/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/010416.MBX T R O U B L E D C O M P A N Y R E P O R T E R Monday, April 16, 2001, Vol. 5, No. 74 Headlines ARMSTRONG HOLDINGS: Court Allows Trading Of Securities BRIDGE INFORMATION: Reuters Confirms Bid For Certain Assets CALYPTE BIOMEDICAL: Seeks More Funds To Sustain Operations CAROLINA POTTERY: Taps Universal Capital To Handle Store Sales CENTRAL EUROPEAN: Shareholders' Meeting Is On May 18 in Bermuda CHECKERS: Richard Strong & Calm Waters Report 9.45% Equity Stake COLORADO GREENHOUSE: Court Fixes June 4 Bar Date COMPASS AEROSPACE: Says Will Not Make Interest Payment on Notes CONVERSION TECH: Files For Chapter 7 Bankruptcy Protection CYBERCASH: Receives Two Competing Bids For Operating Assets DIGITAL INFORMATION: Files Chapter 11 Petition in N.D. Texas FASTCOMM: Cash Burn Continues Due To Weak Sales & Collection FINANTRA CAPITAL: Engages Aspen Capital as Financial Advisors FINE AIR: Seeks More Time To Decide On Real Property Leases FRUIT OF THE LOOM: Proposes Liquidation Plan For NWI Land GE CAPITAL: Fitch Junks Ratings On Home Equity Loan Certificates GENESIS HEALTH: $300,000 De Minimis Asset Sale Protocol Okayed HARNISCHFEGER: Beloit Junks Coinpasa License Agreement HEDSTROM HOLDINGS: Disclosure Statement Hearing Set For April 25 ICG: Velcor Moves To Foreclose Mechanic's Lien In Kern County CA IMPERIAL SUGAR: Plan Confirmation Hearing Scheduled On May 2 INSCI-STATEMENTS.COM: Nasdaq Eyes Delisting Shares From Trading INTEGRATED HEALTH: Allows 18 More To File Tardy Proofs Of Claim KOZMO.COM INC.: Shuts Down Web Site & Ceases Operations LEINER HEALTH: Obtains Further Waiver Extension From Lenders LOEWEN GROUP: Resolves Contract Disputes With the Craciuns LTV CORPORATION: Proposes Key Employee Retention Program MAIL-WELL: Moody's Reviewing Ratings For Possible Downgrade MARCHFIRST INC: Files Chapter 11 Petition in Wilmington MARCHFIRST INC: Case Summary and 20 Largest Unsecured Creditors MUSICBANK: Online Music Company Lays-Off Staff & Closes Shop NOMURA ASSET: S&P Slashes Rating On Mortgage Certificate To 'D' OTR EXPRESS: Talking to Four Equipment Lenders About Debt Terms OWENS CORNING: Reports First Quarter Financial Results PACIFIC GAS: Hires Howard Rice, et al., as Lead Counsel PARACELSUS: Deutschlan Unit & Park Hospital Own 33.66% Of Stock PINPOINT CORPORATION: Ceases Operations Due To Lack of Funds PIONEER COMPANIES: Posts $105.6 Million Net Loss for FY 2000 PLAY CO.: Buxbaum Participates In Liquidation Of 33 Toy Stores PSINET INC.: Cuts More Jobs To Conserve Cash RIVAL NETWORKS: Sports Web Site Calls It Quits SERVICE MERCHANDISE: Assumes Nine Leases For Go-Forward Stores SHAMAN PHARMACEUTICALS: Court Grants Approval to Assign Lease STARTEC GLOBAL: Receives Delisting Notice from Nasdaq STORE OF KNOWLEDGE: Taps Ozer & Hilco To Manage 70 Store Sales TRANSTECHNOLOGY: Senior Lenders Agree To Waive Covenant Defaults VENCOR: US Trustee Balks at Reimbursing Indenture Trustee Fees W.R. GRACE: Honoring Prepetition Employee Obligations WORLDWIDE XCEED: Shares Subject To Delisting From Nasdaq Market BOND PRICING: For the week of April 16-20, 2001 ********* ARMSTRONG HOLDINGS: Court Allows Trading Of Securities ------------------------------------------------------ Judge Farnan granted the Committee's Application, finding that any Committee member acting in any capacity will not be violating its fiduciary duties as a Committee member and, accordingly, will not subject its claims to possible disallowance, subordination, or other adverse treatment, to the extent that any Committee member and its affiliates trade in Armstrong Holdings, Inc.'s stock, notes, bonds, debentures, or participates in any of the Debtors' debt obligations or other claims not covered by the Bankruptcy Rules during the pendency of these cases; however, Judge Farnan requires that each such member establish, effectively implement, and strictly adhere to policies and procedures, such as a Chinese Wall, to prevent the member's trading personnel from the misuse of non-public information obtained through the performance by such member's designated personnel of the Committee-related activities, and to prevent such personnel from receiving information regarding the member's trading in securities in advance of such sales. (Armstrong Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., 609/392-0900) BRIDGE INFORMATION: Reuters Confirms Bid For Certain Assets ----------------------------------------------------------- Reuters, the global information, news and technology group, has submitted a bid to acquire certain assets of Bridge Information Systems Inc. Bridge and certain of its affiliates filed a voluntary petition for reorganization under Chapter 11 of the United States' Bankruptcy Code with this court earlier this year. Reuters bid focuses on Bridge's core US institutional securities businesses. These include Bridge Information Systems in North America; the EJV bond data and analytics business; the Bridge Trading Company brokerage business; the Bridge Trading Technologies and Transaction Services businesses; the eBridge Internet business; and an option on Bridge's interest in Savvis Communications. The current bid excludes a number of Bridge's businesses including the ADP and Telerate businesses; Bridge Information Systems outside of North America; BridgeNews; the Bridge Commodity business; and Bridge's interest in BridgeDFS. In accordance with the Bankruptcy Court's order, a final auction is to take place on April 16, 2001 with the final offer selected by Bridge to be submitted to the Bankruptcy Court for approval at a hearing scheduled for April 19, 2001, all subject to extension or modification by Bridge or the Bankruptcy Court. During this time Bridge, Reuters and the other bidders may engage in discussions with one another, which may result in revised bids or other modifications. Specific proposed terms are not permitted to be disclosed due to confidentiality restrictions required by the Bankruptcy Court. CALYPTE BIOMEDICAL: Seeks More Funds To Sustain Operations ---------------------------------------------------------- Calypte Biomedical Corporation (Nasdaq: CALY) announced that its preliminary first quarter revenues for the three months ended March 31, 2001 had exceeded its previous best quarter. At the same time, the Company stated that it does not believe that its currently-available financing will be adequate to sustain operations at current levels through the second quarter of 2001. In addition, the Company is currently in discussions with the staff of Nasdaq regarding the Company's failure to meet the net tangible asset requirement for continued listing on the Nasdaq SmallCap Market set forth in the Nasdaq Marketplace Rules. Calypte's preliminary first quarter 2001 gross revenues increased 27% to a record $1.4 million as compared to $1.1 million for the three months ended March 31, 2000. This amount is unaudited and subject to possible change. Calypte expects to announce its full first quarter results after close of market on April 26, 2001. Calypte currently believes that its first quarter 2001 loss will be similar to its fourth quarter 2000 loss. At March 31, 2001, the Company's cash on-hand was $89,000. During the first quarter of 2001, the Company's cash expenditures exceeded its cash receipts by approximately $1 million. Due to the decline in the market price of its shares, the Company's ability to draw down funds under its equity line of financing has been severely limited and the Company no longer believes that this line of financing will be sufficient to fill its short-term financing requirements. "We are encouraged by our record revenues in the first quarter and we believe that performance validates our business and marketing plans," said Nancy E. Katz, Calypte's president, CEO and CFO. "However, due to the decline in the price of Calypte shares, our ability to access needed operating capital through our equity line has diminished substantially. We are looking at steps that we can take to reshape our cost structure to preserve operating capital, but we believe that the Company will require a substantial additional capital infusion. We are also actively searching for strategic opportunities including investment in the Company, a merger or other comparable transaction, the sale of certain of our assets or a financial restructuring to sustain our operations. While some of these opportunities are promising, we do not have any agreements in place." There can be no assurance that additional capital will be available to the Company on acceptable terms, or at all. In addition, on March 8, Nasdaq notified the Company that it was not in compliance with the Nasdaq SmallCap Market listing requirements. Specifically, Nasdaq cited the Company's failure to meet one of the three criteria relating to net assets, market capitalization or net income. As of December 31, 2000, Calypte's net tangible assets were ($1.56) million and that number has declined further during the first quarter of 2001. Calypte has submitted a plan for meeting the net tangible asset criteria to Nasdaq and has been engaged in discussions with the staff regarding the adequacy of its plan. Calypte expects the Nasdaq staff to issue a determination with respect to the adequacy of the plan within the next several weeks. Should the Nasdaq staff determine that the Calypte plan is inadequate, Calypte would have the right to request a hearing before a Nasdaq Listing Qualifications Panel to review the Staff's determination. There can be no assurance that the Staff will find the Company's plan adequate. In that event, there also can be no assurance that the Nasdaq Panel will grant the Company's request for continued listing on the Nasdaq SmallCap Market. In such event, the Company's shares would likely trade over the counter. Additionally, the Company's continued ability to use its equity line of financing facility is dependent upon its continued listing on the Nasdaq SmallCap Market. Calypte Biomedical Corporation (NASDAQ: CALY), headquartered in Alameda, California, is a public healthcare company dedicated to the development and commercialization of urine-based diagnostic products and services for Human Immunodeficiency Virus Type 1 (HIV-1), sexually transmitted diseases and other infectious diseases. Calypte's tests include the screening EIA and supplemental Western Blot tests, the only two FDA-approved HIV-1 antibody tests that can be used on urine samples. The company believes that accurate, non-invasive urine-based testing methods for HIV and other infectious diseases may make important contributions to public health by helping to foster an environment in which testing may be done safely, economically, and painlessly. Calypte markets its products in over 40 countries worldwide through international distributors and strategic partners. CAROLINA POTTERY: Taps Universal Capital To Handle Store Sales -------------------------------------------------------------- Universal Capital Partners, LLC, a Minneapolis-based retail consulting and liquidation firm, confirmed that it is managing the liquidation sales for five Carolina Pottery outlets including two stores in South Carolina, and one store each in Kentucky, Tennessee and Georgia. Carolina Pottery, headquartered in Smithfield, North Carolina, is a specialty retailer of housewares, crafts and decorative accessories. The Company currently operates seven retail outlets. Carolina Pottery recently filed for voluntary bankruptcy protection under Chapter 11 of Title 11 of the United States Code to allow it the time to restructure its operations. Mike Catain, UCP President and Chief Executive Officer, said, "It's unfortunate when a quality retailer like Carolina Pottery, with a long and successful history, has to close some of its stores. We're pleased, however, to have submitted the winning bid to assist them with these store closings. Our management team, with years of merchandising experience, has strong capabilities in valuing and liquidating inventory in a very cost-effective manner. We have conducted going out of business sales in the past for numerous specialty and home decor retailers, including MJDesigns and Wangs International." Shoppers can expect tremendous discounts on a broad array of home fashion items, including: -- A huge assortment of silk and dried floral merchandise; -- Home decor including furniture, lamps, area rugs and other decorative accessories; -- Kitchen gadgets, glassware, dinnerware and table linens; -- An endless supply of candles and potpourri; -- Seasonal items including Christmas greenery and accessories; -- Home and garden items; -- Baskets, framed art, picture frames and more! STORE SALE DETAILS Sales have already started at the stores to be closed and include the following locations STORE ADDRESS CITY ST ------------- ---- -- 3775 Avenue of the Carolinas Fort Mill SC 1495 HWY 17 North Mt. Pleasant SC 5238 Jewel Futch Rd. Lake Park (Valdosta) GA 354 Shadowtowne Rd. Blountville TN 401 Outlet Center Dr. Georgetown KY Questions concerning the remaining locations in Smithfield, NC and Macon, GA as well as corporate information should be directed to Carolina Pottery's corporate office in Smithfield, North Carolina at 919-934-1157. Universal Capital Partners, LLC is a full-service, retail consultant serving both retail management and asset-based lenders. Headquartered in Minneapolis, Universal Capital employs 75 people and has offices in New York and Greensboro, N.C. Universal Capital provides a variety of services including strategic store analyses, inventory evaluation, real estate restructuring, collateral monitoring and inventory liquidations. The company also maintains a credit facility in excess of $100 million to assist lenders and businesses with their funding and liquidity needs. Universal Capital has conducted liquidations in hundreds of locations throughout the United States, representing more than $400 million in retail inventory. The company's retail client list includes Jay Jacobs, Just for Feet, Pacific Linen, Sun Television and Appliances, MJDesigns, Three D Bed & Bath, West Lumber, Strouds, Wang's International, Carolina Pottery and LOT$OFF. CENTRAL EUROPEAN: Shareholders' Meeting Is On May 18 in Bermuda --------------------------------------------------------------- The Annual General Meeting of Shareholders of Central European Media Enterprises Ltd., a Bermuda company, will be held at the offices of Conyers Dill & Pearman, Richmond House, 12 Par-La- Ville Road, Hamilton, Bermuda, on May 18, 2001 at 10:00 A.M., for the following purposes: (1) To elect six directors to serve until the next Annual General Meeting of Shareholders; (2) To receive and adopt the financial statements of the Company for the Company's fiscal year ended December 31, 2000, together with the auditors' report thereon; and (3) To appoint Arthur Andersen as auditors for the Company and to authorize the directors to approve their fee. The approval and adoption of each matter to be presented to the shareholders is independent of the approval and adoption of each other matter to be presented to the shareholders. Only shareholders of record at the close of business on April 10, 2001 are entitled to notice of and to vote at the meeting. CHECKERS: Richard Strong & Calm Waters Report 9.45% Equity Stake ---------------------------------------------------------------- Richard S. Strong and Calm Waters Partnership hold 9.45% of the outstanding common stock of Checkers Drive-In Restaurants, Inc. represented by the beneficial holding of 892,000 shares of Checkers common stock. They each have shared voting and dispositive powers over the stock held. Calm Waters Partnership is a private investment fund owned by Mr. Strong and family members. COLORADO GREENHOUSE: Court Fixes June 4 Bar Date ------------------------------------------------ In the case of Colorado Greenhouse Holdings, Inc., the U. S. Bankruptcy Court for the District of Colorado entered an order providing that all creditors and equity security holders whose claims or interests are not scheduled or are scheduled as disputed, contingent or unliquidated shall file a proof of claim on or before June 4, 2001. COMPASS AEROSPACE: Says Will Not Make Interest Payment on Notes --------------------------------------------------------------- Compass Aerospace Corporation, a supplier of precision-machined parts and sub-assemblies, has announced that it filed its Form 10-K annual report on April 2, 2001 for the year ended December 31, 2000. Compass will not make the interest payment of approximately $4.7 million due April 15, 2001 on Compass' outstanding Series B and Series D notes. Failure to make the interest payment on the notes by May 15, 2001 would be an event of default under the indentures securing those notes. Additionally, Compass continues not to be in compliance with the terms of its bank credit agreement and is not able to borrow under that agreement. The agent for Compass' lenders under the credit agreement has sent a letter to Compass reserving its rights, but to date has not sought to exercise any remedies under the credit agreement. CONVERSION TECH: Files For Chapter 7 Bankruptcy Protection ---------------------------------------------------------- Conversion Technologies International, Inc. (OTC Pink Sheets: CVTL) and its two wholly owned subsidiaries, Dunkirk International Glass and Ceramics Corp. and Advanced Particle Technologies, Inc., are no longer able to continue business operations. All three corporations have filed for chapter 7 bankruptcy. If you require further information, contact Robert Altman, Esq. at (386) 325-4691. CYBERCASH: Receives Two Competing Bids For Operating Assets ----------------------------------------------------------- CyberCash, Inc. (OTC Bulletin Board: CYCHQ), a leading provider of electronic payment technologies and services, announced the results of the court sanctioned auction of CyberCash's operating assets as part of CyberCash's reorganization under Chapter 11. At the auction, the company received two competing, high bids just over $20 million. The company is currently considering the bids and working out certain details in order to determine the most favorable bid. The identity of the two bidders is not being announced pending resolution of the auction. The winning bid, once determined, is subject to approval by CyberCash, Inc.'s Board of Directors and the bankruptcy court, both of which are expected by April 17, 2001. Closing is expected to occur shortly thereafter. Excluded from the transaction are CyberCash's financial assets, including CyberCash's interest in CyberCash K.K., its Japanese payment processing joint venture with SoftBank, as well as CyberCash's investments in Commission Junction, Xcom and Outbounder, Inc. (formerly UUCom). CyberCash intends to sell these financial assets through subsequent auctions in the next 60 days. About CyberCash CyberCash, Inc., headquartered in Reston, VA, is a leading provider of Internet payment services and electronic payment software for both Business- to-Consumer (B2C) and Business-to- Business markets (B2B). The Company provides service solutions to more than 27,500 Internet merchants and has shipped more than 145,000 copies of its software products. In addition to enabling Internet payments, CyberCash offers merchants state-of-the-art risk management capabilities through its FraudPatrol(TM) Internet fraud detection service, and the opportunity to generate additional sales leads through an affiliate marketing program. CyberCash offers the broadest reach in the payment industry with a comprehensive distribution network focusing on both direct and indirect channels, which include marketing partnerships with financial institutions, Internet service providers, application service providers, storefront solution providers and leading independent software vendors. On March 2, 2001, CyberCash terminated its previously announced merger with Network 1 Financial Corporation and commenced the sale of its operations in Chapter 11. For more information, visit http://www.cybercash.com. DIGITAL INFORMATION: Files Chapter 11 Petition in N.D. Texas ------------------------------------------------------------ Digital Information & Virtual Access, Inc., a Nevada corporation (Pink Sheets: DVTL) and its wholly-owned subsidiaries, Money Business, Inc., a Texas corporation, and Talk Productions Network, Inc., a Texas corporation, filed voluntary petitions with the United States Bankruptcy Court for the Northern District of Texas. The Companies seek to reorganize their respective capital structures under Chapter 11 of Title 11 of the United States Code, 11 U.S.C. Sections 101 et seq. The management of the Companies intends to create a plan of reorganization and to file the plan with the Bankruptcy Court as soon as possible. During this period, the Companies will conduct business as usual. Each of the Companies plans to pay all obligations incurred during the Chapter 11 period out of current operations. The Companies have retained the Dallas law firm of Campbell & Cobbe, P.C. as its Chapter 11 counsel. The Company is a cross-media company that specializes in consumer shopping information through its Shop magazine, radio show, interactive website and shopping guide books. Talk Productions, Inc. is a Dallas-based radio production company, which produces the radio properties of its parent company, DIVA. Money Business, Inc. serves as the operating entity of DIVA. FASTCOMM: Cash Burn Continues Due To Weak Sales & Collection ------------------------------------------------------------ Fastcomm Communications Corporation, for the fiscal quarter ended January 27, 2001 reported revenue of $1,842,651 with a net loss of $(3,341,853). In the same period ended January 29, 2000 revenues were reported of $1,175,418 with a net loss of $(1,437,826). For the three fiscal quarters ended January 27, 2001 revenues were $9,691,259 with net losses of $(6,684,150). For comparison, the same three fiscal quarter period ended January 29, 2000 showed revenues of $4,491,526 and net losses of $(3,468,076). On March 31, 2000, the Company acquired substantially all of the assets and assumed certain liabilities of Cronus Technology, Inc. for approximately $9,600,000, plus the assumption of liabilities of approximately $6,700,000 subject to adjustment as set forth in the agreement. The acquisition was accounted for as a purchase and, accordingly, the acquired assets and liabilities were recorded at their estimated fair market values at the date of acquisition. The Company recorded goodwill of approximately $12,000,000 related to this transaction. The results of operations for the current fiscal quarter includes post-acquisition revenue and expenses generated by Cronus. The results of operations for the quarter and three fiscal quarters ended January 29, 2000 do not include such revenue and expense items. To facilitate comparability, the analysis of revenue and expense items includes information presented on a proforma basis assuming the inclusion of Cronus revenues and expenses as if the acquisition occurred on May 1, 1999. The Company continues to experience severe cash flow problems resulting from reduced sales and slow collections. In order to address this issue, the Company has taken or is planning to take the following actions, among others: (a) refinanced its senior debt with a new senior lender; (b) commenced accelerated collection efforts; (c) repriced existing options and warrants; (d) engaged an investment firm to provide the Company with strategies for addressing cash-flow and shareholder value issues; and (e) reduced overheads. In addition to the foregoing, the Company is considering either selling or recapitalizing certain portions of its business or licensing certain of its technologies. The Company's ability to make future capital expenditures and fund the development and launch of new products, are dependent on existing cash and demands on cash to support inventory for the Company's products and the Company's return to profitability. The timing and amount of the Company's future capital requirements can not be accurately predicted, nor can there be any assurance that debt or equity financing, if required, can be obtained on acceptable terms. There can be no assurance that the company will have cash available in the amounts and at the times needed. There can be no assurance that the required increased sales and improved operating efficiencies necessary to return to profitability will materialize, or if they do, the Company will be able to raise sufficient funding to finance its working capital needs. On February 6, 2001, the Company entered into an accounts receivable financing agreement with Alliance Financial Capital, Inc. that replaced the revolving line of credit and term loan agreement with LaSalle National Bank. All debt associated with the LaSalle agreement was satisfied. Under the accounts receivable financing agreement, the Company can borrow up to the lesser of $3,000,000 or 85% of eligible accounts receivable, as defined in the agreement. The accounts receivable financing agreement bears interest at prime rate plus 1.0% plus an additional 1.5% per invoice funded. The term of this agreement is for twelve months with a minimum average daily account balance of $750,000. The Company used $4,496,000 in cash from operations during the nine months ended January 27, 2001. This compares unfavorably to $2,676,000 in cash used in operations during the corresponding period of the previous fiscal year. This $1,820,000 increase is primarily attributable to an increase in the net loss for the period, increases in inventory balances offset by pay-downs of current liabilities and increased non-cash expenditures, primarily goodwill amortization. FINANTRA CAPITAL: Engages Aspen Capital as Financial Advisors ------------------------------------------------------------- Finantra Capital, Inc. (Nasdaq:FANT) has engaged Aspen Capital Partners, LLC to render consulting advice relating to mergers, acquisitions and related transactions. The Company said Aspen will help them evaluate various options regarding its subsidiary companies, restructuring and refinancing issues. The Company said Aspen is an experienced firm that has a clear understanding of Finantra's current situation and the various challenges it faces. Finantra indicated they have confidence Aspen will provide the Company with a viable strategic plan and access to the capital required to execute its short-and long- term business plan. The Company has been notified by NASDAQ that due to its delinquency in the filing of the Form 10-KSB for the fiscal year ended 12/31/00, that its trading symbol has been changed from FANT to FANTE (Nasdaq:FANTE) and FANTW to FANWE. This delinquency will be considered by the NASDAQ listing qualifications panel at the Company's hearing scheduled for Friday, May 11, 2001. The Company said that its plan will include a reverse stock split to meet NASDAQ stock price requirements following the filing of its quarterly financial information. Finantra said that the less than $1.00 stock price and the delinquent filing of its Form 10-KSB are technical issues that jeopardize its NASDAQ SmallCap status. There can be no assurance that the submitted plan will be accepted by the panel for continued listing. The Company said it has not yet finalized a new credit facility for its consumer finance unit, Travelers Investment Corporation, to replace the Finova Capital facility which has expired. Finantra also said that its $3.65 million loan with BHC Interim Funding LP, which provided some of the funding to acquire Travelers, has lapsed. The Company said its inability to secure a credit facility has hindered efforts to rebuild its portfolio and generate the revenues required to repay the BHC loan. While the loan is technically in default, the company said it is currently negotiating with BHC to explore various options for repayment and other issues. About Finantra Finantra Capital, Inc. is a consumer finance company specializing in mortgage lending and servicing, delivered through traditional and online processing systems and consumer finance, billing and collection services offered through its Travelers Investment Corporation subsidiary. The consumer finance group is involved in mortgage banking and other types of retail specialty financing. The company's leading consumer finance subsidiary, Travelers Investment Corporation, recently completed a $27 million asset securitization with Dain Rauscher acting as the company's investment banker. The majority of the bonds received an A2 investment grade rating and were placed institutionally. FINE AIR: Seeks More Time To Decide On Real Property Leases ----------------------------------------------------------- Fine Air Services Corp., et al. seeks additional time within which to assume or reject all of its unexpired leases of nonresidential real property for an additional 60 days --- from March 26, 2001 through and including May 25, 2001. The decision whether to assume or reject the leases is more properly made in connection with the debtor's overall reorganization plan. Therefore, the debtors are considering each lease, and need the time to review and consider each of the leases. FRUIT OF THE LOOM: Proposes Liquidation Plan For NWI Land --------------------------------------------------------- As close as possible to the Effective Date of their Joint Plan of Reorganization, Fruit of the Loom, Ltd. proposed that a liquidation agent will proceed with the liquidation of NWI Land Management. For voting purposes, each NWI claim will be placed in a subclass into which it would have been placed had it been asserted as a claim against the consolidated estate. The claims of the prepetition secured creditors are secured by liens on all the assets of both NWI and Fruit of the Loom. The liquidation agent will be empowered to: (a) effect all actions necessary to complete the plan, (b) make necessary distributions, (c) establish and administer any disputed reserves with respect to claims, (d) employ professionals to represent it in its responsibilities. The amount of any fees and expenses incurred by the liquidation agent and any compensation shall be paid first out of the proceeds of the NWI liquidation. The reorganized Fruit of the Loom will pay any remaining reimbursements. The liquidation agent will make quarterly reports to Debtor and the Court. All equity interests in NWI will be canceled and extinguished. (Fruit of the Loom Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service, Inc., 609/392-0900) GE CAPITAL: Fitch Junks Ratings On Home Equity Loan Certificates ---------------------------------------------------------------- Fitch lowered the ratings of the following GE Capital Mortgage Services Inc. (GECMSI) home equity loan pass-through certificates: -- Series 1996-HE4 class B1 from `BB' to `CCC'; -- Series 1997-HE1 class B1 from `BB' to `CCC'; -- Series 1997-HE2 class B1 from `A' to `BBB-`, Remains on Rating Watch Negative; -- Series 1997-HE2 class B2 from `B' to `CCC'; -- Series 1997-HE4 class B3 from `BB' to `CCC'; -- Series 1997-HE4 class B4 from `CCC' to `D'. In addition, the following certificates are placed on Rating Watch Negative: -- Series 1996-HE4 class M rated `AA'; -- Series 1997-HE1 class M rated `AA'; -- Series 1997-HE3 class B2 rated `BBB'; -- Series 1997-HE4 class B2 rated `BBB'; -- Series 1999-HE1 classes B3 rated `BB' and B4 rated `B'; -- Series 1999-HE3 class B4 rated `B'. Fitch's rating actions reflect the likelihood of loss to the referenced classes, given the performance to date and the outstanding 90+ day delinquent loans, including loans in foreclosure and REO. As of the March 25, 2001 distribution: -- Series 1996-HE4 remittance information indicates that approximately 8.08% of the pool is over 90 days delinquent, and cumulative losses are $4,568,831 or 2.08% of the initial pool. Classes M and B1 have 7.68% and 1.89% of credit support remaining respectively. -- Series 1997-HE1 remittance information indicates that approximately 8.37% of the pool is over 90 days delinquent, and cumulative losses are $3,475,886 or 1.76% of the initial pool. Classes M and B1 have 7.68% and 2.52% of credit support remaining respectively. -- Series 1997-HE2 remittance information indicates that approximately 8.36% of the pool is over 90 days delinquent, and cumulative losses are $4,258,536 or 1.74% of the initial pool. Classes B1 and B2 have 3.58% and 1.59% of credit support remaining respectively. -- Series 1997-HE3 remittance information indicates that approximately 7.61% of the pool is over 90 days delinquent, and cumulative losses are $1,957,665 or 0.83% of the initial pool. Class B2 has 3.84% of credit support remaining. -- Series 1997-HE4 remittance information indicates that approximately 6.09% of the pool is over 90 days delinquent, and cumulative losses are $1,296,892 or 0.72% of the initial pool. Classes B2, B3 and B4 have 3.46%, 1.42% and 0% of credit support remaining respectively. -- Series 1999-HE1 remittance information indicates that approximately 6.84% of the pool is over 90 days delinquent, and cumulative losses are $2,703,156 or 0.53% of the initial pool. Classes B3 and B4 have 2.63% and 1.60% of credit support remaining respectively. -- Series 1999-HE3 remittance information indicates that approximately 5.47% of the pool is over 90 days delinquent, and cumulative losses are $1,058,081 or 0.24% of the initial pool. Class B4 has 2.43% of credit support remaining. Fitch will continue to closely monitor the performance of these transactions. GENESIS HEALTH: $300,000 De Minimis Asset Sale Protocol Okayed -------------------------------------------------------------- In order to sell certain of their relatively small assets outside of the ordinary course of business in the most cost- effective manner, Genesis Health Ventures, Inc. sought and obtained the Court's authority to sell real property, personal property, and intangible assets including, without limitation, furniture, fixtures, equipment, inventory, contract rights, and vehicles for a purchase price of $300,000 or less from time to time without the need to file a motion with the Court for approval under section 363 of the Bankruptcy Code. The Debtors explained that prior to the filing of their chapter 11 cases, in the ordinary course of their businesses, they analyzed and evaluated the usefulness of all of their real property, personal property, and intangible assets, and would dispose of those assets that were not beneficial to the Debtors' businesses. Such assets include, without limitation, furniture, fixtures, equipment, inventory, contract rights, and vehicles. Subsequent to the Commencement Date, however, because the Debtors are not in the business of selling such assets, they believe that Court approval for the sale of such assets, pursuant to section 363(b) of the Bankruptcy Code, may be necessary. In lieu of a notice of motion and a hearing for the sale of Assets pursuant to section 363 of the Bankruptcy Code, the Debtors will sell the Assets in accordance with the Court- approved Sale Procedures: (1) The Debtors will give notice of each proposed sale of Assets to (a) the U.S. Trustee, (b) attorneys for the Committee, (c) attorneys for the Debtors' prepetition senior lenders and postpetition lenders, (d) the purchaser of the Asset(s), (e) all parties known to the Debtors who have expressed an interest in purchasing the Asset(s), (f) the holder of any lien, claim, or encumbrance relating to the Asset(s) proposed to be sold, (g) any applicable taxing authority, and (h) all other parties identified in the General Service List (2) The Debtors will have the right to make nonmaterial amendments to the terms of the sale set forth in the Notice without serving an amended Notice on the Notice Parties. (3) The Notice Parties shall have 5 business days after the Notice is served to (a) object to the proposed transaction, (b) request additional time to evaluate the proposed transaction, or (c) submit a higher and better offer (the Competing Offer) for the Asset(s) proposed to be sold. (4) All objections, requests for extensions of time, and Competing Offers should be in writing, delivered to: -- Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York 10153, Attn: Gary T. Holtzer, Esq. and -- Richards, Layton & Finger, P.A., One Rodney Square, P.O. Box 551, Wilmington, Delaware 19899, Attn: Mark D. Collins, Esq., the Debtors' counsel, so as to be actually received by WG&M and RL&F by 5:00 p.m. 5 business days after the Notice is served. (5) Competing Offers must also be delivered to Genesis Health Ventures, Inc., 101 East State Street, Kennett Square, Pennsylvania 19348, Attn: Michael Sherman, Esq. (6) If a Notice Party provides a written request to WG&M and RL&F for additional time to evaluate the proposed transaction, only such Notice Party shall have an additional 15 days to object to the proposed transaction or to submit a Competing Offer. (7) The minimum initial Competing Offer with respect to each Asset must increase the proposed purchase price of such Asset by at least 10% higher than the previous bid. (8) In the event a Competing Offer, which has been accepted by the Debtors as the highest and best offer exceeds $300,000 (exclusive of inventory sold at or above cost), the Debtors will file a motion with the Court seeking Court approval of the sale of such Assets, pursuant to section 363 of the Bankruptcy Code. (9) The Debtors and an objecting party will use good faith efforts to consensually resolve the objection, and if they are unable to achieve a consensual resolution, the Debtors will not proceed with the proposed transaction but may seek Court approval of the proposed transaction upon notice and a hearing. (10) The Debtors may seek Court approval at any time of any proposed transaction upon notice and a hearing. The Multicare Companies, Inc. have also filed a motion requesting for approval of Asset Sale Procedures. In the Multicare cases, a hearing has been set for April 24, 2001 and the Objection Deadline is April 11, 2001. (Genesis/Multicare Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 609/392-0900) HARNISCHFEGER: Beloit Junks Coinpasa License Agreement ------------------------------------------------------ Beloit Corporation told the Court that Compania International de Plantas Papeleras, S.A. (Coinpasa) has been in default of its obligations to pay Beloit a royalty of 5% of the net sales price of products licensed under a License Agreement whereby Beloit is the licensor Beloit and Coinpasa is the licensee. The patents and technology that are the subject matter of the Coinpasa Agreement were transferred to one or more buyers pursuant to sale orders entered in the Debtors' cases after Coinpasa had notice and the opportunity to object. Beloit has determined that continuance of the contractual relationship between Beloit and Coinpasa provides no benefit to the estate of Beloit but could needlessly saddle the estate of Beloit with administrative liabilities under section 365(d)(1) of the Bankruptcy Code. Beloit has exercised its rights under the Coinpasa Agreement to terminate the Agreement by sending a termination letter to Coinpasa on February 8, 2001 citing two grounds for termination: (a) Beloit's bankruptcy; and (b) Coinpasa's material default of its obligations under the Agreement. Termination upon the former ground is immediate; termination on the latter ground becomes effective upon the expiration of a three-month notice and cure period. If Coinpasa does not contest and the Coinpasa Agreement is terminated, the Agreement will no longer be executory and Beloit will no longer be required to reject it. To the extent Coinpasa succeeds in contesting termination, Beloit sought to reject the Agreement effective as of the date of the order granting the relief. Beloit requested that the Court authorize: (1) the rejection of the Coinpasa Agreement (a) to the extent it has not previously been terminated; (b) except as otherwise assumed pursuant to the Order under 11 U.S.C. sections 105, 363, 365, and 1146(c) (2) sale of certain of Debtors' assets to RCI free and clear of all liens, claims, interests and encumbrances; and (3) assumption and assignment of certain leases and executory contracts, which was entered by the Court in the RCI Order. (Harnischfeger Bankruptcy News, Issue No. 40; Bankruptcy Creditors' Service, Inc., 609/392- 0900) HEDSTROM HOLDINGS: Disclosure Statement Hearing Set For April 25 ---------------------------------------------------------------- A hearing to consider approval of the Disclosure Statement of Hedstrom Holdings Inc., et al. will be held before the Honorable Peter J. Walsh, US Bankruptcy Court, Wilmington, on April 25, 2001 at 11:30 AM. The debtors are represented by Weil, Gotshal & Manges LLP and Richards, Layton & Finger PA. ICG: Velcor Moves To Foreclose Mechanic's Lien In Kern County CA ---------------------------------------------------------------- R. Karl Hill of the Wilmington firm of Seitz, Van Ogtrop & Green, and each of Mary E. Olden, Mark Gorton, and Todd M. Bailey of the Sacramento California firm of McDonouogh Holland & Allen, asked that Vellutini Corporation, dba Velcor, be permitted to bring a proceeding to foreclose its mechanic's lien in Kern County, California, recorded in December 2000. This arose from an agreement between ICG Telecom Group, Inc., ICG Communications, Inc., and Velcor by which Velcor was to provide construction labor and materials to improve ICG's fiber optic network by forming a loop around the central portion of the City of Fresno, California. This project consisted of three phases identified as the Blackstone phase, the Golden State phase, and the Shaw phase. The original contract price for the three phases was $830,150 for Blackstone, $783,145 for Golden State, and $1,383,529 for Shaw. Change orders in the amount of $258,735 brought the total price for the Golden State phase to $1,041,880, with a total for all three phases of $3,255,559. Velcor stated that the ICG Communications, Inc. Debtors remain obligated to pay it $1,093,955.50 for the construction labor and materials Velcor supplied before the Debtors instructed Velcor to discontinue work on the project (which remains unfinished). Velcor has perfected a mechanic's lien under California law, and now seeks termination of the stay to enforce the rights granted it under that lien. Such an action must be brought within 90 days of the recordation of the lien. Since California law provides that commencing an action to foreclose a mechanic's lien is not a step in perfection, which is automatically excepted from the bankruptcy stay, but is instead an act of enforcement for which relief from the stay must be obtained, Velcor, to assure preservation of its lien rights, must obtain relief from the stay to file its lien foreclosure action. As Velcor must bring its action or lose its lien, its interests in the Debtors' property is not adequately protected. Under the balance of hardships, Velcor may suffer irreparable hardship if the stay is not lifted as it must commence its action in state court or risk loss of the lien. Velcor told the Bankruptcy Judge there is no colorable dispute as to the validity of its lien. The Debtors have requested that Velcor perform more work on the project postpetition, which raises an inference that Velcor's lien may be perfected postpetition. Even if the Debtors were to dispute the lien, it would of necessity be an issue which would be litigated either in the bankruptcy court or in a lien foreclosure action in California. The difference in forums imposes no hardship on the Debtors, particularly as the Debtors have Los Angeles counsel, but does impose a serious hardship on Velcor. Further, the validity of the lien implicates only issues of California law, with no requirement of the Bankruptcy Court's special expertise. The only witnesses would be located in California. Relief from the stay to permit Velcor to initiate an action in California is thus appropriate. (ICG Communications Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., 609/392-0900) IMPERIAL SUGAR: Plan Confirmation Hearing Scheduled On May 2 ------------------------------------------------------------ By Order, Judge Robinson has set May 2, 2001, as the date to consider whether Imperial Sugar Company's Plan, as it may be amended from time to time, should be confirmed. This date is subject to the Court's approval of the adequacy of the information in the Debtors' Disclosure Statement. (Imperial Sugar Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service, Inc., 609/392-0900) INSCI-STATEMENTS.COM: Nasdaq Eyes Delisting Shares From Trading --------------------------------------------------------------- insci-statements.com, Corp. (Nasdaq:INSI), now doing business as INSCI, received notices of Nasdaq Staff Determinations on April 5, 2001 and April 9, 2001, indicating that the Company failed to comply with the net tangible assets and minimum bid price requirements for continued listing, and is subject to delisting from The Nasdaq SmallCap Market. The Company is appealing and has filed a request for a hearing with the Nasdaq Listing Qualifications Panel to review the Staff Determinations. There can be no assurance that the Company's actions will prevent delisting of its common stock. The Company will not be notified until the Panel makes a formal decision. Until then, the Company's shares will continue to be traded on The Nasdaq SmallCap Market. In the event the shares are delisted from The Nasdaq SmallCap Market, it will attempt to have its common stock traded on the NASD OTC Bulletin Board. About INSCI: insci-statements.com, Corp., doing business as INSCI, is a leading-provider of highly scalable digital document repository solutions that provide high-volume document capture, storage and delivery functions via Local and Wide Area Networks or the Internet. Its award-winning products bridge back-office with front-office mission critical and customer-centric applications by web- enabling legacy-generated reports, bills, statements and other documents. The Company has strategic partnerships and relationships with such companies as Bell & Howell, Xerox, Moore and Unisys. For more information about INSCI, visit www.insci.com. INTEGRATED HEALTH: Allows 18 More To File Tardy Proofs Of Claim --------------------------------------------------------------- Integrated Health Services, Inc. has agreed to grant 18 more claimants permission to file proofs of claim after the bar date: * Kenneth N. Phillips, as personal representative of the estates of Ruth Avis Phillips and Arthur Phillips; * Romillus Hendrix and Rebecca Hendrix; * Carol C. Northwood and Donald Northwood * Kathleen R. Lisko, as personal representative of the estate of Mary Reilly; * Betty Stieve; * Sylvia N. Greenberg; * Judith Knight; * Linda J. Gardiner, as personal representative for the Estate of Irene Lucy; * Kenneth J. Bachman; * Personal Injury Creditor (re: Gail Palmer, individually and as Administrator of the Estate of Geoffrey Miles Palmer, and Mary Palmer, Grant Palmer and Donna Palmer); * Janice Fling, Executor De Son Tort of the Estate of Marguerite Dorothy Geary; * Susan Johnson as next of kin of Norma Johnson; * Romunda Fulton, as next of kin of Mary Fulton; * Rebecca Davis as next of kin of Edward Allen Hoplight; * Joseph Mandina by and through Francis Mandina his Attorney-In-Fact; * Queen Jameison; * Marie Cocuzza as personal representative of the Estate of Roy Cocuzza; * Johanna Dotson on behalf of Hubert Dotson; * Victoria Dziubic; * Martha Ray, individually and on behalf of the Estate of Ernest Jackson William Subject to the reservation of rights to object to such proofs of claim on bases other than timeliness, the Debtors agreed that these proofs of claim will be deemed timely if they are filed within 30 days of the date of entry of separately-negotiated Stipulated and Agreed Order. (Integrated Health Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., 609/392-0900) KOZMO.COM INC.: Shuts Down Web Site & Ceases Operations ------------------------------------------------------- Online delivery service Kozmo.com Inc. has shut down its web site and will cease operations in all of its markets immediately, according to the Associated Press. Stephanie Cohen Glass, Kozmo's director of communications, said all 1,100 Kozmo workers would be told of the decision. "We've contacted a liquidator who will be liquidating the company's property," she said. "We will be paying our creditors. This is not a bankruptcy." The New York-based Kozmo was launched in 1998 on the premise of delivering goods ordered over the Internet, including flowers, groceries and other items. Earlier this year, Kozmo said it was gearing up for a more conventional approach, including a print catalog, to sell its products. Kozmo operated in Atlanta, Boston, Chicago, Los Angeles, New York, Portland, San Francisco, Seattle, and Washington, D.C. (ABI World, April 12, 2001) LEINER HEALTH: Obtains Further Waiver Extension From Lenders ------------------------------------------------------------ Leiner Health Products Inc. has reached an agreement in principle with its lenders to extend its previously announced waiver letter from April 12 to June 15, 2001. The Company said that this latest extension will allow it to complete its Fiscal Year 2002 business plan. It is anticipated that the waiver extension will be executed on Monday, April 16, 2001. Robert Kaminski, Chief Executive Officer, said, "We are gratified by the ongoing support we have received from our lenders. Leiner has made substantial progress in the reengineering of its operations. Management believes the previously announced plant closures are addressing the excess capacity issues that negatively impacted the prior year's financial results. The management team continues to identify further opportunities to improve operational performance and restore historical levels of profitability. Additionally, the headcount reductions and non-payroll cost savings in the SG&A area resulting from the Company's reengineering effort are contributing to improving results. Our business plan is taking shape, and we appreciate this further show of confidence from our banking partners." Kaminski added, "The Company would like to acknowledge the continued support of its loyal customer and supplier partners during this period of reengineering. We are fully committed to the creation of enterprise value through our commercial operations as we work with our lenders to develop the company's plans going forward." As previously announced, Leiner received a waiver extension letter from its lenders through April 12, 2001. Leiner entered into the original waiver letter with its lenders on February 14, 2001 under which the lenders agreed to waive events of default under its amended credit agreement for a limited time period. The original waiver was a result of the Company reporting that as of December 31, 2000, the Company was not in compliance with certain financial covenants of the amended credit agreement that require, among other things, the Company to comply with certain financial ratios and tests. The Company has not missed a scheduled interest payment and expects to meet all of its payment obligations on a current basis. The Company underscored that it believes that cash flow from operating activities, combined with its current cash availability, will be sufficient to fund the Company's currently anticipated working capital requirements. Leiner Health Products Inc., headquartered in Carson, California, is one of America's leading vitamin, mineral, nutritional supplement and OTC pharmaceutical manufacturers. The Company markets more than 500 products under several brand names, including Natures OriginTM, YourLife(R) and Pharmacist Formula(R). For more information about Leiner Health Products, visit www.leiner.com. LOEWEN GROUP: Resolves Contract Disputes With the Craciuns ---------------------------------------------------------- Debtor Loewen Group International, Inc., entered into Non Competition Agreements and Management Agreements each with Joseph Creciun and James Craciun on March 8, 1995. Prior to the Petition Date, Craciun Funeral Home, Inc. assumed the obligations under the Noncompetition Agreements and the Management Agreement pursuant to an Assignment and Assumption Agreement dated March 8, 1995. LGII has guaranteed Craciun Funeral Home's obligations under the Noncompetition Agreements and the Management Agreements. The Joseph Craciun Management Agreement provides that in consideration for the performance of his duties as manager, Joseph Craciun is to receive an annual salary of $65,000 subject to annual reviews, four weeks of paid vacation per year and participation in employee benefits programs for which he is eligible. Under the terms of the James Craciun Management Agreement, James Craciun agreed to serve as a manager of the Funeral Homes in consideration for which he is to receive a compensation package of an annual salary of $65,000 subject to annual reviews, four weeks of paid vacation per year and participation in employee benefits programs for which he is eligible. Under the Noncompetition Agreements, the Debtors are obligated to pay Joseph Craciun $40,000 per year and James Craciun $40,000 per year. The Agreement and Stipulation The Craciuns agreed not to object to the rejection of the Noncompetition Agreements on the terms set forth in a Stipulation and Agreed Order which provides that: (1) The applicable Debtors may reject each of the Noncompetition Agreements, pursuant to section 355 of the Bankruptcy Code, effective as of September 8, 2000. (2) Each of the Noncompetition Agreements and the Management Agreements is a separate, freestanding executory contract that is not integrated with any other agreement. (3) Craciun Funeral Home and LGII will assume each of the Management Agreements, pursuant to section 365 of the Bankruptcy Code, effective as of the date of entry of the Stipulation and Order. (4) On account of any unpaid amounts under the Joseph Craciun Noncompetition Agreement or the rejection of it, Joseph Craciun shall have: (a) an allowed general unsecured nonpriority claim in the chapter 11 case of Craciun Funeral Home in the amount of $147,561,S5; and (b) an allowed general unsecured nonpriority claim in the chapter 11 case of LGII in the amount of $l47,561.85 provided, however, that Joseph Craciun will not receive on account of the Joseph Craciun Rejection Claims distributions under any plan or plans of reorganization confirmed in the Debtors' chapter 11 cases that have aggregate value greater than $147,561.85. (5) On account of any unpaid amounts under the James Craciun Noncompetition Agreement or the rejection of the James Craciun Noncompetition Agreement, James Craciun will have: (a) an allowed general unsecured nonpriority claim in the chapter 11 case of Craciun Funeral Home in the amount of $147,561.85; and (b) an allowed general unsecured nonpriority claim in the chapter 11 case of LGII in the amount of $147,561.85 provided, however, that James Craciun will not receive on account of the James Craciun Rejection Claims distributions under any plan or plans of reorganization confirmed in the Debtors' chapter 11 cases that have aggregate value greater than $147,561.85. (Loewen Bankruptcy News, Issue No. 36; Bankruptcy Creditors' Service, Inc., 609/392-0900) LTV CORPORATION: Proposes Key Employee Retention Program -------------------------------------------------------- Having won Judge Bodoh's approval of their financing package which includes a set-aside for funding a retention program, The LTV Corporation loses no time in presenting a Motion seeking Judge Bodoh's authority to initiate and implement a key employee retention program. David G. Heiman, Richard M. Cieri, and Michelle M. Morgan of Jones, Day, Reavis & Pogue of Cleveland, together with Jeffrey B. Ellman of Jones Day in Columbus, asked Judge Bodoh to approve a key employee retention program. The Rationale for the Retention Program The Debtors told Judge Bodoh that one of the keys to their successful restructuring is their employees -- the individuals who are intimately familiar with the Debtors' businesses and industries and who have the experience and knowledge necessary to revitalize the Debtors' performance and profitability. The Debtors' employees are indispensable to the Debtors' respective business operations and contribute specialized knowledge and skill in their respective areas of responsibility. The Debtors believe that retaining their key employees, including, in particular, the core members of their current management team and other key employees, is critical to their reorganization efforts. The Debtors pointed out that their current circumstances leave them extremely vulnerable to the loss of their key employees. The immediate need to implement the proposed employee retention measures is evidenced by the significant loss of key employees already suffered by the Debtors. The Debtors' current attrition rate is running at three times their normal rate. The Debtors told Judge Bodoh that, absent approval of this Motion, these already unacceptable attrition rates will increase. The Debtors simply cannot afford to continue to lose their valuable employees at such high rates; not only will valuable experience and expertise be lost, but it will be difficult and very costly for the Debtors to attract qualified replacements. To that end, the Debtors have worked with their professionals to develop a key employee retention program that provides the incentives necessary for the Debtors to retain their core management team and other key employees, while adhering to the financial constrains and obligations to creditors that the Debtors face in Chapter 11. The proposed retention program is designed to provide the Debtors' key employees with competitive financial incentives to, among other things, remain employees of the Debtors through at least the stages of these cases that are critical to the development and confirmation of a plan or plans of reorganization, to assume the additional administrative and operational burdens imposed on the Debtors by these Chapter 11 cases, and to use their best efforts to improve the Debtors' financial performance and facilitate their successful reorganization. In developing the retention program, the Debtors provided the Committees' professionals with substantial information regarding the terms of the retention program and the justifications for its immediate implementation. The Debtors and their professionals also participated in meetings with, and made several of the Debtors' employees available to answer the questions of, the Committees' professionals regarding the retention program. As a result of these discussions, the Debtors modified certain aspects of the retention program and are seeking approval of the retention program with these modifications. In most large Chapter 11 cases, key employee retention programs comparable to the retention program and severance payments are approved by the courts and implemented by debtors. This is particularly true where, as here, the debtor has worked with its professionals and creditor constituencies to craft relief tailored to meet its specific business needs and reorganization goals. In light of the substantial value that the continued loyalty and efforts of the Debtors' key employees will provide to their reorganization, the Debtors believe that the implementation o f the retention program and authority to make certain severance payments will be not only beneficial to their respective estates and creditors, but essential to maximizing creditors' recoveries in these cases. Moreover, the Debtors recognize the need to conserve resources in these Chapter 11 cases and thus have narrowly tailored the payments to be made under the retention program to address their immediate employee retention needs. The cost of the retention program is well within the ranges incurred for similar programs by comparable Chapter 11 debtors. Terms of the Retention Program The Debtors advised Judge Bodoh they intend to prefund the maximum amount of certain of their retention incentive payment obligations under the program, consisting of potential retention incentive payments under the LTV Retention Plan, the Copperweld Retention Plan, the Bricker Agreement, and the Turner Agreement, immediately upon the entry of an order approving this Motion. These programs will substitute for any prepetition retention benefits that otherwise would be applicable to any of the Debtors' key employees under contract or otherwise. An eligible employee's right to participate in the Retention Plan will be contingent upon that employee's execution of a release and waiver agreement in a form and substance acceptable to the Debtors. Under this release, the employee will waive any rights or entitlements with respect to retention-type benefits that he or she may have at law or under prepetition employment or retention agreements or company programs, and release and waive any claims against the Debtors or their affiliates related to those rights or entitlements as they may exist. The Retention Program includes two separate components: (a) the Retention Incentive Plan, designed to provide retention incentives to key management employees; an (b) the Bricker Agreement and the Turner Agreement, designed to provide compensation and retention incentives to two of the Debtors' key executives that are commensurate with the executives' increased duties in connection with these Chapter 11 cases and their anticipated contributions to the Debtors' reorganization efforts. The LTV Plan The Retention Incentive Plan includes three separate retention incentive plans; i.e., plans for (a) LTV and LTV Steel; (b) Copperweld and certain of its affiliates; and (c) VP Buildings. Under the LTV Retention Plan, LTV and LTV Steel will implement a targeted program. Participation in this plan will be limited to senior management, executives, and managers identified by the Compensation and Organization Committee of the Board or its authorized designee, in its sole discretion, w ho are expected to contribute significantly to the Debtors' restructuring efforts or otherwise be critical to the Debtors' ongoing business operations during the pendency of these Chapter 11 cases. An employee covered by this plan will be eligible for a retention incentive payment based on a percentage of his or her then- current base salary, as determined by LTV, in its sole discretion. The amount of each employee's payment will be identified in his or her LTV Retention Agreement. The payment will be made in three installments: one-third on June 30, 2001; one-third on December 31, 2001; and one- third on the earlier of confirmation of a plan, or June 30, 2002. An employee's right to receive each installment will be based solely upon the employee's continued employment with the applicable Debtor and will vest and become payable on the applicable payment date or, as a lump sum payment, upon the earlier of the employee's death, disability, or involuntary termination. The Debtors currently anticipate that approximately 80 key employees will be eligible for the LTV Retention Plan. The estimated cost of this Plan for these employees is $3.9 million. Any payments will not exceed this amount without additional court order, and may be less. LTV and LTV Steel currently have two active employees who are entitled to a grandfathered benefit formula under the LTV Benefit Plan. By seeking to continue the LTV Benefit Plan, the Debtors also are seeking to continue the grandfathered provisions with respect to these two active employees. The accrued benefits under the LTV Benefit Plan currently are funded through a rabbi trust account. The Debtors intend to transfer these funds to a trust immediately upon entry of an order approving this Motion and to fund future benefits into the trust as they accrue. As of December 31, 2000, accrued benefits under the LTV Benefit Plan for active employees totaled approximately $1.1 million. The Copperweld Plan Under the Copperweld Retention Plan, Copperweld has identified 19 key employees who are critical to Copperweld's reorganization efforts and ongoing business operations during the pendency of these Chapter 11 cases. As part of the retention program, Copperweld intends to enter into retention agreements with these key employees. The Copperweld Retention Agreements generally will provide that the employee is entitled to receive a retention incentive payment equal to the employee's then-current annual base salary, or a percentage thereof, payable in three installments: one-third on June 30, 2001; one-third on December 31,k 2001; and one-third on the earlier of confirmation of a plan, or June 30, 2002. The employee's right to recei8ve each installment of this Plan will vest and become payable on the applicable payment date or, as a lump sum payment, upon the earlier of the employee's death, disability or involuntary termination. The estimated cost of the Copperweld retention plan is $3.1 million. In addition, under this plan the Debtors intend to fund retention incentive payments to two executives currently employed by Copperweld Canada, who the Debtors believe are critical to the ongoing operations of Copperweld Canada and the preservation of the value of the Debtors' interests in those operations. The VP Buildings Plan The VP Buildings Retention Plan includes ten key employees who are critical to VP's ongoing operations during the pendency of these Chapter 11 cases. This agreement generally will provide that the employee is entitled to receive a lump-sum retention incentive payment equal to the employee's then-current annual base salary, or a percentage thereof, payable at the earlier of one year following any sale of VP, or June 30, 2002. The employee's right to receive the payment will vest and become payable on the applicable payment date or upon the earlier of the employee's death, disability or involuntary termination. The estimated cost of the VP retention plan is $1.7 million. (LTV Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 609/392-00900) MAIL-WELL: Moody's Reviewing Ratings For Possible Downgrade ----------------------------------------------------------- Approximately $1.25 billion of debt securities were affected when Moody's Investors Service placed the ratings of Mail-Well Corporation and parent holding company Mail-Well Inc. under review for possible downgrade. The ratings under review are as follows: Mail-Well Corporation: -- Ba2 assigned to the $800 million secured facility consisting of a $250 million revolver; $300 million term A loans; and $250 million term B loans; -- B1 assigned to the $300 million 8.75% senior subordinated notes, due 2008; Mail-Well, Inc.: -- B2 assigned to the $150 million 5% convertible subordinated notes, due 2002. Also under review are the Ba3 senior unsecured issuer rating, and the Ba2 senior implied rating. According to Moody's, the review for possible downgrade is in response to the considerable margin pressure Mail-Well is experiencing mainly from the economic slowdown in the US (notably reduced and/or suspended advertising and marketing spending) as well as from higher operating costs, pricing pressures, and soft demand for traditional business products. "The review will address the reduction in interest coverage as well as the company's high financial leverage, its liquidity, and return on assets. "Additionally, Moody's will focus on the company's on-going restructuring efforts and will review the company's revised strategic business plan," Moody's said. Mail-Well Corporation, a wholly owned subsidiary of Mail-Well Incorporated, is a leading commercial printer in the United States and is a manufacturer and printer of envelopes in the United States and Canada. The company also prints office products for the distributor market and labels for the food and beverage industry. MARCHFIRST: Files Chapter 11 Petition in Wilmington --------------------------------------------------- marchFIRST, Inc. (Nasdaq: MRCH) and its domestic subsidiaries and affiliates filed for relief under Chapter 11 of the Federal Bankruptcy Code. The Chapter 11 filing is expected to provide the Company with the time to complete the orderly liquidation of its domestic business units and core assets and to maximize their value. This action is consistent with the Company's prior public disclosure of the Company's general inability to satisfy creditor obligations as they become due, liquidity shortfalls and less than necessary cash reserves. The Company also filed a Chapter 11 plan that essentially provides for distribution of any cash proceeds received by the Company to creditors and, if creditors have been fully paid, to holders of the Company's preferred stock and then holders of its common stock. However, at this time it is unlikely that any proceeds will remain for distribution to holders of the Company's common stock. The Company intends to commence the plan confirmation process shortly. The Company intends to work closely with creditors to recover on all available assets and maximize their value. The Company's European business units were not included as part of the Chapter 11 filing. The Company also announced that following the receipt of anti- trust approval, it completed the sale of its SAP practice, VAR business and other assets, (including its interest in BlueVector) to divine, inc., pursuant to the agreement described in the Company's news release on April 2, 2001. As previously disclosed, the purchase price for these business units and assets was $6.25 million at closing, an additional $29.75 million note payable over not more than five years and up to an additional $16 million payable over five years which is contingent on the units' future performance. As described in its April 2, 2001 news release, the Company previously completed an initial transaction with divine, selling divine its Central Region business unit in exchange for $6.25 million at closing, an additional $27.75 million note payable over not more than five years, and up to an additional $39 million payable over five years which is contingent on the units' future performance. The Company has also completed the sale of certain other business units, including McKinney & Silver, Inc. and the Company's Salt Lake City office. The aggregate purchase price for these business units was approximately $13.6 million and the assumption of liabilities of approximately $17.0 million. The Company continues to be in active discussions for the sale of other domestic and foreign business units. The European business units are currently expected to continue to operate in the ordinary course of business. In addition, the Company announced that it does not intend to file with the SEC an Annual Report on Form 10-K for the year ended December 31, 2000 and, for this and other reasons, believes its stock will be delisted from trading on the Nasdaq National Market. MARCHFIRST INC: Case Summary and 20 Largest Unsecured Creditors --------------------------------------------------------------- Lead Debtor: marchFIRST, Inc. 311 South Wacker Drive Suite 3500 Chicago, IL 60606 Debtor affiliates filing separate Chapter 11 petitions: marchFIRST Reseller Corporation Fulcrum Solutions, Inc. Challenger 31 L.L.C. marchFIRST Consulting, Inc. USWEB Acquisitions Corporation 102 USWEB Atlanta Corporation USWEB Pittsburgh Corporation USWEB Acquisition Corporation 112 USWEB Houston Corporation USWEB Acquisition Corporation 128 MS Closure Corp. f/k/a Mckinney & Silver, Inc. SM Closure Corp. SiteSpecific, Inc. marchFIRST Partners Venture Fund, L.L.C USWEB Acquisition Corporation 115 CKS Group, Inc. CKS Partners, Inc. Donovan & Green, Inc. Mitchell Madison Consulting Group, Inc. Mitchell Madison Group (DEL), L.L.C Mitchell Madison Group G.P. Type of Business: marchFIRST, Inc. is an Internet professional services firm that provides a variety of services to help companies build business models, brands, systems, and processes to capitalize on opportunities created by the Internet. Chapter 11 Petition Date: April 12, 2001 Court: District of Delaware Bankruptcy Case Nos.: 01-01381; 01-01383 through 01-01403 Debtors' Counsel: Norman L. Pernick, Esq. Domenic E. Pacitti, Esq. Saul, Ewing, Remick & Saul 222 Delaware Avenue Suite 1200 Wilmington, DE 19899 (302)421-6825 Total Assets: $789,286,000 Total Debts: $427,482,000 List Of Debtors' 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Microsoft Corporation Trade $ 12,000,000 1 Microsoft Way Redmond, WA 98052 Contact: Marck Bolander (425)703-2764 Credit Suisse First Boston Trade $ 10,684,200 11 Madison Avenue 9th Floor New York, NY 10010 Contact: Michael Pelz (212)325-2000 PNC Bank Bank Loan $ 5,025,936 One PNC Plaza 249 Fifth Avenue Pittsburgh, PA 15222 Contact: Martin Mueller (412)762-6268 KBC Bank NV Bank Loan $ 3,146,785 37 rue des Deux Eglises Brussel 1000 Bruxelles Phone: 32-2-285-0100 Herman Miller Workplace Trade $ 2,920,539 Resource 22264 Network Place Chicago, IL 60873 Phone:(630)972-9600 Henricksen Trade $ 2,264,749 1070 West Ardmore Ave. Itasca, IL 60143 Phone:(630)250-9090 Electro Rent Corporation Trade $ 1,988,001 6060 Sepulveda Boulevard File 53686 Van Nuys, CA 91411 Phone:(610)661-1000 SAP America, Inc. Trade $ 1,967,993 399 Westchester Pike Newton Square, PA 19073 Phone:(610)661-1000 Hallmark Computer Products Trade $ 1,937,307 8700 S. Price Road Tempe, AZ 85284 Contact: Jolea Kidd (480)794-6858 KPMG, LLP Trade $ 1,936,867 303 East Wacker Drive Chicago, IL 60601 Phone:(312)685-1000 Global Center $ 1,190,651 141 Caspian Court Sunnyvale, CA 94089 Phone:(408)543-4763 IBM Credit Corporation Trade $ 917,924 91222 Collection Center Drive Chicago, IL 60693 Phone:(800)341-3661 Plumtree Software Trade $ 739,052 500 Sansome Street San Francisco, CA 94111 Contact: Eric Borman (877)293-1809 Williams Communications Trade $ 683,257 1170 Chess Drive Suite A Foster City, CA 94404 Phone:(650)358-4871 Xerox Corporation Trade $ 643,779 125 S. Wacker Drive Chicago, IL 60606 Phone:(888)339-7887 John Moriarty & Trade $ 640,177 Associates, Inc 3 Church Street Winchester, MA 08190 Phone:(781)729-3900 PNC Leasing Trade $ 532,324 1 PNC Plaza 249 Fifth Avenue Pittsburgh, PA 15222 Phone:(800)223-8933 AT&T Trade $ 522,239 32 Avenue of the Americas New York, NY 10013 Phone:(212)387-5400 Korn Ferry International Trade $ 508,374 1800 Century Park East Suite 900 Los Angeles, CA 90067 Phone:(310)552-1834 Turner Construction Company Trade $ 494,896 55 East Monroe Suite 31 Chicago, IL 60603 Phone:(312)327-2770 MUSICBANK: Online Music Company Lays-Off Staff & Closes Shop ------------------------------------------------------------ Musicbank ceased operations Tuesday and dismissed its entire staff, according to CNET News.com. Late Tuesday night, the company's web site went dark, except for white lettering announcing the closure. Musicbank had ties to the five major recording companies. The company was formed in November 1999 and was designed to act as a "storage locker" for consumers to access their personal music collections. The company made a name for itself late last year when it co-sponsored two lavish fund- raisers that featured live performances by Motown legend James Brown and rock band Blues Traveler. Investors included Atlas Venture, Bertelsmann Ventures, Bonaventure Investments and Universal Music Group. The company also had scored licensing deals with BMG Entertainment, Universal Music Group, Warner Music Group, Sony Music Entertainment and EMI Recorded Music. In addition, it signed on Virgin Megastores in an exclusive retail partnership. (ABI World, April 12, 2001) NOMURA ASSET: S&P Slashes Rating On Mortgage Certificate To 'D' --------------------------------------------------------------- Standard & Poor's lowered its rating on Nomura Asset Securities Corp.'s mortgage pass-through certificates series 1994-2 class 2M-3 to 'D' from double-'C'. The lowered rating reflects a permanent principal reduction due to losses in the secured mortgage pool, having fully eroded the subordinate loss protection for class 2M-3. Series 1994-2 is a multiple loan group transaction, which employs a senior subordination credit support structure to protect rated certificates from losses. The mortgage pool backing series 1994-2 (loan group 2) consists of 15- to 30-year fixed-rate, first-lien residential mortgage collateral with roughly 84 months of seasoning. Approximately 20% of the pool's initial principal balance was secured by single-'B' quality borrowers at issuance, and approximately 10% of the pool was secured by single-'C' or 'D' quality borrowers. Other original mortgage pool characteristics include a maximum geographic concentration of 16% in Maryland, a 68% weighted average loan-to-value ratio, a weighted average loan coupon of 10.40%, and 94% owner occupied properties. At present, the loan group two has an outstanding principal balance of $7 million. Approximately 5.44% of the outstanding balance is 30 or more days delinquent, including approximately 3.11% 90 or more days delinquent, including foreclosure and REO, Standard & Poor's said. OTR EXPRESS: Talking to Four Equipment Lenders About Debt Terms --------------------------------------------------------------- OTR Express, Inc. (AMEX:OTR), a nationwide transportation company, confirmed that it expects to report a significant loss for the first quarter of 2001, as previously disclosed, and said it has made significant progress in downsizing its fleet. The first-quarter loss is primarily a result of the soft freight market, continued high fuel costs, costs of the Company's downsizing and losses on disposal of tractors and trailers in connection with that action. According to President and CEO William P. Ward: "We are continuing to feel the effects of the economic slowdown and high fuel costs. We have also seen further weakening in the used tractor and trailer markets, which has negatively impacted the sale of revenue equipment related to our downsizing. These factors will be reflected in our first-quarter results." OTR remains in discussions with its four largest equipment lenders to modify terms of its debt and improve cash flow, but to date no definitive agreement has been executed. The Company has returned to these lenders or sold all of the nearly 200 tractors and most of the nearly 400 trailers that OTR previously announced it would divest. In late March, the Company met with the equipment lenders and agreed in principle to return or sell an additional 100 company-owned tractors by year-end. The Company hopes to maintain the current fleet size of approximately 250 trucks (including owner operators) by increasing owner operators to approximately 50% of the total from the current 20%. As previously reported, OTR also is operating in default on certain financial covenants in its working capital line of credit, and the Company expects to remain in default based on the current agreement. The Company reported that its fleet downsizing has caused corresponding reductions in gross revenues and that the Company expects that it may also create additional operational challenges. The Company said two of its senior executives have taken salary cuts of up to 40% in order to assist in OTR's efforts to return to profitability. Additionally, the Company has reduced its non-driver payroll by approximately 50% from the same period last year. OTR also reported that it has been notified by the American Stock Exchange (AMEX) that it is below certain of AMEX's continued listing guidelines. Specifically, the Company's market value of public float is below $1 million. As a result, AMEX is initiating a review of the Company's eligibility for continued listing, which may result in the removal of the Company's security from listing. There can be no assurance that the Company will continue to be listed on AMEX in the future and any de-listing would likely have a negative impact on the trading liquidity of the Company's shares. OTR Express, Inc. is a nationwide dry van truckload carrier and logistics company serving customers throughout the 48 states. The common stock is traded on the American Stock Exchange under the symbol OTR. For further information, please contact Steve Ruben, chief financial officer, OTR Express, at 913/829-1616, extension 3102, or visit www.otrx.com. OWENS CORNING: Reports First Quarter Financial Results ------------------------------------------------------ Owens Corning (NYSE: OWC) reported financial results for the first quarter ended March 31, 2001. For the first quarter, the company had net sales of $1.068 billion, compared to $1.257 billion in the same period in 2000. Income from Operations before other charges and Chapter 11 reorganization items was $46 million in the quarter, compared to $105 million in the first quarter of the prior year. Results for the first quarter of 2001 reflect lower volume and a weaker price environment for the company's building materials business in North America, and the impact of higher energy prices on manufacturing costs. For the first quarter of 2001, Owens Corning reported a net loss of $10 million, compared to net income of $48 million in the prior year. Results for the quarter include $42 million in pre-tax charges for restructuring and other activities, and $21 million in pre-tax Chapter 11-related reorganization items. The company ended the first quarter of 2001 with approximately $450 million in cash. In addition, the company has available a $500 million Debtor in Possession credit facility. On April 2, 2001, Owens Corning filed with the Securities and Exchange Commission a Form 10-K annual report for the fiscal year ended December 31, 2000. In light of the filing under Chapter 11 of the U.S. Bankruptcy Code, the Form 10-K will serve as the company's annual report for the year 2000. Owens Corning is a world leader in building materials systems and composites systems. The company has sales of $5 billion and employs approximately 20,000 people worldwide. Additional information is available on Owens Corning's Web site at http://www.owenscorning.comor by calling the company's toll- free General Information line: 1-877-799-6904. On October 5, 2000, Owens Corning and 17 United States subsidiaries filed voluntary petitions for relief under Chapter 11 of the U. S. Bankruptcy Code in the U. S. Bankruptcy Court for the District of Delaware. The Debtors are currently operating their businesses as debtors-in-possession in accordance with provisions of the Bankruptcy Code. The Chapter 11 cases of the Debtors are being jointly administered under Case No. 00-3837 (JKF). The Chapter 11 cases do not include other U. S. subsidiaries of Owens Corning or any of its foreign subsidiaries. The Debtors filed for relief under Chapter 11 to address the growing demands on Owens Corning's cash flow resulting from its multi-billion dollar asbestos liability. Owens Corning is unable to predict at this time what the treatment of creditors and equity holders of the respective Debtors will be under any proposed plan or plans of reorganization. Pre-petition creditors may receive under a plan or plans less than 100% of the face value of their claims, and the interests of Owens Corning's equity security holders may be substantially diluted or cancelled in whole or in part. It is not possible at this time to predict the outcome of the Chapter 11 cases, the terms and provisions of any plan or plans of reorganization, or the effect of the Chapter 11 reorganization process on the claims of the creditors of the Debtors, or the interests of Owens Corning's equity security holders. PACIFIC GAS: Hires Howard Rice, et al., as Lead Counsel ------------------------------------------------------- Pacific Gas and Electric Company sought and obtained permission to employ the San Francisco-based law firm of Howard, Rice, Nemerovski, Canady, Falk & Rabkin as its counsel to represent it in its chapter 11 cases. Roger J. Peters, Senior Vice President and General Counsel for PG&E, told Judge Montali that PG&E looks to Howard Rice for: (A) Service as General Bankruptcy Counsel by: (1) advising and representing the Company with respect to all matters and proceedings in this Chapter 11 case; (2) advising the Company with respect to its affairs and duties as a debtor-in-possession; (3) dealing with parties-in-interest and their attorneys and agents as is necessary during the pendency of this case; (4) preparing on behalf of the Company necessary applications, orders and other legal papers; and (5) counseling the Company with respect to the bankruptcy, litigation and other issues related to the case, and performing all other legal services for the Company which may be necessary and desirable. (B) Continued Employment as Intellectual Property Counsel by: (1) advising the Company concerning general intellectual property matters; (2) trademark prosecution, counseling and licensing; (3) advising the Company concerning its Web site content and structure; (4) advising the Company concerning its marketing an advertising efforts; and (5) representing the Company in connection with negotiations concerning intellectual property matters, including various contracts and software licensing agreements. (C) Continued Employment as Appellate Counsel by: (1) advising and representing the Company with respect to all matters and proceedings relating to: (a) the appeal of a judgment rendered in Fairhaven Power Company, et al., v. Pacific Gas and Electric Company, pending in the Court of Appeal of the State of California; and (b) an appeal of a judgment rendered in Modesto Irrigation District, et al., v. Pacific Gas and Electric Company, pending in the Court of Appeal of the State of California; (2) preparing on behalf of the Company necessary pleadings, orders and other legal papers and documents in connection with the Appeals; and (3) performing all other legal services for the Company which may be necessary and desirable. James L. Lopes, Esq., leading the Debtor's legal team, disclosed that his Firm received pre-petition payments totaling $1,546,076 prior to the Petition Date. In contemplation of these chapter 11 case, Mr. Peters said, PG&E paid Howard Rice a $1,000,000 retainer, and approximately $600,000 of that amount was consumed on account of pre-petition bankruptcy-related services. Howard Rice professionals will bill for their services at their customary hourly rates: In connection with the bankruptcy case: Attorney/Legal Assistant Hourly Rate ------------------------ ----------- Jerome B. Falk, Jr., Esq. $475 James L. Lopes, Esq. $475 Steven E. Schon, Esq. $410 Jeffrey L. Schaffer, Esq. $400 Janet A. Nexon, Esq. $370 William J. Lafferty, Esq. $350 Gary M. Kaplan, Esq. $325 Amy E. Margolin, Esq. $290 Peter J. Drobac, Esq. $245 Sarah M. King, Esq. $255 Jerome E. Ferrer $165 In connection with the Intellectual Property Matters: Attorney/Legal Assistant Hourly Rate ------------------------ ----------- Raymond P. Haas, Esq. $465 Barry A. Abbott, Esq. $445 Alison B. Shames, Esq. $245 Tyler J. Fuller, Esq. $230 Terri G. Li $180 In connection with the Appellate Matters: Attorney/Legal Assistant Hourly Rate ------------------------ ----------- Jerome B. Falk, Esq. $475 Theresa B. Stewart, Esq. $380 Jerome E. Ferrer $165 Other Howard Rice attorneys bill at $175 to $475 per hour and other legal assistants bill at $85 to $180. Mr. Lopes is confident that he and his Firm are disinterested within the meaning of 11 U.S.C. Sec. 101(14). Mr. Lopes confirmed that Howard Rice does not represent any party other than the Debtor in connection with PG&E's chapter 11 case. (Pacific Gas Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 609/392-0900) PARACELSUS: Deutschlan Unit & Park Hospital Own 33.66% Of Stock --------------------------------------------------------------- While Dr. Heiner Meyer Zu Losebeck and Dr. Peter Frommhold, as Co-executors under the Will of Professor Krukemeyer, no longer hold a beneficial interest in the common stock of Paracelsus Healthcare, Paracelsus-Kliniken-Deutschlan and Park Hospital GMB H beneficially own 19,906,742 such shares, with shared voting and dispositive powers. This amount represents 33.66% of the outstanding common stock of Paracelsus Healthcare. On December 31, 2000, the executorship of the Co-executors under the Wills with regard to Professor Krukemeyer's estate terminated. As a result, as of January 1, 2001, the Co-executors no longer share voting and dispositive power with respect to the shares of Common Stock of Paracelsus owned by Park. PINPOINT CORPORATION: Ceases Operations Due To Lack of Funds ------------------------------------------------------------ PinPoint Corporation, a developer of local positioning system technologies, has notified all of its shareholders that it has been unsuccessful in its attempt to raise additional capital required to continue operations. The Company attributes its failure to raise capital to the "state of the current private equity market." As such, PinPoint has ceased operations and has filed for protection under the bankruptcy laws. iTech Capital noted that while PinPoint had been building its customer base and apparently had a business model that would have been successful, such success was dependent upon access to the capital markets. iTech Capital, a technology holding company, maintains interests in Medsite, Applied Data Systems, HorizonLive, BizFon, Enviromation and Elastic Networks. PIONEER COMPANIES: Posts $105.6 Million Net Loss for FY 2000 ------------------------------------------------------------ Pioneer Companies, Inc. (OTC Bulletin Board: PIONA) reported that its net loss for the year 2000 was $105.6 million or $9.15 per share, compared to a net loss in 1999 of $50.4 million or $4.38 per share. The net loss for 2000 included a tax provision of $41.0 million, primarily attributable to a valuation allowance for its net operating loss carryforward. Pioneer had previously disclosed selected financial data for 2000, including its pre-tax results, but finalizing the complete financial statements was delayed to determine the possible effect of its announced financial restructuring efforts on its deferred tax asset. That asset primarily relates to the estimated use of net operating loss carryforwards to offset future taxable income. Based on the uncertainties regarding the outcome of those efforts and the possible effect of that outcome on projected taxable income and the availability and use of the net operating loss carryforwards, the Company estimated that it was not likely to realize the full benefit of the deferred tax assets. Accordingly, the Company has recorded a valuation allowance of $67.8 million, resulting in a tax provision of $41.0 million for the year ended December 31, 2000. Pioneer, based in Houston, Texas, manufactures chlorine, caustic soda, hydrochloric acid and related products used in a variety of applications, including water treatment, plastics, pulp and paper, detergents, agricultural chemicals, pharmaceuticals and medical disinfectants. The Company owns and operates five chlor- alkali plants and several downstream manufacturing facilities in North America. Current financial information and press releases of Pioneer Companies, Inc. can be obtained from its Internet web site at www.piona.com. PLAY CO.: Buxbaum Participates In Liquidation Of 33 Toy Stores -------------------------------------------------------------- Buxbaum Group announced that it is part of the joint venture liquidating the inventories at 33 stores operated by Play Co. Toys & Entertainment Corp. (OTC Bulletin Board: PLCO), the San Marcos, Ca.-based retailer of unique collectible, specialty and educational toys. In addition to Encino-based Buxbaum, the joint venture includes the Nassi Group, Alco Capital and Schottenstein Bernstein Capital Group. On March 28, Play Co. and its main operating subsidiary, Toys International.Com, Inc., filed for Chapter 11 protection under the U.S. Bankruptcy Code in order to execute an orderly wind-down of its business and sale of its assets. The company's stores operate under the Play Co. Toys, Toys Co. and Toys International names. Sixteen of the 33 stores are located in California (primarily in the southern part of the state); three are in Las Vegas, Nev.; three are in Texas (two in Dallas, one in Houston); two are in Illinois (Gurnee and Schaumberg); and two are in the Charlotte, N.C. market. The company also has single stores in Tempe, Ariz.; Broomfield, Colo.; Orlando, Fla.; Nashville, Tenn.; Hanover, Md.; Bloomington, Minn.; and Auburn Hills, Mich. The inventory sales started on April 9 and are expected to continue for as long as 12 weeks. Buxbaum Group provides inventory appraisals, turnaround and crisis management and other consulting services for banks and other financial institutions with retail, wholesale/ distribution and consumer-product manufacturing clients. The firm also provides liquidation services on consumer-product inventories, machinery and equipment, and buys and sells consumer-product inventories. PSINET INC.: Cuts More Jobs To Conserve Cash -------------------------------------------- PSINet Inc. began its third round of layoffs affecting sales people, engineers and even the department that maintained the corporate web site, according to The Washington Post. A spokesman for the Ashburn, Va.-based Internet service provider declined to disclose the number of cuts, though some of the laid-off employees said at least 125 people or positions were affected. PSINet recently said it might file for bankruptcy because it is running out of cash and struggling to pay off $3.4 billion in debt. The company's auditors have questioned whether PSINet can stay in business for another year. PSINet "will impose staff reductions over the next few weeks," said spokesman Eric McErlain. "This action, while unfortunate, is consistent with the company's efforts as well as those of many of the leading technology companies to conserve cash in response to the new market realities." (ABI World, April 12, 2001) RIVAL NETWORKS: Sports Web Site Calls It Quits ---------------------------------------------- Rival Networks, a struggling Seattle-based sports web site better known as Rivals.com, said it will shut down, according to the Seattle Times Eastside. The decision came after weeks of negotiations with Yahoo! and Nike. A deal with Yahoo fell through two weeks ago in the wake of that portal's ad-related distress. Nike was the last potential buyer to look at Rival and was in due diligence last weekend. But on Monday, Nike nixed the deal. Rival officials blame the failure to make a deal on the rocky financial market. The network of more than 600 college sports sites has burned through $70 million since it was launched in August 1999. Rival Networks provided links to information on sports, teams and leagues, ranging from professionals to high school. (ABI World, April 12, 2001) SERVICE MERCHANDISE: Assumes Nine Leases For Go-Forward Stores -------------------------------------------------------------- The Court granted Service Merchandise Company, Inc.'s motion for the assumption of certain leases included in the program regarding lease/sublease of store space to TJX Companies, Inc. with respect to Store Location Parties to Lease ----- -------- ---------------- 19 Stuart, Florida Compson Associates of FL (landlord) SMCO, Inc. (tenant) 72 Evansville, IN General Growth Properties predecessor in interest to SDG Macerich Properties, L.P. (landlord) SMCO, In.c (tenant) 81 Burlington, MA Betsey J. Sherman and Helen M. Goldkemp, as Trustee of Burlington Mall Realty Trust, predecessor in interest to E and A Northeast Limited Partnership (landlord) SMCO, Inc. (tenant) 98 Bloomingdale, IL C.Y.A., Inc. as predecessor in interest to Simon Property Group (IL), L.P. (landlord) SMCO, Inc. (tenant) 482 Orlando, FL Village Associates, Ltd. as predecessor in interest to Florida Income Properties Limited Partnership (landlord) Leeds Distributors, Inc. IV, predecessor in interest to H.J. Wilson Co., Inc. (tenant) 786 Greensburg, PA Westmoreland Mall, Inc. (landlord) SMCO, Inc. (tenant) 176 West Melbourne, FL West Melbourne Associates, predecessor in interest to Kimco West Melbourne Associates Predecessor in interest to Kimco West Melbourne Associates (landlord) SMCO, Inc. (tenant) 303 Altamonte Spring, C.C. Altamonte Joint Venture FL (landlord) SMCO, Inc. (tenant) 533 Novi, Michigan West Oaks Development Co. predecessor in interest to Ramco-Gershenson Properties, L.P. (landlord) SMCO, Inc. (tenant) The Court issued separate orders for the assumption of each of the leases. The Court's orders provide that the Debtors are authorized to assume the respective leases, contingent upon the resolution of any dispute regarding the Cure Amounts in a manner satisfactory to the Debtors in the sole and absolute discretion of the Debtors. The Court directed that in the event any dispute between the landlords and the Debtors regarding the amount of the Cure Claim remains outstanding, an evidentiary hearing to determine the amount of the Cure Claim will be held. Accordingly, the Cure Claims have been fixed at the amounts of: * $227,695.65 with respect to Store Number 482 in Orlando, Florida * $32,627.98 with respect to Store Number 786 in Greensburg, Pennsylvania * $227,695.65 with respect to Store Number 98 in Bloomington, Illinois * $105,702.74,with respect to Store Number 72 in Evansville, Indiana * $206,795.15 with respect to Store Number 303 in Altamonte Spring, Florida The Court has authorized the Debtors to pay the Cure Claims in the amounts fixed. (Service Merchandise Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service, Inc., 609/392-0900) SHAMAN PHARMACEUTICALS: Court Grants Approval to Assign Lease ------------------------------------------------------------- Shaman Pharmaceuticals, Inc. (OTCBB:SHPH.OB) announced that assignment of its lease to a biotechnology company has been approved by the U.S. Bankruptcy Court, Northern District of California, and that Shaman's landlord has consented to the assumption and assignment of the lease to this company. As a result of this assignment, Shaman will receive a significant one-time cash payment from the company that will be used, in part, to pay creditors and for forward operating expenses. Shaman will also receive six (6) months free rent in its current facilities, further reducing its operating expenses as it completes its reorganization. This court decision brings to an end six months of negotiations between Shaman and its landlord regarding the assignment of Shaman's lease agreement. Shaman voluntarily filed a Chapter 11 reorganization petition for protection under federal bankruptcy law, on January 5, 2001, in part because it believed that a bankruptcy reorganization would bring closure to the negotiations with its landlord, and provide the best means of maximizing the value of its lease. Shaman Pharmaceuticals, Inc. is a leader in medicinal plant research and commercialization of proprietary dietary supplements, working with indigenous communities to discover, harvest and reforest medicinal plants. Shaman has retained Roth Capital Inc., an investment bank, to assist in exploring strategic business opportunities to drive shareholder value. This press release contains, among other things, certain statements of a forward-looking nature relating to Shaman's ability to advance its development and research programs. Such statements involve a number of risks and uncertainties including the Risk Factors listed in the Shaman Pharmaceuticals, Inc.'s Annual Report on Form 10K and 10K/A for the year ended December 31, 1999. These filings are available at 650/952-7070. Visit Shaman at http://www.Shaman.com STARTEC GLOBAL: Receives Delisting Notice from Nasdaq ----------------------------------------------------- Startec Global Communications Corporation (Nasdaq: STGC) received notification from Nasdaq that it is no longer in compliance with the $1 minimum bid price requirement for continued listing on The Nasdaq National Market as set forth in Marketplace Rule 4450(b)(4). The Company has requested a hearing, pursuant to the procedures set forth in the Nasdaq Marketplace Rule 4800, before the Nasdaq Listing Qualifications Panel to discuss the continued listing of the Company's common stock on the Nasdaq. Pending the outcome of the hearing, completion of the review process and further notification from Nasdaq, the Company's common stock will continue to trade on The Nasdaq National Market. About Startec Startec Global Communications Corporation is a leading provider of advanced communications and Internet services to ethnic residential customers and enterprises transacting business in the world's emerging economies. The Company's extensive affiliated network of international gateway and domestic switches, IP gateways and ownership in undersea fiber optic cables also provides IP-based voice, data and video service to major long distance carriers, Internet Service Providers (ISPs) and Internet Portals. STORE OF KNOWLEDGE: Taps Ozer & Hilco To Manage 70 Store Sales -------------------------------------------------------------- The U.S. Bankruptcy Court in Los Angeles has approved the selection of The Ozer Group and Hilco Merchant Resources to manage the liquidation process in 70 stores operated by the Store of Knowledge. The California-based Store of Knowledge Inc. filed for protection in the U. S. Bankruptcy Court for the Center District of California, Los Angeles division, on March 28, 2001. With more than $30 million in inventory to be liquidated in the upcoming weeks, the liquidation sales are already underway. Signs have been hung and discounts have been taken on all merchandise in every store. Store of Knowledge is stocked with educational games, puzzles, books, videos, computer software, hobby kits and more. The merchandise spans more than 60 subjects, including history, science, the arts, foreign language, and self-improvement. "This is an excellent opportunity for parents to purchase educational products for their kids at incredible savings" said Cory Lipoff, EVP & Principal of Hilco Merchant Resources. "The top names in retail have been forced to restructure," said William Weinstein, Principal of The Ozer Group. "With the Store of Knowledge, liquidating these stores is a prudent change necessary for long-term success." Jim Berk, President of Store of Knowledge said, "While we are sorry to have to liquidate the inventory in these stores, we believe that this is a necessary step towards successfully reorganizing." Based in Needham, Mass., The Ozer Group is one of the country's leading retail consulting, business evaluation and asset disposition firms. Ozer is quick, flexible and creative in offering solutions to retailers of all sizes throughout North America and Europe. In addition to helping companies maximize realization for their assets, Ozer manages human resources issues, real estate relationships and other critical areas that are affected when companies undergo change. Ozer's management and partners are retailers who have managed thousands of stores and billions of dollars in inventory. To learn more about The Ozer Group, visit www.ozergroup.com. Based in Chicago, Hilco Merchant Resources, its parent company, Hilco Trading Co. Inc. and its affiliates, with offices in Boston, Toronto and London, provide strategic financial services for retailers, distributors, manufacturers, lenders, venture capitalists, investment bankers and the professionals that serve them. Hilco Trading Co. Inc. has offices across North America with national and international resources, capabilities and experience. For more than 25 years, Hilco Trading Co. Inc., and its principals have sold more than $25 billion of retail inventories in over 1,000 major liquidations involving 7,500 locations. To learn more about Hilco Merchant Resources, visit www.hilcotrading.com. List of Store of Knowledge Stores That Are Closing 7014 E. Camelback Rd. Ste. 2300 Scottsdale AZ 85251 1630 Redwood Hwy. Corter Madera CA 94925 200 E. Via Rancho Pkwy. Ste. 341 Escondido CA 92025 1156 Glendale Galleria Glendale CA 91210 2700 Crown Valley Parkway sp#820 Mission Viejo CA 92691 5040 Montclair Plaza Lane Montclair CA 91763 29 Newport Ctr. Drive Newport Beach CA 92660 355 Stanford Shopping Center Bldg. M Palo Alto CA 94304 1356 Stoneridge Mall Rd. Pleasanton CA 94588 157 Horton Plaza San Diego CA 92101 7007 Friars Rd. Ste. 820 San Diego CA 92108 160 Hillsdale Mall San Mateo CA 94403 2855 Stevens Creek Blvd. Ste. 2321 Santa Clara CA 95050 178 Santa Monica Santa Monica CA 90401 552 West Hillcrest Drive Thousand Oaks CA 91360 1145 Broadway Plaza Sp C-74 Walnut Creek CA 94596 6100 Topanga Canyon Blvd. #241 Woodland Hills CA 91367 8900 Pena Blvd. Unit BM-2H Denver CO 80249 3000 First Ave. Denver CO 80206 8505 Park Meadows Ctr. Dr. #2044 Littleton CO 80124 7 Backus Avenue Danbury CT 06810 3222 M Street NW, Suite #W-217 Washington DC 20007 7981 Citrus Park Town Center Mall Tampa FL 33625 3393 Peachtree Rd. NE Atlanta GA 30326 3979 Buford Drive sp#1026 Buford GA 30519 845 N. Michigan Ave. Chicago IL 60611 2046 Northbrook Court Northbrook IL 60062 100 Oakbrook Ctr. Ste. 79 Oak Brook IL 60523 648 Orland Square Orland Park IL 60462 L101 Woodfield Shopping Ctr. Schaumburg IL 60173 122 Hawthorne Ctr. Ste. 321 Vernon Hill IL 60061 49 W. Maryland St. Indianapolis IN 46204 1475 W. 95th Street Overland Park KS 66214 Briarwood Circle Sp. G105 Ann Arbor MI 48108 4600 Lakeside Circle Space H-112 Sterling Heights MI 48313 2800 West Big Beaver Rd. Ste. 356 Troy MI 48084 268 North Garden Bloomington MN 55425 4705 Broadway Kansas City MO 64112 2178 Saint Louis Galleria Richmond Heights MO 63117 4325 Glenwood Ave., Store 114-A Raleigh NC 27612 3320 Silas Creek Pkwy. Ste. 444 Winston-Salem NC 27103 1750 Deptford Center Rd. Deptford NJ 08096 Routes 4 & 17 Space 2140 Paramus NJ 07652 1200 Morris Turnpike Ste. D-132 Short Hills NJ 07078 1091 3th. Avenue New York NY 10021 153 World Trade Center Mall New York NY 10048 3462 Palisades Center Dr. West Nyak NY 10994 4150 Belden Village Mall Unit C-15 Canton OH 44718 7875 Montgomery Rd. Cincinnati OH 45236 1108 South Park Ctr. Strongsville OH 44136 12000 SE 82nd St. Ste. 2185 Portland OR 97266 9530 S. W. Washington Square Rd. Portland OR 97223 344 Mall Blvd. King of Prussia PA 19406 124 Monroeville Mall Monroeville PA 15146 214 South Hills Village Pittsburgh PA 15241 100 Ross Park Mall Drive Pittsburgh PA 15237 13350 N. Dallas Pkwy. Ste.2600 Dallas TX 75240 1042 Baybrook Mall Friedswood TX 77546 4800 S. Hulen St. Ste. 217 Ft. Worth TX 76132 1590 Willowbrook Mall Houston TX 77070 5015 Westheimer, Ste. 3200 Houston TX 77056 811 N. Central Expressway #1083 Plano TX 75075 16535 Southwest Fwy. Ste. 569 Sugar Land TX 77479 1100 South Hayes St. Space Y02 Arlington VA 22202 11741 L Fair Oaks Fairfax VA 22033 8034 Tysons Corner Center McLean VA 22102 300 Montecello Ave. Sp. 121 Norfolk VA 23510 701 Lynnhaven Pkwy. Sp. E5 Virginia Beach VA 23452 3000 184th Street S.W. Ste. 250 Lynwood WA 98037 600 Pine St. Ste. 405 Seattle WA 98101 TRANSTECHNOLOGY: Senior Lenders Agree To Waive Covenant Defaults ---------------------------------------------------------------- TransTechnology Corporation (NYSE:TT) stated that it had entered into an amendment of its existing credit agreement under which the company's senior lenders agreed to forbearance with respect to the company's continuing violations of certain covenants in that senior agreement through September 27, 2001, subject to the company's meeting certain interim debt reduction and EBITDA targets. The company's subordinated lenders entered into a letter agreement forbearing with respect to the company's expected violation of its net worth covenant as a result of write-offs expected to be incurred in the fourth fiscal quarter as part of its restructuring plan. The company also announced that, following a review of alternative strategic initiatives, it would become solely a manufacturer of niche aerospace products. As a result, the company will divest TransTechnology Engineered Components (TTEC), a manufacturer of spring steel engineered fasteners and headlight adjusters. The company had previously announced in January that it would seek to divest separately its cold-headed products, aerospace rivet, retaining ring, and hose clamp operations over the next few months, with the proceeds going towards the retirement of its $275 million debt. The company will seek to have all of the divestitures, including TTEC, completed by September 2001 and to have retired substantially all of its debt by that time. Michael J. Berthelot, Chairman, President and Chief Executive Officer of TransTechnology, said, "Over the past year we have seen a sea change in the domestic automobile and heavy truck manufacturing industries, apart from their current economy- induced slowdowns. It has become clear to us that in order to remain successful as a component supplier to the automotive OEM's, the supplier will have to be of substantial size. We do not believe that, in the current or expected capital markets, we will have the opportunity to reach that necessary size within a reasonable time frame. As a result, we have decided to change our course and concentrate on our aerospace product businesses, where size is not a prerequisite to continuing success. We expect to present a proposal to our shareholders to divest the TTEC business later this summer." The company announced that Evercore Partners, a New York City based investment-banking firm that it has retained in a continuing evaluation of strategic initiatives, has also been retained as its financial advisor with respect to the divestiture of TTEC. Mr. Berthelot continued "Our Aerospace Products business has been a tremendous success over the past five years as this profitable business segment has grown internally and through acquisitions. Fiscal 2001 will be the sixth consecutive year Aerospace Products will achieve higher annual sales and profits. We are the world's leading manufacturer of rescue hoists, cargo hooks, and hold-open rods for commercial and military aircraft. We have identified substantial growth opportunities by extending our line of actuation products further into the aerospace, defense, and medical instrumentation markets. Our Aerospace Products group revenues have grown at a compound rate of 18% over the past five years while operating income has grown at a 30% rate. For the first nine months of fiscal 2001, our Aerospace Products revenues were $49.6 million and operating income was $11.9 million. While fourth quarter and full fiscal 2001 results will not be announced until next month, we expect our Aerospace Products segment to report a substantial increase over the prior year's fourth quarter and fiscal year." "Following the divestiture of the fastener units", Mr. Berthelot said, "we expect to have retired substantially all of our debt, which is currently $275 million, and we expect to reduce our corporate overhead by more than $4 million from its present $8.7 million level. Additionally, for tax purposes we expect to have a significant operating loss carry-forward which should shelter our future earnings from taxes for several years. We believe that TransTechnology, repositioned as an aerospace products manufacturer with revenues from new equipment sales, maintenance and service of existing equipment, and spare parts sales, will be a significantly more profitable and less leveraged entity, with substantial growth opportunities. We believe that TransTechnology will present substantially more value to its shareholders thus restructured than in its present form." TransTechnology Corporation is a multi-national manufacturer of aerospace products and specialty fasteners with more than 2,300 employees at its 14 manufacturing facilities in the U.S., Canada, England, Germany and Brazil. The company also maintains sales offices in Southfield, Michigan; Paris, France; and Barcelona, Spain. VENCOR: US Trustee Balks at Reimbursing Indenture Trustee Fees -------------------------------------------------------------- The Bank of New York seeks payment by the Vencor, Inc. Debtors for services rendered by the Bank as Indenture Trustee for the 8 5/8% Senior Subordinated Notes Due 2007, plus reimbursement of attorney fees and expenses incurred in connection with those services. The amounts involved are: Indenture Trustee ----------------- Pre-petition Services Fees $7,812.90 Post-petition Services Fees 18,701.00 ---------- $26,513.90 Attorneys --------- Post-petition Fees 50,221.26 Post-petition Expenses 4,319.25 ---------- 54,540.51 Estimated Fees (2/1/2001 thru 3/1/2001) 5,500.00 ---------- $60,040.51 The Indenture Trustee has attached with the application exhibits of: -- The Indenture Trustee's Counsel Bryan Cave's itemized time records identifying (i) the date each service was rendered; (ii) the professionals who performed the service; (iii) the particular services rendered; (iv) the time spent performing the service and (v) the hourly rate of each professional performing services. -- A summary of Bryan Cave fees and expenses showing the total amount billed on a monthly basis through January 31, 2001. -- Indenture Trustee's invoice for post-petition fees and expenses. BNY told the Court that it is entitled to the payment because it has fulfilled its duties and responsibilities as Indenture Trustee under the Indenture and the Trust Indenture Act throughout the course of the Debtors' chapter 11 cases, by among other things, issuing notices to bondholders concerning the status of the chapter 11 cases, responding to individual bondholder inquiries, and filing a proof of claim on behalf of all Noteholders. Moreover, at the organizational meeting of creditors, it was appointed as a voting member of the Official Committee of Unsecured Creditors by the United States Trustee, the Indenture Trustee reminds the Court. The Indenture Trustee asserted that its representation of the Noteholders on the Committee was essential since the Notes are normally held by a large number of small holders who rely on the Indenture Trustee for information regarding the case and their potential recovery. The Indenture Trustee also claimed entitlement to allowance of its fees and expenses as an administrative expense in accordance with bankruptcy law and by statute as a member of the Committee and governing contracts. Pursuant to the Plan, the Indenture is to submit the application for payment of its outstanding fees and expenses, including its counsel's fees and expenses and to provide a notice of an objection period. The Plan also provides that unless an objection is timely filed, the Court is to enter an order approving the fees and expenses and upon confirmation, the Debtor is to pay the Expenses. Accordingly, the Indenture Trustee asked the Court to authorize allowance of compensation for services rendered by it in the amount of $26,513.90, and reimbursement of attorney fees and expenses incurred in connection with those services up to $60,040.51 ($50,221.26 + $4,319.25 + $5,500). The Indenture Trustee also asked the Court to direct the Debtors to make prompt payment to the Indenture Trustee of all unpaid portions of these amounts. The United States Trustee's Objection The United States Trustee raised doubts about the necessity or reasonableness in the requested amount of $55,721.26 for Bryan Cave's legal services and the estimated legal fees of $5,500.00. To be eligible for reimbursement of counsel fees under 503(b)(3) and 503(b)(4), the UST pointed out, the tasks performed by counsel for a committee member must be in furtherance of legal work for the committee as a whole. The UST saw neither needs nor compelling reasons for personal counsel to assist the committee member in the performance of its duties as a member of the Committee. In its objection, the UST also told the Court that: (1) The application describes neither needs nor compelling reasons for personal counsel to assist the committee member in the performance of its duties as a member of the Committee. (2) The application contains entries that are vaguely described, specifically, the subject of telephone conversations and many work entries are not identified. (3) Several distinct projects are lumped together so that the reviewer does not know how much time was spent on each project. (4) The positions of individuals providing services, their rates of compensation and the number of hours worked are not provided. (5) The application does not identify the rates charged for expenses for computer services, delivery services, facsimile transmissions and internal photocopying. (Vencor Bankruptcy News, Issue No. 27; Bankruptcy Creditors' Service, Inc., 609/392-0900) W.R. GRACE: Honoring Prepetition Employee Obligations ----------------------------------------------------- W. R. Grace & Co.'s 3,860 Employees are vital to daily operations, maintaining positive employee morale is important, and the reorganization effort will fail if W.R. Grace loses its valuable employees, David B. Siegel, the Debtors' Senior Vice President and General Counsel, told the Court. Thus, the Debtor sought and obtained permission to honor all pre-petition wage, salary and benefit obligations owed to their Employees. The Debtors estimate approximately $725,000 is owed on account of unpaid prepetition employee-related obligations. James H.M. Sprayregen, Esq., from Kirkland & Ellis, advised Judge Newsome at the First Day Hearing that no single employee is owed more than the $4,650 priority accorded to employee compensation claims under 11 U.S.C. Sec. 507 -- or if an employee is, the Debtors will cap the payment to any single employee at $4,650. The Debtors told the Court that this Motion also contemplates payments to 95 consultants who work as independent contractors in the financial, information services, engineering, sales and security areas. This Motion additionally contemplates payment of amounts owed to temporary employment agencies. The Debtors provided the Court with estimates of their Projected 2001 Employee-related costs and expenses: Wages and Salaries $238,800,000 Annual Incentive Compensation Plan 7,500,000 Sales Incentive Plans 4,500,000 Pay-for-Performance Plan 1,200,000 Six Sigma Bonus Program 450,000 Special IT Bonus Program 120,000 Premier Award Program 125,000 Outside Director Compensation 400,000 Executive Salary Protection Plan 240,350 Split-Dollar Life Insurance Plan 570,000 Financial Counseling Program 30,000 Personal Excess Liability Insurance 10,000 Deferred Compensation Program 0 Outside Directors' Retirement Plan 0 Rabbi Trusts 0 Executive Registry medical insurance 15,000 Annual Physical Exams Program 35,000 Leased Car Program 65,000 Self-Insured Health Insurance Programs 6,800,000 Partially Self-Insured Health Insurance 1,400,000 Fully-Insured HMOs 4,812,500 Dental Coverage 1,700,000 Employee Life Insurance 1,400,000 Employee Travel Accident Insurance 63,000 Voluntary Insurance Administration Fees 17,000 Insured Short-Term Disability Coverage 575,000 Libby Medical Program 500,000 Employee Assistance Programs 94,000 AT&T Telephone Cards 425,000 American Express Cards 0 Cell Phones and Pagers 350,000 Automobile Leasing Program 3,100,000 SOS Card Medical & Evacuation Assistance 5,000 Tuition Reimbursement 650,000 Grace Service Awards Program 150,000 Grace Dependent Care Connection Program 40,000 International Benefit Protection Plan 300,000 Colombian Pensions 18,000 Dividend Reinvestment Program 0 Grace Relocation Program 2,500,000 For 6,700 covered Retirees, the Debtors estimate their Projected 2001 costs at: Grace Retiree Medical Program 19,500,000 Retiree Life Insurance Programs 1,100,000 Nothing in this request, the Debtors made clear and Judge Newsome confirmed, contemplates an assumption nor precludes a rejection of any agreement or policy that may be considered an executory contract. (W.R. Grace Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 609/392-0900) WORLDWIDE XCEED: Shares Subject To Delisting From Nasdaq Market --------------------------------------------------------------- Worldwide Xceed Group, Inc. (NASDAQ:XCED), a digital strategy and professional services firm, has been advised by The Nasdaq Stock Market staff that it has determined that Xceed has failed to comply with the minimum bid price requirement for continued listing on The Nasdaq National Market as set forth in Marketplace Rule 4450(a)(5). Xceed's common stock is therefore subject to delisting from The Nasdaq National Market. Under Marketplace Rule 4310(c)(8)(B), Xceed was provided 90 calendar days, or until April 5, 2001, to regain compliance by maintaining a bid price of at least $1.00 for a minimum of ten consecutive trading days prior to April 5, 2001. On March 21, 2001, Xceed implemented a ten for one reverse stock split which has been ineffective in raising the bid price to $1.00. Xceed has requested a hearing before a Nasdaq Listing Qualifications Panel to review the Nasdaq staff's determination. Xceed expects that its common stock will continue to trade on The Nasdaq National Market pending outcome of the appeal. A hearing date has not been set. There can be no assurance that the Panel will grant Xceed's request for continued listing on The Nasdaq National Market. If the Xceed's common stock is delisted from The Nasdaq National Market, the common stock may be eligible to trade on the Nasdaq over the counter bulletin board. About Xceed Xceed (www.xceed.com) provides strategic consulting and digital solutions to enable Fortune 1000 and other companies and market leaders compete more effectively in the new economy. Xceed leverages strategic relationships, vertical industry expertise, and proprietary solutions to accelerate the development of e- business models that make enterprises smarter, faster, and more valuable. With more than 300 interactive professionals, Xceed is headquartered in New York City with offices in Atlanta, Chicago, Colorado Springs, Dallas, Los Angeles, Phoenix, Amsterdam, and London. BOND PRICING: For the week of April 16-20, 2001 ----------------------------------------------- Following are indicated prices for selected issues: Amresco 9 7/8 '04 53 - 55 Arch Comm 12 3/4 '07 33 - 34 Asia Pulp 7 Paper 11 3/4 '05 10 - 15 (f) Chiquita 9 5/8 '04 54 - 56 (f) Federal Mogul 7 1/2 '04 15 - 17 Fruit of the Loom 6 1/2 '03 57 - 58 (f) Friendly Ice Cream 10 1/2 '07 56 - 59 Globalstar 11 3/8 '04 3 - 4 (f) Level 3 Com 9 1/2 '08 63 - 65 Oakwood Homes 7 7/8 '04 38 - 40 Owens Corning 7 1/2 '05 25 - 27 (f) PSI Net 11 '09 6 - 9 (f) Revlon 8 5/8 '08 42 - 44 Sterling 11 3/4 '06 29 - 33 Trump AC 11 1/2 '06 66 - 68 TWA 11 3/8 '06 2 - 4 (f) Weirton Steel 10 3/4 '05 36 - 38 ********* Bond pricing, appearing in each Monday's edition of the TCR, is provided by DLS Capital Partners in Dallas, Texas. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658- 9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ USA, and Beard Group, Inc., Washington, DC USA. Debra Brennan, Yvonne L. Metzler, Larri-Nil Veloso, Aileen Quijano and Peter A. Chapman, Editors. Copyright 2001. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $575 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 301/951-6400. *** End of Transmission ***