================================================================= KAISER BANKRUPTCY NEWS Issue Number 1 ----------------------------------------------------------------- Copyright 2002 (ISSN XXXX-XXXX) February 14, 2002 ----------------------------------------------------------------- Bankruptcy Creditors' Service, Inc. 609-392-0900 FAX 609-392-0040 ----------------------------------------------------------------- KAISER BANKRUPTCY NEWS is published by Bankruptcy Creditors' Service, Inc., 24 Perdicaris Place, Trenton, New Jersey 08618, on an ad hoc basis (generally every 10 to 20 days) as significant activity occurs in the Debtors' cases. Each issue is prepared by Peter A. Chapman, Editor. Subscription rate is US$45 per issue. Any re-mailing of KAISER BANKRUPTCY NEWS is prohibited. ================================================================= IN THIS ISSUE ------------- [00000] HOW TO SUBSCRIBE TO KAISER BANKRUPTCY NEWS [00001] BACKGROUND & DESCRIPTION OF KIASER [00002] CONSOLIDATED BALANCE SHEET AT SEPTEMBER 30, 2001 [00003] COMPANY'S PRESS RELEASE ANNOUNCING CHAPTER 11 FILING [00004] KAISER ALUMINUM CHAPTER 11 DATABASE [00005] LIST OF THE DEBTORS' 50-LARGEST UNSECURED CREDITORS [00006] ADVERSARY PROCEEDING -- Debtors v. State Street & US Bank [00007] DEBTORS' MOTION TO OBTAIN $300,000,000 OF DIP FINANCING KEY DATE CALENDAR ----------------- 02/12/02 Voluntary Petition Date 03/04/02 Deadline to provide Utilities with adequate assurance 03/14/02 Deadline for filing Schedules of Assets and Liabilities 03/14/02 Deadline for filing Statement of Financial Affairs 03/14/02 Deadline for filing Lists of Leases and Contracts 04/13/02 Deadline to make decisions about lease dispositions 05/13/02 Deadline to remove actions pursuant to F.R.B.P. 9027 06/12/02 Expiration of Debtor's Exclusive Plan Proposal Period 08/11/02 Expiration of Debtor's Exclusive Solicitation Period 02/11/04 Deadline for Debtor's Commencement of Avoidance Actions Organizational Meeting with UST to form Committees Bar Date for filing Proofs of Claim First Meeting of Creditors pursuant to 11 USC Sec. 341 ----------------------------------------------------------------- [00000] HOW TO SUBSCRIBE TO KAISER BANKRUPTCY NEWS ----------------------------------------------------------------- KAISER BANKRUPTCY NEWS is distributed to paying subscribers by electronic mail. 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Name: ---------------------------------------------- Firm: ---------------------------------------------- Address: ---------------------------------------------- ---------------------------------------------- Phone: ---------------------------------------------- Fax: ---------------------------------------------- E-Mail: ---------------------------------------------- (Distribution to multiple professionals at the same firm is provided at no additional cost.) KAISER BANKRUPTCY NEWS is distributed to paying subscribers by electronic mail. New issues are published on an ad hoc basis as significant activity occurs (generally every 10 to 20 days) in the Debtor's cases. The subscription rate is US$45 per issue. Newsletters are delivered via e-mail; invoices, transmitted following publication of each newsletter issue, arrive by fax. Re-mailing of KAISER BANKRUPTCY NEWS is prohibited. Distribution to multiple individuals at the same firm is provided at no additional charge; folks outside of your firm should set-up and pay for their own subscriptions. Subscriptions may be canceled at any time without further obligation. ----------------------------------------------------------------- [00001] BACKGROUND & DESCRIPTION OF KIASER ----------------------------------------------------------------- KAISER ALUMINUM CORPORATION 5847 San Felipe, Suite 2600 Houston, Texas 77057-3010 Telephone (713) 267-3777 Fax 713-267-3701 http://www.kaiseral.com Kaiser Aluminum Corporation (NYSE: KLU) owns 100% of Kaiser Aluminum & Chemical Corporation. Through KACC and other subsidiaries, affiliates and joint ventures, Kaiser operates in all principal aspects of the aluminum industry, including: * mining bauxite; * refining bauxite into alumina; * production of primary aluminum from alumina; and * manufacturing fabricated and semi-fabricated aluminum products Kaiser's $3 billion of assets and 5,800 employees generate over $1.5 billion in annual revenue. Kaiser uses most of the bauxite it mines and some of the alumnia and aluminum it produces; the bulk of the alumina and aluminum is sold to third parties in domestic and international markets. Kaiser carves its operations into four business units: (A) Bauxite and Alumina Kaiser's Bauxite and Alumina business unit is a major producer of alumina and sells significant amounts of its alumina production in domestic and international markets. The business unit's strategy is to sell a substantial portion of the alumina available to it in excess of the Kaiser Companies' internal smelting requirements under multi-year sales contracts with prices linked to the price of primary aluminum. Currently, Kaiser's internal bauxite requirement is approximately 5.9 million dry metric tons per year, leaving 1.8 million dry metric tons to be sold to third party customers. With respect to the 2.8 million tons of alumina produced by the Kaiser Companies, only 400,000 tons is consumed internally, making the Kaiser Companies the world's second largest seller of alumina to third parties. This business unit's principal customers consist of other aluminum producers, trading intermediaries, which resell raw materials to end-users, and users of chemical grade alumina. The Government of Jamaica has granted the business unit (through Kaiser Bauxite Company ("KBC"), a wholly owned non- debtor subsidiary of KACC) a mining lease for bauxite mining that will, at a minimum, satisfy the bauxite requirements of the Kaiser Companies' Gramercy, Louisiana, alumina refinery, enabling it to produce at its estimated annual capacity of 1,250,000 tons until 2020. Kaiser Jamaica Bauxite Company ("KJBC"), a Jamaican partnership in which KBC owns a 49% interest, mines the bauxite from the land, which is subject to the mining lease, as an agent for KBC. Although the business unit, through KBC, owns 49% of KJBC, it is entitled to, and generally takes and must pay for, all KJBC's estimated annual 4,500,000 tons of bauxite output. The bauxite mined by KJBC that is not refined into alumina at the Kaiser Companies' Gramercy refinery is sold to a third party. Through Kaiser Jamaica Corporation ("KJC") and Alpart Jamaica Inc. ("AJI"), the Company also owns a 65% interest in Alumina Partners of Jamaica ("Alpart"), a Delaware general partnership that owns an alumina plant located in Jamaica with an estimated annual capacity of 1,450,000 tons. The Government of Jamaica has granted a mining lease to Alpart and has entered into other agreements with Alpart designed to assure that sufficient reserves of bauxite will be available to Alpart to operate its refinery, which it may expand up to a capacity of 2,000,000 tons per year. through 2024. In 1999, Alpart entered into a joint venture with JAMALCO, a separate joint venture between affiliates of Alcoa Inc. and the Government of Jamaica, to consolidate Alpart and JAMALCO's bauxite mining operations in Jamaica, with the objective of optimizing mining operations and minimizing capital costs. The mining joint venture agreement also grants Alpart certain rights to bauxite mined from JAMALCO's reserves. The mining joint venture commenced operations in 2000. In addition, through Debtor Kaiser Alumina Australia Corporation ("Kaiser Australia"), the Company owns a 20% interest in Queensland Alumina Limited ("QAL"), a Queensland corporation located in Queensland, Australia. QAL owns one of the largest and most efficient alumina refineries in the world with an estimated annual capacity of 3,650,000 tons. QAL refines bauxite into alumina for the account of its participants under long-term tolling contracts. The participants, including Kaiser Australia, purchase bauxite from another participant under long-term supply contracts. Kaiser Australia has contracted with QAL to take approximately 730,000 tons of alumina per year or pay standby charges. Historically, Kaiser Australia has sold half of its share of QAL's production to third parties and used the remainder to supply the Kaiser Companies' two aluminum smelters located in the State of Washington, both of which are currently curtailed. (B) Primary Aluminum The Primary Aluminum business unit converts alumina into primary aluminum at two primary aluminum smelters located in the State of Washington (currently curtailed) and at two primary aluminum smelters owned and operated through joint venture arrangements with certain third parties, one in Ghana and the other in Wales, The United Kingdom. The primary aluminum produced at these smelters in excess of the Kaiser Companies' own internal needs is sold primarily to large trading intermediaries and metal brokers, which in turn resell to end users. 12. The State of Washington smelters, located in Mead and Tacoma, have an estimated annual capacity of 200,000 tons and 73,000 tons, respectively. The Ghanaian smelter is owned and operated by Volta Aluminium Company Limited ("Valco"), a Ghanaian corporation. KACC owns a 90% interest in Valco. The smelter, which has an annual estimated capacity of 200,000 tons, processes alumina supplied by KACC and Reynolds Metals Company (now owned by Alcoa Inc.), the other participant, into primary aluminum under tolling contracts that provide for proportionate payments by the participants. The operating level of this entity has been subject to substantial fluctuation over the years due to the availability of hydro-based power on which the smelter is reliant. Substantially all of KACC's primary aluminum received from Valco is sold to Debtor Kaiser Aluminium International, Inc. ("KATI") for resale to third parties. During 2001, the Ghanaian smelter generally operated at approximately 80% of its capacity. The Wales smelter is owned and operated by a wholly owned subsidiary of Anglesey Aluminium Limited ("Anglesey"), a United Kingdom Corporation. KACC owns a 49% interest in Anglesey. KACC supplies 49% of the smelter's alumina requirements and purchases 49% of the smelter's aluminum output. KACC (through KATI) sells this share of Anglesey's output to third parties at market prices. The smelter has an annual estimated capacity of 135,000 tons. (C) Flat-Rolled Products The Flat-Rolled Products business unit operates a rolling mill in Trentwood, Washington, where heat-treat sheet and plate and other flat-rolled products are manufactured for the aerospace, transportation, industrial and beverage container markets. During 2000, the business unit shifted the product mix of its Trentwood rolling mill toward higher value-added product lines, such as heat-treat sheet and plate and automotive brazing sheet, and away from beverage can body stock, whole stock and common alloy tread products in an effort to enhance its profitability. The business unit's flat-rolled products are also sold to beverage container manufacturing locations primarily in the western United States and Asian Pacific Rim countries. During 2001, in addition to exiting can body stock production, beverage can lid and tab manufacturing were also de-emphasized to further increase the business unit's focus on higher value-added heat treat product lines. (D) Engineered Products The Engineered Products business unit operates nine soft-alloy and hard-alloy extrusion plants and two engineered components (forgings) plants in the United States and Canada. These facilities manufacture extruded products and forged parts for a variety of industrial markets, including ground transportation, distribution, durable goods, defense, building and construction, electrical and general aviation markets. Soft-alloy extrusion facilities are located in Los Angeles, California; Sherman, Texas; Tulsa, Oklahoma; Richmond, Virginia; and London, Ontario, Canada. Products manufactured at these facilities include rod, bar, tube, shapes and billet. The Tulsa facility is a production facility for standard soft-alloy extrusion products. Hard-alloy extrusion facilities are located in Newark, Ohio and Jackson, Tennessee and produce rod. bar, screw machine stock, redraw rod, forging stock and billet. The business unit also extrudes seamless tubing in both hard? and soft-alloys at a facility in Richmond, Washington and produces drawn tubes in both hard- and soft-alloys at a facility in Chandler, Arizona. Forging facilities are located in Oxnard, California and Greenwood, South Carolina. Forged parts manufactured at these facilities are sold to the automotive, heavy-duty truck, general aviation, soil, machinery and equipment, and ordnance markets. ----------------------------------------------------------------- [00002] CONSOLIDATED BALANCE SHEET AT SEPTEMBER 30, 2001 ----------------------------------------------------------------- KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED BALANCE SHEETS At September 30, 2001 (Unaudited) ASSETS Current assets: Cash and cash equivalents $212,100,000 Receivables: Trade, net 145,500,000 Other 151,000,000 Inventories 333,100,000 Prepaid expenses and other current assets 148,800,000 --------------- Total current assets 990,500,000 Investments in and advances to unconsolidated affiliates 59,100,000 Property, plant, and equipment - net 1,228,500,000 Deferred income taxes 385,300,000 Other assets 700,900,000 --------------- Total $3,364,300,000 =============== LIABILITIES & STOCKHOLDERS' EQUITY Current liabilities: Accounts payable 166,200,000 Accrued interest 24,300,000 Accrued salaries, wages, and related expenses 89,300,000 Accrued postretirement medical benefit obligation - current portion 58,000,000 Other accrued liabilities 257,000,000 Payable to affiliates 59,200,000 Long-term debt - current portion 206,400,000 --------------- Total current liabilities 860,400,000 Long-term liabilities 805,100,000 Accrued postretirement medical benefit obligation 649,200,000 Long-term debt 698,700,000 Minority interests 116,000,000 Commitments and contingencies Stockholders' equity: Common stock 800,000 Additional capital 538,700,000 Accumulated deficit (330,400,000) Accumulated other comprehensive income 25,800,000 --------------- Total stockholders' equity 234,900,000 --------------- Total $3,364,300,000 =============== ----------------------------------------------------------------- [00003] COMPANY'S PRESS RELEASE ANNOUNCING CHAPTER 11 FILING ----------------------------------------------------------------- Kaiser Aluminum Files Voluntary Petition Under Chapter 11 of United States Bankruptcy Code Company Finalizing $300 Million Loan Agreement to Fund Ongoing Operations; Production, Customer Service Not Impacted by Filing HOUSTON, Texas -- February 12, 2002 -- Kaiser Aluminum Corporation (NYSE:KLU) said today that the company and its operating subsidiary Kaiser Aluminum & Chemical Corporation and certain of its wholly owned subsidiaries have filed voluntary petitions under Chapter 11 of the Federal Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. In conjunction with the filing, the company expects to enter into definitive documentation today for $300 million in Debtor- in-Possession (DIP) financing from Bank of America, subject to court approval. The DIP financing, in combination with the company's current invested cash, should provide sufficient liquidity to meet its ongoing operating needs. Kaiser's production and shipment of bauxite, alumina, primary aluminum products, and fabricated aluminum products will continue without interruption. Kaiser has been facing significant near-term debt maturities at a time of unusually weak aluminum industry business conditions, depressed prices, and a broad economic slowdown that was further exacerbated by the events of September 11. In addition, the company has become increasingly burdened by asbestos litigation and growing legacy obligations for retiree medical and pension costs. The confluence of these factors has created the prospect of continued operating losses and negative cash flow, resulting in lower credit ratings and an inability to access the capital markets. In October 2001, Jack A. Hockema, who led the turnaround in Kaiser's fabricated products businesses, was named the company's President and Chief Executive Officer. "When I came on board as President and CEO, it became evident that Kaiser needed to accelerate the process it was pursuing to establish a sustainable financial and operational framework" said Hockema. "While we have examined many alternatives including, but not limited to, asset sales and debt restructuring, no alternative provided more than a partial or temporary fix. Only a filing provided the time and tools necessary to adequately address these issues." "The decision to seek protection under Chapter 11 will provide Kaiser with the opportunity to reorganize its financial structure and implement a strategic plan to return to sustained profitability," said Hockema. "The reorganization process will also allow the company to expand on and quicken the pace of its operational improvements." "Our core businesses are sound. Our fabricated operations have good market positions, 'best-in-class' customer service rankings, and continue to make progress in implementing 'lean sigma' methods. At the same time our commodities businesses are aggressively pursuing performance improvement initiatives," added Hockema. For well over half a century, Kaiser Aluminum has produced a wide range of products from 'upstream' bauxite, alumina and aluminum to 'downstream' products for the aerospace, ground transportation, and industrial markets. The company will continue to focus its energies on the quality products and superior service for which it is known. Hockema concluded, "Kaiser employees have been the key to our past success, and their continued loyalty and commitment to the job at hand will ensure that we meet the challenges we face. There will be hard work and tough decisions ahead, but we have weathered difficult times before and will use the reorganization process to implement the financial and operational initiatives that will position us for long-term success." Although the filing includes certain U.S. subsidiaries through which the company holds an interest in foreign operations, it does not include the operations of the following entities: the 65%-owned Alpart alumina refinery and the 49%-owned Kaiser Jamaica Bauxite Company in Jamaica; the 20%-owned QAL alumina refinery in Australia; the 90%-owned Valco aluminum smelter in Ghana; the 49%-owned Anglesey aluminum smelter in Wales, or the 100%-owned extrusion plant in Ontario, Canada. In this regard, and in conjunction with expected approval of first- day court motions, Kaiser has taken appropriate steps designed to ensure that its participation in each of these entities, including the funding of certain costs and expenses, will not be impacted by the filings. For additional information, see the newly established restructuring section of the company's web site at http://www.kaiseral.com or call the newly established restructuring hotline at 1-888-829-3340 or 1-402-220-0856. Kaiser Aluminum is a leading producer of alumina, primary aluminum and fabricated aluminum products. ----------------------------------------------------------------- [00004] KAISER ALUMINUM CHAPTER 11 DATABASE ----------------------------------------------------------------- Lead Debtor: Kaiser Aluminum Corporation Bankruptcy Case No.: 02-10429-PJW Chapter 11 Petition Date: February 12, 2002 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Kaiser Aluminum & Chemical Corporation 02-10430-PJW Akron Holding Corporation 02-10431-PJW Kaiser Alumina Australia Corporation 02-10432-PJW Kaiser Aluminum & Chemical Investment, Inc. 02-10433-PJW Kaiser Aluminium International, Inc. 02-10434-PJW Kaiser Aluminum Properties, Inc. 02-10435-PJW Kaiser Aluminum Technical Services, Inc. 02-10436-PJW Kaiser Bellwood Corporation 02-10437-PJW Kaiser Finance Corporation 02-10438-PJW Kaiser Micromill Holdings, LLC 02-10439-PJW Kaiser Texas Micromill Holdings, LLC 02-10440-PJW Kaiser Sierra Micromills, LLC 02-10441-PJW Kaiser Texas Sierra Micromills, LLC 02-10442-PJW Oxnard Forge Die Company, Inc. 02-10443-PJW Court: United States Bankruptcy Court District of Delaware 824 Market Street, 5th Floor Wilmington, DE 19801 Telephone (302) 252-2900 Bankruptcy Judge: The Honorable Peter J. Walsh Debtors' Lead Bankruptcy Counsel: Corinne Ball, Esq. Jones, Day, Reavis & Pogue 599 Lexington Ave., 32nd Floor New York, NY 10022 Telephone (212) 326-3939 Debtors' Local Bankruptcy Counsel: Daniel J. DeFranceschi, Esq. Richards, Layton & Finger One Rodney Square P.O. Box 551 Wilmington, DE 19899 Telephone (302) 658-6541 Debtors' Special Corporate Counsel: Kramer Levin Naftalis & Frankel LLP Debtors' Special Asbestos Counsel: Wharton, Levin, Ehrmantraut, Klein & Nash Debtors' Special Insurance Counsel: Heller Ehrman White & McAuliffe, LLP Debtors' Special Labor Counsel: Seyfarth Shaw Special Products Liability Counsel: Lemle & Kelleher, L.L.P. and Shaw Norton, L.L.P. U.S. Trustee: United States Trustee for Region 3 844 King Street, Suite 2313 Lockbox 35 Wilmington, Delaware 19801-3519 Telephone (302) 573-6491 Fax (302) 573-6497 Debtors' Financial Advisor: Lazard Freres & Co. Debtors' Accountants: Arthur Andersen LLP Debtors' PR Consultants: The MWW Group ----------------------------------------------------------------- [00005] LIST OF THE DEBTORS' 50-LARGEST UNSECURED CREDITORS ----------------------------------------------------------------- Entity Nature Of Claim Claim Amount ------ --------------- ------------ State Street Bank & 12 3/4% Senior $400,000,000 Trust Company Subordinated Notes David Ganss Due 2003 2 Avenue de LaFayette Boston, MA 02112-1724 Tel: 617 662 1724 Fax: 612 662 1466 U.S. Bank Trust National 9 7/8% Senior Notes $397,780,000 Association Due 2002 and 10 7/8% Rick Prokasch Senior Notes Due 2006 180 East 5th Street Suite 200 St. Paul, MN 55101 Tel: 651 244 0721 Fax: 651 244 0711 Bank One Trust Company, State of Louisiana $20,000,000 N.A. Solid 7 3/4% Waste Terri Franklin Disposal Revenue Bonds Corporate Trust Services 201 St. Charles Avenue 29th Floor New Orleans, LA 7417 Tel: 504 623 1586 Fax: 504 623 1432 JP Morgan Chase Bank West VA Pollution $12,400,000 Institutional Trust 61/2% Control Revenue Services Bonds Pilar Maybill 2001 Bryan Street 10th Floor Dallas, TX 75201 Tel: 214 468 6042 Fax: 214 468 6430 Defense Logistics Agency Trade Debt $10,852,325 Danny Lester 8725 Jhon J. Kingman Rd. Suite 4616 Ft. Belvoir, VA 22060-6223 Tel: 703 767 5482 Fax: 703 767 5484 Glencore AG Trade Debt $8,317,500 Andrew Bentley Bearermattstrasse 3 PO Box 666 CH-6341 Baar Switzerland Tel: 4141 709 2336 Fax: 4141 709 3536 Alean International Trade Debt $4,333,555 Limited Jean Grenon 1955 Mellon Street Building 109 Jonquiere Quebec Canada G7S4L2 Tel: 514 848 8387 Fax: 514 848 1461 Coral Energy Resources LP Trade Debt $3,332,576 Ray Walsh 909 Fannin, Suite 700 Houston, TX 77010 Tel: 713 767 5525 Fax: 713 265 5525 LA Scrap Trade Debt $1,200,000 Sergio (Sal) Alvarez 1910 E. Olympic Blvd. Los Angeles, CA 90021 Tel: 213 622 5744 Fax: 213 622 8501 Enron Metal & Commodity Trade Debt $1,077,057 Limited Enron House London, UK Tel: 44 207 783 0000 Bonnevillie Power Admin Trade Debt $1,038,081 Joan Traversie PO Box 6040 Portland, OR 97228-6040 Tel: 503 230 3339 Performance Contractors Trade Debt $818,399 A.C. Ferachi 3700 Crestwood Parkway Suite 100 Duluth, GA 30096 Avistta Energy Trade Debt $730,000 Mike D'Areinzo 201 W. North River Drive Spokane, WA 99201 Tel: 509 495 4495 Fax: 509 495 8100 Thelen Reid & Priest LLP Legal Services $688,738 Jennifer A. Kuenster PO Box 60000 San Francisco CA 94160-2947 Tel: 415 371 1200 Fax: 415 371 1211 Hutch Associates Trade Debt $520,000 Consultants, Inc. Richard Smith 62150 Sheridan Drive Buffalo, NY 14221-4884 Tel: 412 497 2000 Fax: 412 497 2212 The Valspar Corporation Trade Debt $487,577 Daniel A. Currie 2001 Tracey Street Pittsburgh, PA 15233 Tel: 412 734 8507 Fax: 412 732 3167 Reliance Street & Trade Debt $457,429 Aluminum Corp. Bill Sates 350 South Grand Avenue Los Angeles, CA 9007 Tel: 213 687 7700 Alcan International Trade Debt $455,000 Limited Jean Doucer 1955 Mellon Street Building 109 Jonquire Quebec Canada, G7S4L2 Tel: 514 848 8049 Fax: 514 848 1215 Dewoff, Boberg & Trade Debt $450,000 Associates, Inc. Stanley Stafford PO Box 2055 Bluffton, SC 29910 Tel: 800 800 6030 Fax: 972 808 9291 KLS Logistics Services Trade Debt $440,000 Bob Flint 3061 Independence Dr. Suite 5 Livermore, CA 94550 Tel: 925 243 6516 Fax: 925 243 6526 Bryan Cave LLP Legal Services $420,399 Michael B. McKinnis One Metropolitan Square 211 N. Broadway Suite 3600 St. Louis, MO 63102-2750 Ronal Adams Contractor, Trade Debt $495,587 Inc. Thomas Hymel 1074 Highway 1 Thibodaux, LA 70301 Tel: 985 447 4466 Fax: 985 447 4546 Alutek, Inc. Trade Debt $364,000 John Seelifo 3401 N. Tschirlely Rd. Spokane, WA 99216 Tel: 509 924 2689 Fax: 509 928 3788 Morgan Lewis & Bockius Legal Services $389,542 LLP James D. Pagliaro, Esq. 1701 Market Street Philadelphia, PA 19103-2921 Tel: 215 963 5000 Fax: 215 963 5299 Conti Lines USA, Trade Debt $337,737 LTD. Inc. Wolfgang K. Teuckert 1800 Eller Drive Suite 205 Fort Lauderdale, FL 33316 Tel: 954 524 4323 CASS Trade Debt $300,000 Elizabeth Cady 900 Cheimsford Street Cross Point Tower Lowell, MA 01851 Tel: 978 323 6761 Fax: 978 323 6624 Kinder Morgan Trade Debt $290,000 Bulk Terminal Tom Stanley 1770 Highway 44 Reserve, LA 70084 Tel: 800 535 8170 CII Carbon, LLC Trade Debt $288,312 Trudy Ferguson 1615 East Judge Perez Drive Chalmette, LA 70043 Pechiney World Trade Debt $280,000 Trade (USA) Emanuel Dupuy-d' Angeac U.S. Agencies Division PO Box 73433 Chicago, IL 60673-7433 IMCO Recycling of Trade Debt $274,355 Idaho, Inc. Tom Rogers Central Tower at Williams Sq. 5215 North O'Conner Blvd. Suite 940 Irving, TX 75039 Red Man Pipe & Supply Trade Debt $261,189 Company Larry Delger Central Tower at Williams Sq. 5215 North O'Conner Blvd. Suite 940 Irving, TX 75039 Vista Metals Trade Debt $260,000 Robert Pruefke 13425 Whitram Ave, Fontana, CA 92336 Tel: 909 823 4278 Fax: 909 823 5353 Producers Gas Sales, Trade Debt $235,753 Inc. Betty A. Tally asbestos claim $225,000 Joan Dunn and asbestos claim $225,000 Wendy Dunn Southern California Trade Debt $205,000 Edison Standard Shipping Inc. Trade Debt $200,000 Environcon Trade Debt $198,000 Columbia Metals Co. Trade Debt $179,158 Jenkins & Martin LLP Legal Services $175,893 Vallen Safety Supply Trade Debt $175,000 Company American Electric Trade Debt $169,862 Power Furnish & Associates Trade Debt $169,507 Eng. Inc. Alliance Energy Trade Debt $168,500 Services Doussan Cases & Trade Debt $155,533 Industrial - Oxy Earl M. Jorgesen Trade Debt $154,108 Relocation, Inc. Home Buyout $152,348 Forman Perry Watkins Legal Services $151,834 Krutz & Tardy PLLC Spur Indusrties Trade Debt $150,000 Ondeo Naico Company Trade Debt $149,648 ABB Automation, Inc. Trade Debt $146,901 Cytec industries Inc. Trade Debt $139,908 Springfellow & Trade Debt $139,892 Associates Grinnel Fire Trade Debt $136,000 Protection Witherspoon, Kelley, Trade Debt $132,943 Davenport & Toole Foster Pepper & Legal Services $125,000 Shefelman PLLC ----------------------------------------------------------------- [00006] ADVERSARY PROCEEDING -- Debtors v. State Street & US Bank ----------------------------------------------------------------- State Street Bank and Trust Company and U.S. Bank Trust National Association serve as the indenture trustees for four public issues of the Debtors' bonds: (a) $400,000,000 of 12-3/4% Senior Subordinated Notes due 2003; (b) $225,000,000 of 9-7/8% Senior Notes due 2002; (c) $175,000,000 of 10-7/8% Series B Senior Notes due 2006; and (d) $50,000,000 of 10-7/8% Series D Senior Notes due 2006. Alpart Jamaica, Inc., and Kaiser Jamaica Corporation guarantee Kaiser Aluminum & Chemical Corporation's obligations to repay the $850 million of senior debt. Moreover, Kaiser agrees, under the explicit terms of each indenture, that in the event the Company files for bankruptcy, the Indenture Trustees can take whatever steps they think appropriate to enforce and collect on those guarantees. Kaiser says that AJI and KJC can't pay, but it makes no sense for those companies to file for bankruptcy or commence other insolvency proceedings. By way of this Adversary Proceeding, the Debtors ask Judge Walsh to issue a temporary restraining order and put a preliminary injunction in place that bars the Indenture Trustees from enforcing the guarantees under U.S., Jamaican or other applicable law. Ian Connor Bifferato, Esq., at Bifferato, Bifferato & Gentilotti in Wilmington, Delaware, argue that the TRO and injunction are necessary to preserve the value of AJI and KJC, which are significant assets of the Debtors' estates. By preserving the value of these two non-debtor entities, Kaiser's overall reorganization has a higher probability of success. A bankruptcy filing by either AJI or KJC, Mr. Bifferato continues, would create substantial uncertainty under Delaware law and could materially and adversely affect the value of the Debtors' estates by precluding the Debtors from continuing to realize the benefits of the Debtors' investment in Alpart and a balanced raw material system both in terms of the cost of raw material needed to supply the Debtors' partially owned smelters in Ghana and Wales, as well as the loss of revenue from third party sales of alumina. Under Delaware partnership law, a bankruptcy filing by or against a partner causes the dissociation of the partner from the partnership. A partner's dissociation effectively terminates the partner's right to participate in the management and conduct of the partnership business. Under Jamaican law, State Street and U.S. Bank, because of Kaiser's bankruptcy filing, can now apply to the Supreme Court to obtain a Mareva injunction, so named after the case which introduced it into English law, Mareva Compania Naviera S.A. v. International Burk Calliers S.A., 1975 2 Lloyds 509. In its usual scope, such an order restrains the defendant, in this case, AJI and KJC, from removing from the jurisdiction or in any way disposing or dealing with or diminishing the value of any of his assets in the jurisdiction, in this case Jamaica, whether in the name of the defendant or not and whether solely or partly owned, until trial of action. AJI and KJC's assets that would be subject to the injunction would be any assets in Jamaica owned beneficially by AJI or KJC solely and AJI's and KJC's share of the assets held as tenants-in-common with Hydro Aluminum Jamaica a.s., as partners for Alpart. Alpart's assets are liable to execution to satisfy AJI and KJC's non-partnership debts. In addition to, or as an alternative to executing against the partner's share of the assets, a judgment creditor is entitled to seek the appointment of a Receiver of the partner's share of the profits and of any monies due him under the partnership. Although the creditors in this case would probably encounter some difficulty establishing the risk of dissipation since most of the assets of AJI and KJC in the jurisdiction are held as tenants-in- common with others, there would, however, be free assets of AJI and KJC in Jamaica such as bank accounts and their share of bauxite or alumina products delivered to them for shipment out of Jamaica, etc., which might more easily be transferred or sold or charged, and the risk of the dissipation hurdle might be more easily met in relation to such assets. If the noteholders obtained a Mareva injunction, the Debtors warn that Alpart could be precluded from making payroll and paying other operational costs and could be shut down. If Alpart ceased operating, the Debtors' supply of alumina from Alpart would be effectively cut off, which, in turn, would: (a) shut down the Debtors' partially owned smelters in Ghana and Wales, which are unable to store more than a short-term supply of alumina; (b) expose those smelters to substantial costs associated with the shut down and restart of equipment; (c) deny the Debtors access to alumina necessary to meet customer needs, resulting in a loss of significant revenue and damage to the Debtors' business; and (d) cause available alumina at Alpart to be rendered unusable due to chemical deterioration (alumina cannot be effectively stored or stockpiled). Similarly, if for any reason, Alpart is unable to distribute alumina to AJI and KJC, Alpart, without the ability to store alumina, would be forced to shut down or curtail operations. Further, as another consequence of that injunction, AJI and KJC would be precluded from meeting their obligations in respect to a power plant they manage and other obligations under a mining lease with the Government of Jamaica. Because of this widespread impact, entry of a Mareva injunction would substantially impair the ability of the Debtors to reorganize. The way to avert these problems, the Debtors tell Judge Walsh, is to tie the Indenture Trustees' hands by issuing the TRO and preliminary injunction and preventing them from enforcing the guarantees. ----------------------------------------------------------------- [00007] DEBTORS' MOTION TO OBTAIN $300,000,000 OF DIP FINANCING ----------------------------------------------------------------- Kaiser Aluminum Executes Definitive Loan Agreement for $300 Million Debtor in Possession Financing From Bank of America HOUSTON, Texas -- February 12, 2002 -- Kaiser Aluminum Corporation (NYSE:KLU), which filed for Chapter 11 protection earlier today, announced that it has executed a definitive loan agreement with Bank of America for $300 million in DIP Financing, subject to Bankruptcy Court Approval. The DIP financing, in combination with the company's current invested cash, should provide sufficient liquidity to meet its ongoing operating needs. Kaiser's production and shipment of bauxite, alumina, primary aluminum products and fabricated aluminum products will continue without interruption. * * * Kaiser Aluminum Granted Interim Use of Up to $100 Million of $300 Million DIP Financing in Voluntary Chapter 11 Case; Court Approves First-Day Orders HOUSTON, Texas -- February 13, 2002 -- Kaiser Aluminum Corporation (NYSE:KLU) said today that the company has received interim approval from the Bankruptcy Court to use up to $100 million of its $300 million in Debtor-in-Possession (DIP) financing, together with existing invested cash, to continue operations, pay employees and purchase goods and services going forward during its voluntary Chapter 11 case. At today's hearing, the company received Court approval to, among other things, pay pre-petition and post-petition wages, salaries and benefits to its employees, and to honor obligations to its customers. Interim approval of a portion of the total DIP commitment is common in Chapter 11 reorganization cases. A final hearing on the DIP facility is expected to occur in the next 30 days. The approval of only a portion of the facility is not an issue for Kaiser, as usage of the DIP facility in the near-term is expected to be limited to issuance of letters of credit. Immediate borrowings under the DIP facility are not anticipated as Kaiser has adequate invested cash for the foreseeable future at the petition date. "We are pleased with the court's prompt approval of the first-day orders," said Jack Hockema, president and CEO of Kaiser. "The interim approval of our DIP financing, combined with the company's invested cash, should provide adequate funding to meet our employee and supplier obligations as well as build on the performance improvement initiatives we have recently put in place. Kaiser's operations, production and delivery schedules will continue without interruption. We appreciate the support being shown by our employees, customers and suppliers as we begin the restructuring process." * * * A detailed summary of the DIP Financing Facility, including key operating and financial covenants, will follow in Issue No. 2 of Kaiser Bankruptcy News. *** End of Issue No. 1 *** ------------------------------------------------------------------------- Peter A. Chapman peter@bankrupt.com http://bankrupt.com ------------------------------------------------------------------------- Recommended Reading: Professor Stuart Gilson's newest title, "Creating Value Through Corporate Restructuring: Case Studies in Bankruptcies, Buyouts, and Breakups." List Price: $79.95 -- Discounted to $55.96 at http://amazon.com/exec/obidos/ASIN/0471405590/internetbankrupt -------------------------------------------------------------------------