T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, February 23, 2005, Vol. 9, No. 45 Headlines ACCESS CARDIOSYSTEMS: Case Summary & Largest Unsecured Creditors ACCIDENT & INJURY: Section 341(a) Meeting Slated for March 22 AINSWORTH LUMBER: Will Discuss 4th Quarter Results on March 1 ARGUS CORP: Needs CDN$251,000 to Pay Pref. Stock Dividends in May ATA AIRLINES: Names John G. Denison Chief Executive Officer ATA AIRLINES: Wants to Lease 3 Engines from GE Engine Leasing ATHLETES FOOT: Has Until May 9 to Make Most Lease Decision ATHLETES FOOT: Creditors Committee Taps BDO Seidman as Accountants B&A CONSTRUCTION: Taps Scroggins & Williamson as Bankr. Counsel BEAR STEARNS: Moody's Puts Ba2 Rating on $22.025M Class M-7 Certs. BELLA VISTA: Moody's Puts Ba2 Rating on $5.471M Class B-4 Certs. BOMBARDIER INC: Aerospace Delivers 329 Aircraft in FY 2004-05 C.R. STONE CONCRETE: Case Summary & 20 Largest Unsecured Creditors CAESARS ENT: HSR Waiting Period on Harrah's Merger Expires CATHOLIC CHURCH: Spokane Gets OK to Hire Turner Stoeve & Gagliardi CHOICE HOTELS: Dec. 31 Balance Sheet Upside-Down by $203 Million CINCINNATI BELL: Dec. 31 Balance Sheet Upside-Down by $621.5 Mil. CITATION CAMDEN: Has Until March 1 to File Plan of Reorganization DATATEC SYSTEMS: Court Approves 363 Sale to Eagle Acquisition DONNKENNY: U.S. Trustee Appoints 5 Creditors to Serve on Committee DPL INC: Moody's Upgrades Senior Unsecured Debt Rating to Ba2 ENTERPRISE PRODUCTS: Prices $250 Million Private Debt Offering EVOLVED DIGITAL: Names Richard J. Eskind Chairman of the Board FEDERAL-MOGUL: Employs A.T. Kearney for Cost Reduction Advice FMC CORP: Astaris Obtains New $75 Million Revolving Facility HEDMAN RESOURCES: Looks to Raise Up to $1 Mil. in Equity Placement HOLLINGER INC: Illinois Court Affirms Dismissal of RICO Lawsuit HOLLINGER INC: Will Pay $5M Interest on Senior Notes on March 1 HOLLINGER INC: Can't Decide Yet on Proposed Privatization Move HOLT ELECTRICAL: Case Summary & 20 Largest Unsecured Creditors HORIZON MORTGAGE: Moody's Puts Ba2 Rating on $450K B-4 Sub. Certs. IMPERIAL METALS: Inks $10M Convertible Debenture Placement Deal INGLES MARKETS: Earns $28.8 Million of Net Income in 4th Quarter INTEGRATED HEALTH: Wants Objection Deadline Extended to May 6 INTERSTATE BAKERIES: Court Authorizes Payment of Benefits IRWIN WHOLE: Moody's Puts Ba2 Rating on $10.556M Class M-7 Certs. JAZZ PHOTO: Has to Cease Operations by Mar. 1 & Liquidate Business KMART HOLDINGS: Shareholders to Vote on Sears Merger on March 24 LAIDLAW INT'L: Buys Pension Plan's Shares for $84.5 Million LEMONTONIC INC: Awards 300,000 Class A Shares to CFO & COO MAXIDE ACQUISITION: Wants Robert Berger as Claims & Noticing Agent MCI INCORPORATED: Carlos Slim Disclose 13.7% Equity Stake METROMEDIA INT'L: Georgian Unit Issues $27 Million Dividend MIRANT CORP: Wants to Enter into Addendum to ACE Worker's Policy MOSAIC COMPANY: Board Declares 7.50% Preferred Stock Dividend NATIONAL CENTURY: JPMorgan & Bank One Want Dist. Ct. in Control NEWAVE INCORPORATED: Outlines Strategic Initiatives for 2005 NOVO NETWORKS: Forms Strategic Partnership with Berliner Comms. NQL DRILLING: Look for Fourth Quarter Financials on Monday OMT INC: Janice Miles Resigns as Chief Financial Officer OMT INC: Looks to Raise $400K from Subordinate Debenture Offering ORMET CORP: Ohio Congressman Wants to End Exclusive Periods PARMALAT: Farmland Wants to Reject GE Capital Master Lease Pact PLATTE VIEW: Brings-In Sender & Wasserman as Bankruptcy Attorneys PLATTE VIEW: Section 341(a) Meeting Slated for March 10 POPULAR ABS: Moody's Puts Ba1 Rating on $6.250M Class B-3 Certs. PRIDE INT'L: French Unit Sells Jackup Rig for $40 Million in Cash QWEST COMMS: Dec. 31 Equity Deficit Widens to $2.6 Billion RELIANT ENERGY: Robert Harvey Resigns as Executive Vice President SEARS HOLDINGS: Shareholders to Vote on Merger on March 24 SECURITY NATIONAL: Moody's Puts Ba2 Rating on $3.097M Sub. Certs. SOLUTIA INC: Nitro Residents Wants to File $4 Billion in Claims SOLUTIA INC: Astaris Obtains New $75 Million Revolving Facility STRATOS GLOBAL: Buying Back 7.4 Mil. Common Shares at $10.75 Each SYRATECH CORPORATION: Wants to Employ Weil Gotshal as Counsel SYRATECH CORPORATION: U.S. Trustee Will Meet Creditors on Mar. 24 TASEKO MINES: Equity Deficit Widens to $4,335,271 at December 31 TRADEX CORPORATION: Voluntary Chapter 11 Case Summary TRANSCOM ENHANCED: Case Summary & 20 Largest Unsecured Creditors UAL CORP: Pilots Demand Continued Pension Benefit Payments UAL CORP: Retired Pilots Want Pension Payments Continued UNITED SURGICAL: Fourth Quarter Earnings Up 49% to $9.4 Million US AIRWAYS: Relieves Logan and Company as Claims Agent USG CORP: US Gypsum to Invest $132M to Rebuild Sheetrock Brand USG CORP: Wants Until Sept. 1 to Make Lease-Related Decisions USGEN: Wants Court to Approve NEP & Taunton Settlement Agreement VAST EXPLORATION: Looks to Raise $3M in Private Equity Placement VP GROUP: Receives $230,000 from Equity Private Placement W.R. GRACE: Wants to Appeal Solow's $25 Million Judgment WINN-DIXIE: Files for Chapter Protection in S.D. New York WINN-DIXIE STORES: Case Summary & 50 Largest Unsecured Creditors WINN-DIXIE: Wachovia Bank Extends $800 Million of DIP Financing WISTON XIV: Files Schedules of Assets & Liabilities in Nebraska WODO LLC: Foster Pepper Approved as Creditors Committee Counsel YUKOS OIL: Court To Rule on Dismissal Motion This Week * Liquidation World Names Jonathan Hill President and CEO * Upcoming Meetings, Conferences and Seminars ********* ACCESS CARDIOSYSTEMS: Case Summary & Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Access Cardiosystems, Inc. 150 Baker Avenue Extension Concord, Massachusetts 01742 Bankruptcy Case No.: 05-40809 Type of Business: The Debtor sells medical supplies. See http://www.accesscardiosystems.com/ Chapter 11 Petition Date: February 18, 2005 Court: District of Massachusetts (Worcester) Judge: Henry J. Boroff Debtor's Counsel: Jeffrey D. Sternklar, Esq. Jennifer L. Hertz, Esq. Duane Morris, LLP 470 Atlantic Avenue, Suite 500 Boston, MA 02210 Tel: 617-289-9216 Fax: 617-289-9201 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 ------ --------------- ------------ SMTEK International, Inc. Vendor $480,000 Dept. 2874 Los Angeles, CA 90084 Schiller Handelsgesellschaft Distributor $255,390 m.b.H. Perkins Smith & Cohen One Beacon Street, 30th fl. Boston, MA 02108 Matrx Medical Inc. Distributor $176,631 P. O. Box 210 Ballentine, SC 29002 David M. Barash Employee $129,148 Aved Electronics Inc. Vendor $82,049 Ropes & Gray Professional $71,662 Boone County Fire Protection Customer $70,536 District Gayatri Software Vendor $52,768 Pace Plus, Inc. Customer $47,300 Healthcare Tech. Intl. Ltd. Vendor $43,642 R. L. Dolby & Company, Ltd. Distributor $41,655 All Mold, Inc. Vendor $39,695 Katecho, Inc. Vendor $38,932 Merrill Communications, LLC Vendor $38,562 Brian Healey Employee $37,500 Lane Powell Spears Lubersky Professional $29,709 Pandiscio & Pandiscio, P.C. Professional $29,251 Mark H. Totman Employee $27,500 United Emergency Networks Customer $22,124 Inc. Bleck Design Group Vendor $20,000 ACCIDENT & INJURY: Section 341(a) Meeting Slated for March 22 ------------------------------------------------------------- The United States Trustee for Region 7 will convene a meeting of Accident & Injury Pain Centers, Inc. and its debtor-affiliate's creditors at 10:00 a.m., on March 22, 2005, at the Office of the U.S. Trustee, Room 976 located in 1100 Commerce Street in Dallas, Texas. This is the first meeting of creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Dallas, Texas, Accident & Injury Pain Centers, Inc., -- http://www.accinj.com/-- operate clinics that treat patients with highly advanced therapy equipment and techniques. The Company and its debtor-affiliates filed for chapter 11 protection on Feb. 10, 2005 (Bankr. N.D. Tex. Case No. 05-31688). Glenn A. Portman, Esq., at Bennett, Weston & LaJone, P.C., represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they reported estimated assets and debts of $10 million to $50 million. AINSWORTH LUMBER: Will Discuss 4th Quarter Results on March 1 ------------------------------------------------------------- Ainsworth Lumber Co. Ltd. (TSX:ANS) will host a conference call for the investor community on Tuesday, March 1, 2005 at 8:30 a.m. PST (11:30 a.m. EST) to review the fourth quarter 2004 results that will be released in the late afternoon of February 28. Call participants may dial 1-800-660-7963 and reference conference ID number 21233200. Replay of the conference call will be available until March 8, 2005 by calling 1-800-558-5253 and using conference ID number 21233200. Ainsworth Lumber Co., Ltd., a British Columbia corporation headquartered in Vancouver, Canada, is a publicly traded integrated OSB producer that also manufactures specialty overlaid plywood and finger-jointed lumber. Post the Potlatch acquisition, Ainsworth will have a 13% market share in OSB, and OSB sales will represent approximately 97% of total revenues. * * * As reported in the Troubled Company Reporter on Sept. 16, 2004, Moody's Investors Service assigned a B2 rating to Ainsworth Lumber Co. Ltd.'s proposed US$450 million new note issues. The new notes are being issued to fund Ainsworth's US$457.5 million purchase of Potlatch Corporation's oriented strandboard -- OSB -- assets, and will rank equally with Ainsworth's existing senior unsecured notes. Accordingly, the ratings on the existing notes, as well as Ainsworth's senior implied and issuer ratings, were downgraded to B2. The ratings outlook is stable. Standard & Poor's Ratings Services also affirmed its 'B+' long-term corporate credit and senior unsecured debt ratings on Vancouver, B.C.-based Ainsworth Lumber Co. Ltd. At the same time, the ratings were removed from CreditWatch, where they had been placed on Aug. 26, 2004, following the company's announcement to purchase all of Potlatch Corp.'s oriented strandboard -- OSB -- manufacturing and related facilities for about US$457.5 million. Ainsworth's proposed new issues of US$300 million of fixed senior unsecured notes due 2012 and US$150 million of floating variable- rate senior notes due 2010 were also assigned 'B+' ratings. The outlook is stable. ARGUS CORP: Needs CDN$251,000 to Pay Pref. Stock Dividends in May ----------------------------------------------------------------- Argus Corporation Limited (TSX:AR.PR.A)(TSX:AR.PR.D)(TSX:AR.PR.B) disclosed that it had Cdn. $124,035 of cash as of the close of business on February 18, 2005. Argus indirectly owns 21,596,387 Common Shares of Hollinger with a market value at the close of trading on February 18, 2005, on the Toronto Stock Exchange of Cdn. $6.10 per share or an aggregate of Cdn. $131,737,961. The market value of its shareholdings is subject to the minority interest of The Ravelston Corporation Limited, the parent of Argus, stated to be Cdn. $20,585,670 at September 30, 2004, and future income taxes on unrealized net capital gains that were stated to be Cdn. $14,793,176 at September 30, 2004. At that date, the value of Argus' investment in Common Shares of Hollinger was Cdn. $86,385,548. Ravelston holds all of the Common Shares and Class C Preference Shares of Argus and 2,900 of Argus' 55,893 issued Class A Preference Shares $2.60 Series. Argus is indebted to Ravelston in the amount of Cdn. $251,703 in respect of a loan provided by Ravelston to permit Argus to pay dividends on its Class A and Class B Preference Shares. The loan was made on January 31, 2005, pursuant to a promissory note. The loan bears no interest and is due to be repaid on February 28, 2006. Dividends Argus' next scheduled regular quarterly dividends are to be paid on May 1, 2005, to the holders of record of its Class A and Class B Preference Shares at the close of business on January 20, 2005. The total amount of the dividends that are then to be paid is approximately Cdn. $251,703. Argus will require additional funds to be able to pay the May 1, 2005, and future dividends on its Class A and Class B Preference Shares on an uninterrupted basis. Argus intends to make efforts to ensure that such dividend payments can be made on May 1, 2005 and continue to be made thereafter. Argus Corporation Limited is a holding company and its assets consist principally of an investment in the retractable common shares of Hollinger, Inc., a Canadian public company listed on the Toronto Stock Exchange, a receivable from The Ravelston Corporation Limited, the Company's parent company and cash. Argus owns or controls 61.8% of the Retractable Common Shares These Common Shares are the only significant asset held by Argus. Hollinger in turn owns 66.8% of the voting shares and 17.4% of the equity of International. Hollinger and International have both also been subject to Management and Insider Cease Trade Orders for their failure to file financial statements and related reports when required. Those orders were issued on June 1, 2004. Based on the company's alternative financial reporting, as of September 30, 2004, Argus has a $44,034,263 stockholders' deficit compared to $6,522,159 of positive equity at Dec. 31, 2003. ATA AIRLINES: Names John G. Denison Chief Executive Officer ----------------------------------------------------------- ATA Airlines, Inc., principal operating subsidiary of ATA Holdings Corp. (ATAHQ), named John G. Denison its Chief Executive Officer. The appointment is expected to continue through the Company's Chapter 11 reorganization period. Mr. Denison, who has served as the Company's Co-Chief Restructuring Officer since Jan. 20, 2005, will report to J. George Mikelsons, Chairman and Chief Executive Officer of ATA Holdings Corp. "John has proven himself to be a valuable member of our senior management team in the short time he has been with ATA," said George Mikelsons. "We appreciate his willingness to take on a greater leadership role." Prior to joining ATA, Mr. Denison served in several senior management positions with Southwest Airlines from 1986 to 2001, including Executive Vice President of Corporate Services and Chief Financial Officer. Prior to joining Southwest, Mr. Denison held various positions with The LTV Corporation and Chrysler Corporation. Mr. Denison graduated from Oakland University in Rochester, Michigan, with a B.A. in economics and received an M.B.A. in finance from Wayne State University in Detroit, Michigan. Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA Holdings Corp. -- http://www.ata.com/-- is the nation's 10th largest passenger carrier (based on revenue passenger miles) and one of the nation's largest low-fare carriers. ATA has one of the youngest, most fuel-efficient fleets among the major carriers, featuring the new Boeing 737-800 and 757-300 aircraft. The airline operates significant scheduled service from Chicago-Midway, Hawaii, Indianapolis, New York and San Francisco to over 40 business and vacation destinations. Stock of parent company, ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. The Company and its debtor-affiliates filed for chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case No. 04- 19866, 04-19868 through 04-19874). Terry E. Hall, Esq., at Baker & Daniels, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $745,159,000 in total assets and $940,521,000 in total debts. ATA AIRLINES: Wants to Lease 3 Engines from GE Engine Leasing ------------------------------------------------------------- Pursuant to Section 363 of the Bankruptcy Code, ATA Airlines, Inc., seeks the United States Bankruptcy Court for the Southern District of Indiana's authority to enter into new leases for three spare engines with GE Engine Leasing, as agent or principal. Jeffrey J. Graham, Esq., at Sommer Barnard Attorneys, PC, in Indianapolis, Indiana, relates that after the Petition Date, ATA Airlines entered into several agreements with GE Engine Leasing and other lessors, secured creditors, and other parties-in- interest to comply with the deadline imposed by operation of Section 1110 of the Bankruptcy Code. Pursuant to its 1110 Filing with regard to GE Engine Leasing and its affiliates, ATA Airlines agreed to reject the leases pertaining to four spare engines, with the understanding that the parties could thereafter attempt to negotiate a new agreement with respect to one or more of the spare engines. ATA Airlines has concluded its negotiations and has determined that entering into new medium-term leases with GE Engine Leasing for three spare engines still being used by ATA Airlines will allow the Airline to retain sufficient spare engines meeting its requirements at the most reasonable cost. Mr. Graham explains that although the Airline is in the process of reviewing and in some cases altering its fleet, the retention of a prudent number of spare engines is essential to ATA Airline's operational and safety needs and the Debtors' reorganization effort. The retention of the engines is necessary to avoid delays and maintain flight schedules. In addition to benefits of the new lease rates, the retention saves ATA Airlines the expense of removing the engines from any aircraft and returning the engines to GE Engine Leasing. Headquartered in Indianapolis, Indiana, ATA Airlines, owned by ATA Holdings Corp. -- http://www.ata.com/-- is the nation's 10th largest passenger carrier (based on revenue passenger miles) and one of the nation's largest low-fare carriers. ATA has one of the youngest, most fuel-efficient fleets among the major carriers, featuring the new Boeing 737-800 and 757-300 aircraft. The airline operates significant scheduled service from Chicago-Midway, Hawaii, Indianapolis, New York and San Francisco to over 40 business and vacation destinations. Stock of parent company, ATA Holdings Corp., is traded on the Nasdaq Stock Exchange. The Company and its debtor-affiliates filed for chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case No. 04- 19866, 04-19868 through 04-19874). Terry E. Hall, Esq., at Baker & Daniels, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $745,159,000 in total assets and $940,521,000 in total debts. (ATA Airlines Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., 215/945-7000) ATHLETES FOOT: Has Until May 9 to Make Most Lease Decision ---------------------------------------------------------- The Honorable Stuart M. Bernstein of the U.S. Bankruptcy Court for the Southern District of New York extended, until Mar. 31 and May 9, 2005, the periods within which Athlete's Foot Stores, LLC, and its debtor-affiliate can elect to assume, assume and assign, or reject two groups of unexpired nonresidential real property leases. The May 9 lease decision deadline applies to the Debtor's leases referred to as Schedule 1 Remaining Retail, Warehouse and Corporate Leases, consisting of 106 unexpired nonresidential leases. The Mar. 31 deadline relates to the group of leases referred to as the Schedule 2 Remaining Retail Leases, consisting of 10 unexpired nonresidential leases. Both groups of unexpired nonresidential leases are subject to the Court's Going Out of Business (GOB) Sale Order, dated Dec. 17, 2004, and the Lease Sale Procedures Order dated Dec. 28, 2005. The Debtors explain that the store closing sales authorized under the GOB Order are on-going and they are still marketing all the remaining leases scheduled for assumption and assignment. The Debtors add that until all those store closing sales are concluded, the Debtors need to remain in possession of the Retail Leases under the two Schedules of Leases. The Debtors relate that in an auction conducted on Jan. 31, 2005, they were successful in soliciting bids for 60 of the Retail Leases for an aggregate purchase price of approximately $5,845,000, exclusive of value obtained for lease terminations with landlords. The Debtors continue their efforts to identify purchasers for the other remaining leases that were not sold during the auction. The Debtors assure Judge Bernstein that extension of the Sec. 365(d)(4) deadline will not prejudice the landlords of the remaining leases and they are current on all postpetition rents of those leases. Headquartered in New York, New York, Athlete's Foot Stores, LLC, -- http://www.theathletesfoot.com/--operates approximately 125 athletic footwear specialty retail stores in 25 states. The Company and its debtor-affiliate filed for chapter 11 protection on December 9, 2004 (Bankr. S.D.N.Y. Case No. 04-17779). Bonnie Lynn Pollack, Esq., and John Howard Drucker, Esq., at Angel & Frankel, P.C. represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed total assets of $33,672,000 and total debts of $39,452,000. ATHLETES FOOT: Creditors Committee Taps BDO Seidman as Accountants ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York gave the Official Committee of Unsecured Creditors of Athlete's Foot Stores, LLC, and its debtor-affiliate, permission to employ BDO Seidman, LLP, as its accountants. BDO Seidman will: a) analyze the Debtors' financial operations and real property interests, including lease assumptions and rejections; b) perform forensic investigating services regarding prepetition activities of the Debtors in order to identify potential causes of action and perform claims analysis for the Committee, including analysis of reclamation claims; c) verify the physical inventory of merchandise, supplies, equipment and other material assets and liabilities, as necessary; d) analyze the Debtors' liquidation budgets, cash flow projections, restructuring programs, selling and general administrative structure and other reports or analyses prepared by the Debtors or its professionals in order to advise the Committee on the liquidation of the Debtors' operations; e) scrutinize cash disbursements on an on-going basis for the period subsequent to the Petition Date and analyze transactions with insiders, related and affiliated companies; f) assist the Committee in its review of the financial aspects of a plan of liquidation to be submitted by the Debtors and attend meetings of creditors and conference calls with representatives of the creditor groups and their counsel; g) prepare hypothetical orderly liquidation analysis and monitor the sale or liquidation of the Debtors; h) analyze the financial ramifications of any proposed transactions for which the Debtors seek Bankruptcy Court approval, including post-petition financing, sale of all or a portion of the Debtors' assets, management compensation and retention and severance plans; i. perform all other necessary services as the Committee or its counsel may request in relation to the financial, business and economic issues that may arise in the Debtors' chapter 11 cases. William K. Lenhart, C.P.A., a Member at BDO Seidman, reports the Firm's professionals bill: Designation Hourly Rate ----------- ----------- Partners $335 - $675 Senior Managers $230 - $510 Managers $210 - $345 Senior Staff $150 - $255 Staff $95 - $195 BDO Seidman assures the Court that it does not represent any interest adverse to the Committee, the Debtors or their estates. Headquartered in New York, New York, Athlete's Foot Stores, LLC, -- http://www.theathletesfoot.com/--operates approximately 125 athletic footwear specialty retail stores in 25 states. The Company and its debtor-affiliate filed for chapter 11 protection on December 9, 2004 (Bankr. S.D.N.Y. Case No. 04-17779). Bonnie Lynn Pollack, Esq., and John Howard Drucker, Esq., at Angel & Frankel, P.C. represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed total assets of $33,672,000 and total debts of $39,452,000. B&A CONSTRUCTION: Taps Scroggins & Williamson as Bankr. Counsel --------------------------------------------------------------- B&A Construction Co., Inc., asks the U.S. Bankruptcy Court for the Northern District of Georgia, Gainesville Division, for authority to retain Scroggins & Williamson as its bankruptcy. Scroggins & Williamson is expected to: a) prepare pleadings and applications; b) conduct examinations; c) advise the Debtor of its rights, duties and obligations as debtor-in-possession; d) consult and represent the Debtor with respect to the formulation of a chapter 11 plan; e) perform legal services incidental and necessary in the day-to-day operation of the Debtor's business, including, but not limited to, institution and prosecution of necessary legal proceedings, and general business and corporate legal advice and assistance; and f) take any and all other action incidental to the proper preservation and administration of the Debtor's estate and business. Robert Williamson, Esq., a principal at Scroggins & Williamson, discloses that his Firm received a $26,000 retainer from B&A Construction. The hourly billing rates of professionals at Scroggins & Williamson are: Designation Rate ----------- ---- Attorneys $210-305 Legal Assistants $75 To the best of the Debtors' knowledge, Scroggins & Williamson is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Gainesville, Georgia, Scroggins & Williamson, is a commercial, highway and residential grading contractor. The Company filed for chapter 11 protection on Feb. 18, 2005 (Bankr. N.D. Ga. Case No. 05-20421). When the Debtor filed for protection from its creditors, it estimated assets and debts between $10 million to $50 million. BEAR STEARNS: Moody's Puts Ba2 Rating on $22.025M Class M-7 Certs. ------------------------------------------------------------------ Moody's Investors Service has assigned an Aaa rating to the senior certificates issued by Bear Stearns Asset Backed Securities I Trust 2005-HE1, and ratings ranging from Aa2 to Ba2 to the subordinate certificates in the deal. The securitization is backed by mortgage loans primarily originated by Encore Credit Corporation (51.91%), and Decision One Mortgage Company, LLC (19.94%). The remaining mortgage loans were originated by various originators, none of which have originated more than 10% of the loans in the aggregate. The pool consists of both adjustable-rate (83.31%) and fixed-rate (16.69%) subprime mortgage loans acquired by EMC Mortgage Corporation. The ratings are based primarily on the credit quality of the loans, and on the protection from subordination, over-collateralization, and excess spread. The credit quality of the loan pool is in line with the average loan pool backing recent subprime securitizations. EMC Mortgage will act as master servicer of the loans. Moody's has assigned EMC Mortgage its top servicer quality rating (SQ1) as a primary servicer of subprime loans. The complete rating actions are: * Class I-A-1, $191,996,000, rated Aaa * Class I-A-2, $88,379,000, rated Aaa * Class I-A-3, $22,015,000, rated Aaa * Class II-A-1, $721,706,000, rated Aaa * Class II-A-2, $180,426,000, rated Aaa * Class M-1, $100,250,000, rated Aa2 * Class M-2, $81,263,000, rated A2 * Class M-3, $27,341,000, rated A3 * Class M-4, $18,987,000, rated Baa1 * Class M-5, $18,227,000, rated Baa2 * Class M-6, $17,468,000, rated Baa3 * Class M-7, $22,025,000, rated Ba2 The Class M-7 certificates are being offered in privately negotiated transactions without registration under the 1933 Act. The issuance was designed to permit resale under Rule 144A. BELLA VISTA: Moody's Puts Ba2 Rating on $5.471M Class B-4 Certs. ---------------------------------------------------------------- Moody's Investors Service has assigned a rating of Aaa to the senior certificates issued in the BellaVista Mortgage Trust 2005-01 securitization of hybrid and negative amortization loans secured by first liens on one- to four-family residential properties. Ratings of Aa2, A2, Baa2 and Ba2 were also assigned to the subordinate classes. According to Moody's analyst Amita Shrivastava, the ratings of the certificates are based on the quality of the underlying mortgage, the credit support provided through subordination, the legal structure of the transaction, as well as Countrywide's capability as a servicer of mortgage loans. The underlying collateral consists of 30-year and 40-year hybrid and negative amortization mortgage loans. The mortgage loans are divided into four groups. All loans in group I are negative amortization loans, loans in group 2 are 1-month, 6-month or 1-year LIBOR loans while loans in groups 3 and 4 are hybrids. Countrywide Home Loans Servicing LP will be the master servicer of the mortgage loans. Countrywide is considered to be a highly capable servicer of prime quality mortgage loans. The complete rating actions are: Issuer: BellaVista Mortgage Trust 2005-01 Depositor: BellaVista Funding Corporation Master Servicer: Countrywide Home Loans Servicing LP * Class I-A-1, $164,994,000, Aaa * Class I-A-2, $110,000,000, Aaa * Class II-A, $468,793,000, Aaa * Class III-A, $36,867,000, Aaa * Class IV-A, $76,622,000, Aaa * Class I-A-X, Interest Only/Principal Only, Aaa * Class II-A-X, Interest Only, Aaa * Class IV-A-X, Interest Only, Aaa * Class A-R, $100, Aaa * Class B-X, Interest Only/Principal Only, Aa2 * Class B-1, $19,150,000, Aa2 * Class B-2, $12,310,000, A2 * Class B-3, $9,119,000, Baa2 * Class B-4, $5,471,000, Ba2 BOMBARDIER INC: Aerospace Delivers 329 Aircraft in FY 2004-05 ------------------------------------------------------------- Bombardier Inc.'s subsidiary Bombardier Aerospace delivered 329 aircraft in the fiscal year ended January 31, 2005. This compares to the 324 aircraft deliveries in the previous fiscal year 2003/04 (the year ending January 31, 2004). "Our ongoing investment in new aircraft platforms has begun to pay dividends and is validated by this fiscal year's increased deliveries of the new Bombardier Learjet 40, Challenger 300 and Global 5000 business aircraft. These products are entering the market at the perfect time," said Pierre Beaudoin, president and chief operating officer, Bombardier Aerospace. "In the regional aircraft segment, deliveries of our larger regional jets, the Bombardier CRJ700 and CRJ900 aircraft, also increased, reflecting our customers' wish to remain with the superior operating economics of the CRJ family of aircraft." "As we proactively manage short-term challenges within the context of an industry in recovery, we continue to plan and make decisions for the long term to maintain our leadership position and ensure our success," he added. Deliveries in the regional aircraft segment totalled 200 aircraft compared to 232 for the same period last year. Deliveries of the Bombardier CRJ Series reached 178 compared to 214 during last fiscal year 2003/04 and deliveries of Bombardier Q Series aircraft reached 22 aircraft compared with 18 in the previous fiscal year 2003/04. This includes delivery of 16 Bombardier Q400 aircraft, the new-generation, high-speed 70-passenger turboprop whose profitability and strong passenger appeal have been demonstrated by follow-on orders from operators such as All Nippon Airways Co. Ltd., Japan Air Commuter, Horizon Air and FlyBE. In the business aircraft segment, 128 units were delivered compared to 89 for the same period last year, an increase of 44 per cent. Fifty-one of the business aircraft delivered this fiscal year were of the newest Bombardier business aircraft: the Learjet 40, Challenger 300 and Global 5000. One Bombardier 415 amphibious aircraft was delivered during fiscal year 2004/05 (year ending January 31, 2005) compared to three in the previous fiscal year. Recent industry figures show that general aviation posted a strong recovery in 2004 due to the continued growth of the U.S. economy. The General Aviation Manufacturers Association (GAMA) reported that the sharp rise in the industry's aircraft deliveries was due in part to a 14 per cent increase in business jet deliveries. Strong interest in new products such as the Bombardier Learjet 40, Challenger 300 and Global 5000 aircraft coupled with the sustained popularity of the Bombardier Challenger 604 and Global Express aircraft demonstrate that Bombardier's modern, innovative business jet families are positioning the Corporation to continue increasing its market share. For commercial airlines, the increased focus on operating economics during these tougher times has led to heightened interest in aircraft that offer best-in-class economics and benefits arising from fleet commonality. As airlines continue to evolve towards larger regional aircraft, and scope clauses in the U.S. airline industry are relaxed, Bombardier's 70-seat CRJ700 and 86-passenger CRJ900 aircraft, of which there are more than 200 already in operation worldwide, will continue to be market leaders in their class. A world-leading manufacturer of innovative transportation solutions, from regional aircraft and business jets to rail transportation equipment, Bombardier, Inc. -- http://www.bombardier.com/-- is a global corporation headquartered in Canada. Its revenues for the fiscal year ended Jan. 31, 2004 were $15.5 billion US and its shares are traded on the Toronto and Frankfurt stock exchanges (BBD and BBDd.F). * * * As reported in the Troubled Company Reporter on Dec. 15, 2004, Standard & Poor's Ratings Services placed its ratings, including its 'BB' long-term corporate credit ratings, on transportation- equipment manufacturer Bombardier, Inc., and its subsidiaries on CreditWatch negative. "The CreditWatch placement reflects new uncertainty about Bombardier's financial policies and strategic direction following the resignation of the company's CEO," said Standard & Poor's credit analyst Kenton Freitag. The increased uncertainty adds to Standard & Poor's previously stated concerns, formerly reflected in a negative outlook, that adverse developments in the U.S. airline industry could further affect the company's profitability. C.R. STONE CONCRETE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: C.R. Stone Concrete Contractors, Inc. 72 Grove Street Franklin, Massachusetts 02038 Bankruptcy Case No.: 05-11119 Type of Business: The Debtor is a concrete contractor. Chapter 11 Petition Date: February 18, 2005 Court: District of Massachusetts (Boston) Judge: William C. Hillman Debtor's Counsel: Alan L. Braunstein, Esq. Riemer & Braunstein, LLP Three Center Plaza Boston, MA 02108 Tel: 617-880-3516 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 ------ --------------- ------------ FCC Equipment Financing Inc. Trade debt $594,916 P.O. Box 905010 Charlotte, NC 28290 Tresca Brothers Sand & Trade debt $503,365 Gravel, Inc. P.O. Box 189 66 Main Street Millis, MA 02054 VStructural LLC Trade debt $108,823 P.O. Box 75090 Baltimore, MD 21275 Aggregate Industries Trade debt $66,020 Peri Formwork Systems, Inc. Trade debt $62,959 Diamond Rebar Group Trade debt $52,568 AIM Mutual Insurance Co. Trade debt $50,649 G&C Equipment, Inc. Trade debt $47,585 Mack Commercial Finance Trade debt $34,993 Key Equipment Finance Trade debt $27,336 Whaling City Iron Trade debt $26,251 AH Harris & Sons, Inc. Trade debt $24,737 Petro-Deblois Oil Company Trade debt $23,546 Mill Metals Corporation Trade debt $23,506 Barker Steel Company, Inc. Trade debt $23,217 Sean F. Murphy C.P.A. LLC Trade debt $18,290 Geotechnical Consultants Inc Trade debt $16,404 Zurich North America Trade debt $14,955 Lampasona Concrete Corp. Trade debt $14,413 NES Rentals Trade debt $12,480 CAESARS ENT: HSR Waiting Period on Harrah's Merger Expires ---------------------------------------------------------- Harrah's Entertainment, Inc. (NYSE: HET) and Caesars Entertainment, Inc. (NYSE: CZR) said that the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, in connection with Harrah's pending acquisition of Caesars expired at 11:59 PM Eastern Time on Feb. 17, 2005. As previously disclosed, the parties certified their substantial compliance with the Federal Trade Commission's requests for additional information on Jan. 18, 2005. Expiration of the HSR waiting period is a condition to completion of the merger between Harrah's and Caesars. The Federal Trade Commission is continuing its investigation, and is not precluded from bringing an action challenging the transaction. The consummation of the transaction remains subject to other customary conditions, including the receipt of regulatory approvals and approval by stockholders of both Harrah's and Caesars. Harrah's and Caesars continue to expect to be able to complete these activities as previously announced and to close the merger in the second quarter of 2005. About Caesars Entertainment Caesars Entertainment, Inc. is one of the world's leading gaming companies. With annual revenue of $4.2 billion, 27 properties on four continents, 26,000 hotel rooms, two million square feet of casino space and 50,000 employees, the Caesars portfolio is among the strongest in the industry. Caesars casino resorts operate under the Caesars, Bally's, Flamingo, Grand Casinos, Hilton and Paris brand names. The company has its corporate headquarters in Las Vegas. About Harrah's Entertainment Founded 67 years ago, Harrah's Entertainment, Inc. -- http://www.harrahs.com/-- owns or manages through various subsidiaries 28 casinos in the United States, primarily under the Harrah's brand name. Harrah's Entertainment is focused on building loyalty and value with its target customers through a unique combination of great service, excellent products, unsurpassed distribution, operational excellence and technology leadership. * * * As reported in the Troubled Company Reporter on July 19, 2004, Fitch Ratings has affirmed the following long-term debt ratings of Harrah's Entertainment and placed the long-term ratings of Caesars Entertainment on Rating Watch Positive. HET -- Senior secured debt 'BBB-'; -- Senior subordinated debt 'BB+'. CZR -- Senior unsecured debt 'BB+'; -- Senior subordinated debt 'BB-'. CATHOLIC CHURCH: Spokane Gets OK to Hire Turner Stoeve & Gagliardi ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Eastern District of Washington approves the Diocese of Spokane's request to employ the law firm of Turner, Stoeve & Gagliardi, P.S., as general counsel for non- bankruptcy matters. Turner Stoeve has served as outside general counsel to Spokane since 1978 and is familiar with all aspects of the Diocese of Spokane's business and all encountered legal issues. According to Bishop Skylstad, it is important to retain continuity in the representation of Spokane so that the Diocese will be fully represented in the most efficient and cost-effective manner. The Roman Catholic Church of the Diocese of Spokane filed for chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on Dec. 6, 2004. Michael J. Paukert, Esq., at Paine, Hamblen, Coffin, Brooke & Miller, LLP, represents the Spokane Archdiocese in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $11,162,938 in total assets and $81,364,055 in total debts. (Catholic Church Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service, Inc., 215/945-7000) CHOICE HOTELS: Dec. 31 Balance Sheet Upside-Down by $203 Million ---------------------------------------------------------------- Choice Hotels International, Inc., (NYSE:CHH) reported the following highlights for the fourth quarter and full year 2004: -- Diluted earnings per share for full year 2004 were $2.15 compared to $1.96 for 2003; Diluted earnings per share for fourth quarter 2004 were $0.60 compared to $0.57 for fourth quarter 2003; -- Adjusted diluted earnings per share for full year 2004 were $2.16, up 16% from $1.87 for the same period in 2003, on a non-GAAP basis, excluding specified items; -- Royalty revenues up 13% and 11% for fourth quarter and full year 2004, respectively, total revenues up 12% and 11% for fourth quarter and full year, respectively; -- Domestic unit growth of 5.4%; -- Domestic system-wide revenue per available room increased 7.9% for fourth quarter 2004 and 5.1% for full year 2004 compared to prior year results; -- Year-to-date new domestic hotel franchise contracts up 17% to a record 552; -- Domestic hotels under development increased in 2004 by more than 14% to 460 hotels representing 35,652 rooms at year end 2004; worldwide hotels under development grew 16% to 569 hotels at year end 2004, representing 45,167 rooms; -- Company returned more than $175 million of cash to shareholders in 2004 through a combination of treasury share repurchases and dividends; -- Company announces 2005 full year guidance of $2.38 to $2.42 diluted earnings per share. "Choice Hotels enjoyed yet another record-setting year in 2004 as we added more than 15,000 rooms to our domestic system and achieved a significant milestone with more than 400,000 rooms open worldwide," said Charles A. Ledsinger, Jr., president and chief executive officer. "We had a second consecutive record development year, with more than 550 contracts for new franchises executed, which positions us well for unit growth in 2005 and beyond." He added, "We are also encouraged by strengthening industry fundamentals that contributed to an increase in domestic RevPAR of nearly 8% in the fourth quarter. We are optimistic that the strong momentum reflected in our 2004 results will carry forward into next year. We are especially excited with this month's announcement of the launch of our new upscale brand, Cambria Suites, which has received an enthusiastic reception from developers." Full Year 2004 & Fourth Quarter Performance Choice reported full year 2004 net income of $74.3 million, a 10% increase in diluted EPS over the same period for 2003. For full year 2003, the company reported net income of $71.9 million, or $1.96 diluted EPS. Adjusted net income for full year 2004 was $74.8 million, compared to adjusted net income of $68.5 million for the same period in 2003. Adjusted diluted EPS was $2.16 for full year 2004, a 16% increase compared to the same period in 2003. Adjusted net income and adjusted diluted EPS presented for full year 2004 exclude a $0.4 million (net of related tax effect), loss on extinguishment of debt. Adjusted net income and adjusted diluted EPS presented for full year 2003 exclude a $3.4 million gain (net of related tax effect), or $0.09 per share, attributable to the prepayment of a note receivable from Sunburst Hospitality Corporation which was repaid to the Company in December 2003. Operating income for full year 2004 increased 10% from $114.0 million to $125.0 million. Franchising margins for 2004 increased to 60.9% from 60.4% for full year 2003. The company also reported total revenues of $428.8 million for 2004, compared to $386.1 million in 2003, an increase of 11%. Franchising revenues, which include royalty revenues, initial and relicensing fees, partner services and other revenue, for 2004 were $203.8 million, an increase of 9% from the $187.1 million reported a year ago. Royalty revenues for 2004 were $167.2 million, compared to $151.3 million for 2003, an increase of 11%. System-wide domestic revenue per available room (RevPAR) was $35.95 for full year 2004, compared to $34.21 for 2003, a 5.1% increase. For fourth quarter 2004, Choice reported net income of $20.3 million or $0.60 diluted EPS compared to net income of $20.7 million and $0.57 diluted EPS reported for fourth quarter 2003. Net income of $20.3 million for fourth quarter 2004 increased 17% compared to adjusted net income of $17.3 million for the same period in 2003. Diluted EPS for fourth quarter 2004 increased 25% compared to adjusted diluted EPS of $0.48 for fourth quarter 2003. Adjusted net income and adjusted diluted EPS presented for fourth quarter 2003 exclude a $3.4 million gain (net of related tax effect), or $0.09 per share, gain on the Sunburst note receivable prepayment. Operating income for fourth quarter 2004 increased 11% to $31.5 million, compared to $28.3 million for the same period a year ago. Total revenues were $106.9 million for the three months ended December 31, 2004, an increase of 12% compared to $95.2 million for the same period in 2003. Franchising revenues for the last three months of 2004 increased 11% to $53.7 million, compared to $48.5 million for the same period a year ago. Royalty revenues for fourth quarter 2004 were $42.9 million, compared to $38.1 million for the same period a year ago, an increase of 13%. System-wide domestic RevPAR was $35.96 for the last three months of 2004, compared to $33.34 for the same period in 2003, a 7.9% gain. 2004 Unit Growth The number of domestic Choice hotels on-line grew by 5.4% to 3,834 (309,586 rooms on-line) as of December 31, 2004 from 3,636 (294,268 rooms on-line) as of the same date a year ago. Net domestic franchise additions in 2004 were 198 compared to 154 net domestic franchise additions in 2003, a 29% increase. In fourth quarter 2004, net domestic franchise additions were 38, an increase of 9% compared to 35 for the same period a year ago. Choice executed 552 new domestic hotel franchise contracts representing 47,277 rooms in 2004, compared to 470 new contracts representing 41,039 rooms for the same period a year ago, increases of approximately 17% and 15% respectively. For the quarter ended December 31, 2004, Choice executed 198 new domestic hotel franchise contracts, representing 17,078 rooms, compared to 176 contracts, representing 15,075 rooms, for the same period in 2003, increases of 12% and 13% respectively. These increases in executed new franchise contracts and an increase in the number of existing franchise relicensings have contributed to better than 19% increases in initial franchise and relicensing fees for both the three month period and year ended December 31, 2004, compared to the same periods in 2003. For full year 2004, 182 contracts for new construction hotel franchises, representing 12,799 rooms were executed, compared to 128 contracts, representing 8,649 rooms for the same period a year ago, representing increases of approximately 42% and 48%, respectively. For the three months ended December 31, 2004, 82 contracts for new construction hotels representing 5,931 rooms were executed, representing increases of 64% and 82%, respectively, compared to 50 contracts, representing 3,250 rooms, for new construction hotels for the same period a year ago. As of December 31, 2004, Choice had 460 hotels under development in its domestic hotel system, representing 35,652 rooms, compared to 401 hotels and 31,409 rooms at the same date in 2003, increases of 15% and 14%, respectively. As of December 31, 2004, the number of Choice hotels on-line worldwide grew 3.5% to 4,977 from 4,810 as of the same date a year ago. This growth represents an increase of 3.9% in the number of rooms open to 403,806 from 388,618. As of December 31, 2004, Choice had 569 hotels under development worldwide, representing 45,167 rooms, compared to 491 hotels and 39,877 rooms at the same date in 2003. Use of Free Cash Flow The company has consistently used the free cash flow (cash flows from operations less capital expenditures) generated from its operations to return value to its shareholders. This is primarily achieved through share repurchases and dividends. During 2004, the company purchased 3.2 million shares of its common stock at an average price of $46.45 per share for a total cost of $148.3 million. For the three months ended Dec. 31, 2004, the company purchased 0.9 million shares of its common stock at a total cost of $47.1 million. The company has remaining authorization to purchase up to 1.8 million shares. Since Choice announced its stock repurchase program on June 25, 1998, the company has purchased 32.5 million shares of its common stock at an average price of $20.38 per share and a total cost of $663 million, through December 31, 2004. Total shares outstanding as of December 31, 2004, are 32.3 million. During 2004, the company paid $27.7 million of cash dividends to shareholders. The current annual dividend rate on the company's common stock is $0.90 per share. The company expects to continue to return value to its shareholders through a combination of share repurchases and dividends. First Quarter & Full-Year 2005 The company's first quarter 2005 diluted EPS is expected to be $0.32 to $0.34. These first quarter estimates assume the existing share count and RevPAR growth of approximately 5% to 6%. Full year 2005 diluted EPS is expected to be $2.38 to $2.42. These estimates assume the existing share count and RevPAR growth of approximately 5% to 7%. These estimates exclude the effect of adopting Statement of Financial Accounting Standards No. 123R, Share-Based Payment (SFAS 123R) related to unvested stock options granted prior to 2003 About the Company Choice Hotels International -- http://www.choicehotels.com/-- franchises more than 4,900 hotels, representing approximately 400,000 rooms, in the United States and 41 other countries and territories. As of December 31, 2004, 460 hotels are under development in the United States, representing 35,652 rooms, and an additional 109 hotels, representing 9,515 rooms, are under development in 21 countries and territories. Its Comfort Inn, Comfort Suites, Quality, Clarion, Sleep Inn, Econo Lodge, Rodeway Inn and MainStay Suites brands serve guests worldwide. At Dec. 31, 2004, Choice Hotels' balance sheet showed a $203,053,000 stockholders' deficit, compared to a $118,187,000 deficit at Dec. 31, 2003. CINCINNATI BELL: Dec. 31 Balance Sheet Upside-Down by $621.5 Mil. ----------------------------------------------------------------- Cincinnati Bell, Inc., (NYSE:CBB) reported revenue of $300 million, operating income of $63 million, and net income of $21 million for the fourth quarter of 2004. Reported results reflect the impact of two special items recorded during the quarter: -- a non-cash income tax benefit of $13 million related to a change in estimated future tax benefits, and -- an $11 million restructuring charge, of which $1 million was cash, related to the company's previously announced restructuring plan. Excluding the restructuring charge and the tax benefit, the company generated quarterly operating income of $75 million and net income of $16 million. For the year ended Dec. 31, the company reported revenue of $1.207 billion, operating income of $299 million and net income of $64 million. Excluding restructuring charges and tax benefits, operating income totaled $311 million and net income was $59 million. Capital expenditures were $134 million, or 11 percent of revenue, for 2004. Highlights for the Year 2004 "This year our core customers were not only well satisfied, they demonstrated increased confidence in us by expanding their commitments to our products and services," said Jack Cassidy, president and chief executive officer of Cincinnati Bell, Inc. This success, combined with our recently announced refinancing plan, strengthens our cash flows and allows us to accelerate debt reduction to the benefit of our shareholders and our future competitive strength." In 2004, Cincinnati Bell: -- Continued to de-lever the company, reducing net debt(a) by $149 million and exceeding its goal of approximately $140 million in 2004. Net debt of $2,112 million was 7% less than at the end of 2003. The company also produced $167 million of free cash flow(b), which was 82 percent more than in 2003 and exceeded guidance by $7 million. -- Defended its core franchise through bundling, adding 52,000 net subscribers to its Custom Connections "super bundle" which offers local, long distance, wireless and/or DSL. The company finished the year with 123,000 super bundle subscribers, or 73 percent more than at the end of the prior year. Additionally, total access lines declined by 1.6 percent versus the end of 2003, a full percentage point improvement over the 2.6 percent annual decline reported in the prior year as the company saw little impact from cable telephony competition. Combining access lines and DSL lines, the company added 16,000 net new total connections for the year. -- Grew its business by adding 31,000 Digital Subscriber Line (DSL) subscribers, or 26 percent more than were added in 2003, which is within the guidance range of 30,000 to 35,000 DSL net additions. The company finished the year with 131,000 DSL subscribers, or 31 percent more than at the end of 2003. Cincinnati Bell increased its DSL penetration by 4 points, to 14 percent of total access lines at year-end. Highlights for the Fourth Quarter 2004 "DSL adoption and service bundling continue to be success stories for Cincinnati Bell," said Mr. Cassidy. "DSL growth continues to help offset traditional access line losses, while 78 percent of in-territory consumer DSL activations and 76 percent of in- territory consumer postpaid wireless activations came as part of the bundle." In the fourth quarter, Cincinnati Bell: -- Posted DSL net additions of 8,000, up 15 percent from the fourth quarter of 2003. -- Added 10,000 net subscribers to its Custom Connections "super-bundle." Twenty percent of the company's in-territory consumer households are now super-bundle customers. This helped to increase in-territory consumer revenue per household 5 percent versus the fourth quarter of 2003, to a total of approximately $77 per month. -- Improved postpaid wireless churn to 2.78 percent, a 0.9 point improvement versus the third quarter of 2004. Financial Results "During 2004, Cincinnati Bell exceeded its net debt reduction goal while at the same time continuing to make the investments necessary to operating a world-class telecommunications company. We continue to generate strong cash flow for de-levering the company while remaining the pre-eminently positioned competitive force in our market," said Brian Ross, Cincinnati Bell Inc.'s chief financial officer. Revenue For the fourth quarter, revenue of $300 million was flat versus the fourth quarter of 2003 when excluding the impact of the sale of substantially all of the out-of-territory assets of the company's Hardware and Managed Services segment. This sale resulted in a decrease in revenue of $11 million. For the year, excluding the Broadband segment, revenue decreased $49 million, or 4 percent, versus 2003. Of this decrease, $33 million was due primarily to the sale of substantially all of the out-of-territory assets of CBTS, while $13 million was due to a decline in local service revenue resulting from a decrease in access lines. On a consolidated basis, revenue of $1,207 million declined 23 percent, or $351 million, versus 2003, primarily due to the sale of substantially all of the company's broadband assets in 2003. Operating Income For the fourth quarter, operating income, excluding restructuring charges, was $75 million, which was 22 percent, or $14 million, higher than the fourth quarter of 2003. This increase was primarily due to an $8 million decrease in asset impairments and other charges, a $6 million decrease in depreciation, a $5 million decrease in the cost of long distance minutes in the Other segment and a $3 million decrease in operating taxes in the Local segment, partially offset by a $3 million increase in non-cash rent expense in the Wireless segment and the decline in revenue. The increase in rent expense was due to a non-cash, non-recurring adjustment to account for the terms of cell site ground leases and the amortization periods of their respective leasehold improvements consistently. For the year, excluding the Broadband segment, operating income decreased 15 percent, or $51 million, primarily due to a $23 million increase in wireless and DSL customer acquisition expenses, a $20 million increase in depreciation and amortization and a $5 million increase in restructuring charges. On a consolidated basis, operating income of $299 million decreased 56 percent, or $385 million, versus 2003, primarily due to a $332 million decrease in gain on the sale of substantially all of the broadband assets. Local Communications Services Cincinnati Bell's Local segment, which includes the operations of the company's local-exchange subsidiary, Cincinnati Bell Telephone -- CBT, produced revenue of $191 million for the fourth quarter, down 1 percent versus the fourth quarter of 2003, as higher DSL revenue partially offset declining voice revenue. For the year, CBT recorded $762 million in revenue, a 2 percent decrease versus 2003, as higher DSL revenue partially offset lower voice and wiring revenue. In 2004, DSL revenue increased 29 percent versus the prior year, driven by a 31 percent increase in subscribers over the same period. The Local segment produced operating income, excluding restructuring charges, of $73 million for the fourth quarter, a 6 percent, or $4 million, increase versus the fourth quarter of 2003. This increase was primarily due to a $3 million decrease in operating taxes and a $4 million decrease in depreciation, partially offset by the decline in revenue. For the year, the Local segment reported operating income, excluding restructuring charges, of $290 million, up 1 percent, or $2 million, versus 2003. The increase was due primarily to a $9 million decrease in depreciation and a $7 million decrease in operating taxes, partially offset by a $5 million increase in customer acquisition expense and the decline in revenue. CBT finished the year with 970,000 total access lines, a 1.6 percent decline versus the prior year, a full percentage point improvement over the 2.6 percent decline reported in 2003. This improvement was due primarily to the addition of 21,000 out-of- territory lines in 2004, which was 18,000 more than were added in 2003. This increase in out-of-territory lines was primarily due to the launch of local service in the Dayton market, where Cincinnati Bell sells local service bundled with wireless and long distance service. These out-of-territory lines partially offset the decline of 37,000 in-territory lines. The decrease in in- territory lines was primarily due to wireless and broadband substitution, disconnects for non-payment and, to a lesser degree, cable telephony competition. Combining the in and out-of- territory lines with the increase of 31,000 DSL subscribers, Cincinnati Bell reported a net increase of 16,000 total connections versus the end of 2003. Capital investment was $21 million for fourth quarter and $80 million, or 11 percent of revenue, for the year. Wireless Services Cincinnati Bell Wireless (CBW) reported revenue of $64 million in the fourth quarter, up 3 percent versus the fourth quarter of 2003, as increases in equipment, data and prepaid voice revenue offset lower postpaid voice revenue. For the year, CBW produced revenue of $262 million, up 1 percent versus 2003, for substantially the same reasons. In 2004, CBW increased wireless data revenue 62 percent, or $6 million, to $15 million, or 6 percent of service revenue. The operating loss for the quarter was $9 million, an $8 million greater loss than the fourth quarter of 2003. This was due in part to the $3 million non-cash, non-recurring adjustment to rent expense described above. CBW also reported a $2 million increase in customer acquisition cost related to a 10 percent increase in gross activations, as well as a $2 million increase in depreciation, amortization and asset write-downs. For the year, the operating loss was $1 million, a $62 million decrease in operating income versus 2003. This decrease was due primarily to a $35 million increase in depreciation, amortization and asset write-offs, all related to the company's transition from TDMA to GSM technology, an $18 million increase in customer acquisition cost related to a 27 percent increase in gross activations, the $3 million non-cash adjustment to rent expense mentioned above and a $4 million increase in customer care expenses and operating taxes, with the remainder due to the decline in postpaid voice revenue. In the fourth quarter, the company posted gross activations of 70,000, a 10 percent increase versus the fourth quarter of 2003. Seventy-six percent of consumer postpaid activations in Cincinnati came as part of the bundle. Cincinnati Bell also reported net subscriber additions of 2,000. Postpaid churn finished the quarter at 2.78 percent, which was a 0.9 point improvement versus the third quarter of 2004. The churn improvement was due primarily to improvements in network quality as the company transitions from TDMA to GSM technology. For the year, gross activations of 243,000 increased 27 percent versus 2003. Net activations of 7,000 were 3,000 higher than in 2003. For the quarter, postpaid Average Revenue Per User (ARPU(d)) was $51, a 7 percent decrease, while prepaid ARPU was $19, a 12 percent increase, both versus the fourth quarter of 2003. Postpaid ARPU declined due to customer migration to lower ARPU plans as well as lower roaming revenue. Capital investment was $10 million, or 15 percent of revenue, in the fourth quarter. For the year, capital investment was $32 million, or 12 percent of revenue. Cincinnati Bell finished the year with 481,000 subscribers, 207,000 of which were on the company's GSM network, which the company launched in the fourth quarter of 2003. Hardware and Managed Services For the fourth quarter, revenue in the Hardware and Managed Services segment of $34 million increased 3 percent versus the fourth quarter of 2003, excluding revenue associated with the out- of-territory assets of Cincinnati Bell Technology Solutions -- CBTS. This increase was due primarily to strong hardware sales to enterprise customers and increased managed services revenue driven by the implementation of a data center in the third quarter of 2004. Including the revenue associated with the out-of-territory assets of CBTS, revenue declined 23 percent versus the fourth quarter of 2003. For the year, excluding revenue associated with the sale of substantially all of the out-of-territory assets of CBTS, revenue increased 5 percent, or $5 million, compared to 2003, due to strong hardware sales. Including the impact of the sold assets, revenue declined by 17 percent versus 2003. For the fourth quarter, operating income of $3 million declined $2 million from the fourth quarter of 2003 primarily due to lower margins on equipment sales and also due to the sale of the out-of- territory assets. For the year, operating income of $13 million was down $5 million versus 2003, for substantially the same reasons. The segment reported capital investment of $2 million in the quarter. The segment had capital investment of $16 million for the year, substantially all related to an investment in a data center in the third quarter of 2004. Virtually all of the data center space is currently under long-term service contracts with enterprise customers. Other Communications Services Other Communications Services, which includes Cincinnati Bell's voice long distance and public payphone operations, reported revenue of $20 million for the fourth quarter, 4 percent, or $1 million, higher than the same quarter a year ago. This increase was due primarily to a 10 percent, or $2 million, increase in long distance revenue, which was partially offset by a decline in payphone revenue. Long distance revenue increased due to the company's bundling efforts in and out-of-territory, while payphone revenue decreased primarily due to the sale of substantially all of the segment's out-of-territory and correctional institution payphones in the fourth quarter of 2004. For the year, the Other segment produced revenue of $79 million, or 3 percent less than in 2003. This decrease was due primarily to a 17 percent decrease in payphone revenue as a result of the sale of payphones. The Other segment produced $6 million in operating income for the quarter as compared to break-even performance in the fourth quarter of 2003. This improvement was primarily due to a $4 million asset impairment in the payphone business recorded in the fourth quarter of 2003 and not repeated in the fourth quarter of 2004, as well as a substantial decrease in the cost of long distance minutes. For the year, the Other segment reported operating income of $18 million, up $11 million from 2003, for substantially the same reasons. CBAD's Cincinnati market share of CBT access lines for which a long distance carrier is selected was 76 percent in the consumer market and 48 percent in the business market at the end of the year, improvements of 5 points and 3 points, respectively, versus the prior year. Broadband The Broadband segment produced no revenue in the quarter, due to the sale of substantially all of the company's broadband assets in 2003. There are no longer any meaningful operations in this segment. The remaining activity relates to the disposition of remaining liabilities associated with the broadband sale. At the end of 2004, the company had $24 million in such liabilities. For the year, the company eliminated $38 million of such liabilities, using $26 million in cash. The Broadband segment reported operating income of $6 million for the fourth quarter of 2004, entirely due to favorable adjustments to liabilities and reserves. About the Company Cincinnati Bell, Inc. (NYSE: CBB) -- http://cincinnatibell.com/-- is parent to one of the nation's most respected and best performing local exchange and wireless providers with a legacy of unparalleled customer service excellence. Cincinnati Bell provides a wide range of telecommunications products and services to residential and business customers in Ohio, Kentucky and Indiana. Cincinnati Bell is headquartered in Cincinnati, Ohio. At Dec. 31,2004, Cincinnati Bell's balance sheet showed a $621.5 million stockholders' deficit, compared to a $679.4 million deficit at Dec. 31, 2003. CITATION CAMDEN: Has Until March 1 to File Plan of Reorganization ----------------------------------------------------------------- Citation Corporation and its debtor-affiliates sought and obtained an extension of their exclusive period to file a chapter 11 plan until March 1, 2005, from the U.S. Bankruptcy Court for the Northern District of Alabama, Southern Division. The Debtors need a few more days to resolve some unspecified issues before filing their plan. The Official Committee of Unsecured Creditors, the prepetition lenders and the postpetition lenders agreed to the extension. Without the brief extension, the Debtors' exclusive period was set to expire this past Monday. Headquartered in Camden, Tennessee, Citation Camden Castings Center, Inc. -- http://www.citation.net/-- an affiliate of Citation Corporation, manufactures ductile iron parts for disc brakes. The Company filed for chapter 11 protection on Dec. 7, 2004 (Bankr. N.D. Ala. Case No. 04-10781). Cathleen C. Moore, Esq., and Michael Leo Hall, Esq., at Burr & Forman represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $655,575 in total assets and $324,334,598 in total debts. DATATEC SYSTEMS: Court Approves 363 Sale to Eagle Acquisition ------------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware has approved the sale of substantially all of the assets of Datatec Systems, Inc., and Datatec Industries, Inc., to Eagle Acquisition Partners, Inc., pursuant to Section 363 of the United States Bankruptcy Code, on Feb. 18, 2005. Eagle was formed in December 2004 and its investors include Raul Pupo, the former CEO of Datatec, and certain former senior managers of Datatec. The sale is expected to close on March 4, 2005. Mr. Pupo, who has 30-years of experience in founding and successfully operating IT service companies in the United States and internationally, announced that "I know this is a great day for the customers and employees of Datatec. Datatec has always had a history of exhibiting service leadership in the areas of staging, configuration and deployment. With this clean slate and renewed financial strength, the Company is poised to become the market leader in this growing space." Headquartered in Alpharetta, Georgia, Datatec Systems, Inc., -- http://www.datatec.com/-- specializes in the rapid, large-scale market absorption of networking technologies. The Company and its debtor-affiliate filed for chapter 11 protection on Dec. 14, 2004 (Bankr. D. Del. Case No. 04-13536). John Henry Knight, Esq., at Richards, Layton & Finger, P.A. and Bruce Buechler, Esq., at Lowenstein Sandler PC represent the Debtors' restructuring. When the Company filed for protection from its creditors, it listed total assets of $26,400,000 and total debts of $47,700,000. DONNKENNY: U.S. Trustee Appoints 5 Creditors to Serve on Committee ------------------------------------------------------------------ The United States Trustee for Region 2 appointed five creditors to serve on an Official Committee of Unsecured Creditors Donnkenny, Inc., and its debtor-affiliates' chapter 11 cases: 1. Clo-Shur International, Inc. Attn: Mike Miller 5301 Tacony Street Box 208 Philadelphia, Pennsylvania 19137 Tel: 212-268-5029 2. Plan4Demand Solutions, Inc. Attn: Vita Maire Fontana, Controller 1501 Reedsdale Street, Suite 401 Pittsburgh, Pennsylvania 15233 Tel: 523-733-5011 3. 1411 Trizechahn-Swig, LLC Attn: Charles E. Boulbol 26 Broadway, 17th Floor New York, New York 10004 4. Susan Kroll 305 East 40th Street New York, New York 10016 Tel: 917-669-5992 5. Sharon Wax Wilson Drive Alpine, New Jersey 07620 Tel: 201-767-1154 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Headquartered in Manhattan, New York, Donnkenny, Inc., designs, imports, and markets broad lines of moderately and better-priced women's clothing. Almost all of the Debtors' products are produced abroad and imported into the U.S., principally from Bangladesh, China, Guatemala, Hong Kong, India, Korea, Mexico, Nepal, and Vietnam. The Company and its debtor-affiliates filed for chapter 11 protection on February 7, 2005 (Bankr. S.D.N.Y. Case No. 05-10712). Bonnie Steingart, Esq., at Fried, Frank, Harris, Shriver & Jacobson LLP, represents the Debtors in their restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $45,670,000 and total debts of $100,100,000. DPL INC: Moody's Upgrades Senior Unsecured Debt Rating to Ba2 ------------------------------------------------------------- Moody's Investors Service upgraded DPL Inc.'s senior unsecured debt to Ba2 from Ba3, and upgraded The Dayton Power and Light Company's senior secured debt to Baa2 from Baa3; senior unsecured debt and Issuer Rating to Baa3 from Ba1; preferred stock to Ba2 from Ba3; and short term rating for commercial paper to Prime-3 from Not Prime. Moody's also upgraded the trust-preferred securities issued by DPL Capital Trust II to Ba3 from B1. The ratings of DPL Inc., Dayton Power, and DPL Capital Trust II remain on review for possible upgrade. The upgrades are prompted by: 1) DPL Inc.'s recent announcement that it had reached an agreement to sell its private equity portfolio, which Moody's believes will reduce business risk and enhance transparency; 2) DPL Inc.'s improved liquidity profile and the expected increase in its funds from operations in 2005; 3) the utility's renewed access to its $100 million bank revolving credit facility, which had been precluded while its financial statements were delayed; 4) the new management team's announced intention to execute a "back to basics" strategy and focus on its core utility business; 5) initial actions by management to resolve internal control and corporate governance issues that were raised by the DPL's controller and its external auditor. The upgrade of Dayton Power's short term rating for commercial paper to Prime-3 considers the solid cash position of the consolidated enterprise, including cash on hand of $202 million and publicly traded securities of $87 million as of 12/31/04; the expected inflow of $825 million of cash from the sale of the investment portfolio; and the availability of Dayton Power's $100 million revolving credit facility. Moody's notes that this revolving credit facility contains a material adverse change clause for new borrowings that does not include a carve-out for commercial paper, emphasizing the significance of the company's cash position. The ratings of DPL Inc. and Dayton Power remain under review for possible upgrade. The review will focus on the timing and execution of the sale of the private equity portfolio and the use of the anticipated $825 million of cash proceeds; the likely amount of reduction of the high cost debt at the parent company level; and the investments the company plans to make in its core utility business. The review will also consider the ongoing ability of DPL Inc. to generate cash from sources other than Dayton Power, including its wholesale generation fleet; the utility plan of protection recently filed with the Public Utility Commission of Ohio and any ring fencing provisions that may result from the plan; developments with regard to the investigations of the company by the SEC, Internal Revenue Service and the Department of Justice; actions taken by DPL senior management to address internal control and corporate governance issues; and the overall strategic and business plan of the company going forward. The ratings upgraded and remaining under review for possible upgrade include: * DPL Inc.'s senior unsecured debt, to Ba2 from Ba3; * Dayton Power's senior secured debt, to Baa2 from Baa3; senior unsecured debt and Issuer Rating, to Baa3 from Ba1; preferred stock, to Ba2 from Ba3; and commercial paper, to Prime-3 from Not Prime. * DPL Capital Trust II trust preferred securities rating to Ba3 from B1. DPL, Inc., is a diversified regional energy company operating in the Midwest through its subsidiaries, The Dayton Power and Light Company, DPL Energy, LLC, and MVE, Inc. The company is headquartered in Dayton, Ohio. ENTERPRISE PRODUCTS: Prices $250 Million Private Debt Offering -------------------------------------------------------------- Enterprise Products Partners L.P.'s (NYSE:EPD) operating subsidiary, Enterprise Products Operating L.P., has priced the private placement of $250 million of 10-year senior unsecured notes and $250 million of 30-year senior unsecured notes. A portion of the net proceeds from the sale of the notes will be used to refinance the Operating Partnership's outstanding $350 million of 8.25 percent Senior Notes due March 15, 2005. The remaining proceeds will be used for general partnership purposes, including the temporary repayment of indebtedness outstanding under its multi-year revolving credit facility. The 10-year notes will be issued at 99.379 percent of their principal amount and will have a fixed-rate interest coupon of 5.00 percent and a maturity date of March 1, 2015. The 30-year notes will be issued at 98.691 percent of their principal amount and will have a fixed-rate interest coupon of 5.75 percent and will mature on March 1, 2035. The settlement date is March 2, 2005 for both series of notes. Enterprise will guarantee the notes through an unsecured and unsubordinated guarantee. These notes, which include registration rights, have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration under the Securities Act. About the Company Enterprise Products Partners L.P. is one of the largest publicly traded energy partnerships with an enterprise value of more than $14 billion, and is a leading North American provider of midstream energy services to producers and consumers of natural gas, natural gas liquids (NGLs) and crude oil. Enterprise transports natural gas, NGLs and crude oil through 31,000 miles of onshore and offshore pipelines and is an industry leader in the development of midstream infrastructure in the Deepwater Trend of the Gulf of Mexico. Services include natural gas transportation, gathering, processing and storage; NGL and propylene fractionation (or separation), transportation, storage, and import and export terminaling; crude oil transportation and offshore production platform services. * * * As reported in the Troubled Company Reporter on Sept. 24, 2004, Standard & Poor's Rating Services affirmed its 'BB+' corporate credit rating on Enterprise Products Partners L.P. At the same time, Standard & Poor's assigned its 'BB+' senior unsecured rating to Enterprise Products' subsidiary Enterprise Products Operating L.P.'s proposed (in aggregate) $2.0 billion note issues. The notes will be issued in four tranches, due 2007, 2009, 2014 and 2034. Total debt principal outstanding at Dec. 31, 2004 was approximately $4.3 billion, which represented 44.2% of the partnership's total capitalization. Enterprise had cash of approximately $34 million at the end of 2004. EVOLVED DIGITAL: Names Richard J. Eskind Chairman of the Board -------------------------------------------------------------- Evolved Digital Systems, Inc., (TSX: EVD) reported that Richard J. Eskind has joined the Board of Directors and was elected to serve as Chairman. Mr. Eskind has co-founded and served as a board member of several healthcare companies including Hospital Affiliates International, Inc., a for-profit hospital company, HealthAmerica, Inc., an HMO company and Clintrials, Inc., a clinical trials management company. John Southcott, the Company's former Chief Executive Officer, also joined the Board of Directors. "Richard Eskind's experience and leadership in the healthcare industry will be invaluable as we continue to grow the Company," stated Jon Lehman, Vice Chairman. "Combined with John Southcott's recent experience leading the Company as CEO, the two are outstanding additions to the Board." Dennis Wood of Dennis Wood Holdings, Inc., and Rob Breckon from MDS, Inc., both resigned from the Board. As a result of the resignations, the total number of Directors will remain at nine. With over 100 customer locations across North America, Evolved Digital Systems, Inc., is a healthcare technology solutions company. Its services and enabling technologies transform hospital and clinic imaging departments from manual to digital- based systems, improving efficiency, turnaround time, and patient care. Evolved is a publicly traded company listed on the Toronto Stock Exchange. Corporate headquarters are based in Laval, Quebec. U.S. offices are located in Brentwood, Tennessee. Evolved Digital's September 30, 2004, financial statements express significant doubt about the company's ability to continue as a going concern, noting that the Company has incurred significant operating losses, negative operating cash flows, and that the Company is dependent on additional financing or capital to fund its future operations. FEDERAL-MOGUL: Employs A.T. Kearney for Cost Reduction Advice ------------------------------------------------------------- Federal-Mogul Corporation, its debtor-affiliates and the Official Committee of Unsecured Creditors appointed in the Debtors' chapter 11 cases seek the approval of U.S. Bankruptcy Court for the District of Delaware to continue using A.T. Kearney's services. A.T. Kearney will introduce identified cost savings initiatives in a fourth wave of plants and to implement follow-up procedures to the plants in Wave I, II, and III to capture the fullest cost savings practicable. Representing the Creditors Committee, Eric M. Sutty, Esq., at The Bayard Firm, in Wilmington, Delaware, relates that the services for Wave IV are largely identical to those services approved and performed during Wave II and III. A.T. Kearney would continue to employ the OAE methodology, incorporating lessons learned in Waves I, II and III to further improve the process. The Wave IV rollout will be executed by teams consisting of both A.T. Kearney consultants and the Debtors' personnel. An A.T. Kearney consultant and one of the Debtors' managers will serve as the senior project leaders supervised by the Debtors overall project leader -- Rainer Jueckstock. Individual implementation teams charged with coaching plant leaders in the OAE methodology would consist of one manufacturing support employee employed by the Debtors and one A.T. Kearney consultant. In addition, two senior A.T. Kearney senior consultants will be involved in directly supporting each of the individual implementation teams at the Wave IV plants. A.T. Kearney projects to complete the implementation of Wave IV rollout over the course of a 12-week period, Mr. Sutty tells the Court. The risk reduction follow-up for plants in Waves I, II and III is designed to maximize the likelihood that the plants in Waves I, II, and III will realize the identified savings opportunities and sustain the improved processes without the need for further outside support. There are three main causes for the risk that the plants in Waves I, II, and III will not realize the complete cost savings possible: (1) The implementation of the rollouts was very rapid, with only a 12-week learning cycle; (2) Many of the processes introduced were completely new to the plants; and (3) The Debtors' management has experienced some natural turnover, many of the personnel at the facilities have changed roles or been replaced since the start of the rollout. A.T. Kearney estimates that the risk reduction follow-up for plants in Waves I, II and III will last 14 weeks. A.T. Kearney has classified the risk level of each plant as (1) high risk, (2) medium risk, or (3) low risk. The 21 high-risk plants will have one full-time external resource team dedicated to 3 to 5 plants. The 12 medium risk plants will have one full-time external resource team for every 6 to 8 plants. The 17 low risk plants will have no full-time resource team but will have an emergency support as needed. According to Mr. Sutty, the risk reduction follow-up will address three main areas: (1) The follow-up will focus on process compliance by visiting the plants' steering committee meetings and ensuring through process checklists that the critical elements of the process improvement are followed; (2) The extent to which the plant improvement plans have been successful will be evaluated and the plant improvement plans will be modified to address any gaps in performance; and (3) Potential for new savings will be identified. The ultimate goal of the risk reduction follow-up is to ensure that the process is sustained without the need for ongoing external resources. A.T. Kearney's fees will be calculated on an hourly basis using actual hours worked and a specified rate structure for A.T. Kearney personnel having varying levels of experience. A.T. Kearney's consulting fees and expenses will be capped at $2,500,000 for Wave IV and risk reduction follow-up. The first three invoices each will be in the amount of $710,000 to be paid within 60 days of invoicing. The last invoice will be adjusted from $370,000 to reconcile for the actual hours billed as well as expenses. The plants contemplated in the Wave IV rollout and risk reduction follow-up include plants owned by the U.S. Debtors, by non-debtor affiliates of the Debtors, and by the English Debtors. Accordingly, Judge Lyons: (a) authorizes the Debtors to enter into a Letter Agreement with A.T. Kearney in relation to the consulting services to rollout Wave IV and to perform risk reduction follow- up in plants in Waves I, II, and III; (b) approves A.T. Kearney's compensation for the consulting services: (c) requires the applicable U.S. Debtors, English Debtors and Non-Debtors Affiliates to reimburse Federal-Mogul Corporation for the pro rata costs of A.T. Kearney services rendered at their plants to the extent Federal-Mogul directly pays A.T. Kearney's fees and expenses; and (d) directs A.T. Kearney to make available to the Creditors Committee and other Plan Proponents certain information generated in connection with A.T. Kearney's performance of the consulting services contemplated under by the Letter Agreement. Headquartered in Southfield, Michigan, Federal-Mogul Corporation -- http://www.federal-mogul.com/-- is one of the world's largest automotive parts companies with worldwide revenue of some $6 billion. The Company filed for chapter 11 protection on October 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan, Esq., James F. Conlan, Esq., and Kevin T. Lantry, Esq., at Sidley Austin Brown & Wood, and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $10.15 billion in assets and $8.86 billion in liabilities. (Federal-Mogul Bankruptcy News, Issue Nos. 73; Bankruptcy Creditors' Service, Inc., 215/945-7000) FMC CORP: Astaris Obtains New $75 Million Revolving Facility ------------------------------------------------------------ Astaris LLC, has obtained a new three-year revolving credit facility for up to $100 million from a group of lenders with Citicorp USA, Inc., acting as Administrative Agent. The facility initially will be up to $75 million with a $25 million uncommitted expansion option. It replaces a $20 million credit facility that was scheduled to expire in September 2005. "We were very pleased with the support shown by our new lenders," said Paul L. Howes, president and chief executive officer. "The new revolving credit facility increases our liquidity and was accomplished without the need for continued credit support from our joint-venture owners, Solutia, Inc., and FMC Corporation. The new credit agreement also allowed us to repay Solutia and FMC approximately $16 million each that had been deferred in support of the company's restructuring plan announced in October 2003." Based in St. Louis, MO, Astaris LLC is jointly owned by Solutia Inc. (OTC Bulletin Board: SOLUQ) and FMC Corporation (NYSE: FMC) and provides phosphate technology solutions for food, industrial and institutional applications to customers worldwide. FMC Corporation is a diversified chemical company serving agricultural, industrial and consumer markets globally for more than a century with innovative solutions, applications and quality products. The company employs approximately 5,500 people throughout the world. FMC Corporation divides its businesses into three segments: Agricultural Products, Specialty Chemicals and Industrial Chemicals. * * * As reported in the Troubled Company Reporter on Sept. 24, 2004, Moody's Investors Service assigned a Ba1 rating to FMC Corp.'s proposed senior secured credit facility consisting of a $100 million term loan A, $100 million letters of credit facility, and a $350 million revolving credit facility. Proceeds from the new credit facility will be used to redeem the existing credit facility and to free restricted cash assuring certain obligations. Concurrent with this action, Moody's raised FMC's ratings outlook to positive from stable. The outlook revision reflects Moody's belief that the company has made significant progress reducing contingent liabilities and improving credit metrics, and that a general economic upturn will translate into improved performance for 2005. Ratings assigned: * $350 million senior secured revolver due 2009 -- Ba1 * $100 million senior secured term loan A due 2009 -- Ba1 * $100 million senior secured letters of credit facility due 2009 -- Ba1 Ratings affirmed: * $355 million senior secured bonds due 2009 -- Ba2 * $45 million senior secured debentures due 2011 -- Ba2 * $178 million of medium-term notes due 2005 to 2008 -- Ba2 * $178 million of senior unsecured industrial revenue bonds due 2007 to 2032 -- Ba3 * $250 million senior secured revolver due 2005 -- Ba1 * $245 million senior secured term loan B due 2007 -- Ba1 * Speculative Grade Liquidity Rating -- SGL-2 HEDMAN RESOURCES: Looks to Raise Up to $1 Mil. in Equity Placement ------------------------------------------------------------------ Hedman Resources Limited (TSX VENTURE:HDM) is proceeding with a non-brokered private placement which is expected to raise a minimum of $400,000 and maximum of $1,000,000 through the issuance of a minimum of 5,714,286 Units and a maximum of 14,285,715 Units. Each Unit shall be issued at a price of $0.07 and shall consist of one common share of the Company and one common share purchase warrant. Each common share purchase warrant shall entitle the purchaser to purchase, at any time within 24 months of the closing of the placement, one common share of the Company at a price of $.09. The Units are subject to a four-month hold period. To the best of the Company's knowledge, there are no insiders participating in this private placement. Proceeds from the private placement will be used to further the Company's initiatives, including the ongoing CRADA with the United States Department of Energy, other research and development projects, working capital and further debt reduction. This private placement is set to close no later than March 14, 2005. The transaction is subject to regulatory and commission approvals, as necessary. The securities being offered have not, nor will they be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from the U.S. registration requirements. This release does not constitute an offer for sale of securities in the United States. Hedman Resources Limited is an Ontario incorporated public company and its principal business activity is the mining, research and development of mineral ore. Going Concern Doubt As stated in Hedman Resources' September 30, 2004, financial report, the company has experienced several continuous years of operating losses, has an eroding working capital position and is a co-defendant in a number of class action lawsuits. The company's ability to realize its assets and discharge its liabilities in the normal course of business is dependent upon continued support, including new financing from its lenders and creditors. The company is also dependent on an infusion of equity from potential shareholders. The company engages in ongoing efforts to obtain additional financing from its existing shareholders and other strategic investors to continue its operations. However, there can be no assurance that the company will obtain sufficient additional funds from these sources. These conditions cause substantial doubt about the company's ability to continue as a going concern. HOLLINGER INC: Illinois Court Affirms Dismissal of RICO Lawsuit --------------------------------------------------------------- Hollinger, Inc., (TSX:HLG.C)(TSX:HLG.PR.B) reported that on February 3, 2005, Judge Blanche Manning of the United States District Court for the Northern District of Illinois issued a ruling denying the motion of Hollinger International, Inc., for an immediate appeal of the dismissal of Hollinger International's Complaint against, among others, Hollinger that included allegations pursuant to the Racketeer and Corrupt Influenced Organizations Act. The defendants to Hollinger International's Second Amended Complaint have brought a further motion to dismiss that Complaint in which Hollinger International is seeking approximately US$542 million, including US$117 million of pre-judgment interest at the time of filing, together with costs. The Motion to dismiss the Second Amended Complaint is also before Judge Manning to decide. It is anticipated that she will make that ruling in writing. As reported in the Troubled Company Reporter on Nov. 3, 2004, Hollinger International's Special Committee of its Board of Directors has filed a Second Amended Complaint in the U.S. District Court for the Northern District of Illinois on behalf of the Company in its lawsuit against certain directors and former directors and officers, as well as the Company's controlling shareholder and its affiliated companies. The total amount of damages sought in this Second Amended Complaint is approximately $542 million, which includes pre-judgment interest of $117 million. As previously announced, the Second Amended Complaint asserts all of the same breach of fiduciary duty claims against Hollinger Conrad Black, David Radler, Ravelston, Barbara Amiel Black, John Boultbee, and Daniel Colson as had been in the previous Amended Complaint filed May 7, 2004. The Second Amended Complaint asserts additional claims against certain of the Defendants based on the findings set forth in the Report of Investigation by the Special Committee filed with the Court on August 30, 2004. These include, among others, claims to rescind the $33.5 million balance of a $36.8 million loan from the Company to Hollinger that is alleged to have been obtained on the basis of false and misleading statements. The Second Amended Complaint also adds claims for fraud, conversion and punitive damages, while eliminating as Defendants Bradford Publishing Company and the Horizon companies. The Second Amended Complaint adds Hollinger International Director Richard N. Perle as a Defendant. The suit claims breaches of fiduciary duty by Perle related to his service as a member of the Company's Executive Committee. Inspection Ernst & Young, Inc., is continuing the inspection of Hollinger's related party transactions pursuant to an Order of Justice Colin L. Campbell of the Ontario Superior Court of Justice. The Inspector has provided six interim Reports with respect to its inspection of Hollinger. Hollinger and its staff continue to give their full and unrestricted assistance to the Inspector in order that it may carry out its duties, including access to all files and electronic data. At a hearing held on February 9, 2005, Justice Campbell set a schedule for certain developments with respect to inspection. The Inspector is to inform the Court during the first week of March of a date no later than the end of March by which it is to present to the Court its priorities for the inspection. Thereafter, it is expected that the motion with respect to the Inspector's request to examine Conrad (Lord) Black, F. David Radler and J.A. Boultbee will be heard. To February 21, 2005, the cost to Hollinger of the inspection (including the costs associated with the Inspector and its legal counsel and Hollinger's legal counsel) is in excess of C$4.25 million. Hollinger's principal asset is its interest in Hollinger International, Inc., which is a newspaper publisher, the assets of which include the Chicago Sun-Times, a large number of community newspapers in the Chicago area and a portfolio of news media investments, and a portfolio of revenue-producing and other commer