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/raid1/www/Hosts/bankrupt/TCR_Public/050105.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, January 5, 2005, Vol. 9, No. 3 Headlines 900 ORIOLE LLC: Voluntary Chapter 11 Case Summary ACTION REAL ESTATE: Voluntary Chapter 11 Case Summary APPLIED SOIL: Creditors Must File Proofs of Claim by Jan. 14 ARDENT HEALTH: Majority of Noteholders Agree to Amend Indenture ATA AIRLINES: Gets Court Nod to File Section 1110 Stipulations AMCAST INDUSTRIAL: Wants to Hire Ordinary Course Professionals BATY DEVELOPMENT: Case Summary & 20 Largest Unsecured Creditors BELLAIRE GENERAL: Case Summary & 20 Largest Unsecured Creditors BRILLIANT DIGITAL: Taps Vasquez & Co. as Independent Accountant CARBIZ INC: Equity Deficit Widens to $28.9 Million at October 31 CENTURY/ML: Asks Court to Stretch Plan Filing Period to March 31 CIRTRAN: $3.68 Million Equity Deficit Spurs Going Concern Doubt CONE MILLS: Has Until Jan. 27 to Solicit Acceptances of Plan CROWN PACIFIC: Transfers Timberland Property to Crown Pacific Unit DI GIORGIO: Launches Sr. Debt Tender Offer & Consent Solicitation DICKIE WALKER MARINE: Auditors Raise Going Concern Doubt EL CONEJO: Files Chapter 11 Reorganization Plan in N.D. Texas EL CONEJO: Gets Second Interim Court Okay to Use Cash Collateral ENVIRONMENTAL REMEDIATION: Reports $3.593 Mil. Net Loss in YE 2004 EXECAIR MAINTENANCE: Case Summary & 20 Largest Unsecured Creditors EYE CARE: Offers to Purchase $100 Million of 9-1/8% Sr. Notes FIBERMARK INC: Plan Confirmation Hearing Set for Jan. 27 FOSTER WHEELER: Converts 87.4% Pref. Shares to 34MM Common Shares GENEVA STEEL: Committee Taps Benedetto & BF as Financial Advisors GENOIL INC: Receives $4.6 Million Private Equity Financing GMAC COMMERCIAL: Moody's Holds Ba2 Rating on $12.2M Class F Certs. INTEGRATED HEALTH: Settles Dispute with Litchfield for $1,563,571 iSECURETRAC: Converts $1.3 Million of Debt into Common Stock IWO HOLDINGS: Files Pre-Packaged Chapter 11 Plan in Delaware IWO HOLDINGS INC: Case Summary & 60 Largest Unsecured Creditors KAISER ALUMINUM: Board Elects John Donnan as General Counsel KANSAS CITY: Welcomes Arthur Shoener as COO & Executive VP KISTLER AEROSPACE: Files Plan of Reorganization in Washington KMART CORP: SEC Charges Former Kmart Executives with Fraud KMART HOLDING: Nov. & Dec. Same Store Sales Down by 4.6 Percent KRISPY KREME: Credit Line Dries Up & Starts Talking to Lenders LOEWEN: State Street Wants $5.5 Mil. Reserve Account Maintained LUCENT TECH: Annual Shareholders' Meeting Slated for February 16 MANDALAY RESORT: Reminder About $400MM Senior Debt Conversion MORGAN STANLEY: Moody's Places Low-B Ratings on Five Cert. Classes MOOG INC: Moody's Rates Proposed $120M Senior Sub. Notes at Ba3 MURRAY INC: U.S. Trustee Appoints 7-Member Creditors Committee NATIONAL CENTURY: Trust Objects to JP Morgan & Bank One Claims NORTEL NETWORKS: Has Until March 31 to File 2003 Annual Report NRG ENERGY: Inks Coal Transport Pact for Big Cajun II Facility OM GROUP: NYSE Extends Form 10-K Filing Deadline Until March 31 OPTINETRICS INC: Voluntary Chapter 11 Case Summary PROSOFTTRAINING: Nasdaq Schedules Jan. 27 Delisting Hearing RELIANCE GROUP: Liquidator Wants to Recover Busti's Legal Fees REPUBLIC ENGINEERED: Nothing Left & Moves to Dismiss Chap. 11 Case REVCARE INC: Losses & Deficits Trigger Going Concern Doubt SAFETY-KLEEN: Bankr. Court Approves IBM Settlement Agreement SALTIRE INDUSTRIAL: Has Exclusive Right to File Plan Until Mar. 16 SALTIRE INDUSTRIAL: Has Until Feb. 15 to Decide on Leases SCOTT ACQUISITION: Genovese Joblove Approved as Committee Counsel SCOTT ACQUISITION: Creditors Must File Proofs of Claim by Feb. 23 SIDESHOW CREATIVE: Case Summary & 20 Largest Unsecured Creditors SPIEGEL INC: Wants Court to Determine Prepetition Tax Liabilities TENET HEALTHCARE: Completes Sale of 5 Hospitals in 3 States THISTLE MINING: Toronto Stock Exchange Halts Common Stock Trading TRICN INC: Case Summary & 20 Largest Unsecured Creditors UAL CORP: Sec. 1113(c) Conference Slated for Friday UAL CORPORATION: Files 9th Reorganization Status Report US AIRWAYS: Pegasus Aviation Presses for Adequate Protection USGEN: Dominion Closes Three Northeast Power Station Purchases VENTURE HOLDINGS: DIP Facility Expires on January 28 VERESTAR INC: Court Adjourns Disclosure Statement Hearing Sine Die W.R. GRACE: Sealed Air & Cryovac Object to Disclosure Statement W.R. GRACE: Fresenius Complains Disclosure Statement is Ambiguous W.R. GRACE: Asbestos PI Committee Blasts Disclosure Statement YELLOW ROADWAY: Completes Exchange Offers for Sr. Notes due 2023 YUKOS OIL: Deutsche Bank Attacks U.S. Jurisdiction of Bankruptcy * Dechert LLP Welcomes 67 Lawyers from Swidler Berlin's 2 Offices * Cadwalader, Wickersham & Taft LLP Names Five New Partners * Ralph C. Ferrara to Join LeBoeuf as Litigation Partner * Upcoming Meetings, Conferences and Seminars ********* 900 ORIOLE LLC: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: 900 Oriole LLC 2192 Martin Suite 165 Irvine, California 92612 Bankruptcy Case No.: 04-17784 Type of Business: Real Estate Chapter 11 Petition Date: December 29, 2004 Court: Central District of California (Santa Ana) Judge: John E. Ryan Debtor's Counsel: Ronald Appel, Esq. Appel & Appel 12341 Newport Avenue, Suite B100 Santa Ana, CA 92705 Tel: 714-573-9011 Total Assets: $4,660,000 Total Debts: $1,351,000 The Debtor has no unsecured creditors who are not insiders. ACTION REAL ESTATE: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Action Real Estate Inc. 16300 Lindburgh Street Van Nuys, California 91406 Bankruptcy Case No.: 04-18163 Type of Business: Real Estate Chapter 11 Petition Date: December 29, 2004 Court: Central District of California (San Fernando Valley) Judge: Kathleen T. Lax Debtor's Counsel: Julie Ann Herzog, Esq. 18980 Ventura Boulevard Suite 320 Tarzana, CA 91356 Tel: 818-881-9535 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor has no unsecured creditors who are not insiders. APPLIED SOIL: Creditors Must File Proofs of Claim by Jan. 14 ------------------------------------------------------------ The United States Bankruptcy Court for the Central District of California, Northern Division set January 14, 2005, as the deadline for all creditors and equity security holders owed by Applied Soil Mechanics, Inc., now known as Earth Systems Consultants Northern California, to file their proofs of claim. Three types of claims are exempt from the Bar Date: a) claims arising from the rejection of an executory contract or unexpired lease, b) claims of governmental units, and c) claims arising as the result of a transfer or avoidance action pursuant to chapter 5 of the Bankruptcy Code. All original proofs of claim or interest must be filed with: Clerk of the Court U.S. Bankruptcy Court, Central District of California 1415 State Street Santa Barbara, California 93101 and a copy must be served on: Simon Aron, Esq. Wolf, Rifkin, Shapiro & Schulman, LLP 11400 W. Olympic Boulevard, 9th Floor Los Angeles, California 90064 Headquartered in San Luis Obispo, California, Applied Soil Mechanics Inc. offers environmental services support to industrial firms in California. The Company filed for chapter 11 protection (Bankr. C.D. Cal. Case No. 04-11716) on July 2, 2004. Simon Aron, Esq., at Wolf, Rifkin, Shapiro & Schulman, LLP, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated of more than $500,000 in assets and more than $1 Million in debts. ARDENT HEALTH: Majority of Noteholders Agree to Amend Indenture --------------------------------------------------------------- Ardent Health Services LLC's subsidiary, Ardent Health Services, Inc., has received consents from holders of a majority of its 10% Senior Subordinated Notes due 2013 to an amendment to the financial reporting covenant in the indenture governing the Notes. The Noteholders also consented to a waiver of all existing defaults under the indenture relating to the financial reporting covenant. Citigroup Global Markets Inc. and Banc of America Securities LLC acted as the solicitation agents and Global Bondholder Services Corporation acted as the information and tabulation agent for the consent solicitation. About the Company Ardent Health Services is a provider of health care services to communities throughout the United States. Ardent currently operates 35 hospitals in 14 states, providing a full range of medical/surgical, psychiatric and substance abuse services to patients ranging from children to adults. * * * As reported in the Troubled Company Reporter on Dec. 7, 2004, Standard & Poor's Ratings Services placed its single-B ratings on Ardent Health Services, Inc., on CreditWatch with negative implications. The CreditWatch listing reflects our increasing concerns about the hospital chain's ability to control its operations in a period of rapid growth and manage its tightened liquidity. Ardent's growth is illustrated by its ballooning revenues, which have increased by about 70% since 2003, taking into account its recent acquisition of Hillcrest HealthCare System. Ardent announced that it will lower its earnings in a financial restatement for 2003 and for the first two quarters of 2004. The restatement stems from accounting adjustments at its largest subsidiary, Lovelace Sandia Health System, and will result in an annualized reduction in earnings of about $20 million. The company will not release any financial statements until the end of the first quarter in 2005. Ardent is in the process of changing its financial accounting procedures to address these issues. Meanwhile, liquidity is tighter because Ardent has agreed with its banks not to draw on the revolving credit facility. "We are furthermore concerned about the potential for additional financial adjustments due to information technology issues," said Standard & Poor's credit analyst David Peknay. "The announcement of a $26 million impairment charge relating to the consolidation of information systems could indicate greater acquisition integration challenges than originally anticipated." Standard & Poor's expects to review management's efforts to better control its activities and handle its funding needs through the possible near-term sale of its Samaritan Hospital and through bank borrowing negotiations. ATA AIRLINES: Gets Court Nod to File Section 1110 Stipulations -------------------------------------------------------------- To recall, ATA Airlines, Inc., and Chicago Express Airline, Inc., ask the United States Bankruptcy Court for the Southern District of Indiana for permission to make elections pursuant to Section 1110(a) of the Bankruptcy Code and perform obligations under certain leases and secured financings relating to aircraft and aircraft engines that may be subject to Section 1110. The Court grants ATA Airlines, Inc., and Chicago Express Airlines' request, subject to these terms: (a) The Airlines are authorized to enter into 1110(a) Elections and perform their obligations under the Aircraft Agreement pursuant to Section 1110 of the Bankruptcy Code with respect to Equipment so designated by the Airlines, during the period from the Petition Date through the rejection, assumption or renegotiation of the relevant Aircraft Agreement; (b) The Airlines are authorized to make the payments and take other actions as are necessary to cure defaults and retain protection of the automatic stay with respect to the Equipment subject to each 1110(a) Election; (c) The 1110(a) Elections, and any amendment to the Aircraft Agreements executed pursuant thereto, will not constitute assumptions of any of the Aircraft Agreements; (d) The Airlines' elections to perform under the Aircraft Agreements will be effective as of 11:59 pm (EST) on December 24, 2004, or as otherwise provided in the 1110(a) Election or in any amendment to the Aircraft Agreement executed pursuant to the 1110(a) Election; (e) The Airlines are authorized to cure all defaults, other than a default of a kind specified in Section 365(b)(2), under each Aircraft Agreement, either in the time frame specified by agreement with the Aircraft Creditor or in the time frame provided by Section 1110(a)(2)(B), pursuant to the 1110(a) Elections; (f) The Airlines are authorized to enter into: -- 1110(b) Stipulations in extending the time to perform obligations under Section 1110; and -- stipulations to provide "adequate protection" in respect of Aircraft Equipment; (g) Upon execution and filing of Adequate Protection Stipulations and timely performance by the Airlines thereunder, the Adequate Protection Stipulations will be effective, unless and until the Stipulations ultimately are not approved by the Court; (h) The Airlines will use their best efforts to provide the counsel to the Official Committee of Unsecured Creditors with copies of the 1110(a) Elections, Stipulations, and modification to the Aircraft Agreements two days prior to filing; and (i) The Airlines are authorized to file under seal the 1110(a) Elections, the Stipulations and any Aircraft Agreement modifications, with copies of the sealed information provided to the U.S. Trustee, counsel for the Committee and counsel for the Air Transportation Stabilization Board. 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) AMCAST INDUSTRIAL: Wants to Hire Ordinary Course Professionals -------------------------------------------------------------- Amcast Industrial Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of Ohio for permission to continue retaining, employing and paying professionals they turn to in the ordinary course of their business without bringing formal employment applications to the Court. In the Debtors' day-to-day operation of their businesses, they regularly call upon certain professionals to provide them with services on discrete litigation matters, environmental matters, employee benefits and personnel related matters, and corporate, operational and financial matters. Because the Debtors' substantial business operations are located in various locations throughout the U.S., it would be impractical, inefficient and unnecessarily costly for the Debtors to require each Ordinary Course Professional to submit individual employment and compensation applications to the Court. The Debtors assure the Court that: a) each Ordinary Course Professional will file an affidavit of disinterestedness to the Court within 30 days of their employment commencement; b) the Debtors will pay each Ordinary Course Professional 100% of their fees and expenses; and c) every 90 days from the date of entry of a Court order authorizing the employment of the Ordinary Course Professionals, the Debtors will submit to the Court a Statement containing: (i) the name of each Professional, (ii) the aggregate amount paid as compensation for services rendered and reimbursement of expenses for each Professional, and (iii) a list of any additional Professionals that the Debtors will hire after the Court's authorization Order. Although some of the Ordinary Course Professionals may hold minor amount of unsecured claims, the Debtors do not believe that any of them have an interest materially adverse to the Debtors, their creditors, or other parties in interests. 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. BATY DEVELOPMENT: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Baty Development Group, LLC 891 Rodney Drive Nashville, Tennessee 37205 Bankruptcy Case No.: 04-15453 Type of Business: The Debtor is a contractor. Chapter 11 Petition Date: December 30, 2004 Court: Middle District of Tennessee - (Nashville) Judge: Keith M. Lundin Debtor's Counsel: Beth A Dunning, Esq. Dunning Law Group PLLC 7000 Executive Center Drive, #375 Brentwood, Tennessee 37027 Tel: (615) 373-8227 Fax: (615) 250-2011 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ OJ Milano Earnest Money and $67,750 210 25th Avenue North Down Payment on Suite 1015 Sale Contract Nashville, Tennessee 37203 Jane Kerber Earnest Money on $24,250 2591 Dallas Parkway Pending Sale Contract Suite 300 Frisco, Texas 75034 Thomas A. Drummond Earnest Money on $21,450 1017 Willow Park Circle Terminated Sale Contract Gina Levine Kosser $21,250 American Coatings $20,422 Joseph Blankenship, Jr. $19,250 Julia C. Goodin $17,500 Dunning Law Group, PLLC $15,000 Jim and Kara Carden $15,000 Ceramic Tile Distributors, Inc. $12,362 SledgeCraft Inc. $12,067 George M. Underwood and $11,900 Michelle A. Underwood Volunteer Tile & Floor Covering $8,325 Ferguson Enterprises Inc. $7,619 InterVac Systems, Inc. $6,990 Southern Deck & Fence $6,440 Trail & Trail $6,000 ICU Security Inc. $5,800 James Robbins Hardwood $5,500 Glass Contractors of Construction Materials $4,307 Tennessee, Inc. and Labor BELLAIRE GENERAL: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Bellaire General Hospital, L.P. dba Bellaire Medical Center 5314 Dashwood Houston, Texas 77081 Bankruptcy Case No.: 05-30089 Type of Business: The Debtor operates a hospital. See http://www.bellairemedicalcenter.com/ Chapter 11 Petition Date: January 3, 2005 Court: Southern District of Texas (Houston) Judge: Karen K. Brown Debtor's Counsel: Michael Leppert, Esq. McClain, Leppert & Maney, P.C. 711 Louisiana Street, Suite 3100 Houston, Texas 77002 Tel: (713) 654-8001 Fax: (713) 654-8818 Estimated Assets: $10 Million to $50 Million Estimated Debts: $10 Million to $50 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Reliant Energy Solutions $430,535 PO Box 120954 Dallas, Texas 75312-0954 Attn: Joe Reeves Tel: (713) 497-3419 Gulf Coast Regional Blood Center $240,191 PO Box 200601 Houston, Texas 77216-0601 Attn: Charles Abear Tel: (713) 791-6225 HCA Information Technology Service, Inc. $160,275 PO Box 415000 Nashville, Tennessee 37241-5000 Smith Moore LLP $153,735 1355 Peachtree Northeast, Suite 750 Atlanta, Georgia 30309 Tel: (404) 962-1000 Synthes $149,875 Ferot Systems Healthcare $142,986 Silverhawk Healthcare $122,003 Bayou Anesthesia $113,495 Medical Information Technology, Inc. $111,951 American Sleep & Cardio $110,925 Edix/Tem Corporation $108,642 Burns International Security Service $96,205 Resource Corporation $95,182 GE Medical Systems Biomed $89,985 Cardiology Associates $76,675 Cash Retriever $74,139 Jefferson Pilot Financial $72,498 Metlife $71,993 Crest Services $66,748 Genesis Medical $65,000 BRILLIANT DIGITAL: Taps Vasquez & Co. as Independent Accountant --------------------------------------------------------------- BDO Seidman, LLP has resigned as the independent public accountants for Brilliant Digital Entertainment, Inc., effective as of December 30, 2004. In addition, the Company's Board of Directors, upon recommendation of the Audit Committee, has resolved to engage Vasquez & Company LLP as the Company's new independent accountants to audit the Company's financial statements for the fiscal year ended December 31, 2004. The engagement of Vasquez & Company LLP took effect on December 30, 2004. BDO's reports on the Company's consolidated financial statements for either of the two fiscal years ended December 31, 2003, and 2002, did not contain an adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles. During the two fiscal years ended December 31, 2003, and through the date of BDO's resignation, there were no disagreements with BDO on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to BDO's satisfaction, would have caused it to make reference to the subject matter of the disagreements in connection with its report on the Company's consolidated financial statements. Brilliant Digital Entertainment, Inc., is a company which, through its Altnet, Inc., subsidiary, operates a peer-to-peer-based content distribution network that allows us to securely and efficiently distribute a content owner's music, video, software and other digital files to computer users via the Internet. As of September 31, 2004, the Company's balance sheet showed a $5,222,000 stockholders' deficit. CARBIZ INC: Equity Deficit Widens to $28.9 Million at October 31 ---------------------------------------------------------------- Carl Ritter, Chief Executive Officer of Carbiz, Inc., (TSX VENTURE:CZ) reported the company's third-quarter results. Revenue for the third quarter increased by 17 percent compared to the same period last year. The increase was primarily due to the incremental revenue increase from the Carbiz Auto Credit division, which contributed $255,453 in sales and $21,315 in operating profit for the third quarter. Operating expenses increased year-to-year based on fees related to pursuit of a listing on the U.S. OTC-BB, as well as reporting changes resulting from adoption of the CICA issued handbook Section 3870, Stock-Based Compensation and Other Stock-Based Payments. Included in the former are legal fees and accrual for professional fees in connection with U.S. tax and legal work. According to Mr. Ritter, "Our auto-credit business will continue to increase over the next quarter in both sales and profit and revenues from the TaxMax division will begin to be reflected in the fourth quarter. The majority of expenses for the OTC-BB application will be absorbed by the end of the fiscal year, providing Carbiz an opportunity to reflect results based primarily on operations in the first quarter rather than the addition of several one-time or unique expense items." At October 31, 2004, the company's stockholders' deficit widened to $28,979,217 from a $26,334,483 deficit at Oct. 31, 2003. Based in Sarasota, Florida and Toronto, Canada, Carbiz, Inc., -- http://www.carbiz.com/-- is a provider of Internet and software solutions to the North American automotive industry. Carbiz's suite of business solutions includes dealer software products focused on the finance, sub-prime finance and "buy-here, pay-here" markets. Carbiz has 40 full-time employees and provides finance solutions, lead generation, Internet capability and training services. Carbiz supports more than 3,000 dealers with a recurring revenue model, in addition to individual product sales. Carbiz also provides a tax refund service and refund anticipation loans at a facility in Clearwater, Florida that employs 90 people on a seasonal basis. In 2004, the Carbiz began leveraging its industry knowledge and software products into company-owned credit centers, which are used-car dealerships that offer financing to customers with poor credit. Carbiz opened its first two credit centers in Palmetto and St. Petersburg, Florida in 2004. The company intends to open a third credit center in the Tampa, Florida area in early 2005. Each credit center originates, funds, manages and collects loans for vehicles sold to customers. CENTURY/ML: Asks Court to Stretch Plan Filing Period to March 31 ---------------------------------------------------------------- Pursuant to Section 1121(d) of the Bankruptcy Code, Century/ML Cable Venture, ML Media Partners, LP, and Century Communications Corp. ask Judge Gerber of the U.S. Bankruptcy Court for the Southern District of New York to further extend their exclusive periods during which they may: (a) file a plan of reorganization, through March 31, 2005; and (b) solicit and obtain acceptances of their plan, through May 25, 2005. According to Richard S. Toder, Esq., at Morgan Lewis & Bockius LLP, in New York, counsel for the United States Trustee has no objection to Century/ML's request. Century Communications Corporation filed for Chapter 11 protection on June 10, 2002. Century's case has been jointly administered to proceedings of Adelphia Communications Corporation. Century operates cable television services in Colorado, California and Puerto Rico. CENTURY is an indirect wholly owned subsidiary of ACOM and an affiliate of Adelphia Business Solutions, Inc. Lawyers at Willkie, Farr & Gallagher represent CENTURY. Headquartered in Coudersport, Pennsylvania, Adelphia Communications Corporation (OTC: ADELQ) is the fifth-largest cable television company in the country. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, high-speed Internet access and other advanced services over its broadband networks. The Company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the ACOM Debtors. (Adelphia Bankruptcy News, Issue No. 76; Bankruptcy Creditors' Service, Inc., 215/945-7000) CIRTRAN: $3.68 Million Equity Deficit Spurs Going Concern Doubt --------------------------------------------------------------- Cirtran Corporation sustained losses of $1,497,673 and $2,910,978 for the nine months ended September 30, 2004, and the year ended December 31, 2003, respectively. As of September 30, 2004, and December 31, 2003, the Company had an accumulated deficit of $19,638,953 and $18,141,280, respectively, and a total stockholders' deficit of $3,684,023 and $4,915,251, respectively. In addition, the Company used, rather than provided, cash in its operations in the amounts of $1,075,957 and $1,123,818 for the nine months ended September 30, 2004, and the year ended December 31, 2003, respectively. These conditions raise substantial doubt about the Company's ability to continue as a going concern. In addition, the Company is a defendant in numerous legal actions. These matters may have a material impact on the Company's financial position, although no assurance can be given regarding the effect of these matters in the future. In view of these matters, recoverability of a major portion of the recorded asset amounts is dependent upon continued operations of the Company, which in turn is dependent upon the Company's ability to meet its financing requirements on a continuing basis, to maintain or replace present financing, to acquire additional capital from investors, and to succeed in its future operations. The Company's plans include working with vendors to convert trade payables into long-term notes payable and common stock, and to cure defaults with lenders through forbearance agreements that the Company will be able to service. During the nine months ended September 30, 2004, and the year ended December 31, 2003, the Company successfully converted trade payables, notes payable, and accrued interest of approximately $1,263,713 and $2,986, respectively, into notes. Accrued interest of $27,020 associated with the notes payable was not converted to the note payable with Abacus Ventures, Inc., therefore, a gain on forgiveness of debt was recorded for $27,020 for the nine months ended Sept. 30, 2004. The Company intends to continue to pursue this type of debt conversion going forward with other creditors. The Company has entered into an equity line of credit agreement and a standby equity distribution agreement with a private investor. The Company intends to terminate the equity line of credit agreement when it is able to draw against the standby equity distribution agreement. Realization of additional proceeds under either agreement is not assured. As of September 30, 2004, the Company had accrued liabilities in the amount of $2,136,891 for delinquent payroll taxes, including interest estimated at $458,677 and penalties estimated at $230,927. Of this amount, approximately $306,153 was due the State of Utah. Approximately $1,830,738 was owed to the Internal Revenue Service as of September 30, 2004. The Company, in response to collection notices, filed a due process appeal with the Internal Revenue Service's Appeals Office. The appeal was resolved by an agreement with the Appeals Office that allowed the Company to file an offer in compromise of all federal tax liabilities owed by the Company based on its ability to pay. The Company filed its offer in compromise with the IRS in November 2003, and after meeting with IRS personnel, filed a revised offer in compromise on August 31, 2004. The Company was notified in November 2004 that the IRS had accepted the offer in compromise. Under the offer, the Company is required to pay an aggregate amount of $500,000 (representing payments of $350,000 by Circuit Technology, Inc., $100,000 by CirTran Corporation, and $50,000 by Racore Technology, Inc.), not later than February 3, 2005. Additionally, the Company must remain current in its payment of taxes for 5 years, and may not claim any NOLs for the years 2001 through 2015, or until the three companies pay taxes in an amount equal to the taxes waived by the offer in compromise. Further, the Utah State Tax Commission has entered into an agreement to allow the Company to pay the liability owing to the State of Utah in equal monthly installments of $4,000 over a two- year period running through December 2005. Through November 2004, the required payments had been made by the Company. There are a number of non-affiliated companies claiming non- payment of amounts due them by Cirtran and many such companies are seeking redress in the courts. Cirtran is involved in settlement negotiations with a number of these claimants, is in default with some, has issued its common stock to satisfy other claims, and in general, is heavily laden with liabilities. Cirtran Corporation provides a mixture of high- and medium-volume turnkey manufacturing services using surface mount technology, ball-grid array assembly, pin-through-hole, and custom injection molded cabling for leading electronics original equipment manufactures -- OEMs -- in the communications, networking, peripherals, gaming, law enforcement, consumer products, telecommunications, automotive, medical, and semiconductor industries. Its services include pre-manufacturing, manufacturing, and post-manufacturing services. Through its subsidiary, Racore Technology Corporation, it designs and manufactures Ethernet technology products. The Company's goal is to offer customers the significant competitive advantages that can be obtained from manufacture outsourcing, such as access to advanced manufacturing technologies, shortened product time-to- market, reduced cost of production, more effective asset utilization, improved inventory management, and increased purchasing power. CONE MILLS: Has Until Jan. 27 to Solicit Acceptances of Plan ------------------------------------------------------------ Cone Mills Corporation and its debtor-affiliates sought and obtained an extension until Jan. 27, 2005, from the U.S. Bankruptcy Court for the District of Delaware to solicit acceptances of their Amended Joint Plan of Reorganization. As previously reported in the Troubled Company Reporter, Cone Mills filed a chapter 11 plan in August of 2004 to distribute the proceeds of the sale of substantially all assets to Wilbur Ross' International Textile Group. The Debtors need this brief extension to further negotiate with creditors to ensure that the Plan will be confirmed. The Debtors' capital structure and ongoing litigation with their secured creditors have created "difficult distribution issues," which the Debtors believe are best resolved prior to the confirmation hearing. The Official Committee of Unsecured Creditors appointed in Cone Mills Corporation, et al.'s chapter 11 cases supports the Second Amended Chapter 11 Plan of Liquidation dated August 20, 2004, and urged its constituency to vote to accept the plan following Judge Walrath's approval of the Company's First Amended Disclosure Statement. Under the Plan, Holders of Allowed General Unsecured Claims of less than $1,000,000 (including any Holder that elects on its Ballot to reduce its claim to $1,000,000) are projected to receive a cash distribution of 5% of the amount of their allowed claim on account of Class 3 Trade and Employee Claim classification and treatment. Holders of Allowed General Unsecured Claims in Class 8 (comprised primarily of the secured creditors' deficiency claims) are projected to receive an estimated 1.6% to 2.2% recovery. While the proposed distribution is "admittedly modest," the Committee says, given the concessions made by the Secured Creditors in the case and the high likelihood that unsecured creditors would receive nothing in a chapter 7 liquidation, the Committee supports the Plan and recommends that general unsecured creditors vote to accept the Plan. Mark S. Indelicato, Esq., and Mark T. Power, Esq., at Hahn & Hellen LLP, in New York City, represent the Committee. The Company, with its debtor-affiliates filed for chapter 11 protection on September 24, 2003 (Bankr. Del. Case No. 03-12944). Cone Mills filed a Chapter 11 Liquidation Plan following a sale of substantially all of the company's assets to WL Ross & Co. in March 2004, for $46 million plus assumption of certain liabilities. WL Ross, in turn, merged Cone Mills' assets with Burlington Industries' assets to form International Textile Group. Pauline K. Morgan, Esq., at Young, Conaway, Stargatt & Taylor represents the Debtors. When the Company filed for protection from its creditors, it listed $318,262,000 in total assets and $224,809,000 in total debts. CROWN PACIFIC: Transfers Timberland Property to Crown Pacific Unit ------------------------------------------------------------------ Following an 18-month Chapter 11 bankruptcy process, a court- approved liquidation plan formally transferred the ownership of 522,000 acres of industrial timberlands to Cascade Timberlands LLC, a new entity created to own the assets formerly held by Crown Pacific LP. Crown Pacific LP was substantially owned by its parent, Crown Pacific Partners, LP (OTCBB:CRPP), a publicly held partnership. Crown Pacific LP and Crown Pacific Partners, LP, filed for bankruptcy in June 2003 after defaulting on over $500 million of secured debt owed to a number of banks and institutional investors. The timberlands were the remaining assets of Crown Pacific after sales of sawmill manufacturing assets and wholesale lumber distribution yards were completed in 2004. Under the terms of the liquidation plan, Crown Pacific Partners, LP, will cease to exist and Cascade Timberlands LLC, owned by the secured creditors of Crown Pacific LP, will assume ownership of nearly all of the remaining timberland assets in Oregon and Washington. The Cascade Timberlands properties consist of three farms: -- Oregon tree farm - 293,000 acres located on the eastern side of the Cascade mountain range extending from Bend, Oregon south toward the California border; -- Hamilton tree farm - 147,000 acres located in the western foothills of the Cascade range extending from the Canadian border southward into three counties of Washington State; and -- Olympic tree farm - 82,000 acres located at the extreme northwest corner of Washington State's Olympic Peninsula. The timberlands' new owners will have the same ownership percentage in Cascade Timberlands as they had in the secured debt of Crown Pacific LP at the conclusion of the bankruptcy case. Cascade has a board of directors that will include both shareholder representatives and independent directors. Cascade has hired Olympic Resource Management LLC to manage the properties. Cascade and ORM are considering these options: -- restructuring the new company as a master limited partnership or a REIT and attracting public or private investors; -- selling the timberlands to a single buyer; and -- marketing the properties in smaller tracts for either end-use as timberland or alternate higher valued uses. A liquidating trustee has been appointed by the court to administer the final wind-up of the affairs of the operating company, Crown Pacific LP. Headquartered in Portland, Oregon, Crown Pacific Partners, L.P., is an integrated forest products company. Crown Pacific owns and manages approximately 524,000 acres of timberland in Oregon and Washington, and uses modern forest practices to balance growth with environmental protection. Crown Pacific operates mills in Oregon and Washington, which produce dimension lumber, and also distributes lumber products through its Alliance Lumber operation. The Debtors filed for chapter 11 protection on June 29, 2003 (Bankr. D. Ariz. Case No. 03-11260). Alisa C. Lacey, Esq., and C. Taylor Ashworth, Esq., at Osborn Maledon, P.A., represent the Debtors in their restructuring efforts. DI GIORGIO: Launches Sr. Debt Tender Offer & Consent Solicitation ----------------------------------------------------------------- Di Giorgio Corporation commenced an offer to purchase and consent solicitation with regard to any and all of its outstanding 10% senior notes due 2007. The current aggregate outstanding principal amount of the notes is $148,300,000. The offer to purchase will expire at 5:00 p.m., New York City time, on February 1, 2005, unless extended. The consent solicitation will expire at 5:00 p.m., New York City time, on January 18, 2005, unless extended. The total consideration to be paid to holders who tender their notes and deliver their consents prior to 5:00 p.m., New York City time, on January 18, 2005, will be $1,023.23 for each $1,000 principal amount of notes validly tendered, which includes a consent payment of $30.00 per $1,000 principal amount of notes. Holders who validly tender their notes after 5:00 p.m., New York City time on January 18, 2005, but prior to the expiration of the tender offer will receive $993.23 for each $1,000 principal amount of notes validly tendered and not revoked on or prior to the expiration date. Holders who validly tender notes will also be paid accrued and unpaid interest up to but not including the date of payment for the notes. The purchase price for the notes and the consent payment for notes tendered on or before the expiration of the consent solicitation are expected to be paid promptly following the acceptance of the consents. The purchase price for the notes tendered on or before the expiration date of the offer to purchase is expected to be paid promptly following the expiration date of the offer to purchase. Holders tendering their notes will be deemed to have delivered their consent to certain proposed amendments to the indenture governing the notes, which will eliminate certain restrictive covenants and certain provisions relating to events of default and amend certain other related provisions. The terms of the offer to purchase and consent solicitation, including the conditions to the Company's obligations to accept the notes tendered and consents delivered and pay the purchase price and consent payments, are set forth in the Company's offer to purchase and consent solicitation statement, dated Jan. 3, 2005. The offer is subject to certain conditions, including the receipt of the requisite number of consents required to amend the indenture, the execution of the supplemental indenture and the Company having raised funds from a private offering of new notes in an aggregate principal amount of approximately $150,000,000. The new notes to be offered have not been and will not be registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements. The Company may amend, extend or terminate the offer to purchase and consent solicitation at any time in its sole discretion without making any payments with respect thereto. Merrill Lynch & Co. is the dealer manager for the offer to purchase and the solicitation agent for the consent solicitation. Questions or requests for assistance may be directed to Merrill Lynch & Co., telephone: (212) 449-4914 or toll-free at (888) ML4- TNDR). Requests for documentation may be directed to Global Bondholder Services Corporation, the information agent, telephone: (866) 470-3800). About the Company Di Giorgio Corporation -- http://www.whiterose.com/-- through its White Rose division, is one of the largest independent food distributors in the New York City market. The White Rose Food Division of Di Giorgio Corporation serves supermarket chains, independent retailers and members of voluntary cooperatives from Maryland to New England. The Division provides over 24,000 food and non-food products to more than 1,600 customer locations. The White Rose brand label consists of over 950 items and has been a fixture in New York homes for over a century. * * * As reported in the Troubled Company Reporter on Dec. 21, 2004, Standard & Poor's Ratings Services lowered its ratings for Di Giorgio Corporation and removed them from CreditWatch, where they were placed with negative implications on Nov. 9, 2004. The corporate credit rating was lowered to 'B' from 'B+'. The outlook is stable. "The downgrade reflects Di Giorgio's weaker credit measures due to slower-than-anticipated progress in attracting new customers to replace the loss of its client, The Great Atlantic & Pacific Tea Co. Inc. -- A&P, late last year," explained Standard & Poor's credit analyst Stella Kapur. DICKIE WALKER MARINE: Auditors Raise Going Concern Doubt -------------------------------------------------------- Dickie Walker Marine Inc. "has incurred recurring operating losses and has an accumulated deficit. These conditions raise substantial doubt about the Company's ability to continue as a going concern," Ernst & Young LLP, of San Diego, California said in its Auditors Report to the Company's Board of Directors dated December 3, 2004. At September 30, 2004, approximately $1,059,000 in cash and cash equivalents was available to fund operations. Management's current business plan for fiscal 2005 reflects continued initiatives to increase revenue, reduce cost of goods sold as a percentage of revenue, and control selling, general and administrative costs. If unable to maintain revenue and cost targets within a reasonable range of its operating plan, Dickie Walker Marine will need to raise additional funds through the public or private sale of its equity or debt securities, or from other sources, in order to satisfy projected cash needs, at least through September 30, 2005. No assurance can be given that the business or operations will not change in a manner that would consume available resources more rapidly than anticipated. The timing and amount of capital requirements will depend on a number of factors, including demand for its products, the need for merchandising and promotional programs and competitive pressures. If additional funds are raised through the issuance of equity or convertible debt securities, the percentage ownership of its stockholders will be reduced and its stockholders will experience additional dilution. The additional securities may have rights, preferences, or privileges senior to those of its common stockholders. There can be no assurance that the additional financing will be available on terms favorable to the Company, if at all. If adequate funds are not available, or are not available on acceptable terms, the ability to fund the Company's expansion, take advantage of unanticipated opportunities, develop or enhance products or otherwise respond to competitive pressures could be significantly limited, any of which could have a material adverse effect on the Company's ability to continue as a going concern. Its business, financial condition and results of operations may be harmed by the limitations. Since inception, and through September 30, 2004, the Company has incurred losses of $5,405,817. Successful transition to attaining profitable operations is dependent upon achieving a level of revenues adequate to support the Company's cost structure. Management's current business plan for fiscal 2005 reflects continued initiatives to increase revenue, reduce cost of goods sold as a percentage of revenue, and control selling, general and administrative costs. If the Company is unable to maintain revenue and cost targets within a reasonable range of its operating plan, the Company will need to raise additional funds through the public or private sale of its equity or debt securities or from other sources, in order to satisfy its projected cash needs at least through September 30, 2005. However, there can be no assurance that additional financing will be available, and if available, will be on terms acceptable to the Company. At September 30, 2004, Dickie Walker Marine had 23 employees, 19 of whom were full-time. None of its employees are represented by a labor union or under collective bargaining agreements. The Company currently leases a facility located in Oceanside, California, which consists of approximately 21,000 square feet of office and warehouse space at a monthly rent of $4,100, with annual escalation adjustments. The facility houses Company administrative and design offices and also serves as its warehousing and distribution center. The Company leases the facility under a lease that expires on April 30, 2008 with an option to renew for five years. It also leases a retail store of approximately 2,000 square feet in La Jolla, California at a monthly rent of approximately $7,300 with annual escalation adjustments. The term of the lease is ten years with two five-year renewal options. Both properties are in good condition. Since inception, the Company has funded operations and satisfied capital expenditure requirements primarily with proceeds from sales of common stock to its founders, the private placement of its common stock and promissory notes in fiscal 2001 and fiscal 2004, and its initial public offering in fiscal 2002. In the quarter ended June 30, 2002, the Company completed its initial public offering and received approximately $5,287,000 in cash, net of underwriting discounts, commissions, and other related expenses. Proceeds from these financing sources since inception and through September 30, 2004 totaled a approximately $8,600,000 and capital equipment lease financing totaled approximately $207,000. Dickie Walker Marine, Inc., a Delaware corporation originally incorporated in California in October 2000, designs, sources and has manufactured, markets and distributes, authentic lines of nautically inspired apparel, gifts and decorative items. Its products are designed to appeal to consumers who enjoy coastal living, boating, or being around the water. The Dickie Walker brand consists of nautically inspired apparel and nautically inspired decorative and functional accessory items for the home, office and boat. Its unique apparel line features quality fabrics and comfortable silhouettes for the 30 to 60 year-old, upper middle- class consumer. The Dickie Walker brand of apparel and accessories is distributed through specialty retailers and coastal stores. EL CONEJO: Files Chapter 11 Reorganization Plan in N.D. Texas ------------------------------------------------------------- El Conejo Bus Lines, Inc., filed its plan of reorganization with the U.S. Bankruptcy Court for the Northern District of Texas. The plan provides for the distribution of the net proceeds from the liquidation of all of the Debtor's assets. The Debtor anticipates its Plan will be fully consummated 4 years from the Effective Date. The Plan will be funded by: -- all cash on hand on Confirmation and Effective Date, and -- monthly payments received by the Debtor from the sale of assets from Autobuses El Conejo, Inc., a Mexican company. The Plan classifies and treats claims this way: Class 1 Administrative Paid in Full. Unimpaired. This Expenses Class is deemed to accept the Plan. Class 2 Allowed Claims Impaired. Unpaid 941 taxes in the of the Internal amount of $346,924.50 with 5% Revenue Service interest per annum will be paid from the Purchase Fund and the remainder on a monthly basis starting on the effective date and continuing for a period of 48 months. Class 3 Unsecured Impaired. The Creditors will Claims received a pro rata share of the Purchase Fund totaling $200,000 less allowed Class 1 claims. Class 4 Claims of Impaired. Shareholders will not Interest receive anything. Holders Headquartered in Dallas, Texas, El Conejo Bus Lines, Inc. -- http://www.elconojobuslines.com/ -- is the first Hispanic bus company based in the Dallas Metroplex area. El Conejo serves the Hispanic passenger market with routes from the U.S. border with Mexico and points north, including Dallas, the greater Kansas City area and Chicago. The Company filed for chapter 11 protection on December 3, 2004 (Bankr. N.D Tex. Case No. 04-82977). Eric A. Liepins, Esq., at Eric A. Liepins, P.C., represents the Company in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $220,000 in assets and $2,005,468 in debts. EL CONEJO: Gets Second Interim Court Okay to Use Cash Collateral ---------------------------------------------------------------- The Honorable Harlin DeWayne Hale of the U.S. Bankruptcy Court for the Northern District of Texas gave El Conejo Bus Lines, Inc., continuing interim approval to use approximately $522,000 of cash collateral to finance its operation. The Internal Revenue Service cash asserts a first lien on the debtor's cash and accounts receivable. As adequate protection, the court granted the IRS a replacement lien under Section 552 of the U.S. Bankruptcy Code. Judge Hale will convene a hearing on January 6, 2005, at 1:30 p.m. to determine if this order should be continued, modified or terminated. Headquartered in Dallas, Texas, El Conejo Bus Lines, Inc. -- http://www.elconojobuslines.com/ -- is the first Hispanic bus company based in the Dallas Metroplex area. El Conejo serves the Hispanic passenger market with routes from the U.S. border with Mexico and points north, including Dallas, the greater Kansas City area and Chicago. The Company filed for chapter 11 protection on December 3, 2004 (Bankr. N.D Tex. Case No. 04-82977). Eric A. Liepins, Esq., at Eric A. Liepins, P.C., represents the Company in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $220,000 in assets and $2,005,468 in debts. ENVIRONMENTAL REMEDIATION: Reports $3.593 Mil. Net Loss in YE 2004 ------------------------------------------------------------------ Environmental Remediation Holding Corporation -- ERHC (OTCBB:ERHC) filed its Annual Report on Form 10-K for its fiscal year ended Sept. 30, 2004. The summary of several key items contained in the Company's Annual Report: -- The Company has reached agreement with Chrome to restructure all of its convertible debt, and Chrome has agreed to provide a new $2,500,000 line of credit. The Company expects to utilize this line of credit to continue to develop and promote its interests offshore West Africa. Additionally, the availability of future working capital has allowed the Company to remove the "going concern" qualification from the audit opinion. -- In August 2004, the Company entered into a Participation Agreement with Pioneer Natural Resources whereby the companies will jointly apply for rights in the production sharing contract for Block 2 of the Joint Development Zone (JDZ). -- In September 2004, the Company entered into a participation Agreement with Noble Energy International, Ltd., a subsidiary of Noble Energy Inc., whereby the companies will jointly apply for rights in the production sharing contract for Block 4 of the JDZ. -- In December 2004, the Company entered into a Participation Agreement with Pioneer Natural Resources whereby the companies will jointly apply for rights in the production sharing contract for Block 3 of the JDZ. -- On Dec. 15, 2004, ERHC and its co-ventures submitted bids on Blocks 2, 3 and 4 in the JDZ. -- The Company terminated the management services agreement with Chrome Oil Services effective Dec. 31, 2004. As of Jan. 1, 2005, the Company will assume direct responsibility for costs and expenses of its officers and staff, and the lease obligation of its office space. -- During the year ended Sept. 30, 2004, the Company incurred a net loss of $3,593,388, compared to a net loss of $3,153,882 for the year ended Sept. 30, 2003. A significant portion of the increase in net loss for the year ended Sept. 30, 2004, was attributable to a $463,000 increase in interest expense. * * * As previously reported in the Troubled Company Reporter on Mar. 30, 2004, Environmental Remediation Holding Corporation is an independent oil and gas company. The Company's current focus is to exploit its only assets, which are agreements with the government of the Democratic Republic of Sao Tome & Principe concerning oil and gas and natural gas exploration in the exclusive territorial waters of Sao Tome, an island nation located in the Gulf of Guinea off the coast of central West Africa, and with the Nigeria-Sao Tome and Principe Joint Development Authority and DRSTP in a Joint Development Zone between Sao Tome and the Federal Republic of Nigeria. The Company intends to explore forming relationships with other oil and gas companies having greater technical and financial resources to assist the Company in leveraging its interests in the EEZ and the JDZ. The Company currently has no other operations. The Company's auditor issued a going concern opinion in connection with the audit of the Company's financial statements as of September 30, 2003. The Company's current liabilities exceed its current assets by $15,689,281 at December 31, 2003. For the three months ended December 31, 2003, the Company's net loss was $834,094. The Company has incurred net losses of $3,153,882 and $4,084,210 in the fiscal years 2003 and 2002, respectively. These conditions raise substantial doubt as to the ability of the Company to continue as a going concern. The Company is in ongoing negotiations to raise general operating funds and funds for specific projects. Management will be required to, and expects to, raise additional capital through the issuance of debt securities and offerings of equity securities to fund the Company's operations, and will attempt to continue raising capital resources until such time as the Company generates revenues sufficient to maintain itself as a viable entity. However, there is no assurance that such financing will be obtained. EXECAIR MAINTENANCE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Execair Maintenance, Inc. 3225 North Harbor Drive, Suite 101 San Diego, California 92101 Bankruptcy Case No.: 05-00008 Type of Business: The Debtor offers maintenance, repair, and security services for airlines and general aviation at Lindbergh Field (SAN) in San Diego. See http://www.execairmtc.com/ Chapter 11 Petition Date: January 3, 2005 Court: Southern District of California (San Diego) Debtor's Counsel: Thomas J. McKinney, Esq. Thomas J. McKinney, Attorney at Law 625 Broadway, Suite 1206 San Diego, CA 92101 Tel: 619-236-8308 Fax: 619-236-8309 Total Assets: $178,512 Total Debts: $1,110,330 Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Donald E. Lundy Operating Loan $275,000 3225 N. Harbor Dr. San Diego CA 92101 Internal Revenue Service trust fund and income $205,000 880 Front St. taxes San Diego CA 92101 Community First Bank Operating Loan $189,000 1234 E. Main St. El Cajon CA 92021 Donald E. Lundy II Operating Loan $150,000 California State EDD trust fund and income $82,500 taxes Wells Fargo Business Checking $50,030 Line of Credit State Compensation Ins Fund $7,016 Chase Automotive Finance Purchase Money $29,549 Security Amer. Express Bus. Finance Operating Loan $12,422 GMAC Purchase Money $23,304 Security Value of Collateral: $11,000 Net Unsecured: $12,304 City of Los Angeles Airport Fees $11,710 Dept. of Airports Capital One Revolving charge acct. $9,435 CK Hill Operating Loan $5,000 Community First Bank Overdraft on closed $4,636 account MBNA Revolving charge acct. $4,338 Wells Fargo Revolving charge acct. $2,581 Wells Fargo Revolving charge acct. $2,457 Cintas Corp. Clothing Acct $1,476 National Assoc of Drug Free $788 Home Depot Credit Services Revolving charge acct. $784 EYE CARE: Offers to Purchase $100 Million of 9-1/8% Sr. Notes ------------------------------------------------------------- Eye Care Centers of America, Inc., has commenced an offer to purchase for cash all of its $100 million aggregate principal amount of 9-1/8% Senior Subordinated Notes due 2008 and all of its $30 million aggregate principal amount of Floating Interest Rate Subordinated Term Securities due 2008. ECCA is also soliciting consents from the holders of the Notes to approve certain amendments to the indenture under which the Notes were issued. The consents being solicited will eliminate substantially all of the covenants and certain events of default in the Indenture. The tender offer is subject to various conditions including the completion of the acquisition of ECCA by Moulin International Holdings Limited and Golden Gate Capital and the related financing transactions, as well as the receipt of consents necessary to approve the amendments to the Indenture. The tender offer will expire at 12:00 Midnight, New York City time, on Jan. 31, 2005, unless extended or earlier terminated by ECCA. The total consideration to be paid to holders that tender their Notes and deliver their consents prior to 5:00 p.m., New York City time, on Jan. 14, 2005, will be equal to $1,032.92 per $1,000 principal amount of the Fixed Rate Notes and $1,002.50 per $1,000 principal amount of the Floating Rate Notes, each of which includes a consent payment of $2.50 per $1,000 principal amount of the Notes. Holders that tender their Notes after 5:00 p.m., New York City time, on Jan. 14, 2005, and prior to the expiration of the tender offer will receive $1,030.42 per $1,000 principal amount of the Fixed Rate Notes and $1,000.00 per $1,000 principal amount of the Floating Rate Notes. Also, in all cases, ECCA will pay accrued and unpaid interest on the Notes up to, but not including, the date of payment. ECCA currently intends, but is not committed, to redeem all Notes not tendered and accepted for payment shortly after the expiration or termination of the tender offer at the applicable redemption prices set forth in the Notes, plus accrued and unpaid interest to, but not including, the redemption date. Information regarding the pricing, tender and delivery procedures and conditions of the tender offer and consent solicitation is contained in the Offer to Purchase and Consent Solicitation Statement dated Jan. 3, 2005, and related documents. Copies of these documents can be obtained by contacting Global Bondholder Services Corporation, the information agent and depositary, at (866) 294-2200 (toll free) or (212) 430-3774 (collect). J.P. Morgan Securities Inc. is the exclusive dealer manager and solicitation agent for the tender offer and consent solicitation. Additional information concerning the terms and conditions of the tender offer and consent solicitation may be obtained by contacting J.P. Morgan Securities Inc. at (212) 270-7407 (collect). About the Company Eye Care Centers of America, Inc., is the third largest operator of optical retail stores in the United States as measured by net revenues. The company currently operates 377 stores in 33 states. The company's brand names include EyeMasters, Binyon's, Visionworks, Hour Eyes, Dr. Bizer's VisionWorld, Dr. Bizer's ValueVision, Doctor's ValuVision, Stein Optical, Vision World, Doctor's VisionWorks, and Eye DRx. Founded in 1984, the company is headquartered in San Antonio, Texas. * * * As reported in the Troubled Company Reporter on Dec. 10, 2004, Moody's Investors Service has placed the ratings of Eye Care Center of America on review direction uncertain following the recent announcement that the company has signed a sale agreement to a consortium comprised of Golden Gate Capital and affiliates of Moulin International Holdings Limited. These ratings of Eye Care Center were placed on review direction uncertain: * Senior implied rating of B2; * $25 million secured revolving credit facility maturing 12/06 of B2; * $55 million secured Term A loan facility amortizing through 12/05 of B2; * $62 million secured Term B loan facility amortizing through 11/07 at B2; * Long-term senior unsecured issuer rating of B3; * $100 million 9.125% senior subordinated notes due 2008 of Caa1; * $29.7 million 9.125% senior subordinated discount notes due 2008 of Caa1. FIBERMARK INC: Plan Confirmation Hearing Set for Jan. 27 -------------------------------------------------------- The Honorable Colleen A. Brown of the U.S. Bankruptcy Court for the District of Vermont approved the Disclosure Statement filed on Dec. 16, 2004, by FiberMark, Inc., and its debtor-affiliates explaining their Joint Plan of Reorganization. The Debtors are authorized to transmit the Disclosure Statement to their creditors and to solicit their votes to accept or reject the Plan. The Court will convene a hearing on Jan. 27, 2005, at 10:30 a.m. to consider confirmation of the Plan. Objections, if any, must be filed and served by 4:00 p.m. on Jan. 20, 2005. About the Plan The Plan provides for the equal treatment of claims in accordance with the priorities established under the Bankruptcy Code. Claims that have priority status under the Bankruptcy Code or are secured by valid liens on collateral are reinstated or paid in full. Non- priority, unsecured claims will receive a pro rata distribution of New Common Stock and of New Notes to be created and issued under the Plan, providing estimated recoveries of approximately 70%. Because holders of non-priority, unsecured claims will not be paid in full, the holders of old FiberMark Common Stock will receive no distributions under the Plan, and all shares of Old FiberMark Common Stock will be cancelled. Noteholders and general unsecured creditors will share in a distribution of (a) 10,000,000 shares of New Common Stock; and (b) up to $125,000,000 in aggregate principal amount of the New Notes to be issued under the Plan. The reorganization value of the Reorganized Debtors is estimated at $265 million and $305 million. Unless an Option Termination Event (defined in detail in the Plan) occurs, a Cash Payment Option will be available to unsecured creditors. In short, that Option allows: (x) holders of general unsecured claims to elect a discounted cash payment and (y) holders of noteholder claims to participate in the funding of the discounted Cash payment and thereby acquire the New Common Stock and New Notes allocable to the electing holders of general unsecured claims. Headquartered in Brattleboro, Vermont, FiberMark, Inc. -- http://www.fibermark.com/-- produces filter media for transportation applications and vacuum cleaning; cover stocks and cover materials for books, graphic design, and office supplies and base materials for specialty tapes, wallcoverings and sandpaper. The Company filed for chapter 11 protection on March 30, 2004 (Bankr. D. Vt. Case No. 04-10463). Adam S. Ravin, Esq., D.J. Baker, Esq., David M. Turetsky, Esq., and Rosalie Walker Gray, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from its creditors, they listed $329,600,000 in total assets and $405,700,000 in total debts. FOSTER WHEELER: Converts 87.4% Pref. Shares to 34MM Common Shares ----------------------------------------------------------------- Foster Wheeler Ltd. (OTCBB: FWHLF) disclosed that, subsequent to its Nov. 29, 2004, shareholders meeting, 524,460 or 87.4% of its Series B Convertible Preferred Shares have been converted into 34,089,900 Common Shares. As a result, the total number of the Company's outstanding Common Shares at the close of business on Dec. 31, 2004, was 40,542,898, and the Company's common share market capitalization was approximately $643.4 million. 75,484 Series B Convertible Preferred Shares remain outstanding as of Dec. 31, 2004. These Preferred Shares are convertible into an additional 4,906,441 Common Shares. As previously announced, the Series B Convertible Preferred Shares ceased to have voting rights immediately following the Company's shareholders meetings on Nov. 29, 2004, except in limited circumstances as required under Bermuda law and the Company's bye- laws. Foster Wheeler Ltd. -- http://www.fwc.com/-- is a global company offering, through its subsidiaries, a broad range of design, engineering, construction, manufacturing, project development and management, research and plant operation services. Foster Wheeler serves the refining, upstream oil and gas, LNG and gas-to-liquids, petrochemical, chemicals, power, pharmaceuticals, biotechnology and healthcare industries. The corporation is based in Hamilton, Bermuda, and its operational headquarters are in Clinton, New Jersey, USA. At Sept. 24, 2004, Foster Wheeler's balance sheet showed a $441,238,000 stockholders' deficit, compared to an $872,440,000 deficit at Dec. 26, 2003. GENEVA STEEL: Committee Taps Benedetto & BF as Financial Advisors ----------------------------------------------------------------- The Official Committee of Unsecured Creditors of Geneva Steel LLC asks the U.S. Bankruptcy Court for the District of Utah, Central Division, for permission to retain Benedetto, Gartland & Company and BF Capital Partners LLC as its financial advisors for two months. The Committee needs the professional services of Benedetto and BF Capital to decide whether to sell the Debtor's remaining real property assets or wait for a few years in order for the property to have a higher market value. The Committee reminds the Court that since there are two competing plans of reorganization filed by Geneva's creditors, it needs the assistance of qualified financial advisors to address the economic issues. Quintus von Bonin, managing director at BF Capital and Charles B. Mobus, managing director at Benedetto disclose that the Committee proposes that each of the Firms will be paid a flat fee of $75,000 per month. To the best of the Committee's knowledge, Benedetto and BF Capital are "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Provo, Utah, Geneva Steel LLC, owns and operates an integrated steel mill. The Company filed for chapter 11 protection on January 25, 2002 (Bankr. Utah Case No. 02-21455). Andrew A. Kress, Esq., Keith R. Murphy, Esq., and Stephen E. Garcia, Esq., at Kaye Scholer LLP represent the Debtor in its restructuring efforts. When the company filed for protection from its creditors, it listed $262 million in total assets and $192 million in total debts. GENOIL INC: Receives $4.6 Million Private Equity Financing ---------------------------------------------------------- Genoil (TSX VENTURE:GNO)(OTCBB:GNOLF.OB) disclosed a $4.6 million (Cdn. $5.6 million) private placement primarily funded by a major US financial institution. David K. Lifschultz, the Chairman and CEO of Genoil, will be participating in the issue as well. The proceeds of the placement will support the construction of the first commercial GHU -- Genoil Hydroconversion Upgrader -- for the Silver Eagle Refinery in Utah, in addition to general expenses. The multi-billion dollar financial institution with significant expertise in energy investments has the wherewithal to finance future major projects of Genoil either by itself or with correspondent institutions, although no such agreements have been made in respect of any future financings. As well as providing a dramatic improvement in Genoil's balance sheet, Genoil expects the transaction to provide significant benefit to Genoil's growing international sales program. The issue is being placed as a 10-year convertible debenture that will have a 0% (zero %) interest rate. The conversion price of the debenture is Cdn $0.44 per share. According to the terms of the agreement, Genoil can force conversion if Genoil common shares trade over $1.55 per share for a pre-defined period. The participants in the private placement will additionally receive 3.2 million warrants (1/4 warrant for each common share purchasable under the convertible debenture). The warrants will be exercisable at $0.85 per share, and will expire Dec. 23, 2009. The conversion and exercise prices are subject to adjustment for certain changes to Genoil's share capital and in the event of specified dilutive transactions. About the Company Genoil is a technology development company providing solutions to the oil and gas industry through the use of proprietary technologies. Genoil's shares are listed on the TSX Venture Exchange under the symbol GNO and on the OTC Bulletin Board under the symbol GNOLF.OB. * * * Going Concern Doubt The Corporation has not achieved commercial operations from its various patents and technology rights and continues to incur losses. At March 31, 2004, the Company has a working capital deficiency of $3,044,177, including a note payable due in January 2005. The future of the Corporation is dependent upon its ability to maintain the continued financial support of the note holder, and obtain additional financing to fund the development of commercial operations. These consolidated financial statements are prepared on the basis that the Corporation will continue to operate throughout the next fiscal period to March 31, 2005, as a going concern. A failure to continue as a going concern would then require that stated amounts of assets and liabilities be reflected on a liquidation basis, which would differ from the going concern basis. The Company has not attained commercial operations from its various patents and technology rights and continues to incur losses. At September 30, 2004, the Company has a working capital deficiency of $5,121,092, including a note payable and accrued interest in the amount of $2,959,332 due in January 2005. The future of the Company is dependent upon its ability to maintain the continued financial support of the note holder, and obtain adequate additional financing to fund the development of commercial operations. These consolidated financial statements are prepared on the basis that the Company will continue to operate throughout the next fiscal period as a going concern. A failure to continue as a going concern would then require that stated amounts of assets and liabilities be reflected on a liquidation basis, which would differ from the going concern basis. GMAC COMMERCIAL: Moody's Holds Ba2 Rating on $12.2M Class F Certs. ------------------------------------------------------------------ Moody's Investors Service upgraded the ratings of four classes and confirmed or affirmed the ratings of three classes of GMAC Commercial Mortgage Securities, Inc., Mortgage Pass-Through Certificates, Series 2002-F1 as follows: -- Class A, $87,599,837, Floating, affirmed at Aaa -- Class X, Notional, affirmed at Aaa -- Class B, $27,233,234, Floating, upgraded to Aaa from Aa2 -- Class C, $20,859,070, Floating, upgraded to Aaa from A2 -- Class D, $20,859,070, Floating, upgraded to Aa3 from Baa2 -- Class E, $9,849,837, Floating, upgraded to Baa1 from Baa3 -- Class F, $12,168,332, Floating, confirmed at Ba2 The Certificates are collateralized by participation interests in five mortgage loans, which range in size from 1.4% to 61.5% of the transaction based on current principal balances. As of the December 13, 2004, distribution date the transaction's aggregate certificate balance has decreased by approximately 61.2% to $178.6 million from $460.6 million at securitization due to the payoff of 16 loans initially in the pool. Subsequent to the December distribution date, the One Kendall Square Loan ($109.9 million) paid off in full. Therefore all deal and loan level information presented exclude this loan. Moody's current weighted average loan to value ratio -- LTV -- is 76.9%, compared to 61.1% at securitization. Two of the remaining loans are performing below Moody's expectations and three are performing better than Moody's expectations. Moody's placed Classes B, C, D, E and F on review for possible downgrade on July 28, 2004, due to the poor performance of four loans in the pool. Classes B, C, D and E are being upgraded and Class F confirmed in spite of poorer overall pool performance due to credit support increases resulting from the payoff of the One Kendall Square Loan. The largest loan is The Infomart Loan ($56.0 million - 81.6%). The loan is secured by a Class A office and telecommunications building containing 1.1 million square feet located at the edge of the Stemmons Freeway Corridor and the Uptown/Turtle Creek submarkets in Dallas, Texas. As of June 2004 the property was approximately 76.0% occupied compared to 91.0% at securitization. The largest tenant is Wyndham Hotel Corporation (18.0% of occupied area), which utilizes the space as its corporate headquarters. The second and third largest tenants are WorldCom, Inc., (13.0%) and Allegiance Telecom, Inc. (10.0%). WorldCom, Inc., emerged from bankruptcy in April 2004 and Allegiance Telecom, Inc., is currently in bankruptcy, although the bankruptcy court has approved the acquisition of its assets by XO Communications, an existing tenant in The Infomart. The property's performance has been negatively impacted by weakness in both the Dallas office market and the telecommunications industry. The loan, which matured in May 2004, has a final maturity date of May 1, 2005. Moody's LTV is 66.2%, compared to 53.1% at securitization. The LTV including subordinate debt is in excess of 100.0%. The second largest loan is the Stevens-Arnold Building Loan ($7.4 million - 10.9%). The loan is secured by a 100,026 square foot office/research and development building located in Milpitas, California. The entire building is master leased to Artesyn Technologies, Inc., which currently occupies 30.0% of the building. The master lease expires in December 2005. The loan, which matured in July 2004, has a final maturity date of July 1, 2005. Artesyn Technologies' rent is significantly above market and real estate market fundamentals have deteriorated since securitization. These conditions pose a re-leasing risk. One mitigating factor is the full cash flow sweep implemented in March 2003, which has reduced the loan balance by 18.0% since securitization. Moody's LTV is 66.9%, compared to 62.2% at securitization. The third largest loan is the Atrium Tower Office Building Loan ($2.6 million - 10.8%). The loan is secured by a 162,244 square foot office building located in Houston, Texas. For the six-month period ending June 2004 the building was 91.0% occupied, compared to 81.0% at securitization. The building has over 130 tenants, most on short-term leases of one to two years. Moody's LTV is 40.7%, compared to 56.9% at securitization. The fourth largest loan is the 525 Northbelt Atrium Office Building Loan ($1.6 million -- 2.4%). The loan is secured by a 78,399 square foot office building located in Houston, Texas. For the six-month period ending June 2004 the building had an occupancy of 88.0%, compared to 86.0% at securitization. The building has approximately 60 tenants with most occupying less than 1,000 square feet. This loan is cross-collateralized with the 505 Northbelt Atrium Loan. Moody's LTV is 61.0%, compared to 63.9% at securitization. The fifth largest loan is the 505 Northbelt Atrium Office Building Loan ($981.4 thousand -- 1.4%). The loan is secured by a 77,476 square foot office building located in Houston, Texas. For the six-month period ending June 2004 the building was 88.0% occupied, compared to 74.0% at securitization. The building is leased to primarily small tenants with lease terms of one year or less. The outstanding loan balance has been reduced by approximately 10.0% since securitization due to the property's failure to meet debt service coverage tests. This loan is cross-collateralized with the 525 Northbelt Atrium Loan. Moody's LTV is 38.7%, compared to 63.3% at securitization. INTEGRATED HEALTH: Settles Dispute with Litchfield for $1,563,571 ----------------------------------------------------------------- Judge Walrath approved a Settlement Agreement among IHS Liquidating, LLC, Litchfield Asset Management Corporation, and State Street Bank and Trust Company, as Trustee. Pursuant to the Settlement Agreement, Litchfield will pay IHS Liquidating $1,563,571 and relinquish any and all rights in and to the $436,430 amended supersedeas bond posted by the IHS Debtors. A number of disputes among the IHS Debtors, Litchfield and the Trustee arose in connection with a facilities agreement between Integrated Health Services of Lester, Inc., and Litchfield. The disputes were litigated before the Bankruptcy Court, and in each case, the Bankruptcy Court's ruling was appealed to the United States District Court for the District of Delaware. Pursuant to the Settlement Agreement, IHS Liquidating, IHS-Lester and Litchfield filed with the District Court Stipulations of Dismissal with Prejudice of Appeal, with each party bearing its own costs and fees in these five proceedings: * Integrated Health Services, Inc., at al. v. Litchfield Investment Company, L.L.C., Civ. Action No. 03-155(GMS); * Litchfield Investment Company, L.L.C. v. Integrated Health Services, Inc., et al., Civ. Action No. 03-187(GMS); * Integrated Health Services, Inc., et al. v. Litchfield Investment Company, L.L.C., Civ. Action No. 03-945(GMS); * Litchfield Investment Company, L.L.C. v. IHS Liquidating, LLC, Civ. Action No. 04-267(GMS); and * Integrated Health Services, Inc. and Integrated Health Services of Lester, Inc. v. Litchfield Investment Company, L.L.C., Civ. Action No. 03-286(GMS). Integrated Health Services, Inc. -- http://www.ihs-inc.com/-- operated local and regional networks that provide post-acute care from 1,500 locations in 47 states. The Company and its 437 debtor-affiliates filed for chapter 11 protection on February 2, 2000 (Bankr. Del. Case No. 00-00389). Rotech Medical Corporation and its direct and indirect debtor-subsidiaries broke away from IHS and emerged under their own plan of reorganization on March 26, 2002. Abe Briarwood Corp. bought substantially all of IHS' assets in 2003. The Court confirmed IHS' Chapter 11 Plan on May 12, 2003, and that plan took effect September 9, 2003. Michael J. Crames, Esq., Arthur Steinberg, Esq., and Mark D. Rosenberg, Esq., at Kaye, Scholer, Fierman, Hays & Handler, LLP, represent the IHS Debtors. On September 30, 1999, the Debtors listed $3,595,614,000 in consolidated assets and $4,123,876,000 in consolidated debts. (Integrated Health Bankruptcy News, Issue No. 87; Bankruptcy Creditors' Service, Inc., 215/945-7000) iSECURETRAC: Converts $1.3 Million of Debt into Common Stock ------------------------------------------------------------ iSECUREtrac(TM) Corp. (OTC Bulletin Board: ISRE), an industry leader in advanced global positioning systems tracking solutions, announced today that it has retired an additional $1.3 million of Notes Payable, converting them to Common Stock at a price of $.23 per share. This brings the total to over $2.2 million of debt conversions during the fourth quarter of 2004, resulting in a $37,000 reduction in quarterly interest expense. "We have eliminated 30% of our non-lease debt in the last three months," said David Vana, CFO of iSECUREtrac Corp. "These transactions, which have strengthened our balance sheet and contributed to an improved cash flow, are part of the overall financial restructuring, the fourth and final phase of our strategic corporate initiative," Vana continued. "I have been very encouraged by the receptiveness to our plan which is evidenced by the progress we have made thus far," Vana Added. About iSECUREtrac iSECUREtrac Corp -- http://www.isecuretrac.com/-- is a technology and information services company providing advanced GPS tracking solutions for the remote tracking and monitoring of individuals, including real time data collection, secure remote reporting, and data warehousing. Currently focused in the area of Law Enforcement, iSECUREtrac's products are designed to improve security, enhance overall management information, and provide faster analysis and response for targeted government and commercial applications. * * * At Sept. 30, 2004, iSECUREtrac balance sheet showed a $5,765,713 deficit compared to $2,960,944 at Dec. 31,2003. IWO HOLDINGS: Files Pre-Packaged Chapter 11 Plan in Delaware ------------------------------------------------------------ IWO Holdings, Inc., a PCS affiliate of Sprint (NYSE: FON) and subsidiary of US Unwired Inc. (OTC: UNWR), and its subsidiaries have filed a "pre-packaged" chapter 11 plan to implement its previously announced financial reorganization to restructure and substantially reduce the Company's debt, strengthen its balance sheet and increase its liquidity. The plan was filed on January 4, 2005 in U.S. Bankruptcy Court for the District of Delaware and IWO anticipates emerging from chapter 11 by the end of February 2005. As reported in the Troubled Company Reporter on Dec. 2, 2004, IWO Holdings commenced a solicitation of votes from the holders of its 14% Senior Notes due 2011 in support of a pre-packaged Chapter 11 plan of reorganization. Pursuant to the proposed Chapter 11 plan: (i) IWO will repay in full its outstanding senior credit agreement debt in the aggregate principal amount of $215,000,000; (ii) its outstanding Senior Notes in the aggregate principal amount of $160,000,000 will be exchanged for all of the new common stock of IWO; (iii) all other general unsecured claims will be unimpaired and paid in full; and (iv) the existing common stock of IWO, all of which is owned by US Unwired Inc., will be cancelled. IWO has entered into a lock-up agreement with holders of approximately 68% of the outstanding principal amount of its Senior Notes pursuant to which they have agreed to vote in support of the Chapter 11 plan. In connection with the Chapter 11 plan, a newly formed corporation which will be merged into IWO upon consummation of the plan anticipates issuing $225,000,000 in aggregate proceeds of new notes. The proceeds of such new notes would be used primarily to repay IWO's senior credit agreement debt. If IWO receives the requisite votes from the holders of its Senior Notes, it intends to effectuate the proposed pre-packaged Chapter 11 plan of reorganization pursuant to a filing under the Bankruptcy Code in late December 2004 or early January 2005. The Company expects to continue normal operations throughout the restructuring process. All services provided to customers are expected to continue in the ordinary course of business. Headquartered in Lake Charles, Louisiana, IWO Holdings, Inc., through its Independent Wireless One Corporation subsidiary, is a PCS affiliate of Sprint. IWO provides mobile digital wireless personal communications services, or PCS, under the Sprint and Sprint PCS brand names in upstate New York, New Hampshire (other than Nashua market), Vermont and portions of Massachusetts and Pennsylvania. The Debtors filed for chapter 11 protection on January 4, 2005 (Bankr. D. Del. Case Nos. 05-10009 to 05-10011). When the Debtors sought bankruptcy protection, they reported assets amounting to $246,921,000 and debts amounting to $413,275,000. IWO HOLDINGS INC: Case Summary & 60 Largest Unsecured Creditors --------------------------------------------------------------- Lead Debtor: IWO Holdings, Inc. 901 Lakeshore Drive Lake Charles, Louisiana 70601 Bankruptcy Case No.: 05-10009 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Independent Wireless One Corporation 05-10010 Independent Wireless One Leased Realty Corporation 05-10011 Type of Business: The Debtors provide wireless personal communication services, commonly referred to as PCS, in upstate New York, New Hampshire (other than the Nashua market), Vermont, and portions of Massachusetts and Pennsylvania. See http://iwocorp.com/ Chapter 11 Petition Date: January 4, 2005 Court: District of Delaware Judge: Peter J. Walsh Debtor's Counsel: Mark D. Collins, Esq. Richards Layton & Finger One Rodney Square PO Box 551 Wilmington, Delaware 19899 Tel: (302) 651-7531 Fax: (302) 651-7701 Jeffrey L. Tanenbaum, Esq. Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, New York 10153 Chief Restructuring Officer: James J. Loughlin, Jr. Loughlin Meghji + Company 148 Madison Avenue New York, New York 10016 Crisis Managers: Loughlin Meghji + Company 148 Madison Avenue New York, New York 10016 Financial Advisors: Evercore Restructuring L.P. East 52nd Street New York, New York 10055 Financial Condition as of September 30, 2004: Total Assets: $246,921,000 Total Debts: $413,275,000 A. IWO Holdings, Inc.'s 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ U.S. Bank, Bond Debt $160,000,000 National Association as Successor in Interest to Firstar Bank, N.A. Nevada Financial Center 2300 West Sahara, 3rd Floor Las Vegas, Nevada 89102 Attn: Sandra Spivey Tel: (702) 386-7053 Fax: (702) 362-4128 AIG Global Investment Bond Debt $81,690,000 Group, Inc. 175 Water Street, 24th Floor New York, New York 10038 Attn: Ryan Langdon Tel: (713) 831-1906 Fax: (713) 831-1052 The Bank of New York Bond Debt $64,320,000 One Wall Street New York, New York 10286 Attn: Cecile Lamarco Tel: (212) 319-3066 Fax: (212) 809-9528 State Street Bank and Trust Bond Debt $33,903,000 Company 1776 Heritage Drive Global Corporate Action Unit JAB 5 Northwest No. Quincy, Massachusetts 02171 Attn: Joseph J. Callahan Tel: (617) 985-6453 Fax: (617) 537-5004 Greenwich Capital Partners Bond Debt $21,076,000 500 West Putnam Greenwich, Connecticut 06830 Attn: Richard Rolnick Tel: (203) 625-6904 Fax: (203) 618-2132 JP Morgan Chase Bank, N.A. Bond Debt $16,350,000 Proxy/Class Actions/Bankruptcy 14201 Dallas Parkway Dallas, Texas 75254 Attn: Violet Smith Tel: (469) 477-1071 Fax: (469) 477-2183 Eaton Vance Management Bond Debt $15,400,000 255 State Street Boston, Massachusetts 02109 Attn: Michael Weilheimer Tel: (617) 598-8467 Fax: (617) 482-2396 Investors Bank & Trust Company Bond Debt $14,490,000 200 Clarendon Street, 9th Floor Boston, Massachusetts 02116 Attn: Eric Lippmann Tel: (617) 937-6557 Fax: (617) 351-4308 Goldman Sachs Asset Management Bond Debt $14,280,000 85 Broad Street New York, New York 10004 Attn: V.J. Mohan Tel: (212) 902-6380 Fax: (212) 902-4451 Ares Management, LP Bond Debt $12,800,000 1999 Avenue of the Stars, Suite 1 Los Angeles, California 90067 Attn: Jeffrey Moore Tel: (310) 201-4100 Fax: (310) 201-4157 JP Morgan Chase Bond Debt $12,076,000 Bank/Greenwich Capital 4 New York Plaza, 21st Floor New York, New York 10004 Attn: Georgia Stanback Tel: (212) 623-5670 Fax: (212) 623-1232 First Southwest Company Bond Debt $9,000,000 1700 Pacific Avenue, Suite 500 Dallas, Texas 75201 Attn: James Furino Tel: (214) 953-8823 Fax: (214) 953-8732 Credit Suisse Asset Bond Debt $4,630,000 Management, LLC 11 Madison Avenue, 7th Floor New York, New York 10010 Attn: Richard Lindquist Tel: (212) 832-2626 Fax: (212) 325-6665 Northwestern Investment Bond Debt $3,000,000 Management Company 720 E. Wisconsin Avenue, 17th Fl. Milwaukee, Wisconsin 53202 Attn: Jefferson DeAngelis Tel: (414) 665-5291 Fax: (414) 665-5792 Berkshire Bancorporation, Inc. Bond Debt $3,000,000 160 Broadway, First Floor New York, New York 10017 Attn: Moses Marx Tel: (212) 349-2875 Fax: (212) 227-3208 Credit Suisse First Boston LLC Bond Debt $3,000,000 c/o ADP Proxy Services 51 Mercedes Way Edgewood, New York 11717 Tel: (631) 254-7400 Fax: (631) 254-7618 Spear, Leads & Kellogg Bond Debt $3,000,000 30 Hudson Street Jersey City, New Jersey 07302 Attn: Anthony Bruno Tel: (212) 357-4266 Fax: (212) 433-7310 Brown Brothers Harriman and Bond Debt $2,310,000 Company 525 Washington Boulevard New Port Towers Jersey City, New Jersey 07302 Attn: Bernard Hamilton Tel: (201) 418-6097 Fax: (212) 493-6892 Highland Capital Management Bond Debt $2,000,000 13455 Noel Road 2 Galleria Tower, Suite 1300 Dallas, Texas 75240 Attn: Kevin Enoch Tel: (972) 628-4100 Fax: (972) 628-4147 Dwight Asset Management Company Bond Debt $501,000 100 Bank Street Burlington, Vermont 05401 Attn: David Thompson Tel: (802) 862-4170 Fax: (802) 862-2513 B. Independent Wireless One Corporation's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Sprint PCS Trade Debt $27,661,486 Attn: Affiliates Settlements 6130 Sprint Parkway Overland Park, Kansas 66251 US Unwired, Inc. Management Fees $546,600 901 Lakeshore Drive Lake Charles, Louisiana 70601 Lawler Ballard Van Trade Debt $350,000 Durrand, Inc. 31 Inverness Center, Suite 110 Birmingham, Alabama 35242 Verizon CABS Trade Debt $194,939 PO Box 37210 Baltimore, Maryland 21297 Berkshire Wireless, Inc. Trade Debt $89,046 West Tower Receivable Trade Debt $88,369 Wireless Inc. Trade Debt $63,765 Frontier Citizens Utility Services $56,926 Communications of New York New York State Sales Taxes $54,000 Tax Processing Time Warner Telecom Utility Services $27,793 Holdings, Inc. Unibill, Inc. Trade Debt $26,155 Clough, Harbour & Legal $15,950 Associates, LLP GE Fleet Services Trade Debt $12,389 Milliken & Company Trade Debt $10,845 Crane, Greene & Parente Trade Debt $9,514 Loomis, Fargo & Company Trade Debt $9,152 Pyramid Network Services, LLC Trade Debt $9,000 Kelley Services, Inc. Trade Debt $8,081 Power Products Unlimited, Inc. Trade Debt $7,866 Joseph Ross Trade Debt $7,425 C. Independent Wireless One Leased Realty Corporation's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Site Acquisitions, Inc. Construction $67,927 25 Nashua Road, Suite C-1 Services Londonderry, New Hampshire 03053 Crown Atlantic Company LLC Rent $64,890 PO Box 203127 Houston, Texas 77216-2127 Delos R. Robinson and Repairs and $60,000 James R. Robinson as Trustee Maintenance Under the James Riker Robinson Family Trust 1573 Day Hollow Road Owego, New York 13827 SBA Towers, Inc. Rent $51,100 Epic Ventures L.P. Repairs and $45,000 Maintenance TCP Communications, Inc. Rent $38,560 Consolidated Edison Company of Construction $31,712 New York, Inc. Services American Tower Rent $26,907 Village of Chester Repairs and $24,484 Maintenance Gerkad L. Hoffus and Repairs and $12,950 Elizabeth K. Hoffus Maintenance Bison Heating & Cooling Inc. Unpaid Services $12,000 Orange & Rockland Utilities Repairs & Maintenance $11,459 Inc. On the Rise LLC Repairs & Maintenance $10,267 Capital Civic Center, Inc. Repairs & Maintenance $10,000 Petricca Development Repairs & Maintenance $10,000 Americo Real Estate Company Repairs & Maintenance $10,000 Renesselaer Polytechnic Repairs & Maintenance $5,000 Wakefield Investment Rent $2,389 333 Butternut Drive LLC Lease Renewal $2,283 Oakdale Mall, L.P. Rent $71 KAISER ALUMINUM: Board Elects John Donnan as General Counsel ------------------------------------------------------------ Kaiser Aluminum's board of directors has elected John M. Donnan, 43, as Vice President, Secretary and General Counsel, and Daniel J. Rinkenberger, 45, as Vice President and Treasurer. Mr. Donnan succeeds Edward F. Houff, 58, who had previously served as Vice President, Secretary and General Counsel since 2002 and who will remain with Kaiser as Senior Vice President and Chief Restructuring Officer -- CRO. Mr. Houff has held the CRO position since 2003 and now will focus exclusively on completing the company's restructuring and emergence from Chapter 11. Mr. Rinkenberger assumes the Treasurer position from Kerry A. Shiba, 50, who continues as Vice President and Chief Financial Officer. "The promotions and realignment of duties reflect a Kaiser that is working hard on parallel paths, concentrating its efforts on getting out of Chapter 11 while simultaneously continuing to install a management team with specific knowledge and expertise in fabricated products to lead the emerging company in a seamless transition," said Jack A. Hockema, President and Chief Executive Officer. Mr. Donnan joined the company in 1993 as Associate Corporate Counsel and was named Deputy General Counsel in 2002. In addition to his corporate legal duties, he has typically acted as the company's lead attorney on commercial matters related to Kaiser's fabricated products business. Before joining Kaiser, Mr. Donnan was an associate in the Corporate/Securities section of the Houston, office of Chamberlain Hrdlicka. He holds a Juris Doctorate degree from the University of Arkansas School of Law and Bachelor of Business Administration degrees in finance and in accounting from Texas Tech University. He is a member of the Texas and California bars. Mr. Rinkenberger was most recently Vice President of Economic Analysis and Planning, and he will retain those functional responsibilities in his role as Treasurer. He joined the organization in 1991 as Assistant Treasurer. In 1997, he assumed responsibility for Finance and Business Planning for what was then the Flat-Rolled Products business unit, and in 2000, he assumed similar responsibilities for all of Kaiser Fabricated Products. He was named a Vice President in 2002. Before joining Kaiser, he held a series of progressively responsible positions in the Treasury Department at Pennzoil Corporation. He holds a Master of Business Administration degree in Finance from the University of Chicago and a Bachelor of Education degree from Illinois State University. He is a Chartered Financial Analyst. Headquartered in Houston, Texas, Kaiser Aluminum Corporation -- http://www.kaiseral.com/-- operates in all principal aspects of the aluminum industry, including mining bauxite; refining bauxite into alumina; production of primary aluminum from alumina; and manufacturing fabricated and semi-fabricated aluminum products. The Company filed for chapter 11 protection on February 12, 2002 (Bankr. Del. Case No. 02-10429). Corinne Ball, Esq., at Jones Day, represent the Debtors in their restructuring efforts. On June 30, 2004, the Debtors listed $1.619 billion in assets and $3.396 billion in debts. KANSAS CITY: Welcomes Arthur Shoener as COO & Executive VP ---------------------------------------------------------- Kansas City Southern (KCS, or the Company)(NYSE: KSU) elected Arthur L. Shoener to the position of Executive Vice President and Chief Operating Officer of KCS and the positions of President and Chief Executive Officer of The Kansas City Southern Railway Company (KCSR) and The Texas-Mexican Railway (Tex-Mex). Shoener will report directly to Michael R. Haverty, who remains Chairman, President and CEO of KCS and Chairman of KCSR. Haverty has also been elected Chairman of Tex-Mex. Shoener will be directly responsible for managing all of KCS rail holdings within the United States. As EVP and COO of the Company, Shoener will play an important advisory role in the oversight of TFM, S.A. de C.V. (TFM), which will become a subsidiary of the Company following completion of the recently announced acquisition, and the Panama Canal Railway Company (PCRC), which operates across the Isthmus of Panama. Shoener began his distinguished career in the transportation industry in 1968 as a participant in the management training program at the Missouri Pacific Railroad Company. He subsequently held a variety of operations positions with the company and was serving as general manager of the eastern region in 1982 when the Missouri Pacific was acquired by the Union Pacific Railroad Company. His career continued to progress as he took positions of increased authority at Union Pacific. In 1991, he was named executive vice president of operations for the entire rail system. Shoener held that position until he left Union Pacific in 1997 and established a transportation consulting firm, which had domestic and international clients. "We are fortunate to have someone of Art Shoener's caliber join KCS," stated Michael Haverty. "He is widely acknowledged to be one of the premier railroad operations professionals in the business. He comes to KCS at a crucial juncture in the Company's history as we set out to significantly enlarge the scope of our operations in the U.S. and internationally. Art provides us with the expertise and management capabilities to ensure that KCS' rail investments achieve and maintain the highest level of operational efficiency and customer service." "I welcome the challenge of joining what will be the fastest growing railroad system in North America," said Art Shoener. "KCS has the opportunity to create something unique within the transportation industry, something no other railroad can duplicate. The opportunities are enormous. To succeed, all of KCS' rail holdings must be operated at the highest level of efficiency, while at the same time we aggressively market our rail services to achieve top line growth. I look forward to working with the entire KCS team to attain the exceptional results that we know are possible." KCS also appointed Owen M. Zidar to the position of Vice President - Marketing. Zidar joins KCS from Pacer Global Logistics, where he served as regional vice president of sales. From 1980 to 2000, he was at Burlington Northern Santa Fe, where he served in a variety of functions which coordinated marketing and transportation functions. "I am pleased to join KCS at such an important time," said Zidar. "I am especially excited about the extraordinary marketing and sales opportunities provided by the expansion of KCS' rail system." KCS is also announcing the restructuring of the management at KCSR with the arrival of Mr. Shoener. Jerry Heavin, formerly Senior Vice President Operations, will assume the newly created position of Senior Vice President-International Engineering and will oversee the rail infrastructure needs for not only KCS' U.S. rail holdings, but also its international affiliates. Heavin will report to Shoener. The U.S. transportation, mechanical, marketing and sales, and labor relations functions will report to Shoener as will purchasing and risk management. "Jerry Heavin has done an outstanding job of improving KCSR's rail operations over the past two and one-half years," said Mike Haverty. "With Art Shoener's arrival and KCS' planned and existing international investments, we need Jerry's many years of engineering and track experience to cover a broader spectrum." On Dec. 15, 2004, KCS reached an agreement with Grupo TMM, S.A. (TMM) that will ultimately result in KCS owning all of the shares of TFM entitled to full voting rights. TFM operates the rail corridor between Mexico City and the border at Laredo, Texas, where it links with the Tex-Mex. TFM also serves most of Mexico's principal industrial cities and three of its major ports, including the rapidly expanding Pacific port of Lazaro Cardenas. Upon completion of the acquisition, KCSR, TMM and Tex-Mex will operate under KCS as the holding company, and comprise a seamless 6,000-mile rail network linking the commercial and industrial heartlands of the U.S. and Mexico, as well as interchanging with the Class I railroads serving North American shippers. KCS also owns 50 percent of the voting control of the PCRC that operates passenger and freight service between the Atlantic and Pacific Oceans adjacent to the Panama Canal and traces its origins back to 1855. Panama Holdings, LLC, of Hazel Crest, Illinois, owns the other 50 percent voting control of PCRC. * * * As reported in the Troubled Company Reporter's Mar. 12, 2004, edition, Standard & Poor's Ratings Services assigned its 'BB+' rating and its recovery rating of '1' to Kansas City Southern Railway Co.'s new $250 million credit facility, consisting of a $150 million term loan B facility due 2008 and a $100 million revolving credit facility due 2007. Ratings on the company's existing credit facility are withdrawn. The debt is guaranteed by parent Kansas City Southern and certain subsidiaries. The 'BB-' corporate credit ratings for both KCSR and Kansas City Southern are affirmed. The new credit facilities are rated 'BB+', two notches above the corporate credit rating, indicating high expectation of full recovery of principal in the event of default. The outlook is negative. The Kansas City, Missouri-based Class 1 railroad has about $850 million of lease-adjusted debt outstanding. "The ratings on Kansas City Southern reflect its aggressive financial profile and uncertainties related to its strategically important investment in TFM S.A. de C.V., somewhat offset by the favorable risk characteristics of the U.S. freight railroad industry and the company's strategically located (albeit limited in size) rail network," said Standard & Poor's credit analyst Lisa Jenkins. Kansas City Southern's relationship with its affiliate, TFM, is strained at this time, and the status of its proposal to take control of TFM is uncertain. Ratings incorporate room for the company to pay its portion of the put option or for the company to complete the TFM transaction as originally proposed. However, if Kansas City Southern is forced to pay the full amount of the put, or if financial performance at Kansas City Southern or TFM weakens from expected levels, or if the TFM deal goes forward under more onerous terms, ratings could be reviewed for a downgrade. KISTLER AEROSPACE: Files Plan of Reorganization in Washington ------------------------------------------------------------- Kistler Aerospace Corporation filed its Plan of Reorganization with the U.S. Bankruptcy Court for the Western District of Washington. A full-text copy of the Plan is available for a fee at: http://www.researcharchives.com/download?id=040812020022 The Debtor believes that the Plan will enable it to successfully and expeditiously emerge from bankruptcy, preserve its businesses and allow creditors to realize the highest recoveries. The Debtor's projected market value after restructuring is between $112 million and $175 million. The Plan provides among other things that: * DIP Facility claim holders will receive $1 in Series A Convertible Secured Notes on the Effective Date; * senior secured claims will receive one share of Series A Preferred Stock for each dollar of such claim; * contractor claims will get 0.2742 shares of Series A Preferred Stock for each dollar of such claim; * general unsecured creditors will receive their pro rata share of the New Common Stock; and * equity interests will be extinguished and cancelled on the Effective Date. The Series A Preferred Stock shares given to senior secured creditors and to the Contractors will put them in the best position to control the outcome of actions regarding shareholder approval, including the election of directors. Headquartered in Kirkland, Washington, Kistler Aerospace Corporation, develops a fleet of fully reusable launch vehicles to provide lower cost access to space for Earth orbiting satellites. The Company filed for chapter 11 protection on July 15, 2003(Bankr. W.D. Wash. Case No. 03-19155). Jennifer L. Dumas, Esq., Youssef Sneifer, Esq., at Davis Wright Tremaine LLP represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $6,256,344 in total assets and $587,929,132 in total debts. KMART CORP: SEC Charges Former Kmart Executives with Fraud ---------------------------------------------------------- On December 2, 2004, the Securities and Exchange Commission filed civil fraud charges against three former Kmart executives and several current and former employees of Eastman Kodak Company, Coca Cola Enterprises Inc. and PepsiCo Inc.'s wholly owned subsidiaries, Pepsi-Cola Company and Frito-Lay, Inc. The SEC's Complaint, which was filed in the United States District Court for the Eastern District of Michigan, alleges that these individuals caused Kmart to issue materially false financial statements by improperly accounting for millions of dollars worth of vendor "allowances." Kmart obtained allowances from its vendors for various promotional and marketing activities. According to the Complaint, defendants caused Kmart to recognize allowances prematurely on the basis of false information provided to the company's accounting department. A number of vendor representatives participated in the fraud by co-signing false and misleading accounting documents, executing side agreements, and, in some instances, providing false or misleading third party confirmations to Kmart's independent auditor, PricewaterhouseCoopers LLP. As a result, Kmart's net income for the fourth quarter and fiscal year ended January 31, 2001, was overstated by approximately $24 million or 10 percent, as originally reported. The company restated its financial statements after filing for bankruptcy to correct these and other accounting errors. The Kmart defendants are: * John Paul Orr, former Divisional Vice President of Kmart's photo division; * Michael K. Frank, former Divisional Vice President and General Merchandise Manager of Kmart's food and consumables division; and * Albert M. Abbood, former Divisional Vice President of non-perishable products in Kmart's food and consumables division. Without admitting or denying the allegations of the Complaint, Frank and Abbood consented to final judgments permanently enjoining them from violations of Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 and Rules 10b-5, 13b2-1 and 13b2-2 thereunder and from aiding and abetting violations of Sections 13(a) of the Exchange Act and Rules 13a-1 and 12b-20 thereunder. Frank consented to a five-year officer and director bar, and Abbood agreed to pay a $50,000 civil penalty. The proposed final judgment against Frank does not impose a civil penalty based upon his demonstrated inability to pay. The vendor defendants are: * Darrell Edquist, a former Vice President and General Manager of Eastman Kodak Company; * David C. Kirkpatrick, a former National Sales Director for Coca Cola Enterprises, Inc.; * David N. Bixler, a former National Sales Director of PepsiCo's Pepsi-Cola division and current Vice President and General Manager of PepsiCo; * Randall M. Stone, a former National Account Manager for PepsiCo's Frito-Lay division; and * Thomas L. Taylor, a former Director of Sales for PepsiCo's Frito-Lay division. Without admitting or denying the allegations of the Complaint, Edquist consented to a final judgment permanently enjoining him from violations of Sections 10(b) and 13(b)(5) of the Exchange Act and Rules 10b-5, 13b2-1 and 13b2-2 thereunder and from aiding and abetting violations of Sections 13(a) of the Exchange Act and Rules 13a-1 and 12b-20 thereunder and directing that he pay a $55,000 civil penalty. Without admitting or denying the allegations of the Complaint, Stone consented to a final judgment permanently enjoining him from violations of Sections 10(b) and 13(b)(5) of the Exchange Act and Rules 10b-5 and 13b2-1 thereunder and from aiding and abetting violations of Sections 13(a) of the Exchange Act and Rules 13a-1 and 12b-20 thereunder and directing that he pay a $30,000 civil penalty. Without admitting or denying the charges against him, Taylor consented to an administrative order to cease and desist from committing or causing violations of Section 13(a) of the Exchange Act and Rules 13a-1, 12b-20 and 13b2-1 thereunder and a final judgment directing that he pay a $25,000 civil penalty. The SEC's Kmart investigation is continuing. A full-text copy of the SEC's complaint is available for free at: http://www.sec.gov/litigation/complaints/comp18989.pdf Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART Holding Corporation) -- http://www.bluelight.com/-- is the nation's second largest discount retailer and the third largest merchandise retailer. Kmart Corporation currently operates approximately 2,114 stores, primarily under the Big Kmart or Kmart Supercenter format, in all 50 United States, Puerto Rico, the U.S. Virgin Islands and Guam. The Company filed for chapter 11 protection on January 22, 2002 (Bankr. N.D. Ill. Case No. 02-02474). Kmart emerged from chapter 11 protection on May 6, 2003. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the retailer in its restructuring efforts. The Company's balance sheet showed $16,287,000,000 in assets and $10,348,000,000 in debts when it sought chapter 11 protection. (Kmart Bankruptcy News, Issue No. 87; Bankruptcy Creditors' Service, Inc., 215/945-7000) KMART HOLDING: Nov. & Dec. Same Store Sales Down by 4.6 Percent --------------------------------------------------------------- Kmart Holding Corporation (Nasdaq: KMRT) reported strong profitability and cash generation for November and December of 2004 (period ending Dec. 29, 2004). During that same period, Kmart's same store sales evidenced a significant moderation in the rate of decline. Kmart expects to generate net income (excluding any asset sales and bankruptcy-related expenses) of approximately $250 million for November and December of 2004 and income before interest and income taxes (excluding any asset sales and bankruptcy-related expenses) of approximately $400 million. This represents an increase in net income of approximately $23 million, or 10% over the same period in 2003. Same store sales for November and December declined by 4.6%, with December same store sales declining approximately 2.6%. This represents a significant improvement on the trends from earlier in 2004. During this period, gross margin improved by over 100 basis points over the prior year period. Aylwin Lewis, Chief Executive Officer of Kmart, said, "We are pleased with the significant improvement in the rate of our same store sales decline. As we have discussed before, Kmart has taken actions on many fronts to reset baseline sales at a level that forms the basis for profitable growth. It is our intention to maintain a substantial base of sales and be significantly profitable at the same time, and we are pleased with our progress to date. We are implementing numerous initiatives to grow sales and increase profits in 2005." Mr. Lewis added, "I have been extremely impressed with the Kmart associates I have met during my first 60 days on the job. I am proud to lead an organization that has succeeded against the expectations of many as shown by our earnings generated over this year. We look forward to continuing to demonstrate the considerable strength of this franchise." At the end of December, Kmart's inventory levels were approximately $3.4 billion. Kmart's cash balance has grown from $2.1 billion at the end of our 2003 fiscal year on January 28, 2004 to approximately $3.9 billion at the end of December and is expected to be approximately $3.2 billion at the end of Kmart's 2004 fiscal year on January 26, 2005. The $3.2 billion does not include the roughly $400 million receivable from Sears expected in March and April of 2005. As a result of its cash balances and cash generation, Kmart has terminated the balance of an existing credit agreement which has been undrawn for its entire life with the exception of letters of credit. Kmart expects the proposed merger with Sears, Roebuck & Co. to close by early March 2005. Headquartered in Troy, Michigan, Kmart Corporation (n/k/a KMART Holding Corporation) -- http://www.bluelight.com/-- is a mass merchandising company that offers customers quality products through a portfolio of exclusive brands that include Thalia Sodi, Jaclyn Smith, Joe Boxer, Martha Stewart Everyday, Route 66 and Sesame Street. The Company filed for chapter 11 protection on January 22, 2002 (Bankr. N.D. Ill. Case No. 02-02474). Kmart emerged from chapter 11 protection on May 6, 2003. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the retailer in its restructuring efforts. The Company's balance sheet showed $16,287,000,000 in assets and $10,348,000,000 in debts when it sought chapter 11 protection. KRISPY KREME: Credit Line Dries Up & Starts Talking to Lenders -------------------------------------------------------------- Krispy Kreme Doughnuts, Inc. (NYSE:KKD) disclosed yesterday that its Board of Directors has concluded that the Company's previously issued financial statements for the fiscal year ended February 1, 2004 and the last three quarters of fiscal year 2004 should be restated to correct certain errors. "Accordingly, Krispy Kreme said yesterday "such financial statements should no longer be relied upon." Krispy Kreme says its Board of Directors reached this conclusion on December 28, 2004, in consultation with, and upon the recommendation of, its Audit Committee and management of the Company, and with the concurrence of its Special Committee of independent directors, following receipt of preliminary conclusions of the Special Committee concerning various accounting issues. The Board has determined that adjustments totaling between $6.2 million and $8.1 million should be made to reduce pre-tax income for fiscal 2004. The principal adjustments, which relate to the Company's accounting for the acquisitions of certain franchisees, are: * a pre-tax adjustment of between $3.4 million and $4.8 million to record as compensation expense, rather than as purchase price, some or all of the disproportionate consideration paid to a former owner of the Michigan franchise, who was its operating manager and who subsequently worked for the Company for a short period of time; * a pre-tax adjustment of approximately $500,000 to reverse certain income and to record as expense amounts that were improperly accounted for as part of the Company's acquisition of the Michigan franchise; * a pre-tax adjustment of between $500,000 and $1.0 million to record as compensation expense, rather than as purchase price, some or all of the disproportionate consideration paid to a former owner of the Northern California franchise, who was its former operating manager and who worked for the Company for a short period of time; * a pre-tax adjustment of approximately $800,000 to record as expense, rather than as purchase price, part of the consideration paid to another former owner of the Northern California franchise; this adjustment was proposed subsequent to the Company filing its Form 8-K on December 16, 2004; * a pre-tax adjustment of approximately $600,000 to reverse income recorded as a management fee prior to the Company's acquisition of the minority interest in the Northern California franchise; and * a pre-tax adjustment of approximately $500,000 million to record as expense, rather than as purchase price, part of the consideration in the Company's acquisition of the Charlottesville franchise; These first and third adjustments, with a combined pre-tax effect of $3.9 million to $5.8 million, reflect the application of judgment and interpretation in determining the amount of compensation or other expense embedded within acquisitions in which a selling shareholder was employed by the Company for a short period of time and/or received a disproportionately higher purchase price compared to other sellers. Restatement of the Company's financial statements to reflect the six principal adjustments referred to above and certain other minor adjustments are expected to reduce net income for fiscal 2004 by between approximately $3.8 million and $4.9 million (between 6.6% and 8.6%) and net income for the fiscal 2004 second, third and fourth quarters by approximately $0.3 million (2.2%), approximately $0.3 million (2.1%) and between approximately $3.2 million and $4.3 million (19.3% and 26.3%), respectively. The adjustments are expected to reduce diluted earnings per share ("EPS") for fiscal 2004 by between approximately $0.07 and $0.08 and diluted EPS for the fiscal 2004 second, third and fourth quarters by approximately $0.01, less than $0.01 and between $0.05 and $0.07, respectively. As a result of the restatement of the fiscal 2004 financial statements, the Company also expects to restate its financial statements for the first and second quarters of fiscal 2005 to reflect the effects of the restatement of the February 1, 2004 balance sheet; however, the Company's previously reported results of operations for the first and second quarters of fiscal 2005 are not expected to be materially affected by this restatement. Since the Special Committee's investigation -- discussed in the Company's Form 8-K filed December 16, 2004 -- is ongoing, there can be no assurance that, upon completion of the investigation, the Special Committee will not conclude, either for quantitative or qualitative reasons, that the Company's historical financial statements require restatement with respect to matters or periods beyond those discussed above. In such event, there can be no assurance that the amount of those additional adjustments will not be material individually or in the aggregate. A full-text copy of that Dec. 16 Form 8-K is available at no charge at: http://www.sec.gov/Archives/edgar/data/1100270/000095016204001441/0000950162 -04-001441.txt SEC Probe Continues In addition, the investigation of the Company by the Commission's Division of Enforcement is ongoing. The Company also is conducting discussions with the Commission staff regarding the staff's inquiries concerning certain accounting matters, including the matters giving rise to the adjustments disclosed yesterday. As previously reported in the Troubled Company Reporter, Krispy Kreme was notified on October 7, 2004, that the Securities and Exchange Commission that it had entered a formal order of investigation concerning the Company. Lease & Depreciation Accounting Review The Company and its joint venture partners lease a substantial number of properties on which significant improvements have been constructed. The Company currently is reviewing its accounting practices for leases and depreciation of related assets to determine whether or not those practices fully comply with generally accepted accounting principles ("GAAP"). The Company became aware, in December 2004, as a result of filings made by certain other restaurant companies, that those companies intend to restate previously issued financial statements to correct errors in the application of GAAP to certain leases or leasehold improvements. Insofar as the Company is able to determine, the restatements generally arise from corrections to properly account for lease renewal options and/or rent escalations in computing rent expense for operating leases; to determine properly the depreciable lives of leasehold improvements when renewal options are present in leases; and to require use of the same lease term in determining the operating or capital classification of a lease, rent expense thereunder and depreciable lives of related leasehold improvements. Based on current reports filed by the certain other restaurant companies, it appears their restatements generally will reflect increased depreciation and/or rent expense compared to that previously reported. If the Company determines (as it presently expects) that its historical accounting practices in this regard do not fully comply with GAAP, adjustments to fiscal 2004 financial statements will be required, in addition to the adjustments to such financial statements the Company has already determined are necessary as discussed herein. If the restatement of the Company's fiscal 2004 financial statements reflects adjustments as a result of this review, the Company expects that its previously issued interim financial statements for fiscal 2005 also would be restated. In addition, depending on materiality, it is also possible that financial statements for one or more fiscal years prior to fiscal 2004 may be restated as a result of this issue. Reporting Delays In its Current Report on Form 8-K filed December 16, 2004, the Company noted that its quarterly report on Form 10-Q for the period ended October 31, 2004, could not be filed timely with the Commission due to ongoing analyses related to the accounting treatment of certain franchise matters in the Company's third fiscal quarter, primarily concerning the Company's consolidation of KremeKo, Inc., its area developer for Central and Eastern Canada. In that Current Report, the Company stated its intention to file the quarterly report as soon as practicable following the completion of those analyses. These analyses have not yet been completed. Subsequent to December 16, the Company concluded that the filing of the quarterly report should await not only the completion of the analyses of the franchise matters, but also the completion of as many as practicable of the ongoing investigations, inquiries, reviews and other analyses now underway. The completion of such ongoing work could result in adjustments of previously issued financial statements in addition to the adjustments described herein and such adjustments could, individually or in the aggregate, be material. Because the Company believes it would be desirable to accomplish all restatements at one time, the Company currently intends to finalize, at a minimum, completion of the analyses of franchise matters and the analysis of lease and depreciation matters before restating the fiscal 2004 financial statements, the interim fiscal 2005 financial statements and filing the fiscal 2005 third quarter report on Form 10-Q. Depending upon the status and timing of completion of the foregoing analyses, the Company may also await the conclusion of the discussions with the Commission staff and completion of the work of the Special Committee before restating the fiscal 2004 financial statements, the interim fiscal 2005 financial statements and filing the fiscal 2005 third quarter quarterly report. Moreover, the time required to complete such ongoing work could cause the Company to be unable to file on a timely basis its fiscal 2005 annual report on Form 10-K. Bank Loan Covenant Breach The failure of the Company to deliver to its lenders the Company's financial statements for the quarter ended October 31, 2004 on or before January 14, 2005 (which will not be delivered on or before that date for the reasons discussed above) will, absent a waiver from the lenders, constitute an event of default under the Company's $150 million Credit Facility. Additionally, the adjustments to the Company's fiscal 2004 financial statements described herein may also constitute an event of default. In the case of an event of default, lenders representing more than 50% of the financing commitment under the Credit Facility may direct that the Credit Facility be terminated and all amounts outstanding thereunder be immediately due and payable. At October 31, 2004, the total amount outstanding under the Credit Facility was approximately $90.9 million. Waiver Requested The Company has informed the lenders of the matters discussed herein and has requested a waiver from the lenders. Although the Company is in active discussions with the lenders regarding the Company's request, there can be no assurance that the lenders will accede and, if the lenders accede, under what conditions they will do so. Any such waiver will require the consent of lenders representing more than 50% of the financing commitment under the Credit Facility. Unable to Borrow For the reasons described above, the Company is currently unable to borrow funds under the Credit Facility. The Company believes that its existing cash, combined with cash generated from operations, will be sufficient to fund current operations and presently contemplated capital expenditures. However, borrowings under the Credit Facility or other additional cash resources may be required if the Company is called upon to honor its guarantees of franchisee debt or franchisee operating leases. At October 31, 2004, the total guaranteed amount was approximately $52.3 million, primarily comprised of $32.1 million related to consolidated joint ventures and $20.2 million related to franchisees in which the Company has less than a controlling interest. To date, the Company has not experienced any losses with respect to these guarantees; however, the Company has been advised that certain of its franchisees are not in compliance with certain covenants contained in their credit agreements. At October 31, 2004, the total amount of the debt guaranteed by the Company under such credit agreements was approximately $16.7 million. Credit Agreement Summary Subject to assignments of the Lenders' commitments, KRISPY KREME DOUGHNUT CORPORATION is the Borrower under a $150,000,000 CREDIT AGREEMENT DATED AS OF OCTOBER 31, 2003 with: Revolving Term Loan Total Lender Commitment Commitment Commitment ------ ------------ ----------- ------------ Wachovia Bank, N.A. $35,005,667 $8,994,333 $44,000,000 Branch Banking & Trust Company 22,276,333 5,723,667 28,000,000 Bank of America, N.A. 19,094,000 4,906,000 24,000,000 Royal Bank of Canada 19,094,000 4,906,000 24,000,000 CIBC Inc. 11,933,750 3,066,250 15,000,000 The Bank of Nova Scotia 11,933,750 3,066,250 15,000,000 ------------ ----------- ------------ TOTAL $119,337,500 $30,662,500 $150,000,000 KRISPY KREME DOUGHNUTS, INC., provides a Guarantee of the Borrower's obligations to the Lenders at the parent company level. The Credit Agreement contains three key financial covenants: (a) Krispy Kreme promises that its Fixed Charge Coverage Ratio won't fall below 1.5 to 1.0; (b) Krispy Kreme agrees that its Consolidated Leverage Ratio won't exceed 2.5 to 1.00; and (c) Krispy Kreme promises that its Consolidated Tangible Net Worth will at no time be less than $175,000,000 plus the sum of (i) 50% of the cumulative Reported Net Income of the Parent and its Consolidated Subsidiaries during any period after August 3, 2003 (taken as one accounting period) plus (ii) 50% of the aggregate increases in Stockholders' Equity after October 31, 2003, by reason of the issuance and sale of capital stock of the Parent in connection with a secondary public offering (including upon any conversion of debt securities of the Parent into such capital stock). When the Credit Agreement was put in place, Peter S. Brunstetter, Esq., at Kilpatrick Stockton LLP, advised Krispy Kreme and James E. Lilly, Esq., at Womble, Carlyle, Sandridge & Rice, PLLC, provided the Lenders with legal advice. NYSE Listing in Jeopardy The Company's failure to file timely its quarterly report on Form 10-Q or potentially its annual report on Form 10-K also may constitute failure to comply with the continued listing requirements of the New York Stock Exchange, on which the Company's common stock is listed. The Company has not received any communication from the Exchange in this regard; however, the Company cannot predict what action, if any, the Exchange may take should the Company not promptly file its required reports. Internal Controls Under Review Section 404 of the Sarbanes-Oxley Act of 2002 requires the Company to include in its Annual Report on Form 10-K for fiscal 2005 a report of management on internal control over financial reporting, which must include, among other things, an assessment of the effectiveness as of the end of the fiscal year of the Company's internal control structure over financial reporting. The Company's independent auditors are also required to issue a report on the assessment made by management. The Company is undertaking a comprehensive effort to comply fully with these requirements. This effort includes documenting, evaluating the design of and testing the effectiveness of the Company's internal controls over financial reporting. During this process, the Company may identify deficiencies in its system of internal controls over financial reporting that may require remediation. As described above, the Company has identified certain errors in its historical financial statements. Due to the ongoing evaluation and testing of the Company's internal controls and the adjustments to the historical financial statements as described above, there can be no assurance that any deficiencies identified may not be material weaknesses that the Company would be required to report. The Company will continue to devote substantial time and incur substantial costs in connection with the requirements of Section 404 of the Act. Although the Company has a plan in place to complete the work necessary to present the required management report and for its independent auditors to issue their report, management has not yet completed its evaluation. The current formal investigation of the Commission and the independent investigation of the Special Committee significantly increase the challenges to the Company in completing the Section 404 requirements on a timely basis. These ongoing investigations have put a strain on available resources. In addition, the findings and conclusions reached in these investigations could raise issues concerning the Company's internal controls that require remediation and subsequent testing. The Company's independent auditors have advised the Company that they have concerns regarding whether management will be in a position to complete its work and provide its report on a timely basis and thus will be able to obtain the required attestation report on internal controls on a timely basis, and whether the independent auditors will be able to issue unqualified attestation reports as to management's assessment and the operating effectiveness of the Company's internal controls over financial reporting. Failure to complete the evaluation in a timely manner or failure to comply fully with Section 404 might subject the Company to sanctions or investigation by regulatory authorities, such as the Commission or the Exchange. Any such action could adversely affect the Company's financial results and the market price of the Company's common stock. In addition, any failure to implement new or improved controls, or difficulties encountered in their implementation, could harm the Company's operating results and/or cause the Company to fail to meet its reporting obligations. About Krispy Kreme Founded in 1937 in Winston-Salem, North Carolina, Krispy Kreme is a leading branded specialty retailer of premium quality doughnuts, including the Company's signature Hot Original Glazed. Krispy Kreme currently operates 440 stores (comprised of 402 factory stores and 38 satellites) in 45 U.S. states, Australia, Canada, Mexico and the United Kingdom. Krispy Kreme can be found on the World Wide Web at http://www.krispykreme.com/ LOEWEN: State Street Wants $5.5 Mil. Reserve Account Maintained --------------------------------------------------------------- Francis A. Monaco, Jr., at Monzack and Monaco, P.A., in Wilmington, Delaware, notes that the Plan and Confirmation Order provide for the creation by Loewen Group, Inc., and its debtor- affiliates of segregated accounts, to be funded with cash in the Series Reserve Amounts aggregating $5.5 million, to satisfy State Street Bank and Trust Company's secured claims against the Debtors. State Street is a secured creditor in the Debtors' cases and a former indenture trustee. State Street continues to accrue secured claims with respect to the Series 6 Notes, the Series 7 Notes and the PATS Notes. State Street's secured claims against the Debtors include amounts for: (1) compensation for State Street's services as indenture trustee; (2) reimbursement for State Street's disbursements and expenses arising from State Street's services as indenture trustee; (3) fees and expenses of State Street's agents and counsel arising from State Street's services as indenture trustee; and (4) indemnification and defense of any past or future loss or liability arising from State Street's administration of the trusts created under the Prepetition Indentures. Mr. Monaco relates that a significant portion of State Street's secured claims against the Debtors with respect to the Series 6 Notes, the Series 7 Notes and the PATS Notes are for legal fees and expenses for the defense of claims against it with respect to the controversy that arose in the Debtors' cases relating to the secured status of those notes under the Collateral Trust Agreement between Loewen and Bankers Trust Company, the Collateral Trustee. Under the terms of the Plan, Mr. Monaco says, State Street's secured claims are classified as Class 23 Claims, and it is clearly contemplated under the terms of the Plan that those claims may not even be incurred until an undetermined time in the future. The Plan contemplated future litigation relating to the CTA and the CTA Issue. In fact, Mr. Monaco says, the Plan created a $3 million "war chest" for the prosecution of claims by noteholders against State Street and other potentially responsible parties. To assure, however, that funds would be available to satisfy the secured claims of State Street in the future, the Plan required that the Series Reserve Amounts be held by the Debtors at least until the third anniversary of the Effective Date of the Plan. The third anniversary of the Effective Date of the Plan will occur on January 2, 2005. The Plan, however contemplates that the precise amount of State Street's secured claims against the Debtors may not be determined and allowed by that third anniversary. Therefore, the Plan provides that "if there is a proceeding then pending against State Street in respect of which it may be entitled to a Class 23 Allowed Claim under the Prepetition Indenture, upon motion by State Street, the Bankruptcy Court may extend the period such account must be maintained." On March 21, 2002, an action entitled A.G. Capital Funding Partners, L.P., et al. v. State Street Bank and Trust Company, Index No. 02/601134, was filed in New York State Supreme Court, New York County. The A.G. Capital Action was filed by holders of PATS Notes, Series 6 Notes and Series 7 Notes. The A.G. Capital Action asserts, inter alia, claims for breach of contract, breach of fiduciary duty, and negligence, alleging that State Street caused the secured status of the PATS Notes, the Series 6 Notes and Series 7 Notes to be uncertain by allegedly failing to deliver Additional Secured Indebtedness Registration Statements to the CTA Trustee, Bankers Trust Company. The Noteholders allege that they received tens of millions of dollars less than they would have received if State Street had delivered the ASIRS to the CTA Trustee. State Street's answer denies the material allegations and affirmatively alleges that it had no obligation to deliver the ASIRS to Bankers Trust and that any injury or damages to the Noteholders were caused by the acts or omissions of the Noteholders or third parties other than State Street, and asserts various affirmative defenses. The A.G. Capital Action remains pending and no trial date has been scheduled. Clearly, Mr. Monaco asserts, because of State Street's entitlement to a secured claim for indemnification of any past costs or future defense or other costs arising from State Street's administration of the trusts created under the Prepetition Indentures, resolution of the A.G. Capital Action is required before a determination can be made of the precise amount of State Street's Class 23 Allowed Claim with respect to the PATS Notes, the Series 6 Notes and the Series 7 Notes. Thus, State Street asks the Court to extend until January 2, 2008, the period during which the Series Reserve Amounts with respect to the Series 6 Notes, Series 7 Notes and PATS Notes must be maintained for the payment of State Street's secured claims against the Debtors. The amounts, which cover both pre-Effective Date and post-Effective Date fees and expenses, are: -- $1,343,806 for the Series 6 Notes, -- $1,635,754 for the Series 7 Notes, and -- $1,927,702 for the PATS Notes, for a total of $4,907,263. "Only by granting an extension can State Street's unequivocal rights be protected and the terms of the Plan that [the] Court confirmed be carried out. The protection of State Street's rights under the terms of the Plan will not harm any holder of PATS Notes, Series 6 Notes or Series 7 Notes because any excess funds in the segregated accounts will ultimately be distributed to [those] holders, with interest accrued, pursuant to the provisions of the Plan," Mr. Monaco says. Formerly The Loewen Group, Alderwoods Group is North America's #2 funeral services company. Alderwoods Group owns or operates about 750 funeral homes and some 170 cemeteries in the US and Canada. The firm's funeral services include casket sales, remains collection, death registration, embalming, transportation, and the use of funeral home facilities. The Debtors filed for chapter 11 protection in the United States and CCAA protection in Canada on June 1, 1999 after the Debtors failed to make debt payments after its aggressive acquisition phase. Loewen became Alderwoods Group when it emerged from bankruptcy on January 2, 2002. (Loewen Bankruptcy News, Issue No. 91; Bankruptcy Creditors' Service, Inc., 215/945-7000) LUCENT TECH: Annual Shareholders' Meeting Slated for February 16 ---------------------------------------------------------------- Lucent Technologies is providing proxy materials to its shareholders in connection with the solicitation by the Board of Directors of Lucent Technologies, Inc., of proxies to be voted at its 2005 Annual Meeting of Shareowners, and at any postponement or adjournment of the meeting. Shareholders are cordially invited to attend the annual meeting on February 16, 2005, beginning at 9 a.m. EST. The annual meeting will be held at the DuPont Theatre located at 10th and Market Streets, Wilmington, Delaware 19802. Shareowners will be admitted beginning at 8 a.m. EST. The location is accessible to handicapped persons and, upon request, the Company will provide wireless headsets for hearing amplification. A map and directions to the annual meeting are on the admission ticket. Shareholders will need an admission ticket, as well as a form of personal identification, to enter the annual meeting. Shareowners of record will find an admission ticket attached to the proxy card sent to them by Lucent. If planning to attend the annual meeting, shareholders must retain the admission ticket. If arrival at the annual meeting is without an admission ticket, Lucent will allow admission only if able to verify Lucent shareownership. The Company is offering a live audio webcast of the annual meeting. If the choice is to listen to the audio webcast, one may do so at the time of the meeting through the link on http://www.lucent.com/investor Lucent Technologies is first mailing its proxy statement and accompanying form of proxy and voting instructions on January 3, 2005 to holders of its common stock on December 20, 2004, the record date for the annual meeting. Lucent Technologies designs and delivers the systems, services and software that drive next-generation communications networks. Backed by Bell Labs research and development, Lucent uses its strengths in mobility, optical, software, data and voice networking technologies, as well as services, to create new revenue-generating opportunities for its customers, while enabling them to quickly deploy and better manage their networks. Lucent's customer base includes communications service providers, governments and enterprises worldwide. For more information on Lucent Technologies, which has headquarters in Murray Hill, New Jersey, USA, visit http://www.lucent.com/ * * * As reported in the Troubled Company Reporter on Sept. 14, 2004, Moody's Investors Service raised the senior implied debt rating of Lucent Technologies, Inc., to B2 from Caa1 and affirmed the SGL-2 short-term ratings. The rating outlook is positive. The current rating takes into consideration the risks inherent in the volatile communications equipment market, including weakened capital spending by carriers, intense competitive pressure from existing and new entrants like Huawei Technologies and rapidly evolving technology standards. The positive outlook reflects the fact that Lucent's rating could be upgraded to the extent the company is able to sustain profitable revenue growth and positive free cash flow generation that result in further improvement in credit metrics. Alternatively, the rating outlook could face downward pressure to the extent revenues show material decline, the company is unable to sustain improvements in profitability and cash generation, future acquisitions consume a substantial amount of cash or the company adopts a materially less conservative approach towards its internal liquidity profile or the use of vendor financing. MANDALAY RESORT: Reminder About $400MM Senior Debt Conversion ------------------------------------------------------------- Mandalay Resort Group's (NYSE: MBG) $400 million original principal amount of Floating Rate Convertible Senior Debentures due 2033 that were issued pursuant to an Indenture between Mandalay and The Bank of New York, as trustee, dated as of March 21, 2003 (as supplemented on July 26, 2004) will be convertible during the calendar quarter ending March 31, 2005, pursuant to section 11.2 of the Indenture. The Indenture provides that the debentures are convertible in a calendar quarter if the closing price of Mandalay's common stock exceeds $68.76 per share (120% of the base conversion price) for at least 20 trading days of the 30 consecutive trading day period ending on the last trading day of the preceding calendar quarter, which was the case for the quarter ended Dec. 31, 2004. Consequently, holders of the debentures may convert the debentures into shares of the Mandalay's common stock during the next calendar quarter (ending March 31, 2005) at the conversion rate in effect on the conversion date. Mandalay is obligated to cash settle a number of shares of common stock equal to the base conversion rate in effect on the conversion date, provided, however, that the amount of cash that Mandalay will be required to pay to cash settle such shares shall not exceed $1,000 per debenture, or up to an aggregate of $400 million. In the event that the conversion rate in effect on the conversion date is greater than the base conversion rate of 17.452 shares per $1,000 debenture, Mandalay has the right, but not the obligation, to cash settle all or a portion of any such additional shares in accordance with Section 11.6 of the Indenture. In accordance with Statement of Financial Accounting Standards No. 128, Earnings Per Share, the dilutive effect of the debentures will be reflected in diluted earnings per share by application of the if-converted method. Accordingly, Mandalay will include additional shares on a weighted-average basis in its diluted earnings per common share calculation for the quarter and the fiscal year ending Jan. 31, 2005. For example, while each $1,000 debenture is convertible into 17.452 shares of Mandalay common stock based on the Base Conversion Price of $57.30, any such conversion must be settled in cash. However, to the extent the price of Mandalay's common stock exceeds $57.30, additional "incremental" shares may be issued up to a maximum of 14.2789 shares per $1,000 debenture. It is these incremental shares that must be included in the computation of diluted earnings per share, even though Mandalay retains the right to also settle these shares in cash. The dilutive impact of assuming conversion will be partially offset by the add-back of interest expense (net of income tax) related to the Debentures to net income in accordance with the if-converted method. Mandalay Resort Group owns and operates 11 properties in Nevada: Mandalay Bay, Luxor, Excalibur, Circus Circus, and Slots-A-Fun in Las Vegas; Circus Circus-Reno; Colorado Belle and Edgewater in Laughlin; Gold Strike and Nevada Landing in Jean and Railroad Pass in Henderson. The company also owns and operates Gold Strike, a hotel/casino in Tunica County, Mississippi. The company owns a 50% interest in Silver Legacy in Reno, and owns a 50% interest in and operates Monte Carlo in Las Vegas. In addition, the company owns a 50% interest in and operates Grand Victoria, a riverboat in Elgin, Illinois, and owns a 53.5% interest in and operates MotorCity in Detroit, Michigan. * * * As reported in the Troubled Company Reporter on June 9, 2004, Fitch Ratings has placed the following long-term debt ratings of MGM MIRAGE (MGG) and Mandalay Resort Group (MBG) on Rating Watch Negative. * MGG --Senior secured debt 'BB+'; --Senior subordinated debt 'BB-'. * MBG --Senior unsecured debt 'BB+'; --Senior subordinated debt 'BB-'. The action follows the June 4, 2004, announcement that MGG made an offer to purchase MBG for $68 per share, or approximately $4.9 billion in cash plus the assumption of $2.8 billion in debt. This represents a 9.6 times (x) multiple of estimated fiscal-year end January 2005 EBITDA of $800 million. MBG announced that it would consider the offer, which puts a 12.8% premium on its share price as of June 4 close. An increase in the offer to $75 per share would add roughly $500 million to the purchase price. The combined entity will have the capacity to begin reducing debt from free cash flow, with the pace of debt reduction contingent on the level of discretionary investments and share repurchases. Fitch's review will also include, among other things, a review of the strategic benefits that may be achieved with respect to competitive positioning, potential synergies and cost savings. MORGAN STANLEY: Moody's Places Low-B Ratings on Five Cert. Classes ------------------------------------------------------------------ Moody's Investors Service is reviewing for possible downgrade the ratings of ten classes of Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through Certificates, Series 2003-TOP11 as follows: -- Class C, $32,859,000, WAC, currently rated A2 -- Class D, $13,443,000, WAC, currently rated A3 -- Class E, $14,936,000, WAC, currently rated Baa1 -- Class F, $7,468,000, WAC, currently rated Baa2 -- Class G, $7,468,000, WAC, currently rated Baa3 -- Class H, $11,948,000, Fixed, currently rated Ba2 -- Class J, $2,988,000, Fixed, currently rated Ba3 -- Class K, $2,987,000, Fixed, currently rated B1 -- Class L, $2,987,000, Fixed, currently rated B2 -- Class M, $2,987,000, Fixed, currently rated B3 Moody's placed the Certificates on review for possible downgrade due to concerns regarding potential losses associated with two specially serviced loans - the Alabama/Arizona Warehouse/Distribution Loan ($27.4 million - 2.3% of pool) and the Troy Technology Park Portfolio Loans ($25.8 million - 2.2% of pool). The Alabama/Arizona Warehouse/Distribution Loan is secured by two warehouse distribution facilities containing a combined 1.4 million square feet. The properties are located in Montgomery, Alabama and Glendale, Arizona. Each property is 100% occupied by KB Toys, Inc., which filed for Chapter 11 bankruptcy in January 2004. KB has closed 389 stores and has announced plans to close between 140 and 240 additional stores by Jan. 31, 2005. To date it has not closed any of its four distribution centers. There is a $4.0 million letter of credit as additional collateral that can be drawn upon in event of default. The Troy Technology Park Portfolio Loans consists of three cross-collateralized and cross-defaulted loans secured by eleven flex/industrial buildings totaling 426,500 square feet. The properties are all located in an industrial park in Troy, Michigan. The portfolio's major tenant is General Motors, which occupied approximately 80.1% of the premises at securitization. General Motors has vacated approximately 20% of the premises and has indicated that it will be vacating the remainder of its space shortly. In addition, another tenant, Visteon Corporation, which leases approximately 10.0% of the premises, has indicated that it will not renew at the expiration of its current lease in May 2005. Moody's review will focus on the financial performance of all the loans in the pool and will incorporate expected losses from the specially serviced loans. As of the December 13, 2004, distribution date the transaction's aggregate outstanding pool balance has declined by approximately 1.8% to $1.174 billion from $1.195 billion at securitization. MOOG INC: Moody's Rates Proposed $120M Senior Sub. Notes at Ba3 --------------------------------------------------------------- Moody's Investors Service has assigned a Ba3 rating to Moog, Inc.'s proposed $120 million senior subordinated notes, due 2015. The company has a Ba2 senior implied with a stable ratings outlook. The purpose of the new notes offering is primarily to repay approximately $117 million of senior secured revolving credit outstanding, extending the company's debt maturity profile and increasing liquidity. The rating outlook is stable. The ratings continue to reflect: (1) Moog's relatively modest debt levels, which will be essentially unchanged as a result of the proposed transaction, (2) its strong revenue growth across a number of military and commercial platforms, and (3) the expectation of continued strong cash flow generation to support its indebtedness. These strengths are balanced against the concentration of the company's revenue base among large aerospace OEM's and the U.S. DoD, as well as the liabilities associated with Moog's under- funded pension plan. The stable rating outlook anticipates that favorable business trends in the defense market and continued recovery of commercial aerospace demand will support the company's credit metrics and that the company will maintain its strong liquidity profile, incorporating the benefits of a longer debt maturity schedule provided through this financing. Ratings or their outlook could be subject to upward revision if the company were to further reduce debt while consistently generating substantial cash flow, such that leverage (lease- adjusted debt/EBITDAR) were to fall below 2x for a sustained period, while free cash flow were to exceed 30% of total debt for a sustained period. Conversely, although the ratings allow for a modest amount of additional leverage, ratings could be revised downward if the company were to undertake a large, leveraged acquisition, such that free cash flow were to fall below 15% of debt over a prolonged period, or if lease adjusted debt were to exceed 4x. Upon close of the transaction, Moog's debt levels will remain moderate relative to the company's earnings capacity. As of September 2004, Moog reported $311 million of total debt, or 40% of total capital. With the proceeds of the proposed notes offering, total debt will remain essentially unchanged ($313 million). Pro forma lease-adjusted debt/EBITDAR will remain moderate at about 3.0x, which is appropriate for this rating category. Pro forma interest coverage will be strong at about 6.1x EBIT/interest for FY 2004 (ending September 2004). Pro forma free cash flow will be similarly robust at approximately 31% of total debt, although this in part reflects a CAPEX level that is lower than future expectations as well as a large reduction in accounts receivable experienced in FY 2004 that is not expected to recur. Moody's also noted that Moog's debt structure, which had been entirely comprised of senior debt (predominantly $295 million drawn on its $368 million senior secured credit facilities due 2008, including a $53 million term loan), will now have $120 million of debt shifted from the senior secured level to the subordinated level. The introduction of subordinated indebtedness into the company's capital structure is viewed favorably as it diversifies the company's funding sources and should enhance the relative claim of existing bank creditors in the company's capital structure Moog's recent business trends have facilitated steady revenue growth and strong free cash flow generation. Over the past two years, Moog's revenue has grown by over 30%, from $719 million as of FY 2002 to $939 million as of FY 2004. Much of this growth is attributable to the September 2003 acquisition of the Poly-Scientific division of Litton Systems from Northrup Grumman for $152 million. The acquisition of Poly Scientific established Moog's Components segment, which provided about $130 million of revenue in FY 2004. EBITDA has similarly increased, from about $104 million to $130 million in FY 2004 on stable margins of about 14-15%. However, Moody's notes that the company's revenue base is still relatively concentrated in the military sector (50% of FY 2004 sales), leaving the company particularly exposed to changes in budget priorities related to key military aircraft and space platforms on which Moog is a supplier. Despite rapid growth, including the Poly-Scientific acquisition, Moog has been able to maintain moderate levels of outstanding indebtedness, with about $311 million of debt outstanding as of September 2004. This demonstrates the company's recent strong operating performance, which essentially allowed for the $152 million purchase of Poly-Scientific without increasing debt from 2002 levels. However, the rating agency remains cautious that despite relatively modest acquisition activity prior to the Poly-Scientific transaction, the company could pursue further acquisitions as part of its growth initiative. Moody's notes the significant unused availability that will exist under the company's revolving credit facility; Moog currently has the ability to draw about $190 million remaining under its revolving credit facility without violating any covenants. While the existing ratings could accommodate a strategically beneficial acquisition of moderate size, a debt-financed transaction in excess of $120 million could place downward pressure on the rating. Moody's also notes that Moog maintains defined benefit pension plans that are currently under-funded, creating the likelihood of a modest draw on cash in the near term. As of September 2004, the company reported a combined (U.S. and non-U.S. plans) under-funded status of about $115 million on year-end projected benefits of about $361 million. The company has contributed about $36 million to the plan in 2004, and plans more moderate contributions in the near term to improve the plans' funding status. The Ba3 rating assigned to the new senior subordinated notes, one notch below the senior implied rating, reflects its junior status in claim behind all current and potential future senior secured or unsecured debt commitments. The new notes are not guaranteed by any of Moog's subsidiaries. Furthermore, since all of the company's U.S. assets are pledged to the $368 million senior secured credit facilities, these notes lack the substantial collateral coverage that the senior bank debt enjoys. Moog, Inc., headquartered in East Aurora, New York, is a leading designer and manufacturer of high performance precision motion control products and systems for aerospace and industrial markets. The company operates within four segments: Aircraft Controls (44% of FY 2004 revenues), Space Controls (12%), Industrial Controls (30%) and Components (14%). Moog had FY 2004 revenues of $939 million. MURRAY INC: U.S. Trustee Appoints 7-Member Creditors Committee -------------------------------------------------------------- The United States Trustee for Region 8 appointed seven creditors to serve on the Official Committee of Unsecured Creditors of Murray, Inc.'s chapter 11 case: 1. Pension Benefit Guaranty Corporation Attn: Dana Cann 1200 K Street, NW Washington D.C. 20005 Phone: 202-326-4070, Fax: 202-842-2643 2. Suzhou Murray Machinery & Mfg.Co., Ltd. Attn: Yan Ting 86 South Dongwu Road Suzhou, China Phone: 512-65254870, Fax: 512-65654218 Or by Proxie to: Robert Sable, Esq. McGuireWoods LLP Dominion Tower 625 Liberty Avenue, 23rd Floor Pittsburgh, Pennsylvania 15222 Phone: 412-667-7936, Fax: 412-667-6050 3. Wenling Qianjian Import & Export Co., Ltd. Dba Wenling Long River Mach. Mfg. Co. Attn: Kenneth H. Chang, Esq., /CPA (via proxie) Evanston Law Group 600 North 85th Street, Suite C101 Seattle, Washington 98103 Phone: 206-781-9288, Fax: 206-783-3123 4. International Union, UAW And Its Local 1623 Attn: Niraj R. Ganatra 8000 E. Jefferson Avenue Detroit, Michigan 48214 Phone: 313-926-5216, Fax: 313-925-5240 5. Steel Coils Of Tennessee, Inc. Attn: Thear Lemoine or Mike Boyle 26 Century Blvd., Suite 100 Nashville, Tennessee 37214 Phone: 615-883-1425, Fax: 615-883-6022 6. Tecumseh Power Company Attn: Marge Dilts 900 North Street Grafton, Wisconsin 53024 Phone: 262-376-8211, fax: 262-376-8211 7. Monitor Manufacturing Company Attn: P. Jeffrey Pizzola 1820 S. Cobb Industrial Blvd. Smyrna, Georgia 30080 Phone: 614-866-9803 Ext. 224, Fax: 614-866-9805 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 Brentwood, Tennessee, Murray, Inc. -- http://www.murray.com/-- manufactures lawn tractors, mowers, snowthrowers, chipper shredders, and karts. The Company filed for chapter 11 protection on Nov. 8, 2004 (Bankr. M.D. Tenn. Case No. 04-13611). Paul G. Jennings, Esq., at Bass, Berry & Sims PLC, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated more than $100 million in total debts and assets. NATIONAL CENTURY: Trust Objects to JP Morgan & Bank One Claims -------------------------------------------------------------- The business of National Century Financial Enterprises, Inc., and its debtor-affiliates involved issuances of substantial amounts of notes, in multiple series, and pursuant to multiple different indentures. In general, each indenture was entered into with a trustee bank. At the bankruptcy petition date, the outstanding notes were notes issued by NPF VI, Inc., and NPF XII, Inc. Bank One, N.A., served as Indenture Trustee with respect to NPF XII, which had $2 billion in outstanding notes. JP Morgan Chase Bank served as Indenture Trustee with respect to NPF VI, which had $900 million in outstanding notes. Bank One and JP Morgan Chase, as Indenture Trustees, filed proofs of claim on behalf of noteholder beneficiaries, asserting claims for indemnification. JP Morgan filed 31 claims: Claim No. Background of Claim -------- ------------------- 628 through 642 Claims for adequate protection resulting (Cash Collateral from the diminution in value of collateral Claims) for the NPF VI Notes caused by the Debtors' use of the cash collateral 643 through 655 Filed against the Debtors other than (Diversion National Premier Financial Services, Inc., Claims) and NPF VI Claims relating to the NPF VI Indentures or the sales and subservicing agreements with providers, including (a) amounts that should have been paid to NPF VI Noteholders but were allegedly diverted to the Debtors for their own corporate purposes, and (b) claims that JP Morgan may have against the Debtors as sellers or subservicers under the sales and subservicing agreements 656, 657 Claims based on the "actions and inactions" (NPFS Claims) of NPFS as servicer under the NPF VI Indenture and sales and subservicing agreements 658 Claim for principal and interest amounting to $884.5 million arising out of the NPF VI Indenture; and other claims relating to the NPF VI Indenture, including claims for compensation and reimbursement and indemnification. Bank One asserted 14 claims: Claim No. Background of Claim -------- ------------------- 284 Claim against NPF XII for: (a) principal and interest amounting to $2,047,500,000 arising out of the NPF XII Indenture; and (b) other claims arising out of the NPF XII Indenture, including claims for Indemnification. 285 through 297 Filed against the Debtors other than NPF (Diversion XII and Allied Medical, Inc., for unjust Claims) enrichment, breach of contract, conversion, fraud, fraudulent transfer, constructive trust and other causes of action for the Debtors' alleged misconduct in advancing funds to providers that were not supported by purchased receivables and wrongfully transferring funds from reserve accounts maintained for the benefit of the NPF XII Noteholders Claims Addressed by Prior Orders Sydney Ballesteros, Esq., at Gibbs & Bruns, LLP, in Houston, Texas, asserts that claims filed by JP Morgan and Bank One other than the Indenture Trustee Non-P&I Claims were addressed by prior orders. On April 28, 2004, the Court: (a) allowed the claim for unpaid principal, interest, fees and charges under the NPF VI Notes included in the Indenture Trustee Claim filed by JP Morgan against NPF VI for $884,123,360; (b) allowed the claim for unpaid principal, interest, fees and charges under the NPF XII notes included in the Indenture Trustee Claim filed by Bank One against NPF XII for $2,050,187,966; and (c) disallowed the "Contractual Note Claims," which are claims for contractual principal, interest, fees and charges under the notes, asserted in the Noteholder Claims as duplicative of the Indenture Trustee Claims that were asserted on the Noteholders' behalf. Ms. Ballesteros adds that the Debtors' Liquidation Plan has resolved all of the outstanding claims of the Noteholders and the Indenture Trustees other than the Indenture Trustee Non-P&I Claims, pursuant to the Noteholder Deficiency Claim Settlement in the Plan. The Settlement allowed the Noteholder Deficiency Claim and thus, resolved the JP Morgan Cash Collateral Claims, the JP Morgan Diversion Claims, the JP Morgan NPFS Claims and the Bank One Diversion Claims. Furthermore, the JP Morgan P&I Claim and the Bank One P&I Claim have been previously allowed pursuant to the Noteholder Claims Order as the Allowed NPF VI Note Claim and Allowed NPF XII Note claim. Objection to the Indenture Trustee Claims Claim No. 284 includes the Bank One Non-P&I Claims. Ms. Ballesteros argues that the claim should be disallowed because: (a) the claim fails to comply with Rules 3001(c) and 3001(f) of the Federal Rules of Bankruptcy Procedure; and (b) Bank One has not provided sufficient documentation or evidence establishing or explaining any of the claims. Ms. Ballesteros also contends that JP Morgan's Claim No. 658 should be disallowed because: (a) the claim is duplicative to administrative claims filed by JP Morgan; (b) the claim fails to provide any detail or explanation of its request for at least $387,000 of purported "Holder expenses for legal and accounting services"; and (c) JP Morgan fails to include documentation concerning six lawsuits which it seeks indemnification. Furthermore, Ms. Ballesteros points out that with respect to Claim Nos. 284 and 658: (a) The claims are for unliquidated and contingent contribution or indemnity claims, and thus must be disallowed pursuant to Section 502(2)(1)(B) of the Bankruptcy Code; (b) The claims are not within the scope of any cognizable indemnity obligation of the Debtors; (c) Bank One and JP Morgan's conduct and malfeasance, more fully described in the Unencumbered Assets Trust's Complaint against JP Morgan Chase Bank, et al., filed in the United States District Court for the Southern District of Ohio, Eastern Division, on November 17, 2004, gives rise to equitable subordination of the claim and to the defenses of prior material breach, unclean hands, estoppel, offset and other equitable defenses; and (d) Under Ohio law, indemnification is not permissible and thus, not enforceable when the party seeking indemnity is liable for negligence, misconduct, or acts of bad faith. Thus, the Unencumbered Assets Trust, as successor to the Debtors, and its Trustee, Erwin I. Katz, Ltd., ask Judge Calhoun to disallow each of the Indenture Trustee Claims. Withdrawal of the Reference Though many of the bankruptcy and procedural issues in the Trust's Objection do not implicate matters at issue in litigations pending before Judge Graham in the District Court, and many of the issues in the Objection may best be administered and resolved by the Bankruptcy Court, to the extent that particular rulings may affect or involve specific issues also in dispute in those cases before Judge Graham, the UAT asks the District Court to withdraw the reference with respect to those particular issues so that the discovery and adjudication on those matters may be coordinated by Judge Graham. Headquartered in Dublin, Ohio, National Century Financial Enterprises, Inc. -- http://www.ncfe.com/-- through the CSFB Claims Trust, the Litigation Trust, the VI/XII Collateral Trust, and the Unencumbered Assets Trust, is in the midst of liquidating estate assets. The Company filed for Chapter 11 protection on November 18, 2002 (Bankr. D. Ohio Case No. 02-65235). The Court confirmed the Debtors' Fourth Amended Plan of Liquidation on April 16, 2004. Paul E. Harner, Esq., at Jones Day, represents the Debtors in their restructuring efforts. (National Century Bankruptcy News, Issue No. 50; Bankruptcy Creditors' Service, Inc., 215/945-7000) NORTEL NETWORKS: Has Until March 31 to File 2003 Annual Report -------------------------------------------------------------- Nortel Networks Corporation (NYSE:NT) (TSX:NT) and its principal operating subsidiary, Nortel Networks Limited -- NNL, reported that the New York Stock Exchange -- NYSE -- has granted the Company and NNL an extension of up to an additional three months to file their 2003 Annual Reports on Form 10-K with the Securities and Exchange Commission -- SEC, during which time the common shares of the Company and other Company and NNL securities will remain listed on the NYSE. The extension is subject to review by the NYSE on an ongoing basis. In the event that the Company and NNL do not complete the filing of their 2003 Annual Reports on Form 10-K by March 31, 2005, the NYSE will move forward with the initiation of suspension procedures. The Company and NNL continue to cooperate with the NYSE concerning their expected timetable regarding the filing of their 2003 Annual Reports on Form 10-K and their quarterly reports for 2004. As previously announced, the Company expects that it and NNL will commence to file these reports on January 10, 2005. About Nortel Nortel Networks is a recognized leader in delivering communications capabilities that enhance the human experience, ignite and power global commerce, and secure and protect the world's most critical information. Serving both service provider and enterprise customers, Nortel delivers innovative technology solutions encompassing end-to-end broadband, Voice over IP, multimedia services and applications, and wireless broadband designed to help people solve the world's greatest challenges. Nortel does business in more than 150 countries. For more information, visit Nortel on the Web at http://www.nortel.com/ * * * As reported in the Troubled Company Reporter on Dec. 10, 2004, Standard & Poor's Ratings Services placed its B-/Watch Developing credit rating on Nortel Networks Lease Pass-Through Trust certificates series 2001-1 on CreditWatch with negative implications. The rating on the pass-through trust certificates is dependent upon the ratings assigned to Nortel Networks, Ltd., and ZC Specialty Insurance, Co. This CreditWatch revision follows the Dec. 3, 2004, withdrawal of the ratings assigned to ZC Specialty Insurance, Co. Previously, the rating had a CreditWatch developing status due to the CreditWatch developing status on the rating assigned to Nortel. The pass-through trust certificates are collateralized by two notes that are secured by five single-tenant, office/R&D buildings that are leased to Nortel ('B-'). Nortel guarantees the payment and performance of all obligations of the tenant under the leases. The lease payments do not fully amortize the notes. A surety bond from ZC Specialty Insurance Co. insures the balloon amount. The notes mature in August 2016, at which time a final principal payment of $74.7 million is due. If this amount is not repaid, the indenture trustee can obtain payment from the surety, provided certain conditions are met. The notes will remain on CreditWatch while Standard & Poor's examines the impact of the withdrawal of the ratings on ZC Specialty Insurance Co. NRG ENERGY: Inks Coal Transport Pact for Big Cajun II Facility -------------------------------------------------------------- NRG Energy, Inc. (NYSE:NRG) has entered into a long-term coal transport agreement with The Burlington Northern and Santa Fe Railway Company and affiliates of American Commercial Lines LLC to deliver Powder River Basin coal to its Big Cajun II facility in New Roads, Louisiana, beginning April 1, 2005. "This agreement represents another important step in the implementation of our long-term coal strategy which is predicated on managing risk through an integrated approach to the procurement, transportation and handling of our key fuel commodities," said David Crane, NRG President and Chief Executive Officer. "In addition, Powder River Basin coal transported under this agreement is naturally low in sulfur and thus provides our customers in the South Central United States with environmentally responsible, low-cost and reliable electric power." Earlier last year, NRG announced plans to lease 1,540 rail cars some of which would be used to transport coal by BNSF and ACL affiliates to the Big Cajun II facility. Big Cajun II is a three-unit, 1,700 megawatt (MW) coal generating station that is owned and operated by Louisiana Generating, a wholly owned subsidiary of NRG. NRG co-owns unit three with Entergy, which owns a 42 percent share (or 241.5 net MW). Louisiana Generating serves all the electricity needs of Louisiana's 11 electric cooperatives. 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." OM GROUP: NYSE Extends Form 10-K Filing Deadline Until March 31 --------------------------------------------------------------- The New York Stock Exchange has granted OM Group, Inc. (NYSE: OMG) an extension of up to an additional three months to file its 2003 Form 10-K for year ended Dec. 31, 2003. The Company's stock will remain listed on the NYSE during that time. The extension is subject to review by the NYSE on an ongoing basis. In the event the Company does not complete its Form 10-K by March 31, 2005, the NYSE will move forward with the initiation of suspension procedures. On December 22, 2004, the Company anticipates the audit of its restated financial statements will be completed in January 2005, such that the Company's delayed 2003 Form 10-K can be filed with the SEC by the end of that month. About the Company OM Group, Inc. -- http://www.omgi.com/-- is a leading, vertically integrated international producer and marketer of value-added, metal-based specialty chemicals and related materials. Headquartered in Cleveland, Ohio, OM Group operates manufacturing facilities in the Americas, Europe, Asia, Africa and Australia. * * * As reported in the Troubled Company Reporter on Aug. 23, 2004, Standard & Poor's Ratings Services' 'B+' corporate credit and 'B-' subordinated note ratings on Cleveland, Ohio-based OM Group Inc. remain on CreditWatch, but the implications are revised to developing from negative. "The revision reflects the potential that the ratings could be raised upon a satisfactory outcome of the independent auditors' review of OM's restated financial statements and if earnings continue at improved levels," said Standard & Poor's credit analyst Wesley E. Chinn. OPTINETRICS INC: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Optinetrics Inc. 20401 Earl Street Torrance, California 90503 Bankruptcy Case No.: 04-34037 Type of Business: The Debtor produces highly integrated passive and active Planar Lightwave Circuit (PLC) components for fiber to the home communications, optical interconnects and switching, and Solid state sources for displays and backlighting. See http://www.optinetrics.com/ Chapter 11 Petition Date: December 28, 2004 Court: Central District of California (Los Angeles) Judge: Samuel L. Bufford Debtor's Counsel: Leslie A. Cohen, Esq. Liner Yankelevitz Sunshine & Regenstreif LLP 1100 Glendon Avenue 14th Floor Los Angeles, CA 90024 Tel: 310-500-3500 Total Assets: $457,900 Total Debts: $1,590,874 The Debtor did not file a list of its 20-largest unsecured creditors. PROSOFTTRAINING: Nasdaq Schedules Jan. 27 Delisting Hearing ----------------------------------------------------------- ProsoftTraining (Nasdaq: POSO) has been granted a hearing before a Nasdaq Listing Qualifications Panel. The company's stock will continue to trade on the Nasdaq SmallCap Market pending the panel's decision. The hearing will be held on Jan. 27, 2005. The purpose of the hearing is to review the Nasdaq Staff Determination of Dec. 21, 2004, which indicated that the company's securities are subject to delisting from Nasdaq due to the bid price of its common stock failing to meet the $1.00 per share minimum established by Marketplace Rule 4310(c)(4). At the company's 2004 annual stockholders' meeting scheduled Tuesday, Jan. 7, 2005, the stockholders will consider a proposal to amend the company's articles of incorporation to effect a share consolidation of between two-for-one and seven-for-one. The share consolidation is designed to raise the company's share price to a level that will allow it to meet and maintain compliance with Rule 4310(c)(4). Prosoft has filed a definitive proxy statement with the Securities and Exchange Commission that explains the proposed share consolidation in detail. There can be no assurance that the panel will grant the company's request for continued listing following the hearing, or that the proposed share consolidation will be approved by the company's shareholders or, if approved, that it will be successful in raising the share price sufficiently to regain and maintain compliance with the Nasdaq rules. 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. RELIANCE GROUP: Liquidator Wants to Recover Busti's Legal Fees -------------------------------------------------------------- At the start of the bankruptcy proceedings, several shareholders of Reliance Group Holdings filed class action complaints against RGH Officers and Directors. The Securities Class Actions were consolidated in the United States District Court for the Southern District of New York under the caption In re Reliance Group Holdings, Inc., Securities Litigation, No. 00-CV-4653. RGH purchased Directors and Officers Insurance Policies from Lloyd's Underwriters, Greenwich, and Clarendon Insurance Co., to cover defense costs. Several Directors and Officers that were named in the Actions sought to tap the Policies to cover defense costs. The Liquidator of Reliance Insurance Company intervened, asserting that the Policies were assets of RIC's estate. On November 14, 2001, George Bello and Lowell Freiberg commenced an adversary proceeding seeking a declaration of coverage under the Policies. Messrs. Bello and Freiberg sought payment of their defense costs and indemnification from the Policies, including the Securities Class Action. Additionally, Dennis A. Busti commenced an action captioned Busti v. Syndicate 1212 at Lloyd's London, et al., 04 Civ. 1577 in the U.S. District Court for the Southern District of New York, seeking to compel the Underwriters to pay disputed sums from the Policies. Prior to a decision, the parties reached an Agreement with the Liquidator and the Underwriters, whereby the Policies would pay for covered defense costs for Messrs. Bello, Freiberg and Busti, as well as other insureds. The Agreement contemplated use of $17,400,000 of proceeds from the Policies for the Securities Class Actions. Now, the Liquidator believes that the law firm of Fensterstock & Partners, counsel for Mr. Busti, is overbilling and unnecessarily depleting the resources of the Policies, which are to be used for legitimate D&O coverage costs. Fensterstock represented Mr. Busti in three legal matters, namely: (1) Koken v. Steinberg, et al., (2) Dennis Busti V. Syndicate 1212 at Lloyd's London, et al., and (3) Smolow & Landis Pension & Profit Sharing Plan v. Steinberg, et al. The Liquidator wants the Commonwealth Court to direct Fensterstock to substantiate its fees and expenses. The fees and expenses are inadequately documented, unreasonable and outside the coverage afforded under the Policies. Also, the Liquidator asserts, the Court should declare the Policies assets of the estate. Jerome B. Richter, Esq., at Blank Rome, in Philadelphia, Pennsylvania, notes that although the defense costs and other expenses will be paid under the Agreement, there is no formal mechanism to resolve financial disputes. The Underwriters have informed the Liquidator that from January 2002 to the present, Fensterstock has submitted nearly $4,500,000 in fees and expenses for payment under the Policies in representation of Mr. Busti. Of this amount, $4,200,000 relates to only one of 18 defendants in the Koken v. Steinberg action. This represents almost one fifth of the aggregate defense costs for all defendants in the Koken v. Steinberg action. To date, Fensterstock has been paid more than $3,400,000 from the Policies to represent Mr. Busti. Mr. Richter recounts that between October 2003 and April 2004, Fensterstock submitted invoices for almost $1,700,000, an average of over $336,000 per month. Due to minimal documentation and disproportionate appearance, the Liquidator objected to Fensterstock's October and December 2003 invoices. Thereafter, Fensterstock began submitting invoices to the Underwriters only, bypassing and avoiding the Liquidator. By letter agreement dated June 10, 2004, the Liquidator and Fensterstock agreed to resolve their fee dispute. Fensterstock would reduce its fees on the disputed invoices by $615,890, or 30%. Fensterstock was to receive the remainder of $1,504,665. Upon receipt of payment from the Underwriters, Fensterstock would seek dismissal without prejudice of the Busti action and the Liquidator would withdraw its objection. The Underwriters paid Fensterstock as agreed, on August 30, 2004. However, neither Mr. Busti nor his counsel has sought dismissal of the Busti action as required. Moreover, the most recent invoice submitted by Fensterstock violates the letter agreement. That invoice includes a previous balance due of $1,600,000, which appears to include the amount that was to be reduced under the letter agreement. Further, Fensterstock's latest invoices do not include detailed billing information; they only provide the number of hours and rate billed, plus a brief and general description of the work performed. According to Mr. Richter, Fensterstock's conduct is intolerable. The Policies are assets of the RIC estate. The value of the Policies is depleted through the payment of counsel's fees and expenses. The available limits of the Policies have been depleted by more than $25,000,000. Defense costs submitted for payment must be substantiated. Fees that are inadequately documented or unreasonable under the Polices should be disallowed. The Liquidator wants the Commonwealth Court to compel Fensterstock to submit its fee documentation to the Court for review. Fees found excessive, unreasonable and uncovered should be disallowed. The Court should prohibit payment of fees incurred in connection with the Busti Action. Headquartered in New York, New York, Reliance Group Holdings, Inc. -- http://www.rgh.com/-- is a holding company that owns 100% of Reliance Financial Services Corporation. Reliance Financial, in turn, owns 100% of Reliance Insurance Company. The holding and intermediate finance companies filed for chapter 11 protection on June 12, 2001 (Bankr. S.D.N.Y. Case No. 01-13403) listing $12,598,054,000 in assets and $12,877,472,000 in debts. The insurance unit is being liquidated by the Insurance Commissioner of the Commonwealth of Pennsylvania. (Reliance Bankruptcy News, Issue No. 66; Bankruptcy Creditors' Service, Inc., 215/945-7000) REPUBLIC ENGINEERED: Nothing Left & Moves to Dismiss Chap. 11 Case ------------------------------------------------------------------ UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF OHIO EASTERN DIVISION In re: ) Case Nos. 03-55118, 03-55120, ) and 03-55121 REPUBLIC ENGINEERED PRODUCTS ) HOLDINGS LLC, et al., {n1} ) Jointly Administered ) Chapter 11 Debtors. ) Judge Marilyn Shea-Stonum NOTICE OF HEARING ON DEBTORS' MOTION FOR AN ORDER DISMISSING THEIR CHAPTER 11 CASES PLEASE TAKE NOTICE OF THE FOLLOWING: 1. The above-captioned debtors (collectively, the "Debtors") have filed the Debtors' Motion for an Order Dismissing Their Chapter 11 Cases (the "Motion"). In the Motion, the Debtors seek an order of the Court dismissing the Debtors' bankruptcy cases, pursuant to 11 U.S.C. Sec. 1112. 2. Pursuant to Local Bankruptcy Rule 9013-1, if you do not want the Court to grant the relief requested in the Motion, then on or before Thursday, January 6, 2005 at 4:00 p.m. (EST), you or your lawyer must file with the Court a written objection to the Motion, explaining your position, at: Clerk of Courts U.S. Bankruptcy Court 455 U.S. Courthouse Two South Main Street Akron, OH 44308-1810 If you mail your response to the Court for filing, you must mail it early enough so that the Court will receive it on or before the date stated above. You must also mail a copy to Shawn M. Riley, Esq., McDonald Hopkins Co., LPA, 600 Superior Avenue, E., Suite 2100, Cleveland, Ohio 44114 so as to be received on or before the date stated above. 3. A hearing on the Motion will be held at the United States Bankruptcy Court, Federal Building - U.S. Courthouse, 2 South Main Street, Courtroom 260, Akron, Ohio 44308 on Friday, January 14, 2005, at 10:00 a.m., Eastern Time. 4. If no objection is filed and served in the manner described above, the Court may grant the relief requested in the Motion without further notice or a hearing. 5. Copies of the Motion may be obtained by written request from: DeBorah G. Marshall McDonald Hopkins Co., LPA 600 Superior Avenue, E., Suite 2100 Cleveland, Ohio 44114 E-mail: dmarshall@mcdonaldhopkins.com Telephone: 216-348-5400 Facsimile: 216-348-5474 Dated: December 16, 2004 Respectfully submitted, /s/ Sherri L. Dahl ___________________________________ Shawn M. Riley (0037235) Sherri L. Dahl (0073621) MCDONALD HOPKINS CO., LPA 600 Superior Avenue, E., Suite 2100 Cleveland, OH 44114-2653 Telephone: (216) 348-5400 Facsimile: (216) 348-5474 E-mail: sriley@mcdonaldhopkins.com sdahlffimcdonaldhopkins.com COUNSEL FOR THE DEBTORS __________ {n1} The Debtors are: Republic Engineered Products Holding, LLC, n/k/a REPH LLC; Republic Engineered Products, LLC, n/k/a REPL LLC; and Blue Steel Capital Corp., n/k/a BSC Corp. * * * Notice of the Jan. 14 Hearing on the Debtors' Motion to Dismiss is accompanied by a letter from Republic Engineering's lawyers: McDonald Hopkins Co., LPA Attorneys at Law 600 Superior Avenue, E. Suite 2100 Cleveland, Ohio 44114 Telephone 216.348.5400 Fax 216.348.5474 http://www.mcdonaldhopkins.com/ December 16,2004 To all Creditors of Republic Engineered Products, LLC: As the bankruptcy case of Republic Engineered Products, LLC, n/k/a REPL LLC, and its affiliates {n1} (collectively, "REP") winds down, we write to provide a summary of the case and an explanation of the outcome. REP filed its bankruptcy case on October 6, 2003. The filing was prompted by a lack of liquidity, driven by, among other things, declining steel prices and catastrophic damage to one of REP's blast furnaces caused by the August 14, 2003 electrical blackout in Ohio, Michigan, New York, and Ontario, Canada. The damage to the blast furnace required a significant curtailment of operations. The curtailment of operations meant less steel was sold; lower steel sales meant lower cash collections (and borrowings from REP's lenders); and with less cash, REP was unable to pay its bills. A bankruptcy filing became the only option available. After REP filed bankruptcy, it focused all of its efforts on returning to normal operations, eliminating its losses and selling its business. It hired investment bankers to find potential purchasers and it obtained from the Bankruptcy Court approval of a sale process. That sale process was designed to sell all of REP's assets and to generate the highest possible price. And, based on the numerous bids received and the lengthy auction that followed, the sale process worked as designed. Ultimately, after a two-day auction, and a Bankruptcy Court hearing that stretched over several days, the Bankruptcy Court entered an order on December 16, 2003, approving Perry Capital (PAV Republic, Inc.) as the winning bidder. The sale of REP's assets to Perry Capital closed on December 19, 2003. The purchaser continues to operate REP's steel-making assets under the new name, Republic Engineered Products, Inc. Many of you are likely doing business with the new company. Unfortunately, the sale of REP's assets to Perry Capital generated substantially less than the $375 million that REP owed to its creditors. In fact, the sale did not generate enough to pay REP's secured creditors, who were owed $330 million and who were entitled under the Bankruptcy Code to be paid first. REP and its advisors, working with the Creditors' Committee and its advisors, agreed with the secured creditors that $1 million would be set [*2] aside to pay for the wind down of REP and its bankruptcy estate. Although we disagreed over the appropriate use of that $1 million, ultimately we were able to work out our differences. The resolution of the use of the $1 million was presented to the Bankruptcy Court, which approved it on August 16, 2004. This resolution provides for the distribution of all of the available funds to post-bankruptcy (so-called "administrative") creditors. It now appears that all administrative claims will be paid (in some cases at agreed-upon, reduced amounts), and that, as a result, parties that provided goods or services after the October 6, 2003, bankruptcy filing will be paid. For those parties that provided goods or services prior to the bankruptcy filing, so-called "prepetition unsecured creditors," there are no funds in REP's bankruptcy estate to pay those claims. We regret that outcome. The Bankruptcy Court's approval of the resolution marks the end of REP's bankruptcy proceedings. We are now preparing to dismiss REP's bankruptcy case. We understand that bankruptcy proceedings are frustrating for both debtors and creditors. If you have any questions about the REP case, please feel free to contact Sherri Dahl at 216.430.2041. Very truly yours, /s/ Shawn M. Riley Shawn M. Riley Counsel for Republic Engineered Products, LLC __________ {n1) The affiliates: Republic Engineered Products Holding, LLC, n/k/a REPH LLC and Blue Steel Capital Corp., n/k/a BSC Corp. REVCARE INC: Losses & Deficits Trigger Going Concern Doubt ---------------------------------------------------------- Revcare, Inc., filed its Form 10-KSB for the fiscal year ended with the Securities and Exchange Commission reporting net losses of $2,034,380 and $3,572,112 in fiscal years 2004 and 2003, respectively. The Company had a deficit of $3,045,488 and a working capital deficit of $6,668,788 at September 30, 2004. The working capital deficit includes $3,254,361 of principal and accumulated interest that the Company owes to its largest shareholder, FBR, which has provided funding to the Company in the past. The Company's accountant, Mayer Hoffman McCann P.C., raised substantial doubt about the Company's ability to continue as a going concern due to these losses and deficits. Management believes that the recent losses are primarily attributable to a decrease in revenues from its service lines, which more than compensated for significant decreases in operating costs. The Company lost more clients than it gained in 2004. The Company's cash balances may be diminished during 2005 due to many factors, including: -- the use of cash for operations, -- changes in working capital, -- capital expenditures, and -- repayment of outstanding notes payable and related interest. The number of major receivable management contracts for the Company in 2005 is expected to be a little higher than 2004 and this trend is expected to continue. However, implementation and installation costs of new contracts will negatively impact the Company's cash balances. Despite these factors, the Company believes that available funds and cash flows expected to be generated by current operations will be sufficient to meet its anticipated cash needs for working capital and capital expenditures for its operating segments for at least the next twelve months. However, the Company will not have sufficient cash to repay non-operating liabilities (primarily its Notes Payable and Financing Obligations) and credit facilities that will be due during the next twelve months. About the Company RevCare, Inc., is a leading provider of revenue cycle management services in California, Nevada and Hawaii. It has traditionally focused its services on three segments of the accounts receivable management industry: healthcare, banking and retail. However, with its acquisition of four healthcare revenue cycle management companies in August 2000, it is now concentrating on offering its comprehensive and integrated suite of services to manage the revenue cycle of healthcare providers. The Company now has the ability to provide the services required by its healthcare clients to manage all phases of their revenue cycle, which include: physician and hospital billing, non-delinquent and delinquent receivable collections, and reimbursement maximization projects. Revcare has a presence in the Southern California, Las Vegas and Hawaii healthcare markets. It provides services to approximately 88 healthcare facilities in these geographic areas. It currently manages over $500 million in receivables for its billing and collections clients on an annual basis. SAFETY-KLEEN: Bankr. Court Approves IBM Settlement Agreement ------------------------------------------------------------ As previously reported, the Safety-Kleen Creditors Trustee, Oolenoy Valley Consulting, filed two separate complaints, as amended, against International Business Machines Corp. to avoid and recover preferential or fraudulent transfers for $2,411,038 and $257,942, allegedly made by Safety-Kleen Corporation and its debtor-affiliates during the 90 days prior to their bankruptcy filing. At the Trustee's request, The U.S. Bankruptcy Court for the District of Delaware approves the Settlement Agreement with International Business Machines Corp. pursuant to Rule 9019 of the Federal Rules of the Bankruptcy Procedure. Headquartered in Delaware, Safety-Kleen Corporation -- http://www.safety-kleen.com/-- provides specialty services such as parts cleaning, site remediation, soil decontamination, and wastewater services. The Company, along with its affiliates, filed for chapter 11 protection (Bankr. D. Del. Case No. 00-02303) on June 9, 2000. Gregg M. Galardi, Esq., at Skadden, Arps, Slate, Meagher, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $3,031,304,000 in assets and $3,333,745,000 in liabilities. (Safety-Kleen Bankruptcy News, Issue No. 84; Bankruptcy Creditors' Service, Inc., 215/945-7000) SALTIRE INDUSTRIAL: Has Exclusive Right to File Plan Until Mar. 16 ------------------------------------------------------------------ The Honorable Burton R. Lifland of the U.S. Bankruptcy Court for the Southern District of New York extended the period within which Saltire Industrial, Inc., has the exclusive right to file a chapter 11 plan through and including March 16, 2005. The Debtor has until May 16, 2005, to exclusively solicit acceptances of that plan from their creditors. This is the Debtor's first extension of its exclusive periods. The Debtor gives the Court three reasons militating in favor of the extension of its exclusive periods: a) since the Petition Date, the Debtor and its professionals have worked diligently in addressing and resolving a large number of administrative and substantive issues associated with the commencement and prosecution of its chapter 11 case; b) the Debtor is actively assisting and cooperating with the Creditors Committee in the conduct of its due diligence concerning the Debtor's business and financial affairs; and c) the Debtor's ability to propose a chapter 11 plan depends on its ability to identify and quantify the numerous liabilities asserted against its estate, particularly those involving the Legacy Liabilities that stems from retiree benefits and environmental issues. Headquartered in New York, New York, Saltire Industrial, Inc., manufactures diverse consumer and industrial products sold under a variety of brand names. The Company filed for chapter 11 protection on August 17, 2004 (Bankr. S.D.N.Y. Case No. 04-15389). Albert Togut, Esq., at Togut, Segal & Segal LLP represents the Debtor in its restructuring. When the Debtor filed for protection, it listed $1 million to $10 million in estimated assets and $10 million to $100 million in estimated debts. SALTIRE INDUSTRIAL: Has Until Feb. 15 to Decide on Leases --------------------------------------------------------- The Honorable Burton R. Lifland of the U.S. Bankruptcy Court for the Southern District of New York extended, until Feb. 15, 2005, the period within which Saltire Industrial, Inc., can elect to assume, assume and assign, or reject its unexpired nonresidential real property leases. The Debtor is a party to an unexpired nonresidential lease located at 274 Riverside Avenue, Westport, Connecticut. The Debtor is also the sublessee of some office space at 274 Riverside under an Assignment and Assumption Agreement with Core Software Technology, Inc., the Primary Tenant of the lease. The Assignment and Assumption Agreement assigns Core Software's right, title and interest in its lease with 274 Riverside Associates LLC, the predecessor in interest to Lexham Riverside LLC, who is the Landlord under the lease to the Debtor. The Debtor argues that the extension will give it more time to determine the importance of its remaining lease and whether to assume, assign or reject the Assignment Agreement in relation to its reorganization process. The Debtor assures Judge Lifland that the extension will not prejudice Core Software or Lexham Riverside because it has the finances to stay current on all post-petition rents under the lease as required by Section 365(d)(3) of the Bankruptcy Code. Headquartered in New York, New York, Saltire Industrial, Inc., manufactures diverse consumer and industrial products sold under a variety of brand names. The Company filed for chapter 11 protection on August 17, 2004 (Bankr. S.D.N.Y. Case No. 04-15389). Albert Togut, Esq., at Togut, Segal & Segal LLP represents the Debtor in its restructuring. When the Debtor filed for protection, it listed $1 million to $10 million in estimated assets and $10 million to $100 million in estimated debts. SCOTT ACQUISITION: Genovese Joblove Approved as Committee Counsel ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware gave the Official Committee of Unsecured Creditors of Scott Acquisition Corp., and its debtor-affiliates, permission to employ Genovese Joblove & Battista, P.A., as its counsel. Genovese Joblove will: a) advise the Committee with respect to its rights, powers, and duties in the Debtors' chapter 11 cases; b) assist and advise the Committee in its consultation with the Debtors relative to the administration of their chapter 11 cases; c) assist the Committee in analyzing the claims of the Debtors' creditors and in negotiations with creditors; d) assist the Committee in its investigation of the acts, conducts, assets, liabilities and financial condition of the Debtors and the operation of their businesses; e) assist the Committee in its analysis and negotiation with the Debtors and any third parties concerning matters relating to the terms of any plan of reorganization; f) assist and advise the Committee in its communications with the general creditor body and represent the Committee at all hearings and proceedings; g) advise the Committee in the review and analysis of all applications, orders, statements of operations and schedules filed with the Court; h) assist the Committee in preparing pleadings and applications in furtherance of the Committee's interests and objectives; and i) perform other legal services to the Committee that may be appropriate and necessary in the Debtors' chapter 11 cases. Craig P. Rieders, Esq., a Partner at Genovese Joblove, is the lead attorney for the Committee. Mr. Rieders will charge $365 per hour for his services. Mr. Rieder reports Genovese Joblove's professionals bill: Professional Designation Hourly Rate ------------ ----------- ----------- Glen D. Moses Partner $325 Heather Yonke Associate 215 Chris Tarrant Paralegal 100 Genovese Joblove assures the Court that it does not represent any interest adverse to the Committee, the Debtors or their estates. Headquartered in Winter Haven, Florida, Scott Acquisition Corp., is a retailer of a wide range of building materials and home improvement products serving the "do-it-yourself" market for individual homeowners, as well as the professional builder and commercial markets. The Debtors filed for protection on Sept. 10, 2004 (Bankr. D. Del. Case No. 04-12594). Brendan Linehan Shannon, Esq., and M. Blake Cleary, Esq., at Young Conaway Stargatt & Taylor, LLP represent the Debtors in their restructuring efforts. When the Company and its debtor-affiliates filed for protection from their creditors, they reported $45,681,000 in assets and debts. SCOTT ACQUISITION: Creditors Must File Proofs of Claim by Feb. 23 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware set February 23, 2005, as the deadline for all creditors owed money by Scott Acquisition Corp., and its debtor-affiliates, on account of claims arising prior to September 10, 2004, to file their proofs of claim. Creditors must file their written proofs of claim on or before the February 23 Claims Bar Date, and those forms must be delivered only to the Debtors' claims agent: Delaware Claims Agency LLC Attn: Scott Acquisition Corp. Claims P.O. Box 515 Wilmington, Delaware 19801 For a Governmental Unit, the Claims Bar Date is March 9, 2005. Headquartered in Winter Haven, Florida, Scott Acquisition Corp., is a retailer of a wide range of building materials and home improvement products serving the "do-it-yourself" market for individual homeowners, as well as the professional builder and commercial markets. The Debtors filed for protection on Sept. 10, 2004 (Bankr. D. Del. Case No. 04-12594). Brendan Linehan Shannon, Esq., and M. Blake Cleary, Esq., at Young Conaway Stargatt & Taylor, LLP represent the Debtors in their restructuring efforts. When the Company and its debtor-affiliates filed for protection from their creditors, they reported $45,681,000 in assets and debts. SIDESHOW CREATIVE: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Sideshow Creative, Inc. 560 Broadway, Suite 202 New York, New York 10012 Bankruptcy Case No.: 05-10011 Type of Business: The Company Sideshow is an award-winning marketing, advertising and promotion firm providing a wide array of services to companies of the entertainment industry. Sideshow creates & develops marketing, advertising & promotion concepts & to take these concepts through completion in the form of brand development campaigns, film/video production as well as post-production services such as graphics motion design, 3-D animation, virtual & special effects. See http://www.sideshowcreative.com/ Chapter 11 Petition Date: January 3, 2005 Court: Southern District of New York (Manhattan) Judge: Allan L. Gropper Debtor's Counsel: Ian R. Winters, Esq. Patrick J. Orr, Esq. Sean C. Southard, Esq. Klestadt & Winters, LLP 292 Madison Avenue, 17th Floor New York, New York 10017-6314 Tel: (212) 972-3000 Fax: (212) 972-2245 Financial Condition as of December 31, 2004: Total Assets: $3,821,792 Total Debts: $5,514,522 Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Newmark & Company Real Estate $167,631 125 Park Avenue, 11th Floor New York, New York 10017 Attn: Donna Vogel Tel: (212) 431-9416 JM & R Funding $140,500 c/o Matthew Roach 1940 Commerce Street Yorktown Heights, New York 10598 Tel: (914) 962-8445 American Express (82005) $134,064 115 East 23rd Street, 7th Floor New York , New York 10010 Tel: (800) 492-8468 Flickerlab $83,333 Accion New York Inc. $49,628 American Express Business Capital Line $48,927 North Fork Bank $48,900 Envirochrome Interiors And Design, Inc. $40,375 Transistor Studios $40,000 Chase Business Credit Card $29,106 Jones Production Services Inc. $27,594 Big Foote Music $25,450 Onomatopoeia Inc. $21,114 Hsbc Business Card $19,525 Maggie Klein & Co., Inc. $19,350 Boxx Technologies $18,120 Fluid Sound Design $18,000 Garrett Wagner $17,803 Sacred Noise $17,500 BDO Seidman, LLP $16,882 SPIEGEL INC: Wants Court to Determine Prepetition Tax Liabilities ----------------------------------------------------------------- Spiegel Inc. and its debtor-affiliates own and lease certain tangible, taxable property that comprises a number of different real and personal property asset types, including, without limitation: (i) numerous retail stores, distribution warehouses, office buildings and other related facilities; (ii) furniture, fixtures, machinery and equipment required for the sale, transfer and storage of the Debtors' inventory; and (iii) retail inventory. The states in which the Taxed Property is located assess ad valorem taxes on the property on an annual basis. Most states calculate the amount of ad valorem property taxes to assess by first determining a given parcel of property's "market value," "true cash value," "cash value," "fair market value" or their equivalent and then converting that value into an assessed value using conversion ratios prescribed by applicable state tax codes. The Assessed Value of the property is then used to determine the amount of tax to assess on the property. Several state and local taxing authorities have filed the proofs of claim alleging for the most part amounts due in respect of certain prepetition and postpetition ad valorem property taxes. Debtors' Review of Tax Claims In 2003, the Debtors retained the services of Assessment Technologies, Ltd. and Appraisal Systems, Inc. to assist them in reviewing the State and Local Ad Valorem Tax Claims. Assessment Technologies specializes in assessing, analyzing and valuing large commercial and industrial properties. It examined the Market Values and corresponding Assessed Values asserted by the Taxing Authorities in the Tax Claims to determine whether any Taxing Authority had overstated the Market Values of the Taxed Property resulting in overstated Assessed Values under the applicable state's statutory tax requirements and, therefore, overstated Tax Claims. To determine these values, Assessment Technologies completed a comprehensive review of the Taxed Property, which includes: * reviewing current tax assessments and supporting data; * calculations and assumptions; and * conducting research into valuations of similar property. ASI is an independent, national valuation firm specializing in commercial personal property appraisals. ASI assisted Assessment Technologies by providing appraisals of the Taxed Properties. More specifically, ASI reviewed inventory cost figures provided by the Debtors and inspected and completed on-site appraisals of a representative sampling of the Taxed Property to accurately determine the value of these specific properties. ASI then used these representative appraisals in conjunction with asset listings and other related data provided by the Debtors to arrive at appropriate valuations of the facilities not inspected by ASI for certain prepetition tax years and for the 2004 tax year. In addition to the valuation data compiled by ASI, Assessment Technologies also reviewed the sales prices of certain of the Taxed Property that had been sold since the Petition Date to determine the correct valuation of the Taxed Property sold as well as other similar Taxed Property. Based on the appraisals and calculations, Assessment Technologies determined that the Taxing Authorities had over-estimated the Market Value of certain of the Taxed Property for certain prepetition tax years and for the 2004 tax year, resulting in overstatement of the Assessed Values and, thus, inappropriate determinations of the taxes due and owing on the Taxed Property for those tax periods. Where these instances were identified, Assessment Technologies applied corrected valuations to the applicable state assessment ratios and determined the correct Assessed Values and the appropriate amounts for the taxes on each Taxed Property. Debtors Object to Certain Tax Claims Based on the work performed by Assessment Technologies, the Debtors dispute certain claims filed by various Taxing Authorities on these grounds: 1. Certain of the claims are overstated since the calculation of the underlying tax claim is based on inflated Assessed Values of the underlying Taxed Property. 2. Certain of the claims were filed against the incorrect Debtor or have been partially or fully satisfied. 3. Certain of the Claims have been amended and superseded by later filed claims. A. Unpaid Tax Claims Andrew V. Tenzer, Esq., at Shearman & Sterling, LLP, in New York, reports that 183 taxing authorities filed Tax Claims on account of unpaid state ad valorem taxes. The Debtors reviewed each Unpaid Tax Claim and believe that each claim filed as: -- a secured claim is secured by a properly perfected lien against the underlying Tax Property; -- a priority claim is entitled to priority under Section 507(a)(8) of the Bankruptcy Code; and -- an administrative expense claim should be treated in accordance with Section 503(b)(1)(B) because it accrued postpetition tax periods. However, the Debtors also determined that the Unpaid Tax Claims are overstated and that certain of those claims, although liabilities of one or more Debtors, have been filed against the wrong Debtor. Moreover, the Debtors determined that the claims filed by the City and County of Denver, Colorado, and the Office of Law of Baltimore County, Maryland, are not merely overstated, but that there are additional bases on which to object to those claims. The Debtors ask the Court to reduce and, in some cases, expunge the Unpaid Tax Claims and otherwise correct the defects in the claims. (a) Ad Valorem Property Taxes Based on Assessment Technologies' analysis, the Debtors assert that the Assessed Value of the Taxed Property used to calculate the Unpaid Tax Claims is overstated. Thus, the Debtors want the claims reduced to their proposed amounts. Where the Unpaid Tax Claim is a secured or unsecured claim entitled to priority or administrative expense priority, the Debtors ask the Court to allow those claims in the reduced amounts. (b) Denver Claim The City and County of Denver filed Claim No. 153 against Spiegel for: $4,361 in personal property taxes assessed during the 2002 and 2003 tax years; and $12,705 in sales and $439 in occupational taxes assessed during the 2003 tax year. After reviewing their books and records and the Denver Claim, the Debtors found that they do not owe Denver the sales or occupational taxes. Those portions of the Denver Claim must be expunged. The Debtors also determined that the Assessed Value of the Taxed Property used to calculate the ad valorem tax portion of the Denver Claim is overstated and should, therefore, be reduced. (c) Baltimore Claims The Debtors' books and records show that the Office of Law of Baltimore County, Maryland filed two administrative expense claims -- Claim Nos. 3807 and 3814 -- against Spiegel, each in for $2,536. During their review of the Baltimore Claims, the Debtors discovered that in November 2003, Baltimore County purported to request the Court to allow an alleged administrative expense claim. That request was not entered on the Court's docket or served on the Debtors. Rather, Baltimore County apparently sent the request, with a proposed form of order allowing the claim, to Bankruptcy Services, LLC, the Debtors' official claims and noticing agent. BSI recorded the request as Baltimore Claim No. 3814 and the proposed form of order as Baltimore Claim No. 3807. Although the Debtors have acknowledged that Baltimore County holds an allowed claim entitled to administrative expense priority under Section 503(b)(1)(B), they dispute the amounts asserted in the Baltimore Claims. To that end, the Debtors have determined that the Assessed Value of the Taxed Property used to calculate the Baltimore Claims is overstated and that, the claim asserted by Baltimore County is overstated and should be reduced to $177. Accordingly, the Debtors want Claim No. 3814 allowed and Claim No. 3807 expunged. (d) Incorrect Debtor Claims The Debtors have identified the case number of the correct Debtor for those Unpaid Tax Claims filed against the incorrect Debtor. The Debtors ask the Court to allow the Unpaid Tax Claims against the correct Debtor. A list of the Unpaid Tax Claims incorporating the Ad Valorem Property Taxes, the Denver Claim, the Baltimore Claims, and the Incorrect Debtor Claims, is available for free at: http://bankrupt.com/misc/Unpaid_Tax_Claims.pdf B. Amended Claims The Debtors found that seven proofs of claim have been amended and superseded by claims subsequently filed by the same taxing entity in relation to the same underlying Tax Claim. Thus, the Debtors want the Amended Claims disallowed and expunged. A list of the Amended Claims is available for free at: http://bankrupt.com/misc/Amended_Claims.pdf C. The King County Claim --Claim Partially Paid King County, Washington, filed Claim No. 1282 for $481,661 against Eddie Bauer. King County asserted a secured claim on account of ad valorem personal property taxes allegedly due and owing for the 2003 tax year. Based on Assessment Technologies' analysis, the Debtors determined that the total Tax Liability owed to the County is $479,989. The Debtors have already paid King County $431,542 on account of the personal property taxes asserted in the King County Claim. Accordingly, the Debtors submit that the total remaining liability due and owing to King County on the Taxed Property for the 2003 tax year is $48,447, plus interest accruing until the amount is paid, at a rate agreed by the parties or determined by the Court. D. The Franklin County Claims -- No Amount Due and Owing The Franklin County, Ohio, Treasurer's Office filed Claim Nos. 2829 and 2830 against Spiegel. Franklin County asserted secured claims for $1,335,158 on account of real and personal property ad valorem taxes allegedly due and owing for the 2002 and 2003 tax years. Mr. Tenzer informs Judge Blackshear that the Debtors previously paid $852,639 to Franklin County for taxes owed for the 2003 tax year. The Debtors made the payment based on the County's Assessed Value of the Taxed Property. However, based on Assessment Technologies' analysis, the Debtors determined that their actual tax liability to Franklin County is $848,814. As a result, the Debtors have overpaid the tax liability owed under the Franklin County Claims. Hence, the Debtors assert that no amount is due and owing in respect of the Franklin County Claims. Instead, the Debtors assert a $3,825 Net Amount Due from the County. E. 2004 Property Assessed Values The Debtors have received tax notices from a number of Taxing Authorities setting forth the Assessed Value for certain of the Debtors' property on which taxes have not yet been assessed for the 2004 tax year. Mr. Tenzer informs the Court that states calculate ad valorem property taxes based on the Market Value and Assessed Value of the given item of property. Under state tax laws generally, upon receiving these notices, individuals have an opportunity to contest both the Market Value and Assessed Value as determined by the taxing authority. According to Mr. Tenzer, the Debtors dispute both the Market Value and Assessed Value of the parcels of property comprising the 2004 Untaxed Property as determined by the applicable taxing authority. Assessment Technologies, with the assistance of ASI, has determined the correct Market Values and Assessed Values for parcels of property comprising the 2004 Untaxed Property. Assessment Technologies determined the appropriate Assessed Values for each parcel of 2004 Untaxed Property by applying the appropriate state's assessment ratio to the corresponding appropriate Market Values. A copy of the appropriate Market Values and Assessed Values, as determined by Assessment Technologies, for the 2004 Untaxed Property is available for free at: http://bankrupt.com/misc/2004_Property_Assessed_Values.pdf The Debtors ask the Court to determine the Assessed Value for the 2004 Untaxed Property in the amounts set forth. Release of Tax Liens The Debtors further ask Judge Blackshear to rule that, upon payment of: (a) the taxes on the Taxed Property, plus any applicable postpetition interest, at a rate to be agreed by the parties or determined by the Court, on secured claims, accruing until the applicable claims are paid; (b) the remaining taxes owed in respect of the King County Claim, plus interest, at a rate to be agreed by the parties or determined by the Court, accruing until the King County Claim is paid; and (c) the taxes on the 2004 Untaxed Property based on the Revised Assessed Values, all of the Tax Claims and all ad valorem taxes on the Taxed Property for the 2004 tax year will be satisfied in full, and any and all tax liens arising from and in connection with taxes assessed on the Taxed Property or the 2004 Untaxed Property will be extinguished, released and satisfied. Headquartered in Downers Grove, Illinois, Spiegel, Inc. -- http://www.spiegel.com/-- is a leading international general merchandise and specialty retailer that offers apparel, home furnishings and other merchandise through catalogs, e-commerce sites and approximately 560 retail stores. The Company filed for Chapter 11 protection on March 17, 2003 (Bankr. S.D.N.Y. Case No. 03-11540). James L. Garrity, Jr., Esq., and Marc B. Hankin, Esq., at Shearman & Sterling, represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $1,737,474,862 in assets and $1,706,761,176 in debts. (Spiegel Bankruptcy News, Issue No. 36; Bankruptcy Creditors' Service, Inc., 215/945-7000) TENET HEALTHCARE: Completes Sale of 5 Hospitals in 3 States ----------------------------------------------------------- Tenet Healthcare Corporation (NYSE:THC) reported that several of its subsidiaries have completed the previously announced sales of five acute care hospitals in California, Louisiana and Massachusetts to various buyers. The completed transactions are: -- Hollywood Presbyterian Medical Center in Los Angeles, Calif., has been sold to the CHA Medical Group. Net after- tax proceeds, including an approximately $4 million note from the CHA Medical Group and the liquidation of working capital, are estimated to be approximately $71 million. -- St. Charles General Hospital in New Orleans, La., has been sold to Preferred Continuum Care. Net after-tax proceeds, including the liquidation of working capital, are estimated to be approximately $11 million. -- Saint Vincent Hospital at Worcester Medical Center in Worcester and two-campus MetroWest Medical Center, consisting of Leonard Morse Hospital in Natick and Framingham Union Hospital in Framingham, have been sold to a subsidiary of Vanguard Health Systems, Inc. Net after-tax proceeds, including the liquidation of working capital, are estimated to be approximately $169 million. The company expects to use the proceeds of the sales for general corporate purposes. The five hospitals are among 27 hospitals Tenet announced it was divesting on Jan. 28, 2004. With this announcement, Tenet has completed the divestiture of 18 of the 27 facilities and has entered into definitive agreements to divest an additional four hospitals. Discussions and negotiations with potential buyers for the remaining five hospitals slated for divestiture are ongoing. About the Company Tenet Healthcare Corporation -- http://www.tenethealth.com/-- through its subsidiaries, owns and operates acute care hospitals and related health care services. Tenet's hospitals aim to provide the best possible care to every patient who comes through their doors, with a clear focus on quality and service. * * * As reported in the Troubled Company Reporter on Dec. 9, 2004, Moody's Investors Service assigned an SGL-4 speculative grade liquidity rating to Tenet Healthcare Corporation. At the same time, Moody's affirmed Tenet's existing long-term debt ratings (senior implied at B2) and assigned a B3 rating to Tenet Healthcare's $1 billion 9.875% senior unsecured note offering, which was issued in June of this year. The rating outlook is negative. Ratings assigned: * Tenet Healthcare Corporation: -- SGL-4 speculative grade liquidity rating; -- B3, 9.875% senior unsecured notes. Ratings affirmed: * Tenet Healthcare Corporation: -- B2 senior implied; -- B3 issuer rating; -- B3 senior unsecured note ratings. THISTLE MINING: Toronto Stock Exchange Halts Common Stock Trading ----------------------------------------------------------------- The Toronto Stock Exchange suspended trading in Thistle Mining Inc.'s (TSX: THT and AIM:TMG) common shares effective at the close of trading on Dec. 31, 2004, due, in part, to the recently announced restructuring by Thistle. Upon completion of the restructuring, Thistle intends to make an application to the Toronto Stock Exchange for the re-instatement of trading of its common shares. However, at this time there can be no assurance that, following the restructuring, Thistle will able to satisfy all of the specified Toronto Stock Exchange listing requirements. The Company's common shares continue to trade on AIM, a market operated by the London Stock Exchange. Thistle Mining -- http://www.thistlemining.com/-- says its goal is to become one of the fastest gold mining growth operations in the world. Thistle has focused on acquiring companies with established reserves and will not be developing green field sites. The company operations in South Africa and Kazakhstan are in production, while the Masbate project in the Philippines is forecast to commence production in the latter half of 2005. * * * As reported in the Troubled Company Reporter on Dec. 23, 2004, Thistle Mining Inc. (TSX: THT and AIM: TMG) intends to undertake a restructuring of its debt and equity in accordance with a restructuring and lock-up agreement signed Dec. 20, 2004, among Thistle, Meridian Capital Limited and Meridian's affiliate, Thistle Holdings Limited. The proposed restructuring will result, upon implementation, in the following percentages of all the issued shares of Thistle being held as follows: -- 70% Meridian Capital Limited; -- 25% Holders of secured and certain unsecured convertible loan notes; and -- 5% Affected unsecured creditors and existing shareholders of Thistle Mining Inc. The existing equity issued by Thistle will be cancelled. The 5% of new equity to be issued by Thistle to its affected unsecured creditors and its existing shareholders upon implementation will be allocated between them in a manner to be determined by Meridian Capital Limited. The percentage of shares to be received by the existing shareholders will depend on the amount of claims by Thistle's affected unsecured creditors. Upon implementation, Thistle will be indebted to Meridian in the principal amount of US$ 20 million (and in the additional principal amounts loaned by Meridian to any subsidiary of Thistle after Dec. 16, 2004 and before the date of the initial CCAA Order). The amount will include the principal amount of Cdn $3,930,000 loaned by Meridian to a subsidiary of Thistle on Dec. 20, 2004. Holders of a significant principal amount of Thistle's secured convertible loan notes are in support of the plan. Thistle is confident that the proposed plan will enable the Company to restructure in a manner, which will be beneficial to Thistle and its creditors. TRICN INC: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: TriCN, Inc. 164 Townsend Street, Suite 10 San Francisco, California 94107 Bankruptcy Case No.: 04-33651 Type of Business: The Debtor develops intellectual property (IP) for high-speed semiconductor interface technology. See http://www.tricn.com/ Chapter 11 Petition Date: December 30, 2004 Court: Northern District of California (San Francisco) Judge: Dennis Montali Debtor's Counsel: Eric A. Nyberg, Esq. Kornfield, Paul and Nyberg 1999 Harrison Street #2675 Oakland, CA 94612 Tel: 510-763-1000 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Trinity Ventures Bridge loan $284,113 3000 Sandhill Rd. Menlo Park, CA 94025 Cadence Design Systems Software License $275,000 Dept. CH 10585 Palatine, IL 60055 Rocket Ventures Bridge loan $155,715 2000 Sandhill Rd. Bldg. 7, Suite 170 Menlo Park, CA 94025 TreeHouse Design, Inc. Vendor Services $135,160 Fitzgerald, Abbot and Vendor Services $91,876 Beardsley LLP - Legal Mentor Graphics Software Maintenance $35,261 The Logicworks Sales Commission $28,712 Broadview, a Division of Vendor Services $25,000 Jefferies Ireland San Filippo Vendor Services $22,567 - Accounting City & County of San Unpaid payroll taxes $20,000 Francisco Russo and Hale Vendor Services - $15,749 Legal STATS Vendor Services $10,170 Amos Technologies Sales Commission $8,750 Amkor Technology Vendor Services $6,900 Salesforce.com Software License $6,264 Productivity Card Services Credit Card $6,238 HellerEhrman Vendor Services - $5,000 Legal DesignCon Tradeshow $3,100 PCI-SIG Membership Dues $3,000 ESilicon Reimbursement $2,790 UAL CORP: Sec. 1113(c) Conference Slated for Friday --------------------------------------------------- The Section 1113(c) Hearing will commence at 9:30 a.m. on January 10, 2005, and continue on January 11 at 10:30 a.m., January 12 at 2:00 p.m., January 13 at 10:30 a.m. and January 14 at 9:30 a.m. Any further necessary hearings will be set in accordance with the Court's schedule. Judge Wedoff will rule on the Section 1113(c) Motion by the January 21, 2005 Omnibus Hearing. As previously reported, James H.M. Sprayregen, Esq., at Kirkland & Ellis, in Chicago, Illinois, tells Judge Wedoff that the Debtors need additional labor cost savings before exiting bankruptcy, above and beyond savings from pension plan termination. Low yields and sharply higher fuel costs have accelerated the deadline for realizing cost savings. To maintain adequate cash balances, satisfy DIP covenants and procure exit financing, the Debtors must have these labor cost savings by mid-January 2005. As reported in the Troubled Company Reporter yesterday, the Pension Benefit Guaranty Corporation is moving to assume responsibility for the pensions of more than 14,000 active and retired pilots at United Airlines. Participants in the company's other pension plans are unaffected. Dec. 30's action follows the agreement the pilots union entered into with the company on Dec. 17 regarding the termination of the defined benefit plan in exchange for other benefits and considerations. "The PBGC will protect the pension benefits of United Airlines' pilots up to the limits set by law," said Executive Director Bradley D. Belt. "Retirees will continue to receive monthly benefit checks without interruption, and other pilots will receive benefits when they retire." The United Airlines Pilot Defined Benefit Pension Plan is 49 percent funded on a termination basis, with $2.8 billion in assets to cover $5.7 billion in benefit liabilities, according to PBGC estimates. Of the $2.9 billion in underfunding, the PBGC expects to be liable for approximately $1.4 billion in guaranteed benefits, making the United pilots plan the third-largest claim in the history of the insurance program. 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) UAL CORPORATION: Files 9th Reorganization Status Report ------------------------------------------------------- UAL Corporation and its debtor-affiliates' focus has been on the Section 1113 negotiations with its unions. By mid to late January 2005, the Debtors expect to complete the Section 1113 process -- either through consensual agreement or Court ruling. Once the Section 1113 process has concluded, the Debtors will focus on bankruptcy exit and seek a further extension of exclusivity. The Debtors are close to finalizing their business plan. Bridge Associates, LLC has completed its review of the business plan and has declared the plan feasible, subject to certain caveats. Once completed, the Debtors and their Exit Financing Subcommittee will present the business plan to the capital markets to procure exit financing. In anticipation, the Debtors have begun reaching out to potential exit lenders. The Debtors and Indenture Trustees had reached an agreement to settle their claims in the Chicago-O'Hare Airport municipal bond recharacterization adversary proceeding, subject to bondholder approval. However, the Indenture Trustees for two bond issues were instructed by their holders not to proceed with the settlement, which since has been terminated. The Debtors are trying to facilitate intercreditor discussions and reconstitute the proposed settlement to resolve the outstanding objections. In the absence of an imminent settlement, the Debtors will ask the Court to rule on the long- pending motions for judgment on the pleadings and summary judgment pending in the recharacterization adversary proceeding. Further delay on these matters will negatively impact the reorganization efforts. To emerge from bankruptcy, the Debtors must know the extent of their obligations under the Special Facility Agreements and the Airport Use Agreement. The Debtors have filed approximately 200 preference actions and 27 other actions to avoid statutory liens under Section 545 of the Bankruptcy Code. The Debtors hope to resolve these actions through mediation, rather than protracted litigation. To date, the Debtors have resolved 536 preference claims. 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.71; Bankruptcy Creditors' Service, Inc., 215/945-7000) US AIRWAYS: Pegasus Aviation Presses for Adequate Protection ------------------------------------------------------------ Pegasus Aviation and its affiliate Pacific AirCorp 24554, Inc., ask the U.S. Bankruptcy Court for the Eastern District of Virginia to require US Airways, Inc., and its debtor-affiliates to provide adequate protection for its aircraft. Pacific AirCorp 24554, Inc., owns a Boeing 737-400 with Tail No. N432US, that is leased to the Debtors for $90,000 per month. The airframe, engines, appliances, spare parts, records and documents, which are subject of the Lease, constitute property under Section 1110(a)(3) of the Bankruptcy Code. On Nov. 10, 2004, the Debtors made a unilateral Section 1110 agreement to fully perform under the Lease, but failed to pay interest and past due rent. Thus, the Debtors did not cure the monthly basic rent defaults in full. Pegasus and the Debtors are currently in dispute over the cure amount. William J. Rochelle, III, Esq., at Fulbright & Jaworski, in New York City, says the Court should, as adequate protection, require the Debtors to pay Pegasus a monthly amount sufficient to fund "maintenance reserves" for the airframe, engines, landing gear and Auxiliary Power Unit maintenance. This will allow Pegasus to pay for the necessary system, structural checks and overhauls so the Debtors can continue to use the aircraft. In the alternative, Pegasus asks the Court to lift the automatic stay so it may terminate the Lease and repossess the Aircraft. Headquartered in Arlington, Virginia, US Airways' primary business activity is the ownership of the common stock of: * US Airways, Inc., * Allegheny Airlines, Inc., * Piedmont Airlines, Inc., * PSA Airlines, Inc., * MidAtlantic Airways, Inc., * US Airways Leasing and Sales, Inc., * Material Services Company, Inc., and * Airways Assurance Limited, LLC. Under a chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another chapter 11 petition on September 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in their restructuring efforts. In the Company's second bankruptcy filing, it lists $8,805,972,000 in total assets and $8,702,437,000 in total debts. (US Airways Bankruptcy News, Issue No. 76; Bankruptcy Creditors' Service, Inc., 215/945-7000) USGEN: Dominion Closes Three Northeast Power Station Purchases -------------------------------------------------------------- Dominion (NYSE: D), one of the nation's largest producers of energy, closed on its purchase of three Northeast power stations from USGen New England, Inc., effective Jan. 1, increasing its electricity-generating portfolio by 10 percent to about 28,340 megawatts. The $642-million acquisition was part of a bankruptcy court- supervised divestiture of USGen New England's fossil assets. Dominion purchases include: -- the 1,599-megawatt coal- and oil-fired Brayton Point Station in Somerset, Mass.; -- the 745-megawatt coal- and oil-fired Salem Harbor Station in Salem, Mass.; and -- the 495-megawatt, natural gas-fired Manchester Street Station in Providence, R.I. About 60 percent of the combined output from the three stations is being sold under contracts to various buyers, with the balance being sold into the NEPOOL wholesale market. Dominion did not acquire any of the facilities' debt in the transaction and plans to finance the acquisition with a combination of debt and equity that will be balance sheet neutral. The equity associated with the acquisition was part of the forward sale of equity completed last September. Dominion expects the transaction to be accretive immediately. Dominion is one of the nation's largest producers of energy, with an energy portfolio of about 28,340 megawatts of generation, 6.4 trillion cubic feet equivalent of proved natural gas reserves and 7,900 miles of natural gas transmission pipeline. Dominion also operates the nation's largest underground natural gas storage system with more than 960 billion cubic feet of storage capacity and serves retail energy customers in eight states. For more information about Dominion, visit the company's Web site at http://www.dom.com/ Headquartered in Bethesda, Maryland, USGen New England, Inc., an affiliate of PG&E Generating Energy Group, LLC, owns and operates several electric generating facilities in New England and purchases and sells electricity and other energy-related products at wholesale. The Debtor filed for Chapter 11 protection on July 8, 2003 (Bankr. D. Md. Case No. 03-30465). John E. Lucian, Esq., Marc E. Richards, Esq., Edward J. LoBello, Esq., and Craig A. Damast, Esq., at Blank Rome, LLP, represent the Debtor in their restructuring efforts. When it sought chapter 11 protection, the Debtor reported assets amounting to $2,337,446,332 and debts amounting to $1,249,960,731. VENTURE HOLDINGS: DIP Facility Expires on January 28 ---------------------------------------------------- Venture Holdings Company and its debtor-affiliates borrowed funds that are critical for their continuing operations and restructuring efforts under: (i) a Senior Postpetition Credit Agreement by and among Venture Holdings Company LLC as Borrower, and the remaining Debtors as Guarantors, the lenders, Bank One, NA as Issuer, and Black Diamond Commercial Finance, LLC as Administrative Agent, and (ii) an Amended and Restated Postpetition Credit Agreement by and among Venture Holdings Company LLC as Borrower, and the remaining Debtors as Guarantors, the lenders, Bank One, NA as Issuer, and Black Diamond Commercial Finance, L.L.C. as Administrative Agent. The aggregate financing commitments under the DIP Facilities total $75.0 million. The DIP Facilities were scheduled to expire as of December 31, 2004. On December 30, 2004, the United States Bankruptcy Court for the Eastern District of Michigan entered an order granting the Debtors' motion to amend the DIP Facilities. Pursuant to the amendment approved by the Court, the expiration date of the DIP Facilities has been extended through January 28, 2005. Venture Holdings Company is a worldwide manufacturer and supplier of automotive components and systems. The company and its debtor-affiliates filed for chapter 11 protection (Bankr. E.D. Mich. Case No. 03-48939) on March 28, 2003. Judy A. O'Neill, Esq., at Foley & Lardner LLP, represent the Debtors in their restructuring efforts. VERESTAR INC: Court Adjourns Disclosure Statement Hearing Sine Die ------------------------------------------------------------------ The Honorable Allan L. Gropper of U.S. Bankruptcy Court for the Southern District of New York adjourned the December 7, 2004, confirmation hearing for the Amended Disclosure Statement explaining the Joint Consolidated Liquidating Plan of Reorganization filed by Verestar Inc., and its debtor-affiliates. The Debtors filed their first Disclosure Statement and Joint Plan on September 29, 2004. The Debtors filed their Amended Disclosure Statement on December 3, 2004. Judge Gropper adjourned the Dec. 7 hearing when representatives from the Debtors, the Committee of Unsecured Creditors and American Tower Corporation who attended the hearing, agreed to an adjournment due to the pending motions of America Tower before the Court. The Court has yet to set a schedule for the next confirmation hearing for the Debtors' Amended Disclosure Statement. American Tower, one of the largest creditors of the Debtors with a claim of approximately $535 million, has two pending motions to the Court, objecting to the approval of the Debtors' first Disclosure Statement, and to the motion of the Debtors for a fourth extension of their exclusive periods to file a Plan and accept solicitations for that Plan. As reported in the Troubled Company Reporter on November 8, 2004, American Tower tells the Court that approving the Disclosure Statement will be useless since Verestar's underlying Plan is not confirmable. American Tower explains that it intends to vote to reject the Plan because it fails to provide sufficient information on the treatment of it's $535 million claim against Verestar. Being Verestar's largest creditor, the Plan will not be confirmed without American Tower's affirmative vote. The Amended Disclosure Statement states that a Liquidation Trust will be established for the benefit of holders of Allowed Claims. The Plan provides for the Debtors and the Committee to jointly designate a Plan Administrator who will administer and manage the wind-down of the Debtors' affairs, make all distributions required under the Plan, and prosecute and settle litigations and claims. The Plan groups claims and interest into six classes and provide for these recoveries: a) Class 1 claims consisting of Allowed Other Secured Claims will be paid in full on or after the Effective Date; b) Class 2 claims consisting of the SkyTerra Secured Claims will be paid in full on the Initial Distribution Date; c) Class 3 claims consisting of Allowed Priority Claims will be paid in full after the Effective Date; d) Class 4 claims consisting of Allowed General Unsecured Claims will receive its Pro Rata Share of available cash after the Effective Date; and e) Class 5 and Class 6 claims consisting respectively of Allowed Subordinated Claims and Interests Holders will not receive any distribution of any kind under the Plan on account of those claims and interests. Full-text copies of the Amended Disclosure Statement and Joint Plan are available for a fee at: http://www.researcharchives.com/download?id=040812020022 Headquartered in Fairfax, Virginia, Verestar, Inc., -- http://www.verestar.com/-- is a provider of satellite and terrestrial-based network communication services. The Company and two of its affiliates filed for chapter 11 protection on December 22, 2003 (Bankr. S.D.N.Y. Case No. 03-18077). Matthew Allen Feldman, Esq., at Willkie Farr & Gallagher LLP represents the Debtors. When the Company filed for protection from its creditors, it listed assets and debts of more than $100 million each. W.R. GRACE: Sealed Air & Cryovac Object to Disclosure Statement --------------------------------------------------------------- As previously reported, Sealed Air Corporation, Cryovac, Inc., the Asbestos Property Damage Claimants Committee and the Asbestos Personal Injury Claimants Committee appointed in the chapter 11 cases of W.R. Grace & Co., and its debtor-affiliates are parties to a settlement agreement, which resolves the putative successor liability and fraudulent conveyance claims alleged against the Sealed Air Companies. Under the terms of the Sealed Air Settlement Agreement, Cryovac would make payments worth approximately $1 billion upon entry of a final order confirming a Chapter 11 plan in the Debtors' cases -- which plan and confirmation Order must be consistent with the terms of the Sealed Air Settlement Agreement: (i) $512.5 million in cash, plus interest thereon from December 21, 2002 until the Plan's effective date at a rate of 5.5% per annum compounded annually, and (ii) 9 million shares of Sealed Air common stock. Due to a stay imposed in connection with proceedings seeking to have Judge Wolin removed from the Debtors' Chapter 11 cases, no objection deadline or hearing date has ever been set for the Sealed Air Settlement Motion, and it remains pending before the District Court. Although the Debtors had participated in negotiations to determine whether they would become parties to the Sealed Air Settlement Agreement, those negotiations were not successful and the Debtors are not signatories to that agreement. Mark S. Chehi, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Wilmington, Delaware, notes that the Sealed Air Settlement Payment is clearly the cornerstone of the Debtors' Proposed Plan of Reorganization because it provides for -- and relies on -- the Sealed Air Settlement Payment into a Section 524(g) asbestos trust to fund the Asbestos PI-SE Class Fund, the Asbestos PD Class Fund, and the Asbestos Trust Expenses Fund, all of which are to be established by the Proposed Plan. The Debtors' own Section 524(g) trust fund payments will only be used to the extent that the Sealed Air Settlement Payment is insufficient to fund the various asbestos trust funds. The Debtors nevertheless have indicated they have certain "issues" with some provisions of the Sealed Air Settlement Agreement and propose to seek certain modifications. According to Mr. Chehi, the Debtors fail to disclose that most of these "issues" were previously proposed by the Debtors and rejected by the Sealed Air Companies when Debtors participated in negotiations leading up to the Sealed Air Settlement Agreement. Evidently, Mr. Chehi says, the Debtors are now attempting to gain through the Proposed Plan what they were previously unable to obtain through negotiation. The Sealed Air Companies do not intend to consent to the modifications to the Sealed Air Settlement Agreement that the Debtors seek. In sum, Mr. Chehi asserts, the Proposed Plan is materially inconsistent with the Sealed Air Settlement Agreement because the Proposed Plan includes terms that conflict directly with the Sealed Air Settlement Agreement or ignores obligations of the Debtors that are specifically required by the Sealed Air Settlement Agreement. Accordingly, unless the Sealed Air Settlement Agreement is approved in the form presented in the Sealed Air Settlement Motion and unless the conditions and the Debtors' obligations outlined in the Sealed Air Settlement Agreement are incorporated into the Proposed Plan, the Sealed Air Settlement Payment will not be required to be made -- and will not be made. "In these circumstances, the Proposed Plan is illusory, non-confirmable, and not feasible," Mr. Chehi says. Headquartered in Columbia, Maryland, W.R. Grace & Co., -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor- affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. Del. Case No. 01-01139). James H.M. Sprayregen, Esq., at Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, represent the Debtors in their restructuring efforts. (W.R. Grace Bankruptcy News, Issue No. 77; Bankruptcy Creditors' Service, Inc., 215/945-7000) W.R. GRACE: Fresenius Complains Disclosure Statement is Ambiguous ----------------------------------------------------------------- Daniel B. Butz, Esq., at Morris, Nichols, Arsht & Tunnell, in Wilmington, Delaware, recounts that on June 25, 2003, the United States District Court for the District of Delaware approved a settlement agreement by and among the Official Committee of Asbestos Property Damage Claimants and the Official Committee of Asbestos Personal Injury Claimants appointed in the chapter 11 cases of W.R. Grace & Co., and its debtor-affiliates, the Debtors, and Fresenius Medical Care Holdings, Inc., and National Medical Care, Inc. Fresenius believes that both the Plan of Reorganization and the Disclosure Statement reflect a good faith effort by the Debtors to implement and describe the rights and obligations of the Debtors and the other Settling Parties under the Fresenius Settlement Agreement and the Fresenius Settlement Order. In general, Fresenius does not object to the Court approving the Disclosure Statement. However, Mr. Butz complains, the Debtors' Disclosure Statement fails to provide "adequate information" as required by Section 1125 of the Bankruptcy Code concerning the Plan's proposed treatment of the rights and claims of Fresenius and the corresponding obligations of the Debtors and other Settling Parties under the Fresenius Settlement Agreement and the Fresenius Settlement Order. Specifically: (1) the Disclosure Statement and the Plan are ambiguous regarding the treatment provided to any tax-related claims held by Fresenius, including whether the Debtors intend to treat any tax-related claims held by Fresenius in accordance with the proposed treatment of Priority Tax Claims, and the Disclosure Statement fails to adequately inform creditors and other parties in interest relying on the Disclosure Statement that the Plan's proposed treatment of Priority Tax Claims in Section 2.3 of the Plan may not be consistent with the Debtors' obligations pursuant to the Fresenius Settlement Agreement and Fresenius Settlement Order; (2) the Disclosure Statement and the Plan are ambiguous regarding the issuance and implementation of the injunctions, releases, and indemnifications under Sections 524(g), 105(a), and otherwise provided by the Plan to protect Fresenius and its affiliates, and the Disclosure Statement fails to adequately inform creditors and other parties in interest that the Plan's proposed issuance and implementation of various injunctions and releases may not be consistent with the Debtors' obligations pursuant to the Fresenius Settlement Agreement and Fresenius Settlement Order; (3) the Disclosure Statement fails to provide adequate information concerning the dismissal of certain actions identified in the Fresenius Settlement Agreement; and (4) the Disclosure Statement may fail to provide adequate information concerning other material terms of the Fresenius Settlement Agreement and Fresenius Settlement Order. To remedy Fresenius' problems with the adequacy of the Debtors' disclosures, Mr. Butz asserts, the Court should require that the Debtors amend their Plan and Disclosure Statement in order to eliminate any ambiguities and provide adequate information regarding the treatment of the Fresenius Settlement Agreement and the Fresenius Settlement Order. Therefore, Fresenius proposes to the Court certain modifications and changes to the Disclosure Statement, and to the extent necessary, the Plan, so that they more accurately and completely reflect the obligations of the Settling Parties under the Fresenius Settlement Agreement. Headquartered in Columbia, Maryland, W.R. Grace & Co., -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor- affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. Del. Case No. 01-01139). James H.M. Sprayregen, Esq., at Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, represent the Debtors in their restructuring efforts. (W.R. Grace Bankruptcy News, Issue No. 77; Bankruptcy Creditors' Service, Inc., 215/945-7000) W.R. GRACE: Asbestos PI Committee Blasts Disclosure Statement ------------------------------------------------------------- The linchpin of W.R. Grace & Co., and its debtor-affiliates' chapter 11 plan is their stunning assertion that asbestos creditors will not be entitled to vote at all, Mark T. Hurford, Esq., at Campbell & Levine, LLC, in Wilmington, Delaware, says. The Plan proposes to divide asbestos creditors into three classes. Class 6 would comprise asbestos personal injury claimants who, as of the Petition Date, were "symptomatic" -- Asbestos PI-SE Claims. Class 7 would comprise asbestos personal injury claimants who, as of the Petition Date, were "asymptomatic" -- Asbestos PI-AO Claims. Class 8 would comprise all asbestos property damage claimants -- Asbestos PD Claims. According to the Debtors, all three classes of asbestos creditors will be paid in full because an estimation will be conducted to determine the aggregate value of their claims, and assets assertedly of equal value will be placed in the Asbestos Trust to pay all allowed claims in full as they arise and are resolved. On the basis of that premise, the Debtors contend that all three classes of asbestos creditors will be "unimpaired" and will therefore be conclusively presumed to have accepted the Plan and, accordingly, will have no right to vote. The Official Committee of Asbestos Personal Injury Claimants argues that the Debtors' contention is wrong for two distinct reasons: (1) Both classes of Asbestos PI Claimants would clearly be "impaired" under the Plan, and their acceptances to the Plan must accordingly be solicited under Sections 1125 and 1126(c) of the Bankruptcy Code; and (2) Whether or not Asbestos Claimants are afforded the right to vote under Section 1126(c), their vote is affirmatively required under Section 524(g), compliance with which the Plan requires as a condition precedent to confirmation. The Asbestos PI Committee asks the Court to disapprove the Debtors' Disclosure Statement. Headquartered in Columbia, Maryland, W.R. Grace & Co., -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor- affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. Del. Case No. 01-01139). James H.M. Sprayregen, Esq., at Kirkland & Ellis, and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, represent the Debtors in their restructuring efforts. (W.R. Grace Bankruptcy News, Issue No. 77; Bankruptcy Creditors' Service, Inc., 215/945-7000) YELLOW ROADWAY: Completes Exchange Offers for Sr. Notes due 2023 ---------------------------------------------------------------- Yellow Roadway Corporation (Nasdaq: YELL) completed the previously announced offers pursuant to which holders of its: -- 5.0% Contingent Convertible Senior Notes due 2023 and -- 3.375% Contingent Convertible Senior Notes due 2023 could exchange their Existing Notes for an equal amount of the company's new 5.0% Net Share Settled Contingent Convertible Senior Notes due 2023 and 3.375% Net Share Settled Contingent Convertible Senior Notes due 2023, respectively. The exchange offers expired at 12:01 a.m., New York City time, on Dec. 29, 2004. The notes validly and timely tendered in exchange for an equal principal amount of the New Notes were: -- $247.65 million aggregate principal amount of the $250 million of 5.0% Contingent Convertible Senior Notes due 2023 outstanding; and -- $144.62 million aggregate principal amount of the $150 million of 3.375% Contingent Convertible Senior Notes due 2023 outstanding, representing 99.06 percent and 96.41 percent. All Existing Notes that were properly tendered were accepted for exchange. The New Notes contain a net share settlement feature that, upon conversion, provides for the principal amount of the New Notes to be settled in cash and the excess value to be settled in common stock, as well as an additional change in control feature. The exchange offers were made pursuant to the company's prospectus dated Dec. 17, 2004, which includes full details of the terms and conditions of the exchange offers. Credit Suisse First Boston acted as dealer manager and Morrow & Co., Inc. was the information agent for the exchange offers. This news release shall not constitute an offer to sell or the solicitation of an offer to buy 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 Yellow Roadway Corporation is one of the largest transportation service providers in the world. Through its subsidiaries including Yellow Transportation, Roadway Express, New Penn Motor Express, Reimer Express, Meridian IQ and Yellow Roadway Technologies, Yellow Roadway provides a wide range of asset and non-asset-based transportation services integrated by technology. The portfolio of brands provided through Yellow Roadway Corporation subsidiaries represents a comprehensive array of services for the shipment of industrial, commercial and retail goods domestically and internationally. Headquartered in Overland Park, Kansas, Yellow Roadway Corporation employs over 50,000 people. * * * As reported in the Troubled Company Reporter on Sept. 15, 2004, Moody's Investors Service assigned a Ba1 rating to Yellow Roadway Corporation's $500 million unsecured revolving credit facility due 2009. Concurrently, Moody's upgraded the company's senior unsecured and issuer ratings to Ba1, affirmed the senior implied at Ba1, and withdrew the senior secured rating. The rating outlook remains positive. The rating actions reflect the change in relative priority of claim among creditors in Yellow Roadway's capital structure as a result of the replacement of an existing secured bank credit facility with a new unsecured facility. With all of the company's debt now unsecured, Moody's upgraded the senior unsecured and issuer ratings to the senior implied rating of Ba1. YUKOS OIL: Deutsche Bank Attacks U.S. Jurisdiction of Bankruptcy ---------------------------------------------------------------- A German bank, which lost millions of dollars in commissions when Yukos Oil filed for chapter 11 bankruptcy, wants Yukos' bankruptcy case tossed out of the U.S. Court system. Deutsche Bank, which along with ABN Amro and Dresdner Kleinwort Wasserstein had intended to finance a US$10 billion to US$13 billion bid by Gazprom for Yukos' main asset, urges the Houston court to dismiss the case outright. Filed Tuesday last week, the motion argues that Yukos owns no real or personal property in Houston and conducts no business operations in the area. "This blatant attempt to artificially manufacture a basis for jurisdiction constitutes cause to dismiss this case," the motion states. In its petition on December 14, Yukos argued that the Texas court had jurisdiction over its bankruptcy because its chief financial officer, Bruce K. Misamore, was conducting company business from his home in Houston. Proof of this is Yukos' US$7 million in two Houston bank accounts to cover legal fees and Mr. Misamore's costs. Mr. Misamore was on a business trip in London late November when Russian authorities ordered the arrest of several Yukos executives. This prompted him to proceed to the U.S. where he has a residence in Texas. In an interview with the Associated Press recently, Mike Lake, a spokesman for Yukos' lawyers, said the company remained confident the jurisdiction of the chapter 11 case was proper. Judge Letitia Z. Clark accepted Yukos petition and granted an emergency injunction to block the auction of Yuganskneftegas on December 16. The injunction, which was later upheld by U.S. District Court Judge Nancy Atlas when Gazprom appealed, scuttled Deutsche Bank's financing plan. The bank suggests the European Court or an international arbitration tribunal are appropriate fora to entertain Yukos' complaints. A copy of the motion to dismiss is available for a fee at: http://www.researcharchives.com/download?id=040812020022 Headquartered in Houston, Texas, Yukos Oil Company -- http://www.yukos.com/-- is an open joint stock company existing under the laws of the Russian Federation. Yukos is involved in the energy industry substantially through its ownership of its various subsidiaries, which own or are otherwise entitled to enjoy certain rights to oil and gas production, refining and marketing assets. The Company filed for chapter 11 protection on Dec. 14, 2004 (Bankr. S.D. Tex. Case No. 04-47742). Zack A. Clement, Esq., C. Mark Baker, Esq., Evelyn H. Biery, Esq., John A. Barrett, Esq., Johnathan C. Bolton, Esq., R. Andrew Black, Esq., Fulbright & Jaworski, LLP, represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $12,276,000,000 in total assets and $30,790,000,000 in total debts. * Dechert LLP Welcomes 67 Lawyers from Swidler Berlin's 2 Offices ----------------------------------------------------------------- Dechert LLP is the new professional home of 57 lawyers from the New York office of Swidler Berlin Shereff Friedman and eight lawyers from Swidler's Washington office, disclosed Barton J. Winokur, Chair of Dechert. The New York lawyers will join forces with Dechert's strong white collar and corporate investigations, securities litigation and enforcement, mergers and acquisitions and private equity practices. The Washington lawyers will join Dechert's top-ranked antitrust and white collar practices. "Dechert is a leading player in the financial services sector and our new colleagues in New York cement that standing," Mr. Winokur stated. "The addition of this extraordinary group is a major step in our strategy to expand our portfolio of world class practices, especially in New York. In the antitrust area, we're now joined by one of the leading antitrust merger teams in the United States. We believe that there is now no firm in the country better equipped to handle matters of the utmost importance to clients in these areas of practice." Most of the lawyers joining Dechert from Swidler's New York office were earlier with Shereff Friedman Hoffman & Goodman, a firm that merged with Washington's Swidler Berlin six years ago. "If we could have designed a firm that would fit best with our practice, Dechert would be it," said Martin Nussbaum, a new Dechert partner formerly in Swidler's New York office. "Dechert already has a major national and international platform. We share a common strategy of creating top tier core practices in key areas in which Dechert already has great strength." He added, "At a time when there has been a dramatic increase in government scrutiny of businesses and every investigation creates the risk of criminal prosecution, SEC, state and NASD enforcement, securities class actions and collateral litigation, clients want firms that can handle problems from beginning to end. That's the team we've put together by joining Dechert." Robert Katz, formerly general counsel and now a senior director of the Goldman Sachs Group, Inc., said that the teaming up of this group of lawyers is a terrific idea: "the sum is greater than the parts, and the parts were already great." Commenting on the combination, Richard D. Weinberg, First Vice President and Assistant General Counsel of Merrill Lynch, and a client of the former Swidler attorneys, said "They are wonderful lawyers who are great problem solvers and skilled trial lawyers. Their work for Merrill always has been outstanding. This is a great achievement for Dechert, and I am quite pleased." With the addition of the former Swidler attorneys, Dechert now has more than 760 lawyers worldwide, including 170 in New York. New partners joining Dechert are: * New York: -- Gerald Adler - corporate, M&A, private equity -- Richard D. Belford - employee benefits, tax -- Joseph F. Donley - securities and commercial litigation -- Adam M. Fox - M&A -- Robert M. Friedman - corporate, M&A, private equity -- Richard A. Goldberg - corporate, M&A -- Jeffry S. Hoffman - private equity, investment management -- Shalom Jacob - bankruptcy -- Les Jacobowitz - real estate and structured finance -- Nicolle L Jacoby - white collar and commercial litigation, corporate investigations -- David S. Hoffner - white collar and securities litigation, corporate investigations -- Robert J. Jossen - white collar, securities and commercial litigation, corporate investigations, legal ethics -- Andrew J. Levander - white collar, securities and commercial litigation, corporate investigations -- Gary J. Mennitt - securities and commercial litigation -- James H. Nix - tax, ERISA, investment management -- Martin Nussbaum - corporate, M&A -- Kevin J. O'Brien - white collar and commercial litigation, corporate investigations -- Guy Petrillo - white collar, securities and commercial litigation, corporate investigations -- Benjamin E. Rosenberg - white collar, securities and commercial litigation, corporate investigations -- David S. Rosenthal - corporate, M&A -- Louis M Solomon - securities and commercial litigation -- Shari L. Steinberg - securities and commercial litigation -- Claude M. Tusk - securities, commercial and employment litigation -- Charles I. Weissman - corporate, M&A -- Scott M. Zimmerman - corporate, M&A * Washington, DC: -- Paul T. Denis - antitrust/competition -- Michael D. Farber - antitrust, white collar, corporate investigations With more than 760 lawyers located in 17 cities around the world, Dechert LLP -- http://www.dechert.com/-- advises corporations and financial institutions on corporate, transactional, regulatory, and litigation matters. * Cadwalader, Wickersham & Taft LLP Names Five New Partners ----------------------------------------------------------- Cadwalader, Wickersham & Taft LLP elected: * Justin A. Bickle, * Jeffrey J. Lee, * Andrew J. Lucas, * Charles G. Roberts, and * Robert L. Ughetta as Partners of the firm. "We are pleased to welcome these outstanding attorneys to the partnership. They represent a cross section of our core practice areas and a demonstration of the growth and expansion the firm is experiencing across offices," said Robert O. Link, Jr., Cadwalader's Chairman. "It is a great pleasure to congratulate them today and we look forward to their continued success and contributions to the firm in years to come." These attorneys were elected Partner: -- Justin A. Bickle, an attorney in the London Financial Restructuring Department, focuses his practice on high yield, 'fallen angel' and event-driven debt restructurings and advising bondholders and distressed debt investors based in Europe and the United States. He has advised high yield holders, hedge funds, investment banks, proprietary trading desks, real estate investors, mezzanine lenders and private equity firms in connection with numerous leverage, capital structure and strategic investment issues, advising on restructuring/insolvency regimes in the UK, Germany, Spain, Portugal, Luxembourg, Canada, France, Poland and the Netherlands. Mr. Bickle obtained the highest Upper Second class Degree in Law in his year at the University of Exeter in 1992, completed the Law Society Finals course at Chester College of Law in 1993, and qualified as a solicitor in England and Wales in 1995. He is a member of the Law Society of England and Wales and a full member of the Insolvency Lawyers Association. -- Jeffrey J. Lee, an attorney in the Charlotte Real Estate Finance Department, focuses his practice on real estate finance and workouts, negotiating, documenting and closing real estate financings, including construction loans and mezzanine loans. He has conducted real estate loan closings and workouts in over 20 states, has negotiated and closed numerous leases with national tenants and has managed conduit loan programs with money center banks. Mr. Lee has a Bachelor of Arts in History from Boston University in 1970, and he earned a J.D. from the Boston University School of Law in 1973. He is admitted to practice in New Jersey and is also a member of the Bar of the Supreme Court of the United States. -- Andrew J. Lucas, an attorney in the London Corporate/M&A Department, focuses his practice on a wide range of corporate, restructuring and refinancing matters throughout Europe and South-East Asia, including public and private company financings, mergers and acquisitions, reorganizations and restructurings, joint ventures, take- overs, initial public offerings and general corporate governance and regulatory matters. Mr. Lucas graduated with an LLB degree from Kings College London in 1990. He qualified as a solicitor in England and Wales in 1994 and as a solicitor in Hong Kong in 1997 -- Charles G. Roberts, an attorney in the London Capital Markets Department, focuses his practice on mortgage securitization and has represented underwriters, issuers and institutional investors in numerous public and private offerings in both the U.S. and Europe. He is a governor of the European Chapter of the Commercial Mortgage Securities Association -- CMSA, Chair of its Regulatory Committee in Europe and Chair of the International Committee of the CMSA. Mr. Roberts received a Bachelor of Science in Finance from New York University in 1987 and earned his J.D. in 1993 from the Hofstra University School of Law. He is admitted to practice in England and the State of New York. -- Robert L. Ughetta, an attorney in the Charlotte Capital Markets Department, focuses his practice on structured finance, derivative products, other types of innovative financing and the federal securities laws. He represents underwriters, credit enhancers, issuers, collateral managers, trustees and institutional investors in a wide range of matters, including the securitization of traditional and non-traditional assets, the creation of various types of swaps and derivative instruments, the repackaging of corporate, asset-backed and non-U.S. securities, and the creation of commercial paper vehicles. He actively practices and has extensive experience in the areas of warehouse conduit financing, market value swaps and CDOs. Mr. Ughetta graduated from Princeton University in 1989 and received his J.D., cum laude, from Albany law School of Union University in 1993. He is admitted to practice in the State of New York. Cadwalader, Wickersham & Taft LLP -- http://www.cadwalader.com/-- established in 1792, is one of the world's leading international law firms, with offices in New York, Charlotte, Washington and London. Cadwalader serves a diverse client base, including many of the world's top financial institutions, undertaking business in more than 50 countries in six continents. The firm offers legal expertise in securitization, structured finance, mergers and acquisitions, corporate finance, real estate, environmental, insolvency, litigation, health care, banking, project finance, insurance and reinsurance, tax, and private client matters. * Ralph C. Ferrara to Join LeBoeuf as Litigation Partner -------------------------------------------------------- LeBoeuf, Lamb, Greene & MacRae, L.L.P. said Ralph C. Ferrara, one of the nation's leading experts on securities litigation, will join the firm as a partner in its litigation practice effective January 1, 2005. He will be based in LeBoeuf's Washington, DC, office. LeBoeuf Chairman Steven H. Davis said, "LeBoeuf is delighted and proud that a lawyer of Ralph Ferrara's stature in securities litigation is joining our firm, especially at a time when so many companies and industries across the country are facing complex securities-related business and legal issues. "Ralph will further expand LeBoeuf's litigation practice, greatly enhance our capabilities in securities regulation and enforcement and class-action litigation, and bolster our presence in Washington, DC," said Mr. Davis. "Ralph's decision to join LeBoeuf underscores our long-standing strategy to attract the most accomplished and dynamic lawyers and enable them to apply their expertise and experience to address our clients' most challenging legal issues." Commenting on his move to LeBoeuf, Ralph Ferrara said, "I am excited about the opportunity to join LeBoeuf and contribute to its talented litigation practice. Over the past several years LeBoeuf has earned a strong reputation for the high-quality work it has performed on many prominent situations, and I have great respect for the deep client relationships the firm has built across many practice areas both in the United States and in international markets." Mr. Ferrara is joining LeBoeuf after a 23-year career at Debevoise & Plimpton LLP, where he served most recently as the managing partner of the Washington, DC office and as a member of the firm's Management Committee and its Securities Litigation Practice. Previously, Mr. Ferrara served in a number of senior positions at the Securities and Exchange Commission, including serving as General Counsel. While at Debevoise & Plimpton, Mr. Ferrara advised a number of prominent companies, including Dollar General, Global Crossing, MicroStrategy, Royal Dutch Shell, Waste Management and Yukos. Mr. Ferrara is a prolific author who has written treatises, monographs and articles on securities regulation and litigation for a number of influential publications, including The National Law Journal, American Business Law Journal, Securities Litigation & Regulation, International Financial Law Review, The Review of Securities & Commodities Regulation, and International Securities Regulation Report. He has also served as a member of many professional and business associations, including the New York Stock Exchange Legal Advisory Committee, the Federal Bar Association, the American Bar Association, the Center for Public Resources, the University of Cincinnati College of Law Board of Visitors, the Practicing Law Institute, and the Council of the Securities Law Advisory Committee. Over the course of his career, Mr. Ferrara has argued on five occasions before the United States Supreme Court, including the precedent setting Aaron v. Securities and Exchange Commission, 444 U.S. 902 (1980) and Steadman v Securities and Exchange Commission, 450 U.S. 91 (1981). Mr. Ferrara has also appeared in each of the Federal Circuit Courts of Appeal and represented clients in state and federal courts across the country. Mr. Ferrara is admitted to the bar in the District of Columbia (1970), New York (1982), Florida (1990) and Colorado (1993). He is also admitted to appear before the U.S. Supreme Court, the U.S. Courts of Appeal in the Fourth, Fifth, Tenth and D.C. Circuits and the D.C. Superior Court. He is listed in the London Registry of Foreign Lawyers 1997, and has London Affiliate Status Membership (1997). Mr. Ferrara received B.S. and B.A. degrees from Georgetown University in 1967, a J.D. from the University of Cincinnati College of Law in 1970 and an LL.M. summa cum laude from George Washington National Law Center in 1972. About LeBoeuf, Lamb, Greene & MacRae, L.L.P. LeBoeuf, Lamb, Greene & MacRae, L.L.P. has more than 600 lawyers practicing in 22 offices worldwide. Well known as one of the preeminent legal services providers to the insurance/financial services and energy and utilities industries, the Firm has built upon these strengths to gain prominence in corporate, technology/intellectual property, international, taxation, environmental, real estate, bankruptcy and litigation practices. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- January 19, 2005 PRACTISING LAW INSTITUTE Emerging Issues in Workouts & Bankruptcies New York, NY Contact: 1-800-260-4PLI; 212-824-5710 or info@pli.edu February 9, 2005 NACHMAN HAYS BROWNSTEIN, INC. Due Diligence Symposium 2005 Hilton Woodbridge, Iselin, New Jersey Contact: 1-888-622-4297 or info@nhbteam.com February 10-12, 2005 AMERICAN BANKRUPTCY INSTITUTE 10th Annual Rocky Mountain Bankruptcy Conference Westin Tabor Center Denver, Colorado Contact: 1-703-739-0800 or http://www.abiworld.org/ February 11, 2005 AMERICAN BANKRUPTCY INSTITUTE Canadian-American Symposium on Cross Border Insolvency Law Marriott Eaton Center, Toronto, Ontario Contact: 1-703-739-0800 or http://www.abiworld.org/ March 2-3, 2005 PRACTISING LAW INSTITUTE 27th Annual Current Developments in Bankruptcy & Reorganization New York, NY Contact: 1-800-260-4PLI; 212-824-5710; or info@pli.edu March 3, 2005 AMERICAN BANKRUPTCY INSTITUTE Bankruptcy Fundamentals: Nuts & Bolts for Young Practitioners (L.A.) The Century Plaza Los Angeles, California Contact: 1-703-739-0800 or http://www.abiworld.org/ March 4, 2005 AMERICAN BANKRUPTCY INSTITUTE 12th Annual Bankruptcy Battleground West Looking Ahead to the Next Bankruptcy Cycle The Westin Century Plaza Hotel & Spa Los Angeles, Calif. Contact: 1-703-739-0800 or http://www.abiworld.org/ March 9-12, 2005 TURNAROUND MANAGEMENT ASSOCIATION 2005 Spring Conference JW Marriott Desert Ridge, Phoenix, Arizona Contact: 312-578-6900 or http://www.turnaround.org/ March 10-12, 2005 ALI-ABA Bench and Bar Bankruptcy Conference Washington, DC Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/ April 7-8, 2005 PRACTISING LAW INSTITUTE 27th Annual Current Developments in Bankruptcy & Reorganization San Francisco, CA Contact: 1-800-260-4PLI; 212-824-5710 or info@pli.edu April 13, 2005 TURNAROUND MANAGEMENT ASSOCIATION Mediation in Turnarounds & Bankruptcies Milleridge Cottage Long Island, NY Contact: 312-578-6900 or http://www.turnaround.org/ April 14-15, 2005 BEARD GROUP AND RENAISSANCE AMERICAN MANAGEMENT CONFERENCES The Sixth Annual Conference on Healthcare Transactions Successful Strategies for Mergers, Acquisitions, Divestitures and Restructurings The Millennium Knickerbocker Hotel, Chicago Contact: 1-800-726-2524; 903-595-3800 or dhenderson@renaissanceamerican.com April 28, 2005 AMERICAN BANKRUPTCY INSTITUTE Bankruptcy Fundamentals: Nuts & Bolts for Young Practitioners (East) J.W. Marriott Washington, D.C. Contact: 1-703-739-0800 or http://www.abiworld.org/ April 28- May 1, 2005 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting J.W. Marriot, Washington, D.C. Contact: 1-703-739-0800 or http://www.abiworld.org/ May 9, 2005 AMERICAN BANKRUPTCY INSTITUTE New York City Bankruptcy Conference Millenium Broadway New York, New York Contact: 1-703-739-0800 or http://www.abiworld.org/ May 12-14, 2005 ALI-ABA Fundamentals of Bankruptcy Law Washington, D.C. Contact: 1-800-CLE-NEWS or http://www.ali-aba.org/ May 12-14, 2005 ALI-ABA Fundamentals of Bankruptcy Law Santa Fe, NM Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/ May 13, 2005 AMERICAN BANKRUPTCY INSTITUTE Bankruptcy Fundamentals: Nuts & Bolts for Young Practitioners (N.Y.C.) Association of the Bar of the City of New York, New York Contact: 1-703-739-0800 or http://www.abiworld.org/ May 19-20, 2005 BEARD GROUP AND RENAISSANCE AMERICAN MANAGEMENT CONFERENCES The Second Annual Conference on Distressed Investing Europe Maximizing Profits in the European Distressed Debt Market Le Meridien Piccadilly Hotel London UK Contact: 1-800-726-2524; 903-595-3800 or dhenderson@renaissanceamerican.com May 23-26, 2005 AMERICAN BANKRUPTCY INSTITUTE Litigation Skills Symposium Tulane University Law School New Orleans, Louisiana Contact: 1-703-739-0800 or http://www.abiworld.org/ June 2-4, 2005 ALI-ABA Partnerships, LLCs, and LLPs: Uniform Acts, Taxation, Drafting, Securities and Bankruptcy Omni Hotel, San Francisco Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/ June 9-11, 2005 ALI-ABA Chapter 11 Business Reorganizations Charleston, South Carolina Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/ June 16-19, 2005 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort Traverse City, Michigan Contact: 1-703-739-0800 or http://www.abiworld.org/ June 23-24, 2005 BEARD GROUP AND RENAISSANCE AMERICAN MANAGEMENT CONFERENCES The Eighth Annual Conference on Corporate Reorganizations Successful Strategies for Restructuring Troubled Companies The Millennium Knickerbocker Hotel, Chicago Contact: 1-800-726-2524; 903-595-3800 or dhenderson@renaissanceamerican.com July 14 -17, 2005 AMERICAN BANKRUPTCY INSTITUTE Ocean Edge Resort, Brewster, Massachusetts Contact: 1-703-739-0800 or http://www.abiworld.org/ July 27- 30, 2005 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop Kiawah Island Resort and Spa, Kiawah Island, S.C. Contact: 1-703-739-0800 or http://www.abiworld.org/ September 8-11, 2005 AMERICAN BANKRUPTCY INSTITUTE Southwest Bankruptcy Conference (Including Financial Advisors/Investment Bankers Program) The Four Seasons Hotel Las Vegas, Nevada Contact: 1-703-739-0800 or http://www.abiworld.org/ September 26, 2005 AMERICAN BANKRUPTCY INSTITUTE International Insolvency Workshop Site to Be Determined London, England Contact: 1-703-739-0800 or http://www.abiworld.org/ October 7, 2005 AMERICAN BANKRUPTCY INSTITUTE Views from the Bench Georgetown University Law Center Washington, D.C. Contact: 1-703-739-0800 or http://www.abiworld.org/ October 19-23, 2005 TURNAROUND MANAGEMENT ASSOCIATION 2005 Annual Convention Chicago Hilton & Towers, Chicago Contact: 312-578-6900 or http://www.turnaround.org/ November 2-5, 2005 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES Seventy Eighth Annual Meeting San Antonio, Texas Contact: http://www.ncbj.org/ December 1, 2005 AMERICAN BANKRUPTCY INSTITUTE Bankruptcy Fundamentals: Nuts & Bolts for Young Practitioners (West) Hyatt Grand Champions Resort Indian Wells, California Contact: 1-703-739-0800 or http://www.abiworld.org/ December 1-3, 2005 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Hyatt Grand Champions Resort, Indian Wells, Calif. Contact: 1-703-739-0800 or http://www.abiworld.org/ March 30 - April 1, 2006 ALI-ABA Partnerships, LLCs, and LLPs: Uniform Acts, Taxation, Drafting, Securities, and Bankruptcy Scottsdale, AZ Contact: 1-800-CLE-NEWS; http://www.ali-aba.org/ April 18-22, 2006 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting JW Marriott Washington, D.C. Contact: 1-703-739-0800 or http://www.abiworld.org/ June 15-18, 2006 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort Traverse City, Michigan Contact: 1-703-739-0800 or http://www.abiworld.org/ July 13-16, 2006 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Newport Marriott Newport, Rhode Island Contact: 1-703-739-0800 or http://www.abiworld.org/ July 26-29, 2006 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz Carlton Amelia Island Amelia Island, Florida Contact: 1-703-739-0800 or http://www.abiworld.org/ October 11-14, 2006 TURNAROUND MANAGEMENT ASSOCIATION 2006 Annual Conference Milleridge Cottage Long Island, NY Contact: 312-578-6900 or http://www.turnaround.org/ November 30-December 2, 2006 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Hyatt Regency at Gainey Ranch Scottsdale, Arizona Contact: 1-703-739-0800 or http://www.abiworld.org/ The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Yvonne L. Metzler, Emi Rose S.R. Parcon, Rizande B. Delos Santos, Dylan Carlo Gallegos, Jazel P. Laureno, Cherry Soriano-Baaclo, Marjorie Sabijon, Terence Patrick F. Casquejo and Peter A. Chapman, Editors. Copyright 2005. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $675 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***