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/raid1/www/Hosts/bankrupt/TCR_Public/050214.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, February 14, 2005, Vol. 9, No. 37 Headlines ADESA INC: Earns $21.9 Million of Net Income in Fourth Quarter ADVANCED BIO/CHEM: Changes Name to Industrial Enterprises ALASKA COMMS: Subsidiary Closes Senior Debt Tender Offer ALISON GEM: Gets Interim Okay to Use Lender's Cash Collateral ALISON GEM: Look for Bankruptcy Schedules by Feb. 23 AMERCO: Earns $18.3 Million of Net Income in Third Quarter AMERICAN REPROGRAPHICS: S&P Revises Rating Outlook to Positive A.P.I. INC: Combined Confirmation Hearing Set for Feb. 28 ASSET SECURITIZATION: Fitch Junks Three Certificate Classes BELL CANADA: Issues C$700 Million of Medium Term Note Debentures BISHOP GOLD: Will Get $250,000 from Private Equity Placement BOYD GAMING: Earns $40 Million of Net Income in Fourth Quarter CAROLINA REINSURANCE: Sec. 304 Injunction Hearing Set for Feb. 23 CATHOLIC CHURCH: Portland Wants to Execute Restrictive Covenants CHAPMAN LUMBER: Case Summary & 20 Largest Unsecured Creditors CENTERPOINT ENERGY: Subsidiary Changes Ticker on Existing Bonds CONSOLIDATED FREIGHTWAYS: Closes $5.1MMM Alum Creek Property Sale CONSOLIDATED FREIGHTWAYS: Taking Bids on Georgesville Rd. Property D.R. HORTON: Moody's Puts Ba1 Rating on $300MM of 5.25% Sr. Notes DECORA INDUSTRIES: Chapter 11 Admin. Claims Due by Mar. 31 EARL BRICE: Court Gives J. Killips Authority to Liquidate Assets ECU SILVER: Will Get $750,000 from Private Equity Placement EL PASO: Moody's Puts Ba3 Rating on $560K Junior Subordinate Bonds EMPIRE FINANCIAL: Subsidiary Required to Increase Net Capital EVANS, INC.: Liquidating Trustee Can't Locate Certain Creditors EXCO RESOURCES: Sells Canadian Subsidiary to NAL Oil for $443.4M GAP INC: Good Operating Performance Prompts S&P to Upgrade Ratings HIGH VOLTAGE: Bankruptcy Court Approves Use of Cash Collateral HOLYOKE HOSPITAL: Moody's Pares Rating on $13.1MM Series B Bonds HOLLYWOOD ENT: Shareholders Have Until Feb. 16 to Vote on Merger IMMUNE RESPONSE: Appoints Robert Knowling as Chairman of the Board INTERACTIVE BRAND: Withdraws Appeal of AMEX Delisting Notice INTERSTATE BAKERIES: Wants Court Nod to Implement KERP JAZZ PHOTO: Imation Agrees to Settle Litigation for $21 Million JORGENSEN CO: S&P Upgrades Rating on Senior Secured Notes to B JOY GLOBAL: Improved Credit Profile Prompts S&P to Lift Ratings KAISER ALUMINUM: Can Use Up to $200 Million in New DIP Financing KALYPSO'S LLC: Case Summary & 20 Largest Unsecured Creditors KMART CORP: Eddie Lampert Discloses 53.7% Equity Stake LAIDLAW INT'L: Completes $820-Mil Sale of Healthcare Companies LEGACY HEALTH CARE: Case Summary & 80 Largest Unsecured Creditors MAYTAG CORPORATION: Declares $0.18 Dividend Per Common Share MEDCOMSOFT INC: Raises $2.8 Million in Rights Offering MERRILL LYNCH: S&P Places Low-B Ratings on Classes F & G Certs. MURRAY INC: Wants Until Oct. 4 to Make Lease-Related Decisions MUZAK LLC: Moody's Junks Senior Unsecured & Subordinated Notes NEWAVE INC: Declares 3 for 1 Forward Stock Split NRG ENERGY: Hosting Fourth Quarter Conference Call on March 9 NTK HOLDINGS: S&P Junks $250 Million Senior Discount Notes OFFSHORE LOGISTICS: Moody's Revises Rating Outlook to Negative OXFORD AUTOMOTIVE: Comm. Wants to Conduct Rule 2004 Examination PACIFIC GAS: Sells $1.9 Billion Energy Bonds for Customer Savings PAXSON COMMS: S&P's Junks Corporate Credit Rating PEGASUS SATELLITE: Has Until April 15 to Solicit Votes on Plan RIGGS NATIONAL: PNC Acquisition Talks Cues Fitch to Revise Outlook RIGGS NATIONAL: S&P Affirms Low-B Ratings After Review RUSSELL CORP: Declares $0.04 Regular Quarterly Dividend SMC HOLDINGS: Wants More Time to File Schedules & Statements STAR GAS: Poor First Quarter Results Spur S&P to Junk Ratings STELCO INC: Steelworkers Applauds Ontario's Directive on Pension STILE CONSOLIDATED: S&P Assigns B+ Corporate Credit Rating T-REX CORPORATION: Case Summary & 20 Largest Unsecured Creditors TRANSMONTAIGNE INC: Earns $4.2 Million of Net Income in 3rd Qtr. TRUMP HOTELS: Judge Wizmur Okays $100,000,000 DIP Financing Pact TRUMP HOTELS: Equity Committee Wants to Terminate Plan Exclusivity TRUMP HOTELS: File First Amended Plan & Disclosure Statement UNITED REFINING: Moody's Affirms B3 Sr. Implied & B3 Note Ratings UNITED REFINING: S&P Assigns B- Rating to $25 Million Senior Notes US UNWIRED: Dec. 31 Balance Sheet Upside-Down by $262.8 Million VARTEC TELECOM: Wants Exclusive Filing Period Stretched to June 1 VENTURE HOLDINGS: Soliciting Bids for Venture & Deluxe Assets WINN-DIXIE: Posts $399.7 Million Net Loss in Second Quarter YUKOS OIL: Files Plan of Reorganization in Texas YUKOS OIL: Files $20-Bil Plus Suit for Automatic Stay Violations YUKOS OIL: Wants to Hire Alvarez & Marsal as Restructuring Advisor * FTI Consulting Promotes Five Attorneys as Sr. Managing Directors * McDermott Expands in Brussels with Key Lawyers from Stanbrook * New England Consulting Opens Buffalo Area Office * BOND PRICING: For the week of February 14 - February 18, 2005 ********* ADESA INC: Earns $21.9 Million of Net Income in Fourth Quarter ------------------------------------------------------------ ADESA, Inc. (NYSE: KAR), reported its fourth quarter and annual financial results for the period ended December 31, 2004. For the fourth quarter 2004, the Company reported net income of $21.9 million on revenue of $224.8 million. The Company's fourth quarter results included incremental after-tax interest and corporate expenses of $2.1 million and $2.9 million compared to the fourth quarter of 2003. Recent Highlights: * GAAP income from continuing operations for 2004 was $109.5 million or $1.20 per share * Adjusted income from continuing operations for 2004 was $119.8 million or $1.31 per share, which excludes $10.3 million of non-recurring transaction costs or $0.11 per share * Auction and Related Services income from continuing operations grew 10 percent for the fourth quarter and 20 percent for the year * Dealer Financing income grew 17 percent for the quarter and 12 percent for the year * Repurchased 4.4 million shares of common stock for $86.7 million during the fourth quarter 2004 * Expanded salvage operations into Clearwater, Florida and the greater Hartford, Connecticut area shortly after the end of 2004 and recently opened new AFC loan production offices in North and South Carolina * Tripled both the number of dealers registered for on-line auctions and the number of lanes equipped with LiveBlock(TM), resulting in over 675,000 vehicles being offered for sale in a dual bidding forum during 2004 * Achieved record fourth quarter AFC loan transactions of 269,000, 13% above 2003 "The continued strong financial performance generated by both of our operating segments reflects my confidence in ADESA's ability to deliver solid earnings, expand operations and build long-term value for our shareholders," said David Gartzke, ADESA Chairman, Chief Executive Officer and President. "In addition to our solid operating results we were able to further enhance shareholder value by repurchasing $86.7 million of ADESA stock." Quarterly Consolidated Results For the fourth quarter of 2004, the Company reported revenue of $224.8 million compared with $217.8 million in the fourth quarter of 2003. Increases in revenue per vehicle sold, the number of loan transactions and revenue per loan transaction contributed to the revenue growth, which more than offset a four-percent decline in vehicles sold at ADESA auctions. Canadian currency translation favorably impacted revenue by $3.0 million. Net income for the current quarter was $21.9 million or $0.24 per share, compared with net income of $24.9 million, or $0.28 per share in the fourth quarter of 2003. Results for the current quarter included incremental after-tax interest and corporate expenses of $2.1 million and $2.9 million, or anaggregate $0.05 per share. The fourth quarter of 2003 included a non-recurring gain on the sale of real estate of $2.1 million after-tax, or $0.02 per share. The incremental interest and corporate expenses in the current quarter were the result of the Company's 2004 debt refinancing and additional infrastructure required to operate as an independent public company. For the quarter ended December 31, 2004, the Company had approximately 92.4 million shares outstanding on a weighted average diluted basis, compared with 88.6 million shares for the same quarter in 2003. The share increase as compared with the fourth quarter of 2003 is primarily the result of the Company's initial public offering of 6.25 million common shares in the second quarter of 2004, net of the effect of its share repurchases of approximately 4.4 million shares in the fourth quarter of 2004. Quarterly Segment Results Fourth quarter 2004 income from continuing operations for Auction and Related Services increased 10 percent to $16.9 million, compared with $15.3 million in the fourth quarter of 2003. Due primarily to favorable Canadian currency translation and increased ancillary services revenue, as well as the benefits of selective fee increases implemented earlier in 2004, revenue per vehicle sold increased to $433 compared to $410 for the fourth quarter of 2003. The Company's Dealer Financing segment also experienced strong growth in the fourth quarter of 2004, as income from continuing operations increased 17 percent to $11.2 million for the current quarter, compared with $9.6 million in the fourth quarter of 2003. Loan transaction volume increased 13% to a fourth quarter record of 269,000 while revenue per loan transaction increased from $110 in 2003 to $115 in 2004. Quarterly segment income statements, including statistical information, for 2004, 2003 and 2002 can be found at the Company's website http://www.adesainc.com/ Full Year Consolidated Results For the year ended December 31, 2004, the Company reported revenue of $931.6 million and net income of $105.3 million or $1.15 per share, compared with revenue of $911.9 million and net income of $115.1 million or $1.30 per share for 2003. Income from continuing operations was $109.5 million for 2004 compared with $114.8 million in 2003. Canadian currency translation favorably impacted revenue by $11.5 million in 2004. The results for 2004 included non-recurring transaction costs of $10.3 million net of tax, or $0.11 per share and a loss from discontinued operations of $4.2 million net of tax, or $0.05 per share. Absent these non-recurring costs and the results of discontinued operations, the Company would have reported net income of $119.8 million or $1.31 per share. Financial results for 2004 also included incremental interest and corporate expenses of approximately $5.3 million and $7.3 million net of tax, or an aggregate $0.14 per share. ADESA's 2003 financial results included a non-recurring gain on the sale of real estate of $2.1 million after-tax, or $0.03 per share. For 2004, the Company had approximately 91.5 million shares outstanding on a weighted average diluted basis, compared with 88.6 million shares in 2003. 2005 Outlook ADESA expects 2005 earnings to be approximately $1.37 to $1.43 per share, prior to the impact of the new Financial Accounting Standards Board -- FASB -- pronouncement regarding expensing of stock options. This range is based on an estimated weighted average diluted share count of approximately 92 million shares. This guidance includes expected increases in interest expense ($0.05 per share) and corporate expenses ($0.03 per share) resulting from a full year of ADESA as an independent public company, as well as an expected increase in depreciation and amortization ($0.02 per share). ADESA's effective tax rate is expected to be between 39.5 percent and 40 percent in 2005. ADESA provides earnings guidance on a continuing operations basis because management believes that this presentation provides useful information to investors to assist them in evaluating the Company's results period over period. As a result, guidance does not reflect matters classified as discontinued operations. In addition, the earnings guidance does not contemplate such future items as business development activities (including acquisitions), strategic developments (such as restructurings or dispositions of assets or investments), significant litigation, and changes in applicable laws and regulations (including significant accounting and tax matters). The timing and amounts of these items are highly variable, difficult to predict, and of a potential size that could have a substantial impact on the Company's reported results for a period. Prospective quantification of these items is generally not reasonable. Headquartered in Carmel, Indiana, ADESA, Inc. (NYSE: KAR) -- http://www.adesainc.com/-- is North America's largest publicly traded provider of wholesale vehicle auctions and used vehicle dealer floorplan financing. The Company's operations span North America with 53 ADESA used vehicle auction sites, 30 Impact salvage vehicle auction sites and 83 AFC loan production offices. * * * As reported in the Troubled Company Reporter on June 4, 2004, Standard & Poor's Rating Services assigned its 'B+' rating to ADESA Inc.'s proposed $125 million senior subordinated notes due 2012, and affirmed its 'BB' corporate credit and senior secured ratings on the Carmel, Indiana-based operator of wholesale used-vehicle auctions and provider of used-vehicle floorplan financing. Moody's affirmed its B1 rating on those 7-5/8% senior unsecured subordinated notes due June 15, 2012, on Nov. 2, 2004. ADVANCED BIO/CHEM: Changes Name to Industrial Enterprises --------------------------------------------------------- Advanced Bio/Chem, Inc. (Pink Sheets: AVBC) has changed its name to Industrial Enterprises of America, Inc. The name change became effective upon filing a Certificate of Amendment to the Company's Certificate of Incorporation with the Secretary of State of the State of Nevada. The Company also filed an application for a name change, as well as a trading symbol change, with the NASDAQ Stock Market. The name change and new trading symbol ILNP are effective as of the open of business on, Feb. 11, 2005. The Company has appointed new key executives and changed its strategic focus from a biotechnology company to a holding company. Through the Company's wholly owned subsidiary, EMC Packaging, Inc., a Delaware corporation, the Company intends to continue to market and sell the products that had been offered by EMC Packaging prior to the Company's purchase of all of the stock of EMC Packaging in October 2004. EMC Packaging supplies refrigerant in units used by ultimate end users. EMC Packaging's dusters are used in the computer and electronics industries, as well as the photographic market, as an aerosol cleaner. EMC Packaging's products are also used in forensic medicine to freeze medical specimens. EMC Packaging's products are sold nationally and its clients encompass a variety of industries, including the automotive, electronic (such as computer manufacturers) and photographic industries. The Company also intends to focus on acquiring other profitable industrial manufacturing and marketing operations. Additionally, as a significant stockholder of Power3 Medical Products (OTCBB: PWRM), the Company continues to monitor its 15,000,000 share interest in such company. On Oct. 15, 2004, the Board of Directors elected Crawford Shaw as the Company's Chairman of the Board, Chief Executive Officer and President, and John D. Mazzuto as Vice Chairman of the Board, Chief Financial Officer and Assistant Secretary. Crawford Shaw, 69, has been an international lawyer, financier and management consultant in the past thirty years. Previously, Mr. Shaw was a partner with Shaw and Reed, practicing in the areas of international law and finance. At Shaw and Reed, which he founded, Mr. Shaw served as legal, financial and management consultant to several small and medium sized private and public companies. Mr. Shaw is also a director of Paper Free Medical Solutions. Mr. Shaw graduated from Yale College in 1958 and Yale Law School in 1961. John Mazzuto, the Company's Chief Financial Officer has been an investor, financial consultant and advisor to a number of mid and small sized firms in various industries. Previously, he was Managing Director of corporate finance of Chemical Bank of New York. Mr. Mazzuto was Group Managing Director of an international merchant bank and was a member of the board of directors of a number of companies. Mr. Mazzuto graduated from Yale College in 1970. In October 2004, the Company purchased all of the issued and outstanding capital stock of EMC Packaging, Inc., a Delaware corporation based out of Lakewood, N.J. In consideration for these shares, the stockholders of EMC Packaging received 2,296,800 shares of the Company's common stock. EMC Packaging has been in the business of packaging, marketing and selling refrigerants since 1974, and its clients encompass a variety of industries, including the automotive, electronic and photographic industries. EMC Packaging supplies refrigerant in units to end users, its dusters are used on computers and electronics components as an aerosol cleaner. EMC Packaging's products are also used in forensic medicine to freeze medical specimens, and EMC Packaging packages the only Coast Guard approved boat horns. About the Company Industrial Enterprises of America, Inc., a Nevada corporation, is headquartered in Houston, Texas. Industrial Enterprises of America is the parent company of EMC Packaging, Inc., a Delaware corporation that packages, markets and sells refrigerants. EMC Packaging has been in this business since 1974. Its products serve a variety of industries and its current clients include a number of fortune 500 companies. * * * Going Concern Doubt As reported in the Troubled Company Reporter on Jan 20, 2005, Advanced Bio/Chem has suffered recurring losses from operations and its total liabilities exceed its total assets. This raises substantial doubt about the Company's ability to continue as a going concern. The Company had a $3,676,849 working capital deficit at June 30, 2004. The Company also had a $3,517,207 working capital deficit at September 30, 2004. These compare to a $1,977,216 working capital deficit at the fiscal year end, December 31, 2003. Net cash provided by operations for the six months ended June 30, 2004, was a negative $324,561, compared to a negative cash flow in the same period in 2003 of $335,060. Net cash provided by operations for the nine months ended September 30, 2004 was a negative $551,966, compared to a negative cash flow in the same period in 2003 of $606,990. The Company obtained funds to operate in the six months ended June 30, 2004, from the issuance of common stock in the amount of $275,000 and increased notes payable to shareholders and related parties of $100,000. The Company obtained funds to operate in the nine months ended September 30, 2004, from the issuance of common stock in the amount of $405,000 and increased notes payable to shareholders and related parties of $200,000. In September 2004, the Company offered and sold an aggregate of 1,000,000 shares of its common stock to several accredited investors for $0.05 per share. The purchasers in this private placement represented his or her intention to acquire the securities for investment only and not with a view toward distribution. These securities were not sold through an underwriter and there were no underwriting discounts or commissions involved. These sales and purchases in the private placement were exempt from registration under the Securities Act of 1933, as amended and the regulations promulgated thereunder, on the basis that the private placement did not involve a public offering. ALASKA COMMS: Subsidiary Closes Senior Debt Tender Offer -------------------------------------------------------- Alaska Communications Systems Group, Inc. (Nasdaq:ALSK) reported the closing of the previously announced tender offers by its subsidiary, Alaska Communications Systems Holdings, Inc., for: -- any and all of the $147,500,000 aggregate principal amount of outstanding 9-3/8% Senior Subordinated Notes due 2009 issued by ACSH, and -- up to $59,350,000 aggregate principal amount of outstanding 9-7/8% Senior Notes due 2011 issued by ACSH. The tender offers expired at 9:00 a.m., New York City time. Liane Pelletier, ACS president and chief executive officer, stated, "Closing these tender offers substantially completes a series of debt and equity transactions that have strengthened our financial position and significantly lowered our overall cost of capital." As of 9:00 a.m., New York City time, on Feb. 10, 2005, ACSH had received tenders for $140,070,000 aggregate principal amount of the senior subordinated notes, representing approximately 95.0% of the outstanding senior subordinated notes, and $171,035,000 aggregate principal amount of the senior notes, representing approximately 96.3% of the outstanding senior notes, in each case, giving effect to the cancellation on Feb. 1, 2005 of $4.35 million of the senior notes and $2.5 million of the senior subordinated notes that were previously repurchased on the open market by ACSH. In accordance with the terms of the senior notes tender offer, the tender offer for the senior notes is subject to proration at a factor of 34.70% because tenders for more than $59,350,000 aggregate principal amount of senior notes were received. Therefore, ACSH will purchase the principal amount of each holder's tendered notes multiplied by the proration factor of 34.70% and rounded down to the nearest $1,000. Holders of senior subordinated notes who validly tendered and did not withdraw their senior subordinated notes by 5:00 p.m., New York City time, on Jan. 25, 2005, will receive total consideration for their senior subordinated notes of $1,046.88 per $1,000 principal amount of notes tendered by such time, which includes a consent payment of $30.00 per $1,000 principal amount of notes. Holders of senior subordinated notes who validly tendered and did not withdraw their senior subordinated notes after 5:00 p.m., New York City time, on Jan. 25, 2005 and before 9:00 a.m., New York City time, on Feb. 10, 2005, will receive total consideration of $1,016.88 per $1,000 principal amount of notes. This amount does not include the consent payment of $30.00 per $1,000 principal amount of notes. Subject to proration, holders of senior notes who validly tendered and did not withdraw their senior notes by 5:00 p.m., New York City time, on Jan. 25, 2005, will receive total consideration for their senior notes of $1,098.75 per $1,000 principal amount of notes tendered by such time. The total consideration consists of: (1) $1,088.75 per $1,000 principal amount of the senior notes and (2) a consent payment of $10.00 per $1,000 principal amount of the senior notes. All senior notes validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on Jan. 25, 2005, that are not purchased due to proration will receive a consent payment of $10.00 per $1,000 principal amount. Subject to proration, holders who tendered (and did not withdraw) their senior notes after 5:00 p.m., New York City time, on Jan. 25, 2005, but prior to the 9:00 a.m. on Feb. 10, 2005, will receive total consideration of $1,088.75 per $1,000 principal amount of notes. This amount does not include the consent payment of $10.00 per $1,000 principal amount of the senior notes. As a result of the closing of the senior subordinated notes tender offer, the previously announced amendments to the indenture under which ACSH's senior subordinated notes were issued became operative pursuant to the terms of the supplemental indenture, dated as of Jan. 25, 2005. The supplemental indenture governing ACSH's senior notes became operative on Feb. 1, 2005. ACSH made the tender offers as part of a refinancing of a portion of its existing debt. ACSH is financing the tender offers with a portion of the term loan borrowings under its $380 million new senior secured credit facility, the proceeds of an approximately $75 million equity offering by ACS and cash on hand. On Feb. 1, 2005, ACSH issued a notice to redeem on Mar. 3, 2005, all of its outstanding senior subordinated notes that were not tendered in the tender offer, in accordance with the indenture under which the senior subordinated notes were issued. J.P. Morgan Securities Inc. and CIBC World Markets Corp. acted as the dealer managers and solicitation agents, and Global Bondholder Services Corp. acted as depositary, in connection with the tender offers and consent solicitations. 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 any 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 Alaska Communications Systems Group, Inc., is the leading integrated communications provider in Alaska, offering local telephone service, wireless, long distance, data, and Internet services to business and residential customers throughout Alaska. * * * As reported in the Troubled Company Reporter on Nov. 5, 2004, Standard & Poor's Ratings Services affirmed its ratings on Alaska Communications Systems Group, Inc., and subsidiaries, including the 'B+' corporate credit rating. All ratings were removed from CreditWatch, where they were placed with negative implications June 8, 2004, due to concern about higher financial risk accompanying the company's proposed $400 million income deposit securities -- IDS -- offering. The outlook is negative. ALISON GEM: Gets Interim Okay to Use Lender's Cash Collateral ------------------------------------------------------------- The Honorable Prudence Carter Beatty of the U.S. Bankruptcy Court for the Southern District of New York gave Alison Gem Corporation, permission, on an interim basis, to use cash collateral securing repayment of prepetition obligations to its primary lender, Antwerp Diamond Bank N.V. The Debtor needs access to the cash collateral in order to run the day-to-day operations of its business, including meeting payroll and paying other customary and necessary day-to-day expenses. Moreover, the Debtor requires the use of the cash collateral to prevent immediate and irreparable harm to its estate. The Debtor owes approximately $8 million to Antwerp Diamond under a Prepetition Credit Facility. Antwerp Diamond's loan is secured by perfected security interests and liens in substantially all of the Debtor's assets, including inventory, accounts, general intangibles, and equipment, and all profits, income, and proceeds derived from the Prepetition Collateral. The Court granted the Debtor permission to use the cash collateral on an interim basis for a five-week period from Jan. 28, 2005, through Feb. 25, 2005, in strict compliance with a budget approved by the Court. For the Week Ending 01/28/05 02/04/05 02/11/05 02/18/05 02/25/05 ---------- --------- -------- -------- -------- Beginning Cash Balance $1,000,000 $903,000 $440,000 $498,000 $587,000 Accounts Receivable 150,000 150,000 150,000 150,000 150,000 ---------- --------- -------- -------- -------- 1,150,000 1,053,000 590,000 648,000 737,000 Total Disbursements 247,000 613,000 92,000 61,000 146,000 ---------- --------- -------- -------- -------- Ending Cash Balance $903,000 $440,000 $498,000 $587,000 $591,000 ========== ========= ======== ======== ======== To adequately protect its interests, Antwerp Diamond is granted valid, perfected, and enforceable liens and security interests in all types of the Debtor's property coming into existence after the Petition Date. As additional adequate protection, the Debtor will make monthly cash payments to Antwerp Diamond in amounts established in the budget after the entry of the Court's interim order. Judge Beatty will convene a hearing at 2:30 p.m., on Mar. 2, 2005, to consider the Debtor's request to use the cash collateral on a permanent basis. Headquartered in New York City, New York, Alison Gem Corp., is a manufacturer and wholesaler of jewelry goods selling both diamond and colored stone jewelry to a variety of major retailers, small local retail chains, and single family owned retail stores. The Company filed for chapter 11 protection on January 25, 2005 (Bankr. S.D.N.Y. Case No. 05-10404). Ian R. Winters, Esq., at Klestadt & Winters, LLP, represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it reported total assets of $20,600,000 and total debts of $43,000,000. ALISON GEM: Look for Bankruptcy Schedules by Feb. 23 ---------------------------------------------------- The Honorable Prudence Carter Beatty of the U.S. Bankruptcy Court for the Southern District of New York gave Alison Gem Corporation, more time to file its Statements of Financial Affairs, Schedules of Assets and Liabilities, Schedules of Current Income and Expenditures, Schedules of Executory Contracts and Unexpired Leases. The Debtor has until February 23, 2005 to file those documents. The Debtor explains that its accountants have been having difficulty since Dec. 2004 in analyzing the Debtor's books and records. The former owners of the Company, the Alibayof Brothers who served as officers of the Debtor until Dec. 2004 refuse to provide the Debtor's accountants with various information concerning costing, inventory levels, pricing and a variety of other issues. Since Dec. 2004, the Debtor has been working diligently with its accountants and other staff members in restoring accuracy and proper record keeping with its books and records in order to have accurate information in the Debtor's Schedules and Statements. The Debtor is also still in the process of retaining outside accountants who will assist in the task of compiling and preparing the information for the Schedules and Statements. The Debtor assures Judge Beatty that the extension will give it more time to mobilize its employees in working diligently to compile the necessary information for the Schedules and Statements and submit those documents on or before the extension deadline. Headquartered in New York City, New York, Alison Gem Corp., is a manufacturer and wholesaler of jewelry goods selling both diamond and colored stone jewelry to a variety of major retailers, small local retail chains, and single family owned retail stores. The Company filed for chapter 11 protection on January 25, 2005 (Bankr. S.D.N.Y. Case No. 05-10404). Ian R. Winters, Esq., at Klestadt & Winters, LLP, represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it reported total assets of $20,600,000 and total debts of $43,000,000. AMERCO: Earns $18.3 Million of Net Income in Third Quarter ---------------------------------------------------------- AMERCO (Nasdaq: UHAL), the parent of U-Haul International, Inc., Oxford Life Insurance Company, Republic Western Insurance Company and Amerco Real Estate Company, reported its financial results for the third quarter and nine months ending Dec. 31, 2004. Financial Results Revenues for the third quarter of fiscal 2005 were $460.5 million, compared with $502.6 million for the same period in fiscal 2004. Earnings available to common shareholders were $18.3 million, compared with a net loss of $24.9 million for the same period last year. Revenues for the first nine months of fiscal 2005 were $1.59 billion, compared with $1.71 billion in the same period last year. Earnings available to common shareholders were $109.3 million, compared with $40.4 million, for the same period last year. The results for the quarter and year-to-date include non-recurring litigation settlement proceeds of $1.56 per share. These results reflect solid growth at U-Haul; the exit of unprofitable insurance business at Republic Western, net of losses related to hurricane damages in the southeastern U.S.; the deconsolidation of SAC Holding Corporation; the absence of restructuring charges; and charges related to probable litigation losses at Oxford. Moving and Storage Operations Earnings from operations at U-Haul were $3.7 million in the third quarter of fiscal 2005, compared with a loss of $10.4 million for the same period last year. This represents an improvement of $14.1 million and is attributable to stronger truck, trailer and storage rentals and the timing of recognizing current year insurance expense to better match revenues and expenses. Earnings from operations at U-Haul for the first nine months of fiscal 2005 were $172.7 million, compared with $153.8 million for the same period last year. This 12.3% increase is attributable to stronger truck, trailer and storage rentals and tight cost controls for the current fiscal year. Insurance Operations Combined revenues at RepWest and Oxford declined $19.8 million and $74.2 million in the third quarter and the first nine months, respectively, compared with the same periods last year. This primarily reflects the impact of RepWest's strategy to exit unprofitable non-U-Haul lines of business. Losses from operations for the combined insurance companies were $12.7 million in the third quarter and $6 million for the first nine months of 2004. These results include after-tax charges during the third quarter of 2004 of $9.2 million from hurricane related losses at RepWest and litigation related costs at Oxford. This year's results compare with losses last year of $2.9 million and $13.9 million for the third quarter and nine months, respectively. Fiscal Year 2005 Performance and Outlook "We continue to make steady progress through the first nine months of fiscal 2005. Moving equipment rentals gross revenue grew 3.9% to the highest level in our history," stated Joe Shoen, chairman of AMERCO. "Our self-storage occupancy rate has improved year over year. Our objective for the final quarter of fiscal 2005, typically our seasonally weakest quarter, is to position our rental fleet to achieve larger market share as well as revenue and transaction growth for the upcoming moving season," concluded Shoen. Headquartered in Reno, Nevada, AMERCO's principal operation is U- Haul International, renting its fleet of 94,000 trucks, 75,000 trailers, and 35,000 tow devices. U-Haul has also been a leader in the storage industry since 1974, with over 340,000 rooms and more than 28.8 million square feet of storage space and over 1,000 facilities throughout North America. The Company filed for chapter 11 protection on June 20, 2003 (Bankr. Nev. Case No. 03-52103). Craig D. Hansen, Esq., Jordan A. Kroop, Esq., Thomas J. Salerno, Esq., and Carey L. Herbert, Esq., at Squire, Sanders & Dempsey LLP, represented the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,042,777,000 in total assets and $884,062,000 in liabilities. AMERCO's confirmed chapter 11 Plan took effect on March 15, 2004. * * * Standard & Poor's assigned its B+ rating to AMERCO's $105.1 million 9% second lien notes due 2009 last year. AMERICAN REPROGRAPHICS: S&P Revises Rating Outlook to Positive -------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on American Reprographics Co. -- ARC -- to positive from stable. At the same time, Standard & Poor's affirmed its ratings, including its 'BB-' corporate credit rating, on the Glendale, Calif.-based company. Approximately $330 million in debt was outstanding as of Sept. 30, 2004. "The outlook revision follows the IPO that was announced on Feb. 4, 2005, and incorporates the expectation that the proceeds will be applied toward debt reduction and the redemption of preferred stock," said Standard & Poor's credit analyst Sherry Cai. As a result, credit measures are expected to improve meaningfully. An upgrade will be considered if the company can demonstrate its ability to improve and sustain debt to EBITDA in the 3x area over the intermediate term. A.P.I. INC: Combined Confirmation Hearing Set for Feb. 28 --------------------------------------------------------- The Honorable Gregory F. Kishel of the U.S. Bankruptcy Court for the District of Minnesota will convene a combined hearing at 10:00 a.m., on February 28, 2005, to consider the adequacy of the Disclosure Statement and confirm the Plan of Reorganization filed by A.P.I. Inc., fka API Construction Company. The Debtor filed its Disclosure Statement and Plan on January 7, 2005. The Plan provides for a distribution of Cash on the Effective Date to satisfy in full all allowed Administrative Claims, Allowed Priority Tax Claims, and Allowed Priority Claims. To address both current and future holders of Asbestos Claims efficiently and fairly, the Plan provides for the establishment of a Trust under the Asbestos Settlement Trust Agreement. Liabilities for the Asbestos Claims will be transferred to and assumed by the Trust, which will determine the amount of those Asbestos Claim through procedures established in the Plan, the Trust and in the Trust Distribution Procedures using a disease criteria matrix in the Trust Distribution Procedures. Partial payments will then be made on a pro-rata basis, retaining in the Trust, amounts deemed necessary to pay the holders of future Asbestos Claims on the same basis. Supplemental payments will be made as funds become available. The Plan groups claims and interests into six classes. Unimpaired Claims, consisting of Priority Wage Claims, Priority Employee Benefit Claims and General Unsecured Claims will be paid in full on the Effective Date. The Unimpaired Claim of the Secured Claims of Holders of Senior Notes and LaSalle Bank will be bound by the Debtor's guarantees in favor of the holder of those claims and those claims holders will have a security interests the Debtor's assets with the same nature, dignity and priority as existed on the Petition Date. The Plan identifies two impaired classes and describes how they will be treated: a) Asbestos Claims liabilities will be automatically assumed by the Trust on the Effective Date. On the Effective Date, the Trust will make an immediate partial distribution to each of the Qualified Current Direct Claimants pursuant to the provisions of the Trust Distribution Procedures, together with a Pro Rata Share of the net proceeds of any settlement with a Settling Asbestos Insurance Company, which occurs on the Effective Date that are otherwise payable under the terms of the Trust Distribution Procedures to the Qualified Direct Claimants. The claims of Indirect Asbestos Claimants will be subordinate to the Claims of Direct Asbestos Claimants and will only be paid after all Direct Asbestos Claims are paid in full. b) Holders of Interests in API Inc., will retain their Interests subject to a Pledge Agreement described under the Plan. Full-text copies of the Disclosure Statement and Plan are available for a fee at: http://www.researcharchives.com/download?id=040812020022 Headquartered in St. Paul, Minnesota, A.P.I. Inc., http://www.apigroupinc.com/--is a wholly owned subsidiary of the APi Group, Inc., and is an industrial insulation contractor. The Company filed for chapter 11 protection on January 5, 2005 (Bankr. D. Minn. Case No. 05-30073). James Baillie, Esq., at Fredrikson & Byron P.A., represents the Debtor's restructuring. When the Debtor filed for protection from its creditors, it listed total assets of $34,702,179 and total debts of $63,000,000. ASSET SECURITIZATION: Fitch Junks Three Certificate Classes ----------------------------------------------------------- Fitch Ratings downgrades Asset Securitization Corp.'s commercial mortgage pass-through certificates, series 1997-MDVII: -- $40.0 million class A-3 to 'BBB-' from 'A' and placed on Rating Watch Negative; -- $37.5 million class A-4 to 'CC' from 'CCC'; -- $27.5 million class A-5 to 'C' from 'CC'; -- $10.0 million class A-6 to 'C' from 'CC'. These classes are affirmed by Fitch: -- $2.6 million class A-1A at 'AAA'; -- $214.3 million class A-1B at 'AAA'; --Interest-only class PS-1 at 'AAA'; --Interest-only class CS-1 at 'AAA'; --$42.5 million class A-2 at 'AA'. Fitch does not rate classes B-1 and B-1H. The downgrades are due to a greater estimate of losses anticipated on the Fairfield Inn Portfolio. As of January 2005, 13 hotels remain in the portfolio, six of which are under contract and estimated to close by March 31, 2005. Class A-3 will remain on Rating Watch Negative until a more accurate estimation of losses can be calculated based upon the final expected resolution of the loan. BELL CANADA: Issues C$700 Million of Medium Term Note Debentures ---------------------------------------------------------------- Bell Canada disclosed the offering of Cdn $700 million of Medium Term Note Debentures pursuant to its medium term debenture program. The 5.00% MTN Debentures, Series M-18, which will be dated Feb. 11, 2005, will mature on Feb. 15, 2017, and will be issued at a price of Cdn $99.928 for a yield to the investor of 5.01% compounded semi-annually. A pricing supplement relating to this issue will be filed by Bell Canada with the various securities commissions in all provinces of Canada. The net proceeds of this issue will be used to repay maturing short-term debt and for general corporate purposes. BMO Nesbitt Burns Inc., CIBC World Markets Inc., Casgrain and Company Limited, Desjardins Securities Inc., Merrill Lynch Canada Inc., National Bank Financial Inc., RBC Dominion Securities Inc., Scotia Capital Inc. and TD Securities Inc. will be acting as agents with respect to the offering of the Series M-18 Debentures. About Bell Canada Bell Canada, Canada's national leader in communications, provides connectivity to residential and business customers through wired and wireless voice and data communications, local and long distance phone services, high speed and wireless Internet access, IP-broadband services, e-business solutions and satellite television services. Bell Canada is wholly owned by BCE Inc. BCI is operating under a court-supervised Plan of Arrangement, pursuant to which BCI intends to monetize its assets in an orderly fashion and resolve outstanding claims against it in an expeditious manner with the ultimate objective of distributing the net proceeds to its shareholder and dissolving the company. BISHOP GOLD: Will Get $250,000 from Private Equity Placement ------------------------------------------------------------ Bishop Gold, Inc. (TSX VENTURE:BSG), reported a private placement of up to $250,000 of units of Bishop at a price of $0.125 per unit, each such unit being comprised of one common share and one-half of one common share purchase warrant. Each whole Warrant will entitle the holder to acquire one common share at a price of $0.25 for a period of twelve months from the date of issue. Finder's fee commissions may be payable in connection with the Private Placement. The Private Placement is subject to acceptance by regulatory authorities and the TSX Venture Exchange. Subject to Exchange approval, it is expected that the closing the Private Placement will occur on or before February 23, 2005. The securities issued under the Private Placement will be subject to a four-month hold period. Proceeds from the Private Placement will be used to fund Bishop's continuing work program on the Lawyer's group of claims in the Toodoggone region of British Columbia and for general working capital purposes. Bishop Gold is a junior precious metals exploration company focused on the acquisition and development of mineral properties of historical exploration and past production merit in Western and Northern Canada. Bishop owns 100% of two significant epithermal gold prospects; the "The Lawyers Group" and "The Ranch" (also known as "The Al Group") properties in the Toodoggone region of north-central British Columbia. Bishop also owns 100% of the Gordon Lake Property in the Giant Bay Region near Yellowknife, NWT. Going Concern Doubt Bishop Gold's 3rd Quarter Report for the period ending June 30, 2004, notes that the Company "has realized recurring losses from operations, and has a working capital deficiency of $191,905. These factors, amongst others, cast substantial doubt with respect to the Company's ability to continue as a going concern." BOYD GAMING: Earns $40 Million of Net Income in Fourth Quarter -------------------------------------------------------------- Boyd Gaming Corporation (NYSE: BYD) reported its financial results for the fourth quarter and full year 2004. The Company reports that its "adjusted earnings" soared 163% over what the company reported for the fourth quarter 2003. For the full year, the Company reports record "adjusted earnings," up 75% from 2003. Adjustments for reported periods include pre-opening expenses, gain on sales of undeveloped land and certain non-recurring items, more fully described in a table and footnotes later in this report. This quarter's results include the operations of the four properties of Coast Casinos, which the Company acquired on July 1, 2004, and Sam's Town Shreveport, which the Company acquired in May 2004. Per share amounts are reported on a diluted basis. Fourth Quarter Results The Company reported record EBITDA in the fourth quarter of $149 million, a 122% increase over the $67.4 million reported in the fourth quarter 2003. This was the second quarter in a row that quarterly EBITDA was more than double the comparable quarter in the prior year. While much of the increase resulted from the addition of the five properties acquired in 2004, a significant amount of the increase resulted from strength at properties that operated in both periods. Revenues for the fourth quarter were $540 million, an increase of 75% over the $308 million reported in the fourth quarter 2003 principally due to the addition of the Coast and Shreveport properties. On a same-store basis, revenues were up 5.3% in the quarter versus the comparable quarter in 2003. Net income in the fourth quarter was $40.0 million, versus $12.3 million, reported in the fourth quarter 2003. In this year's fourth quarter, the Company's weighted average diluted shares were 22.7 million greater than last year's shares, due principally to shares issued in the Coast Casinos merger. William S. Boyd, Chairman and Chief Executive Officer of Boyd Gaming, commented on the Company's fourth quarter results, "I am very pleased with the outstanding results of our Company's operations. While our very strong earnings growth was widespread in the quarter, the principal drivers of the growth were in two areas where market dynamics, our business models, and our current expansion projects provide excellent prospects for continuing our strong earnings. The Las Vegas locals market is firing on all cylinders with growing demand and limited supply growth, with our Company's excellent properties enjoying a significant share in that strong market. And we expect to increase that share with the addition, less than a year from now, of South Coast, which will serve a dynamic growth area of the Las Vegas locals market. And our 'category-killer' property in Atlantic City, Borgata, is truly a market leader and should continue to be for some time. We have begun a major expansion of the property to meet the strong demand. While our Company is performing well across the board and we have broad-based growth initiatives in the works, having that powerful Las Vegas locals/Borgata combination gives me confidence that we can continue to build value for our shareholders." Full Year Results Revenues for the full year 2004 were $1.734 billion, an increase of 38% over the $1.253 billion reported in 2003. The increase was primarily attributable to the addition of Coast Casinos and Sam's Town Shreveport, neither of which were owned by the Company during 2003. EBITDA for 2004 was $449 million versus $266 million (before a $3.5 million one-time retroactive gaming tax imposed by the State of Indiana) reported in the same period last year. The increase was also principally attributable to the addition of both Coast Casinos and Sam's Town Shreveport and by a large increase in the Company's EBITDA from Borgata, which operated for six months during 2003. Net income for 2004 was $105 million, or $1.34 per share, versus $40.9 million, or $.62 per share, in 2003. Borgata The Company also reported fourth quarter and full year results for Borgata Hotel Casino and Spa, the Company's joint venture property in Atlantic City. As an unconsolidated joint venture, Borgata's results appear in only two lines of the Company's consolidated statements of operations; therefore, more detailed financial information is presented in tables later in this release. In the fourth quarter, Borgata reported revenue and EBITDA results well above its fourth quarter 2003 results and close to its own record results in the seasonally strong third quarter 2004. Borgata reported gaming revenue in the quarter of $165 million, a 35% increase over the fourth quarter 2003, and non-gaming revenue of $56.8 million, a 6.2% increase over the fourth quarter 2003. Net revenues in the quarter were $179 million, a 27% increase over the fourth quarter 2003. Borgata's EBITDA in the fourth quarter was $60.1 million, an increase of 77% over the $33.9 million reported in the fourth quarter 2003. In the fourth quarter, Borgata reported an EBITDA margin of 33.5% versus 23.9% reported in the fourth quarter 2003. As was the case in every other quarter of 2004, the Company believes Borgata's EBITDA in the fourth quarter was the highest of any property in Atlantic City. For the fourth quarter, Borgata reported the highest table game win in the Atlantic City market, garnering 21% of the table game market and topping the property in second place by 56%. Table game win per unit per day in the quarter was $4,674, which beat the second place property by $1,734 and was 82% above the $2,572 average win per table per day in Atlantic City in the fourth quarter. For the first time since its July 2003 opening, Borgata's quarterly slot win, $104 million in the fourth quarter, was the highest in the Atlantic City market. In slot win per unit per day, Borgata reported the highest result in the Atlantic City market at $324, $48 above the second place property and 51% above the Atlantic City average, which was $215 per day in the fourth quarter. Hotel occupancy in the quarter was 92.5% and the average daily room rate was $129. Borgata also reported results for the full year 2004, the property's first full calendar year of operations. Borgata's reported 2004 gaming win of $638 million was the second best in the Atlantic City market and only $9 million behind the much larger Bally's. Borgata's 2004 table game win led the market by a large margin, and its table game win per unit was 61% above the Atlantic City average. Borgata's 2004 slot win was the second best in the market, behind only Bally's, which operated 68% more slot machines than Borgata in 2004. Borgata's 2004 slot win per unit of $313 was the highest in the market, $27 above the second place property and $81, or 35%, above the Atlantic City average. Borgata's EBITDA for 2004 was $216 million and its EBITDA margin was 31.9%. Hotel occupancy for the year was 92.0% and the average daily rate was $127. Bob Boughner, Chief Executive Officer of Borgata, said, "In the fourth quarter, Borgata defied both conventional wisdom and historical precedent by reporting fourth quarter results similar to our summer results reported in the third quarter. We are very pleased that the environment and experience we are offering our customers appear to have year-round appeal." Borgata Expansion The Company made further announcements concerning its expansion activity at Borgata. Construction has begun on the public space expansion with completion scheduled for the second quarter 2006. The rooms expansion project that the Company announced in its last earnings release is moving forward, with construction expected to commence in the fourth quarter 2005 and completion scheduled for the fourth quarter 2007. Bob Boughner commented on developments in the public space expansion, "Our significant market share premiums apply not only to our gaming operations, but to our food and beverage operations as well, creating a need for more restaurant seats, especially fine dining. Our public space expansion will include, among others, restaurants developed and operated by three nationally acclaimed restaurateurs, Bobby Flay, Michael Mina, and Wolfgang Puck. The restaurants, Bobby Flay Steak, Seablue by Michael Mina, and Wolfgang Puck, are being designed by world-class designers to create spectacular spaces that we expect will keep Borgata in the forefront of the Atlantic City entertainment experience." Boulder Strip In the fourth quarter, the Boulder Strip properties, catering principally to the Las Vegas locals market, reported a 13.9% increase in revenues and a 41% increase in EBITDA versus the fourth quarter in 2003. EBITDA margins increased 5.5 percentage points, as 69% of the quarterly revenue increase fell to the EBITDA line. Fourth quarter EBITDA was the highest ever recorded for the Boulder Strip properties. Full year 2004 revenues of $183 million represented an increase of 9.4% over 2003, and record full year 2004 EBITDA of $49.4 million represented an increase of 25% over 2003. The strong results were generally due to increased business levels across the board and effective cost control. Coast Casinos As the merger with Coast Casinos was completed on July 1, 2004, there are no comparative results in the Company's financial statements. Therefore, all comparisons presented here are with Coast's pre-merger results of operations when they were an independent company, which results are reconciled in tables later in this release. Coast's revenues in the fourth quarter were $179 million, an increase of 17.2% over the fourth quarter of 2003. EBITDA in the fourth quarter was $60.5 million, a 41% increase over the prior period. This strength reflects the strong condition of the Las Vegas locals economy, particularly its gaming and entertainment sectors. EBITDA margin in the fourth quarter was 33.7%, up from 28.1% in the fourth quarter 2003, as 67% of the incremental revenue flowed through to the EBITDA line. For the full year 2004 (which amounts reflect both pre- and post-merger results), Coast Casinos' revenues were $668 million, an increase of 12.8% over 2003; and EBITDA was $205 million(2), a 25% increase over the $164 million reported in 2003. The unit's 30.6% EBITDA margin for 2004 was 3.0 percentage points above the prior year. Stardust The Stardust continued its turnaround in the fourth quarter with its best revenue quarter in four years. Fourth quarter revenues were $38.8 million, a 9.8% increase over the fourth quarter 2003, driven principally by a 21% increase in slot revenue. Fourth quarter EBITDA of $4.8 million was nearly double the $2.5 million reported in the fourth quarter 2003. In the fourth quarter, 66% of the property's revenue gains from the fourth quarter 2003 flowed through to the EBITDA line. For the full year, Stardust reported EBITDA of $18.0 million, its best results since 1998 and 88% above the $9.6 million reported in 2003. Downtown Properties Downtown Properties revenues increased 6.4% in the fourth quarter versus the comparable quarter in 2003. Despite higher fuel costs in connection with the unit's Hawaiian air charter operations, the group recorded a 5.3% EBITDA increase, reporting EBITDA of $12.3 million, versus $11.7 million, in the fourth quarter 2003. For the full year 2004, EBITDA was $38.7 million, down 4.4% from the $40.5 million reported in 2003. The aforementioned fuel cost increase was the principal reason EBITDA declined in 2004. Central Region The six Central Region properties reported a 23% increase in revenues and a 17.2% increase in EBITDA in the fourth quarter versus the comparable quarter in 2003. This quarter's results include Sam's Town Shreveport, which the Company acquired in May 2004. On a same-store basis, fourth quarter revenues increased 1.8% and EBITDA rose 5.2% over the fourth quarter 2003. Strong margin-driven fourth quarter EBITDA increases at Sam's Town Tunica, Par-A-Dice and Treasure Chest were the principal reasons for the increase. For the full year 2004, Central Region EBITDA was $191 million, an increase of 5.7% versus the prior year (before the $3.5 million Blue Chip tax charge), and, on a same- store basis, a decline of 2.0% from 2003 results. Increased 2004 EBITDA at Sam's Town Tunica, Treasure Chest and Blue Chip could not overcome EBITDA declines at Par-A-Dice and Delta Downs (caused primarily by construction disruption from its nearly completed property reconfiguration, remodel and hotel development project). Financial Statistics The Company provided the following additional information for the fourth quarter ended Dec. 31, 2004: * December 31 debt balance: $2.311 billion * December 31 cash: $161 million * Dividends paid in the quarter: $7.4 million * Maintenance capital expenditures during the quarter: $23 million * Expansion capital expenditures for projects during the quarter: Delta Downs - $29 million Blue Chip - $24 million The Orleans - $ 1 million South Coast - $41 million Stardust land - $43 million * Number of shares outstanding on December 31: 87.5 million * Capitalized interest during the quarter: $2.6 million Headquartered in Las Vegas, Boyd Gaming Corporation (NYSE: BYD) -- http://www.boydgaming.com/-- is a leading diversified owner and operator of 18 gaming entertainment properties, plus one under development, located in Nevada, New Jersey, Mississippi, Illinois, Indiana and Louisiana. * * * As reported in the Troubled Company Reporter on Nov. 25, 2004, Fitch Ratings affirmed Boyd Gaming Corporation's senior secured bank debt ratings at 'BB' and raised the senior unsecured and subordinated debt ratings one notch to 'BB-' and 'B+', respectively. The Rating Outlook is Stable. Approximately $2.3 billion of debt securities are affected by Fitch's action. Ratings reflect: (1) Boyd's sizable and uniquely diversified portfolio of high quality, (2) recently renovated assets, (3) successful operating history, and (4) strong track record of making high-return acquisitions. CAROLINA REINSURANCE: Sec. 304 Injunction Hearing Set for Feb. 23 ----------------------------------------------------------------- Gareth Howard Hughes and John C. McKenna, as Joint Liquidators, of CAROLINA REINSURANCE LIMITED, will ask the Honorable Burton R. Lifland of the U.S. Bankruptcy Court for the Southern District of New York, at a hearing scheduled for 10:00 a.m. on February 23, 2005, to enter an Order: (a) Granting the Verified Petition Pursuant to Section 304 to Commence Cases Ancillary to Foreign Proceedings they filed on December 5, 2001; (b) Providing that the Scheme of Arrangement approved by the Supreme Court of Bermuda on December 3, 2004, shall be given full force and effect in the United States and be binding on and enforceable in the United States; (c) Permanently enjoining all persons and entities from taking any action in contravention of, or inconsistent with, the Scheme of Arrangement; and (d) Permanently enjoining and restraining any creditor under the Scheme of Arrangement from taking any steps or proceedings against the Company or its property or assets (whether by way of demand, legal proceedings, arbitration, judgment, execution or otherwise whatsoever) for the purpose of obtaining payment of any Scheme Claim or for any purpose, except as may be permitted under the Scheme. Objections, if any, must be filed by 4:00 p.m. on February 18, 2005, and served on the Joint Liquidators' counsel: Peter A. Ivanick, Esq. Lynn W. Roberts, Esq. Edward J. Estrada, Esq. LeBOEUF, LAMB, GREENE & MacRAE, L.L.P. 125 West 55th Street New York, New York 10019 Gareth Howard Hughes and John C. McKenna, at Ernst & Young, as Joint Liquidators of CAROLINA REINSURANCE LIMITED, filed a petition under Sec. 304 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 01-16090) on December 5, 2001, to keep U.S. creditors' hands off of Carolina Re's assets located in the U.S. and to gain access to the U.S. Federal Courts to file recovery actions while they pursued a liquidation of the insurer under the supervision of the Supreme Court of Bermuda (2001: No. 415). Carolina Re became insolvent following the 9/11 terrorist attack on New York. Carolina Re acted as a quota share reinsurer of the so-called Fortress pool. Robert E. Juceam, Esq., at Fried, Frank, Harris, Shriver & Jacobson LLP, provided legal counsel to some Carolina Re shareholders, officers and directors in lawsuits commenced in North Carolina by the Liquidators accusing his clients of improperly receiving millions in dividends, seeking the return of those amounts and other damages. CATHOLIC CHURCH: Portland Wants to Execute Restrictive Covenants ---------------------------------------------------------------- On behalf of St. Anthony Church, in Tigard, Oregon, Portland previously sought and obtained court permission to grant a trust deed lien in favor of Washington County, which was used to finance the construction of a St. Vincent de Paul food bank facility on St. Anthony Church's property. As a condition to development imposed by the City of Tigard in its conditional use approval for the project, the City of Tigard imposed two conditions: (1) restrictive covenants for future street improvements which require the parish to agree to future improvements on SW McKenzie Street and SW Grant Avenue; and (2) dedication deeds for road or street purposes which require the parish to dedicate to the public a perpetual right-of- way along SW McKenzie Street and SW Grant Avenue for street, road, and utility purposes. The Archdiocese of Portland in Oregon believes that executing the documents for the benefit of St. Anthony Church would be within the "ordinary course" of Archdiocesan affairs. Due to the dispute between Portland and certain creditors as to what constitutes "property of the estate," Portland feels constrained to seek the Bankruptcy Court's consent. Accordingly, Portland seeks Judge Perris' authority to execute in favor of the City of Tigard, restrictive covenants for future street improvements and dedication deeds for road or street purposes on behalf of St. Anthony Church, for the benefit of the St. Vincent de Paul food storage building. The Archdiocese of Portland in Oregon filed for chapter 11 protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004. Thomas W. Stilley, Esq. and William N. Stiles, Esq. of Sussman Shank LLP represent the Portland Archdiocese in its restructuring efforts. Portland's Schedules of Assets and Liabilities filed with the Court on July 30, 2004, the Portland Archdiocese reports $19,251,558 in assets and $373,015,566 in liabilities. (Catholic Church Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., 215/945-7000) CHAPMAN LUMBER: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Chapman Lumber Company, Inc. 3113 Willow Road Hopkinton, Iowa 52237 Bankruptcy Case No.: 05-00408 Type of Business: The Debtor sells lumber products. See http://www.chapmanlumber.net/ Chapter 11 Petition Date: February 8, 2005 Court: Northern District of Iowa (Cedar Rapids) Judge: Paul J. Kilburg Debtor's Counsel: Joseph A. Peiffer, Esq. Day Rettig Peiffer, P.C. P.O. Box 2877 Cedar Rapids, Iowa 52406 Tel: 319-365-0437 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 ------ --------------- ------------ Biomass Combustion Boilers $92,550 16 Merriam Road Princeton, MA 01541 B.G. Brecke Pipe new boilers, $66,481 4140 F Avenue N.W. feedwater system, Cedar Rapids, IA 52405 kilns and converter Meyer Mechanical Electrical Kilns $31,738 204 2nd Ave NE and Boiler Room Dyersville, IA 52040 Commander Buildings, Inc. Commander AS-600 $30,424 All Steel Building Bard Concrete Concrete $18,451 Iowa Department of Revenue Use Tax Audit $14,502 Compliance Devision Dave's Complete Construction Boiler Buildings $7,500 Kimberly Sauser, CPA Accounting Services $6,220 Alliant Energy Co. Electric Services $5,635 Farm Plan Parts, Supplies $3,896 McDermott Oil Fuel $3,588 Dan's Auto Parts, Inc. $3,463 Quast & Co., Inc. $3,414 Caterpillar Financial Delinquent Payments $3,300 Services on Forklift City Laundering Co. Uniforms $2,876 Mutual Wheel Co. $2,336 Kuehne & Nagel, Inc. $2,206 Bauer Built Inc. Tire Supplier $2,164 Ferrellgas - 4870 LP Gas $2,047 Bradley & Riley $2,044 CENTERPOINT ENERGY: Subsidiary Changes Ticker on Existing Bonds --------------------------------------------------------------- CenterPoint Energy, Inc. (NYSE: CNP) will change the key ticker symbol on transition bonds issued by its subsidiary, CenterPoint Energy Transition Bond Company, LLC, effective Feb. 25, 2005. The ticker symbol on these transition bonds will change from RNLT 2001-1 to CNP 2001-1, which will be accessible on the Bloomberg MTGE key, and will affect bonds with the CUSIP numbers 75953MAA8, 75953MAB6, 75953MAC4, and 75953MAD2. The change is intended to reflect more accurately the change in the name of the Company and its corporate affiliations after these transition bonds were issued. The transition bonds were issued in 2001 by Reliant Energy Transition Bond Company LLC when it was a subsidiary of Reliant Energy, Incorporated. In a restructuring on Aug. 31, 2002, CenterPoint Energy, Inc., became the new holding company for the regulated operations (electric transmission and distribution, gas distribution and gas pipelines) of the former Reliant Energy, Incorporated. At that time Reliant Energy Transition Bond Company LLC changed its name to CenterPoint Energy Transition Bond Company, LLC. CenterPoint Energy, Inc., distributed the stock of its unregulated retail electric sales and trading and marketing businesses in Texas to its shareholders on Sept. 30, 2002, and is no longer affiliated with Reliant Energy, Inc. (formerly named Reliant Resources, Inc.). The Company is a special purpose subsidiary of CenterPoint Energy Houston Electric, LLC, which is a subsidiary of CenterPoint Energy, Inc.; therefore, the Company is no longer affiliated with Reliant Energy, Inc. The transition bonds were issued pursuant to the Texas electric restructuring legislation and a financing order issued by the Public Utility Commission of Texas. The legislation permits the PUCT to issue financing orders authorizing CenterPoint Energy to form one or more special purpose entities in order to issue transition bonds to recover certain regulatory assets and stranded costs that the PUCT has authorized the utility to recover. Each financing order permits a special purpose entity to collect a non- bypassable charge, calculated to recover the amount authorized in the financing order, plus interest, over a period not to exceed 15 years, from retail electric providers who supply electricity to customers in CenterPoint Energy Houston Electric's historic service territory. Under the legislation, the state (including the PUCT) has pledged not to modify the financing orders and the PUCT conducts periodic reviews to ensure that principal and interest on the transition bonds are recovered on the anticipated repayment schedule once transition bonds have been issued pursuant to a financing order. About the Company CenterPoint Energy, Inc. -- http://www.CenterPointEnergy.com/-- headquartered in Houston, Texas, is a domestic energy delivery company that includes electric transmission & distribution, natural gas distribution and sales, interstate pipeline and gathering operations and an electric generation business that the company is under a contract to sell. The company serves nearly five million metered customers primarily in Arkansas, Louisiana, Minnesota, Mississippi, Oklahoma, and Texas. Assets total about $17 billion after giving effect to the first step in the sale of Texas Genco Holdings, Inc. With more than 9,000 employees, CenterPoint Energy and its predecessor companies have been in business for more than 130 years. CenterPoint Energy Houston Electric, LLC is a regulated utility engaged in the transmission and distribution of electric energy in a 5,000-square mile area located along the Texas Gulf Coast, including the City of Houston. CenterPoint Energy Houston Electric, LLC is also the servicer of these transition bonds. * * * As reported in the Troubled Company Reporter on Nov. 16, 2004, Fitch Ratings affirmed the outstanding senior unsecured debt obligations of CenterPoint Energy, Inc., at 'BBB-'. Also affirmed are outstanding ratings of CNP subsidiaries CenterPoint Energy Houston Electric, LLC and CenterPoint Energy Resources Corp. The Rating Outlook for all three companies has been revised to Stable from Negative. The rating action follows Fitch's assessment of the Nov. 10, 2004 determination by the Public Utility Commission of Texas -- PUCT -- that CenterPoint Energy will be permitted to recover a true-up balance of $2.3 billion, including accrued interest. Although this amount is significantly less than the $3.7 billion (excluding interest) true-up sought in CenterPoint Energy's original application with the PUCT, it is in line with Fitch's expectations when taken together with other expected cash proceeds. The conclusion of the true-up proceeding and expected securitization of stranded costs is the second of two highly anticipated deleveraging events factored into Fitch's ratings for CenterPoint Energy and its two wholly owned subsidiaries, CenterPoint Energy Houston Electric and CenterPoint Energy Resources. The first was the definitive agreement reached by CenterPoint Energy on July 21, 2004 to sell its 81% interest in Texas Genco Holdings for after-tax cash proceeds of $2.5 billion in a two-step transaction expected to be completed by the first half of 2005. These transactions, combined with the $177 million retail clawback payment owed by Reliant Energy, Inc., will enable CenterPoint Energy to delever its balance sheet by approximately $5 billion, an amount which will result in consolidated credit measures that are more consistent with CenterPoint Energy's current 'BBB-' rating. Upon completion of CenterPoint Energy's planned monetizations and subsequent retirement of certain debt obligations, Fitch expects CenterPoint Energy'a total debt-to- EBITDA ratio to trend toward the low 4.0 times (x) range, a level which is viewed as appropriate for the rating category given the low cash flow volatility exhibited by CenterPoint Energy's electric and gas distribution and interstate gas pipeline businesses. Fitch notes that the potential $500 million prefunding of CenterPoint Energy's future pension obligations may reduce the amount of funds immediately available for debt repayment. However, such a prefunding would reduce the company's future pension expense by approximately $40 million annually, as well as bolster CenterPoint Energy's equity base by reversing a charge taken in 2002. The Stable Rating Outlook reflects Fitch's expectation that CenterPoint Energy will secure a financing order for its planned securitization in a reasonable amount of time and complete the issuance of bonds by mid-2005. Any prolonged delays would be an unfavorable credit development. Fitch notes that CenterPoint Energy will likely apply for a rehearing of the amount disallowed by the PUCT and appeal to the Texas state courts, if necessary. Importantly, the Texas statute permits CenterPoint Energy to proceed with its plans to securitize the lower $2.3 billion true- up amount, regardless of the appeal status. These ratings are affirmed by Fitch: * CenterPoint Energy, Inc. -- Senior unsecured debt 'BBB-'; -- Unsecured pollution control bonds 'BBB-'; -- Trust originated preferred securities 'BB+'; -- Zero premium exchange notes (ZENS) 'BB+'. * CenterPoint Energy Houston Electric, LLC -- First mortgage bonds 'BBB+'; -- General mortgage bonds 'BBB' -- $1.3 billion secured term loan 'BBB'. * CenterPoint Energy Resources Corp. -- Senior unsecured notes and debentures 'BBB'; -- Convertible preferred securities 'BBB-'. CONSOLIDATED FREIGHTWAYS: Closes $5.1MMM Alum Creek Property Sale ----------------------------------------------------------------- Consolidated Freightways closed the sale of its long-time Columbus distribution facility in December to Old Dominion Freight Line for $5.1 million. CF sold its Columbus terminal located at 2885 Alum Creek Drive to Old Dominion on Dec. 17, 2004. ODFL's existing trucking property at 1700 Georgesville Road in Columbus, in turn, was sold to CF. CF will be offering that property for sale. Old Dominion is moving its operations from that property to the Alum Creek Drive property. CF holds the record for orchestrating the largest real estate sale in transportation history -- 227 total properties with an appraised value of over $400 million. Since CF filed for bankruptcy protection and closed its operations on September 3, 2002, the company has been liquidating the assets of the corporation under orders of the bankruptcy court. To date, 221 CF properties have been sold for $396 million. Headquartered in Vancouver, Washington, Consolidated Freightways Corporation (Nasdaq:CFWY) is comprised of national less-than- truckload carrier Consolidated Freightways, third party logistics provider Redwood Systems, Canadian Freightways LTD, Grupo Consolidated Freightways in Mexico and CF AirFreight, an air freight forwarder. Consolidated Freightways is a transportation company primarily providing LTL freight transportation throughout North America using its system of 300 terminals and over 18,000 employees. The Company and its debtor-affiliates filed for chapter 11 protection on September 3, 2002 (Bankr. C.D. Cal. Case No. 02-24284). Michael S. Lurey, Esq., at Latham & Watkins LLP, represents the Debtors. When the Debtors filed for bankruptcy, they listed $783,573,000 in total assets and $791,559,000 in total debts. The Bankruptcy Court confirmed the Debtors' Amended Consolidated Plan of Liquidation on Nov. 18, 2004. CONSOLIDATED FREIGHTWAYS: Taking Bids on Georgesville Rd. Property ------------------------------------------------------------------ Consolidated Freightways is taking bids for property located at 1700 Georgesville Road in Columbus, Ohio. The Georgesville Road property will be offered for sale to the highest bidder at a reserve auction scheduled for Thursday, March 10, 2005. The 8.2 acre property is comprised of a 65-dock door freight terminal/office building and an additional 10,350 sq. ft. maintenance building. An opening bid price has been established for the property at $1.25 million. Interested parties who would like to participate in the auction can access information about the property and the auction at http://www.cfterminals.com/ Potential bidders need to pre-qualify and submit a deposit as indicated on the web page. Questions about the property or the bidding procedures should be directed to Chris Sloan at CFC Trust at 360-448-4001. CF's upcoming sale of the distribution facility at 1700 Georgesville Road continues the largest real estate sale in transportation history -- 227 total properties with an appraised value of over $400 million. Since CF filed for bankruptcy protection and closed its operations on September 3, 2002, the company has been liquidating the assets of the corporation under orders of the bankruptcy court. To date, 221 CF properties have been sold for $396 million. Headquartered in Vancouver, Washington, Consolidated Freightways Corporation (Nasdaq:CFWY) is comprised of national less-than- truckload carrier Consolidated Freightways, third party logistics provider Redwood Systems, Canadian Freightways LTD, Grupo Consolidated Freightways in Mexico and CF AirFreight, an air freight forwarder. Consolidated Freightways is a transportation company primarily providing LTL freight transportation throughout North America using its system of 300 terminals and over 18,000 employees. The Company and its debtor-affiliates filed for chapter 11 protection on September 3, 2002 (Bankr. C.D. Cal. Case No. 02-24284). Michael S. Lurey, Esq., at Latham & Watkins LLP, represents the Debtors. When the Debtors filed for bankruptcy, they listed $783,573,000 in total assets and $791,559,000 in total debts. The Bankruptcy Court confirmed the Debtors' Amended Consolidated Plan of Liquidation on Nov. 18, 2004. D.R. HORTON: Moody's Puts Ba1 Rating on $300MM of 5.25% Sr. Notes ----------------------------------------------------------------- Moody's Investors Service assigned a Ba1 rating to the $300 million of 5.25% senior notes due February 15, 2015 of D.R. Horton, Inc., proceeds of which will be added to working capital. At the same time, Moody's affirmed all of the Company's existing ratings, including the senior implied rating, issuer rating, and the ratings on the Company's senior notes at Ba1 and on its senior subordinated debt at Ba2. The ratings outlook is positive. The positive ratings outlook reflects the Company's steady and successful execution of its strategy of buying less land, foregoing an active acquisition policy, using any excess cash flow for debt repayment and share purchases, and allowing the rate of equity retention to exceed the expansion in debt capital. As a result, debt leverage has improved from the highest in its peer group to one that compares favorably with those within its peer group. Moody's expects this trend to continue. The ratings acknowledge the Company's strong operating performance, success at integrating prior acquisitions, large equity base, geographic diversity, leading share position in many of the markets it serves, tight cost controls, and healthy returns. At the same time, the ratings continue to incorporate D.R. Horton's somewhat higher than average business risk profile given its past healthy appetite for acquisitions, which its current strategy does not totally disavow. In addition, capacity under its large bank credit facility ($1.21 billion) gives the company ample dry powder to releverage the balance sheet on short notice. The ratings also consider that the Company has a sizable proportion of its earnings coming from California and that it engages in speculative home building to a larger extent than many of its peers. As illustrated in the Homebuilding Rating Methodology dated December 2004, D.R. Horton outperformed its Ba rating category in most of the measurements and was a positive outlier (i.e., outperformed by two complete ratings bands) in the relative market share and return on assets metrics. However, its percentage of spec building stood out as among the more aggressive in its peer group. If a sudden and sharp downturn were to occur, D.R. Horton could be left with excess unsold inventory. Overall, however, Horton's performance suggests a higher rating on a purely quantitative basis. However, the ratings consider that D.R. Horton, while pursuing a new strategy, has not renounced making additional acquisitions, and that its large, essentially untapped bank credit facility gives it substantial borrowing capacity to move quickly on a potentially large acquisition opportunity. Given its history as a very aggressive consolidator within the homebuilding industry and the industry's continuing trend towards consolidation, there may be opportunities that challenge D.R. Horton's recently-adopted capital structure discipline. The test for Horton will be to convince the market and Moody's that its commitment to maintaining an investment grade balance sheet is resolute and enduring. Going forward, the ratings will depend on D.R. Horton's clear articulation of its commitment to maintaining a capital structure discipline consistent with an investment grade rating. Moody's would view positively the company's continuing reduction in its debt leverage. Any action or transaction that had a significantly adverse effect on debt leverage would be viewed negatively. Headquartered in Ft. Worth, Texas, D.R. Horton, Inc., is engaged in the construction and sale of homes designed principally for the entry-level and first time move-up markets. The Company currently builds and sells homes in 21 states and 63 markets, with a geographic presence in the Midwest, Mid-Atlantic, Southeast, Southwest, and Western regions of the United States. Revenues and net income for the fiscal year that ended September 30, 2004, were $10.7 billion and $975 million, respectively. DECORA INDUSTRIES: Chapter 11 Admin. Claims Due by Mar. 31 ---------------------------------------------------------- Decora Industries, Inc. and Decora, Inc. filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the District Delaware on December 5, 2000. On October 21, 2002, the Honorable Mary F. Walrath entered an order converting the Debtors' Chapter 11 cases to cases under Chapter 7 of the Bankruptcy Code. All persons or entities holding or asserting a Chapter 11 administrative claim against the Debtors or their Estates that arose, accrued or became due and payable between December 5, 2000, and October 21, 2002, must file a request for payment of Chapter 11 administrative claim or final application for allowance of compensation and reimbursement of expenses, as the case may be, no later than 4:00 p.m. on March 31, 2005. Each Chapter 11 administrative claim must (i) be in writing and signed by the claimant or his, her or its counsel; (ii) be denominated in the official currency of the United States of America; (iii) set forth with specificity the legal and factual basis in support of the asserted Chapter 11 administrative claim; (iv) have attached to it any and all supporting documentation upon which such claimant will rely to support its Chapter 11 administrative claim; (v) comply with the Bankruptcy Rules and Bankruptcy Code, to the extent not inconsistent with the terms of this Order; (vi) be delivered to the Clerk's Office for the: United States Bankruptcy Court for the District of Delaware 824 Market Street, 5th Floor Wilmington, DE 19801 and (vii) be served on Counsel for the Chapter 7 Trustee: Adelman Lavine Gold and Levin, P.C. 919 N. Market Street, Suite 710 Wilmington, DE 19801 Attn: Bradford J. Sandier, Esq. Any Chapter 11 administrative claim that is not timely filed and served on or before the March 31 Chapter 11 Administrative Claim Bar Date will be disallowed in its entirety, and the claimant will be forever barred, estopped, and permanently enjoined from asserting any Chapter 11 administrative claim against the Debtors, and will not be entitled to receive any distribution in these cases on account of their Chapter 11 administrative claim. Decora Industries, Inc., was a leading manufacturer and marketer of self-adhesive consumer surface-covering products including the prominent Con-Tact(R) and d-c-fix(R) brands. Decora Industries and its Decora Inc., subsidiary filed for chapter 11 bankruptcy protection on December 5, 2000 (Bankr. D. Del. Case No. 00-04459), listing $105,710,204 in assets and debts totaling $120,149,512. Robert A. Klyman, Esq., Gregory O. Lunt, Esq., and Jonathan S. Shenson, Esq., at Latham & Watkins, represent Decora. The case converted to a chapter 7 liquidation on October 21, 2002. Bradford J. Sandier, Esq., at Adelman Lavine Gold and Levin, P.C., represents the Chapter 7 Trustee. EARL BRICE: Court Gives J. Killips Authority to Liquidate Assets ---------------------------------------------------------------- The Honorable Timothy J. Mahoney of the U.S. Bankruptcy Court for the District of Nebraska gave James Killips, the Chapter 11 Trustee for the estate of Earl Brice Equipment, LLC, authority to sell the Debtor's assets free and clear of liens, claims and encumbrances. Judge Mahoney ruled that Mr. Killips can sell the Debtor's assets without further motion or orders from the Court. Mr. Killips must, however, obtain written consent from parties asserting secured claims against any particular asset being sold. Mr. Killips filed a motion on January 11, 2005, to sell the Debtor's assets. The assets consist mostly of equipment with an approximate value of $8 million on a piecemeal or group basis. The assets are subject to security interests in favor of various secured lenders. The secured lenders asserting secured claims on the Debtor's assets are First National Bank of Omaha, Caterpillar Financial, FCC Equipment Finance, Citicapital and John Deere Equipment. Mr. Killips explains that the Debtor has no equity in the assets because the Debtor owes the secured lenders in excess of $11.5 million. Mr. Killips explains that he needs to sell the assets within a few days of receiving acceptable offers from potential purchasers because further delay in disposing the assets will make it more difficult to maximize their value. Mr. Killips assures Judge Mahoney that he will obtain the consent of the secured lenders before making any final decision on the sale of the Debtor's assets. Headquartered in Omaha, Nebraska, Earl Brice Equipment, LLC, filed for chapter 11 protection on December 21, 2004 (Bankr. D. Nebr. Case No. 04-84283). Jenna B. Taub, Esq., at Robert F. Craig, P.C., represents the Debtor's restructuring efforts. When the Debtor filed for protection from its creditors, it reported estimated assets and debts of $10 million to $50 million. ECU SILVER: Will Get $750,000 from Private Equity Placement ----------------------------------------------------------- ECU Silver Mining, Inc., (TSX VENTURE:ECU) reported the closing of a private placement resulting in proceeds of $750,000 being received in two installments by ECU Silver. Pursuant to this private placement, ECU Silver issued an aggregate of 2,727,272 units at a price of $0.275 per unit. Each unit is comprised of one common share of ECU Silver and one common share purchase warrant entitling the subscriber to acquire one common share at a price of $0.365 at any time before December 22, 2006, for the subscribers of the first closing held on December 22, 2004 and before January 4, 2007, for the subscribers of the second closing held on January 4, 2005. Furthermore, the units are subject to a four-month hold period during which no transactions are permitted. Such hold period will end on April 22, 2005, for the units issued on December 22, 2004 and on June 4, 2005, for the units issued on January 4, 2005. In accordance with the TSX Venture Exchange Policy 5.1, a finder's fee was paid to one finder by way of issuance of an aggregate of 193,636 common shares of ECU Silver. The net proceeds of the offering will be used by ECU Silver to purchase additional mining equipment, which will be used to increase production as well as to purchase two trucks which will be used to reduce ECU Silver's shipping cost to Penoles. ECU Silver is engaged in gold and silver development and exploration in Mexico. The Company also has interests in mining properties in Canada and has not yet determined whether those properties contain economically recoverable ore reserves. The recoverability of amounts for mining properties and related deferred exploration expenses, and the capacity to meet all its commitments depend on the discovery of economically recoverable reserves, the ability of the company to obtain necessary financing to complete the development, and the future profitable production or proceeds from the their disposition. As of September 30, 2004, the Company's equity deficit narrowed to $4,647,942 compared to a $10,839,731 equity deficit at December 31, 2003. EL PASO: Moody's Puts Ba3 Rating on $560K Junior Subordinate Bonds ------------------------------------------------------------------ Moody's Investors Service has affirmed its: -- A3 ratings on the $4,055,000 County of El Paso Housing Finance Corporation Multifamily Housing Revenue Bonds (La Plaza Apartments), Series 2000A and Taxable 2000B Bonds; -- Baa3 rating on the $545,000 Subordinate Series 2000C Bonds; and -- Ba3 rating on the $560,000 Junior Subordinate Series D Bonds. Moody's says its rating outlook on the bonds is stable. The underlying rating affirmation reflects the solid financial strength of the property, as evidenced by a current debt service coverage ratio of 1.54x on the senior bonds, 1.32x on the subordinate bonds and 1.15x on the junior subordinate bonds as of the December 30, 2004 unaudited financial statements. Management reports that recent physical occupancy was 98%, demonstrating the property's strong competitive position. The Bonds are secured by rental revenue generated from the La Plaza Apartments complex located within the eastern El Paso submarket, the largest of the city's six representative districts. La Plaza Apartments, built in 1969, is a 129-unit affordable rental complex currently serving a predominantly elderly and low to moderate-income tenant base. Moody's expects the project will remain competitive given its proximity to major transportation arteries and employment sectors, competitive rent levels and the absence of new multifamily construction. The dominant land use in this mature submarket is single and multifamily residential development with good commercial and retail presence. The eastside El Paso rental market is a well-integrated, mixed- income community with Fort Bliss and the El Paso International Airport serving as the dominant economic and employment influences. Service levels, including the presence of retail, commercial, and medical facilities are good. Outlook: The current outlook is stable for the Senior, Subordinate and Junior Subordinate Bonds. This reflects Moody's expectation that the bonds will continue to provide sufficient pledged revenue to bondholders, given the properties demonstrated ability to maintain strong debt service coverage and low vacancy rates. EMPIRE FINANCIAL: Subsidiary Required to Increase Net Capital ------------------------------------------------------------- Empire Financial Holding Company's (Amex: EFH) wholly owned subsidiary, Empire Financial Group, Inc., increased its net capital in order to comply with regulatory requirements. The National Association of Securities Dealers, Inc., conducted a field examination on February 2 and 3, 2005, of Empire Financial Group. As a result of this examination, the Company concluded on Feb. 4, 2005, that due to the rapid growth in Empire Financial Group's market making business and order execution activities that Empire Financial Group needed to obtain additional net capital in order to comply with applicable regulations. On Feb. 7, 2005, the Company caused Empire Financial Group to voluntarily cease its business activities and has been fully cooperating with the NASD with respect to these matters. The Company has now obtained the required capital from various institutional investors and vendors, as well as from certain of its key employees and stockholders. The proceeds from these sources resulted in Empire Finance Group increasing its net capital to the required levels. The Company expects that Empire Financial Group will resume full services for its clients and customers shortly. President Donald A. Wojnowski Jr. stated, "We regret any inconvenience that that this situation may have caused our customers and investors and appreciate their patience. We believe that we have taken the required steps to bring Empire Financial Group back into compliance with the applicable net capital requirements." About the Company Empire Financial Holding Company, through its wholly owned subsidiary, Empire Financial Group, Inc., provides full-service retail brokerage services through its network of independently owned and operated offices and discount retail securities brokerage via both the telephone and the Internet. Through its market-making and trading division, the Company offers securities order execution services for unaffiliated broker dealers and makes markets in domestic and international securities. Empire Financial also provides turn-key fee based investment advisory and registered investment advisor custodial services through its wholly owned subsidiary, Empire Investment Advisors, Inc. Empire Financial's Sept. 30, 2004, balance sheet shows a $1,809,701 stockholders' deficit, compared to an $801,183 deficit at Dec. 31, 2003. EVANS, INC.: Liquidating Trustee Can't Locate Certain Creditors --------------------------------------------------------------- Constantine Lianoglou, who serves as the Trustee for the Evans Liquidating Trust formed under the chapter 11 plan confirmed on May 8, 2000, for Evans, Inc., Evans-Rosendorf of Maryland Inc., and Koslow's, Inc., made an interim distribution to creditors. Some creditors' checks, the Trustee says, were returned as undeliverable. As reported in the Troubled Company Reporter on Sept. 29, 1999, three creditors of Evans Inc., a Chicago-based fur retailer, and its affiliates, filed an involuntary chapter 7 petition (Bankr. S.D.N.Y. Case No. 99-45623) against the company. On Oct. 12, 1999, the company consented to entry of an order for relief and filed a voluntary chapter 11 petition. The company disclosed $39.8 million in assets and liabilities totaling $30.1 million at that time. In late-1999, Evans agreed to sell its assets to Birger Christensen for about $14.2 million. The following year, the company proposed a liquidating chapter 11 plan, Judge Gallet approved a disclosure statement explaining the plan, creditors voted to accept the deal, and Judge Gallet entered a confirmation order. Ms. Lianoglou was appointed to oversee the liquidation of the company's assets and distributions to creditors through a post-confirmation trust. In addition to a number of holders of smaller claims, the Trustee is having difficulty locating these large creditors: Unclaimed Creditor Initial Distribution -------- -------------------- Fred Rogal $1,144.88 Kaitery Furs 2,254.11 Ben Marc International 4,258.20 Nationsbanc Mortgage Corp. 4,850.00 Rendezvous NY 1,570.30 The Trustee advises that distributions that aren't claimed by April will be forfeited. Evans owned and operated six stores in Chicago and had 49 leased fur operations in major department stores across the country, including Bloomingdale's and Rich's. Son K. Le, Esq., at Platzer Swergold Karlin Levine Goldberg & Jaslow, LLP, in Manhattan, represents the Trustee. EXCO RESOURCES: Sells Canadian Subsidiary to NAL Oil for $443.4M ---------------------------------------------------------------- EXCO Resources, Inc., (EXCO) reported the completion of the sale of Addison Energy, Inc., EXCO's Calgary-based operating subsidiary, to NAL Oil and Gas Trust for an aggregate pre-tax cash purchase price of Cdn $553.3 million (U.S. $443.4 million as of February 9, 2005), subject to adjustment for repayment of outstanding indebtedness and other adjustments. The consideration paid at closing is subject to certain post-closing adjustments. According to Douglas H. Miller, EXCO's Chairman and Chief Executive Officer, "The completion of the sale of Addison is a win-win situation for EXCO and NAL. We can now focus our resources and capital on our core U.S. properties as well as future acquisition and development opportunities and NAL is taking over the reigns of a thriving organization. We appreciate everyone's efforts, especially those of Addison's management team and employees, in making the completion of this sale such a success." EXCO Resources, Inc., is a privately held oil and gas acquisition, exploitation, development and production company headquartered in Dallas, Texas with principal operations in Texas, Louisiana, Colorado, Ohio, Pennsylvania, and West Virginia. * * * As reported in the Troubled Company Reporter on Jan. 24, 2005, Standard & Poor's Ratings Services placed Dallas, Texas-based exploration and production company EXCO Resources Inc.'s 'B+' corporate credit rating on CreditWatch with negative implications. The CreditWatch listing follows EXCO's announcement that its board approved an agreement to sell the company's Canadian subsidiary (Addison Energy Inc. (unrated)), which represents about 43% of the company's current production (as of Sept. 30, 2004) and about 34% of the company's total proved reserves (as of year-end 2003 pro forma for the acquisition of North Coast Energy Inc. (unrated)), to NAL Oil and Gas Trust (unrated) for U.S. $452 million (Cdn $550 million). GAP INC: Good Operating Performance Prompts S&P to Upgrade Ratings ------------------------------------------------------------------ Standard & Poor's Ratings Services raised its corporate credit and senior unsecured debt ratings on San Francisco, California-based The Gap, Inc., to 'BBB-' from 'BB+'. The outlook is stable. "The upgrade reflects The Gap's good operating performance over the past three years, its strengthened balance sheet, and our expectation that cash flow protection measures will remain solidly characteristic of investment-grade levels," said Standard & Poor's credit analyst Diane Shand. "Ratings reflect The Gap's strong business position in casual apparel, as well as its geographic diversity and strong cash flow. These factors are offset, in part, by management's challenge to continue to improve the business position of its three brands in an industry that is intensely competitive." Management's initiatives to improve product quality and assortment, store execution, and inventory management, as well as the rationalization of its store base, have resulted in significantly improved operating performance over the past three years. The Gap's operating margin rose to 22.4% in the trailing 12 months ended Oct. 30, 2004, from 21.5% in the prior-year period and a low of 14.0% in 2000. Standard & Poor's believes that operating performance will remain relatively stable over the next few years, as the company has greater management depth than it had in the past and has put in place processes and controls that greatly reduce the likelihood of a deep and protracted decline in its business. Standard & Poor's anticipates that The Gap will improve the productivity of its stores over the next few years through brand extensions, reallocation of product mix, and further rationalization of the store base. However, intense price competition in the industry, apparel deflation, an increasing mix of lower-margin sales from Old Navy, and the inherent fashion risk of the industry will make it difficult for the company to materially increase its operating margins. In addition, profitability is also vulnerable to shifts in same-store sales, as the company is not growing its store base. Same-store sales were flat in 2004, and comparisons will be tough in the first half of 2005. HIGH VOLTAGE: Bankruptcy Court Approves Use of Cash Collateral -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Massachusetts entered an order allowing High Voltage Engineering Corporation and its debtor-affiliates to continue a number of their prepetition customer and benefit programs, including their customer warranty and training programs and their employee benefit programs. These orders will allow the Debtors to continue their operations without interruption. The Debtors also sought and obtained the use of its cash collateral until the Court can hear the Debtors' request seeking approval of their proposed debtor in possession financing. The Court scheduled a hearing on the Debtors' DIP Finance Motion for tomorrow, Feb. 15, 2005 at 11:30 a.m. EST. The Debtors are seeking approval to borrow up to $5 million on an interim basis from GE Commercial Finance. Upon final approval of the financing, the Debtors expect to be able to borrow up to an additional $11.2 million. Headquartered in New Kensington, Pennsylvania, High Voltage Engineering Corporation -- http://www.asirobicon.com/-- owns and operates several affiliated companies specializing in generators and motors. The Company's chief subsidiary, ASIRobicon, manufactures variable frequency drives that reduce energy use in industrial electric motors, motors, generators, power conversion products, and electronic controls for heavy-duty vehicles. The Company and its debtor-affiliates filed for chapter 11 protection on February 8, 2005 (Bankr. D. Mass. Case No. 05-10787). S. Margie Venus, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed total assets of $457,970,00 and total debts of $360,124,000. HOLYOKE HOSPITAL: Moody's Pares Rating on $13.1MM Series B Bonds ---------------------------------------------------------------- Moody's Investors Service downgraded the bond rating on Holyoke Hospital's (MA) Series B (1993) Bonds ($13.1 million outstanding) issued through Massachusetts Health and Educational Facilities Authority to Ba1 from Baa3 and primarily reflects two years of operating losses at Holyoke Hospital, below average debt service coverage and a decline in liquidity to levels that are no longer commensurate with an investment grade rating. The rating outlook remains negative and indicates future rating pressure unless the hospital's performance shows improvement in the next one to two years. Legal Analysis: Bonds are secured by a gross revenue pledge of Holyoke Hospital. No swaps are outstanding. Strengths: -- Increasing admissions (5.4% growth in FY 2004 over FY 2003) as Holyoke Hospital has been successful in recruiting new physicians and midwives to the medical staff who have brought new services to the hospital. The hospital will be adding diagnostic cardiac catheterization in FY 2005 along with new diagnostic equipment that support continued volume growth. -- Improved revenue growth through more favorable managed care contracts that should continue in FY 2005. Furthermore, Holyoke Hospital is expected to receive $2-$2.5 million of state-appropriated funds in FY 2005 given its growing charity care volumes along with additional reimbursement from the uncompensated care pool of $1.5 million. Challenges: -- Below average liquidity as unrestricted cash at Valley Health Systems, Inc., of which Holyoke represents 85% system net patient revenues, declined to $12.2 million or 43 days cash on hand in FY 2004 from $15.2 million or 56 days cash on hand at FY end 2003 (Moody's excludes approximately $2.1 million and $3.2 million of restricted funds, respectively). Cash-to-debt has weakened to 46% due to the liquidity decline and a $4.6 million borrowing in FY 2004 through a lease program with Massachusetts Health. -- Growing operating losses at Holyoke ($2.2 million in FY 2004 from $1.8 million in FY 2003) as bad debt and salary expenses show continued increases. FY 2005 budget shows an operating gain of $500,000, however, Holyoke Hospital's inability to achieve past budget targets casts doubt on reaching budget. The hospital is the financial anchor of Valley Health Systems; the system's loss was slightly greater than the hospitals with a $2.6 million operating loss in FY 2004 (excludes investment income of $207,000). System operating cash flow is very weak, $2.5 million, which translated into a very weak 2.4% operating cash flow margin in FY 2004. -- System debt coverage measures are weak with 1.02 times annual debt service coverage which includes the lease borrowing and 1.21 times maximum annual debt service coverage which only reflects the Series B bonds. Debt to cash flow is very weak, 11.2 times, and substantially weaker than 7.87 times in FY 2003. No future borrowings are anticipated as the hospital has recently completed a large construction project, a portion of which was funded with $4 million of fund-raising. -- Strong competition from two larger providers located 15 minutes away in Springfield: 588-licensed bed Baystate Medical Center and 375-licensed bed Mercy Hospital. Holyoke Hospital reports an estimated 30% market share in its primary service area which is behind Baystate's 35% market share and but ahead of Mercy's 14% market share. Key Facts And Ratios (based on Audited Financial Statements for Valley Health Systems, Inc. ending September 30, 2004) -- Admissions: 7,325 -- Total Operating Revenues: $105.1 million -- Net Revenues Available for Debt Service: $3.4 million (investment income normalized at 6%) -- Maximum Annual Debt Service Coverage: 1.21 times (investment income normalized at 6%) -- Total Debt Outstanding: $26.4 million -- Debt-to-Cashflow: 11.26 times (investment income normalized at 6%) -- Days cash on hand: 43.2 (excludes $2.1 million of restricted funds) -- Operating Cash Flow Margin: 2.4% Outlook: The rating outlook on Holyoke Hospital's Ba1 rating is negative and reflects our belief that unless operating performance shows improvement and liquidity stabilizes, the rating could face pressure in the near-term. HOLLYWOOD ENT: Shareholders Have Until Feb. 16 to Vote on Merger ---------------------------------------------------------------- Feb. 16, 2005, is the record date for determining which Hollywood Entertainment Corporation (Nasdaq: HLYW) shareholders are entitled to receive notice of, and vote at, a special meeting to be held relating to its previously announced merger agreement with Movie Gallery, Inc. (Nasdaq: MOVI). A date for the special meeting has not yet been set. Additional Information The proxy statement that Hollywood plans to file with the SEC and mail to its shareholders will contain information about Hollywood, Movie Gallery, the proposed merger and related matters. Shareholders are urged to read the proxy statement carefully when it is available, as it will contain important information that shareholders should consider before making a decision about the merger. In addition to receiving the proxy statement and a white proxy card from Hollywood by mail, shareholders will also be able to obtain the proxy statement, as well as other filings containing information about Hollywood, without charge, from the SEC's website -- http://www.sec.gov/-- or, without charge, from Hollywood. The proxy statement will also be available from MacKenzie Partners, Inc., by calling (800) 322-2885 toll-free or by email request to: proxy@mackenziepartners.com This announcement is neither a solicitation of proxy, an offer to purchase nor a solicitation of an offer to sell shares of Hollywood. Hollywood and its executive officers and directors may be deemed to be participants in the solicitation of proxies from Hollywood's shareholders with respect to the proposed merger. Information regarding any interests that Hollywood's executive officers and directors may have in the transaction with Movie Gallery will be set forth in the proxy statement. About Movie Gallery Movie Gallery, Inc. is the third-largest company in the specialty video retail industry based on revenues and the second-largest in the industry based on stores. As of December 31, 2004, Movie Gallery owned and operated 2,482 stores located primarily in the rural and secondary markets throughout North America. Since the company's initial public offering in August 1994, Movie Gallery has grown from 97 stores to its present size through acquisitions and new store openings. About Hollywood Entertainment Hollywood Entertainment Corporation is a rental retailer of digital video discs (DVDs), videocassettes and video games in the United States. During the year ended December 31, 2003, the Company operated 1,920 Hollywood Video stores in 47 states and the District of Columbia. Hollywood Entertainment also operates 595 Game Crazy stores, which are game specialty stores where game enthusiasts can buy, sell and trade new and used video game hardware, software and accessories. Hollywood Video stores represented approximately 89%, and its Game Crazy stores represented approximately 11% of the Company's total revenue in 2003. As reported in the Troubled Company Reported on Aug. 10, 2004, Standard & Poor's Ratings Services' ratings for Hollywood Entertainment Corporation, including the 'B+' corporate credit rating, remain on CreditWatch with negative implications. The ratings were initially placed on CreditWatch March 29, 2004, when Hollywood had announced it entered into a definitive merger agreement to be acquired by an affiliate of Leonard Green & Partners L.P. Wilsonville, Oregon-based Hollywood Entertainment operates more than 1,900 Hollywood Video stores in 47 states and approximately 600 Game Crazy video game specialty stores. IMMUNE RESPONSE: Appoints Robert Knowling as Chairman of the Board ------------------------------------------------------------------ Robert E. Knowling, Jr., has joined Immune Response Corporation's (Nasdaq:IMNR) Board of Directors as Chairman. Mr. Knowling may be best known for his career in telecommunications, including positions with Indiana Bell, Ameritech, US West and Covad. He is a nationally known leader in corporate management and currently serves on the Board of Directors of the Hewlett-Packard Company and Heidrick & Struggles International, Inc., among others. "We welcome Bob to lead our Board and are excited about this new era for The Immune Response Corporation. Bob is a nationally recognized expert in strategic planning, capital development and management, and this expertise will be invaluable to us," said John N. Bonfiglio, Ph.D., President and Chief Executive Officer of The Immune Response Corporation. "Bob's experience, business acumen and vision will be especially important as we move toward late-stage development and commercialization of our lead products for HIV and MS. Working closely together we will move this Company forward." "I am looking forward to working with the impressive management and scientific teams at The Immune Response Corporation. This company has come a long way in the last few years, and I believe its focus on immune-based therapies for treating HIV and MS can have a real impact on human health. I am honored to be able to play a part in the development of these immune-based therapies and help bring them to the patients who so desperately need them," said Mr. Knowling. James B. Glavin, who has served as Chairman of the Company's Board of Directors since May 1993, will leave the board later this year. As a lead architect of the Ameritech's re-engineering transformation, Mr. Knowling reported directly to the chairman; and was named vice president of Network Operations in 1994. He then joined US WEST in March 1996 as vice president of Network Operations and in 1997 became EVP of Operations & Technology. In July 1998, he joined Covad Communications, a provider of Digital Subscriber Line (DSL) services to homes and small business customers, as chairman, president and chief executive officer. While at Covad, Mr. Knowling was responsible for day-to-day operations, building strategic relationships and all aspects of the company's national roll-out as the network was built to deliver DSL across the United States. He was instrumental in taking the company public in January 1999 and helped quickly scale the company to be able to deliver DSL nationwide as Covad became the leading national DSL provider. After Mr. Knowling left Covad in 2001, market forces compelled the company to reorganize in Federal bankruptcy proceedings. In January 2003, Mr. Knowling joined the New York City Department of Education as Chief Executive Officer of their Leadership Academy, which is chartered with developing the next generation of principals in the New York City Public School System; currently undergoing a major transformation. The Leadership Academy is funded by the Partnership for NYC, the Wallace Foundation, The Broad Foundation, and the NYC business community. Mr. Knowling serves on the board of directors for Hewlett-Packard Company; Ariba, Inc.; and Heidrick & Struggles International, Inc. He is also a member of the advisory boards for Ontologent, Inc.; Northwestern University's Kellogg Graduate School of Management; and the University of Michigan Graduate School of Business. Mr. Knowling earned a Bachelor of Arts degree from Wabash College and a Master of Business Administration degree from Northwestern University's Kellogg Graduate School of Business. About the Company The Immune Response Corporation (Nasdaq:IMNR) is a biopharmaceutical company dedicated to becoming a leading immune- based therapy company in HIV and multiple sclerosis (MS). The Company's HIV products are based on its patented whole-killed virus technology, co-invented by Company founder Dr. Jonas Salk, to stimulate HIV immune responses. REMUNE(R), currently in Phase II clinical trials, is being developed as a first-line treatment for people with early-stage HIV. We have initiated development of a new immune-based therapy, IR103, which incorporates a second- generation immunostimulatory oligonucleotide adjuvant and is currently in Phase I/II clinical trials in Canada and the United Kingdom. The Immune Response Corporation is also developing an immune-based therapy for MS, NeuroVax(TM), which is currently in Phase II and has shown potential therapeutic value for this difficult-to-treat disease. * * * Going Concern Doubt The Immune Response Corporation's former independent certified public accountants, BDO Seidman, LLP, indicated in their report on the 2003 consolidated financial statements that there is substantial doubt about the Company's ability to continue as a going concern. The Company has incurred net losses since inception and has an accumulated deficit of $323,494,000 as of September 30, 2004. The Company says it will not generate meaningful revenues in the foreseeable future. These factors, among others, raised substantial doubt about the Company's ability to continue as a going concern. INTERACTIVE BRAND: Withdraws Appeal of AMEX Delisting Notice ------------------------------------------------------------ Interactive Brand Development, Inc. (AMEX:IBD) has submitted to the AMEX Listing Qualifications Hearings Department a notice requesting withdrawal of its appeal of the AMEX staff's decision to commence delisting procedures. As a result of the Company's withdrawal notice, the AMEX will initiate the process of delisting the Company's common stock from AMEX. The Company anticipates that trading in the Company's common stock on the AMEX will continue through Friday, Feb. 18, 2005. Current trading information about the Company's common stock can also be obtained from the Pink Sheets -- http://www.pinksheets.com/ Also, the Company is in the process of identifying market makers to apply for quotation of the Company's common stock on the OTC Bulletin Board, although no assurances can be made that the Company's common stock will be eligible for quotation. The basis for AMEX proceeding with delisting the Company's common stock is set forth in the Company's press release dated Jan. 14, 2005 and its Current Report on Form 8-K, filed on Jan. 14, 2005. About the Company Interactive Brand Development, Inc. is a media and marketing holding company that owns Internet Billing Company (iBill), a leading online payments company, and owns a significant interest in Penthouse Media Group (PMG), publisher of Penthouse Magazine, a brand-driven global entertainment business founded in 1965 by Robert C. Guccione. PMG's flagship PENTHOUSE(TM) brand is one of the most recognized consumer brands in the world and is widely identified with premium entertainment for adult audiences. PMG is operated by affiliates of Marc Bell Capital Partners, LLC. IBD also has investments in online auctions and classic animation libraries. * * * Auditors Express Doubt On Jan. 15, 2003, Care Concepts dismissed Angell & Deering as its principal accountants and auditors. A&D's report on the Company's financial statements expressed substantial doubt about the Company's ability to continue as a going concern. On Jan. 15, 2003, William J. Hadaway was hired to review the Company's 2002 financial statements. On Oct. 30, 2003, Care Concepts dismissed WJH. WJH shared A&D's doubts. Effective Oct. 30, 2003, the Company engaged the accounting firm of Jewett, Schwartz & Associates as its new independent accountants to audit the financial statements for the fiscal year ending Dec. 31, 2003. At Sept. 30, 2004, the Company's balance sheet shows $595,034 in current assets and $631,678 in current liabilities. The company balance sheet shows that it's solvent, with $6.4 million in shareholder equity. The company's posted recurring losses and reports negative cash flows from operations. INTERSTATE BAKERIES: Wants Court Nod to Implement KERP ------------------------------------------------------ Interstate Bakeries Corporation and its debtor-affiliates' ability to achieve their restructuring objections in their Chapter 11 cases depends largely on the active participation and dedication of 494 mission-critical management employees who have the knowledge, experience and skills necessary to manage the Debtors' businesses. J. Eric Ivester, Esq., at Skadden Arps Slate Meagher & Flom, LLP, in Chicago, Illinois, tells the Court that the Key Employees assist the Debtors in further developing and implementing the Debtors' restructuring initiatives while continuing to ensure that the Debtors' bakeries and other facilities operate effectively to produce quality products that meet their customers' supply requirements. Accordingly, the Debtors seek the Court's authority to implement a Key Employee Retention Plan. Mr. Ivester explains that the KERP is important because: (1) the viability of the Debtors' restructuring efforts would be substantially diminished if the Debtors lose the services of their Key Employees; (2) Key Employees determine the Debtors' operating profitability; (3) the Debtors need their Key Employees to maintain the managerial consistency necessary for the Debtors' highly complex baking, sales and delivery operation, and achieve their quality and profitability objectives; and (4) the KERP will serve to reduce Key Employee turnover, which would otherwise cause significant cost to the Debtors. The KERP covers 494 of the Debtors' 5,700 non-union employees. The Key Employees are divided into seven tiers according to, among other things, the relative seniority of their positions: Tier Tier Participants ---- ------------------------------------------------ 1st up to 5 executive vice presidents and senior vice presidents, and 1 vice president 2nd up to 26 executive vice presidents, senior vice presidents and directors and key employees 3rd up to 13 vice presidents, directors and managers 4th up to 88 vice presidents, directors and managers 5th up to 21 vice presidents, directors and managers 6th up to 48 plant managers 7th up to 292 other managers Retention Bonuses The KERP, Mr. Ivester says, provides for Retention Bonuses to reward Senior Participants who remain employed by the Debtors throughout their Chapter 11 cases. The Retention Bonuses equal to: -- 20% of base salary for Tier 6 Participants -- 25% of base salary for Tier 5 Participants -- 35% of base salary for Tier 4 Participants -- 40% of base salary for Tier 3 Participants -- 50% of base salary for Tier 2 Participants -- 60% of base salary for Tier 1 Participants The Debtors estimate that the maximum possible cost of the Retention Bonuses would be $7,700,000. Restructuring Performance Bonuses In lieu of the Debtors' 2005 annual incentive bonus plan, which has been terminated, the KERP also contains a performance component. The Restructuring Performance Bonus is designed to encourage all Participants to increase the Debtors' enterprise value, and thus increase value and returns for all stakeholders, during the Debtors' cases. If Interstate Bakeries achieves the Target EBITDAR for fiscal 2005, Key Employees would be eligible to receive a Restructuring Performance Bonus that is equal to: 5.0% of base salary for Tier 7 Participants 10.0% of base salary for Tier 6 Participants 12.5% of base salary for Tier 5 Participants 17.5% of base salary for Tier 4 Participants 20.0% of base salary for Tier 3 Participants 25.0% of base salary for Tier 2 Participants 30.0% of base salary for Tier 1 Participants The aggregate amount of Baseline Restructuring Performance Bonuses is $5,000,000. Termination Any Key Employee who is terminated for cause or voluntarily leaves the Debtors' employment without good reason will automatically will forfeit his or her right to payment of any amount under the KERP. Any amounts that would have otherwise been payable to a Key Employee under the KERP, will be returned to the Debtors' estates and available for distribution to the Debtors' secured and unsecured creditors. Priority Status Any unpaid Retention Bonuses or Restructuring Performance Bonuses would be accorded administrative expense status and priority under Sections 503(b)(1)(A) and 507(a)(1) of the Bankruptcy Code. Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh baked bread and sweet goods, under various national brand names, including Wonder(R), Hostess(R), Dolly Madison(R), Baker's Inn(R), Merita(R) and Drake's(R). The Company employs approximately 32,000 in 54 bakeries, more than 1,000 distribution centers and 1,200 thrift stores throughout the U.S. The Company and seven of its debtor-affiliates filed for chapter 11 protection on September 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6.0% senior subordinated convertible notes due August 15, 2014, on August 12, 2004) in total debts. (Interstate Bakeries Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service, Inc., 215/945-7000) JAZZ PHOTO: Imation Agrees to Settle Litigation for $21 Million --------------------------------------------------------------- Imation Corp (NYSE: IMN) disclosed that its final fiscal 2004 results will include an additional net after tax expense in discontinued operations of $13 million. This expense is associated with the proposed settlement of all claims in connection with the Company's sale of allegedly defective photo film to Jazz Photo Corp. The Company previously issued its fourth quarter 2004 earnings press release on Jan. 25, 2005, without including this expense because the settlement was not contemplated at that time. The litigation surrounding this issue began in 1999 and involved a business that Imation subsequently sold. Trial commenced on Jan. 10, 2005, and matters that gave rise to the settlement opportunity arose just in the last two weeks. Jazz Photo is currently under Chapter 11 protection in the U.S. Bankruptcy Court for the District of New Jersey. The Jazz Photo creditors' committee has been authorized to seek approval of the proposed settlement, which is now pending approval in the bankruptcy court. "We are pleased that we may now be able to put this matter behind us. While we always disputed the legitimacy of the claims against Imation, and are willing to defend ourselves at trial, the opportunity to end this dispute would remove a significant distraction to the company and eliminate ongoing litigation expense," said Bruce A. Henderson, Imation chairman and CEO. If the bankruptcy court approves the settlement, Imation will recognize a $13 million charge, net of taxes, in discontinued operations in the fourth quarter of 2004. While the company previously reported fourth quarter and full-year 2004 results, it has not yet filed its Report on Form 10K. Accounting rules require that a subsequent event such as this be reported in the upcoming filing and recognized in the period being reported on. As a result, for the quarter ended Dec. 31, 2004, the Company will report a net loss including discontinued operations of $7.9 million, equal to a loss of $0.23 per fully diluted share. For the full year 2004, the Company will report net income including discontinued operations of $29.9 million or $0.84 earnings per fully diluted share. Income from continuing operations and per-share earnings on continuing operations will remain unchanged from the Company's previously issued earnings release. Approximately $21 million in cash will be paid in 2005 related to this settlement with an offsetting cash benefit of approximately $8 million to be realized as the Company recognizes the tax deductibility of this settlement during 2005. Ongoing litigation expense associated with this issue has been recorded in discontinued operations in previous periods. About Imation Corp Imation Corp is a leading developer, manufacturer and supplier of magnetic and optical removable data storage media. Additional information about Imation is available on the company's website at http://www.imation.com/or by calling 1-888-466-3456. About Jazz Photo Jazz Photo Corp., is engaged in the design, development, importation and wholesale distribution of cameras and other photographic products in North America, Europe and Asia. The Company filed for chapter 11 protection on May 20, 2003 (Bankr. N.J. Case No. 03-26565). Michael D. Sirota, Esq., and Warren A. Usatine, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it estimated $50 million in debts and assets. JORGENSEN CO: S&P Upgrades Rating on Senior Secured Notes to B -------------------------------------------------------------- Standard & Poor's Ratings Services raised its secured debt rating on Brea, California-based Jorgensen (Earle M.) Co.'s 9.75% senior secured notes due 2012 to 'B' from 'B-'. The corporate credit rating was affirmed at 'B+'. The outlook is stable. Total debt was $418 million at Dec. 31, 2004. The upgrade on the 9.75% notes due 2012 reflects their improved recovery prospects given the meaningful increase in the company's asset base due mainly to increased working capital levels from stronger market conditions and Standard & Poor's assumption that revolver borrowings will be lower than original estimates in light of favorable steel industry conditions. "The ratings on Jorgensen reflect its below-average business position, aggressive financial management, and volatile cash flow due to working capital swings," said Standard & Poor's credit analyst Dominick D'Ascoli. Jorgensen is a relatively large independent distributor of metal products in North America that provides value-added services on approximately 65% of its products, including cutting, honing, polishing, and other services. Jorgensen benefits from broad geographic coverage, a diversified customer base, and economies of scale in purchasing and marketing operations compared with most other industry participants. JOY GLOBAL: Improved Credit Profile Prompts S&P to Lift Ratings --------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Joy Global, Inc., to 'BB+' from 'BB', raised all other ratings on the company, and removed all ratings from CreditWatch, where they had been placed on Oct. 22, 2004. The outlook is positive on the Milwaukee, Wisconsin-based company. Rated debt is approximately $400 million. "This action reflects the improved credit profile because of the solid improvement in the company's operating cash flow and capital structure," said Standard & Poor's credit analyst John Sico. "Although the progress is the direct result of the upturn in commodity markets leading to increased demand for the company's mining equipment, management's financial policies should sustain credit measures consistent with the higher rating, despite an inevitable cyclical downturn." Through its P&H Mining Equipment and Joy Mining Machinery divisions, Joy Global serves surface and subsurface mining markets, selling electric mining shovels, draglines, blast hole drills, and complete longwall and continuous mining systems. "We expect relatively stable aftermarket demand and near-term end- market fundamentals to sustain the company's strong cash flow generation in the near term, despite possible fluctuations in demand for new equipment," Mr. Sico said. "Sustained improvement could lead to a higher rating over the intermediate term if the company continues to perform well while maintaining financial discipline commensurate with an investment-grade financial policy. Such discipline should include restraint on such shareholder value initiatives as large increases in dividends or large share repurchases, because if ratings were to be raised we would expect a low level of debt given the cyclicality of end markets." KAISER ALUMINUM: Can Use Up to $200 Million in New DIP Financing ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved Kaiser Aluminum's previously announced new financing arrangement. The new financing arrangement is an agreement with JPMorgan Chase Bank, National Association, J.P. Morgan Securities Inc., and The CIT Group/Business Credit Inc., under which Kaiser will be provided with a new $200 million Debtor-in-Possession credit facility intended to remain in place until the company's emergence from Chapter 11. The new financing arrangement also provides a commitment to Kaiser for a multi-year exit financing in the form of a $200 million revolving credit facility and a fully drawn term loan of up to $50 million upon the company's emergence from Chapter 11. The company closed on the new DIP credit facility on Feb. 11. Kaiser President and Chief Executive Officer Jack A. Hockema said, "Approval of the new financing arrangement demonstrates Kaiser's continuing financial stability, and it is another important step as we prepare to file our formal Plan of Reorganization and Disclosure Statement within the next few months." 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, represents the Debtors in their restructuring efforts. On June 30, 2004, the Debtors listed $1.619 billion in assets and $3.396 billion in debts. KALYPSO'S LLC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Kalypso's, L.L.C. 104 Tuscany Drive Destin, Florida 32541 Bankruptcy Case No.: 05-30264 Type of Business: The Debtor operates a restaurant. Chapter 11 Petition Date: February 10, 2005 Court: Northern District of Florida (Pensacola) Debtor's Counsel: Hoke Smith, III, Esq. Richard H. Powell & Associates, P.A. P.O. Drawer 2167 Fort Walton Beach, FL 32549 Tel: 850-243-7184 Fax: 850-244-2148 Estimated Assets: $1 Million to $10 Million Estimated Debts: $100,000 to $500,000 Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Inacomp Computer services $99,817 445 Grace Avenue Panama City, FL 32401 Associated Industries Insurance premium $7,791 P.O. Box 310704 Boca Raton, FL 33431 Viking Services Services $7,464 P.O. Box 59207 Minneapolis, MN 55459 Gulf Power Unpaid utilities $4,156 Okaloosa Gas Unpaid utilities $2,028 Sprint Yellow Pages Advertising $1,596 Dave's A/C & Refrigeration Services $1,500 Quantum of Fort Walton, LLC Advertising $1,177 Island Oasis Trade debt $1,120 Sprint Unpaid utilities $1,075 Auto-Chlor Dishwasher lease $792 Amison Seafood, Inc. Trade debt $749 Coca Cola Trade debt $660 Daily News Advertising $543 SOS Printing Printing services $477 Birmingham Hide & Tallow Co. Services $450 First Insurance Funding Insurance premiums $284 Group NBS Trade debt $276 Thrifty Nickel Advertising $193 Taylor Linen Services Trade debt $174 KMART CORP: Eddie Lampert Discloses 53.7% Equity Stake ------------------------------------------------------ In a regulatory filing with the Securities and Exchange Commission dated January 31, 2005, Edward S. Lampert discloses that he is now deemed to beneficially own 54,778,724 shares of Kmart Common Stock: No. of Shares Percentage Beneficially Outstanding Reporting Person Owned of Shares ---------------- ------------- ----------- Edward S. Lampert 54,778,724 53.7% ESL Investments, Inc. 54,778,724 53.7% CRK Partners, L.L.C. 40,546,046 39.8% CRK Partners II, L.P. 40,546,022 39.8% RBS Partners, L.P. 13,946,572 13.7% ESL Partners, L.P. 9,398,587 9.2% ESL Investors L.L.C. 4,547,985 4.5% RBS Investment Management, L.L.C. 286,106 0.3% ESL Institutional Partners L.P. 286,106 0.3% On January 31, 2005, certain of the Reporting Persons converted the unpaid principal amount of the Convertible Notes plus accrued and unpaid interest into 6,269,998 shares of Kmart Common Stock in the aggregate. In particular, pursuant to the conversion, CRK II received 4,643,292 shares of Kmart Common Stock; Partners received 1,073,062 shares of Kmart Common Stock; Investors will receive 520,860 shares of Kmart Common Stock upon release of those shares from escrow; and Institutional received 32,784 shares of Kmart Common Stock. Mr. Lampert is the sole shareholder, chief executive officer and a director of ESL. ESL is the managing member of CRK LLC and RBSIM and the general partner of RBS. CRK LLC is the general partner of CRK II. RBS is the managing member of Investors and the general partner of Partners. RBSIM is the general partner of Institutional. 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 intends to buy Sears, Roebuck & Co., for $11 billion to create the third-largest U.S. retailer, behind Wal-Mart and Target, and generate $55 billion in annual revenues. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act expired on Jan. 27, without complaint by the Department of Justice. Kmart and Sears expect their merger to close next month. (Kmart Bankruptcy News, Issue No. 89; Bankruptcy Creditors' Service, Inc., 215/945-7000) LAIDLAW INT'L: Completes $820-Mil Sale of Healthcare Companies -------------------------------------------------------------- Laidlaw International, Inc. (NYSE:LI) has completed the sale of its healthcare companies, American Medical Response and EmCare, to Emergency Medical Services L.P., an affiliate of Onex Corporation (TSX: OCX.SV), for $820 million and net cash proceeds of $775 million. Proceeds from the transactions were used to retire approximately $573 million of outstanding borrowings under the company's Term B senior secured term facility. Laidlaw International intends to use a portion of the remaining proceeds to purchase all or some of the approximately 3.8 million shares of Laidlaw International common stock held in trust for the benefit of the Greyhound U.S. Pension Plans. Headquartered in Arlington, Texas, Laidlaw, Inc., now known as Laidlaw International, Inc., -- http://www.laidlaw.com/-- is North America's #1 bus operator. Laidlaw's school buses transport more than 2 million students daily, and its Transit and Tour Services division provides daily city transportation through more than 200 contracts in the US and Canada. Laidlaw filed for chapter 11 protection on June 28, 2001 (Bankr. W.D.N.Y. Case No. 01-14099). Garry M. Graber, Esq., at Hodgson Russ LLP, represents the Debtors. Laidlaw International emerged from bankruptcy on June 23, 2003. * * * As reported in the Troubled Company Reporter on Dec. 27, 2004, Moody's Investors Service has placed the long-term debt ratings of Laidlaw International, Inc., under review for possible upgrade. The review is prompted by the recent announcement by the company that it had entered into a definitive agreement to sell both of its healthcare businesses to Onex Partners LP, an affiliate of Onex Corporation, for $820 million. Net proceeds after fees and assumption of a small amount of debt by the buyer is estimated at $775 million, with a majority of the proceeds intended to be used to repay substantial levels of Laidlaw's existing debt. Moody's has also assigned a Speculative Grade Liquidity Rating of SGL-2 to Laidlaw International, Inc. As part of the rating action, Moody's has reassigned to Laidlaw International, Inc., certain ratings, including the senior implied and senior unsecured issuer ratings, originally assigned at Laidlaw, Inc., in order to reflect more appropriately the company's current organizational structure. As reported in the Troubled Company Reporter on Dec. 9, 2004, Standard & Poor's Ratings Services placed its ratings, including its 'BB' corporate credit rating, on Laidlaw International, Inc., on CreditWatch with positive implications. The rating action follows Laidlaw's announcement that it has entered into definitive agreements to sell both of its health care companies, American Medical Response and Emcare, to Onex Partners L.P. for $820 million. Laidlaw expects to receive net cash proceeds of $775 million upon closing of the transaction, which is expected by the end of March 2005. Naperville, Illinois-based Laidlaw currently has about $1.5 billion of lease-adjusted debt. LEGACY HEALTH CARE: Case Summary & 80 Largest Unsecured Creditors ----------------------------------------------------------------- Lead Debtor: Legacy Health Care LLC 199 South Union Road Williamsville, New York 14221 Bankruptcy Case No.: 05-01112 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Ridge View Manor LLC 05-01114 Sheridan Manor LLC 05-01116 Williamsville Suburban LLC 05-01117 Type of Business: The Debtor provides nursing, sub-acute care, rehabilitation, and assisted living care services. See http://www.zacherhealthcare.com/ Chapter 11 Petition Date: February 8, 2005 Court: Middle District of Florida (Orlando) Judge: Karen S. Jennemann Debtors' Counsel: Elizabeth A. Green, Esq. R. Scott Shuker, Esq. Gronek & Latham, LLP 390 North Orange Avenue, Suite 600 Orlando, FL 32801 Tel: 407-481-5800 Fax: 407-481-5801 Estimated Assets Estimated Debts ---------------- --------------- Legacy Health Care LLC $100,000 to $500,000 $1 M to $10 M Ridge View Manor LLC $1 M to $10 M $1 M to $10 M Sheridan Manor LLC $1 M to $10 M $1 M to $10 M Williamsville Suburban $1 M to $10 M $1 M to $10 M LLC A. Legacy Health Care LLC's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Forest Financial Trade debt $402,993 9600 Main Street #3 Clarence, NY 14031 Damon & Morey LLP Legal Services $368,648 c/o Chris Green 100 Cathedral Place 298 Main Street Buffalo, NY 14202 Blue Cross/Blue Shield WNY Medical Insurance $158,524 P.O. Box 80 Buffalo, NY 14210 Freed Maxick Sachs Murphy Trade debt $109,494 Advance 2000 Trade debt $64,480 Salem Solutions LLC Trade debt $53,369 RSM McGladrey Inc. Trade debt $50,615 TBT Enterprises Trade debt $40,274 KLD Ventures/Summit Health Trade debt $27,000 Long Term Care Risk Mgmt. Trade debt $23,502 Jackson Lewis Schnitzler LLP Legal Services $23,212 Dental Shop Trade debt $19,199 Simplex Grinnell Security $18,695 Benefits Plus of NY Trade debt $18,294 ComDoc Trade debt $15,789 Lawley Insurance Group Insurance $15,578 Allstate Life Insurance Insurance $13,215 Elder Medical Services Trade debt $12,600 Nationwide Insurance Insurance $11,631 Medican Group LLC Trade debt $11,500 B. Ridge View Manor LLC's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Comm. of Admin. & Finance $653,045 111 City Hall Buffalo, NY 14202 2121 Main Street Pharmacy Trade debt/Lawsuit $368,439 c/o Philip M. Marshall Esq. (includes 9 Amigone Sanchez Mattrey defendants) 1300 Main Place Tower Buffalo, NY 14202 Long Term Care Risk Mgmt. Trade debt $358,177 170 Northpointe Parkway Amherst, NY 14228 Erie County Tax Department Real Property taxes $217,603 Care Center Pharmacy Trade debt $192,098 NYS Health Facilities Assoc. Trade debt $171,516 Maxim Healthcare Services Trade debt $143,028 McKesson Medical-Surgical Trade debt $134,519 Access Solutions Trade debt $125,100 Nor-Am Patient Care Product Trade debt $124,299 Forest Financial Inc. Worker's Comp. $118,188 Insurance BlueCross BlueShield of WNY $103,284 Murray Roofing Co., Inc. Trade debt $94,879 Main Street Pharmacy Trade debt $93,867 Benefits Plus of NY Trade debt $93,104 Niagara Mohawk Utilities $83,837 Prevent Products, Inc. Trade debt $72,988 Buffalo Pharmacy $70,383 U. S. Food Service Trade debt $55,702 Invacare Continuing Care Trade debt $51,209 Group C. Sheridan Manor LLC's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Long Term Care Risk Mgmt. Trade debt $641,228 c/o Warren-Hoffman 170 Northpointe Parkway Amherst, NY 14228 Northern Healthcare Capital Trade debt $242,067 99 Founders Plaza/3rd Fl. Box 33078 E. Hatford, CT 06108 Care Center Pharmacy Trade debt $152,283 c/o Donald Nash Jr. P.O. Box 552 Dunkirk, NY 14048 Main Street Pharmacy Trade debt $119,007 Maxim Healthcare Services Trade debt $114,227 Forest Financial Inc. Refinancing of $98,490 Worker's Comp Premiums Benefits Plus of New York Trade debt $97,852 Niagara Mohawk Utilities/Electric $90,837 NYS Health Facilities Assoc. Trade debt $89,733 BlueCross BlueShield of WNY Trade debt $76,495 McKeeson Medical-Surgical Trade debt $74,273 Medical Staffing Network Trade debt $63,337 Harter, Secrest, & Emery LLP Trade debt $62,003 KLD Ventures/Summit Health Trade debt $54,345 Catholic Health System Lab Trade debt $35,627 D'Alba & Donovan CPA Fees $32,575 Wilcare Trade debt $30,046 Direct Labor Training Trade debt $30,000 MDTS Trade debt $29,896 McKeeson General Medical Trade debt $28,604 D. Williamsville Suburban LLC's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Long Term Care Risk Mgmt. Trade debt $442,136 c/o Warren-Hoffman 170 Northpointe Parkway Amherst, NY 14228 Niagara Mohawk Utilities $434,603 P.O. Box 4798 Syracuse, NY 13221 Northern Healthcare Capital Sold Accounts $400,282 99 Founders Plaza/3rd Fl. Receivable Box 33078 E. Hatford, CT 06108 2121 Main Street Pharmacy Trade Debt/Lawsuit $368,439 c/o Philip M. Marshall Esq. (includes 9 Amigone Sanchez Mattrey defendants 1300 Main Place Tower Buffalo, NY 14202 Care Center Pharmacy Trade debt $268,646 c/o Donald Nash Jr. P.O. Box 552 Dunkirk, NY 14048 Forest Financial Inc. Refinancing of $230,262 Worker's Comp. Premium BlueCross/BlueShield of WNY Trade debt $213,361 Benefits Plus of New York Trade debt $181,536 Medical Staffing Network Trade debt $155,663 Maxim Healtchare Services Trade debt $154,488 New 165 S. Union Road, Inc. Trade debt $151,980 McKesson Medical-Surgical Trade debt $150,775 NYS Health Facilities Assoc. Trade debt $142,678 MDTS-dba HealthTrac Trade debt $110,635 Goodcare Home Health Service Trade debt $102,666 U. S. Food Service Trade debt $71,188 McKesson General Medical Trade debt $70,856 NYSEG Solutions, Inc. Trade debt $65,234 Sibley Nursing Personnel Trade debt $63,081 Service Nursefinders Trade debt $54,626 MAYTAG CORPORATION: Declares $0.18 Dividend Per Common Share ------------------------------------------------------------ The Maytag Corporation (NYSE: MYG) board of directors declared a quarterly dividend of 18 cents a share on the firm's common stock. The dividend is payable March 15, 2005, to shareowners of record at the close of business March 1, 2005. Maytag Corporation is a leading producer of home and commercial appliances. Its products are sold to customers throughout North America and in international markets. The corporation's principal brands include Maytag(R), Hoover(R), Jenn-Air(R), Amana(R), Dixie-Narco(R) and Jade(R). * * * At Jan. 1, 2005, Maytag's balance sheet reflected a $75,024,000 stockholders' deficit, compared to $65,811,000 of positive equity at Jan. 3, 2004. As reported in the Troubled Company Reporter on Oct. 27, 2004, Fitch Ratings downgraded the senior unsecured rating on Maytag Corp. to 'BB+' from 'BBB-' and the short-term debt rating to 'B' form 'F3'. The Rating Outlook is Stable. MEDCOMSOFT INC: Raises $2.8 Million in Rights Offering ------------------------------------------------------ MedcomSoft, Inc., (TSX - MSF) closed its previously announced Rights Offering, and that an aggregate of 5,622,877 Units have been issued under such financing at $0.50 per Unit. As a result, the Company raised gross proceeds of approximately $2.8 million. Each Unit consists of one common share and one quarter common share purchase warrant. A full common share purchase warrant entitles the holder to purchase one common share of MedcomSoft at an exercise price of $0.65 and is exercisable for a 24-month period from the date hereof. Update on Private Placement The Company also announced that it has been informed by Loewen, Ondaatje, McCutcheon Limited, the exclusive placement agent of its previously announced brokered private placement, that the private placement of 6 million Units for gross proceeds of $3 million will close on February 11, 2005. As previously disclosed, Dr. Sami Aita, Chairman and Chief Executive Officer of the Company, had, subject to the provisions of securities regulations, committed to participate in the Rights Offering in the amount equal to his full pro rata share, namely $500,000. In addition, Dr. Aita had committed to subscribe for an additional $300,000, subject to the rights of other shareholders to subscribe for additional Units and certain restrictions under applicable securities regulations. Dr. Aita had recently provided $800,000 of funds to the Company to assist with its working capital needs. To the extent that Dr. Aita purchased Units under the Rights Offering or otherwise, he had agreed that the Company could apply such funds towards the purchase price of such Units. In accordance with the provisions of securities regulations, the maximum number of Units that Dr. Aita was entitled to subscribe for was $353,644 of Units under the Rights Offering, and accordingly the Company has agreed to issue 892,712 Units to him under a private placement in order to utilize the remaining sum of $446,356 from the funds advanced to the Company by Dr. Aita. This private placement will also close on February 11, 2005. Accordingly, the Company expects to issue 6,892,712 Units tomorrow for gross proceeds of $3,446,356. MedcomSoft, Inc., designs, develops and markets cutting-edge software solutions to the healthcare industry. MedcomSoft has pioneered the use of codified point of care medical terminologies and intelligent pen-based data capture systems to create a new generation of electronic medical records -- EMR. As a result of MedcomSoft innovations, physicians and managed care organizations can now securely build and exchange complete, structured and homogeneous electronic patient records. MedcomSoft applications are written with the latest Microsoft tools to run on the Windows platform (Windows 2000 & XP), operate with MS SQL Server 2000(TM), support MS Terminal Server and fully integrate with MS Office 2003, Exchange and Outlook(R). MedcomSoft applications are fully compatible with Tablet PCs and wireless technology. The Company's September 30, 2004, balance sheet shows a $1,372,508 stockholders' deficit, compared to a $1,436,072 stockholders' deficit at June 30, 2004. MERRILL LYNCH: S&P Places Low-B Ratings on Classes F & G Certs. --------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on six classes of Merrill Lynch Mortgage Investors Inc.'s mortgage pass-through certificates from series 1998-C3. At the same time, ratings are affirmed on three other classes from the same transaction. The raised and affirmed ratings reflect credit enhancement levels that adequately support the ratings as well as the resolution of specially serviced loans over the past 12 months. As of the Jan. 15, 2005, remittance report, the collateral pool consisted of 111 loans with an aggregate principal balance of $478.1 million, down from 139 loans totaling $638.4 million at issuance. The master servicer, Wachovia Bank N.A., provided year-end 2003 or more recent net cash flow -- NCF -- debt service coverage -- DSC -- figures for 92% of the pool. Based on this information, Standard & Poor's calculated a current weighted average DSC, excluding credit-tenant lease and defeased loans, of 1.47x, up slightly from 1.43x at issuance. The trust has experienced six losses totaling $18.1 million, and one appraisal reduction amount -- ARA -- is in effect for $3.4 million. One loan ($8.7 million, 2%) is delinquent, while the remaining loans in the pool are current. The current top 10 loans have an aggregate outstanding balance of $192.7 million (40%). The weighted average DSC for the top 10 loans has increased to 1.52x, up slightly from 1.46x at issuance. The increased DSC occurred despite significant performance declines for five of the top 10 loans, which are discussed. Standard & Poor's reviewed property inspections provided by the master servicer for all of the assets underlying the top 10 loans and all were characterized as "excellent," "good," or "fair." According to the special servicer, there are two specially serviced loans ($18.2 million, 4%) as of the Jan. 15, 2005 remittance date. A 292-room, full-service hotel in Essington, Pennsylvania secures the 10th-largest loan ($9.5 million, 2%), which is with GE Capital Realty Group, Inc. The loan is current, but was the subject of litigation surrounding environmental issues. However, a settlement was recently reached in the litigation. As part of that settlement, the loan was brought current, a principal and interest reserve for approximately $900,000 was established, and an approximate $1.3 million property improvement plan reserve was funded. An ARA of $3.4 million is still outstanding against the loan. A 464-unit multifamily property in Dallas, Texas secures an $8.7 million (2%) loan that is with GE Capital Realty Group, Inc. The loan was transferred to the special on Dec. 30, 2004, after the borrower requested three months forbearance and stopped remitting payments. The property is now 60 to 90 days delinquent. Wachovia reported a watchlist of 37 loans ($204.6 million, 43%). The majority of these loans are on the watchlist due to occupancy issues, lease expirations, or low NCF DSC levels. The second-, third-, fourth-, fifth-, sixth-, and eighth-largest loans ($107.1 million, 22%) are on the watchlist due to either low occupancies or low NCF DSCs. -- The second-, fourth-, and sixth-largest loans ($61.4 million, 13%) are secured by multifamily properties. The second- and fourth-largest loans are secured by properties in Farmington Hills, Michigan and Houston, Texas, respectively, and both suffer from low occupancy. The second-largest loan ($32.4 million, 7%) was 74% occupied as of Sept. 17, 2004, while the fourth-largest loan ($16.6 million, 3%) was 77% occupied as of Dec. 7, 2004. The sixth-largest loan ($12.4 million, 3%) is secured by a property in Dallas, Texas. This loan suffers from low NCF DSC of 0.88x (as of Dec. 31, 2003), despite occupancy of 96% for the same period, which is due to rent concessions. -- The third- and fifth-largest loans ($36.1 million, 8%) are secured by retail properties in Lawrence Township, N.J. and Conshohocken, Pennsylvania, respectively. Both loans are on Wachovia's watchlist for declines in NCF DSC from issuance of 19% and 17%, respectively. -- The final top 10 loan on the watchlist, the eighth-largest loan ($9.6 million, 2%), is secured by an office property in San Francisco, California. The property had suffered from occupancy issues. However, the borrower subsequently leased all 45,444 square feet for a 10-year term beginning on Aug. 1, 2004. The trust collateral is located across 28 states with only: * Texas (18%), * New York (16%), and * California (15%) accounting for more than 10% of the pool balance. Property concentrations greater than 10% of the pool balance are found in: * multifamily (40%), * retail (23%), * office (16%), and * industrial (10%) property types. Standard & Poor's stressed various loans with credit issues as part of its pool analysis. The resultant credit enhancement levels support the revised ratings. Ratings Raised Merrill Lynch Mortgage Investors, Inc. Mortgage Pass-Through Certs Series 1998-C3 Rating Class To From Credit Enhancement (%) ----- -- ---- ---------------------- B AAA AA+ 28.93 C AAA A+ 21.59 D A- BBB 13.58 E BBB+ BBB- 11.91 F BB- B+ 4.56 G B B- 3.56 Ratings Affirmed Merrill Lynch Mortgage Investors, Inc. Mortgage Pass-Through Certs Series 1998-C3 Class Rating Credit Enhancement (%) ----- ------ ---------------------- A-2 AAA 35.94 A-3 AAA 35.94 IO AAA N.A. N.A. - Not applicable MURRAY INC: Wants Until Oct. 4 to Make Lease-Related Decisions -------------------------------------------------------------- Murray, Inc., asks the U.S. Bankruptcy Court for the Middle District of Tennessee, Nashville Division, for an extension until Oct. 4, 2005, of its time to decide whether to assume, assume and assign, or reject unexpired leases of non-residential real property pursuant to Section 365(d)(4) of the Bankruptcy Code. On Feb. 1, 2005, Murray Inc., sold substantially all of its assets to Toro Company. As part of the Asset Purchase Agreement, Toro shall have until the confirmation of a chapter 11 plan to compel the Debtor to decide what to do with its leases. Also, without the extension, the Debtor might imprudently assume leases that will become burdensome or reject leases, which will prove to be valuable in its reorganization. The Debtor assures the Court it is current on all of its postpetition obligations under the leases. 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. MUZAK LLC: Moody's Junks Senior Unsecured & Subordinated Notes -------------------------------------------------------------- Moody's Investors Service downgraded Muzak LLC's senior unsecured notes to Caa2 from Caa1 and its senior subordinated notes to Ca from Caa2 while concurrently affirming the B3 rating on its secured credit facility. In addition, Moody's downgraded all credit ratings of Muzak's parent company, Muzak Holdings LLC, with the senior discount notes lowered to C from Ca and the senior implied lowered to Caa1 from B3. The ratings outlook is negative. The downgrade reflects minimal liquidity, possible covenant violations under the Company's secured credit facility during the next few quarters, continued poor operating performance and Moody's estimate of recovery values of the various classes of debt in the event of default. The ratings downgraded for Muzak LLC: * $220 million senior unsecured notes due 2009, downgraded to Caa2 from Caa1; * $115 million 9.875% senior subordinated notes due 2009, downgraded to Ca from Caa2. The ratings downgraded for Muzak Holdings LLC: * $24 million 13% senior discount notes due 2010, downgraded to C from Ca; * Senior Implied, downgraded to Caa1 from B3; * Senior Unsecured Issuer, downgraded to C from Ca. The ratings affirmed for Muzak LLC: * $55 million senior secured revolver due 2007, rated B3; * $35 million senior secured term loan B due 2007, rated B3. The ratings outlook is negative. The downgrade reflects Muzak LLC's weakening financial condition and continued poor financial performance. Although sales increased about 5% during the nine months ended September 30, 2004 (2004 period), gross profit and operating margins declined significantly. Operating income declined to $4.5 million in the 2004 period from $6.6 million in the comparable 2003 period. The Company had negative free cash flows from operations after capital expenditures of $9.1 million in the 2004 period and debt levels increased by about $14 million to $425 million at September 30, 2004. Muzak LLC has consistently reported negative free cash flows from operations over the last few years and Moody's expects this pattern will continue into 2005. Muzak's ability to generate cash flows continues to be burdened by a customer cancellation rate of approximately 10% and the heavy investment in capital expenditures and sales commissions needed to sign up new customers. Capital expenditures and deferred subscriber acquisition costs were $28.8 million and $13.4 million, respectively, in the 2004 period. Moody's expects continued poor financial performance by Muzak LLC in 2005. As a result, it is possible that Muzak will be in violation of certain financial covenants under its bank facility in the next few quarters and, absent a waiver, will be unable to draw on its revolver. Muzak has a $55 million revolver of which about $23 million was available at September 30, 2004. Given the company's negative free cash flow generation, the revolver is the company's only current source of liquidity. The ratings also reflects increasing competition, pricing pressure in the business music industry and increased expected payments in 2005 pursuant to music license agreements. The negative outlook reflects the expectation that Muzak LLC will continue to generate negative free cash flows from operations and will have limited, if any, liquidity during the next few quarters. A substantial increase in liquidity due to a refinancing of its indebtedness and an improvement in operations or change in business strategy that leads to sustainable positive free cash flows would likely improve the outlook or ratings. A further deterioration in the profitability of the business, which reduces, expected recovery rates for the company's indebtedness in the event of default could put further downward pressure on the rating. The B3 rating on the secured credit facility of Muzak LLC reflects the first priority security interest in all tangible and intangible assets of the Company. The secured credit facility has been notched one level above the senior implied rating reflecting substantial enterprise value coverage of the obligation and a high-expected recovery rate in the event of default. The Caa2 rating on the senior unsecured notes of Muzak LLC reflects the senior unsecured nature of these obligations and the guarantee by substantially all of the subsidiaries of Muzak. The rating on the senior unsecured notes reflects moderate expected recovery rates in the event of default. The Ca rating on the senior subordinated notes of Muzak LLC reflects the contractual subordination of these notes to all existing and future senior indebtedness of Muzak and expected low recovery rates in the event of default. The C rating on the senior discount notes of Muzak Holdings reflects the structural subordination of these notes to all indebtedness and liabilities of Muzak LLC and minimal expected recovery rates in the event of default. Muzak Holdings is dependent on distributions from Muzak to make interest payments on the notes, which became cash pay during 2004. The senior credit facility, the senior unsecured notes and the senior subordinated notes indentures permit Muzak LLC to make distributions to Muzak Holdings in an amount sufficient to permit Muzak Holdings to make cash interest payments when due, however the senior credit facility requires that certain financial covenant levels be met in order to make such distributions. Total debt to EBITDA at September 30, 2004 was about 6.2 times and EBITDA less capital expenditures covered interest expense less than 1 time. Including approximately $149 million of redeemable preferred stock, total adjusted debt to EBITDA was about 8.3 times. Total debt to revenues was about 1.8 times at September 30, 2004. Headquartered in Fort Mill, South Carolina, Muzak LLC, is a leading provider of business music programming in the United States based on market share. Revenue for the twelve-month period ended September 30, 2004 was about $244 million. NEWAVE INC: Declares 3 for 1 Forward Stock Split ------------------------------------------------ NeWave, Inc.'s (OTC Bulletin Board: NWAV) Board of Directors has approved a 3 for 1 forward stock split, to be distributed to all shareholders of record as of Feb. 18, 2005. Shareholders of record will receive 2 additional shares of common stock for every 1 share of common stock beneficially owned. The Company also announced that it will begin trading under a new ticker symbol which will be announced next week. NeWave CEO Michael Hill stated, "Over the past year and a half, we have experienced tremendous growth and are pleased to share this success with our shareholders. I believe the actions of our management team have always been consistent with maximizing shareholder value." He added, "We are excited about NeWave's future outlook and growth opportunities." About NeWave, Inc. NeWave, Inc. (OTCBB: NWAV) is a direct marketing company which utilizes the internet to maximize the income potential of its customers, by offering a fully integrated turnkey ecommerce solution. NeWave's wholly owned subsidiary Onlinesupplier.com, offers a comprehensive line of products and services at wholesale prices through its online club membership. Additionally, NeWave's technology allows both large complex organizations and small stand-alone businesses to create, manage, and maintain effective website solutions for e-commerce. The Company hosts Web sites at http://www.newave-inc.com/http://www.onlinesupplier.com/and http://www.auctionliquidator.com/ * * * As reported in the Troubled Company Reporter on June 8, 2004, Kabani & Company's report on the Company's consolidated financial statements for the fiscal years ended December 31, 2003, and December 31, 2002, included an explanatory paragraph expressing substantial doubt about NeWave's ability to continue as a going concern. Losses have continued in 2004. For the nine-month period ending Sept. 30, 2004, NeWave posted a $3,344,334 net loss. NRG ENERGY: Hosting Fourth Quarter Conference Call on March 9 ------------------------------------------------------------- NRG Energy, Inc. (NYSE:NRG) will host conference call and webcast to review fourth quarter and full year 2004 financial results. The call will be held on Wednesday, March 9, beginning at 9:00 a.m. Eastern. To access the live webcast and presentation materials, log on to NRG's Web site at http://www.nrgenergy.comand click on "Investors." To participate in the call, dial 877.407.8035 approximately five minutes prior to the scheduled start time. International callers should dial 201.689.8035. Later that day, the call will be available for replay from the "Investors" section of the NRG website. About the Company 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. NTK HOLDINGS: S&P Junks $250 Million Senior Discount Notes ---------------------------------------------------------- Standard & Poor's Ratings Services lowered each of its ratings on building products manufacturer Nortek, Inc., by one notch and assigned its 'B' corporate credit rating to NTK Holdings, Inc., a newly formed parent holding company of Nortek, Inc. The outlook is stable. At the same time, Standard & Poor's assigned its 'CCC+' unsecured debt rating to NTK Holdings' $250 million senior discount notes due 2014 to be issued under Rule 144a with registration rights, based on preliminary terms and conditions. Proceeds from the notes will be used to pay a dividend to the equity holders of NTK Holdings and to make a distribution to participants in the company's deferred compensation plan, plus fees and expenses. "The downgrade reflects the material increase in Nortek's already very aggressive debt burden resulting from this transaction, which is inconsistent with our expectations for debt reduction that had been incorporated into the former ratings," said Standard & Poor's credit analyst Pamela Rice. On a pro forma basis, debt (including capitalized operating leases) will increase to $1.669 billion, with pro forma debt to last-12-month EBITDA of 7.2x. The ratings on Providence, Rhode Island-based Nortek reflect its very aggressive debt leverage as a result of the sale of the company to Thomas H. Lee Partners L.P. -- THL -- in late August 2004 and the proposed dividend and distribution, Nortek's competitive, cyclical markets, and the niche characteristic of certain products. These factors are partially mitigated by Nortek's somewhat diversified portfolio of building products (annual sales of roughly $1.7 billion) with significant market shares, relatively stable cash flows, and a manageable debt maturity schedule. Nortek's key product lines include: -- kitchen range hoods and bath fans; -- heating, ventilating, and air conditioning -- HVAC -- systems for site-built residential, custom-designed commercial, and manufactured housing applications; and -- audio/visual distribution and control systems and security and access control products. OFFSHORE LOGISTICS: Moody's Revises Rating Outlook to Negative -------------------------------------------------------------- Moody's changed the outlook for Offshore Logistics' ratings to negative following the company's announcement that it will be delayed in filing its 10-Q for the quarter ended 12/31/04. Pending a benign outcome of the internal investigation and subsequent filing of its 10-Q, the outlook may revert back to stable. However, if the investigation uncovers more serious findings the ratings may be placed on review for downgrade or affirmed with the negative outlook remaining in place until these issues have clearly passed. The Company indicated that the 10-Q reporting delay is caused by the Audit Committee of the Board of Directors engaging outside counsel to complete an internal investigation of certain payments made in a country that Offshore operates in. Though the Company does not believe its initial findings are material to the company's previously reported financial results for December 31, 2004, the internal investigation is ongoing and has been expanded to cover some of Offshore Logistics' other international operations which could result in a prolonged delay in filing it's 10-Q. This filing delay is a violation of the reporting requirements under the bond indenture and may require bondholder's consent to waive this requirement if it is not resolved within 60 days as outlined in the indenture. The Company may also have to seek a waiver from its credit facility lenders if it is deemed to be in violation of the reporting requirements under the credit agreement. The negative outlook also considers the ongoing contract negotiations with the Gulf of Mexico pilots union and its potential impact on the Company's operations if the union decides to strike. Though negotiations continue, to this point, there has not been an agreement and the company has asked the National Mediation Board to be released from negotiations. The release would then allow both the company and the union the opportunity to pursue self-help measures such as the union going on strike, which would affect its operations. Though the Company has engaged temporary contract pilots if needed, there is a likelihood that business will be negatively impacted to some degree, which Moody's will then assess for its ratings impact. Moody's ratings for Offshore Logistics are: i) Affirmed at Ba2 -- Offshore Logistics' senior implied rating ii) Affirmed at Ba2 -- Offshore Logistics' $230 million senior unsecured notes due 2013 iii) Affirmed at Ba3 -- Offshore Logistics' senior unsecured issuer rating The ratings remain restrained by the Company's dependence on the volatile exploration and production of oil and gas; the very mature and cyclical nature of the GOM and North Sea, which generate about half of the Company's earnings and cash flows; and the significant capital being spent on the Company's fleet renewal/expansion over the next couple of years. In the GOM, where Offshore Logistics is the second largest helicopter provider to the exploration and production (E&P) operators in the region, activity has been in decline as most of the larger oil and gas companies have re-directed their focus and capital to foreign basins and redeployed rigs to markets like Mexico. In addition, Seacor's acquisition of the Rowan helicopter fleet has created a new significant competitor, which may intensify an already competitive market. The ratings continue to be supported by Offshore Logistics' increased earnings and cash flow base through disciplined pricing practices, international expansion and diversification; its leading position in its primary markets; and the Company's solid liquidity position with approximately $150 million of cash on hand. Despite ongoing weakness in the GOM, one the Company's two primary markets, and only a recently improved North Sea activity, the company still maintained healthy coverage ratios while generating earnings and cash flows sufficient to cover its normal capital spending and interest expense. The Company's leverage (lease adjusted debt/EBITDAR) as reported in the 2/3/05 earnings release remains low at 2.2x while interest coverage (EBITDA/interest) is still solid 7.7x. While the GOM and North Sea are cyclical, mature markets, they still contain significant activity due to their strategic importance to a number of E&P companies and therefore, will continue to generate significant earnings and cash for Offshore Logistics given its position as the second largest provider of helicopter services in the each of these markets. Further, the company's newer heavier fleet is suited for the deepwater GM, where activity has increased as is expected to remain healthy while commodity prices remain supportive. Offshore Logistics, Inc., headquartered in Lafayette, Louisiana, is a provider of helicopter transportation services to the oil and gas industry worldwide. OXFORD AUTOMOTIVE: Comm. Wants to Conduct Rule 2004 Examination -------------------------------------------------------------- The Official Committee of Unsecured Creditors of Oxford Automotive, Inc., and its debtor-affiliates asks the U.S. Bankruptcy Court for the Eastern District of Michigan, Southern Division, to order the Debtors to submit documents related to their businesses pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure. The Committee needs the documents to complete its analysis of the Debtors' operations and to prepare for various complaints regarding liens. Prior to the filing of the motion, the Committee has repeatedly asked the Debtors to produce the documents but to no avail. The Committee also asks the Court to compel the Debtors to attend to an examination and produce the documents today at 12:00 p.m. at the offices of Jaffe Raitt Heuer & Weiss, PC, located in 27777 Franklin Road, Suite 2500 in Southfield, Michigan. The Committee stresses that it is imperative for it to obtain the necessary information to timely effectuate and protect the rights and remedies of the unsecured creditors. A full-text copy of the list of documents that the Committee seeks can be viewed for a fee at: http://www.researcharchives.com/bin/download?id=040812020022> Headquartered in Troy, Michigan, Oxford Automotive, Inc. -- http://www.oxauto.com/-- is a Tier 1 supplier of specialized metal-formed systems, modules, assemblies, components and related services for the automotive industry. Oxford's primary products include structural modules and systems, exposed closure panels, suspension systems and vehicle opening systems, many of which are critical to the structural integrity and design of the vehicle. The Company and its debtor-affiliates filed for chapter 11 protection on December 7, 2004 (Bankr. E.D. Mich. Case No. 04- 74377). I. William Cohen, Esq., at Pepper Hamilton LLP represents the debtors in their restructuring efforts. When the Debtor filed for protection from its creditors, it listed $727,023,000 in total assets and $771,325,000 in total debts. PACIFIC GAS: Sells $1.9 Billion Energy Bonds for Customer Savings ----------------------------------------------------------------- Pacific Gas and Electric Company disclosed the successful marketing and sale of approximately $1.9 billion in Energy Recovery Bonds (ERBs) to refinance a portion of its balance sheet. The Utility Reform Network (TURN), a utility and consumer group, promised to deliver significant savings to customers when TURN reached a compromise plan to help resolve the utility's emergence from Chapter 11, and this transaction does just that. TURN originally proposed this refinancing structure during the summer of 2003, during the public hearing process on the settlement agreement among the California Public Utilities Commission (CPUC), PG&E Corporation, and Pacific Gas and Electric Company. TURN and Pacific Gas and Electric Company reached a compromise in December 2003, under which the utility agreed to the refinancing structure, with the savings being used to lower customer costs. The CPUC authorized this refinancing effort when it approved the final December 2003 settlement agreement, and specifically approved going forward with this ERB sale in a decision issued Nov. 19, 2004. Over the past several months, the utility has worked alongside the CPUC financing team, comprised of CPUC staff and their outside advisors, to approve and monitor the terms of this ERB transaction. "The sale of the ERBs provides ratepayers some of the best news they've received since the energy crisis," said TURN Senior Attorney Mike Florio. "We appreciate PG&E's effort to conclude this very successful transaction." The proceeds from this ERB sale are being used to refinance the regulatory asset created under the settlement agreement. The total dollar savings to customers as a result of refinancing the regulatory asset will be approximately $1 billion, over the remaining eight-year life of the settlement agreement, assuming that as planned, a second ERB series is issued in November 2005. The customer savings are the result of reduced taxes and finance costs associated with the ERBs compared to conventional utility financing of the regulatory asset. On Monday, Feb. 7, 2005, Pacific Gas and Electric Company filed a request with the CPUC to begin applying the customer savings in retail rates, starting March 1, 2005, and continuing over the remaining eight years of the agreement. Under the terms of the CPUC authorizing decision, the ERBs will be paid off through a nonbypassable Dedicated Rate Component charge (a charge per kilowatt hour of electricity consumed in PG&E's service territory). The ERBs were issued by PG&E Energy Recovery Funding LLC, a limited liability company which is wholly owned and consolidated by the utility. PERF is legally separate from the utility. The utility is a subsidiary of PG&E Corporation. Headquartered in San Francisco, California, Pacific Gas and Electric Company -- http://www.pge.com/-- a wholly owned subsidiary of PG&E Corporation (NYSE:PCG), is one of the largest combination natural gas and electric utilities in the United States. The Company filed for Chapter 11 protection on April 6, 2001 (Bankr. N.D. Calif. Case No. 01-30923). James L. Lopes, Esq., William J. Lafferty, Esq., and Jeffrey L. Schaffer, Esq., at Howard, Rice, Nemerovski, Canady, Falk & Rabkin represent the Debtors in their restructuring efforts. On June 30, 2001, the Company listed $23,216,000,000 in assets and $22,152,000,000 in debts. Pacific Gas and Electric emerged from chapter 11 protection on April 12, 2004, paying all creditors 100 cents-on- the-dollar plus post-petition interest. PAXSON COMMS: S&P's Junks Corporate Credit Rating ------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on West Palm Beach, Florida-based Paxson Communications Corp. to 'CCC+' from 'B-', recognizing that the company still has not demonstrated progress toward completing a strategic transaction that would boost liquidity. The outlook is negative. Television station owner and operator Paxson had approximately $991 million of debt outstanding on Sept. 30, 2004. "The rating action reflects Standard & Poor's heightened concern that Paxson has not executed either piecemeal asset sales, an outright sale of the company, or an investment by a strategic partner, to assure long-term liquidity", said Standard & Poor's credit analyst Alyse Michaelson Kelly. Furthermore, the FCC recently decided that TV stations cannot demand that cable operators "must" carry their digital channels, except for the primary replication of the analog signal, which could depress TV station asset values. The company's ability to sell assets at decent prices is a crucial source of liquidity, and had been a key rating factor. These risks are compounded by Paxson's onerous debt burden with certain debt requiring cash interest in 2006, and the redemption request by the National Broadcasting Company, Inc. -- NBC. Liquidity is far from sufficient to fund NBC's roughly $575 million redemption request, although the redemption request is not expected to trigger a default. Cash balances provide near-term liquidity but are insufficient to cover likely free cash flow deficits for more than two years. Deficits are expected to widen in mid-2006 when cash interest expenses will increase by $60 million annually, causing total cash interest expenses to more than double. The rating on Paxson reflects: (1) high financial risk because of the company's limited liquidity; (2) onerous debt and preferred stock burden; (3) weak EBITDA and negative discretionary cash flow; and (4) the significant business and financial risks related to its start-up television network. Paxson's challenges are exacerbated by the competition from well-capitalized rivals and the lack of a relaxation of TV duopoly and newspaper/broadcaster ownership rules that has hampered its ability to complete a strategic transaction. These factors are minimally offset by the company's valuable programming distribution platform and station asset values. PEGASUS SATELLITE: Has Until April 15 to Solicit Votes on Plan -------------------------------------------------------------- The United States Bankruptcy Court for the District of Maine gave Pegasus Satellite Communications, Inc., and its debtor-affiliates the exclusive right to solicit acceptances of their proposed Chapter 11 Plan until the earliest of April 15, 2005, and the Plan Confirmation Hearing (which the Debtors anticipate will occur on March 24, 2005). Headquartered in Bala Cynwyd, Pennsylvania, Pegasus Satellite Communications, Inc. -- http://www.pgtv.com/-- is a leading independent provider of direct broadcast satellite (DBS) television. The Company, along with its affiliates, filed for chapter 11 protection (Bankr. D. Me. Case No. 04-20889) on June 2, 2004. Larry J. Nyhan, Esq., James F. Conlan, Esq., and Paul S. Caruso, Esq., at Sidley Austin Brown & Wood, LLP, and Leonard M. Gulino, Esq., and Robert J. Keach, Esq., at Bernstein, Shur, Sawyer & Nelson, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,762,883,000 in assets and $1,878,195,000 in liabilities. (Pegasus Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service, Inc., 215/945-7000) RIGGS NATIONAL: PNC Acquisition Talks Cues Fitch to Revise Outlook ------------------------------------------------------------------ Fitch Ratings has revised the Rating Watch on Riggs National Corporation (RIGS; long-term senior rating of 'B') and its affiliates to Positive from Negative. The revision of the Rating Watch reflects the news of the amended and restated agreement between Riggs and The PNC Financial Services Group, Inc. (PNC; long-term senior rated 'A' by Fitch) for PNC to acquire Riggs and all of the assets and liabilities of Riggs Bank National Association. It is expected that Riggs Bank National Association's charter will cease to exist when the deal is consummated. As well as a renegotiated lower price (approximately $652 million), the amended agreement appears to have reduced the ambiguity and concerns that PNC had regarding Riggs' regulatory troubles. Fitch anticipates that Riggs' ratings will be adjusted upward and aligned with PNC's current ratings upon completion of the transaction, which is expected to occur during the next three months. Fitch has revised the Rating Watch on these ratings to Positive from Negative: Riggs National Corporation -- Short-term 'B'; -- Long-term 'B'; -- Subordinated debt 'CCC'; -- Individual rating 'D/E'; -- Support '5'. Riggs Bank National Association -- Short-term 'B'; -- Short-term deposit 'B'; -- Long-term 'B+'; -- Long-term deposit 'BB-'; -- Individual rating 'D/E'; -- Support '5'. Riggs Capital -- Preferred stock 'C'. Riggs Capital II -- Preferred stock 'C'. RIGGS NATIONAL: S&P Affirms Low-B Ratings After Review ------------------------------------------------------ Standard & Poor's Ratings Services affirmed its ratings on Washington D.C.-based Riggs National Corp. (Riggs; NASDAQ: RIGS), including Riggs' long-term counterparty credit rating of 'B-'. The ratings on Riggs' banking subsidiary, Riggs Bank N.A., were also affirmed. At the same time, the ratings of both entities were placed on CreditWatch Developing. The trust-preferred ratings on Riggs were affirmed at 'D' and not placed on CreditWatch. The placement of the ratings on CreditWatch Developing follows PNC Financial Services Group's announcement that it and Riggs have again agreed to merge. This announcement follows Riggs' announcement on Feb. 7, 2005, that it had rejected PNC's terms and conditions to continue with the consummation of the previously announced merger agreement, and that Riggs had filed suit against PNC. "The resolution of the CreditWatch is contingent on the outcome of the newly proposed merger with PNC," said Standard & Poor's credit analyst John K. Bartko, C.P.A. Should this agreement be completed in a timely manner, the ratings on Riggs would be raised. If, for whatever reason, the acquisition is voided, the ratings could be lowered. The extent of any ratings downgrade would depend on our assessment of Riggs' deteriorating operating fundamentals, as well as the ongoing financial and business impact of the bank's legal/regulatory issues. RUSSELL CORP: Declares $0.04 Regular Quarterly Dividend ------------------------------------------------------- The Board of Directors of Russell Corporation (NYSE: RML) has declared its regular quarterly dividend of $.04 per common share, payable Feb. 28, 2005, to shareholders of record on Feb. 14, 2005. This represents the 167th consecutive quarterly dividend paid by the Company. About Russell Corporation Russell Corporation is a leading branded athletic and sporting goods company with over a century of success in marketing athletic uniforms, apparel and equipment for a wide variety of sports, outdoor and fitness activities. The Company's major brands include Russell Athletic(R), JERZEES(R), Spalding(R), and Brooks(R). The Company's common stock is listed on the New York Stock Exchange under the symbol RML and its website address is http://www.russellcorp.com/ * * * As reported in the Troubled Company Reporter on Dec. 16, 2004, Standard & Poor's Ratings Services placed its ratings on Atlanta, Georgia-based athletic apparel and sports equipment manufacturer Russell Corp on CreditWatch with negative implications, including the company's 'BB' long-term corporate credit rating. Russell Corp.'s total debt outstanding at Oct. 3, 2004, was $377.4 million. "The CreditWatch placement follows the company's announcement that it has signed an agreement to acquire Brooks Sports Inc. for approximately $115 million. While Russell expects the transaction to be accretive to 2005 earnings, it will be entirely financed with debt," said Standard & Poor's credit analyst Susan Ding. SMC HOLDINGS: Wants More Time to File Schedules & Statements ------------------------------------------------------------ SMC Holdings Corporation and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware for: (a) an extension until April 11 to file their Schedules and Statements, and (b) permanently waiving the requirement to file the schedules and statements if their joint prepackaged Plan of Reorganization is confirmed prior to that date. In this case, the Debtors filed a pre-negotiated Plan accepted by: -- 66-2/3% of the Holders of Secured Bank Claims (accounting for 93% of the amount owed to the Banks) and -- 100% of the Holders of Senior Note Claims (accounting for 100% of the amount owed to those noteholders). These are the only impaired claims under the Plan. The Debtors believe that the purpose of filing the Schedules and Statements has been fulfilled and that the mechanical tasks involved in completing more forms would be a waste of time, energy, effort and money. Much of the information that would be included in the Schedules and Statements has been disclosed in the Disclosure Statement that was filed with the Plan. Headquartered in St. Paul, Minnesota, SMC Holdings Corporation -- http://www.smartecarte.com/-- provide baggage cart, locker and stroller services at airports, train stations, bus terminals, shopping centers, ski resorts and entertainment facilities across the world. The Debtors and its four debtor-affiliates each filed separated chapter 11 petitions on February 10, 2005 (Bankr. D. Del. Case No. 05-10395). Jason M. Madron, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., and Douglas P. Bartner, Esq., and Michael H. Torkin, Esq., at Shearman & Sterling, LLP represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they estimated assets and debts of more $100 million. STAR GAS: Poor First Quarter Results Spur S&P to Junk Ratings ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Star Gas Partners L.P. to 'CCC+' from 'B-' and its senior unsecured debt rating to 'CCC-' from 'CCC'. All ratings remain on CreditWatch with negative implications, where they were placed on Oct. 18, 2004. The rating action follows the Connecticut-based company's announcement of its poor operating results in its fiscal 2005 first quarter ended Dec. 31, 2004. "The company reported a worse-than-expected 2005 first quarter operating income loss of $21 million, which was primarily due to customer attrition, lower volume of heating oil sales, margin compression, higher operating costs, and significantly increased wholesale heating oil prices," said Standard & Poor's credit analyst Brian Janiak. "The downgrade also reflects the uncertainty surrounding the company's current business model's ability to stop the hemorrhaging of significant operating losses in fiscal 2005, and its effect on the company's ability to maintain sufficient liquidity with its banks. Star Gas has considerable working capital needs through the remainder of the challenging winter heating season, and beyond," Janiak added. Standard & Poor's has heightened concern on whether the company's initiatives to improve results and decrease customer attrition will be effective for the remainder of the heating season and the rest of the fiscal year ended Sept. 30, 2005. Star Gas received about $466 million of net proceeds from the sale of its propane unit on Dec. 17, 2005. The company used $311 million to fully repay all $254 million of its secured debt, plus an estimated prepayment premium of about $42 million, and the remainder was used for other interest and operating expenses in the first quarter of 2005. The company currently has about $112 million of net cash proceeds remaining from the asset sale, which it is obligated under its secured note indenture to apply to debt reduction or invest in assets or capital expenditures useful to Star Gas or its subsidiaries. In addition, the company has about $120 million outstanding under its working capital revolver, and remains constrained with only about $31 million available due to its borrowing base limitations. Standard & Poor's will continue to monitor the remedial steps that Star Gas takes to arrest its current financial predicament. In addition, Standard & Poor's will review management's financial and operational strategy for its heating oil operations, including the apparent weak corporate governance, lack of internal controls and risk management, and the opacity of Star Gas' overall risk exposure toward its heating oil business. These factors have all led to the current financial troubles, which still have not been adequately addressed in a manner consistent with the interest of the company's bondholders. Resolution of the CreditWatch listing depends on a full review of the viability of Star Gas's business model and assurance of access to adequate liquidity through the remainder of the challenging heating season and beyond. STELCO INC: Steelworkers Applauds Ontario's Directive on Pension ---------------------------------------------------------------- The United Steelworkers welcomed the recent decision by the Province of Ontario to require that Stelco, Inc., fully fund the solvency deficiency in its pension. The Union also noted with interest Chief Restructuring Officer Hap Stephen's statement that the "pension funding issue is front- and-centre for the company", particularly in that Stephen is repudiating Chief Executive Officer Courtney Pratt's repeated statements that the pension solvency deficiency would not be addressed as part of the restructuring process. As recently as December 22, 2004, Mr. Pratt stated that "there was and is no plan to address the wind-up deficiency as part of the restructuring process itself." "The government of Ontario appears willing to force Stelco to do what the Steelworkers have long been demanding: address its significant pension solvency deficiency," said Steelworkers' National Director Ken Neumann. "After 12 months of unnecessary court protection, it was time for the province to force Stelco to pay less attention to facilitating exorbitant profits and inflated bonuses for market traders and financial institutions and to pay more attention to putting the company on a solid footing going forward," said Steelworkers' Local 8782 President Bill Ferguson. "Stelco's pensioners have been forced, against their will, to lend the company hundreds of millions of dollars," said Steelworkers' Local 5328 President Scott Duvall. "Those pensions must be secure. After a lifetime of difficult and dangerous service, it is time that pensioners and their families came first in this process." Neumann concluded by noting that "perhaps now Stelco will finally send the Deutsche Bank 'Stalking Horse' with its blatant disregard for pensioners to the glue factory where it belongs." As reported in the Troubled Company Reporter on Feb. 11, 2005, Stelco, Inc., has received a letter from Mr. James Arnett, Special Advisor on the Steel Industry to the Government of Ontario, regarding the funding of the Company's pension plans. In the letter, received on Feb. 9, Mr. Arnett states that "I have been instructed to advise you that upon emergence from CCAA, Stelco will not be entitled to the benefit of Section 5.1." The letter also states that "...the Government supports your auction process and, to that end, is prepared to be flexible in discussing a fair and reasonable plan for the consequent need to fund the pension deficiencies on a solvency basis". Mr. Arnett also offers his commitment "on behalf of the Government, to working constructively with the company, its employees, stakeholders and bidders to address this issue." Stelco has stated that it will actively negotiate with the Ontario Government to develop a fair and reasonable plan to address this potential change in regulation under the Pension Benefits Act. If the Government passes a regulation to simply revoke the 5.1 election, the solvency deficiency of $1.3 billion, as at Dec. 31, 2004, will have to be amortized over a five-year period. For example, if the election had been rescinded as of Jan. 1, 2004, the total 2004 cash contributions to Stelco's four main plans would have increased from $64 million to $353 million. Hap Stephen, Stelco's Chief Restructuring Officer, said, "Our goal is a reasonable and responsible solution that will serve the best interests of the Company and all its stakeholders, including the Government of Ontario, and also reflect the Company's ability to make payments to reduce the solvency deficiency." Mr. Stephen added that, "Stelco has consistently stated that the pension funding issue is front-and-centre for the Company and for the bidders. The bidders are well aware of the issue, of our view, and of the Court's stated assumption that they will keep the issue in mind in making their bids." The Ontario Government amended Regulation 909 under the Pension Benefits Act in 1992 to allow a pension plan with over $500 million in assets to elect to cease funding the plan on a solvency basis. Pension Plans that have taken the 5.1 election are exempt under the Regulation from making special payments to fund a solvency deficiency. These plans, however, must continue to be funded on a going concern basis, and pay higher Pension Benefit Guarantee Fund premiums in accordance with the Pension Benefits Act. Stelco, Inc. -- http://www.stelco.ca/-- which is currently undergoing CCAA restructuring proceedings, is a large, diversified steel producer. Stelco is involved in all major segments of the steel industry through its integrated steel business, mini-mills, and manufactured products businesses. Consolidated net sales in 2003 were $2.7 billion. STILE CONSOLIDATED: S&P Assigns B+ Corporate Credit Rating ---------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' long-term corporate credit rating to Stile Consolidated Corp. (a newly formed holding company), and its newly formed subsidiaries, Stile U.S. Acquisition Corp., and Stile Acquisition Corp. The outlook is stable. The Stile Companies were set up to buy Masonite International Corp., and the ratings are contingent on the successful completion of the acquisition of Masonite International Corp. (BB+/Watch Neg/--) under the original proposed terms offered by Kohlberg Kravis Roberts & Co. and Masonite's management. The existing 'BB+' ratings on Masonite International Corp. will remain on CreditWatch with negative implications until the transaction is completed. The existing legal entity, Masonite International Corp. will be merged into Stile Acquisition Corp. on the completion of the transaction, and the rating on Masonite will be withdrawn. Stile U.S. Acquisition Corp. and Stile Acquisition Corp. will be the borrowers under the proposed bank facility and bond issues. All debt will be cross-guaranteed by the subsidiaries, and the parent, Stile Consolidated Corp. The proposed US$1.5 billion secured bank credit facility is rated 'BB-', one notch above the corporate credit rating, while the proposed US$300 million senior unsecured notes and proposed US$525 million senior subordinated notes are rated 'B-'. The '1' recovery rating reflects Standard & Poor's expectation that secured lenders would receive a full recovery of principal and interest in the event of default. "The ratings on Stile Consolidated and its subsidiaries reflect the company's very aggressive debt leverage and a relatively narrow product focus, and its exposure to the cyclical housing and home renovation markets," said Standard & Poor's credit analyst Daniel Parker. These risks are partially offset by the company's leading position as the largest door manufacturer in the world, and adequate profitability and cash flow generation. The company's financial risk will significantly increase with total debt rising substantially as a result of the leveraged buyout. Total debt is expected to be about US$2 billion at the close of the transaction, which -- measured by debt to EBITDA -- is higher than most leveraged buyouts. Projected total debt to capital is expected to be about 75%. Standard & Poor's expects EBITDA interest coverage of about 2.3x in 2005. Masonite has historically generated free cash flow and management has been successful at deleveraging the company following previous acquisitions. Masonite is able to generate free cash flow because the business has improved its margins and its capital expenditure requirements are not onerous. Although the credit metrics are somewhat aggressive for the ratings, the company's existing business, in addition to the potential for growth and margin improvement, should help it maintain stable credit metrics. Nevertheless, the debt leverage is considered very aggressive and any additional debt or decreased cash flow generation could lead to a negative ratings action. T-REX CORPORATION: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: T-Rex Corporation P.O. Box 315 Londonderry, New Hampshire 03053 Bankruptcy Case No.: 05-10361 Type of Business: The Debtor is a demolition contractor. Chapter 11 Petition Date: February 4, 2005 Court: District of New Hampshire (Manchester) Judge: Mark W. Vaughn Debtor's Counsel: William S. Gannon, Esq. William S. Gannon PLLC 889 Elm Street, 4th Floor Manchester, NH 03101 Tel: 603-621-0833 Fax: 603-621-0830 Estimated Assets: $500,000 to $1 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Volvo Commercial Finance Equipment Lease $79,895 Stephens & Michaels 63 Range Road Windham, NH 03087 Hertz Equipment Rental Corp. Equipment Rental $59,376 P.O. Box 26390 Okalahoma City, OK 73126 Brokk, Inc. Equipment Rental $48,229 NCO Financial 3850 N. Causeway Blvd. Ste. 200 Metairie, LA 70002 Diamond Products Trade debt $36,513 Catamount Environmental Services $31,736 NES Rentals Equipment Rental $27,772 Whitney & Son Equipment Rental $27,220 ATS Equipment Equipment Rental $24,476 Case Credit Services $24,388 KTI - Biofuels Fees $24,218 NationsRent Equipment Rental $23,550 Chase Automotive Finance Equipment Lease $22,745 Exxon Mobil Supplies $16,650 GMAC Equipment Lease $14,851 All State Waste Services $13,684 GMAC Equipment Lease $13,008 T-Quip Equipment Rental $12,315 GE Capital Supplies $11,865 GMAC Equipment Lease $11,237 The Manifest Group Equipment Rental $10,133 TRANSMONTAIGNE INC: Earns $4.2 Million of Net Income in 3rd Qtr. ---------------------------------------------------------------- TransMontaigne Inc. (AMEX:TMG) reported financial results for the three and six months ended Dec. 31, 2004. The Company filed its Quarterly Report on Form 10-Q with the Securities and Exchange Commission. Quarter Ending December 31, 2004 Revenues for the three months ended Dec. 31, 2004, were approximately $2.5 billion, as compared to approximately $2.2 billion for the comparable period in the prior year. The increase in revenues is due to an increase in commodity prices offset by a decrease in delivered volumes. Net operating margins for the three months ended December 31, 2004, were approximately $31.6 million compared to approximately $22.8 million for the three months ended December 31, 2003. Net earnings for the three months ended December 31, 2004, were approximately $4.2 million, as compared to approximately $(0.9) million for the three months ended December 31, 2003. Net operating margins and net earnings for both periods were impacted by inventory gains recognized, inventory gains deferred, and lower of cost or market adjustments. TransMontaigne believes that "adjusted net operating margins" and "adjusted operating income," which eliminate the impact of these inventory adjustments, are useful measures to evaluate and compare performance between reporting periods. The Company's adjusted net operating margins for the supply, distribution and marketing segment for the three months ended December 31, 2004, were approximately $42.4 million, as compared to $16.3 million during the three months ended Dec. 31, 2003. Rack spot margins were $4.2 million and $3.4 million during the three months ended December 31, 2004 and 2003, respectively. Contract sales margins were $8.1 million and $2.5 million during the three months ended Dec. 31, 2004 and 2003, respectively. During the three months ended Dec. 31, 2004, per unit margins from rack spot sales and contract sales were favorably impacted by declining distillate inventories available in the interior wholesale delivery markets due principally to increased demand for distillates, principally heating oil, in the Northeast, which caused shipping capacity on common carrier pipelines to be pro rated and, thereby, increased distillate value in the interior wholesale delivery markets. For the three months ended December 31, 2004 and 2003, the inventory roll benefit was approximately $3.6 million and $2.6 million, respectively, representing the net increase in the value of our discretionary volumes held for immediate sale or exchange from carrying inventory to future periods in a rising forward price environment. The adjusted net operating margins (deficiencies) from our bulk activities and other increased to approximately $6.8 million in the three months ended December 31, 2004, as compared to approximately $(0.3) million in the three months ended Dec. 31, 2003, due principally to a favorable spread between the cash market and the prompt month NYMEX futures contract caused in part by major oil companies disposing of their refined product inventories in the bulk markets to mitigate property taxes associated with inventory volumes on hand at December 31, 2004. The Coastal Fuels assets contributed heavy oil margins of approximately $5.4 million and $3.4 million during the three months ended Dec. 31, 2004 and 2003, respectively. The adjusted net operating margins from our supply chain management services decreased to approximately $3.6 million during the three months ended Dec. 31, 2004, from approximately $4.1 million for the comparable period in 2003, due principally to a decrease in unit margins offset by additional volumes delivered to our existing customer base. The adjusted net operating margins from our trading activities were due principally to short positions taken in the NYMEX options market in anticipation of the liquidation of certain in transit product inventory volumes upon complete implementation of the Morgan Stanley supply agreement. The net operating margins from our terminals, pipelines, tugs and barges were approximately $12.1 million for the three months ended December 31, 2004, as compared to approximately $13.7 million for the three months ended December 31, 2003. The decrease of approximately $1.6 million is due principally to an increase in direct operating costs and expenses of approximately $3.0 million offset by an increase in revenues of approximately $1.4 million. Selling, general and administrative expenses for the three months ended Dec. 31, 2004 and 2003, were approximately $11.8 million and $10.2 million, respectively. During the three months ended Dec. 31, 2004, we accrued bonuses of approximately $2.0 million to compensate our employees for their performance during the six months ended Dec. 31, 2004. Product Supply Agreement On Nov. 4, 2004, we executed a product supply agreement with Morgan Stanley Capital Group Inc. ("MSCG"). The product supply agreement expires on Dec. 31, 2011, subject to provisions for early termination. Under the terms of the product supply agreement, MSCG will be our principal supplier of gasoline and distillate to our existing marketing and distribution business at terminals connected to the Colonial and Plantation Pipelines and our Florida waterborne terminals at market-based rates. MSCG will begin supplying certain of our terminals during January 2005 with complete implementation expected during February 2005. We will accept title and risk of loss to the products from MSCG upon discharge of the products from the delivering pipelines and vessels into our tank storage capacity at the respective terminals. On Nov. 23, 2004, in connection with the closing of the product supply agreement and as partial consideration for MSCG entering into the product supply agreement, we issued warrants to MSCG to purchase 5.5 million shares of TransMontaigne Inc. common stock at an exercise price equal to $6.60 per share, subject to adjustments in accordance with the terms and conditions of the warrant certificate. Based on our discretionary inventory levels at Dec. 31, 2004, the product supply agreement with MSCG should enable us to liquidate approximately 2.5 million to 3.5 million barrels of our discretionary inventory volumes by Mar. 31, 2005. We anticipate using the proceeds for the liquidation of the discretionary inventory volumes to repay outstanding borrowings under our senior secured working capital credit facility. Under the terms of the product supply agreement, MSCG will be responsible for the origination and transportation of gasolines and distillates to most of our terminals. As such, we expect to eliminate most of our bulk activities related to light oil products. About the Company TransMontaigne Inc. -- http://www.transmontaigne.com/--is a refined petroleum products marketing and distribution company based in Denver, Colorado with operations in the United States, primarily in the Gulf Coast, Midwest and East Coast regions. The Company's principal activities consist of (i) terminal, pipeline, and tug and barge operations, (ii) marketing and distribution, and (iii) supply chain management services. The Company's customers include refiners, wholesalers, distributors, marketers, and industrial and commercial end-users of refined petroleum products. * * * As reported in the Troubled Company Reporter on Sept. 27, 2004, Standard & Poor's Ratings Services placed its 'BB-' corporate credit rating on TransMontaigne, Inc., on CreditWatch with developing implications. The rating action follows the announcement that TransMontaigne's board of directors approved the formation of a master limited partnership for certain of its assets (primarily assets from the company's terminal, pipeline, tug and barge businesses) and TransMontaigne would be the general partner and retain the distribution and marketing business. The CreditWatch listing with developing implications reflects the possibility of positive or negative rating actions based on an analysis of TransMontaigne's new corporate structure and business profile. "The formation of an MLP could lead TransMontaigne to concentrate its operations in activities with an improved risk profile and reduce the volatility of its cash flow," said Standard & Poor's credit analyst Paul Harvey. TRUMP HOTELS: Judge Wizmur Okays $100,000,000 DIP Financing Pact ---------------------------------------------------------------- On February 3, 2005, Judge Wizmur authorized the Debtors, on a final basis, to borrow $100,000,000 in postpetition advances subject to the terms of the DIP Loan Agreement entered into with Beal Bank, SSB. Absent further Court approval, the TCH Debtors will not request borrowings under the DIP Agreement if their aggregate principal amount of postpetition obligations exceed $35,000,000. There are nine TCH Debtors: -- Trump Marina Associates, LP; -- Trump Indiana Realty, LLC; -- Trump Indiana Casino Management, LLC; -- THCR Management Holdings, LLC; -- THCR Management Services, LLC; -- Trump Casino Holdings, LLC; -- Trump Casino Funding, Inc.; -- Trump Marina, Inc.; and -- Trump Indiana, Inc. Similarly, the TAC Debtors will not request borrowings under the DIP Agreement if their aggregate principal amount of postpetition obligations exceed $65,000,000. The TAC Debtors are: -- Trump Plaza Associates; -- Trump Atlantic City Associates; -- Trump Plaza Funding, Inc.; -- Trump Atlantic City Holding, Inc.; -- Trump Atlantic City Funding, Inc.; -- Trump Atlantic City Funding II, Inc; -- Trump Atlantic City Funding III, Inc; -- Trump Atlantic City Corporation; and -- Trump Taj Majal Associates. As of February 3, 2005, the TCH Debtors incurred $9,167,165 in postpetition obligations, while the TAC Debtors incurred $24,374,336. Headquartered in Atlantic City, New Jersey, Trump Hotels & Casino Resorts, Inc. -- http://www.thcrrecap.com/-- through its subsidiaries, owns and operates four properties and manages one property under the Trump brand name. The Company and its debtor- affiliates filed for chapter 11 protection on Nov. 21, 2004 (Bankr. D. N.J. Case No. 04-46898 through 04-46925). Robert A. Klymman, Esq., Mark A. Broude, Esq., John W. Weiss, Esq., at Latham & Watkins, LLP, and Charles Stanziale, Jr., Esq., Jeffrey T. Testa, Esq., William N. Stahl, Esq., at Schwartz, Tobia, Stanziale, Sedita & Campisano, P.A., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed more than $500 million in total assets and more than $1 billion in total debts. TRUMP HOTELS: Equity Committee Wants to Terminate Plan Exclusivity ------------------------------------------------------------------ Pursuant to Section 1121(d) of the Bankruptcy Code, the Official Committee of Equity Security Holders ask the U.S. Bankruptcy Court for the District of New Jersey to terminate Trump Hotels & Casino Resorts, Inc., and its debtor-affiliates' exclusive periods to file a plan of reorganization and to solicit acceptances of that plan. "The Debtors' Plan is a sweetheart deal for conflicted insiders and other interested parties, including [Donald J.] Trump and for UBS Securities LLC and its affiliates," Daniel K. Astin, Esq., at The Bayard Firm, in Wilmington, Delaware, says. "The Equity Committee is entitled to a reasonable opportunity to test in the open market the fairness of the Plan's multitude of insider transactions." Trump Hotels & Casino Resorts, Inc., on September 29, 2003, entered into a confidentiality agreement with DLJ Merchant Banking Partnership III, LP, to develop a recapitalization plan. The confidential agreement later turned into an "exclusivity agreement" barring the Debtors from negotiating or providing confidential information to any party other than DLJ Merchant. Pursuant to the exclusivity agreement, DLJMB is to invest $400 million to sponsor a recapitalization of THCR. The Debtors admitted that the DLJMB transaction would have caused the interests of THCR's shareholders to be "substantially diluted." The Equity Committee believes that the dilution would have also affected Mr. Trump but he would have benefited materially in a multitude of other ways. In September 2004, the Debtors terminated discussions for a potential equity investment by DLJMB. "At this point the Debtors' management could have -- but did not -- seek alternative transactions that would benefit shareholders other than Mr. Trump," Mr. Astin notes. Eventually, the Debtors entered into a Restructuring Support Agreement with Mr. Trump and various noteholders. The Restructuring Support Agreement provided Mr. Trump with virtually the same benefits that he was to have received under the DLJMB transaction. The Restructuring Support Agreement further cemented the Debtors' path toward a reorganization that benefited Mr. Trump at the expense of all other shareholders. The Restructuring Support Agreement outlines the terms of the Debtors' proposed Plan and obligates the Debtors to work diligently toward confirmation of the Plan -- and only the Plan. Furthermore, the Restructuring Agreement permits Mr. Trump to unilaterally pull the plug on the Plan if its terms are not consistent with the Term Sheet or, for any items not otherwise set forth on the Term Sheet, will not be in form or substance reasonably acceptable to him. At Mr. Trump's bidding, the Debtors placed themselves in a position where, unless the Court orders otherwise, all they can do is move forward with a Plan that provides lucrative insider deals to Mr. Trump and virtually wipes out other shareholders' interests. The Plan provides for the virtual elimination of existing non-insider equity interests. "The most pervading theme of the Plan, however, is the omnipresence of Mr. Trump," Mr. Astin observes. The Equity Committee outlines the Debtors' "gift basket" to Mr. Trump: 1) A "Services Agreement," pursuant to which Mr. Trump will receive $2 million per year in cash, plus bonuses and other fringe benefits, in exchange for attending a few board meetings and "promotional events"; 2) Limited partnership interests that Mr. Trump can convert into more than 22% of the common stock of the reorganized Debtors; 3) Mr. Trump's right to veto any sale of any the Debtors' four primary casino assets, which can only be overridden if the Debtors agree to indemnify Mr. Trump for as much as $100 million of Trump's personal income tax liabilities associated with any sale; 4) A three-year right of first refusal to act as contractor for any construction project at the Debtors' properties with an initial budget of more than $35 million; 5) Subject to minimum ownership levels, the right to nominate between one and three of the Debtors' nine directors, plus veto power over an additional director; 6) The Debtors' 24.5% limited partnership interest and 0.5% general partnership interest in Miss Universe LP, LLP; and 7) The fee, leasehold, and easement interests in the former World's Fair site, into which the Debtors sunk over $26 million in demolition costs only five years ago. The Debtors defend Mr. Trump's largess under the Plan by asserting that a "Special Committee" of the Board of Directors has investigated the fairness of these transactions. The "Special Committee," however, appears to have been nothing more than a rubber stamp for Mr. Trump's own grand designs. The Equity Committee believes that the "Special Committee" is not an appropriate substitute for true market testing as required by the Supreme Court's decision in Bank of America v. 203 N. LaSalle St. Partnership, 526 U.S. 434, 119 S.Ct. 1411 (1999). In the Debtors' Amended Disclosure Statement, they even admit that the "Special Committee has not undertaken an independent valuation of each component of consideration to be received by [Mr. Trump] under the Plan." After reviewing the Plan and Disclosure Statement, the Equity Committee concludes that they are "seriously deficient." The Plan not only wipes out existing shareholder interests, but also provides insider benefits for Mr. Trump. Thus, in proposing the Plan, Mr. Trump and the rest of management are not representing the interests of shareholders, but their own. Mr. Astin contends that the Plan must be contrasted with what could be achieved if it were proposed for the benefit of the estates as whole. However, only the Debtors can propose a plan of reorganization this time with their plan exclusivity period under Section 1121 of the Bankruptcy Code currently extending through May 20, 2005. Only by terminating exclusivity can the Court permit a fair market testing of the Debtors' Plan and allow other parties to propose a competing plan that will bring more value to the Debtors' estates. Headquartered in Atlantic City, New Jersey, Trump Hotels & Casino Resorts, Inc. -- http://www.thcrrecap.com/-- through its subsidiaries, owns and operates four properties and manages one property under the Trump brand name. The Company and its debtor- affiliates filed for chapter 11 protection on Nov. 21, 2004 (Bankr. D. N.J. Case No. 04-46898 through 04-46925). Robert A. Klymman, Esq., Mark A. Broude, Esq., John W. Weiss, Esq., at Latham & Watkins, LLP, and Charles Stanziale, Jr., Esq., Jeffrey T. Testa, Esq., William N. Stahl, Esq., at Schwartz, Tobia, Stanziale, Sedita & Campisano, P.A., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed more than $500 million in total assets and more than $1 billion in total debts. TRUMP HOTELS: File First Amended Plan & Disclosure Statement ------------------------------------------------------------ To resolve various creditors' concerns and smooth the road to confirmation, Trump Hotels & Casino Resorts, Inc., and its debtor-affiliates delivered to the U.S. Bankruptcy Court for the District of New Jersey on February 1, 2005, an amended Joint Plan of Reorganization and Disclosure Statement. The Debtors made a number of material changes to their Plan of Reorganization. A full-text copy of the blacklined Chapter 11 Plan is available for free at: http://www.thcrrecap.com/pdfs/451-500/02-01-05-483.pdf A full-text copy of the blacklined Disclosure Statement is available for free at: http://www.thcrrecap.com/pdfs/451-500/02-01-05-484.pdf Exhibits to the Amended Disclosure Statement include: -- THCR Debt Restructure http://www.thcrrecap.com/pdfs/451-500/02-01-05-488.pdf -- Preliminary Analysis of General Unsecured Claims http://www.thcrrecap.com/pdfs/451-500/02-01-05-491.pdf As part of the amendments, the Debtors indicate that in addition to the support of the Debtors, Donald J. Trump, the TAC Noteholder Committee, and the TCH Noteholder Committee to the Plan, Local 54, AFL-CIO, which represents the interests of about 3,200 of the Debtors' employees, also supports the Plan. DJT Transactions To address objections on the disclosure relating to transactions with Donald J. Trump, the Debtors makes it clear that Mr. Trump will, in addition to investing $55 million in cash, contribute around $16.4 million aggregate principal amount of TCH Second Priority Notes to reorganized THCR Holdings on the Effective Date, upon the terms set forth in the DJT Investment Agreement. Pursuant to the DJT Investment Agreement, Mr. Trump will receive among others, the New DJT Warrant, THCR's 25% beneficial ownership interests in Miss Universe, LP, LLP, and the parcels of land and appurtenances in Atlantic City, constituting the former World's Fair site. Property Mr. Trump Will Receive Under the DJT Investment Agreement Estimated Value ----------------------- --------------- New DJT Warrant $5 million - $10 million THCR's 25% ownership interests in Miss Universe $5 million World's Fair Site Properties $7.5 million Valuation of DJT New Trademark Agreement Under the Plan, the Debtors and Mr. Trump will enter into a New Trademark License Agreement, which will grant Reorganized THCR Holdings a perpetual, exclusive, royalty-free license to use Mr. Trump's name and likeness in connection with the Debtors' casino and gaming activities. The DJT New Trademark License Agreement has been valued at approximately $124 million by an independent third-party independent appraiser, and the Debtors believe that the agreement is substantially more valuable than the prior trademark agreement existing between THCR and DJT, which has been valued at between $50 and $82 million. The $124 million valuation takes into account THCR's option to pay up to $5 million in annual royalties for continued use of Mr. Trump's name and likeness in the event that the DJT Services Agreement is terminated. Class A Nomination Period As provided in the Amended Plan, the Nomination Period for Class A Directors of reorganized THCR will begin on the Effective Date and terminate on the earlier of: (i) the date immediately after the date on which the sixth annual meeting of stockholders of reorganized THCR after the Effective Date will be held; and (ii) the time as the stockholders of reorganized THCR will fail to elect Mr. Trump to the board of directors of reorganized THCR. Currently Issued Old THCR Common Stock To specifically address the objection of the Official Committee of Equity Security Holders on the Disclosure Statement's failure to identify the number of currently issued shares of Old THCR Common Stock, the Debtors added this paragraph in the Amended Disclosure Statement: "There are 29,904,764 shares of Old THCR Common Stock issued and outstanding, 9,960,884 of which are beneficially owned by DJT and his controlled affiliates. In addition, DJT owns options to purchase up to 1,800,000 shares of Old THCR Common Stock, and beneficially owns Old THCR LP Interests exchangeable at his option into 13,918,723 shares of Old THCR Common Stock, giving him beneficial ownership of an aggregate of approximately 56.4% of Old THCR Common Stock (as of September 30, 2004, assuming currently exercisable options and Old THCR LP Interests held by DJT are exercised or exchanged)." New Common Stock To explain what percentage each share of New Common Stock will represent of the total number of shares of New Common Stock to be issued, this has been added to the Disclosure Statement: "Upon the Effective Date, the authorized capital stock of Reorganized THCR will consist of 50,000,000 shares of New Common Stock, par value $0.001 per share, 41,334,460 of which shall be issued and outstanding (or reserved for issuance, including the Reserve Shares and shares reserved for issuance upon exercise of the New DJT Warrant or upon exchange of the New THCR Holdings LP Interests beneficially owned by DJT, but excluding any shares reserved for issuance under the New THCR Stock Incentive Plan)." DLJMB Claims To address DLJ Merchant Banking Partners III, LP's assertion that the Disclosure Statement fails to adequately describe its claims, Debtors added this to the Disclosure Statement: "On January 26, 2005, DLJMB filed an objection to the Disclosure Statement stating, among other things, that DLJMB has asserted a Claim for payment of $25 million under the DLJMB Tail, plus expenses of at least $1 million against the five Debtors that were signatory to the Letter Agreements. . . The Debtors are evaluating DLJMB's Claim and reserve all rights with respect thereto (including the right to dispute the amount of such Claim with the Bankruptcy Court)." Power Plant Group Litigation To address the objection of The Cordish Company, Power Plant Entertainment, LLC, Native American Development, LLC, Richard T. Fields, and Coastal Development, LLC, the Debtors included in the Amended Disclosure Statement information relating to the Power Plant Group Litigation and counterclaims. The Debtors disclosed two lawsuits that Trump Hotels & Casino Resorts Development Co., LLC, filed -- one against the Paucatuck Eastern Pequot Indian Tribal Nation and the other against Power Plant and Native American. The Amended Disclosure Statement also included the Power Plant Group's allegations against THCR Development and Trump Hotels & Casino Resorts Holdings, LP. Specifically, the Power Plan Group alleges that the two Debtors "have engaged in willful and malicious, tortious conduct, which has given rise to claims and counterclaims which the Power Plant Group now asserts for damages that the Power Plant Group estimates will exceed $500 million." THCR Development disagrees with these allegations. Special Committee THCR's board of directors formed a special committee of independent directors to monitor, assist with and advise THCR's board and management on the Debtors' restructuring efforts, and the Special Committee retained Ropes & Gray LLP and Jefferies & Company, Inc., as the Special Committee's respective legal and financial advisors. The Special Committee will continue during the pendency of the Chapter 11 Cases to exercise oversight of the Debtors' operating businesses and affairs with a view towards, among other things, looking after the interests of the Debtors' public shareholders, with respect to the ongoing negotiation and documentation of the recapitalization plan that is the subject of the Restructuring Support Agreement, which will be effectuated through the Plan. Projections At the end of 2009, the Debtors state, THCR is projected to have a total leverage ratio of 3.9x down from 6.2x at assumed emergence from chapter 11 and an interest coverage ratio of 3.1x up from 1.9x at assumed emergence from chapter 11. Execution of its business plan and the resulting deleveraging should facilitate a refinancing of the Debtors' projected indebtedness if the Reorganized Debtors choose to do so. Moreover, the Debtors believe that Trump Casino Holdings, LLC, would not be able to survive on its own without participating in the recapitalization transactions contemplated under the Plan. If TCH were reorganized on a stand-alone basis and its approximately $493.8 million debt (plus interest, fees and penalties) were reinstated, existing interest payments would continue as currently scheduled (including the payment due in March 2005). Each six months, TCH must pay approximately $17.9 million in interest. However, TCH's stand-alone cash flow is insufficient to service interest payments on the reinstated notes. As of March 2005, after giving effect to the March 2005 interest payment, TCH's cash balance would fall to a negative $18.5 million. Moreover, the State of Indiana has asserted a Priority Tax Claim of $20 million. After lengthy negotiations, TCH has reached an agreement to pay such tax in full over a 12- month period; without the recapitalization contemplated by the Plan, TCH would not general the cash flows sufficient to pay that tax or reach a deal satisfactory to the State of Indiana to pay the tax over time. During the first three months of the cases, TCH has been a net borrower under the existing DIP Facility; absent the recapitalization contemplated by the Plan, TCH would default under the DIP Facility. Further, TCH would need to incur additional overhead and expenses in hiring a new management team and operating independently from TAC. Finally, the assets of TCH (principally consisting of the Trump Indiana Casino and the Trump Marina Casino) operate in highly competitive markets; to remain competitive, TCH needs to consistently dedicate approximately 5% of its current revenues to capital expenditures and an additional 2-3% to catch up with capital expenditures the Debtors have foregone over the past few years. As a result, the Debtors did not independently value TCH's assets. Headquartered in Atlantic City, New Jersey, Trump Hotels & Casino Resorts, Inc. -- http://www.thcrrecap.com/-- through its subsidiaries, owns and operates four properties and manages one property under the Trump brand name. The Company and its debtor- affiliates filed for chapter 11 protection on Nov. 21, 2004 (Bankr. D. N.J. Case No. 04-46898 through 04-46925). Robert A. Klymman, Esq., Mark A. Broude, Esq., John W. Weiss, Esq., at Latham & Watkins, LLP, and Charles Stanziale, Jr., Esq., Jeffrey T. Testa, Esq., William N. Stahl, Esq., at Schwartz, Tobia, Stanziale, Sedita & Campisano, P.A., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed more than $500 million in total assets and more than $1 billion in total debts. UNITED REFINING: Moody's Affirms B3 Sr. Implied & B3 Note Ratings ----------------------------------------------------------------- Moody's affirmed the B3 senior implied and B3 note ratings for United Refining following the Company's announced $25 million senior unsecured add-on to the Company's existing $200 million senior unsecured guaranteed notes. The add-on offering, which will have the same B3 rating as the existing notes, will be used to repay bank borrowings utilized for working capital needs, freeing up needed liquidity in the face of very high crude oil prices. The stable outlook is still very sensitive to the Company's very high leverage, inherent margin volatility; the ability to maintain adequate cash and liquidity (especially under the currently very high commodity price environment); and the Company's ability to restrict senior secured debt borrowings in order to minimize the effective subordination the senior unsecured notes would otherwise face through seasonal clean-up of senior secured debt outstanding. While the $25 million add-on notes will at least help maintain liquidity and bondholder value by repaying secured revolver borrowings, the additional long-term debt does increase the pressure of being able to reduce debt ahead of the next refining margin correction and raise the level of debt service requirements in a weaker margin environment. The outlook also assumes that United Refining will limit restricted payments permitted under the indenture to the $25 million allowed for the planned $400 million Coker project until the project is operating and performing roughly in-line with design specifications. Moody's notes the indenture also permits an additional $30 million of investments other than the planned Coker, however, this amount must be reduced by investments made in the Coker if United Refining does not build or decides to abandon the project, or the full $30 million must be deferred until the Coker project is up and running close to designed specifications, assuming the minimum fixed charge coverage is achieved. Though the permitted indenture carveouts for the Coker project have already been incorporated in United Refining's ratings, Moody's will review of the final financing structure of the Coker project to determine whether there is any further impact to the ratings. The ratings remain restrained by the inherent volatility of United Refining's earnings and cash flow; the significant aggregate carveouts permitted in the indenture; historical distribution trends to the controlling shareholder; United's single refinery status; high debt levels; increased working capital requirements due to high oil prices; and a need for more direct monetary support from the Red Apple Group (RAG), its shareholder. The B3 ratings and stable outlook are supported by continued strong sector crack spreads and historically wide sector light/heavy crude differentials driving greatly improved earnings and cash flow over the past year as the Company has the ability to run over 50% medium/heavy sour crude. This has enabled United to exhibit significantly improved credit metrics, which Moody's expects to continue over the near term. The Company's financial leverage has improved as lease adjusted debt/EBITDAR has been lowered from 6.1x for the quarter ended 2/28/04 to 4.0x for the quarter ended 11/30/04. However, book leverage remains very high with lease-adjusted debt/capitalization of 86% as of 11/30/04. The ratings are also supported by United Refining's large asphalt business; cash flow diversification from its 371 unit (184 United owned) retail network, though facing stiff competition; and to a small degree implicit shareholder, Red Apple Group (RAG) support. Currently, the note ratings are not notched from the senior implied rating since the bonds are unconditionally guaranteed by United Refining's current and future subsidiaries and the secured debt appears to be self liquidating. However, if it becomes evident that the secured debt is no longer self-liquidating; secured borrowings become material; or use of the restricted payments baskets appears to be usurping value from the bondholders, Moody's will re-assess notching the notes. Moody's ratings actions for United Refining are: i) Affirmed at B3-- United's senior implied rating ii) Affirmed at Caa1 -- United's senior unsecured issuer rating iii) Affirmed at B3 -- $225 million senior unsecured notes United Refining Company is headquartered in Warren, Pennsylvania. UNITED REFINING: S&P Assigns B- Rating to $25 Million Senior Notes ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B-' rating to independent petroleum refiner and retail marketer United Refining Co.'s (B-/Stable/--) $25 million senior notes due 2013. The notes are an add-on to United's $200 million senior notes issued in July 2004. At the same time, Standard & Poor's affirmed the ratings on United. The outlook remains stable. Warren, Pennsylvania-based United has roughly $260 million in debt, pro forma for the new notes. Proceeds from the sale of the notes will be used to repay debt under its credit facilities. The ratings on United reflect the significant challenges the company faces as a small independent, private petroleum refiner and marketer with substantial debt, participating in a competitive, erratically profitable, and highly capital-intensive industry. These weaknesses are tempered by the company's niche market and related transportation cost advantage, ability to process heavy-sour crude oil, modest spending necessary to meet upcoming clean-fuels requirements, and sufficient cash resources for at least the next year. "The stable outlook on United reflects Standard & Poor's expectations that the company's debt leverage has reached the upper end of its targeted area," said Standard & Poor's credit analyst Paul B. Harvey. It is expected that the company will manage its operations and any growth initiatives in a manner that does not increase leverage. "The stable outlook also assumes that the company will maintain adequate liquidity and that clean-fuels and maintenance capital-spending requirements will be funded internally, and substantial debt reduction is necessary before Standard & Poor's would consider positive ratings actions," he continued. Conversely, a deterioration in liquidity or leverage measures would likely result in negative rating pressure. US UNWIRED: Dec. 31 Balance Sheet Upside-Down by $262.8 Million --------------------------------------------------------------- US Unwired Inc. (OTCBB:UNWR), a Sprint (NYSE:FON) Network Partner, reported consolidated revenues of $152.6 million for the three- month period ended December 31, 2004. US Unwired posted a consolidated Net Loss of $29.3 million and consolidated Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) of $16.8 million for fourth quarter of 2004. For the year, US Unwired posted a consolidated Net Loss of $130.2 million on $594.8 million of consolidated revenue and generated $99.2 million of consolidated Adjusted EBITDA. On Jan. 4, 2005, IWO Holdings, Inc., and its debtor-affiliates filed a "pre-packaged" plan of reorganization with the United States Bankruptcy Court for the District of Delaware which would eliminate US Unwired's ownership of IWO and IWO's $355 million of debt on US Unwired's consolidated financial statements. The Court confirmed the plan on Feb. 9, 2005. For the fourth quarter of 2004, US Unwired excluding the operations of IWO Holdings, reported a Net Loss of $29.3 million and Adjusted EBITDA of $16.3 million on revenues of $107.9 million. For the full year of 2004, the Company's Net Loss was $130.2 million, while Adjusted EBITDA and revenues were $78.4 million and $417.6 million, respectively. "Our Company finished the year with an exceptionally strong quarter, particularly in sales, where we tripled last quarter's net subscriber additions. The 20,076 net new customers added during the quarter capped a strong year during which we increased our subscriber base by 17%. This feat is even more impressive given that our cost per gross subscriber addition was only $333 for the fourth quarter and even less for the full year. Additionally, our CDMA network continues to show its superiority in design as our dropped and blocked calls fell to an all-time low of 1.3% and 1.4%, respectively, during the final period of the year," said Robert Piper, US Unwired's President and Chief Executive Officer. For the fourth quarter of 2004, monthly average minutes of use per subscriber were 1,011 with roaming and 780 without roaming, while total system minutes of use were approximately 1.5 billion, including 464 million roaming minutes. For the full year, monthly average minutes of use per subscriber were 982 with roaming and 742 without roaming, and total system minutes of use were approximately 5.7 billion, including 1.8 billion roaming minutes. In the fourth quarter, US Unwired redeemed $41.1 million aggregate face amount of its 13 3/8% Senior Subordinated Discount Notes due 2009. The redemption finalized a series of transactions competed throughout 2004 that collectively eliminated approximately $22 million of interest expense annually. At Dec. 31, 2004, the Company had cash of approximately $80.4 million. Certain Lease Issues Like many other publicly traded companies, US Unwired is reviewing its accounting practices with respect to lease accounting. Historically, when accounting for operating leases with escalation provisions, the Company has recorded lease expense at the current rate specified in the lease. The Company has re-evaluated its position and has determined that its operating leases should be recognized on a straight line-basis over the term of the lease. The Company is currently determining the financial effect of straight-lining its operating leases, and, if material, will adjust prior period financial statements. For the year ended December 31, 2004, the Company estimates the impact to US Unwired on a consolidated basis to be a decrease of $0.7 million in cost of service and net loss and to US Unwired, excluding the operations of IWO Holdings, to be a decrease of $1.2 million in cost of service and net loss. The review is being undertaken in consultation with the company's audit committee of the board of directors and its independent public accounting firm, Ernst & Young LLP. As the adjustment relates solely to accounting treatment, it does not affect US Unwired's historical or future cash flows or the timing of payments under the related leases. The review is not attributable to any material non-compliance by the company with any financial reporting requirement under the federal securities laws. About Sprint Sprint offers an extensive range of innovative communication products and solutions, including global IP, wireless, local and multiproduct bundles. A Fortune 100 company with more than $27 billion in annual revenues in 2004, Sprint is widely recognized for developing, engineering and deploying state-of-the-art network technologies, including the United States' first nationwide all- digital, fiber-optic network; an award-winning Tier 1 Internet backbone; and one of the largest 100-percent digital, nationwide wireless networks in the United States. For more information, visit http://www.sprint.com/mr About US Unwired Headquartered in Lake Charles, Louisiana, US Unwired Inc. -- http://www.usunwired.com/-- holds direct or indirect ownership interests in four PCS affiliates of Sprint: Louisiana Unwired, Texas Unwired, Georgia PCS and Gulf Coast Wireless. Through Louisiana Unwired, Texas Unwired and Georgia PCS, US Unwired is authorized to build, operate and manage wireless mobility communications network products and services under the Sprint brand name in 48 markets, currently serving approximately 470,000 PCS customers. US Unwired's PCS territory includes portions of Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, Oklahoma, Tennessee and Texas. At Dec. 31, 2004, US Unwired's balance sheet showed a $262,788,000 stockholders' deficit, compared to a $229,767,000 deficit at Dec. 31, 2003. VARTEC TELECOM: Wants Exclusive Filing Period Stretched to June 1 ----------------------------------------------------------------- Vartec Telecom, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Northern District of Texas to extend the period within which they have the exclusive right to file a chapter 11 plan to June 1, 2005. The Debtors also ask the Court to extend the period within which they have the exclusive right to solicit acceptances of that plan to August 1, 2005. The Debtors hope to use the requested extension to, among other things, negotiate a global settlement of claims asserted by independent representatives and develop a well-vetted business plan. Once those tasks are accomplished, the Debtors will have the information and time needed to analyze the likely distribution to their unsecured creditors and formulate a feasible, and hopefully consensual, plan. The Debtors intend to focus on: (i) finalizing a global settlement with the IRs by early March 2005, (ii) complete a business plan by April 1, 2005, and (iii) file a plan and disclosure statement by June 1, 2005. Headquartered in Dallas, Texas, Vartec Telecom Inc. -- http://www.vartec.com/-- provides local and long distance service and is considered a pioneer in promoting 10-10 calling plans. The Company and its affiliates filed for chapter 11 protection on November 1, 2004 (Bankr. N.D. Tex. Case No. 04-81695). Daniel C. Stewart, Esq., William L. Wallander, Esq., and Richard H. London, Esq., at Vinson & Elkins, represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed more than $100 million in assets and debts. VENTURE HOLDINGS: Soliciting Bids for Venture & Deluxe Assets ------------------------------------------------------------- The Honorable Thomas J. Tucker of the U.S. Bankruptcy Court for the Eastern District of Michigan entered a Sales Procedure Order at the request of VENTURE HOLDINGS COMPANY, LLC, DELUXE PATTERN CORPORATION, and their debtor-affiliates. The Sales Procedures Order authorizes the Debtors to accept bids for substantially all of the assets of the Venture Debtors and the Deluxe Debtors and sets up a uniform competitive bidding process for the sale of those assets to the highest and best bidder, free and clear of all liens, claims and encumbrances, by April 30, 2005. DIP Financing Expired On December 31, 2004, the Debtors' debtor-in-possession financing facilities expired by their own terms. As a result, the Debtors do not have access to funding necessary to maintain their operations. Chapter 11 Plan in Limbo On May 18, 2004, the Debtors filed their Second Amended Joint Plan of Reorganization, and amended the Plan on May 25, 2004. A confirmation hearing began on June 18, 2004, and (after 18 days of testimony from 13 witnesses, numerous designations of deposition testimony, and the presentation of 225 trial exhibits) concluded on Oct. 8, 2004. Judge Tucker has yet to rule on confirmation of the Plan. Selling the Assets Because confirmation is up in the air and the company doesn't have adequate working capital financing, the Debtors, their core creditor constituencies and their major customers have proposed to sell the Company's assets. All requests for information regarding the Assets should be made in writing and directed to: Michael Barr Rothschild Inc. 1251 Avenue of the Americas New York, New York 10020 Copies of the Sale Motion and the Sale Procedures Order are available at no charge from Venture Debtors' claims and noticing agent, Administar Services Group, at: http://www.administar.net/venture/ The Bidding Procedures approved by Judge Tucker require that initial bids must be in writing, must comply with the terms of the Bid Procedures and must be delivered to: David Barnes Venture Holdings Company LLC 6555 15 Mile Road Sterling Heights, Michigan 48312 - and - Nicole Y. Lamb-Hale, Esq. John A. Simon, Esq. Foley & Lardner LLP One Detroit Center 500 Woodward Ave., Ste. 2700 Detroit, Michigan 48226 - and - Steven Towbin, Esq. Deluxe Pattern Corporation c/o Shaw Gussis Fishman Glantz Wolfson & Towbin LLC 321 North Clark Street, Ste. 800 Chicago, Illinois 60610 not later than 4:00 p.m. prevailing Eastern time on March 28, 2005. If more than one Qualified Bid is received by the March 28 Bid Deadline, the Venture Debtors and the Deluxe Debtors will conduct an Auction with respect to the Assets. The Auction will be held on March 30, 2005, at a time and place to be determined. Only Qualified Bidders that submit Qualified Bids are eligible to participate in the Auction. In order to become a Qualified Bidder, an interested party must meet certain requirements pursuant to the Sale Procedures Order and the Bid Procedures, including without limitation the delivery of certain documents specified in the Bid Procedures on or before March 21, 2005. All interested parties are invited to qualify for participation at the Auction and to present Qualified Bids in accordance with the Bid Procedures and Sale Procedures Order. The Sale Hearing will take place on April 6, 2005 at 11:00 a.m. (prevailing Eastern time) at the United States Bankruptcy Court for the Eastern District of Michigan, 211 West Fort Street, Detroit, Michigan, 48226. Objections to the Sale, if any, must be filed with the Bankruptcy Clerk no later than 4:00 p.m. (prevailing Eastern time) on April 4, 2005, and served on: Counsel to the Venture Debtors: Judy A. O'Neill, Esq. Foley & Lardner LLP 500 Woodward Ave., Suite 2700 Detroit, Michigan 48226 Counsel to the Deluxe Debtors: Steven Towbin, Esq. Shaw Gussis Fishman Glantz Wolfson & Towbin LLC 321 North Clark Street, Suite 800 Chicago, Illinois 60610 Counsel to the Agent for the Venture Debtors' prepetition senior lenders: Larry J. Nyhan, Esq. Sidley Austin Brown & Wood LLP Bank One Plaza 10 South Dearborn Street Chicago, Illinois 60603 Counsel to Black Diamond Commercial Finance, LLC, as agent to the Venture Debtors' debtor-in-possession credit facilities: Tim Pohl, Esq. Skadden Arps Slate Meagher & Flom LLP 333 West Wacker Drive Chicago, Illinois 60606 Counsel to General Motors Corporation: Robert B. Weiss, Esq. Honigman Miller Schwartz and Cohn LLP 2290 First National Building 660 Woodward Ave. Detroit, Michigan 48226 Counsel to Ford Motor Company: Stephen S. LaPlante, Esq. Miller, Canfield, Paddock and Stone P.L.C. 150 West Jefferson, Suite 2500 Detroit, Michigan 48226 Daimler Chrysler Corporation: Kim Kolb Daimler Chrysler Corporation 1000 Chrysler Drive Auburn Hills, Michigan 48326-2766 Counsel to Larry J. Winget: Nancy Mitchell, Esq. Greenberg Traurig LLP 77 West Wacker Drive, Suite 2500 Chicago, Illinois 60601 Counsel to the Official Committee of Unsecured Creditors in the Venture Debtors' Chapter 11 cases: Fred Hodara, Esq. Akin Gump Strauss Hauer & Feld LLP 590 Madison Avenue New York, New York 10022 Venture Holdings Company and its debtor-affiliates filed for chapter 11 protection (Bankr. E.D. Mich. Case No. 03-48939) on March 28, 2003. Deluxe Pattern Corporation and its debtor- affiliates filed for chapter 11 protection on May 24, 2004 (Bankr. E.D. Mich. Case No. 04-54977). Together, Venture and Deluxe are part of a worldwide full-service automotive supplier, systems integrator and manufacturer of plastic components, modules and systems. WINN-DIXIE: Posts $399.7 Million Net Loss in Second Quarter ----------------------------------------------------------- Winn-Dixie Stores, Inc. (NYSE: WIN) released its financial results for the second quarter of its 2005 fiscal year, which ended on Jan. 12, 2005. During the second quarter of fiscal 2005, the Company had a net loss from continuing operations of $327.4 million, compared to a net loss from continuing operations of $65.7 million, during the second quarter of fiscal 2004. The net loss included a charge of $10.0 million, related to restructuring and non-cash asset impairment charges and a non-cash income tax expense of $248.0 million, related to recognition of a valuation allowance on the Company's net deferred tax assets. The recognition of the valuation allowance offsets the Company's net deferred tax assets, which consist of the tax effect of items such as book expenses that are not currently deductible and net operating loss carryforwards, which could be deducted from taxable income in future years. Operating loss from continuing operations, absent restructuring and impairment charges, for the sixteen weeks ended Jan. 12, 2005, was $58.6 million, compared with $70.1 million during the sixteen weeks ended Jan. 7, 2004. Operating loss from continuing operations, absent restructuring and impairment charges, for the twenty-eight weeks ended Jan. 12, 2005 was $69.9 million, compared with $57.7 million during the twenty-eight weeks ended Jan. 7, 2004. A reconciliation of operating loss to operating loss absent restructuring and impairment charges is included in this press release. The Company incurred a net loss from discontinued operations of $72.3 million, for the second quarter of fiscal 2005, compared with a net loss from discontinued operations of $13.8 million, during the second quarter of fiscal 2004. The net loss from discontinued operations for the second quarter includes non-cash charges from lease accruals on closed stores totaling $31.9 million, or $0.23 per diluted share, and non-cash income tax expense of $17.2 million, or $0.12 per diluted share, related to the reversal of the tax benefit recognized in the first quarter of fiscal 2005 due to the recognition of a valuation allowance. Including discontinued operations, the Company reported a net loss of $399.7 million for the second quarter of fiscal 2005, or $2.84 per diluted share, as compared to a net loss of $79.5 million, for the second quarter of fiscal 2004. Sales from continuing operations for the 16 weeks ended January 12, 2005 were $3.1 billion, a decrease of 4.7% from the same quarter last year. Identical store sales from continuing operations, which include enlargements and exclude stores that opened or closed during the period, decreased 4.9% for the second quarter as compared to the same period last year. Comparable store sales from continuing operations, which include replacement stores, decreased 4.8% for the quarter compared to the same quarter in fiscal 2004. Gross margin from continuing operations as a percentage of sales was 26.4% for the second quarter, up from 25.4% in the second quarter of fiscal 2004 but down from 26.9% in the first quarter of fiscal 2005. The decline in margin from the first quarter of fiscal 2005 was due primarily to increased inventory shrinkage, particularly in the area of perishables. Commenting on the quarter, Peter Lynch, President and Chief Executive Officer, said, "This was a tough quarter for the Company, with competition continuing to intensify and holiday sales below anticipated levels. The decline we have experienced needs to be addressed swiftly and we intend to do so. Having spent the last two months taking an in-depth look at the Company and visiting over 50 stores across our chain, it's clear to me that Winn-Dixie has both serious challenges and significant opportunities. The Company has great locations in many desirable markets, but the merchandising in many locations needs improvement and there is a lack of excitement in the stores." Mr. Lynch continued, "My immediate focus is on quickly and cost- effectively improving sales across the entire chain. I believe improving the execution of merchandising and sales-focused initiatives, reinvigorating our Associates, and restoring a sales- driven culture across the organization can achieve sales growth quickly without significant capital expenditure. We are therefore improving perishables offerings and other product merchandising, as well as implementing store sales competitions and other initiatives to get our Associates excited about driving sales. These tactics have proven successful in my previous turnaround experience, and I believe they can work at Winn- Dixie." Commenting on the Company's lead market initiative, Mr. Lynch said, "The lead market initiative is strategically sound. Although there are some execution improvements within the lead markets that we intend to make, since the last hurricane hit South Florida approximately 14 weeks ago, our lead market stores have reported better sales performance than the rest of the chain during the same period. We expect to begin the full launch of the entire program in our two lead markets with a supporting advertising campaign later in the third quarter." As of Feb. 10, Winn-Dixie has completed store upgrades in 65 of the 92 targeted stores in the Miami-Ft. Lauderdale Designated Market Area (DMA), at a total cost of approximately $40 million. The Company expects that it will cost an additional $20 million to complete the lead market upgrade in the Miami-Ft. Lauderdale DMA. The Company has also upgraded all 22 stores in the Montgomery, Alabama DMA at a cost of approximately $14 million. Mr. Lynch continued, "There are several elements of the lead market initiative, such as improved perishables, that have already shown they can drive sales quickly and without significant capital expenditure. We are already beginning to incorporate these elements into the execution and merchandising improvements that we are deploying across the entire chain. The successful implementation of our short-term initiatives and convincing our key constituencies, including our employees, customers and vendors, of the soundness of our strategy is critical." Asset Rationalization Update Commenting on the asset rationalization plan, Mr. Lynch said, "The plan was a difficult but important decision for the Company. As we approach the conclusion of the program, I am pleased to report that the number of stores sold has exceeded our expectations. As a result, we now expect restructuring charges and losses to be $230 million to $265 million, significantly below our initial expectation range of $275 million to $400 million, and approximately $205 million of these losses have been incurred through the end of the second quarter. Going forward, we will continue to evaluate each store and market to ensure they continue to support our efforts to grow profitable sales." Store Dispositions and Closures As of the close of business on Feb. 9, the Company has exited 135 of the 156 total stores the Company plans to exit in both its core and non-core markets. Of these, 63 have been sold or subleased and 72 have been closed. Of the 72 stores that have been closed, several involve leases that have expired or will expire by the end of the fiscal year. The Company is continuing to pursue the sale or sublease of as many as possible of the remaining stores to be exited. The Company continues to expect that it will complete the exit from all 156 stores by the end of April 2005. Distribution Centers During the second quarter, the Company closed its Louisville, Kentucky distribution center. In addition to the Louisville facility, the Company has previously closed its Raleigh, North Carolina and Sarasota, Florida distribution facilities. These exits complete the Company's planned streamlining of its distribution network as announced on Apr. 30, 2004. Manufacturing Operations The Company previously sold its Dixie Packers manufacturing facility, closed its Miami, FL dairy and Greenville, SC ice cream plant and transferred production to other facilities. After the end of the second quarter, the Company sold its Crackin' Good Bakers and Crackin' Good Snacks manufacturing facilities based in Valdosta, Georgia. By the end of April 2005, the Company expects it will exit its Montgomery Pizza manufacturing facility, the final manufacturing asset to be sold as part of the asset rationalization plan. In addition, consistent with its determination in April 2004 that all of its manufacturing facilities are non-core assets, the Company has begun marketing for sale its remaining dairy operations and its Chek Beverage, Deep South Condiments, and Astor Products manufacturing assets. Liquidity Update As of Jan. 12, 2005, total liquidity was $176.3 million, which was comprised of $31.6 million in cash and cash equivalents (including cash in stores and ATMs of $11.5 million) and $144.7 million of net borrowing availability under the Company's revolving credit facility. This net borrowing availability reflected a reduction of $100 million due to the Company's failure to meet an earnings before interest, taxes, depreciation, and amortization (EBITDA) test under its revolving credit facility. The other primary reasons for the decline in liquidity, in addition to operating losses, were higher than desired inventory levels at the end of the second quarter and a decrease in accounts payable during the second quarter. Subsequent to the end of the second quarter, the Company obtained from its bank group a waiver of the EBITDA test through June 29, 2005, thereby restoring up to $100 million of borrowing availability under that facility. This waiver is supported by a requirement to perfect the bank group's security interest in assets with a requisite value on or before Mar. 31, 2005. The Company also took other measures to improve short-term liquidity. Primarily as a result of these measures, which were partially offset by operating losses, the Company's estimated net borrowing availability under the revolving credit facility increased to $275 million as of Feb. 9, 2005. In the third quarter, the Company will take further steps to continue to improve liquidity, including implementing sales initiatives designed to increase sales and retail operating profit, continuing to implement new inventory management procedures, and implementing other actions to improve short-term liquidity. However, there can be no assurance that actions taken to improve operations and liquidity will be effective. The Company's liquidity will continue to be dependent upon the continuation of existing bank and vendor financing. Assuming the successful implementation of the Company's plans and the continuation of vendor financing on current terms, management believes that current cash on hand, available trade credit, available borrowings under the revolving credit facility, cash expected to be generated as a result of improvements in working capital and the sales of assets will be sufficient to fund current operating and capital needs. However, in the event actions taken to improve operations and liquidity are not effective or a substantial restriction in or tightening of vendor credit terms occurs, the Company may not have adequate liquidity to operate its business. In the longer term , the Company will need to produce improved operating results or secure additional sources of capital before it can expand the store upgrade program beyond the existing lead markets or increase the scope and timing of full remodels. Commenting on the Company's liquidity, Mr. Lynch stated, "The Company's liquidity position at the end of the quarter was driven primarily by operating losses, the failure to meet the EBITDA test in our credit facility, increased inventory levels, and decreased accounts payable levels. We are pleased to have improved our liquidity significantly since the end of the quarter through the EBITDA waiver and other measures, and we are implementing several initiatives designed to improve liquidity further." About the Company Winn-Dixie Stores, Inc., -- http://www.winn-dixie.com/--is one of the nation's largest food retailers. Founded in 1925, the Company is headquartered in Jacksonville, FL. * * * As reported in the Troubled Company Reporter on Nov. 1, 2004, Standard & Poor's Ratings Services lowered its ratings on Winn- Dixie Stores Inc. The corporate credit rating was lowered to 'B-' from 'B'. The outlook is negative. "The downgrade is based on weaker-than-expected profitability and cash flow," explained Standard & Poor's credit analyst Mary Lou Burde. "Although the company should have sufficient liquidity to fund its near-term operating and capital needs, improved operating results or additional funding will be needed to execute longer- term strategic initiatives." YUKOS OIL: Files Plan of Reorganization in Texas ------------------------------------------------ YUKOS Oil Company filed with the U.S. Bankruptcy Court for the Southern District of Texas, a Plan of Reorganization explaining how it intends to complete its Chapter 11 case and treat fairly its creditors, shareholders and the Russian Government in that Plan. To implement its Plan, YUKOS also filed with the U.S. Bankruptcy Court a Motion setting May 1, 2005, as the Bar Date for filing of claims against the Company's bankrupt estate. YUKOS also filed an Amended Motion to Arbitrate to ensure fair treatment of any claims which will be filed by the Russian Government. That Motion asks the Court to send any Russian Government claim to an international arbitral forum. The Russian Government agreed to this kind of arbitration under its Law on Foreign Investments in the Russian Federation on July 9, 1999. 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. YUKOS OIL: Files $20-Bil Plus Suit for Automatic Stay Violations ---------------------------------------------------------------- YUKOS Oil Company sued Gazprom, Gazpromneft, Baikal Finance Group and Rosneft on Feb. 12, 2005, for more than $20 billion for their role in expropriating Yuganskneftgaz in December 2004, in violation of the automatic stay in the YUKOS Chapter 11 bankruptcy case. YUKOS also continued to sue agent bank, Deutsche Bank, to enjoin it from violating the automatic stay in YUKOS' Chapter 11 case. YUKOS did not sue Deutsche Bank for damages on Friday, as it did with these other four defendants. As reported in the Troubled Company Reporter on Jan. 7, 2005, Zack A. Clement, Esq., at Fulbright & Jaworski, LLP, in Houston, Texas, related that the Temporary Restraining Order issued by the Court on Dec. 16, 2004, was requested by Yukos to supplement and specifically enforce the automatic stay of Section 362 of the Bankruptcy Code, pursuant to an injunction issued under Section 105 of the Bankruptcy Code, to try to stop the conduct of the Auction. United States law gives the U.S. Bankruptcy Court for the Southern District of Texas in Houston, exclusive jurisdiction over the property of Yukos' Chapter 11 estate "wherever located." Under the law, an automatic stay went into immediate effect when the company filed for bankruptcy on December 14, 2004. The automatic stay protects the company's assets through the bankruptcy process. It prevents creditors from collecting claims (including tax claims) that arose prior to the bankruptcy filing or from taking "possession" or "control" of Yukos property covered under the filing. The automatic stay and the Court's December 16 Temporary Restraining Order barring the auction was violated when Gazpromneft and Baikal Finance Group participated in the auction on December 19. Even though the TRO expired, the automatic stay remains in force indefinitely through the bankruptcy process and until lifted or amended by the Court. Though Baikal Finance Group, a previously unknown company, emerged as the winning bidder in the auction, days later its shares were transferred to or purchased by Rosneft, a government-owned oil company, itself set to be acquired by Gazprom. Yukos believes that the terms of the TRO apply to actions that were taken by various parties at the Auction, including by Baikal Finance Group, and to actions taken to consummate the sale of the Stock and related transactions. In any event, the TRO does not limit the general application of the automatic stay. Yukos asserts that the Stock is a property of its bankruptcy estate, and that the Auction was a violation of the automatic stay, which became immediately effective when Yukos filed for bankruptcy. Mr. Clement notes that if sale of the Stock is consummated, it will damage Yukos in excess of $20 billion. 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. YUKOS OIL: Wants to Hire Alvarez & Marsal as Restructuring Advisor ------------------------------------------------------------------ Yukos Oil Company seeks the Court's authority to employ Alvarez & Marsal, LLC, as its restructuring advisor, effective as of the Petition Date. Yukos Chief Financial Officer Bruce K. Misamore believes that Alvarez & Marsal will be able to provide the full range of services the Debtor needs in its bankruptcy case because Alvarez & Marsal: -- specializes in financial advisory work in corporate restructuring and distressed situations; -- is a recognized leader in the restructuring field because of its innovative solutions to complex financial restructurings; -- has extensive knowledge of the Debtor's industry; -- has been retained in numerous nationally prominent restructurings and reorganizations; and -- has the ability and experience to quickly acquire the knowledge and understanding of the Debtor's business in order to effectively represent the Debtor. Pursuant to an employment agreement between the parties, Alvarez & Marsal will provide: * Assistance with respect to strategic, financial, operational and bankruptcy process management matters relative to the Debtor's Chapter 11 proceeding; * Assistance with the development and approval of a Disclosure Statement and Plan of Reorganization; * Testimony as may be necessary during the course of the Chapter 11 proceeding and agreed to by Alvarez & Marsal; and * Other services as requested or directed by the Debtor and agreed to by Alvarez & Marsal. Alvarez & Marsal makes no representation or guarantee (i) that an appropriate restructuring proposal can be formulated for the Debtor, (ii) that restructuring is the best course of action for the company, or, (iii) if formulated, that any proposed restructuring plan will be accepted by the Debtor's creditors, shareholders and other constituents. Alvarez & Marsal will directly report to the CFO and will make recommendations to and consult with the CFO and other senior officers as the CFO directs. Dean E. Swick, a managing director of Alvarez & Marsal, will be responsible for the overall engagement. He will be assisted by other Alvarez & Marsal personnel. The Debtor will compensate Alvarez & Marsal for its services based on these hourly rates: Managing Directors $475 - $690 Directors $375 - $510 Associates $275 - $400 Analysts $150 - $300 Alvarez & Marsal will receive a minimum of $200,000 per month for 10 months or until an aggregate of $2 million in fees has been reached. Thereafter, the fees will be calculated at the hourly rate with no monthly minimum. If the Debtor's case is confirmed or dismissed prior to the point the $2 million mark is reached, then fees accrued at the greater of actual fees based on hours billed or $200,000 minimum per month will be due to the date of that confirmation or dismissal. The Debtor will pay directly or reimburse Alvarez & Marsal upon receipt of periodic billings, for all reasonable out-of-pocket expenses incurred in connection with its rendered services. Alvarez & Marsal will also be reimbursed for the reasonable fees and expenses of its counsel incurred in connection with the preparation, negotiation, enforcement and approval of its employment agreement with the Debtor. The Debtor will remit a $400,000 retainer to Alvarez & Marsal upon Court approval of the engagement, which will be credited against any amounts due at the termination of Alvarez & Marsal's engagement and the excess returned upon the satisfaction of all obligations. Neither Alvarez & Marsal nor any of its personnel or subcontractors will be considered an employee or agent of the Debtor, and the personnel and subcontractors of Alvarez & Marsal are not entitled to any of the benefits that the Debtor provides for its employees. Alvarez & Marsal will keep as confidential all non-public information received from the Debtor except (i) as requested by the Debtor or its legal counsel; (ii) as required by legal proceedings; or (iii) as reasonably required in the performance of the engagement. All obligations as to non-disclosure will cease as to any part of the information to the extent that the information is or becomes public other than as a result of a breach of this provision. The Debtor will not solicit, recruit or hire any Alvarez & Marsal employee effective from Jan. 20, 2005, and continuing for two years subsequent to the termination of the engagement. The Debtor will indemnify Alvarez & Marsal, its shareholders, employees, agents and representatives from and against any claim related to the performance of their obligations under the Engagement Letter. Mr. Swick assures the Court that Alvarez & Marsal does not hold or represent any interest adverse to the Debtor, its creditors or parties-in-interest, with respect to the matters on which Alvarez & Marsal is to be engaged. Alvarez & Marsal is a "disinterested person," as defined in Section 101(14) of the Bankruptcy Code. 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. (Yukos Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000) * FTI Consulting Promotes Five Attorneys as Sr. Managing Directors ------------------------------------------------------------------ FTI Consulting, Inc. (NYSE: FCN), the premier provider of corporate finance/restructuring, forensic and litigation consulting, and economic consulting, promoted Chris Armstrong, Steve Coulombe and Andrew Hinkelman to senior managing director in the Corporate Finance/Restructuring group, and Joseph Looby and Philip Stern to senior managing director in its Forensic and Litigation Consulting practice. Also, FTI disclosed the hiring of three senior managing directors: Jim Hunt and Brad Ross in its Corporate Finance/Restructuring group and Dr. Richard V. L. Cooper in its Economic Consulting practice. Promotions Dominic DiNapoli, chief operating officer, said "It is a pleasure to announce these well-earned promotions. These five executives are consummate professionals; they set the benchmark high, they are leaders in their field and they have a demonstrated commitment to client service excellence. It is through the efforts of executives like these that FTI is able to consistently deliver comprehensive solutions and tailored advice and insight to meet its clients' needs." Chris Armstrong was promoted from managing director to senior managing director in FTI's Corporate Finance/Restructuring group. Mr. Armstrong has over 17 years of diversified experience in a variety of industries and in both advisory and operating capacities. He began his career in the UK and Ireland where he worked in increasing capacities ranging from planning and marketing to COO of an advertising concern. He has significant cross-border and international restructuring experience which will benefit FTI's existing clients' needs in Europe and the US. He moved to the U.S. to work for Blockbuster Entertainment in 1996 and joined Price Waterhouse soon thereafter. Chris joined FTI in connection with the acquisition of PricewaterhouseCoopers' U.S. Business Recovery Services division in 2002. Mr. Armstrong has led many complex company side engagements in diverse industries, including steel, automotive, consumer goods manufacturing and retail. Mr. Armstrong is expected to transfer from Dallas to FTI's London office in 2005. Steve Coulombe was promoted from managing director to senior managing director in FTI's Corporate Finance/Restructuring group. Mr. Coulombe joined FTI in connection with the acquisition of PricewaterhouseCoopers' U.S. Business Recovery Services division in 2002. Prior to FTI, he spent several years in the real estate investment industry. Mr. Coulombe has been a significant contributor to the growth and increasing profile of the Corporate Finance/Restructuring group in the Northeast. He has been the lead managing director on several major engagements for large private equity funds and significant retail engagements, and has developed a following among the major lending institutions in the region. Mr. Coulombe's experience includes significant representation of institutional lenders and companies on both in- and out-of-court restructurings. Notably, he was a member of the team awarded the International Turnaround of the Year - 2002 award by the Turnaround Management Association for an international media company. Mr. Coulombe will be based in FTI's Washington, D.C. office. Andrew Hinkelman was promoted from managing director to senior managing director in FTI's Corporate Finance/Restructuring group. Mr. Hinkelman has over 10 years of experience, and came to FTI in connection with the acquisition of PricewaterhouseCoopers' U.S. Business Recovery Services division in 2002. He has worked in many areas of corporate finance, including corporate bankruptcies, out-of-court operational and financial restructurings, debt negotiations and trustee engagements, with an emphasis on high technology cases, transaction services, and providing forensic accounting services on bankruptcy related matters. Mr. Hinkelman has developed a core following of expanded client relationships and contributed to FTI's market leading presence in Northern California. Joseph Looby was promoted from managing director to senior managing director in FTI's Forensic and Litigation Consulting group. Mr. Looby, based in New York, is a forensic technology specialist focusing on electronic evidence consulting. He has 10 years experience in leading data investigations for public sector concerns and Am Law 100 firms. He specializes in the detection of financial statement errors, irregularities and defalcations. He has provided expert testimony on financial and technology issues. He is an experienced regulator and published software developer. Prior to joining FTI in 2003, Mr. Looby was in the Financial Advisory Services division of Deloitte & Touche. There he specialized in the detection of fraud in financial statement audits based on SAS 99 and provided forensic technology leadership to the firm's national audit technology steering committee. Philip Stern was promoted from managing director to senior managing director in FTI's Forensic and Litigation Consulting group. Mr. Stern, based in New York, has more than 32 years of private sector consulting and federal, state and city government experience, and has developed a reputation as an expert in corporate, computer and health care fraud, litigation consulting and crisis management. Mr. Stern was the regional director of the New York State Special Prosecutor's Office in charge of investigating and prosecuting fraud in the $10 billion Medicaid supported health care delivery system. Also, Mr. Stern served as a special assistant United States attorney in the Southern District of New York from 1986 to 1989. In this role, he was responsible for prosecuting joint federal/state crimes against the government-funded Medicaid system. New Appointments Jack Dunn, president and chief executive officer said, "We are proud of our ability to attract the highest caliber professionals and we are excited to welcome Jim, Brad and Rick to the company and to our expanding corporate finance/restructuring and economic consulting practices. Their experience and expertise will enable us to further enhance the advice and intellectual capital available to our clients." Jim Hunt joins FTI's Corporate Finance/Restructuring group from Venturi Partners, Inc. (VPI) where he was president and chief financial officer. Mr. Hunt directed all administrative functions of VPI, an information technology and commercial staffing company based in Charlotte, NC, and he oversaw the acquisition of over 25 companies by Venturi. Prior to joining Venturi, Mr. Hunt spent 18 years with Arthur Andersen, the last six years as an audit and business advisory services partner. Mr. Hunt will be based in FTI's Charlotte office where he will oversee transaction advisory services initiatives and pursue opportunities with private equity groups headquartered in the region. Brad Ross joins FTI's Corporate Finance/Restructuring group from the Houston office of Ernst & Young, where he was a senior manager responsible for providing transaction advisory related services. Mr. Ross also worked at Deloitte & Touche and PricewaterhouseCoopers, and he has over 16 years of public accounting experience. Mr. Ross will be located in FTI's Houston office where he will be responsible for growing that region's transaction advisory services practice, with a concentration in the energy sector. Dr. Richard V. L. Cooper joins FTI's Economic Consulting practice from Ernst & Young, where he was a managing partner of their economics and business analytics practice. Dr. Cooper is a nationally and internationally renowned expert in transfer pricing and, for the past three years, has been named by International Tax Review, a leading international tax journal, as "one of the world's top transfer pricing specialists." Most recently, his experience at Ernst & Young was building an economic advisory practice focusing on the retail and consumer products, telecommunications, utilities and pharmaceutical industries. Dr. Cooper is based in FTI's Chicago office, and in his new role he will be focused primarily on building an economic consulting practice to aid corporate clients in making internal business decisions. About FTI Consulting FTI Consulting -- http://www.fticonsulting.com/-- is the premier provider of corporate finance/restructuring, forensic and litigation consulting, and economic consulting. Strategically located in 24 of the major U.S. cities and London, FTI's total workforce of approximately 1,000 employees includes numerous PhDs, MBAs, CPAs, CIRAs and CFEs who are committed to delivering the highest level of service to clients. These clients include the world's largest corporations, financial institutions and law firms in matters involving financial and operational improvement and major litigation. * McDermott Expands in Brussels with Key Lawyers from Stanbrook --------------------------------------------------------------- McDermott Will & Emery reached an agreement with the senior partners of the highly rated Brussels-based firm Stanbrook & Hooper under which Clive Stanbrook QC and a team of lawyers will join the Firm, practicing in Brussels under the name of McDermott Will & Emery/Stanbrook LLP. Chairman Harvey Freishtat comments, "By incorporating Clive's team into our existing European practice, we will be able to provide our clients with an insight and experience to compare favorably with the best in the market. This venture is consistent with the Firm's goal of establishing a fully integrated European service in each of the major European financial and commercial centers. We are delighted to be joined by such a group of high caliber lawyers." Clive Stanbrook agrees, "McDermott is a dynamic player in Europe, its combination with Carnelutti last year and its growing strength elsewhere in Europe show it has the ambition and the size to compete at the top table in Europe. Our competition practice compares with the best but in the emerging landscape of legal practice the time has come for us to integrate into a broader based resource. We look forward to working with McDermott Will & Emery's competition lawyers around Europe and its highly rated practice in the United States to provide our clients with an exciting fully integrated competition resource." The combination of Stanbrook and McDermott's competition practices will produce a heavyweight contender in the European and international competition field. McDermott Will & Emery already provides substantial European competition law advice and representation to its European and international clients, to which will be added the considerable resources and experience of the Stanbrook team. Mr. Stanbrook and his team have represented clients in many of the most high profile cases, involving merger control and cartel investigations before the European Commission. They led the merger control filings in a number of cases including MCI/BT, MCI/Worldcom EY/Cap Gemini and in the cartel area have a track record that started with the paper pulp case and includes sectors such as oil and gas, LDPE and vitamins. The Stanbrook team's extensive experience before the European Courts will also enhance our ability to provide competition advocacy services to our clients. Scott Megregian, Head of the Firm's European Competition Group, confirms, "Their wealth of experience and knowledge with Commission procedures will significantly enhance the services we can offer clients of both firms and be a valuable addition to our integrated cross-border practice." Stanbrook & Hooper, pioneered the development of international trade practice in Brussels, and since its first case in the late 1970s, has been involved in more than 100 EU anti-dumping cases, including a number of precedent setting cases in the European Courts. The Stanbrook team represents individual and multinational producers/exporters in China, India, Pakistan and other Asian countries, and will complement McDermott Will & Emery's capacity to provide crucial trade/customs services to international investors and exporters in the emerging economies. The addition of the Stanbrook team will also enhance McDermott's ability to provide a full service EU and U.S. regulatory practice. With the addition of the new EU regulatory capabilities, the Firm will be uniquely positioned to provide integrated trans-Atlantic regulatory advice to clients in a diverse range of industries, including chemicals, energy, food, drugs and agriculture, telecoms and transport. About McDermott Will & Emery McDermott Will & Emery is an international law firm with more than 1000 lawyers who practice from the Firm's offices in Boston, Brussels, Chicago, Dusseldorf, London, Los Angeles, Miami, Milan, Munich, New York, Orange County, Rome, San Diego, Silicon Valley and Washington, D.C. About Stanbrook & Hooper Stanbrook & Hooper is one of the longest standing regulatory law firms in Brussels. Founded by English barristers in 1978, the firm has broadened its cultural and linguistic capabilities and now comprises lawyers from many different countries. The strength of the firm lies in the personal involvement of its partners and the experience they bring to the firm's areas of specialization. Known for the quality of its practice in competition and international trade, the firm has been involved over the years in many of the landmark cases in EU law. * New England Consulting Opens Buffalo Area Office -------------------------------------------------- New England Consulting Partners, LLC, a Boston-based management consulting and strategic advisory firm, opens its Buffalo area office at 300 International Drive, Suite 100, Williamsville New York. The new office will be headed up by one of its principals, Devin Hollands. Mr. Hollands has spent the past several years consulting owners of highly leveraged and financially distressed companies for the purpose of identifying and executing operational and financial restructuring opportunities. Mr. Hollands is a Certified Turnaround Professional and a member of the Turnaround Management Association. Tom Desmond, Managing Partner of NECP said, "Devin brings a wealth of experience and an astute sense of cash management expertise to our firm. We are excited about having Devin head up our Upstate and Pennsylvania region." About the Firm New England Consulting Partners, LLC specializes in a variety of consulting and advisory services including operational cash flow, interim and crisis management, financial restructuring, sales and operational analyses, loan due diligence, IT strategy, business valuations, mergers & acquisitions, liquidations, preference analysis, fraudulent conveyance analysis, bankruptcy and trusteeships. * BOND PRICING: For the week of February 14 - February 18, 2005 --------------------------------------------------------------- Issuer Coupon Maturity Price ------ ------ -------- ----- ABC Rail Product 10.500% 12/31/04 0 Adelphia Comm. 3.250% 05/01/21 9 Adelphia Comm. 6.000% 02/15/06 10 American Airline 7.377% 05/23/19 70 AMR Corp. 4.500% 02/15/24 71 AMR Corp. 10.200% 03/15/20 68 Applied Extrusion 10.750% 07/01/11 59 Armstrong World 6.350% 08/15/03 71 Armstrong World 7.450% 05/15/29 70 ATA Holdings 12.125% 06/15/10 42 ATA Holdings 13.000% 02/01/09 40 Bank New England 8.750% 04/01/99 11 Bank New England 9.500% 02/15/96 2 Borden Chemical 9.500% 05/01/05 1 Burlington Northern 3.200% 01/01/45 65 Calpine Corp. 7.750% 04/15/09 71 Calpine Corp. 7.875% 04/01/08 74 Calpine Corp. 8.500% 02/15/11 70 Calpine Corp. 8.625% 08/15/10 70 Cendant Corp. 4.890% 08/17/06 51 Chic East Ill. RR 5.000% 01/01/54 60 Comcast Corp. 2.000% 10/15/29 46 Continental Airlines 8.499% 05/01/11 75 Cluett American 10.125% 05/15/08 64 Cray Research 6.125% 02/01/11 73 Delta Air Lines 2.875% 02/18/24 55 Delta Air Lines 7.711% 09/18/11 67 Delta Air Lines 7.779% 01/02/12 60 Delta Air Lines 7.900% 12/15/09 54 Delta Air Lines 8.000% 06/03/23 56 Delta Air Lines 8.300% 12/15/29 43 Delta Air Lines 9.000% 05/15/16 45 Delta Air Lines 9.200% 09/23/14 54 Delta Air Lines 9.250% 03/15/22 44 Delta Air Lines 9.750% 05/15/21 44 Delta Air Lines 10.000% 08/15/08 63 Delta Air Lines 10.060% 01/02/16 49 Delta Air Lines 10.125% 05/15/10 53 Delta Air Lines 10.375% 02/01/11 53 Delta Air Lines 10.375% 12/15/22 48 Eagle Food Center 11.000% 04/15/05 3 Enron Corp. 6.400% 07/15/06 29 Enron Corp. 6.625% 11/15/05 30 Enron Corp. 6.750% 09/15/04 30 Enron Corp. 9.125% 04/01/03 31 Enron Corp. 9.875% 06/15/09 38 Falcon Products 11.375% 06/15/09 38 Federal-Mogul Co. 7.500% 01/15/09 32 Federal-Mogul Co. 8.370% 11/15/01 30 Finova Group 7.500% 11/15/09 46 Inland Fiber 9.625% 11/15/07 50 Intermet Corp. 9.750% 06/15/09 66 Iridium LLC/CAP 10.875% 07/15/05 16 Iridium LLC/CAP 11.250% 07/15/05 16 Iridium LLC/CAP 13.000% 07/15/05 16 Iridium LLC/CAP 14.000% 07/15/05 16 Kaiser Aluminum & Chem. 12.750% 02/01/03 16 Kmart Funding 8.800% 07/01/10 75 Level 3 Comm. Inc. 2.875% 07/15/10 56 Level 3 Comm. Inc. 6.000% 03/15/10 51 Level 3 Comm. Inc. 6.000% 09/15/09 52 Liberty Media 3.750% 02/15/30 68 Liberty Media 4.000% 11/15/29 73 Liberty Media 4.000% 11/15/29 73 Metro Mortgage 9.000% 12/15/04 0 Mirant Corp. 2.500% 06/15/21 74 Mirant Corp. 5.750% 07/15/07 75 Mississippi Chem. 7.250% 11/15/17 73 Muzak LLC 9.875% 03/15/09 60 Northern Pacific Railway 3.000% 01/01/47 63 Northwest Airlines 8.070% 01/02/15 64 Northwest Airlines 8.130% 02/01/14 64 NRG Energy Inc. 6.500% 05/16/06 0 Nutritional Src. 10.125% 08/01/09 72 Oakwood Homes 8.125% 03/01/09 25 Oglebay Norton 10.000% 02/01/09 75 O'Sullivan Ind. 13.375% 10/15/09 22 Owens Corning 7.000% 03/15/09 63 Owens Corning 7.500% 05/01/05 64 Owens Corning 7.500% 08/01/18 65 Owens Corning 7.700% 05/01/08 66 Pegasus Satellite 12.375% 08/01/06 60 Pegasus Satellite 12.500% 08/01/07 61 Pegasus Satellite 13.500% 03/01/07 1 Pen Holdings Inc. 9.875% 06/15/08 50 Penn Traffic Co. 11.000% 06/29/09 30 Polaroid Corp. 7.750% 01/15/07 1 Polaroid Corp. 11.500% 02/15/06 3 Primus Telecom 3.750% 09/15/10 68 Read-Rite Corp. 6.500% 09/01/04 49 Reliance Group Holdings 9.000% 11/15/00 25 Revlon Cons. Prod. 8.125% 02/01/06 45 RJ Tower Corp. 12.000% 06/01/13 63 S3 Inc. 5.750% 10/01/03 0 Specialty Paperb. 9.375% 10/15/06 75 Syratech Corp. 11.000% 04/15/07 48 Tower Automotive 5.750% 05/15/24 20 United Air Lines 7.762% 10/01/05 3 United Air Lines 9.000% 12/15/03 7 United Air Lines 9.125% 01/15/12 6 United Air Lines 10.250% 07/15/21 9 United Air Lines 10.670% 05/01/04 8 Univ. Health Services 0.426% 06/23/20 53 Westpoint Stevens 7.875% 06/15/05 2 Westpoint Stevens 7.875% 06/15/08 2 Zurich Reinsurance 7.125% 10/15/23 63 ********* 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. 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