital stock which provides
that that class or series will rank junior to the
Preferred Stock, and
(2) any other class or series of the Company's capital
stock the terms of which provide that that class or
series will rank on a parity with the Preferred Stock;
-- on a parity with any other class or series of the Company's
capital stock the terms of which provide that that class or
series will rank on parity with the Preferred Stock;
-- senior to the Company's common stock and any other class or
series of the Company's capital stock the terms of which
provide that that class or series will rank junior to the
Preferred Stock; and
-- effectively junior to all of the Company's subsidiaries':
(1) existing and future liabilities, and
(2) capital stock held by others.
NRG Energy, Inc., owns and operates a diverse portfolio of power-
generating facilities, primarily in the United States. Its
operations include baseload, intermediate, peaking, and
cogeneration facilities, thermal energy production and energy
resource recovery facilities. The company, along with its
affiliates, filed for chapter 11 protection (Bankr. S.D.N.Y. Case
No. 03-13024) on May 14, 2003. The Company emerged from chapter
11 on December 5, 2003, under the terms of its confirmed Second
Amended Plan. James H.M. Sprayregen, Esq., Matthew A. Cantor,
Esq., and Robbin L. Itkin, Esq., at Kirkland & Ellis, represented
NRG Energy in its $10 billion restructuring.
* * *
As reported in the Troubled Company Reporter on Dec. 14, 2004,
Standard & Poor's Ratings Services assigned its 'CCC+' rating to
NRG Energy Inc.'s (NRG; B+/Stable/--) proposed $400 million
convertible perpetual preferred stock. The outlook is stable.
The proceeds of the preferred stock issuance will be used to
redeem a portion of NRG's outstanding second priority notes due
2013. In addition, NRG will repurchase 13 million shares of
common stock held by investment partnerships managed by
MatlinPatterson Global Advisors LLC using available cash.
NRG, previously a 100% owned subsidiary of Xcel Energy Inc.,
emerged from bankruptcy on Dec. 5, 2003, and has operated for one
year. It is engaged in the ownership and operation of power
generating facilities, primarily in the U.S. merchant power
market, thermal production and resource recovery facilities, and
various international independent power producers.
"NRG has benefited in the past year from high natural gas prices,
which have allowed it to maintain high gross margins," said credit
analyst Arleen Spangler. "There is little room for a ratings
upgrade in the near term based on the high business risk of
operating as predominantly a merchant generator where cash flows
may be volatile."
PACIFIC GAS: Names Donna Jacobs Nuclear Services Vice President
---------------------------------------------------------------
Pacific Gas and Electric Company's board of directors has elected
Donna Jacobs as vice president of nuclear services at the
utility's Diablo Canyon Power Plant. This appointment is
effective December 27, 2004.
Ms. Jacobs will have responsibility for engineering, strategic
projects, nuclear fuel, information technology, geosciences and
procurement at the plant.
"We are committed to the continued reliable, safe, and efficient
operation of Diablo Canyon, and are always striving to do an ever-
better job in that regard," said Gordon R. Smith, president and
CEO of Pacific Gas and Electric Company. "We are pleased to have
someone of Donna's experience and leadership join us in this
effort."
Prior to joining Pacific Gas and Electric Company, Ms. Jacobs
served as vice president and plant manager for the Wolf Creek
Nuclear Operating Corporation, in Burlington, Kansas, a position
she has held since 2001. Ms. Jacobs started at Wolf Creek as a
test engineer in 1986, and held a series of positions of
increasing responsibility during her 18 years at the plant. Her
experience includes work in plant operations, maintenance,
engineering, work management and scheduling.
Ms. Jacobs earned a bachelor's degree in mechanical engineering
from Wichita State University and an MBA from Emporia State
University in Kansas. She also graduated from the Institute of
Nuclear Power Operations' Senior Nuclear Plant Management Course.
She holds a Senior Reactor Operator certification.
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. 88; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
PRICELINE.COM: SEC Declares Registration Statement Effective
------------------------------------------------------------
The Securities and Exchange Commission declared effective
Priceline.com Incorporated's (Nasdaq: PCLN) registration statement
on Form S-3 relating to the resale of its 2.25% Convertible Senior
Notes due 2025 and the shares of its common stock issuable upon
conversion of the notes. The notes were originally issued in a
private placement in June 2004. Priceline.com will not receive
any proceeds from any resale by the selling securityholders of
notes or the shares of common stock issuable upon conversion of
the notes.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be
any sale of these securities in any state in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state.
About the Company
Priceline.com is a travel service that offers leisure airline
tickets, hotel rooms, rental cars, vacation packages and cruises.
Priceline.com also has a personal finance service that offers home
mortgages, refinancing and home equity loans through an
independent licensee. Priceline.com owns and operates the retail
travel Web sites Travelweb.com, Activereservations.com,
Lowestfare.com, RentalCars.com and BreezeNet.com. Priceline.com
licenses its business model to independent licensees, including
pricelinemortgage and certain international licensees.
* * *
As reported in the Troubled Company Reporter on Sept. 27, 2004,
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.
PROSOFTTRAINING: Posts $340,000 Net Loss in First Quarter
---------------------------------------------------------
ProsoftTraining (Nasdaq:POSO) reported financial results for its
first fiscal quarter ended Oct. 31, 2004.
Revenues for the first quarter of fiscal 2005 were $1.86 million,
compared to $2.33 million in the first quarter of fiscal 2004.
Net loss for the first quarter of fiscal 2005 was $0.34 million,
compared to a net loss of $0.11 million for the first quarter of
fiscal 2004. The fiscal 2005 quarterly revenues represented
sequential growth of 6 percent over the prior quarter, the fourth
quarter of fiscal 2004, marking the first time in the past six
quarters that the company has achieved quarter-to-quarter revenue
growth.
"The quarter-over-quarter improvement in revenue is an achievement
this company has not made since the third quarter of fiscal 2003.
Combined with an increase in gross margin, this accomplishment
indicates that our turnaround is underway," stated Benjamin Fink,
Prosoft's president and CEO. "We have begun to invest the capital
raised in August 2004 in people and products, and have now seen
the beginning of tangible results in this top-line growth."
Mr. Fink continued, "During the past three months, we have
successfully raised capital, we have upgraded our revenue-
generating capability by restructuring our sales force under the
leadership of Vince McLain, and we have executed important
distribution agreements with Thomson Course Technology. These
agreements not only double the number of products offered by our
sales force, but also significantly expand the market reach of the
CIW certification program. We will continue to implement these
major initiatives throughout the balance of fiscal 2005, with a
focus on continuing improved performance following our seasonally
slow second fiscal quarter."
Gross profit, as a percentage of revenue, was 71 percent for the
first quarter of fiscal 2005, compared to 66 percent for the first
quarter of the previous fiscal year.
Content development, sales and marketing, and general and
administrative expenses were $1.47 million in the first quarter of
fiscal 2005, compared to $1.44 million for the same quarter of the
previous fiscal year, an increase of $0.03 million or 2 percent.
The cash balance at October 31, 2004, was $1.28 million, compared
to $0.50 million for the previous quarter. The increase was the
result of our issuance of $1.35 million ($1.17 million net of
issuance expenses) of Secured 8% Convertible Notes during the
quarter. Days sales outstanding of receivables were at 31 days,
consistent with recent performance.
About the Company
ProsoftTraining (Nasdaq: POSO) offers content and certifications
to enable individuals to develop and validate critical Information
and Communications Technology (ICT) workforce skills. Prosoft is
a leader in the workforce development arena, working with state
and local governments and school districts to provide ICT
education solutions for high school and community college
students. Prosoft has created and distributes a complete library
of classroom and e-learning courses. Prosoft distributes its
content through its ComputerPREP division to individuals, schools,
colleges, commercial training centers and corporations worldwide.
Prosoft owns the CIW job-role certification program for Internet
technologies and the CCNT (Certified in Convergent Network
Technologies) certification, and manages the CTP (Convergence
Technologies Professional) vendor-neutral certification for
telecommunications. To learn more, visit
http://www.ProsoftTraining.com/http://www.ComputerPREP.com/
http://www.CIWcertified.com/and http://www.CTPcertified.com/
* * *
As reported in the Troubled Company Reporter on Nov. 9, 2004,
Grant Thornton LLP completed its audit of ProsoftTraining's
financial statements for the fiscal year ending July 31, 2004, on
September 24, 2004. Grant Thornton says that there is substantial
doubt about the Company's ability to continue as a going concern.
QWEST COMMS: Launches Expanded Nationwide VoIP Service for Biz
--------------------------------------------------------------
Qwest Communications International Inc. (NYSE: Q) said its award-
winning voice over Internet protocol (VoIP) service is available
to business customers nationwide. Qwest OneFlex(TM) services are
now available in more than 100 cities across the U.S. allowing
small, medium and enterprise business customers to benefit from
Qwest's own reliable and secure VoIP solution.
Qwest OneFlex is now newly available in more than 100 cities
including the following metropolitan areas:
-- Atlanta
-- Cincinnati
-- Cleveland
-- Detroit
-- Houston
-- Indianapolis
-- Miami
-- Milwaukee, Wis.
-- New Orleans
-- Orlando, Fla.
-- St. Louis
-- Tampa, Fla.
For a complete list of where OneFlex is available, customers
should contact their Qwest sales representative.
"We've expanded our OneFlex availability to accommodate
significant business customer demand for VoIP," said Cliff Holtz,
executive vice president, business markets group for Qwest. "With
this launch, customers with offices across the country can now
benefit from this industry-leading solution."
Qwest initially launched OneFlex in August, 2004 and since then
has made it available to business customers in 26 key metropolitan
areas including 14 cities within the company's local service
region and 12 major national markets. Now, Qwest offers the
service in more than 100 additional cities across the U.S.
Qwest offers a range of VoIP solutions including:
-- OneFlex Integrated Access - Enables business customers to
bundle their voice and data services over one high-bandwidth
Internet connection that dynamically adjusts to accommodate
their needs, ensuring that bandwidth is always used most
efficiently. The service automatically adjusts to make the
right amount of bandwidth available for voice calls while
allowing all the remaining bandwidth to be used for data.
The service automatically adjusts again when voice or data
bandwidth use changes.
-- OneFlex Hosted VoIP - A hosted solution that comprises local
and long-distance voice service and high-speed Internet
access, giving businesses a single, reliable connection for
all their communications needs. By using a Web interface,
customers can simply 'point-and-click' to manage their
features such as managing employees' phone lists and making
conference calls. Because Qwest OneFlex is a network-based
solution, customers can concentrate on managing their own
businesses without complex telecom equipment or multiple
providers.
-- IP Centrex Prime - An IP-enabled interface allowing
enterprise business customers with traditional Centrex
services to migrate from their existing PBX connections to a
robust VoIP solution while retaining the call quality and
reliability of a PBX. Customers benefit from new IP-based
flexibility while retaining the simplified telecom
management of Centrex.
About the Company
Qwest Communications International Inc. (NYSE: Q) --
http://www.qwest.com/-- is a leading provider of voice, video and
data services. With more than 40,000 employees, Qwest is committed
to the "Spirit of Service" and providing world-class services that
exceed customers' expectations for quality, value and reliability.
At Sept. 30, 2004, Qwest's balance sheet showed a $2,477,000,000
stockholders' deficit, compared to a $1,016,000,000 deficit at
Dec. 31, 2003.
RCN CORPORATION: Welcomes James Mooney as Board Chairman
--------------------------------------------------------
RCN Corporation (Nasdaq: RCNIV) elected James F. Mooney as
Chairman of its Board of Directors. On December 21, 2004, RCN
emerged from Chapter 11 with a seven-member board of directors,
including Mr. Mooney and newly named President and Chief Executive
Officer Peter D. Aquino.
"We are all very excited about the emergence of the new RCN," said
CEO Peter Aquino. "It is a real opportunity to leverage a
superior broadband network and deliver to our customers the best
of cable, exceptionally fast speeds for Internet access, and high
quality voice services. We have great employees who are
trailblazers in delivering leading-edge technology and products to
consumers. I look forward to working with RCN's talented team of
employees and Jim Mooney to blaze the new path for our company's
success."
New Board Of Directors
-- James F. Mooney
James F. Mooney, newly named Chairman of RCN Corporation,
also currently serves as Chairman of NTL, Incorporated, a
provider of bundled telecommunications services, including
voice, video, and data services, in the United Kingdom and
the Republic of Ireland. Prior to joining NTL, Mr. Mooney
was Executive Vice President and Chief Operating Officer of
Nextel Communications Inc., from Apr. 2001 to Sept. 2002.
Before Nextel, from Jan. 2000 to Jan. 2001, he was Chief
Executive Officer and Chief Operating Officer of Tradeout
Inc., an asset management firm jointly owned by GE Capital
Corp., eBay Inc. and Benchmark Capital.
From Apr. 1999 to Jan. 2000, he was the Chief Financial
Officer at Baan Company, a business management software
provider that had dual headquarters in Amsterdam and
Virginia.
From 1980 to March 1999, Mr. Mooney held a number of
positions with IBM, including his last position as Chief
Financial Officer of the Americas. Mr. Mooney is a director
of Sirius Satellite Radio.
-- Peter D. Aquino
Peter D. Aquino, newly named President and Chief Executive
Officer of RCN Corporation, previously served as a Senior
Managing Director of Capital & Technology Advisors LLC, a
telecom restructuring firm from 2001 through 2004.
From 1995 to 2001, Mr. Aquino helped design, build, and
operate the first "triple play" integrated broadband company
in Venezuela.
Prior to 1995, Mr. Aquino spent thirteen years with Bell
Atlantic (now Verizon) in various positions, including
finance, regulatory, and corporate development. Mr. Aquino
currently serves as a Director of Neon Communications,
Motient Corporation and iBasis, Inc.
Mr. Aquino earned his MBA at George Washington University in
D.C.
-- Benjamin C. Duster, IV
Benjamin C. Duster, IV, a graduate of Yale College, Harvard
Business School and Harvard Law School, is a partner at
Masson & Company, LLC, a turnaround management and financial
restructuring firm and has extensive experience in
turnaround management and restructuring.
Mr. Duster currently serves on the boards of Algoma Steel,
Inc., as Chairman, Neenah Foundry Company as a Board member
and River Cities Capital Fund as an Advisory Board member.
-- Lee S. Hillman
Lee S. Hillman is a graduate of the Wharton School of
Finance of the University of Pennsylvania and the Graduate
School of Business of the University of Chicago. He is a
former partner at Ernst & Young and from 1992-1996 held
numerous executive management positions, including Chairman
and Chief Executive Officer of Bally Total Fitness Holding
Corp. and Executive Vice President and Chief Financial
Officer of Bally Entertainment Corporation, which included
the operation of casino hotels and resorts, health clubs and
other entertainment properties.
-- Michael E. Katzenstein
Michael E. Katzenstein is a graduate of the State University
of New York at Binghamton and Boston University School of
Law. He began his career at Kronish, Lieb, Weiner and
Hellman LLP and in 1995 left private practice to join OpTel,
Inc., as Vice President, Secretary and General Counsel.
OpTel was one of the first and largest companies0 offering
competitive integrated cable television, local and long
distance telephone, and high-speed Internet services to the
U.S. residential marketplace.
Mr. Katzenstein is a founding partner of CXO, L.L.C., a
highly regarded restructuring, crisis and turnaround
management firm with national and international experience.
-- Theodore H. Schell
Theodore H. Schell is a graduate of Johns Hopkins University
and the Johns Hopkins School of Advanced International
Studies. He served for 11 years as Senior Vice President of
Strategy and Corporate development and as a member of the
Management Committee at Sprint Corporation.
Before joining Sprint, Mr. Schell was the founder, President
and CEO of Realcom Communications Corporation, which
operated as an integrated provider of voice and data
services to corporate clients.
Mr. Schell is currently a Managing Director at Liberty
Associated Partners LLP, prior to which he was a General
Partner at Apax Partners where he oversaw U.S. investments
in telecommunications and related technology companies.
He serves as a Director of Time Warner Telecom, Inc., and as
a senior advisor to national and international cable
television and telecommunications companies.
-- Daniel Tseung
Daniel Tseung currently serves as an Investment Advisor to
the Sun Hung Kai Properties Group, one of Asia's largest
conglomerates, as well as Director of Investments for
SUNeVision Holdings Limited, a leading Asian Internet
infrastructure and services provider.
Mr. Tseung was previously a Director in the Technology &
Communications Group of GE Equity, the private equity arm of
GE Capital. Mr. Tseung has completed over twenty private
equity investments in the telecommunications and information
technology sectors. He currently serves as a Board Director
for Chinacast, Cellon, Legend Silicon, and IP Dynamics and
as a Board Observer or eAccess.
Headquartered in Princeton, New Jersey, RCN Corporation --
http://www.rcn.com/-- provides bundled Telecommunications
services. The Company, along with its affiliates, filed for
chapter 11 protection (Bankr. S.D.N.Y. Case No. 04-13638) on
May 27, 2004. Frederick D. Morris, Esq., and Jay M. Goffman,
Esq., at Skadden Arps Slate Meagher & Flom LLP, represent the
Debtors in their restructuring efforts. When the Debtors filed
for protection from their creditors, they listed $1,486,782,000 in
assets and $1,820,323,000 in liabilities.
RCN CORP: National Cable Objects to Debtors' Assumption of Pact
---------------------------------------------------------------
National Cable Television Cooperative is a programming and
hardware buying cooperative that represents more than 1,000
independent cable operators, their 6,500 individual systems, and
more than 14 million subscribers nationwide. By combining the
purchasing power of member companies, NCTC is able to take
advantage of volume discounts similar to those enjoyed by large
multiple system operators on programming, hardware and service
purchases.
RCN Corporation is a member of NCTC and a party to a member
agreement dated as of July 1, 2000, as modified on December 30,
2003. Pursuant to the Member Agreement, RCN Corp. purchases
programming and content via NCTC. In recent months, RCN Corp.'s
payments to NCTC have averaged $3.8 million per month. NCTC then
pays the networks for programming services on RCN Corp.'s behalf.
One of the programmers that provides substantial services to RCN
Corp. through NCTC is ESPN, Inc. Before the Petition Date, NCTC
entered into a modified agreement with respect to certain ESPN
services.
Subject to certain conditions and NCTC's approval, members of
NCTC were afforded the opportunity to switch from the existing
ESPN agreements to an ESPN LTAP Agreement. This would require
RCN Corp. to sign new postpetition modified agreements with both
NCTC and ESPN. While RCN Corp. indicated its desire to switch to
the ESPN LTAP Agreement, it was not willing to assume the
existing NCTC Agreement prior to seeking to modify it to include
the ESPN LTAP Agreement. As a consequence, NCTC asserts that RCN
Corp. continues to be bound by the terms of its Existing ESPN
Agreements.
Effective August 1, 2004, RCN Corp. began paying for ESPN
services at the rates that would apply under the ESPN LTAP
Agreement. NCTC challenges RCN Corp.'s payment at these reduced
rates, maintaining that the reduced rates do not apply since RCN
Corp. is not eligible to participate under the ESPN LTAP
Agreement. ESPN also challenges RCN Corp.'s payment at the
reduced rates.
Alan D. Halperin, Esq., at Halperin Battaglia Raicht, LLP, at New
York, informs Judge Drain that estimated shortfalls are $112,000
for August 2004 and $108,000 for September 2004. The October
2004 payment is still being reconciled and the November 2004
payment will not be due until mid-December 2004. Assuming a
monthly shortfall of $110,000, subject to specific subscriber
account adjustments, four months of underpayments would total
$440,000.
NCTC has received a cure notice from RCN Corp. reflecting an
attempt by RCN Corp. to assume its existing NCTC Agreements.
NCTC's contract is identified in RCN Corp.'s plan of
reorganization as a contract to be assumed. NCTC and RCN Corp.
agree that there is no prepetition shortfall in payments by RCN
Corp. to NCTC. However, due to the dispute over the status of
the obligations owed ESPN based on the failure to pay the full
amount owed under the Existing ESPN Agreement, there will be an
approximate administrative shortfall of $440,000. This shortfall
reflects the difference between the amounts that would be due
from RCN Corp. under the Existing ESPN Agreements and the amounts
that RCN Corp. has actually paid under the ESPN LTAP Agreement.
NCTC does not object to RCN Corp.'s assumption of the NCTC
Agreement. RCN Corp. has been a valued member of NCTC. However,
Mr. Halperin asserts that RCN Corp. has no authority to
unilaterally modify postpetition its contractual obligations not
only with NCTC but also with one of its programmers.
Accordingly, NCTC asks the Court to condition any approval of
assumption of the NCTC Agreement on the payment of the shortfall.
Mr. Halperin assures Judge Drain that NCTC remains committed,
subject to the approval, to work with RCN Corp. in an effort to
negotiate with ESPN, RCN Corp.'s participation under the ESPN
LTAP Agreement and retroactive application of ESPN LTAP Agreement
rates. If these negotiations are successful, Mr. Halperin says,
any portion of the $440,000 Cure Amount in excess of the amount
owed under the ESPN LTAP Agreement will be refunded to RCN Corp.
* * *
The Court authorizes the Debtors to assume their Member Agreement
with the National Cable Television Cooperative, dated as of
July 1, 2000, subject to these provisions:
(a) All of NCTC's rights asserted in its Objection with
respect to cure claims arising under the NCTC Agreement,
and the Debtors' rights, including, without limitation,
the right to assert that they are entitled to the terms
provided by the ESPN LTAP Agreement are preserved;
(b) The portion of the cure claim arising on or before
November 30, 2004, will not exceed $500,000; and
(c) The Debtors or NCTC may assert the rights preserved in the
Bankruptcy Court or any other forum of competent
jurisdiction, upon proper notice.
Headquartered in Princeton, New Jersey, RCN Corporation --
http://www.rcn.com/-- provides bundled Telecommunications
services. The Company, along with its affiliates, filed for
chapter 11 protection (Bankr. S.D.N.Y. Case No. 04-13638) on
May 27, 2004. Frederick D. Morris, Esq., and Jay M. Goffman,
Esq., at Skadden Arps Slate Meagher & Flom LLP, represent the
Debtors in their restructuring efforts. When the Debtors filed
for protection from their creditors, they listed $1,486,782,000 in
assets and $1,820,323,000 in liabilities. (RCN Corp. Bankruptcy
News, Issue No. 18; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
RCN CORP: Inks Pact Paving Way for Liberty Contract Assumption
--------------------------------------------------------------
Liberty Mutual Insurance Company, through its Liberty Mutual
Surety division, provides various surety bonds to RCN Corporation
and its debtor-affiliates. Pursuant to the terms of a General
Agreement of Indemnity - Commercial Surety, dated February 8,
2001, among RCN Corporation, RCN Financial Management, Inc., and
Liberty, the Debtors agreed to indemnify Liberty with respect to
any loss, damage or expense incurred by Liberty in connection with
the Surety Bonds.
The Debtors' obligations to Liberty under the GAI and otherwise
are collateralized by a $3,345,687 letter of credit issued on
October 10, 2002 by JPMorgan Chase Bank for Liberty's benefit.
As part of the transactions to be effectuated by the Debtors
under their Plan of Reorganization, the Debtors propose to cause
Deutsche Bank to issue to Liberty a new letter of credit in the
face amount of $2,759,000 to collateralize the obligations
covered by the JPMorgan LC. The Debtors have requested Liberty's
consent to the substitution of the Deutsche Bank LC for the
JPMorgan LC.
On November 30, 2004, the Debtors sought the Court's permission
to assume certain executory contracts and renew insurance
programs. The Debtors proposed to assume the GAI.
In the Assumption Motion, the Debtors asserted that no cure
amount is due to Liberty as a condition of assumption.
In a stipulation, the Debtors and Liberty agree that:
(a) Liberty will consent to the assumption of the GAI;
(b) To the extent that Liberty is surety for the performance
of any executory contract of any of the Debtors, the
Debtors will amend the schedules to the Assumption Motion
or otherwise take necessary and appropriate actions to
assume the executory contracts. The Debtors will provide
appropriate notice to the counterparties to the contracts
of the assumption;
(c) The Assumption Motion requires the parties to file
objections in the event that they assert cure obligations
in excess of $0;
(d) Liberty will not be obligated to file a cure objection and
the Debtors agree and acknowledge that in the event that
Liberty incurs loss, damage or expense in connection
with the Surety Bonds or that would otherwise be
recoverable under the GAI, the Debtors will not assert
that Liberty is barred, estopped or enjoined from
recovering the losses, damages or expenses, or asserting
any other claim under the GAI, on grounds that Liberty
should have objected to the cure amount;
(d) The GAI, as assumed, will be binding on Reorganized RCN
and will apply to any surety bonds issued by Liberty by or
on behalf of the Debtors after the Effective Date.
Nothing will obligate Liberty to issue any further or
future surety bonds for, or on behalf of, the Debtors; and
(e) Liberty consents to the substitution of the Deutsche LC
for the JPMorgan LC and the reduction of the face amount
to $2,759,000, provided that any other change from the
terms and provisions of the JPMorgan LC is satisfactory to
Liberty.
Headquartered in Princeton, New Jersey, RCN Corporation --
http://www.rcn.com/-- provides bundled Telecommunications
services. The Company, along with its affiliates, filed for
chapter 11 protection (Bankr. S.D.N.Y. Case No. 04-13638) on
May 27, 2004. Frederick D. Morris, Esq., and Jay M. Goffman,
Esq., at Skadden Arps Slate Meagher & Flom LLP, represent the
Debtors in their restructuring efforts. When the Debtors filed
for protection from their creditors, they listed $1,486,782,000 in
assets and $1,820,323,000 in liabilities. (RCN Corp. Bankruptcy
News, Issue No. 18; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
RED BARN RESTAURANT: Case Summary & 89 Largest Unsecured Creditors
------------------------------------------------------------------
Lead Debtor: Red Barn Restaurant, LLC
2300 East Lamar Boulevard
Arlington, Texas 76006
Bankruptcy Case No.: 04-92334
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Tex-Cal Restaurant, LLC 04-92336
Colorado Restaurants, LLC 04-92338
Lifestyle Decatur Restaurant, LLC 04-92339
Tuscaloosa Restaurant, LLC 04-92340
Lifestyle Florence Restaurant, LLC 04-92341
Type of Business: The Debtor operates a restaurant.
Chapter 11 Petition Date: December 27, 2004
Court: Northern District of Texas (Ft. Worth)
Judge: Russell F. Nelms
Debtors' Counsel: John Michael McBride, Esq.
Michael McMahan, Esq.
JMM, P.C.
777 Main Street, Suite 1150
Ft. Worth, TX 76102
Tel: 817-877-1824
Fax: 817-877-1797
Estimated Assets Estimated Debts
---------------- ---------------
Red Barn Restaurant, LLC $10 M to $50 M $10 M to $50 M
Tex-Cal Restaurant, LLC $0 to $50,000 $1 M to $10 M
Colorado Restaurants, LLC $0 to $50,000 $500,000 to $1 M
Lifestyle Decatur Restaurant $0 to $50,000 $100,000-$500,000
LLC
Tuscaloosa Restaurant, LLC $0 to $50,000 $0 to $50,000
Lifestyle Florence $0 to $50,000 $50,000-$100,000
Restaurant, LLC
A. Red Barn Restaurant's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
IRS Form 941 $700,000
Ogden, UT 84201
Betsy Price - Tax Assessor $185,000
Collector
P.O. Box 961018
Fort Worth, TX 76161
David Childs - Tax Assessor $165,227
Collector
P.O. Box 620088
Dallas, TX 75262
Cirro Utilities $102,647
Mesquite Tax Fund $99,800
David Childs - Tax Collector Tax $91,289
Records Building
Texas State Comptroller Sales Tax $87,000
Colorado Dept. of Revenue Sales tax $85,000
Adrian Ciazza, Treasurer $85,000
Mesquite ISD $54,923
Mesquite Tax Fund $52,000
Colorado Dept. of Revenue Withholding tax $42,000
St. Paul Insurance Insurance $40,412
Texas Workforce Commission $36,000
Colorado Department of Labor Unemployment $33,000
Insurance Tax
Mark Paschall $30,000
Facilitec Maintenance $28,061
David Childs - Tax Collector Personal Property Tax $25,031
Records Building
David Childs - Tax Collector $23,418
Records Building
ISI Commercial Refrigeration Lease $22,642
B. Tex-Cal Restaurant's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
IRS Form 941 $325,000
Ogden, UT 84201
AMRESCO Commercial Finance, Rent $320,000
LLC
412 East Parkcenter Blvd.
Ste. 300
Boise, ID 83706
State of Comptroller Sales tax $83,000
111 E. 17th St.
Austin, TX 78774
Texas Workforce Commission $45,000
Texas Workforce Commission $30,321
St. Paul Insurance $26,887
State Comptroller $16,000
City Public Service $14,785
City of Austin Electric and water $13,573
Nelda Wells Spears, Tax Personal property $12,000
Collector Tax
San Antonio Water System Water $11,333
TXU Electric $10,282
Broadcast Music Inc. $10,028
M. Jack Martin III $9,034
ASCAP $7,463
Top Shelf Marketing $7,433
Sylvia Romo - Bexar County Personal Property $5,500
Tax Collector
Clear Channel $5,260
Ecolab $5,115
Amresco Dallas P.P. Tax $5,085
C. Colorado Restaurants' 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
AMRESCO Commercial Finance, $700,000
LLC
412 East Parkcenter Blvd.
Ste. 300
Boise, ID 83706
Sysco $70,074
P.O. Box 281247
Atlanta, GA 30384
Florida Dept. of Revenue $25,900
5050 W. Tennessee St.
Tallahassee, FL 32399
Keyes Asset Management Rent $11,939
Bar Harbor Seafood $11,123
Progress Energy $10,678
Dade Paper Company $6,458
Ray Valdes Tax Collector $6,439
Seminole County Tax Collector $6,372
St. Paul Travelers $4,068
Foliage Design Systems $2,533
City of Altamonte Springs $2,344
End Users $1,761
Royal Cup Coffee $1,233
Coca-Cola - Orlando $1,165
Kerwin Mitchell $991
Hydropolyponics $895
Landscape Improvements, Inc. $788
Tropical Fruit & Nut $704
Newcourt Leasing $692
D. Lifestyle Decatur Restaurant's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Alabama Dept. of Revenue Sales tax $82,239
Sales Tax
P.O. Box 327720
Montgomery, AL 36132
City of Decatur - Sales Tax Sales tax $40,852
P.O. Box 488
Decatur, AL 35602
U.S. Foods $28,144
P.O. Box 117
Montgomery, AL 36101
State of Alabama $10,500
City of Florence $9,121
IRS 941 Form (2001) $8,596
IRS 941 Form $8,000
Morgan County Sales Tax $7,286
St. Paul Insurance $5,996
IRS 941 Form $1,146
Amanda G. Scott - Revenue $1,135
Commissioner
Access Integrated Networks $1,023
BMI $812
Terminex $692
Payday of America $315
Prime Time Communication $198
Nexair, LLC $175
Metlife $168
FEDEX $16
Worldspice $37
E. Tuscaloosa Restaurant's 4 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
State Dept. of Revenue $24,000
Sales Tax Division
P.O. Box 327750
Montgomery, AL 36102
City of Tuscaloosa Sales tax $10,600
Sales Tax Division
Tuscaloosa, AL 35402
City of Tuscaloosa Sales tax $7,700
Revenue Department
P.O. Box 2089
Tuscaloosa, AL 35403
City of Tuscaloosa liquor tax $2,700
Revenue Department
F. Lifestyle Florence Restaurant's 5 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Alatax, Inc. City of Florence $51,542
3001 2nd Ave. South Sales Tax
Birmingham, AL 35233
Alabama Dept. of Revenue $25,385
Sales Tax Division
P.O. Box 327750
Montgomery, AL 36102
Alatax, Inc. Lauderdale County $8,869
3001 2nd Ave. South Sales Tax
Birmingham, AL 35233
Danny Hendrix $6,843
Revenue Commissioner -
Lauderdale County
City of Florence Beverage $1,739
Dept.
RITE AID: 3rd Qtr. Same Store Sales Climb 0.2% from Prior Year
--------------------------------------------------------------
Rite Aid Corporation (NYSE, PCX:RAD) reported financial results
for its third quarter, ended Nov. 27, 2004.
Revenues of $4.1 billion for the 13-week third quarter were flat
compared to revenues in the prior year third quarter. Same store
sales increased 0.2 percent during the third quarter as compared
to the year-ago like period, consisting of 0.1 percent pharmacy
same store sales increase and a 0.3 percent increase in front-end
same store sales. Prescription sales accounted for 64.3 percent
of total sales, and third party prescription sales represented
93.4 percent of pharmacy sales.
Net income for the quarter was $1.0 million, compared to last
year's third quarter net income of $73.6 million. The decrease in
net income was due primarily to a $13.7 million decrease in
adjusted EBITDA (which is reconciled to net income on the attached
table), a $20.2 million loss on debt modifications resulting from
the pay down and refinancing of the company's credit facility
during the third quarter and a $47.5 million tax benefit in the
prior year third quarter compared to a $5.4 million tax provision
in this year's third quarter.
Adjusted EBITDA was $163.8 million or 4.0 percent of revenues
compared to $177.5 million or 4.3 percent of revenues last year.
In the third quarter, the company remodeled 46 stores, relocated 4
stores opened 2 new stores and closed 9 stores. Stores in
operation at the end of the quarter totaled 3,363.
Refinancing That Lowers Borrowing Costs, Reduces Debt Also
Completed in Third Quarter
Other significant events in the quarter include the previously
announced completion of a refinancing that lowered the company's
overall borrowing costs by approximately $27 million annually and
reduced debt by $634 million to approximately $3.2 billion. The
refinancing included a new $1.4 billion senior secured credit
facility and a $400 million three-year accounts receivable asset
securitization facility. The new credit facility consists of a
$450 million term loan and a $950 million revolving credit
facility maturing in September 2009. The new accounts receivable
asset securitization facility matures in September 2007.
Company Lowers Guidance for Fiscal 2005
Based on current trends, Rite Aid said that it is lowering its
fiscal 2005 guidance for sales, net income and adjusted EBITDA.
The company said it expects sales to be between $16.7 billion and
$16.8 billion, with same store sales improving 1.2 percent to 2.1
percent as compared to previous guidance of $16.9 billion and
$17.0 billion, with same store sales improving 2.75 percent to
3.25 percent. Net income for fiscal 2005 is expected to be
between $49.0 million and $99.0 million or between $.03 and $.12
per diluted share as compared to previous guidance of net income
between $122 million and $150 million or between $.16 and $.22 per
diluted share. Adjusted EBITDA is expected to be between
$700 million and $750 million as compared to previous guidance of
between $770 million and $800 million. Capital expenditure
guidance is expected to be $225 million to $250 million as
compared to previous guidance of $275 million to $325 million.
"This was a difficult quarter as we continued to feel the negative
impact of the United Auto Workers mandatory mail program on our
sales and faced tougher year-over-year comparisons because of the
significant business we gained last year from the Southern
California grocery strike. A slow start to the flu season, which
began in earnest mid-November last year, also hurt our sales,"
said Mary Sammons, Rite Aid president and CEO. "While we will
cycle the impact of the UAW mandatory mail program and the results
of last year's grocery strike in the next three to six months, we
expect these factors to negatively impact our business the rest of
the year, which led us to lower guidance. Our team continues to
be focused on initiatives to deliver shareholder value long-term,
including our new store development program designed to strengthen
our market share and competitive positioning."
About the Company
Rite Aid Corporation -- http://www.riteaid.com/-- is one of the
nation's leading drugstore chains with annual revenues of $16.6
billion and approximately 3,400 stores in 28 states and the
District of Columbia.
* * *
As reported in the Troubled Company Reporter on Nov. 25, 2004,
Fitch Ratings initiated coverage of Rite Aid Corporation,
assigning a 'B-' rating to its $1.7 billion senior unsecured
notes, a 'B' rating to the company's $800 million senior secured
notes, and a 'B+' rating to the company's $1.4 billion bank
facility. The Rating Outlook is Stable.
The ratings reflect Rite Aid's improving operating performance,
strengthened debt profile, and positive industry fundamentals.
The ratings also recognize the company's limited financial
flexibility, the competitive operating environment, and industry
pricing pressures. The ratings on Rite Aid's secured bank
facility and senior secured notes reflect their first and second
priority liens, respectively, on the company's assets.
SCHUFF INTERNATIONAL: Extends Consent Solicitation Until Jan. 7
---------------------------------------------------------------
Schuff International Inc. (AMEX:SHF), a family of companies
providing fully integrated steel construction services, has
increased the consent fee and further extended the consent
solicitation in connection with a certain proposed amendment to
the Indenture pursuant to which its 10-1/2% Senior Notes due 2008
were issued. Schuff has increased the consent fee, payable to all
holders of record whose consent is received before expiration or
earlier termination of the consent solicitation, from $0.25 per
$100 principal amount of Notes owned by the consenting holder as
of the record date to $0.50 per $100. Schuff also has further
extended the expiration date until 5 p.m., New York City time, on
Friday, Jan. 7, 2005, unless the consent solicitation is further
extended or earlier terminated if the requisite consent is
obtained before the expiration date.
The adoption of the proposed amendment is conditioned on delivery
of consents from holders of at least a majority of the principal
amount of the Notes. The adoption of the proposed amendment is
also subject to certain other conditions, which are described in
Schuff's Consent Solicitation Statement dated Dec. 8, 2004, as
supplemented to reflect the increased consent fee and the extended
expiration date (the "Consent Solicitation Statement"). The
consent solicitation is being made solely by means of the Consent
Solicitation Statement. Except as otherwise described above, all
terms and conditions of the consent solicitation are unchanged.
This announcement is not an offer to purchase, a solicitation of
an offer to purchase, or a solicitation of consent with respect to
any securities.
Guggenheim Capital Markets LLC is serving as Solicitation Agent in
connection with the consent solicitation. Questions regarding the
terms of the consent solicitation may be directed to the
Solicitation Agent at:
Guggenheim Capital Markets LLC
Attention: Joseph Bencivenga
135 E. 57th St., 8th Floor
New York, New York 10022
Tel: 212-381-7500
joseph.bencivenga@guggenheimcm.com
Global Bondholder Services Corp. is serving as Tabulation Agent
and Information Agent in connection with the consent solicitation.
Questions regarding the delivery procedures for the consents and
requests for additional copies of the Consent Solicitation
Statement or related documents may be directed to the Information
Agent:
Global Bondholder Services Corp.
65 Broadway, Suite 704
New York, NY 10006
Attention: Corporate Actions
212-430-3774
Toll-free: 866-488-1500
Attention: Harvey Eng
heng@gbsc-usa.com
Schuff International Inc. is a family of steel fabrication and
erection companies providing a fully integrated range of steel
construction services, including design engineering, detailing,
joist manufacturing, fabrication and erection, and project
management expertise. The company has multi-state operations
primarily focused in the U.S. Sunbelt.
* * *
As reported in the Troubled Company Reporter on June 21, 2004,
Standard & Poor's Ratings Services lowered its corporate credit
and senior unsecured debt ratings on Schuff International, Inc.,
to 'CCC' from 'B-'. The outlook was negative.
STEWART ENTERPRISES: Earns $8.8 Million in Fourth Quarter
---------------------------------------------------------
Stewart Enterprises, Inc. (Nasdaq NMS:STEI) reported its results
for the fourth quarter and fiscal year 2004 along with the outlook
for fiscal year 2005 operating performance.
Kenneth C. Budde, Chief Executive Officer, stated, "We achieved
our operating and financial goals for our 2004 fiscal year. This
achievement is due to our employees' successful execution of our
operating initiatives and their commitment to serving families
with the best possible care during their time of need. We are
particularly pleased that these initiatives have resulted in
substantial growth in earnings per share and strong cash flow for
the year. We look forward to continued growth throughout fiscal
year 2005."
The Company reported net earnings of $8.8 million for the fourth
quarter and $46.1 million for fiscal year 2004.
Earnings from continuing operations for the fourth quarter of
fiscal year 2004 were $9.0 million, which includes gains on
dispositions, net of impairment losses, of $0.1 million ($0.5
million after tax) and charges for separation pay of $0.2 million
($0.1 million after tax). In the fourth quarter of fiscal year
2003, the Company reported a net loss from continuing operations
of $67.3 million, which includes a non-cash impairment charge on
long-lived assets of $9.3 million ($7.7 million after tax) and a
non-cash impairment charge for goodwill related to its cemetery
segment of $73.0 million ($66.9 million after tax). Excluding
these items, earnings from continuing operations would have been
$8.6 million in the fourth quarter of 2004 compared to
$7.3 million in the fourth quarter of 2003.
Earnings from continuing operations for the fiscal year ended
October 31, 2004 were $43.3 million, which includes charges for
separation pay of $3.4 million ($2.1 million after tax), partially
offset by gains on dispositions, net of impairment losses, of $0.3
million ($1.1 million after tax). For the fiscal year ended
October 31, 2003, the Company reported a net loss from continuing
operations of $51.1 million or $.47 per diluted share, which
includes a non-cash impairment charge on long-lived assets of $9.3
million ($7.7 million after tax, or $.07 per diluted share), a
non-cash impairment charge for goodwill related to its cemetery
segment of $73.0 million ($66.9 million after tax, or $.62 per
diluted share), a loss on early extinguishment of debt of $11.3
million ($7.3 million after tax, or $.07 per diluted share) and a
charge for separation pay of $2.5 million ($1.5 million after tax,
or $.01 per diluted share). Excluding these items, earnings from
continuing operations would have been $44.3 million or $.41 per
diluted share in fiscal year 2004 compared to $32.3 million or
$.30 per diluted share for fiscal year 2003, representing a 37
percent increase.
Revenue from continuing operations increased $13.5 million, or 2.7
percent for fiscal year 2004, and increased $2.2 million, or 1.8
percent, for the fourth quarter of 2004. The increase in revenue
was driven by an increase in cemetery revenue. Funeral revenue
was $278.4 million for both this fiscal year and last, and
cemetery revenue increased $13.5 million to $236.2 million for
fiscal year 2004. For the fourth quarter, funeral revenue
decreased $2.3 million and cemetery revenue increased $4.5
million.
The Company achieved its goal of 2.0 to 3.0 percent annual growth
in average revenue per funeral service, excluding the impact of
funeral trust earnings. For fiscal year 2004, the Company's same-
store funeral operations achieved a 3.6 percent increase in the
average revenue per traditional funeral service and a 4.9 percent
increase in the average revenue per cremation service. For the
fourth quarter of fiscal year 2004, the Company's same-store
funeral operations achieved a 3.6 percent increase in the average
revenue per traditional funeral service and a 4.3 percent increase
in the average revenue per cremation service. These gains were
partially offset by a year-over-year reduction in funeral trust
earnings and an increase in the proportion of non-traditional
funeral services, including cremations, resulting in an overall
1.3 percent increase in the average revenue per funeral service
for the year and a 0.5 percent increase in the average revenue per
funeral service for the quarter. The contribution of trust
earnings recognized as revenue upon the delivery of preneed
funerals was lower in 2004 than in fiscal year 2003 due to lower
investment returns realized in the Company's preneed funeral trust
funds during previous years.
The Company experienced a reduction in the number of families
served by its continuing funeral operations in fiscal year 2004 as
compared to fiscal year 2003, contributing to a decrease in
funeral volumes of 3.1 percent for the fourth quarter and 1.0
percent for fiscal year 2004. The Company's 227 same-store
funeral homes experienced a total decrease of 633 events out of
the 60,792 total same-store events performed over the twelve-month
period.
The Company's sales organization has had great success with its
preneed cemetery property and preneed funeral sales initiatives.
For the year, the Company experienced increases of 9 percent in
both cemetery property and preneed funeral sales, which is in line
with its stated goal of 5 to 10 percent. This increase in cemetery
property sales accounted for about half of the cemetery revenue
increase.
The remaining increase in cemetery revenue was due primarily to
higher levels of revenue associated with the construction of
cemetery projects and an improvement in the quality of accounts
receivable resulting in a reduction in the Company's bad debt
experience. Revenue related to the sale of cemetery property prior
to its construction is recognized on a percentage of completion
method of accounting as construction occurs. In summary, cemetery
revenue was higher in fiscal year 2004 than in fiscal year 2003
due to the increase in property sales, construction during the
year on various cemetery projects, and an improvement in the
Company's bad debt experience.
Mr. Budde added, "As a result of the growth in revenue and our
cost-saving initiatives, both our funeral and cemetery margins are
up substantially. Our funeral margin improved 300 basis points,
our cemetery margin improved 150 basis points, and our EBITDA
margin improved 190 basis points compared to fiscal year 2003. Our
employees and management team have delivered as planned, and we
are proud of what we have accomplished."
Cash flow from operations for fiscal year 2004 was $93.6 million,
and free cash flow was $75.0 million, including a cash inflow of
$33.2 million from a tax refund received during the first quarter
of fiscal year 2004 and cash outflows of $2.1 million for
separation pay. (See tables under "Reconciliation of Non-GAAP
Financial Measures.") As of December 6, 2004, the Company had
outstanding debt of $413.8 million and cash and cash equivalents
of $32.0 million.
The Company's divestiture of non-performing businesses is
proceeding as planned. As of October 31, 2004 the Company had
received $22.6 million from its divestitures representing the sale
of 56 businesses. As of December 6, 2004 the Company had closed on
or had entered into agreements to sell an additional 12 businesses
for about $4.2 million. In total, the Company has closed on or
entered into agreements to sell 68 businesses for about $26.8
million and has 11 additional businesses it will continue to
market.
On November 19, 2004, the Company completed the refinancing of its
senior secured credit facility with a five-year $125 million
Revolving Credit Facility (of which $10.0 million was drawn as of
December 6, 2004) and a seven-year $100 million Term Loan B.
During the first quarter of fiscal year 2005, the Company expects
to incur a charge for early extinguishment of debt of $2.7 million
($1.8 million after tax, or $.02 per diluted share) to write-off
the remaining unamortized book value of fees on the prior
agreement. The fees incurred for the new agreement are
approximately $1.5 million and will be amortized over the life of
the new debt. As a result of the refinancing, the leverage-based
grid pricing for the interest rate on the Company's Revolving
Credit Facility was reduced to LIBOR plus 150.0 basis points at
closing, representing a 50 basis-point reduction, and the interest
rate on the Company's Term Loan B was reduced to LIBOR plus 175.0
basis points, which is 75 basis points below the prior agreement.
The new agreement has substantially the same collateral and
guarantees as the prior agreement and is subject to similar but
somewhat less restrictive financial and other covenants.
On December 2, 2004, the Company announced that Thomas M. Kitchen
was selected as Chief Financial Officer. Mr. Budde commented, "Tom
comes to us from Equitas Capital Advisors, LLC where he served as
an investment management consultant since July 2003. In addition,
during a 25-year career with Avondale Industries, Inc., the
nation's fifth largest shipbuilder, he served at various times as
chief financial officer, president and board member. He has served
on our board of directors since February 2004 and, as a board
member, already knows our industry, our business, our strategies
and our management team. Tom brings extensive financial and
corporate management experience to our organization, and we are
delighted to have him join our executive management team."
Mr. Budde concluded, "Fiscal year 2004 has been an exciting year
for Stewart Enterprises, and we look forward to fiscal year 2005.
We have set our fiscal 2005 targets to achieve $.44 to $.48 in
earnings per share from continuing operations, excluding unusual
items. To achieve this target, we will continue to focus on our
initiatives, which include increasing preneed sales, increasing
call volume and managing the costs in our businesses. We feel
optimistic about the opportunities that exist in our business, and
we remain confident in our direction as we continue to build upon
and further implement our key operating initiatives."
Information regarding the Company's earnings and cash flow
forecasts and the principal assumptions used in those forecasts
can be found in this release under the heading "Company Forecasts
for Continuing Operations in Fiscal Year 2005."
Fourth Quarter Results From Continuing Operations
-- Funeral revenue decreased $2.3 million to $65.5 million,
principally due to a 3.1 percent decrease in the number of
same-store funeral services performed.
-- The Company's same-store businesses achieved average revenue
increases of 3.6 percent per traditional funeral service and
4.3 percent per cremation service for the quarter, partially
offset by a year-over-year reduction in funeral trust
earnings and an increase in the proportion of non-
traditional funerals, including cremations, resulting in an
overall increase of 0.5 percent in average revenue per
funeral service performed.
-- The cremation rate for the Company's same-store businesses
was 37.1 percent for the fourth quarter of 2004 compared to
35.8 percent for the fourth quarter of 2003.
-- Cemetery revenue increased $4.5 million to $60.4 million due
to higher levels of revenue associated with the construction
of cemetery projects, an increase in property sales and an
improvement in the quality of accounts receivable resulting
in a reduction in the Company's bad debt experience. Revenue
related to the sale of cemetery property prior to its
construction is recognized on a percentage of completion
method of accounting as construction occurs.
-- The Company realized an annual average return of 2.9 percent
in its perpetual care trust funds during the fourth quarter
of 2004 compared to 3.7 percent in the comparable period of
2003.
-- Funeral margins were 25.0 percent compared to 24.2 percent
for the same period in 2003. The 80 basis-point improvement
in funeral margins was principally due to reduced general
and administrative costs in the funeral segment resulting
primarily from the Company's cost reduction initiatives.
-- Cemetery margins were 21.5 percent compared to 20.9 percent
for the same period in 2003. The 60 basis-point improvement
in cemetery margins was primarily due to increased cemetery
revenue as discussed above, combined with reduced general
and administrative costs in the cemetery segment resulting
primarily from the Company's cost reduction initiatives.
-- Gross profit increased $1.3 million to $29.4 million
primarily due to the increase in cemetery revenue discussed
above, combined with reduced general and administrative
costs in the funeral and cemetery segments resulting
primarily from the Company's cost reduction initiatives.
-- Corporate general and administrative expenses increased $0.1
million to $4.4 million.
-- During the fourth quarter of fiscal year 2004, the Company
recorded severance charges of $0.2 million ($0.1 million
after tax).
-- During the fourth quarter of fiscal year 2003, the Company
incurred a non-cash impairment charge for goodwill related
to its cemetery segment of $73.0 million ($66.9 million
after tax, or $.62 per diluted share).
-- During the fourth quarter of fiscal year 2003, the Company
recorded an impairment charge on long-lived assets of $9.3
million ($7.7 million after tax, or $.07 per diluted share)
in continuing operations to write down to estimated fair
market value certain assets that it had determined to sell.
During the fourth quarter of fiscal year 2004, the Company
evaluated the long-lived assets remaining and sold several
assets that it held for sale at a gain. The net effect was
that the Company recorded gains on dispositions, net of
impairment losses, of $0.1 million ($0.5 million after tax)
in continuing operations in the fourth quarter of 2004.
-- Other operating income, net was $0.1 million in the fourth
quarter of 2004 and $0.2 million in the fourth quarter of
2003.
-- Interest expense decreased $1.8 million to $11.3 million due
to an $87.4 million decrease in the average debt outstanding
during the fourth quarter of 2004 compared to the fourth
quarter of 2003, partially offset by a 58 basis-point
increase in the average interest rate for the period.
Fiscal Year Results From Continuing Operations
-- Funeral revenue was $278.4 million for both this fiscal year
and last.
-- The Company's same-store businesses achieved average revenue
increases of 3.6 percent per traditional funeral service and
4.9 percent per cremation service for the year, partially
offset by a year-over-year reduction in funeral trust
earnings and an increase in the proportion of non-
traditional funerals, including cremations, resulting in an
overall increase of 1.3 percent in average revenue per
funeral service performed.
-- The increase in average revenue was substantially offset by
a decrease in same-store calls. The Company experienced a
1.0 percent decrease in the number of same-store funeral
services performed, representing a total decrease of 633
events out of the 60,792 total same-store funeral services
performed over the twelve-month period.
-- The cremation rate for the Company's same-store businesses
was 36.6 percent in 2004 compared to 35.9 percent in 2003.
-- Cemetery revenue increased $13.5 million to $236.2 million,
due to the increase in property sales, construction during
the year on various cemetery projects, and an improvement in
the Company's bad debt experience. For the year, the Company
experienced an increase of 9 percent in cemetery property
sales, which accounted for about half of the cemetery
revenue increase. Revenue related to the sale of cemetery
property prior to its construction is recognized on a
percentage of completion method of accounting as
construction occurs.
-- The Company realized an annual average return of 3.1 percent
in its perpetual care trust funds during fiscal year 2004
compared to 4.2 percent during fiscal year 2003.
-- Funeral margins were 28.2 percent compared to 25.2 percent
for the same period in 2003. The 300 basis-point improvement
in funeral margins was principally due to reduced general
and administrative costs in the funeral segment resulting
primarily from the Company's cost reduction initiatives.
-- Cemetery margins were 23.8 percent compared to 22.3 percent
for the same period in 2003. The 150 basis-point improvement
in cemetery margins was primarily due to increased cemetery
revenue as discussed above, combined with reduced general
and administrative costs in the cemetery segment resulting
primarily from the Company's cost reduction initiatives.
-- Gross profit increased $14.8 million to $134.7 million
primarily due to the increase in cemetery revenue as
discussed above, combined with reduced general and
administrative costs in the funeral and cemetery segments
resulting primarily from the Company's cost reduction
initiatives.
-- Corporate general and administrative expenses decreased $0.6
million to $17.1 million primarily due to decreases in
salaries and legal fees.
-- During fiscal year 2004, the Company incurred charges for
separation pay of $3.4 million ($2.1 million after tax, or
$.02 per diluted share) due to workforce reductions
announced in December of 2003 combined with separation pay
to a former officer. During fiscal year 2003, the Company
incurred a charge of $2.5 million ($1.5 million after tax,
or $.01 per diluted share) due to separation pay to former
officers.
-- During fiscal year 2003, the Company incurred a non-cash
impairment charge for goodwill related to its cemetery
segment of $73.0 million ($66.9 million after tax, or $.62
per diluted share).
-- During fiscal year 2003, the Company recorded an impairment
charge of $9.3 million ($7.7 million after tax, or $.07 per
diluted share) in continuing operations to write down to
estimated fair market value certain assets that it had
determined to sell. During the third and fourth quarters of
fiscal year 2004, the Company evaluated the long-lived
assets remaining and sold several assets that it held for
sale at a gain. The net effect was that the Company recorded
gains on dispositions, net of impairment losses, of $0.3
million ($1.1 million after tax, or $.01 per diluted share)
in continuing operations during fiscal year 2004.
-- Other operating income, net was $2.1 million for fiscal
years 2004 and 2003. Other operating income includes net
gains on the sale of assets that were not included in the
Company's businesses classified as held for sale.
-- Interest expense decreased $6.2 million to $47.3 million due
to a $79.5 million decrease in the average debt outstanding
during 2004 compared to 2003, partially offset by a 32
basis-point increase in the average interest rate for the
period.
-- During fiscal year 2003, the Company incurred a loss on
early extinguishment of debt of $11.3 million ($7.3 million
after tax, or $.07 per diluted share).
-- Investment and other income, net decreased $1.4 million to
an expense of $0.9 million, primarily due to a write-down of
certain marketable securities during the first quarter of
2004.
Depreciation and Amortization
-- Depreciation and amortization from continuing operations was
$13.2 million in the fourth quarter of 2004 compared to
$12.9 million in the fourth quarter of 2003.
-- Depreciation and amortization from total operations was
$13.2 million in the fourth quarter of 2004 compared to
$13.3 million in the fourth quarter of 2003.
-- Depreciation and amortization from continuing operations was
$52.2 million in fiscal year 2004 compared to $51.9 million
in fiscal year 2003.
-- Depreciation and amortization from total operations was
$52.8 million in fiscal year 2004 compared to $53.7 million
in fiscal year 2003.
Cash Flow Results and Debt for Total Operations
-- Net cash provided by operating activities for the quarter
ended October 31, 2004 was $25.0 million, compared to $23.6
million for the fourth quarter of 2003.
-- Net cash provided by operating activities for fiscal year
2004 was $93.6 million, compared to $69.8 million in fiscal
year 2003. This includes a tax refund of $33.2 million
received during fiscal year 2004 due to a change in the tax
accounting methods for cemetery merchandise revenue and a
tax refund of $23.3 million received during fiscal year 2003
related to the sale of the Company's foreign operations. The
Company made separation payments of $2.1 million during
fiscal year 2004 and $0.4 million during fiscal year 2003.
Excluding the tax refunds and separation payments, cash flow
from operations would have increased $15.6 million to $62.5
million for fiscal year 2004, compared to $46.9 million in
fiscal year 2003, primarily due to an increase in earnings.
-- Free cash flow for fiscal year 2004 was $75.0 million,
compared to $53.5 million in fiscal year 2003. This includes
cash inflows for tax refunds received and cash outflows for
separation payments made as discussed above.
-- In June 2003, the Company announced a $25 million stock
repurchase program, which was subsequently increased by $3
million to a total of $28 million. As of December 6, 2004,
the Company had invested $22.2 million to repurchase 3.5
million shares since inception of the program.
-- As of October 31, 2004, the Company had outstanding debt of
$416.8 million and cash and cash equivalents of $21.5
million.
-- On November 19, 2004, the Company completed the refinancing
of its senior secured credit facilities with a five-year
$125 million Revolving Credit Facility and a seven-year $100
million Term Loan B.
-- As of December 6, 2004, the Company had outstanding debt of
$413.8 million and cash and cash equivalents of $32.0
million.
Founded in 1910, Stewart Enterprises is the third largest provider
of products and services in the death care industry in the United
States, currently owning and operating 238 funeral homes and 147
cemeteries. Through its subsidiaries, the Company provides a
complete range of funeral merchandise and services, along with
cemetery property, merchandise and services, both at the time of
need and on a preneed basis.
Stewart Enterprises, Inc. will host its quarterly conference call
for investors to discuss fourth quarter results today at 10 a.m.
Central Standard Time. The teleconference dial-in number is 800-
231-5571. From outside the continental United States, call 973-
582-2703. Interested parties may also listen to the live
conference call via the Internet through Stewart Enterprises'
website at http://www.stewartenterprises.com/ To participate,
please call the number or go to the website at least 15 minutes
prior to the call. A replay of the call will be available on the
Company's website until December 30, 2004. Additional investor
information is available at http://www.stewartenterprises.com/
* * *
As reported in the Troubled Company Reporter on Nov. 10, 2004,
Standard & Poor's Ratings Services assigned its 'BB+' rating and
its '1' recovery rating to the proposed senior secured bank credit
facility of large funeral home and cemetery operator Stewart
Enterprises Inc. At the same time, Standard & Poor's affirmed its
'BB' corporate credit and 'B+' subordinated debt ratings on
Stewart. When the transaction is completed, the 'BB' rating on
the existing senior secured bank credit facility will be
withdrawn. As of July 31, 2004, the Jefferson, Louisiana-based
company had about $437 million of debt outstanding.
"The speculative-grade ratings on Stewart reflect its operating
concentration in a competitive, fragmented industry with stable
but modest long-term growth prospects and a rising consumer
preference for lower cost services," said Standard & Poor's credit
analyst David Peknay. "The company's relatively efficient
operations, an improving balance sheet, and a large contracted
revenue backlog partly offset these factors."
TODD MCFARLANE: Wants to Access Lender's Cash Collateral
--------------------------------------------------------
Todd Mcfarlane Productions, Inc., asks the U.S. Bankruptcy Court
for the District of Arizona for authority to use $500,000 of cash
collateral securing repayment of amounts owed to Stephen A.
McConnell. Mr. McConnell asserts a lien on all of the Debtor's
right, title and interest in its accounts receivables and any
proceeds thereof.
The Debtor needs to use the cash collateral in order to preserve
its estate's going concern value and be able to formulate a
confirmable plan of reorganization.
The Debtor proposes to provide a replacement lien of the same
type, extent and validity and will pay 2% interest to protect Mr.
McConnell's interest.
Headquartered in Tempe, Arizona, Todd Mcfarlane Productions, Inc.
-- http://www.spawn.com-- publishes comic books including Spawn,
Hellspawn, & Sam and Twitch. The Company filed for chapter 11
protection on Dec. 17, 2004 (Bankr. D. Ariz. Case No. 04-21755).
Kelly Singer, Esq., at Squire Sanders & Dempsey, LLP, represents
the Debtor in its restructuring efforts. When the Company filed
for protection from its creditors it listed more than $10 million
in assets and more than $50 million in debts.
TRESTLE HOLDINGS: Closes First Tranche of $3.5MM Private Offering
-----------------------------------------------------------------
Trestle Holdings (OTCBB:TLHO) has closed the first tranche of its
private placement to institutional and accredited investors. The
placement amount is authorized up to $3.5 million. The placement
is a unit offering, with each unit consisting of one share of the
Company's common stock and a warrant to purchase 0.75 shares of
common stock. The units are priced at $1.75 and each warrant is
exercisable for whole shares only at $1.75 per share. The Company
intends to use proceeds of the offering for working capital,
including in connection with its previously announced services
business and its proposed acquisition of Interscope Technologies.
The Company has completed the sale of 1,142,858 units resulting in
gross proceeds of $2.0 million to the Company. The units sold by
the Company have not been registered under the Securities Act of
1933 and may not be offered or sold in the United States absent
such registration or an available exemption from registration.
The Company has agreed to file a resale registration statement for
purpose of registering for resale the shares of common stock
forming the units, including the common stock underlying the
warrants, not later than January 31, 2005.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be
a sale of any securities in any jurisdiction in which such
offering would be unlawful. This press release is being issued
pursuant to and in accordance with Rule 135c under the Securities
Act.
About Trestle Holdings Inc.
Trestle Holdings develops and sells digital imaging and
telemedicine applications to the life sciences markets. The
company's products link geographically dispersed users with each
other, information databases, and analytical tools. This improved
integration drives cost savings and process efficiencies, enables
improved pre-clinical and clinical phases of research and
development for new drugs, and enhances patient care.
* * *
Going Concern Doubt
Primarily as a result of its recurring losses and lack of
liquidity, the Company has received a report from its independent
auditors that includes an explanatory paragraph describing the
uncertainty as to Trestle Holdings' ability to continue as a going
concern. The Company has suffered recurring losses from
operations and has an accumulated deficit of approximately
$43,768,000 at Sept. 30, 2004.
"To continue our operations, or if our current level of operations
change, the Company will be required to secure additional working
capital, by way of equity or debt financing, or otherwise, to
sustain continuing operations," the Company said in its SEC
filing. "There can be no assurance that the Company will be able
to secure sufficient financing or on terms acceptable to the
Company. If we are unable to obtain adequate funds if and when
needed, we would be required to delay, limit or eliminate some or
all of our proposed operations. If additional funds are raised
through the issuance of equity securities, the percentage
ownership of our current stockholders is likely to or will be
reduced."
UAL CORP: Moves to Place 1997A Bond Funds into Escrow
-----------------------------------------------------
On August 1, 1997, California Statewide Communities Development
Authority issued $154,845,000 Special Facilities Lease Revenue
Bonds, 1997 Series A (United Air Lines, Inc. - San Francisco
International Airport Projects). The funds were used for
improvements at the San Francisco Airport. In connection with
the Bond issuance, the Debtors entered into a series of Bond
Agreements, including a Facilities Lease, a Site Sublease and a
Maintenance Base Lease.
HSBC Bank USA is the indenture trustee with respect to the Bonds.
On March 21, 2003, the Debtors commenced Adversary Proceeding 03-
A-00975 captioned United Air Lines v. California Statewide
Communities et al., seeking a declaration that, among other
things, the Bond Agreements together with the Facilities Lease
are part of a "disguised" financing arrangement.
On March 30, 2004, the Bankruptcy Court entered a summary
judgment in Adversary Proceeding in favor of the Debtors.
The Bankruptcy Court ruled that the Facilities Lease at San
Francisco was not a "true lease."
HSBC took an appeal from the Bankruptcy Court's order to the
United States District Court for the Northern District of
Illinois. On November 16, 2004, the District Court reversed the
Bankruptcy Court's decision. The Debtors intend to appeal from
the District Court's order to the Seventh Circuit Court of
Appeals.
In the interim, the Debtors, HSBC and the CSCDA agree that:
1) the 1997 SFO Bond Parties will be barred from enforcing
remedies under the Maintenance Facility Lease, the
Facilities Lease, the Site Sublease or any other agreement
due to the Debtors' non-payment of obligations on the Series
1997A Bonds until:
a) final resolution, involving exhaustion of every appeal
and re-hearing, on whether payment obligations of the
Series 1997A Bonds are payment obligations under a true
lease; or
b) further Court order; and
2) the Debtors will put enough funds to cover all outstanding
payment obligations of the Series 1997A Bonds into escrow.
The parties ask Judge Wedoff to approve the Agreement.
The Debtors and the 1997 SFO Bond Parties will enter into an
escrow agreement and the Debtors will place $17,652,330 into
escrow. This deposit will represent the amounts due on the
Series 1997A Bonds from four missed payments. Until the issue is
completely resolved, the Debtors will place all additional
payments due into the escrow account. The funds will be held in
escrow in trust for the benefit of the 1997 SFO Bond Parties and
the holders of Series 1997A Bonds.
HSBC and the CSCDA argue that the Debtors are obligated to pay
for fees and expenses, which are denominated as "Additional Rent"
under the Facilities Lease. HSBC and the CSCDA also assert that
the Debtors must pay default interest for the missed payments.
The Debtors do not agree. Consequently, HSBC and the CSCDA will
reserve their rights to compel the Debtors to escrow the fees,
expenses and default interest.
Kirk D. Dillman, Esq., at Hennigan, Bennett & Dorman, in Los
Angeles, represents HSBC. R. Dale Ginter, Esq., at Downey Brand,
in Sacramento, California, represents the CSCDA.
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. 70; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
ULTIMATE ELECTRONICS: Form 10-Q Discloses Bankruptcy Warning
------------------------------------------------------------
Ultimate Electronics, Inc. (Nasdaq: ULTEE) has received a
notification from the Listing Qualifications Department at The
Nasdaq Stock Market, Inc. (Nasdaq) that it is in material
noncompliance with Marketplace Rule 4310(c)(14) for continued
listing on Nasdaq.
Marketplace Rule 4310(c)(14) requires that a listed company file
with Nasdaq all reports and other documents filed or required to
be filed with the Securities and Exchange Commission. The Company
was unable to file a fully compliant Form 10-Q for the quarterly
period ended Oct. 31, 2004, with the Commission, and Nasdaq in
violation of Marketplace Rule 4310(c)(14), by the extension
deadline of Dec. 15, 2004. As of the opening of business on
Dec. 23, 2004, an "E" was appended to the Company's trading symbol
"ULTE" to reflect its noncompliance with Marketplace Rule
4310(c)(14).
The Company is unable to file a fully compliant Form 10-Q because
the Company's independent auditors have not completed their work
with respect to the Company's quarterly financial statements. The
Company is cooperating fully to ensure that the review of the
Company's quarterly financial statements by the Company's
independent auditors is completed as quickly as possible. After
this matter is completed, the Company will file a compliant Form
10-Q/A with both the Commission and Nasdaq as soon as possible.
The notification does not by itself result in immediate delisting
of the Company's securities, although Nasdaq stated in the
notification that unless the Company requests a hearing regarding
the delisting, the Company's securities will be delisted from
Nasdaq at the opening of business today, Dec. 30, 2004. The
Company submitted a request for a hearing before the Nasdaq
Listing Qualifications Panel on this matter on Dec. 27, 2004 and
the request will stay the delisting of the Company's securities
pending the hearing and a determination by the Panel. There can
be no assurance that the Panel will grant the Company's request
for continued listing.
About the Company
Ultimate Electronics, Inc. (NASDAQ: ULTE) is a leading specialty
retailer of home entertainment and consumer electronics products
in 14 states. The company operates 65 stores, including 54 stores
in Arizona, Idaho, Illinois, Iowa, Kansas, Minnesota, Missouri,
Nevada, New Mexico, Oklahoma, South Dakota, Texas and Utah under
the trade name Ultimate Electronics, and 11 stores in Colorado
under the trade name SoundTrack. In addition, the company operates
Fast Trak, Inc. an independent electronics repair company based in
Colorado and a wholly owned subsidiary of Ultimate Electronics.
* * *
In its Form 10-Q for the quarterly period ended Oct. 31, 2004,
filed with the Securities and Exchange Commission, Ultimate
Electronics has concluded that the continued sales decline, the
requirement for additional reserves and the potential loan
covenant violation(s) raise substantial doubt about its ability to
continue as a going concern. The Company is examining all of its
strategic alternatives, including obtaining additional financing
of at least $25.0 million and a potential reorganization of its
business.
The Company has retained an investment bank to assist it in
obtaining additional financing. Also, the Company is considering
the following to improve its financial condition, liquidity and
results of operations:
-- Refining its turnaround strategy to improve sales and reduce
costs;
-- Seeking a reduction in overall rent expense by negotiating
with certain of its lessors;
-- Closing certain underperforming stores to increase liquidity
to other stores and reduce selling, general and
administrative expenses;
-- Limiting capital expenditures to existing commitments:
-- Entering into strategic alliances or business combinations;
or
-- Selling all or a substantial part of its assets.
The Company and its investment bank are actively engaged in
discussions with numerous parties regarding its strategic
alternatives. Although the Company cannot predict the outcome of
these discussions, it may seek to enter into a transaction in the
near future to avoid exhausting its remaining cash balances. It
is also possible that such a transaction could be consummated in
conjunction with a filing for protection under Chapter 11 of the
federal bankruptcy laws. There can be no assurances, however, as
to when such a transaction might be consummated, if at all, nor
can there be any assurances regarding the potential impact of such
a transaction on the Company's stakeholders. In the event that
such a transaction is not entered into in the near future, it is
possible that the Company will be required to seek protection
under Chapter 11 of the federal bankruptcy laws and there can be
no assurances regarding the impact of such a process on the
Company's stakeholders.
Based on the Company's current operations, it likely will not have
sufficient liquidity to fund ongoing operations beyond the end of
the fourth quarter of this fiscal year. Moreover, the Company's
ability to fund continuing operations through that timeframe could
be further adversely affected by various circumstances, including
further decreases in anticipated sales, employee turnover, further
liquidity restrictions by vendors, and other circumstances outside
of the Company's immediate and direct control.
URSTADT BIDDLE: Posts $18.6 Million Net Income in Fourth Quarter
----------------------------------------------------------------
Urstadt Biddle Properties Inc. reported its fourth quarter and
full year financial results for the fiscal year ended October 31,
2004.
Net income was $18.6 million or $0.76 per diluted Class A Common
share and $0.69 per diluted Common share in 2004 compared to
$17.6 million or $0.73 per diluted Class A Common share and $0.66
per diluted Common share a year ago. Income from continuing
operations was $22.9 million in fiscal 2004 compared to
$19.8 million a year earlier. For the three months ended Oct. 31,
2004, net income applicable to Class A Common and Common
shareholders was $4,649,000 or $0.19 per diluted Class A Common
share and $0.17 per diluted Common share compared to $4,656,000 or
$0.19 per diluted Class A Common share and $0.17 per Common share
in fiscal 2003.
Diluted funds from operations (FFO), the primary indicator of
operating performance, increased to $30.2 million this year from
$28.3 million in fiscal 2003. On a diluted per share basis, FFO
increased to $1.21 per Class A Common share and $1.09 per Common
share in fiscal 2004 compared to $1.15 per Class A Common share
and $1.04 per Common share last year. For the quarter ended
October 31, 2004, FFO increased to $7,666,000 or $.30 per Class A
Common share and $.28 per Common share compared to $7,537,000 or
$.30 per Class A Common share and $.28 per Common share in last
year's fourth quarter.
Rental income from properties in fiscal 2004 increased 9.5% to
$63.5 million from $58.0 million last year. The increase in
revenues was the result of recent property acquisitions, increased
leasing at the Company's core properties and higher recoveries of
operating expenses.
Commenting on 2004's operating results, Willing Biddle, President
and COO said, "Our core properties performed well this year and
given the strong fundamentals of our core markets, together with
our conservative balance sheet, we are well-positioned to continue
generating solid growth in 2005. Capitalizing on the strong
demand for space at our properties, we continued to increase
rental rates and overall property operating income in 2004." "In
terms of property acquisitions, Mr. Biddle noted that,
"Competition for quality grocery-anchored properties remains high;
however, we continue to seek properties that we expect to enhance
our operating results. We are currently in discussions with
several owners to acquire property in fiscal 2005."
Leasing
At the end of the year, the Company's core properties were 99%
leased, an increase of nearly 2% over last year. During the year,
the Company completed new and renewal leases for 284,000 square
feet of retail space.
Dividend Increase
The Directors of the Company approved increases for the eleventh
consecutive year in the dividend rates on shares of UBP's Class A
Common Stock and Common Stock. The quarterly dividend rates were
increased to 22 cents for each share of Class A Common Stock and
20 cents for each share of Common Stock. The dividends are
payable January 17, 2005 to stockholders of record on January 5,
2005.
Acquisitions and Sales
Despite increased competition by buyers of retail properties in
its target areas, the Company acquired a portfolio of four retail
properties totaling 38,000 square feet of leasable space at a cost
of $11 million, including the assumption of approximately $4.7
million in mortgage debt.
Shortly after the close of the Company's fiscal year, the Company
announced that it sold its Farmingdale, New York property for
$9.75 million and will report a gain of approximately $5.7 million
from the sale in the first fiscal quarter of 2005.
Non-GAAP Financial Measure
Funds from Operations
The Company considers FFO to be an additional financial measure of
operating performance of an equity REIT. The Company reports FFO
in addition to net income applicable to common shareholders and
net cash provided by operating activities. Although FFO is a non-
GAAP financial measure, the Company believes it provides useful
information to shareholders, potential investors and management
because it primarily excludes the assumption that the value of
real estate assets diminishes predictably over time and industry
analysts have accepted it as a performance measure. FFO is
helpful as it excludes various items included in net income that
are not indicative of the Company's operating performance such as
gains (or losses) from sales of property. The Company computes
FFO in accordance with standards established by the National
Association of Real Estate investment Trusts. FFO is defined by
NAREIT as net income or loss, excluding gains (or losses) from
debt restructuring and sales of properties plus depreciation and
amortization, and after adjustments for unconsolidated joint
ventures. FFO does not represent cash generated from operating
activities in accordance with GAAP and is not indicative of cash
available to fund cash needs. FFO should not be considered as an
alternative to net income as an indicator of the Company's
operating performance or as an alternative to cash flow as a
measure of liquidity. Since all companies do not calculate FFO in
a similar fashion, the Company's calculation of FFO presented
herein may not be comparable to similarly titled measures as
reported by other companies.
UBP is a self-administered equity real estate investment trust
providing investors with a means of participating in ownership of
income-producing properties with investment liquidity. UBP owns
thirty-three (33) properties containing 3.4 million square feet of
space.
* * *
As reported in the Troubled Company Reporter on Oct. 19, 2004,
Fitch Ratings affirmed the 'BB' rating of the preferred stock
($52.7 million outstanding) of Urstadt Biddle Properties Inc.
(NYSE: UBA). Fitch also assigns a 'BB+' issuer rating to Urstadt
Biddle. The Rating Outlook remains Stable.
The ratings reflect:
(1) Urstadt Biddle's stable, consistent cash flows, and
(2) a good quality portfolio of predominantly grocery-anchored
shopping centers located mostly in high income, mature
suburban markets of Fairfield County, Connecticut and
Westchester and Putnam counties in New York, which together
constitute 75% of the company's gross leaseable area.
WESTPOINT: Wants to Reject Panda Supply Agreement & Lease
---------------------------------------------------------
Before WestPoint Stevens, Inc. and its debtor-affiliates filed for
chapter 11 protection, they operated a vertical towel
manufacturing facility in Roanoke Rapids, North Carolina. The
facility included a weaving mill, a finishing complex, a sewing
operation and a distribution center.
The Debtors, as successors-in-interest to the Bibb Company, are a
party to a Cogeneration Energy Supply Agreement, dated
January 12, 1989, with Panda-Rosemary, L.P., as successor-in-
interest to Panda Energy Corporation.
Pursuant to the Cogeneration Agreement, Panda constructed and
continues to operate a cogeneration facility, which produces
steam and chilled water to be used at the Rosemary Complex. The
Cogeneration Agreement has a 25-year term and is not scheduled to
expire for several years. Panda provides the Debtors with all of
the steam and chilled water necessary to operate the Rosemary
Complex according to the prices set forth in the Cogeneration
Agreement.
To facilitate Panda's operation of its Cogeneration Facility, the
Debtors leased to Panda the property on which the Cogeneration
Facility sits and granted certain related easements, pursuant to a
Real Property and Easement Agreement, dated June 9, 1989. The
Lease term is identical to the term of the Cogeneration Agreement
and is automatically renewable upon any renewal of the
Cogeneration Agreement. Panda pays the Debtors a nominal rent of
$1 per year, which has been prepaid for the term of the Lease.
John J. Rapisardi, Esq., at Weil, Gotshal & Manges, LLP, in New
York, relates that in conjunction with the reorganization of
their businesses, the Debtors ceased their operations at the
Rosemary Complex in June 2003. Thus, the Debtors have ceased
making any significant purchases of steam or chilled water
pursuant to the Cogeneration Agreement. To terminate their
obligations under the Cogeneration Agreement, Panda approached
the Debtors to negotiate a buy-out of the remaining term and
their obligations under the Cogeneration Agreement. Following
extensive, arm's-length negotiations, the parties agreed that
Panda would pay the Debtors $750,000, as consideration for the
Debtors' agreement to:
(i) reject the Cogeneration Agreement and the Lease pursuant
to Section 365(a) of the Bankruptcy Code; and
(ii) convey the Leased Property to Panda, as is, where is.
By this motion, the Debtors seek the Court's authority to:
(a) reject the Cogeneration Agreement;
(b) reject the Lease; and
(c) sell the Leased Property.
Mr. Rapisardi asserts that the Debtors and their estates are no
longer deriving any benefit from continued performance under the
Cogeneration Agreement or the Lease. Rather, the termination of
both agreements will enable the Debtors to realize substantial
value for the benefit of their estates. Aside from the $750,000,
payment, Panda has agreed to waive any claims it may possess
against the Debtors' estates, including those claims asserted in
Claim No. 487, arising from the rejection of, or otherwise related
to, the Cogeneration Agreement or the Lease.
The Debtors' local real estate brokers have advised them that the
consideration the Debtors are receiving from Panda in exchange for
the sale of the Leased Property represents fair market value.
In addition, the Debtors are in the process of marketing the
Rosemary Property as a whole. Consistent with this endeavor, the
Debtors have been advised by their local real estate brokers that
the sale of the Leased Property to Panda will not have an adverse
impact on their efforts to sell the Rosemary Property.
Headquartered in West Point, Georgia, WestPoint Stevens, Inc.,
-- http://www.westpointstevens.com/-- is the #1 US maker of bed
linens and bath towels and also makes comforters, blankets,
pillows, table covers, and window trimmings. It makes the Martex,
Utica, Stevens, Lady Pepperell, Grand Patrician, and Vellux
brands, as well as the Martha Stewart bed and bath lines; other
licensed brands include Ralph Lauren, Disney, and Joe Boxer.
Department stores, mass retailers, and bed and bath stores are its
main customers. (Federated, J.C. Penney, Kmart, Sears, and Target
account for more than half of sales.) It also has nearly 60
outlet stores. Chairman and CEO Holcombe Green controls 8% of
WestPoint Stevens. The Company filed for chapter 11 protection on
June 1, 2003 (Bankr. S.D.N.Y. Case No. 03-13532). John J.
Rapisardi, Esq., at Weil, Gotshal & Manges, LLP, represents the
Debtors in their restructuring efforts. (WestPoint Bankruptcy
News, Issue No. 35; Bankruptcy Creditors' Service, Inc., 215/945-
7000)
WESTPOINT STEVENS: Will File T-Ink License Agreement Under Seal
---------------------------------------------------------------
WestPoint Stevens, Inc. and its debtor-affiliates enter into
various licensing agreements to obtain the right to manufacture
and sell products incorporating licensed trademarks. The Debtors
typically pay licensing and royalty fees on the sales of licensed
products, which are offset by charging a premium for the
established brand. Consumers tend to pay a premium for a
particular brand because they are seeking the "lifestyle" look of
that designer, just as in apparel. A significant portion of the
Debtors' sales is derived from licensed, designer trademarks,
constituting an integral element of the Debtors' business that
enables them to capitalize on well-known consumer brands, which
are supported by their owners with investments for marketing and
advertising.
T-Ink, Inc., has pioneered and patented a revolutionary new
technology that replaces buttons, switches and wires with
conductive or "thinking" ink. This new technology gives two-
dimensional products the ability to talk, sing, make sounds and
light up though the use of a patented ink application and power
source. T-Ink utilizes its "exclusive printable electronically
colored conductive ink" for an array of products with
applications in consumer goods, packaging and promotions,
communications, and electronics. The low-cost printing process
associated with the technology allows the specially formulated
inks to be printed on a variety of materials including paper,
fabric and plastic. The "switch" is printable, flexible,
washable, and is easy to apply.
T-Ink and the Debtors engaged in extensive discussions regarding
the potential applications of the T-Ink technology within the
textile industry. After good faith and arm's-length
negotiations, the Debtors were able to reach an agreement for
licensing the T-Ink technology.
Accordingly, the Debtors seek the Court's authority to enter into
the License Agreement.
The Debtors believe that entry into the License Agreement will
allow them to take advantage of a unique opportunity to expand
their product line and increase market share. The Debtors have
historically been at the forefront of integrating new technology
in the manufacturing and augmentation of their products, through
ownership of their own patents and trademarks as well as through
licensing agreements. The T-Ink License Agreement presents a
unique opportunity for the Debtors to create a new market and
introduce new products with interactive technology into the
textile industry.
In addition, the License Agreement provides the Debtors with
exclusive control over the new technology in the home textile
industry. The Debtors intend to leverage this exclusive
ownership of the T-Ink technology with their existing brands into
the introduction and release of innovative and exciting products
to the market. The Debtors further believe that with the
introduction of these new products and the exclusive right to use
the technology in the home textile industry, they will be able to
attract new licenses and successfully grow their core businesses.
Moreover, the License Agreement offers the Debtors flexibility in
the event they enter into a restructuring sale transaction.
Specifically, the Debtors may assign their rights under the
License Agreement to a successor-in-interest in connection with a
sale of substantially all of their assets pursuant to Section
363(b) of the Bankruptcy Code or pursuant to a Chapter 11 plan
upon T-Ink's prior written consent, which may not be unreasonably
withheld.
* * *
John J. Rapisardi, Esq., at Weil, Gotshal & Manges, LLP, in New
York, tells the Court that the License Agreement contains highly
sensitive, confidential, proprietary and competitive information,
the general disclosure of which would be detrimental and
prejudicial to the Debtors and T-Ink. The Debtors and T-Ink have
agreed that the T-Ink Agreement must remain confidential.
According to Mr. Rapisardi, the License Agreement contains
"commercial information" within the meaning of Section 107(b) of
the Bankruptcy Code.
At the Debtors' behest, the Court authorizes the Debtors to file
the License Agreement under seal.
Headquartered in West Point, Georgia, WestPoint Stevens, Inc.,
-- http://www.westpointstevens.com/-- is the #1 US maker of bed
linens and bath towels and also makes comforters, blankets,
pillows, table covers, and window trimmings. It makes the Martex,
Utica, Stevens, Lady Pepperell, Grand Patrician, and Vellux
brands, as well as the Martha Stewart bed and bath lines; other
licensed brands include Ralph Lauren, Disney, and Joe Boxer.
Department stores, mass retailers, and bed and bath stores are its
main customers. (Federated, J.C. Penney, Kmart, Sears, and Target
account for more than half of sales.) It also has nearly 60
outlet stores. Chairman and CEO Holcombe Green controls 8% of
WestPoint Stevens. The Company filed for chapter 11 protection on
June 1, 2003 (Bankr. S.D.N.Y. Case No. 03-13532). John J.
Rapisardi, Esq., at Weil, Gotshal & Manges, LLP, represents the
Debtors in their restructuring efforts. (WestPoint Bankruptcy
News, Issue No. 35; Bankruptcy Creditors' Service, Inc., 215/945-
7000)
WET SEAL: Expects to Close 150 Underperforming Stores in Feb.
-------------------------------------------------------------
Specialty retailer The Wet Seal, Inc. (Nasdaq:WTSLA) will close
approximately 150 underperforming Wet Seal stores as part of a
major restructuring plan.
The company has appointed a third party liquidator to manage the
inventory liquidations for the closing stores and expects the
store closings to be completed by end of February 2005. In
conjunction with these closures, approximately 2,000 positions
will be eliminated.
The cost of these store closings and related personnel severance
costs will be recognized in the fourth quarter ending January 29,
2005. The company is currently completing its estimate of the
store closing costs and will announce this closing cost estimate
in January 2005.
"While a difficult to decision to make, it is necessary for The
Wet Seal, Inc., to reduce its cost structure and focus on those
stores that can deliver the best performance as we implement our
new merchandise strategy," said Joe Deckop, interim chief
executive officer. "We thank all of our employees for their
continued commitment during these challenging times."
Headquartered in Foothill Ranch, California, The Wet Seal, Inc.,
is a leading specialty retailer of fashionable and contemporary
apparel and accessory items. The company currently operates a
total of 559 stores in 47 states, the District of Columbia and
Puerto Rico, including 463 Wet Seal stores and 96 Arden B. stores.
The company's products can also be purchased online at
http://www.wetseal.comor http://www.ardenb.com. For more company
information, visit http://www.wetsealinc.com
* Lazard & Signatura Link to Expand Services in Brazil
------------------------------------------------------
Lazard and Signatura Advisory have formed Signatura Lazard, a 50-
50 joint venture to provide local and cross-border financial
advisory services in Brazil.
Located in Sao Paulo, the new firm will provide M&A, corporate and
financial restructuring, capital markets and corporate finance
services to a diversified client base that includes companies with
investment or interests in Brazil.
"While Lazard has advised on cross-border activities in Brazil,
we're pleased to now have an on-the-ground presence with top-
flight local advisors," said Lazard President Charles Ward.
"Signatura Lazard will allow us to provide high-quality advisory
services to Brazilian companies and to non-Brazilians looking to
take advantage of the ample investment opportunities that exist in
this market."
Signatura founders, Marcelo Lyrio and Jean Pierre Zarouk, added:
"Signatura Lazard was created based on a shared vision of how to
best serve clients: with independence, execution capability and
long-term commitment. This union comes at a time in which
critical financial transformations are taking place in Brazil,
creating great opportunities for our clients here and abroad."
Signatura's Lyrio and Zarouk, former executives of ING in Brazil,
have advised on some of the nation's most important transactions.
Among the prominent Brazilian deals in which Lazard has
participated as an adviser are: the merger of AmBev and Interbrew,
the acquisition of Quilmes by AmBev, the sale of Banca Intesa's
stake in Banco Sudameris Brazil, the restructuring of AES Sul and
Electropaulo Metropolitana for AES Corp., and MCI's sale of its
stake in Embratel.
Lazard, the world's pre-eminent advisory investment bank, has
offices in 15 countries around the globe. With origins dating
back to 1848, the firm provides international financial advisory
services and global transaction execution to corporations,
partnerships, institutions, governments, and individuals. Lazard
provides services including mergers and acquisitions, asset
management, restructurings, capital markets execution, real estate
investment banking, and alternative investment management.
* O'Melveny & Myers LLP Announces Partnership Class for 2005
------------------------------------------------------------
On February 1, 2005, 16 new partners will be admitted to O'Melveny
& Myers LLP:
-- Eric J. Amdursky
Eric is a member of the Labor and Employment Department and is
resident in the Firm's Newport Beach office. He received his law
degree in 1995 from Loyola Law School, where he was a Sayre
MacNeil Scholar and a member of the Order of the Coif. Eric
joined O'Melveny & Myers in 1995 and has since developed a broad-
based labor and employment practice, including employment
litigation, labor and employment in corporate transactions, and
labor and employment counseling. Eric has specific experience in
employment class action defense, covenants not to compete and
other restrictive covenants, employment discrimination litigation,
and high-stakes executive disputes.
-- Elizabeth H. Baird
Lizzie Baird is a member of the Litigation Department and is
resident in the Firm's Washington, DC office. She received her
law degree from Georgetown University Law Center in 1996. Formerly
a Managing Director for Meridian Capital Corporation and a
municipal bond trader on Wall Street for ten years, Lizzie joined
O'Melveny & Myers in 2001. Lizzie's practice focuses on the
defense of securities enforcement actions, both regulatory
(brought by the SEC, NASD, NYSE or similar agencies) and criminal
(brought by the DOJ, NYAG or similar agencies).
-- Jeffrey A. Barker
Jeff Barker is a member of the Litigation Department and is
resident in the Firm's Century City office. He received his law
degree in 1993 from the University of California, Los Angeles
School of Law, where he was the Chief Managing Editor of the UCLA
Law Review and a Distinguished Advocate in the UCLA Moot Court
Honors Program. Jeff joined O'Melveny & Myers in 1998 and has
since developed experience in complex business litigation and
other adversarial matters, representing individuals and business
entities in the areas of entertainment, intellectual property, and
the Internet.
-- Randall W. Edwards
Randy Edwards is a member of the Intellectual Property and
Technology Department and is resident in the Firm's San Francisco
office. He received his law degree cum laude in 1995 from
Northwestern University, where he was an Associate Articles Editor
of the Northwestern University Law Review. Randy clerked for the
Honorable Charles E. Wiggins of the U.S. Court of Appeals for the
Ninth Circuit. He joined O'Melveny & Myers in 1997 and has
focused his practice on complex litigation, including patent,
copyright, unfair competition and consumer fraud claims.
-- Pamela A. Harris
Pam Harris is a member of the Litigation Department and is
resident in the Firm's Washington, DC office. She received her
law degree in 1990 from Yale Law School, where she was a member of
the Moot Court Board and the Current Topics Editor of the Yale Law
& Policy Review. Pam clerked for Justice John Paul Stevens on the
U.S. Supreme Court and the Honorable Harry T. Edwards, Chief Judge
of the U.S. Court of Appeals for the D.C. Circuit. Prior to
joining the Firm, Pam also served as Attorney Advisor at the
Office of Legal Counsel at the Department of Justice and was a
professor at the University of Pennsylvania Law School, where her
scholarship focused on the law of church and state. Pam joined
O'Melveny & Myers in 1999 and focuses her practice in the area of
appellate litigation, including Supreme Court representation.
-- Amy J. Longo
Amy Longo is a member of the Litigation Department and is resident
in the Firm's Newport Beach office. She received her law degree
in 1996 from Columbia Law School, where she was a Harlan Fiske
Stone Scholar. Amy joined O'Melveny & Myers in 1998 and her area
of practice includes securities and derivative class and
individual actions, corporate governance lawsuits, and commercial
litigation. Amy is an established leader in the American Bar
Association Section of Litigation, where she has held a series of
positions of significant responsibility.
-- Jeremy Maltby
Jeremy Maltby is a member of the Litigation Department and is
resident in the Firm's Los Angeles office. He received his law
degree in 1995 from Columbia Law School, where he was a Chancellor
James Kent Scholar, a Harlan Fiske Stone Scholar, and an Articles
Editor of the Columbia Law Review. Jeremy clerked for Justice
David H. Souter on the U.S. Supreme Court, the Honorable Pierre N.
Leval of the U.S. Court of Appeals for the Second Circuit, and the
Honorable Eugene H. Nickerson of the U.S. District Court for the
Eastern District of New York. Jeremy joined the Firm in 1999 and
his areas of practice range from international sanctions and
arbitration matters, the trial and appeal of white collar cases,
internal corporate investigations, class action procedural issues,
and appellate and Supreme Court matters.
-- James J. Moriarty
Jim Moriarty is a member of the Transactions Department and is
resident in the Firm's New York office. He received his law
degree from New York University in 1995. Except for an 18-month
period when he was general counsel for an Internet incubator fund,
Jim spent his entire professional career first at O'Sullivan,
which merged with O'Melveny & Myers in 2002. On behalf of the
Firm, Jim represents private equity and venture capital funds and
their portfolio companies in a wide variety of transactions,
including merger and acquisition transactions, leveraged buyouts,
strategic investments and venture
capital financings.
-- Luc Moritz
Luc Moritz is a member of the Tax Department and is resident in
the Firm's Los Angeles office. He received law degrees in 1995
from the University of California, Los Angeles School of Law,
where he was Editor of the Pacific Basin Law Journal, and in 1989
from the University of Geneva, Switzerland, where he was president
of the Geneva Law Student Association. Luc joined O'Melveny &
Myers in 1995 and the primary focus of his practice relates to tax
issues arising in international transactions ranging from
financings to mergers and acquisitions. He has also handled
significant tax controversy matters and infrastructure development
projects in the United States and abroad.
-- Russell J. Pinilis
Russ Pinilis is a member of the Tax Department and is resident in
the Firm's New York office. He received his law degree cum laude
from New York University in 1996. In 1999, Russ joined
O'Sullivan, which merged with O'Melveny & Myers in 2002. Russ'
practice focuses on the tax aspects of private equity transactions
and fund formation and he regularly works on leveraged buyout
transactions (including deal structure, contract negotiation,
executive compensation arrangements, and financing structure),
venture capital investments, and exit transactions such as sales,
IPOs, and innovatie financial instruments used by private equity
investors.
-- Gregory A. Robins
Greg Robins is a member of the Transactions Department and is
resident in the Firm's Los Angeles office. He received his law
degree from the University of California, Hastings College of Law
in 1996 and clerked for the Honorable Jerome Farris of the U.S.
Court of Appeals for the Ninth Circuit. Greg joined O'Melveny &
Myers in 1996. His practice emphasizes leveraged acquisition
finance and asset-based lending, as well as debtor-in-possession
and bankruptcy exit financing.
Greg also has significant experience in a wide variety of real
estate financing transactions.
-- Stephen B. Sonne
Steve Sonne is a member of the Transactions Department and is
resident in the Firm's Silicon Valley office. He received his law
degree magna cum laude from Duke University School of Law in 1997.
Steve joined O'Melveny & Myers in 2003 and his practice focuses on
the representation of emerging growth and public technology
companies in connection with venture capital financing, public
offerings, mergers and acquisitions, SEC regulatory matters,
corporate governance and general corporate counseling.
-- William J. Sushon
Bill Sushon is a member of the Litigation Department and is
resident in the Firm's New York office. He received his law
degree in 1995 from Columbia University School of Law, where he
was a Harlan Fiske Stone Scholar. In 2002, Bill joined
O'Sullivan, which merged with O'Melveny & Myers that same year.
His practice focuses on complex commercial litigation, including
securities class actions, shareholder derivative lawsuits, hostile
takeover litigation, partnership disputes, breach of contract
actions, bankruptcy litigation, and a host of other matters. Bill
serves on the Association of the Bar of the City of New York's
Committee on Professional and Judicial Ethics.
-- Lawrence H. Sussman
Larry Sussman is a member of the Transactions Department and is
resident in the Firm's Beijing office. He received his law degree
in 1995 and an LL.M. in Taxation in 1997 from New York University
Law School. Larry joined O'Melveny & Myers in 2002. His practice
includes a diverse cross-section of corporate transactions,
emphasizing foreign direct investment and Chinese regulatory
matters, acquisitions and dispositions of privately, publicly, and
state-owned operating companies, distressed assets transactions,
private equity deals involving various types of Chinese portfolio
companies, and licensing work and advice with respect to
specialized regulatory regimes and intellectual property
protection measures applicable to technology companies doing
business in China.
-- Sharon L. Tomkins
Sharon Tomkins is a member of the Litigation Department and is
resident in the Firm's Los Angeles office. She received her law
degree in 1996 from the University of Southern California, where
she was a member of the Order of the Coif, a recipient of the
Judge Barry Russell Federal Practice Award, and a member of the
Southern California Law Review. Sharon clerked for the Honorable
Danny Boggs of the U.S. Court of Appeals for the Sixth Circuit.
Sharon joined O'Melveny & Myers in 1996 and her practice focuses
on securities and regulatory matters.
-- Scott M. Voelz
Scott Voelz is a member of the Litigation Department and is
resident in the Firm's Los Angeles office. He received his law
degree from Yale Law School in 1995. Scott joined O'Melveny &
Myers in 1995 and, on behalf of the Firm, has represented clients
in contract and construction claims, oil and gas lease disputes,
environmental and toxic tort cases, and a number of class and mass
tort actions involving product liability and property damage
claims. Scott has also represented major entertainment studios in
a number of intellectual property matters. Scott has handled and
tried matters in both federal and state courts, as well as a
variety of Alternative Dispute Resolution (ADR) settings.
Arthur B. Culvahouse, Jr., the Firm's Chair said:
"O'Melveny & Myers is a strong contender for the best clients, for
the best work, and for the best talent. This year's new partner
class represents the bi-coastal and international scope of our
Firm, as well as a broad cross-section of our practices."
"Each of these individuals has demonstrated the exceptional talent
and personal qualities required of an O'Melveny & Myers partner as
embodied in the Firm's values of excellence, leadership and
citizenship, as well as the capacity to be leaders in our Firm and
in the legal profession. We all take great pride in welcoming
them to our partnership."
About O'Melveny & Myers
O'Melveny & Myers LLP is a values-driven law firm guided by the
principles of excellence, leadership and citizenship. With the
breadth, depth and foresight to serve clients competing in a
global economy, our attorneys devise innovative approaches to
resolve problems and achieve business goals. Established in 1885,
the Firm maintains 14 offices around the world, with more than 900
attorneys. O'Melveny & Myers' capabilities span virtually every
area of legal practice, including Antitrust/Competition; Capital
Markets; Corporate Finance; Entertainment and Media; Global
Enforcement and Criminal Defense; Intellectual Property and
Technology; Labor and Employment; Litigation; Mergers and
Acquisitions; Private Equity; Project Development and Real Estate;
Restructuring and Insolvency; Securities; Tax; and Trade and
International Law.
* Sheppard Mullin Adds Two New Attorneys to Growing Practice
------------------------------------------------------------
Sheppard, Mullin, Richter & Hampton LLP disclosed that Iddo Arad
and Miriam Vogel have joined the firm's Entertainment and Media
practice. Mr. Arad will be based in the firm's New York office
and Vogel is based in the firm's Century City office.
Both attorneys will concentrate their transactional practice in
the entertainment and media area, representing major motion
picture studios and other institutional entertainment clients in
connection with all aspects of the development, production,
acquisition and worldwide distribution of motion pictures and
other audiovisual content.
Mr. Arad was most recently Director of Business Affairs with
Sheppard Mullin client, Focus International. Ms. Vogel was most
recently with Manatt Phelps Philips and previously worked in The
White House in the Office of Public Liaison and the Office of
Presidential Personnel.
Robert Darwell, co-chair of the Entertainment and Media practice
group, commented, "Iddo and Miriam will give us greater capacity
to service our growing practice, and both bring strong industry
experience to the firm. With Iddo in New York, Miriam liaising
with our D.C. office on regulatory and legislative issues, and the
practice group based in Century City, we continue to expand the
entertainment and media practice by leveraging the firm's
expansion into the East with the capability to provide a greater
range of legal services."
Additionally, Darwell and Entertainment and Media partner Ben
Mulcahy divide their time between the firm's New York office and
the Century City office. They specialize in the areas of
entertainment and advertising, which practice currently includes
representation of such institutional clients as Disney, Sony,
Paramount, New Line and The Marketing Store Worldwide.
To tap into the continued globalization of the industry, Sheppard
Mullin's Entertainment and Media group has instituted a bilingual
requirement of all attorneys joining the practice area. Mr. Arad
is fluent in Hebrew and speaks Spanish. Ms. Vogel speaks French
and Hebrew.
Mr. Arad received a J.D. from Benjamin N. Cardoza School of Law
2000. He completed a bachelor's degree, cum laude, in business at
The University of Miami in 1997. Ms. Vogel received a J.D. from
Georgetown University Law Center in 2001. She completed a
bachelor's degree, with distinction and high honors, in history at
University of Michigan in 1996.
About Sheppard, Mullin, Richter & Hampton LLP
Sheppard, Mullin, Richter & Hampton LLP is a full service AmLaw
100 firm with more than 430 attorneys in nine offices located
throughout California and in New York and Washington, D.C. The
firm's California offices are located in Los Angeles, San
Francisco, Santa Barbara, Century City, Orange County, Del Mar
Heights and San Diego. Sheppard Mullin provides legal expertise
and counsel to U.S. and international clients in a wide range of
practice areas, including Antitrust, Corporate and Securities;
Entertainment and Media; Finance and Bankruptcy; Government
Contracts; Intellectual Property; Labor and Employment;
Litigation; Real Estate/Land Use; and Tax, Employee Benefits,
Trusts and Estate Planning. The firm was founded in 1927.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
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related conferences are encouraged. Send announcements to
conferences@bankrupt.com.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
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Monthly Operating Reports are summarized in every Saturday edition
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For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published by
Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania,
USA, and Beard Group, Inc., Frederick, Maryland USA. Yvonne L.
Metzler, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Dylan
Carlo Gallegos, 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.
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