/raid1/www/Hosts/bankrupt/TCR_Public/010419.MBX
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, April 19, 2001, Vol. 5, No. 77
Headlines
AMERICAN BANKNOTE: Ernst & Young Resigns As Accountants
AMF BOWLING: CEO Says Unit Is Likely To File For Bankruptcy
ARMSTRONG HOLDINGS: Courts Okays McDermott Will's Employment
ASDAR GROUP: Clarifies Position In LAK Ranch Project
AUREAL INC.: Seeks to Extend Solicitation Period To June 15
CARMIKE CINEMAS: Wants More Time To Decide On Property Leases
CONVERGENT COMMUNICATIONS: Lays-Off 400 Workers to Preserve Cash
CRIIMI MAE: Completes Reorganization & Appoints 5 New Directors
CROWN CORK: Moody's Cuts Senior Unsecured Bond Rating To Caa3
DAW TECHNOLOGIES: Receives Nasdaq Notice Of Non-Compliance
EDISON INTERNATIONAL: Year 2000 Loss Amounts To $1.9 Billion
ELECTRONIC CLEARING: Falls Short Of Nasdaq's Listing Requirement
EMAC: Fitch Places Ratings for All Transaction Classes On Watch
FINOVA GROUP: Employs Richards Layton as Local Counsel
GENESIS HEALTH: Multicare Junks Lease For Office Space in VA
ICG COMMUNICATIONS: Wants To Reject 6 More Real Property Leases
ICG: Creditors Retain Paul Weiss and Bayard As Special Counsel
INNOVATIVE CLINICAL: EQSF Advisers Reports 44.90% Equity Stake
INTEGRAL VISION: Shares Face Delisting From the Nasdaq Market
INTERDENT: Lenders Agree To Waive All Covenant Defaults in 2000
KAISER: Creditors To Get Initial Distribution Of Cash & Stocks
L.L. KNICKERBOCKER: Posts Fourth-Quarter & Year-End 2000 Results
LERNOUT & HAUSPIE: Settles Disputes & Litigation With Visteon
LONDON FOG: Exits Chapter 11 Bankruptcy
LTV CORP: Moves To Revise COO Turner's Employment Agreement
MEDCOM USA: Shares Subject To Delisting From Nasdaq
MONARCH DENTAL: Reaches Preliminary Agreement With Lenders
OSAGE SYSTEMS: Pomeroy Acquires Selected Assets
OWENS CORNING: Creditors Ask Court To Permit Securities Trading
PACIFIC GAS: Obtains Nod To Refund Residential Customer Deposits
PENN TREATY: Shareholder Files Lawsuit Alleging Securities Fraud
PLANET HOLLYWOOD: Losses Cause PwC to Raise Going Concern Doubts
PSINET INC.: Publishes Fourth Quarter Financial Results
RELIANT BUILDING: Alenco Holding Acquires Assets
SACO SMARTVISION: Canadian Court Grants Extension To File Plan
SAVVIS: May File For Bankruptcy If Unable To Raise More Funds
SNOWBALL: Receives Nasdaq Notice Of Delisting
SYNERGY: Board Okays Reverse Split to Meet Nasdaq Requirements
TRICO STEEL: Gets Interim Approval To Use Cash Collateral
V3 SEMICONDUCTOR: Filing Chapter 11 Petition To Facilitate Sale
VENCOR INC.: Transferring Montvue Operations To Shenandoah Inc.
W.R. GRACE: Judge Okays Continued Use Of Cash Management System
WHEELING-PITTSBURGH: Gets New Funding With Passage Of State Bill
WHX CORPORATION: Posts $181.0 Million Net Loss For 2000
WINSTAR COMM.: Fitch's Ratings On Senior Notes Dive To D Levels
WORLD CYBERLINKS: Needs More Money To Continue Operations
*********
AMERICAN BANKNOTE: Ernst & Young Resigns As Accountants
-------------------------------------------------------
On April 5, 2001, Ernst & Young LLP advised American Banknote
Corporation that it was resigning as the Company's independent
accountants. Ernst & Young orally advised the Company that it
was resigning because it has concluded that it is unwilling to
rely on the representations of certain members of management.
The accounting firm advised the Company that it reached this
conclusion because of the uncompleted investigations of the
United States Attorney's Office for the Southern District of New
York and the Securities and Exchange Commission relating to the
revenue recognition issues involving the Company's former
subsidiary, American Bank Note Holographics, Inc., and a $1.5
million consulting fee that one of the Company's subsidiaries
had agreed to pay to a consultant in connection with a foreign
printing project, and the backgrounds of certain members of
management due to past and potential SEC proceedings.
Ernst & Young LLP was engaged by the Company as its independent
accountants in March 2000 and has not issued a report on the
Company's financial statements for any fiscal period.
Ernst & Young has discussed its concerns with a non-employee
director of the Company.
American Banknote's Board of Directors has authorized the
Company to engage the firm of Ehrenkrantz Sterling & Co. LLC (a
member of DFK International) to serve as the Company's
independent accountants. The Company has authorized Ernst &
Young to fully respond to inquiries of Ehrenkrantz Sterling &
Co. LLC, or any other successor accountant, concerning the
reasons for Ernst & Young's resignation and any other matters.
AMF BOWLING: CEO Says Unit Is Likely To File For Bankruptcy
-----------------------------------------------------------
The chairman of AMF Bowling Inc., the world's largest bowling
alley operator, said that its AMF Bowling Worldwide Inc. unit
will likely file for bankruptcy while continuing to restructure
its $1.3 billion debt load, according to Reuters. The 101-year-
old Richmond, Va.-based company, which runs 520 bowling alleys
and the Michael Jordan Golf Centers, also posted a fiscal
fourth-quarter loss of $81.6 million, or 98 cents per share,
nearly double its loss of a year before. AMF President and Chief
Executive Roland Smith said the company, which had 16,386 full-
and part-time employees as of Dec. 31, is in talks to arrange a
debtor-in-possession (DIP) credit facility. This, along with
available cash, would allow AMF Bowling Worldwide to continue
running if it files for chapter 11 reorganization. (ABI World,
April 17, 2001)
ARMSTRONG HOLDINGS: Courts Okays McDermott Will's Employment
-----------------------------------------------------------
Judge Farnan approved Armstrong Holdings, Inc.'s application to
employ McDermott as labor counsel nunc pro tunc to the Petition
Date; however, Judge Farnan additionally ordered that all fees
accrued for services performed by McDermott Will for any of the
Debtors' non-debtor affiliates and which are sought to be paid
by the Debtors shall be identified separately in the fee
application submitted by McDermott Will to the Court. (Armstrong
Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service,
Inc., 609/392-0900)
ASDAR GROUP: Clarifies Position In LAK Ranch Project
----------------------------------------------------
In October 2000, Asdar Group (OTC:XBET) acquired the LAK Ranch
property in respect to which Derek Resources Corporation was in
the process of implementing a steam assisted gravity drainage
pilot plant.
Derek has the right to earn a seventy-five percent (75%)
interest in the LAK property by completing the specific
recommendations of Dr. John K. Donnelly in his reports prepared
prior to September 24, 1997 and timely paying for the interests
as required in Derek's Option Agreement. This work was to be
completed and payment made by December 31, 2000. If not
completed Derek had no interest in the LAK property. Dr.
Donnelly's reports estimated that the cost of constructing the
surface facilities, drilling the necessary wells and operating
the plant for six months would be US$3,500,000.00. Dr.
Donnelly's reports also contained specific budgets for
development and exploration costs and expressly anticipated that
Derek would pay for the first full six months operation expenses
for the project.
On the basis of information provided to date by Derek to Asdar,
in respect to the LAK property, Derek has spent in excess of
US$6,600,000.00 and has only operated the plant for
approximately one month. Asdar's auditors have attempted to
analyze the expenditures incurred by Derek, but Derek has
declined to provide full particulars.
Derek's position has been that having spent more than
US$3,500,00.00 it has earned its interest in the LAK property
and the project is therefore subject to an operating agreement
pursuant to which Derek is the operator. In January 2001, Derek
issued purported cash call to Asdar for US$200,000 for the month
of January and February 2001 and an amount of US$270,501.00 for
alleged excess expenditures incurred to December 31, 2000.
Subsequently, on January 30, 2001 Derek issued a Notice of
Default, as the US$470,501.00 had not been paid. This was
followed by a Notice of Intention to Foreclose unless
US$771,902.13 plus accrued interest of US$5,287.63 was paid.
Asdar said it was not provided with proper or complete notice of
default or right to cure any alleged defaults asserted by Derek.
To date, Asdar has declined to pay these monies because:
(1) Derek's obligation to earn its interest was to develop
the LAK property in accordance with the Donnelly 1997 reports,
which includes paying to operate the plant for six months, which
Derek has failed to do and Derek, therefore, has no interest in
the LAK property;
(2) Asdar did not consent to the approximate excess
US$3,00,000.00 plus of expenditures incurred by Derek and is not
liable for any of such expenditures;
(3) Derek incurred certain expenditures which were not
contemplated by the 1997 Donnelly reports and were not approved
by Asdar, for which Asdar is not responsible;
(4) Derek has repeatedly failed and refused to provide
Asdar with sufficient information to allow Asdar to determine
how or why a US$3,500,000.00 project escalated to a
US$6,600,000.00 plus project after only one month of operation.
(5) If the operating agreement is enforced, Derek did not
give proper notice to Asdar in respect to its purported cash
call or its later attempts to claim default.
Upon receiving the Notice of Intent to Foreclose and in order to
protect its position, Asdar had no alternative but to commence
legal proceedings in Wyoming against Derek. Pursuant to these
proceedings, Asdar seeks to obtain a determination as to the
rights of the parties in respect to the LAK property, an
accounting and, if warranted, damages. To further protect its
position, Asdar has filed a lis pendens against the LAK
property, the effect of which is to put any third party
purchaser on notice as to Asdar's position in respect to the LAK
property and the pending litigation. In addition, under Wyoming
law, Asdar has 90 days in which to redeem its interest, should
the LAK property be sold by way of foreclosure. Derek, through
counsel, has acknowledged this statutory redemption period in
its pleadings in the Wyoming litigation.
In an effort to further protect its position, Asdar brought an
application before a District Court in Wyoming for a Temporary
Restraining Order and Preliminary Injunction. The application
was heard on April 6 and on April 11 the Court denied Asdar's
application without explanation. This interim ruling on the
injunction request in no way affects Asdar's intention to
proceed with the litigation and Asdar is confident that it will
prevail at trial.
During the course of the hearing held on April 6, Mr. Frank
Hallam, a director and Financial Officer of Derek stated that in
excess of US$800,000 is currently owed to creditors on the LAK
project and that Derek was concerned about its ability to raise
and pay those funds and to maintain the lease. Mr. Hallam also
stated under oath that Derek could not sell production from the
LAK project while Asdar's lis pendens is filed because requisite
division order(s) could not be obtained to authorize sale of
production from the project.
AUREAL INC.: Seeks to Extend Solicitation Period To June 15
-----------------------------------------------------------
Aureal Inc. seeks a court order extending the exclusive period
to solicit acceptance of the first amended plan of
reorganization until June 15, 2001 and for authority to sell
32,212 (15%) of the Creative Stock held by the
debtor.
The purpose of requesting this extension is to facilitate
consensus with the Official Committee of Unsecured Creditors to
resolve the one remaining disputed issue under the original plan
of reorganization filed February 9, 2001. The dispute involves
the timing and manner of the sale of 208,079 shares of common
stock in Creative Technologies, Ltd. Under the plan, as
originally filed, the debtor had agreed to allow the Committee
to direct the sale of any remaining Creative Stock eight months
after the Effective Date. The Committee takes the position,
however, that all of the Creative Stock should be sold
immediately.
In order to facilitate negotiation between the parties, the
debtor is prepared to agree to mediation or bidding baseball
arbitration before a neutral third party to resolve their
differences concerning the disposition of the Creative Stock and
incorporate that resolution into the amended plan. The debtor
also agrees to sell 15% of the total Creative Stock, although
the debtor believes that the stock is undervalued and that the
sale of the stock is premature. The debtor also believes that
the benefits of achieving consensus with the Committee justify
such a sale.
A hearing will be held on April 30, 2001 at 2:00 PM before the
Honorable Leslie Tchaikovsky, Oakland, California.
CARMIKE CINEMAS: Wants More Time To Decide On Property Leases
-------------------------------------------------------------
Carmike Cinemas, Inc., et al. seeks court authority to extend
the time within which the debtors may assume or reject unexpired
leases of nonresidential real property through and including
October 9, 2001.
Pursuant to section 365(d)(4) the debtors seek a further
extension of the time within which they must assume or reject
such leases. As of the Commencement Date, Carmike was party to
approximately 390 leases of nonresidential real property for
their theaters. To date, Carmike has closed approximately 120
theaters to date and has received authorization to reject the
underlying leases relating to these theaters.
Carmike will attempt to renegotiate substantially all of its
remaining leases. For many leases, the ability to modify lease
terms, including rent, is an important factor inn determining
whether to close the theater and reject the underlying leases.
The debtors are in the process of analyzing their theater
portfolio in a seasonal industry that is undergoing significant
change. The requested extension will enable the debtors to
review and analyze the operating performance of their theaters
during the critical summer season and to continue to attempt to
negotiate lease concessions from their landlords that may affect
the debtors' ultimate decision with respect to such leases.
The debtors are represented by Mark D. Collins and Paul N. Heath
of Richards, Layton & Finger, PA and Harvey R. Miller of Weil,
Gotshal & Manges LLP.
A hearing on approval of the motion will be convened before The
Honorable Sue L. Robinson, Wilmington, DE on May 1, 2001 at 4:30
PM.
CONVERGENT COMMUNICATIONS: Lays-Off 400 Workers to Preserve Cash
----------------------------------------------------------------
Convergent Communications, Inc. said it has taken aggressive
steps to preserve its cash resources by reducing its workforce
by approximately 400 employees.
The company has been unsuccessful in its efforts to raise
additional funding. Consequently, there is a strong possibility
that Convergent Communications, Inc. and its subsidiary
Convergent Communications Services, Inc., will each seek Chapter
11 protection under the Bankruptcy Code in the very near future
to accomplish a restructuring, sale, merger or other
alternative.
Convergent Capital Corporation is not expected to seek Chapter
11 protection.
CRIIMI MAE: Completes Reorganization & Appoints 5 New Directors
---------------------------------------------------------------
CRIIMI MAE Inc. (NYSE: CMM) and two affiliates announced that
they have completed the necessary steps for their confirmed
joint plan of reorganization to become effective and Tuesday
emerged from bankruptcy. This marks the conclusion of the
Company's financial reorganization.
"We are pleased to announce the successful reorganization of
CRIIMI MAE and its emergence from Chapter 11," said chairman
William B. Dockser. "We appreciate the efforts of our advisors
and the cooperation of our creditors and shareholders. The
employees of CRIIMI MAE deserve the credit for persevering and
completing this complex reorganization."
Executive vice president, David B. Iannarone, said, "The
hallmark of the reorganization is the retention of our core
assets and the continuing service of nearly 140 dedicated
employees, 100 of whom are in our mortgage-servicing subsidiary.
These assets and employees create the necessary base from which
CRIIMI MAE can address the challenges ahead, including managing
the effects of a slowing economy. More important, the Company's
assets and employees provide the platform for expanding the
Company's presence in the commercial mortgage market."
Today, the Company's mortgage-servicing affiliate oversees a
portfolio of over $20 billion of commercial mortgages. The
special servicing team, which is the group assigned to resolve
defaulted loans, has an "above average" rating from Fitch IBCA.
Under the terms of CRIIMI MAE's reorganization plan, the
Company's Board of Directors has expanded effective Tuesday from
six to nine directors, with five new directors joining the
Board. Mr. Dockser said, "The new Board members provide
experience in relevant fields such as commercial real estate,
financial restructuring, Real Estate Investment Trust
operations, and information technology."
The five new Directors are:
* John R. Cooper, senior vice president, finance, of PG&E
National Energy Group, Inc. and chief financial officer
of PG&E National Energy Group Company, a subsidiary of
the National Energy Group, Bethesda, MD, that markets
energy services and products across North America.
* Alan M. Jacobs, president, AMJ Advisors LLC, Woodmere,
NY, that provides expertise in business turnarounds,
corporate restructuring and reorganization corporate
finance and dispute resolution ; AMJ was a financial
advisor for CRIIMI MAE's Official Committee of Equity
Shareholders.
* Donald J. MacKinnon, chief executive officer and
president, REALM, New York, NY, a business-to-business
e-commerce hub that combines the resources of several
real estate software companies: ARGUS Financial
Software, B.J. Murray, CTI Limited, DYNA and NewStar
solutions.
* Donald C. Wood, president and chief operating officer,
Federal Realty Investment Trust, Bethesda, MD, an owner,
manager and developer of high quality retail and mixed-
use properties.
* Michael F. Wurst, principal, Meridian Realty Advisors,
Inc., Dallas, TX, a Dallas-based real estate investment
firm focusing on out-of-favor or liquidity-challenged
sectors and assets.
Directors to remain on the Board are:
* William B. Dockser, chairman, CRIIMI MAE Inc.,
Rockville, MD.
* H. William Willoughby, president, CRIIMI MAE Inc.,
Rockville, MD.
* Robert J. Merrick, chief credit officer and director,
MCG Capital Corporation, Richmond, VA.
* Robert E. Woods, managing director and head of loan
syndication for the Americas, Societe Generale, New
York, NY.
Garrett G. Carlson, Sr. and G. Richard Dunnells resigned as
directors in conjunction with the effective date of the
reorganization plan.
CRIIMI MAE and its two affiliates paid in full all of their
allowed claims using the proceeds from certain asset sales,
financing from an affiliate of Merrill Lynch Mortgage Capital
Inc. and German American Capital Corporation, and the issuance
of two new series of senior secured notes. The recapitalization
financing provides for substantially all cash flows relating to
existing assets to be used to satisfy principal, interest and
fee obligations under the new debt. On the effective date,
CRIIMI MAE's assets include more than $1.3 billion of
subordinated commercial mortgage-backed securities (CMBS), other
mortgage-backed securities and equity investments in mortgage
funds, a trading portfolio of CMBS and residential mortgage-
backed securities and approximately $42 million of restricted
and unrestricted cash. For a more detailed description of the
new debt, including without limitation, payment terms,
restrictive covenants and collateral, please see the Company's
Annual Report on Form 10-K for the year ended December 31, 2000
filed with the Securities Exchange Commission on April 16, 2001,
the contents of which are incorporated herein.
CRIIMI MAE's litigation with First Union National Bank has not
been resolved and, as such, the classification of First Union's
claim as secured or unsecured under CRIIMI MAE's reorganization
plan has not yet been determined. In order to provide for
payment of First Union's claim, if it is determined to be
unsecured, the Company has escrowed cash, new 11.75% Series A
Senior Secured Notes due 2006, and new 20% Series B Senior
Secured Notes due 2007 in the amounts required by the
reorganization plan for delivery to First Union, if the
Bankruptcy Court determines that First Union's claim is
completely unsecured. If and to the extent that the Bankruptcy
Court determines that First Union's claim is secured, then,
pursuant to the Indentures governing the new Notes, a portion of
the new Series B Notes will be mandatorily exchanged for cash
and new Series A Notes held in the First Union Escrow. For a
more detailed description of the First Union litigation and
mechanics of the mandatory exchange if First Union's claim is
determined to be secured, please see (i) the Company's Annual
Report on Form 10-K for the year ended December 31, 2000, (ii)
Amendment No. 2 to Form T-3 relating to the Company's Series A
Notes filed with the SEC on Form T-3 on April 13, 2001, and
(iii) Amendment No. 2 to Form T-3 relating to the Company's
Series B Notes filed with the SEC on Form T-3 on April 13, 2001,
the contents of which are incorporated herein.
CROWN CORK: Moody's Cuts Senior Unsecured Bond Rating To Caa3
-------------------------------------------------------------
Moody's Investors Service lowered Crown & Cork Seal's senior
implied rating to B3 and senior unsecured bond rating to Caa3.
Moreover, it assigned a B1 rating to the new $400 million term
loan maturing in 2002 and a B3 rating to the new $2.5 billion
revolving credit maturing in 2003. The Not Prime short term
commercial paper rating is confirmed. The outlook is negative
while approximately $5 billion of debt securities are affected
by the downgrades.
Moody's took the rating actions due to its continuing concerns
regarding the ability of the company to generate meaningful free
cash flow given its increasingly difficult business position and
high leverage, on-going uncertainty regarding future asbestos
claims payments, and the structural subordination of unsecured
bonds created by the assignment of substantial security to the
new bank facilities, the rating agency said .
Also, Moody's related that with the negative outlook, failure of
the company to substantially reduce leverage and to improve its
business position over time, or further deterioration in
asbestos claims, could result in a further downgrade.
The following ratings were downgraded:
Crown Cork & Seal Company, Inc.:
* Senior unsecured debt, to Caa3 from B2
* Senior implied, to B3 from B2
Crown Cork & Seal Finance PLC:
* Backed senior unsecured debt, to Caa3 from B2
Crown Cork & Seal Finance S.A.:
* Backed senior unsecured debt, to Caa3 from B2
Rating confirmed:
* Rating of the company for short-term obligations, at
Not Prime
Ratings assigned:
* B1 for $400 million senior secured term loan maturing
February 2002
* B3 for $2.5 billion senior secured revolver maturing
December 2003
Crown Cork & Seal Company, Inc., based in Philadelphia,
Pennsylvania, is the leading worldwide manufacturer of packaging
products to consumer marketing companies.
DAW TECHNOLOGIES: Receives Nasdaq Notice Of Non-Compliance
----------------------------------------------------------
Daw Technologies, Inc. (Nasdaq: DAWK), a leader in the design,
engineering and installation of ultra-clean manufacturing
environments, and a contract manufacturer, announced that it has
received a Nasdaq Staff Determination letter dated April 11,
2001 indicating that the company fails to comply with the
minimum bid price requirement for continued listing set forth in
Marketplace Rule 4450(a)(5), and that its common stock is,
therefore, subject to delisting from the Nasdaq National Market.
The company has requested a hearing before a Nasdaq Listing
Qualifications Panel to review the Staff Determination. The
company's common stock will continue to be listed on the Nasdaq
National Market pending the conclusion of the appeal. It is
anticipated that the appeal process will take approximately two
months. As part of the appeal process, the company will prepare
and present a plan for achieving and maintaining compliance with
the minimum bid requirement for continued listing. The company
intends to vigorously pursue its appeal and will carefully
examine all available options.
There can be no assurance that the Panel will grant the
company's request for continued listing. If the Company's common
stock is delisted from the Nasdaq National Market, the stock
should nevertheless be eligible to be quoted on the OTC Bulletin
Board.
EDISON INTERNATIONAL: Year 2000 Loss Amounts To $1.9 Billion
------------------------------------------------------------
After the effect of a financial accounting charge, Edison
International (NYSE: EIX) reported a year 2000 loss of $1.9
billion or $5.84 per share. Excluding the effect of the charge,
Edison International's year 2000 earnings per share were $1.74,
compared with $1.79 per share in 1999.
In compliance with Financial Accounting Standards Board (FASB)
rules for financial accounting by utilities for "regulatory
assets," the company's regulated utility, Southern California
Edison (SCE), reported an after-tax earnings charge of $2.5
billion. Assuming the Memorandum of Understanding announced by
Governor Davis and SCE last week is implemented or,
alternatively, courts uphold Edison's legal claims to recover
its undercollected costs, this charge against earnings could
later be reversed.
According to John Bryson, chairman and CEO of Edison
International, "Today's financial charge, painful as it is for
the company, only recognizes the well-known reality of SCE's
large, unreimbursed costs of serving its customers. What is
important now, however, is not so much compliance with
accounting rules but whether Edison ultimately has a path to
recover its costs. A practical means to recovery is charted in
the Memorandum of Understanding reached with Governor Davis last
week. Prompt implementation of the MOU can avoid the large costs
of an SCE bankruptcy and make it possible for the company to
restore its financial health and ability to maintain a reliable
power grid."
2000 Earnings Summary
Excluding the write-off at SCE, Edison International's 2000
reported earnings were $578 million, compared with $623 million
in 1999, and SCE earned $471 million in 2000, compared with $484
million in 1999. Edison Mission Energy (EME) earned $125 million
in 2000, compared with $130 million in 1999. Edison Capital
earned $135 million in 2000, compared with $129 million in 1999.
Edison Enterprises and the parent company incurred losses of
$154 million in 2000, compared with losses of $120 million in
1999. Edison International's 1999 earnings included special
charges netting to $8 million.
The decrease of $12 million at SCE was primarily attributable to
adjustments to reflect potential regulatory refunds, lower gains
from sales of equity investments, and a 1999 one-time gain
related to a tax benefit partially offset by superior operating
performance at the San Onofre Nuclear Generating Station (SONGS)
and higher kWh sales.
EME's 2000 earnings of $125 million decreased $5 million from
1999. The decrease reflects higher interest costs and taxes
partially offset by a full year of operating results from the
Illinois plants and a reduction of long-term incentive
compensation under EME's Phantom Stock Option plan.
Edison Capital contributed $135 million in 2000 compared with
$129 million in 1999. Growth in earnings from new investments in
infrastructure and leveraged leases, partially offset by
declining revenue from existing leveraged leases, were primarily
responsible for the $6 million increase.
Edison Enterprises and the parent company's $154 million loss in
2000 was mostly the result of higher interest expense at the
parent company.
2000 Fourth Quarter Earnings Summary
For the fourth quarter of 2000, Edison International recorded a
loss of $2.5 billion. The net loss in the fourth quarter
included the December write-off at SCE of generation-related
regulatory assets of $2.5 billion (after tax), or $7.74 per
share, based on the quarter's weighted average shares
outstanding of 325,811,206. Excluding the write-off at SCE,
Edison International's fourth quarter 2000 loss was $28 million,
compared with earnings of $96 million in 1999.
Excluding the write-off, SCE earned $30 million in the fourth
quarter of 2000, compared with $141 million in 1999. The
decrease of $111 million primarily reflects the scheduled
refueling outage of SONGS Unit 2, adjustments to reflect
potential regulatory refunds and higher interest expense.
EME reported a loss of $35 million for the quarter compared to a
loss of $6 million for the same period last year. The decrease
was primarily due to an after-tax gain during the fourth quarter
of last year from the sale of a portion of EME's interest in
Four Star Oil & Gas.
Edison Capital contributed $22 million for the fourth quarter up
$2 million from the same period last year. The increase in
earnings per share was mainly a result of growth in earnings
from new investments in infrastructure, leveraged leases and
affordable housing syndications, and lower operating expenses.
This increase was partially offset by declining revenue from
existing leveraged leases.
Edison Enterprises and the parent company recorded a $46 million
loss in fourth quarter of 2000 compared to a $59 million loss in
fourth quarter of 1999. Increased interest expense at the parent
company offset by a 1999 charge to refocus Edison Enterprises
businesses accounted for most of the 2000 increase.
Based in Rosemead, Calif., Edison International is the parent
company of Southern California Edison, Edison Mission Energy,
Edison Capital, Edison O&M Services, and Edison Enterprises.
ELECTRONIC CLEARING: Falls Short Of Nasdaq's Listing Requirement
----------------------------------------------------------------
Electronic Clearing House Inc. (Nasdaq:ECHO) received a Nasdaq
Staff Determination on April 10, 2001, indicating that the
company fails to comply with the minimum bid price requirement
for continued listing on the Nasdaq SmallCap Market, as set
forth in Market Place Rule 4310 (c)(4), and that its securities
are, therefore, subject to delisting.
The company has requested a hearing before a Nasdaq Listing
Qualifications Panel to review the Nasdaq Staff Determination
which stays any delisting action. The hearing is expected to
occur within the next 45 days.
The company stock's closing bid price maintained a price of
$1.00 or more for 10 consecutive trading days between the period
March 23, 2001, to April 5, 2001, which the company believes
satisfied Nasdaq Market Place Rule 4310 (c)(4) for continued
listing. The company's stock bid price closed slightly below the
$1.00 level for three days following the April 5 date and the
staff of Nasdaq subsequently advised the company of its intent
to initiate a delisting action.
The company disagrees with the position taken by the Nasdaq
staff and has appealed the staff determination to the Hearing
Panel but there can be no assurance the panel will grant the
company's request for continued listing.
"We feel the company complied with the 10-day minimum bid price
requirement and do not feel the staff's subsequent notice is
appropriate," stated Joel M. Barry, chairman and chief executive
officer of ECHO, "but, ignoring this point, we feel confident
that ECHO will resolve the minimum bid price issue as well and
will remain listed on the Nasdaq SmallCap Market."
In case there are questions, shareholders are encouraged to call
the company at 800/262-3246, ext. 3033.
Electronic Clearing House, with headquarters in Agoura Hills,
provides debit and credit card processing, check guarantee,
check verification, check conversion, check re-presentment,
check collection and inventory tracking to more than 58,000
retail merchants and U-Haul dealers across the nation.
EMAC: Fitch Places Ratings for All Transaction Classes On Watch
---------------------------------------------------------------
Fitch places all classes of all EMAC transactions on Rating
Watch Negative. Last week Fitch placed classes D, E and the
Participating Interests of EMAC Owner Trust 1998-1 and classes
E, F, and G of EMAC Owner Trust 1999-1 on Rating Watch Negative.
This action has been expanded to include EMAC Owner Trust 1998-1
classes A-1, A-2, B, C and the interest-only class and EMAC
Owner Trust 1999-1 classes A-1, A-2, B, C, D and the interest-
only class. All classes of EMAC Owner Trust 2000-1 are being
placed on Rating Watch Negative for the first time.
This action is a direct result of a Servicing Event of Default,
which occurred this month due to the failure of EMAC to make the
requisite servicer advances to the trusts. LaSalle National
Bank, as indenture trustee has made all advances for this month.
The indenture trustee has notified EMAC as to its removal as
servicer and is currently evaluating potential servicing
replacements. At that time Fitch will evaluate the new servicing
arrangement as well as the current status of the pools.
FINOVA GROUP: Employs Richards Layton as Local Counsel
------------------------------------------------------
The FINOVA Group, Inc. wish to employ Richards, Layton & Finger,
P.A. of Wilmington, Delaware as their local bankruptcy counsel
in connection with the commencement and prosecution of their
chapter 11 cases, effective as of the Petition Date.
Richards Layton has been selected because of the firm's
extensive experience and knowledge in the field of debtors' and
creditors' rights and business reorganizations under chapter 11
of the Bankruptcy Code as well as its expertise, experience, and
knowledge practicing before the Bankruptcy Court in Delaware,
its proximity to the Court, and its ability to respond quickly
to emergency hearings and other emergency matters in this Court.
Moreover, since January, 2001, Richards Layton has rendered
legal services and advice to the Debtors with respect to the
preparation of the chapter 11 filing. During the course of this
representation, Richards Layton has acquired knowledge of these
Debtors' businesses, financial affairs and capital structure.
The Debtors believe that Richards Layton is both well qualified
and uniquely able to represent them in these chapter ii cases in
a most efficient and timely manner.
The Debtors, Gibson, Dunn and Richards Layton have discussed a
division of responsibilities between the firms with a view to
avoid and/or minimize duplication of effort. With this in mind,
the Debtors contemplate that, if the Court so approves, the team
at Richards Layton, led by Mark D. Collins, will render
professional services:
(1) to advise the Debtors of their rights, powers and
duties as debtors and debtors in possession;
(2) to take all necessary action to protect and preserve
the Debtors' estates, including the prosecution and defense of
actions, the negotiation of disputes and the preparation of
objections to claims filed against the Debtors' estates;
(3) to prepare necessary motions, applications, answers,
orders, reports, and papers in connection with the
administration of the Debtors' estates;
(4) to negotiate and prepare a plan of reorganization and
all related documents; and
(5) to perform all other necessary legal services in
connection with the Debtors' chapter 11 cases.
The Debtors propose to pay Richards Layton its customary hourly
rates in effect from time to time, subject to the provisions of
the Bankruptcy Code, the Bankruptcy Rules and the Local Rules.
The Debtors submit that these rates are reasonable.
As set forth in Mr. Collins' affidavit, the principal
professionals and paraprofessionals designated to represent the
Debtors and their current standard hourly rates are:
Mark D. Collins $385 per hour
Daniel J. DeFranceschi $350 per hour
Deborah E. Spivack $275 per hour
Michael J. Merchant $180 per hour
Patrick M. Leathem $180 per hour
Rebecca L. Booth $150 per hour
James R. Adams $150 per hour
Laura B. Ahtes $115 per hour
Diana M. Poole $115 per hour
Joseph L. King $115 per hour
Other attorneys and paralegals within Richards Layton may from
time to time serve the Debtors in connection with the matters
for the firm's engagement.
Mr. Collins indicates that Richards Layton will apply to the
Court for allowance of compensation and reimbursement of
expenses.
Prior to the Petition Date, the Debtors paid Richards Layton a
$200,000 retainer in connection with and in contemplation of the
Debtors' chapter 11 filings. The Debtors propose that the amount
not expended for prepetition services and disbursements be
treated as a retainer in contemplation of services to be
rendered by Richards Layton as bankruptcy co-counsel.
To comply with the Bankruptcy Code and the Bankruptcy Rules,
Richards Layton obtained from Gibson, Dunn a list of Potential
Parties in Interest and conducted conflicts check, Mr. Collins
told the Court.
Results show that Richards Layton has in the past represented,
currently represents, and/or may in the future represent, in
matters wholly unrelated to these cases, a number of Potential
Parties in Interest but, with the exception of the Wilmington
Trust Company (WTC), Mr. Collins believes no other single client
representation is a major engagement that would involve either
the billing of fees in excess of 0.5% of Richards Layton's
annual fees billed, and no affiliated group of entities in the
aggregate exceeds 1% of Richards Layton's annual fees billed.
Mr. Collins submitted that, based on the information available
to him, he believes that Richards Layton is a "disinterested
person" as that term is defined in section 101(14) of the
Bankruptcy Code, as modified by section 1107(b) of the
Bankruptcy Code.
Specifically, Mr. Collins' affidavit reveals that:
(1) Richards Layton has in the past represented, currently
represents, and/or may in the future represent, in matters
wholly unrelated to the FINOVA cases, Chapter 11 cases in the
Delaware Bankruptcy Court in which the Debtors or their
affiliates have appeared as creditors or parties as
(a) In re Converse, Inc. Case No. 01-0223 (SLR) -
pending;
(b) In re Genesis Health Ventures. Inc., et al.,
Case No. 00-2692 (JHW) - pending; and
(c) In re Sun Healthcare Group, Inc., et al, Case No.
99-3657 (MFW) - pending;
(d) In re Silas Creek. Inc., et aL, Case Nos. 99-1239
through 99-1240 (MFW) - concluded.
Mr. Collins assured that any matters that may arise in the
FINOVA cases that involve other clients of Richards Layton will
be handled by the Debtors' primary counsel, Gibson Dunn &
Crutcher LLP. In any event, Richards Layton will not represent
any of the other debtors-in-possession cases in any facet of the
FINOVA chapter 11 cases nor any of the FINOVA Debtors as a
creditor or party in interest in any facet of the other
bankruptcy cases.
(2) Richards Layton has in the past represented and/or
currently represents the agent for various bank syndicates in
chapter 11 cases in the Delaware Bankruptcy Court where certain
of the Debtors or their affiliates are members of such bank
syndicates, including:
* pending cases
(a) In re Metal Management. Inc., et al., Case No. 00-
4303 (SLR);
(b) In re Physician Health Corporation. Et al, Case No.
00-4482 (MFW);
(c) In re Levitz Furniture Incorporated. et al. Case No.
97-1842 (MFW);
(d) In re Pittsburgh and Lake Erie Properties. Inc.,
Case No. 96-406 (HSB); and
(e) In re Trism, Case No. 99-3364 (SLR).
* cases that are no longer pending
(a) In re Harvard Industries. Inc.. et al., Case Nos.
97-953 through 97-962 (SLR); and
(b) In re Homeplace Stores, Inc.. et al., Case Nos. 99-
008 (PJW) and 99-0010 through 99-0012 (P3W).
(3) Richards Layton represents GE Aircraft Engine Services
Limited as a creditor in the case of In re Tower Air. Case No.
00-1280 (PJW).
During the course of that representation, Richards Layton served
as Delaware local counsel for GEAE in its defense of an
adversary proceeding styled: FINOVA Capital Corporation v. GE
Aircraft Engine Services Limited, Adv. Proc. No. 00-940 (PJW).
Upon Richards Layton's retention by the Debtors, Richards Layton
ceased its involvement in this adversary proceeding and GEAE
retained different Delaware local counsel.
Mr. Collins submitted that Richards Layton will not represent
GEAE in the FINOVA cases nor will Richards Layton represent the
Debtors in any matter in these cases relating to the adversary
proceeding or the transaction underlying such litigation. Mr.
Collins tells the Court that the Debtors' counsel in Tower Air,
The Bayard Firm, will act as Delaware counsel for the Debtors
in this case with respect to such matters.
(4) Richards Layton represented in the past certain of the
Debtors and certain of the Debtors' present and former directors
and officers who have been named as defendants in a derivative
action in September, 2000. Richards Layton was retained when the
defendants expected the action to be filed in Delaware's Court
of Chancery. However, after the action was filed in a
jurisdiction other than Delaware, Richards Layton withdrew as
local counsel and the Debtors retained other counsel.
(5) The Debtors participate in investment alliance funds,
which are investors and selected fund sponsors that provide
equity and debt financing for midsize businesses. FINOVA Capital
Corporation participates as a limited partner in nine investment
alliance funds and has outstanding capital contribution
commitments to such funds.
Richards Layton has in the past represented or currently
represents certain affiliates of BCH Investors LLC, BHC Interim
Funding L.P. and BHCGP, L.L.C., all of whom are partners to the
Debtors in certain investment alliances.
Further, Back Bay Capital Funding LLC, which is also a partner
to the Debtors in certain investment alliance funds, is a
creditor in Delaware cases in which Richards Layton represents
the debtors in possession: (i) In re Hechinger Investment Co.
of Delaware, Inc., et al, Case Nos. 99-2261 (PJW); and (ii) In
re Factory Card Outlet Corp., Case Nos. 99-685 through 99-686
(PJW).
(6) Richards Layton represents the Wilmington Trust Company
(WTC) in a number of corporate, business trust and general
litigation matters that are wholly unrelated to the FINOVA
chapter 11 cases. WTC is the successor indenture trustee with
respect to various outstanding debentures in the FINOVA cases in
the outstanding amount of approximately $4.380 billion. Richards
Layton did not represent the predecessor indenture trustees with
respect to such bond issuances nor did Richards Layton represent
WTC with respect to its assumption of its indenture trustee
responsibilities relating to these debentures. Moreover,
Richards Layton will not represent WTC in connection with such
debentures in the FINOVA cases.
Richards Layton has represented financial institutions serving
as trustee in leveraged airplane lease financing transactions
for which one or more of the Debtors provided financing.
Richards Layton has also represented WTC and other financial
institutions in their capacity as trustee for Delaware Business
Trusts in transactions for which the Debtors have provided
financing for assets such as mortgages or receivables.
(7) Richards Layton has further provided legal advice
and/or legal opinions to certain entities, including FINOVA
Lease Receivables LLC, FINOVA Corporate Finance Receivables LLC,
FINOVA Franchise Receivables LLC, non-debtor affiliates of the
Debtors, Chase Manhattan Bank USA, N.A., and WTC, in connection
with the creation of bankruptcy remote limited liability
companies. FINOVA Capital Corporation was listed in Richards
Layton's conflict check system as a non-adverse party to the
law firm's clients with respect to such transactions.
Mr. Collins assured that Richards Layton has not and will not
represent or have relationship with any entities that would be
adverse to the Debtors or their estates in the matters upon
which Richards Layton is to be employed.
Pursuant to section 327(a) of the Bankruptcy Code, the Debtors
requested that the Court approve the employment of Richards
Layton under a general retainer, as their co-counsel, to perform
the extensive legal services that will be necessary during the
Debtors' chapter 11 cases, effective as of the petition date.
(Finova Bankruptcy News, Issue No. 5; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
GENESIS HEALTH: Multicare Junks Lease For Office Space in VA
------------------------------------------------------------
The Multicare Companies, Inc. Debtors sought and obtained the
Court's approval for the rejection of an unexpired lease of
approximately 3,000 square feet of office space located in
Charleston, West Virginia by and between Horizon Mobile, Inc.,
one of the debtors in the cases (the Tenant) and Industrial
Strategies, Ltd., a general partnership (the Landlord). The
monthly rent under the Lease is $1,000 per month, and the Lease
expires on December 31, 2001.
The Debtors no longer require the use of the Premises in the
operation of their business. However, given that the Lease term
is expiring at the end of this year, the Debtors believe that
the Lease will not be assignable for value to another lessee.
Accordingly, to avoid accruing additional administrative
expenses in connection with the Lease, the Debtors have
concluded that it is in the best interest of the Debtors and
their respective estates and creditors to reject the Lease,
effective January 31, 2001. (Genesis/Multicare Bankruptcy News,
Issue No. 8; Bankruptcy Creditors' Service, Inc., 609/392-0900)
ICG COMMUNICATIONS: Wants To Reject 6 More Real Property Leases
---------------------------------------------------------------
ICG Communications, Inc. filed a Motion seeking Judge Walsh's
permission to reject six additional leases of commercial real
property as unnecessary to their reorganization. Gregg M.
Galardi and Eric M. Davis of the firm of Skadden Arps Slate
Meagher & Flom LLP of Wilmington, asked, on behalf of the
Debtors, that Judge Walsh permit the rejection of these six
additional leases of real property described as office sites not
necessary to the Debtors' ongoing businesses, but under which
the Debtors remain currently obligated.
The Debtors argued that the rent and other expenses due under
these leases constitute an unnecessary drain on their cash flow.
The rent and expenses for these leases total approximately
$140,524.30 per month. Rejecting these leases permits the
Debtors to minimize unnecessary administrative expenses.
Moreover, the Debtors told Judge Walsh that they cannot obtain
any value for these leases by assignment to third parties, and
therefore seek authority to reject them all. The Debtors have
concurrently notified each landlord or contracting party by
letter stating that the premises are abandoned and returning the
keys.
The leased properties and leases are:
Site Notice Address Leasing Entity
---- -------------- --------------
135 Merchant Duke-Weeks Realty LP ICG Telecom Group
Suite 100 38 Triangle Park,
Cincinnati OH Ste 3801
Cincinnati OH
1103 Schrock Rd. Bush Properties ICG Telecom Group
Suite 201 1105 Schrock Rd. #200
Columbus OH Columbus OH
5525 Cloverleaf Pkwy Three Cloverleaf ICG Telecom Group
Valley View OH Parkway
5480 3-Cloverleaf Parkway
Valley View OH
3200 West Market Fairlawn Associates ICG Telecom Group
Suite 304 Attn: Bridgite Pirnar
Akron OH 3180 West Market Street
Akron OH
9200 East Panorama Carr America Realty LP ICG Equipment Inc.
Suite 400 6400 S. Fiddlers
Englewood CO Green Circle Ste. 500
Greenwood Village CO
390 Main Street Violet Realty Inc. ICG NetAhead, Inc.
Suite 1P02-1P08 Main Place Liberty
Buffalo NY 2100 Liberty Bldg.
Buffalo NY
And
Stempel Bennet Claman & Hochberg
Attn: Joelle B. Taub
655 Third Avenue
New York, NY
(ICG Communications Bankruptcy News, Issue No. 5; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
ICG: Creditors Retain Paul Weiss and Bayard As Special Counsel
--------------------------------------------------------------
By order entered on March 22, 2001, by the US Bankruptcy Court,
District of Delaware, the Official Committee of Unsecured
Creditors of ICG Communications, Inc. and its affiliated
entities was granted authority to employ Paul, Weiss, Rifkind,
Wharton & Garrison as special counsel to the
Creditors Committee.
By order entered on March 22, 2001, by the US Bankruptcy Court,
District of Delaware, the Official Committee of Unsecured
Creditors of ICG Communications, Inc. and its affiliated
entities was granted authority to employ The Bayard Firm as
special counsel to the Creditors Committee.
INNOVATIVE CLINICAL: EQSF Advisers Reports 44.90% Equity Stake
--------------------------------------------------------------
EQSF Advisers, Inc. owns 5,416,740 shares of the common stock of
Innovative Clincial Solutions, Ltd., which represents 44.90% of
the outstanding common stock of the Company. EQSF exercises sole
voting and dispositive powers over the shares.
Similarly, M.J. Whitman Advisers, Inc. owns 24,300 shares of the
common stock of the Company, with sole voting and dispositive
powers, representing 0.45% of the outstanding common stock of
the Company.
INTEGRAL VISION: Shares Face Delisting From the Nasdaq Market
-------------------------------------------------------------
Integral Vision, Inc. (Nasdaq: INVI) received a Nasdaq Staff
Determination on April 11, 2001 indicating that the Company
fails to comply with the minimum bid price and market value of
public float requirements for continued listing set forth in
Nasdaq's Marketplace Rules 4450(a)(5) and 4450(a)(2), and that
its securities are, therefore, subject to delisting from The
Nasdaq National Market on April 18, 2001.
The Company has requested a hearing before a Nasdaq Listing
Qualifications Panel to review the Staff Determination. There
can be no assurance that the Panel will grant the Company's
request for continued listing. In the event the Company is
unable to obtain continued listing on the Nasdaq National Market
or the Nasdaq SmallCap Market, the Company believes that its
stock will be eligible for quotation on the OTC Bulletin Board.
Integral Vision, Inc., an ISO 9001 registered firm, offers two
machine vision-based inspection systems to the industrial
manufacturer. Vision systems are used to supplement human
inspection or provide quality assurance when production rates
exceed human capability. More information can be found at
Integral Vision's Website: www.iv-usa.com .
INTERDENT: Lenders Agree To Waive All Covenant Defaults in 2000
---------------------------------------------------------------
InterDent, Inc. (Nasdaq:DENT) announced the amendment of its
senior bank and other debt agreements, the intent to spin-off
its East Coast division (the Dental Care Alliance subsidiary and
additional East Coast practices) and the financial results for
the three and twelve month periods ended December 31, 2000.
InterDent entered into an agreement amending the senior credit
agreement with its bank group, which calls for, in part, the
lending group's agreement to waive all covenant defaults through
the end of 2000. The covenants in the amended agreement have
been restructured to reflect the current status of the Company,
which brings InterDent into full compliance with the credit
agreement. The Company also reached similar agreements with its
senior subordinated debt lender and its convertible debt
holders.
Additionally and separately, InterDent signed a definitive
agreement to sell its East Coast division to a group led by its
current Co-Chairman and President, Steven Matzkin, DDS. Under
the terms of this agreement, the Company would sell the assets
of two practices from the East Coast division in an initial
transaction, and the assets of the remaining practices of the
division in a subsequent transaction expected to close in the
second quarter of 2001, subject to required approvals under the
existing senior credit facility and certain other closing
conditions. The total combined purchase price, including the
sale of all of the capital stock of Dental Care Alliance, is $36
million including the assumption of debt. The Company has
retained an option to repurchase this division at a future date,
and the parties have entered into an ongoing collaboration
agreement. The sale proceeds from these transactions are being
used to reduce outstanding debt and to improve the liquidity of
the company.
Michael Fiore, Co-Chairman and Chief Executive Officer of
InterDent stated, "The strategic moves we have outlined are
designed to restructure the balance sheet and position the
Company for long-term growth. In fact, we showed good progress
in the first quarter of 2001 and we anticipate reporting same
office revenue growth of approximately 10%, well above our
recent growth levels of 7-8%."
Fiore continued, "The agreement to sell the East Coast division
relieves the short-term financing pressures, while preserving
the option to combine the companies in the future. In addition,
the Collaboration Agreement ensures that the benefits created
over the past few years by the larger organization will be
preserved."
"In summary, with an improved balance sheet and stronger
operations in the first quarter, we can focus on returning our
operations to our historical levels of profitability. We are
confident that dental management services presents a significant
growth opportunity, and we remain committed to achieving and
maintaining a leadership position," Fiore concluded.
Net revenue in the fourth quarter increased 23% to $79,114,000
from $64,573,000 in the fourth quarter of 1999. Total patient-
level revenue under management in the fourth quarter of 2000
increased 22% to $84,959,000 from $69,714,000 in the same period
in the prior year. During the quarter, InterDent recognized
approximately $3,400,000 in additional expenses, including a
write-off of accrued development and acquisition costs, legal
fees, and an increase in the bad debt provision. In addition,
InterDent also implemented a new accounting policy that requires
the amortization of the employee notes receivable, which are
collateralized by common stock, to reflect the reduction in
value of the collateral. In the fourth quarter, an additional
expense of $905,000 was recognized for this amortization.
Lastly, to reflect the expected realization of assets from the
East Coast sale transaction, the Company incurred a non-cash
charge of $51,591,000 in the fourth quarter, consisting of
$49,802,000 in impairment of intangibles and advances, and an
impairment reserve against interest receivables of $1,789,000.
With these additional expenses, the net loss attributable to
common stock in the fourth quarter of 2000 was $51,460,000 or a
loss per share of $2.19 per diluted share, compared to net
income attributable to common stock of $1,608,000 or $0.07 per
diluted share for the fourth quarter of 1999.
Total patient-level revenue under management in the year 2000
increased 26% to $315,603,000 from $251,310,000 in the prior
year. InterDent's reported revenues for the twelve months ended
December 31, 2000, reached $293,166,000, a 27% increase over
$231,610,000 for the same period of 1999. For the year ending
December 31, 2000, as a result of the additional expenses
recognized in the fourth quarter, the net loss attributable to
common stock was $48,712,000 or a net loss per diluted share of
$2.20 versus net income attributable to common stock of
$5,222,000 or $0.23 per diluted share for 1999.
InterDent's management team will review the quarter's results on
a conference call today, April 17th, at 4:30 p.m. Eastern / 1:30
p.m. Pacific. To participate, a few minutes before start time,
dial (888) 763-1754. The call will also be Web-cast live at
www.interdent.com. If you are unable to participate, a replay
will be available beginning at 3:30 p.m. Pacific on April 17,
2001 for 48 hours. To access, please dial (800) 633-8284,
reservation number 18630414. The replay can also be accessed via
the Internet at www.interdent.com.
With total annualized patient revenues under management of over
$340 million and 244 locations in 16 states, InterDent is the
largest provider of dental management services in the US. The
Company also owns a stake in Dental X Change, an advanced
Internet portal servicing the professional dental community.
More information about Dental X Change is available through the
press releases on their web site, www.dentalxchange.com.
InterDent's facilities are located in California, Oregon,
Washington, Idaho, Nevada, Arizona, Hawaii, Florida, Georgia,
Michigan, Oklahoma, Kansas, Pennsylvania, Indiana, Maryland and
Virginia. The Company is continuing to build an integrated
support environment utilizing information technologies to enable
dental professionals to provide patients with high quality,
comprehensive, convenient and cost-effective care.
KAISER: Creditors To Get Initial Distribution Of Cash & Stocks
--------------------------------------------------------------
Kaiser Group Holdings, Inc. (OTC Bulletin Board: KSRGQ), the
successor issuer to its subsidiary, Kaiser Group International,
Inc., announced plans for the initial distribution under the
Kaiser Group International Second Amended Plan of
Reorganization. As more fully described below, Kaiser Group
Holdings will be distributing under the Plan cash and shares of
its preferred and common stock. Trading symbols for those
securities on the over-the-counter bulletin board will be
announced when assigned by the NASD. The Company expects former
Kaiser Group International, Inc.'s common stock to continue to
trade for a transition period on the over-the-counter bulletin
board under the symbol "KSRGQ."
Kaiser Group Holdings, Inc. was formed in December 2000 in
connection with the effectiveness, on December 18, 2000, of the
Kaiser Group International, Inc. Second Amended Plan of
Reorganization under Chapter 11 of the United States Bankruptcy
Code. The Plan is described in detail in the Current Report on
Form 8-K filed with the Securities and Exchange Commission by
Kaiser Group International on December 14, 2000 and, in less
detail, in the Annual Report on Form 10-K filed with the SEC by
Kaiser Group Holdings on April 2, 2001.
In very general terms, the Plan contemplates different types of
distributions to be made to three basic classes of creditors.
Holders of so-called "Class 3" claims in the Kaiser Group
International bankruptcy -- generally trade and similar
creditors with claims of $20,000 or less -- will receive cash
for their claims. Such payments, aggregating approximately $0.9
million, will be mailed to holders of such claims on or about
April 17.
"Class 4", the largest class of claims in the Kaiser Group
International bankruptcy, is made up of creditor claims other
than Class 3 claims and equity claims. Class 4 claims include
holders of the former Kaiser Group International senior
subordinated notes due 2003. Holders of Class 4 claims are to
receive a combination of cash and Kaiser Group Holdings
preferred and common stock in respect of their claims. Such
holders will receive one share of preferred stock and one share
of common stock for each $100 of claims. However, the number of
shares of preferred stock to be issued will be reduced by one
share for each $55.00 of cash received by the holder of a Class
4 claim. Thus, the more cash that is available for distribution,
the less preferred stock actually will be issued.
The process of resolving in excess of $500 million of claims
initially filed in the Kaiser Group International bankruptcy
process is ongoing. At the present time, there are approximately
$136.8 million of Class 4 claims that have been allowed in the
bankruptcy process. However, the current total amount of
unresolved claims is approximately $130.3 million.
The Company continues to believe that the amount of Class 4
Claims ultimately allowed in the Kaiser Group International
bankruptcy will be approximately $150 million. However, the Plan
provides that cash reserves must be retained by Kaiser Group
International with respect to unresolved claims. Because of
delays in, and substantial uncertainties as to the resolution of
unresolved claims, Kaiser Group International is required by the
terms of the Plan to hold a substantial cash reserve against
these unresolved claims. This factor and others, including the
fact that Kaiser Group International has not yet received a
substantial cash payment that the Company claims it is due from
the owner of the Nova Hut steel mini-mill in the Czech Republic,
limit the amount of cash available for distribution at this time
to the holders of allowed Class 4 claims. The Company has
determined that an aggregate of approximately $12.8 million of
cash, or approximately $0.09347 per $1.00 of allowed Class 4
claims, will be distributed in the initial distribution to
holders of allowed Class 4 claims. Thus, more shares of Kaiser
Group Holdings preferred stock will be issued than would have
been the case had the claims resolution process advanced more
quickly and had more cash been available from the Nova Hut
project and other sources.
Kaiser Group Holdings expects to make substantial progress in
the resolution of currently unresolved claims over the balance
of this calendar year. The Board of Directors plans to consider,
not less often than quarterly, the amount of cash that can be
released from reserves as a result of claims resolution and made
available to redeem preferred stock at the redemption price of
$55.00 per share.
The Company is required to retain cash, new preferred stock and
new common stock for all unresolved claims at the claimed amount
until such claims are resolved. Shares of new preferred stock
and new common stock will not be issued until claims are
resolved and deemed Allowed. Upon the resolution of all
remaining outstanding claims, available retained cash balances
will be used to redeem shares of outstanding new preferred
stock.
The third class of claims recognized in the Kaiser Group
International bankruptcy are equity claims, consisting of
holders of former Kaiser Group International common stock and
other "Equity Interests" as defined in the Plan. Apart from
holders of former Kaiser Group International common stock, the
only holders of Equity Interests of which the Company is aware
are the former shareholders of ICT Spectrum Constructors, Inc.,
a corporation acquired by merger with a subsidiary of Kaiser
Group International in 1998. The Bankruptcy Court recently
confirmed the equity nature of those claims, which will be
treated as such in the initial distribution.
Under the Plan, holders of Equity Interests will receive a
number of shares of common stock of Kaiser Group Holdings equal
to 17.65% of the number of shares of such common stock issued to
holders of Class 4 Claims. At this time, one share of Kaiser
Group Holdings common stock will be issued for each 96 shares of
previously outstanding Kaiser Group International common stock.
Under the Plan, neither fractional shares of Kaiser Group
Holdings common stock, nor cash in lieu of fractional shares,
will be issued in connection with the initial distribution.
Additional distributions of Kaiser Group Holdings common stock
will be made as additional shares of common stock are issued to
holders of newly allowed Class 4 claims.
Holders of former Kaiser Group International common stock and
holders of allowed Class 4 claims representing former senior
subordinated notes will receive by mail letters of transmittal
with instructions as to how to effect the distribution of Kaiser
Group Holdings preferred and common stock.
The exchange ratio of Kaiser Group Holdings common stock for
former Kaiser Group International common stock (1 share for 96
shares) and the nature of the distribution of shares of common
stock to holders of Class 4 claims will likely result in there
being a number of holders of a relatively small number of shares
of Kaiser Group Holdings common stock. The ultimate value of
such stock will likely depend primarily on the future
performance of Kaiser-Hill Company, LLC, and it will be at least
several years until such value can be reasonably estimated. In
the near term, the market value of Kaiser Group Holdings common
stock will likely be low in relation to (1) the cost to the
Company of maintaining the existence of holders of small numbers
of shares of common stock and (2) the cost to the holder of
effecting sales of a small number of shares. Therefore, the
letters of transmittal to be sent to holders of former Kaiser
Group International common stock and senior subordinated notes
will include an offer to purchase all, but not less than all,
shares of Kaiser Group Holdings common stock distributable to
persons who will receive 99 or fewer shares in the initial
distribution for a price equal to $4.50 per share. This price is
based generally on the trading price of Kaiser Group
International common stock during the past 30 days, which may
not bear any relation to the true value of such shares. The
Company makes no representation as to the fairness of the offer
price.
In the case of holders of former Kaiser Group International
common stock, the offer to purchase shares is conditioned on the
holder's agreement to also sell the holder's right to future
distributions of shares of Kaiser Group Holdings common stock
under the Plan. The offer price for such distribution rights is
$0.50 per share that would otherwise be distributed at this
time. This offer price was determined arbitrarily, based
primarily on the Company's current expectation that future
distributions of shares of Kaiser Group Holdings common stock
will be approximately 10% of the number of shares distributed at
the present time. Holders who wish to sell their right to future
distributions must also sell their shares of Kaiser Group
Holdings common stock.
L.L. KNICKERBOCKER: Posts Fourth-Quarter & Year-End 2000 Results
----------------------------------------------------------------
The L.L. Knickerbocker Co., Inc. (OTC Bulletin Board: KNIC)
reported its financial results for the fourth quarter and fiscal
year ended December 31, 2000.
Fourth-quarter net sales in 2000 were $8.1 million, 19.0% lower
than the $10.0 million in the prior year period. Fourth-quarter
net loss decreased by 46.4% to $3.6 million, or $.08 per diluted
share (on 47.0 million weighted average shares outstanding),
from $6.7 million, or $.15 per diluted share (on 43.0 million
weighted average shares outstanding), in the same period a year
ago. Included in fourth quarter 2000 net loss are impairment
write-downs of goodwill and property of $2.0 million and
professional fees in connection with the bankruptcy of 282,000.
Net sales in 2000 were $30.3 million, 28.0% less than 1999 net
sales of $42.2 million. For the year, net loss decreased by
69.7% to $3.4 million, or $.07 per diluted share (on 47 million
weighted average shares outstanding), from net loss of $11.2
million, or $.33 per diluted share (on 34.3 million weighted
average shares outstanding) in 1999. Included in the 2000 annual
net loss are impairment write-downs of goodwill and property of
$2.4 million, professional fees in connection with the
bankruptcy of $1,080,000, and a gain on extinguishment of
debentures of $3,355,000.
"Excluding the non-recurring impairment write-downs, the
Company's operating losses narrowed considerably in 2000," said
Anthony Shutts, Chief Financial Officer of The L.L.
Knickerbocker Co., Inc. "For the second consecutive year,
Knickerbocker generated positive cash flow from operations. The
Company is continuing to make progress towards returning to
profitability."
As announced earlier, the Company believes it is in the final
stages of its Chapter 11 reorganization. Mr. Shutts added, "The
Company is making progress with its Creditors' Committee towards
formulating a workable restructuring of its debt. We expect to
submit a revised Plan of Reorganization in the near future that
should pave the way for our exit from Chapter 11."
The L.L. Knickerbocker Co., Inc. is a multi-brand collectible
product, gift, toy and jewelry company that designs, develops,
produces and markets products over diverse distribution
channels. The Company's products are sold through independent
gift and collectible retailers, department stores, electronic
retailers, Internet, and international distributors. The Company
is a major supplier of collectible products and fashion jewelry
to the leading electronic retailer in the U.S.A.
LERNOUT & HAUSPIE: Settles Disputes & Litigation With Visteon
-------------------------------------------------------------
Lernout & Hauspie Speech Products N.V. and Dictaphone Corp.
asked Jude Wizmur to authorize them to compromise and settle:
(1) A civil proceeding styled "Visteon Corporation v.
Lernout & Hauspie Speech Recognition Products N.V., L&H
Automotive, Inc., and John Duerden" before the Superior Court of
Massachusetts;
(2) A motion by Visteon Corporation to compel the Debtors
either to perform under a license agreement or turnover
intellectual property; and
(3) A Declaration of Claims filed by Visteon Corporation in
the Concordat reorganization proceeding in Belgium; and approve
(i) the sale of certain intellectual property assets free and
clear of liens, claims and encumbrances, (ii) approve the
assumption and assignment of certain executory contracts and
unexpired leases, (iii) fix cure amounts under those contracts
and leases, and (iv) exempt the sale from any and all transfer
taxes.
The Debtors told Judge Wizmur that this settlement would
resolve, as between the parties, claims in excess of $100
million in pending litigation and filed claims. The critical
component of the structure of the proposed compromise is the
sale of certain intellectual property and other assets and the
assumption and assignment of certain related contracts to
Visteon for a payment of $13,100,000.
In the Massachusetts litigation, Visteon sought injunctive and
monetary relief, including treble damages for RICO violations,
for alleged breach of an operating agreement dated in May 2000.
In its Motion, Visteon sought performance of an intellectual
property license that was executed in December 1997 by
predecessors in interest to Visteon and L&H Holdings. In the
Concordat, Visteon has submitted a Declaration of Claims in
which it formally asserted claims in the amount of $100 million
with respect to the Massachusetts litigation and its Motion.
The Massachusetts litigation arose out of disputes regarding a
joint venture operating agreement between certain members of the
Debtors and Visteon. That agreement contemplated the creation of
a joint venture for the development, marketing, licensing and
sale of voice recognition technology in the automotive market.
Under that joint venture, Visteon would have obtained certain
exclusive rights to market and sell the joint venture's
technology to the automotive market and would have received
royalties on other uses of that technology. Visteon asserted
in the Massachusetts litigation that the breach by L&H resulted
in damages in excess of $100 million. L&H denies all liability.
Before the acquisition of Dragon Systems, Inc., by L&H, Dragon
had entered into a license with Visteon's predecessor, by which
Dragon agreed to provide certain software and related services
and equipment that are crucial to Visteon's automotive voice
recognition business. Visteon asserted that the Debtors have
materially failed to perform under the license, including (a)
the existence of significant software bugs in certain of the
software components delivered by the Debtors under the license;
and (b) the failure of the Debtors to provide Visteon with
certain deliverables called for by the license. The Debtors
claimed that its alleged defaults under the license (a) resulted
from oral instructions from officers of Visteon to L&H Holdings
requesting that Holdings focus on certain requests of Visteon
notwithstanding the fact that the satisfaction of those requests
were inconsistent with the requirements of the license and/or
made it impossible for Holdings' personnel to perform under the
license by diverting their attention to new requests made by
Visteon; (b) resulted from Visteon's alleged failures to perform
under the license and other actions on its part that made it
impossible for Holdings to tender the required performance; (c)
have already been cured; or (d) are immaterial.
Terms of the Proposed Settlement
The settlement negotiations among Visteon, The Debtors, and the
L&H Creditors' Committee have resulted in an agreement by which
the Massachusetts litigation, the Motion, and the Belgium claim
will be resolved by mutual releases between the Debtors and
Visteon, and by the sale of certain intellectual property assets
and related contracts to Visteon. This sale is a key component
to the settlement. The assets and contracts to be sold are a
substantial part of the subject of the Massachusetts litigation,
the Motion, and the Belgium claim. In exchange for these assets,
Visteon will provide to the Debtors, in addition to the
releases, cash consideration in the amount of $13,100,000.
Payment from Visteon: As consideration for the settlement,
Visteon will pay to the Debtors cash in the amount of
$13,100,000, less any amounts paid by Visteon to third parties
as a cure payment made under any assumed contracts or any
commercially reasonable payments required to be made by Visteon
under certain third-party licenses. Visteon will assume all
liabilities arising from the assumed contracts from events
and/or circumstances occurring after the settlement. Visteon
will also release any and all claims and liabilities whatsoever,
including, without limitation, any claims and liabilities
relating to the Massachusetts litigation, the Motion, the
Belgium claim, the operating agreement and the license;
provided, however, there is no release from any obligations and
liabilities that may arise under the terms of the asset
purchase.
Payment from the Debtors: As consideration for the
settlement, the Debtors will provide Visteon with assets such as
source code (i.e., the human-readable form of computer
programming code) for CREC speech recognition engine created
using C programming language, including portion of CREC source
code referred to as "Speaker Adaptation Source Code"; all
makefiles necessary for compiling CREC Source Code; and
parameter tuning scripts created specifically for the CREC
speech recognition engine; Linear Discrimination Analysis
calculation tool created specifically to train Imelda
transformations in connection with CREC speech recognition
engine; speech data display/visualizing tool used in connection
with CREC speech recognition engine, referred to by the Debtors
as "Showspec"; work-in-progress source code, existing data
files, and written reports created directly in connection with
the so-called Voice Destination Entry module/program, which
module is intended to allow for end user entry of destination
information by voice, through both natural spelling and full-
word pronunciation, into NavMate and derivation products,
Buyer's proprietary geographical navigation system, and other
related intellectual property.
The Debtors will also assume and assign a contract between
Dragon Systems, Inc. and Banshee Software, and the licenses
necessary to use server environments and other intellectual
property connected with that contract, to the extent the
contract relates to the assets being transferred. The Debtors
will also release Visteon from any and all claims and
liabilities whatsoever, including any claims and liabilities
relating to the Massachusetts litigation, the Motion, the
Belgium claim, the operating agreement and the license; provided
that there is no release from any obligations and liabilities
that may arise under the terms of the asset purchase agreement.
Allocation of Purchase Price and Indemnification among the
Debtors: The Debtors told Judge Wizmur that they have not had a
sufficient opportunity to determine the proper allocation of the
purchase price among the various debtors and non-debtors that
are "sellers" under this asset purchase agreement. The Debtors
propose to provide this information at a later date.
In consideration of the benefits to the estate, and the prior
consultation with the Creditors' Committee, Judge Wizmur granted
this Motion on the terms stated in it, on an expedited basis.
(L&H/Dictaphone Bankruptcy News, Issue No. 6; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
LONDON FOG: Exits Chapter 11 Bankruptcy
---------------------------------------
London Fog Industries, an international leader in rainwear and
outerwear, announced its emergence from Chapter 11.
On April 5, 2001, the United States Bankruptcy Court in Delaware
approved London Fog Industries' reorganization plan. Following
the expiration of the 10-day appeal period, London Fog
Industries exited Chapter 11 Tuesday.
London Fog Industries' President and Chief Executive Officer
William Dragon, Jr. declared that the company is both stronger
and healthier with respect to its income statement and balance
sheet, citing strong 2001 fiscal year earnings (year end Feb
2001) and the elimination of long term operating debt.
London Fog Industries voluntarily filed for reorganization under
Chapter 11 in September 1999 to liquidate the majority of its
retail outlets, eliminate excess overhead and reduce its long
term operating debt. As a result, the company has closed nearly
all of its retail operations, keeping only 35 of its most
profitable factory outlet stores strictly to aid in liquidating
inventory.
Dragon, who led the Pacific Trail subsidiary into record growth
during his tenure as President of Pacific Trail, was tapped as
CEO by the London Fog Industries board of directors in March of
1999 to lead the company's reorganization. One of Dragon's first
initiatives was to file for Chapter 11 protection and launch an
18-month plan to return London Fog Industries to a leading
position as a designer, marketer and distributor of high quality
outerwear and rainwear for men, women and children.
Established in 1922, London Fog Industries is one of the
country's leading designers, marketers, and distributors of
quality rainwear and outerwear which includes the London Fog(R),
Pacific Trail(R) and Black Dot(R) brands as well as licensed
brands, Dockers(R) and Levi's(R). London Fog Industries is based
in Seattle, with offices in New York and a distribution center
in Eldersburg, Maryland. The company has over 900 employees and
currently operates 35 factory outlet stores throughout the
country.
London Fog Industries is located at 1700 Westlake Ave. N., Suite
200, Seattle, WA 98109. Telephone: 206/270-5300.
LTV CORP: Moves To Revise COO Turner's Employment Agreement
-----------------------------------------------------------
The LTV Corporation asked Judge Bodoh to approve revised
compensation and retention arrangements with John D. Turner,
under which Mr. Turner serves as the Chief Operating Officer and
the Executive Vice President of LTV, and the President of Debtor
Copperweld Corporation.
The Turner Agreement
Prior to the Petition Date Mr. Turner served as the Executive
Vice President of LTV and the President of Copperweld. Under his
prepetition employment agreement with LTV and Copperweld, Mr.
Turner received, among other things, an annual base salary of
$500,000, plus certain deferred compensation benefits and the
ability to participate in any executive performance incentive
programs offered by LTV or Copperweld. The Debtors desired to
expand Mr. Turner's duties and responsibilities with LTV to
include those of the COO of LTV. Because of Mr. Turner's
increased responsibilities as a result of this new position with
LTV, and Mr. Turner's critical ongoing role in the Debtors'
restructuring efforts, the Debtors believe that it is necessary
to structure a revised compensation and retention arrangement
for Mr. Turner. The revised agreement, for the most part, is
very similar to the terms of Mr. Turner's prepetition
compensation arrangement.
The terms of the Turner agreement are:
Term: From date of approval by the Court to December 31,
2002
Duties: COO and EVP of LTV and President of LTV Copperweld,
with responsibility to assist the CEO of LTV in restructuring,
including strategic planning, with reporting responsibility for
LTV Steel, LTV Copperweld, VP Buildings, and information
technology functions
Base pay: $600,000
Incentive compensation: Annual opportunity target equal to
not less than 60% of base salary, heavily weighted toward
integrated steel
Retention payments: Present value of non-qualified pension
payable on earliest of January 1, 2003, confirmation of plan of
reorganization, or sale of stock or assets of LTV Copperweld
(present value estimated at $4 million at 12/31/00, and
projected at $4.7 million on 12/31/02. In addition, retention
payments of $1.5 million, adjusted for earnings, gains and
losses, vests and payable 1/4 on each of June 30,k 2001, January
1, 2002, June 30, 2002, and January 1, 2003 (third and fourth
payments accelerate on confirmation of plan of reorganization or
sale of substantially all of the stock or assets of LTV Steel
and LTV Copperweld combined).
Acceleration of payments: Acceleration upon sale of
substantially all of the stock or assets of LTV and LTV
Copperweld combined, disability, death or involuntary
termination. Forfeiture on voluntary termination.
Security: $5.4 million now in 3 rabbi trusts to be placed
in new irrevocable trust with Mellon Bank as trustee as security
for non- qualified pension and retention payment. Trust will
make payments to Turner on behalf of LTV. Rights in trust
termination of Mr. Turner's voluntary termination, and forfeited
amounts will be returned by the trustee to Copperweld and LTV.
Severance on Involuntary Termination: 2 years' base pay.
Involuntary terminat8ion includes adverse change in position or
offices, adverse change in authority, duties or responsibilities
or reduction in base salary or incentive opportunity.
Non-compete: Two years following any termination; non-
solicitation for same period.
Existing agreements: Cancelled, all claims waived except
split dollar arrangement for which Copperweld will continue to
make payments. (LTV Bankruptcy News, Issue No. 7; Bankruptcy
Creditors' Service, Inc., 609/392-00900)
MEDCOM USA: Shares Subject To Delisting From Nasdaq
---------------------------------------------------
MedCom USA (Nasdaq: EMED), a leader in the healthcare
information technology field, received a Nasdaq Staff
Determination on April 12, 2001 indicating that the Company
fails to comply with the minimum bid price requirement for
continued listing on the Nasdaq SmallCap Market (Marketplace
Rule 4310(c)(4)) and that its securities are therefore subject
to delisting. The notice was triggered solely by the fact that
the Company's common stock has traded below one dollar for
thirty consecutive trading days. MedCom believes it meets all
other requirements to maintain its listing on the SmallCap
Market System.
The Company has requested a hearing before a Nasdaq Listing
Qualifications Panel to review the Staff Determination. While
there can be no assurance that the Panel will rule in the
Company's favor, MedCom's management believes that there are
persuasive arguments for continued listing. The Company also
announced that it has received sufficient shareholder votes to
effect a reverse stock split in order to comply with the minimum
bid price requirement. The Company's common stock will continue
to be traded on the Nasdaq SmallCap Market System pending a
final decision by the Nasdaq Qualifications panel.
About MedCom USA
MedCom USA, Inc. provides innovative technology based solutions
for the healthcare industry that help the users to efficiently
collect, utilize, analyze and disseminate data from payers,
providers and patients. The Company's healthcare business units
include: Internet Healthcare Solutions (IHS) Center which
provides ASP (Application Service Provider) through the Health
Internet Gateway (HIG) as well as SSP (Storage Service Provider)
solutions that meet the information outsourcing needs of
healthcare provider and payor organizations, and MedCard, an
easy to use, cost effective solution for physicians, clinics and
hospitals that offers on-line verification of insurance
eligibility, electronic referrals, 100% paperless claims
processing, patient easy pay and credit and debit card
processing. MedCom's corporate web address: www.medcom.net .
MONARCH DENTAL: Reaches Preliminary Agreement With Lenders
----------------------------------------------------------
Monarch Dental Corporation (Nasdaq: MDDS) entered into a
preliminary agreement with its lenders specifying the terms upon
which they have agreed to extend the term of its existing credit
facility. The agreement extends the maturity of $80,150,000 to
July 1, 2002. This agreement is subject to final bank approval
and the negotiation and execution of definitive documentation
encompassing the terms set forth in this preliminary, non-
binding agreement. Upon the execution of the definitive
documentation, Monarch Dental will cease to be in default under
its loan agreement. Monarch Dental also announced that it will
delay the filing of its annual report on Form 10-K pending the
completion of the definitive documentation with its lenders.
Monarch Dental currently expects that it will complete the
definitive documentation with its lenders and file its annual
report on Form 10-K by April 27. Monarch Dental cannot provide
any assurances that it will be successful in completing the
definitive documentation with its lenders by April 27 or at all
or that it will be successful in eliminating the existing
default under its loan agreement.
Monarch Dental Corporation currently manages 189 dental offices
serving 20 markets in 14 states.
OSAGE SYSTEMS: Pomeroy Acquires Selected Assets
-----------------------------------------------
Pomeroy Computer Resources, Inc. (Nasdaq:PMRY) and its wholly-
owned subsidiary Pomeroy Select Integration Solutions, Inc.
(PSIS) announced the acquisition of certain assets of Osage
Systems Group, Inc., a Phoenix, Arizona based network
integrator.
Osage is a Sun National Service Provider with locations in
Phoenix, Minneapolis, Miami, Austin, Houston, San Antonio,
Chicago and Washington D.C. For the three months ended March 31,
2001, Osage recorded revenues of approximately $7 million. The
transaction was effected through the provisions of U.S.
Bankruptcy Code and was approved by the Court on April 11, 2001.
As a Sun National Service Provider, Osage's primary focus is on
network design, consulting, systems engineering and maintenance
in connection with Sun Microsystems' products. Pomeroy hired
approximately half of the Osage employees of which approximately
35% are systems engineers.
While acquiring essentially all assets associated with the
locations listed above, Pomeroy plans to discontinue operations
in Austin and Chicago. Also, Pomeroy expects to merge the
Minneapolis and Miami operations into existing Pomeroy
facilities in these cities.
President Stephen E. Pomeroy commented, "We are pleased to
expand our Sun capabilities and grow our service offerings and
revenue base. Additionally, this broadens our existing customer
base in Minneapolis and Miami and gives us an immediate presence
in Houston and San Antonio." Pomeroy is currently a Sun Regional
Service Provider and expects to achieve Sun National Service
Provider status in the near future. Mr. Pomeroy added, "We look
forward to providing Pomeroy's and Osage's customers with the
benefits enjoyed by customers of a Sun National Service
Provider."
The Pomeroy Companies provide complete IT integration solutions
including comprehensive services, procurement and financial
offerings. While the Companies have clientele across a broad
spectrum of industries, the major markets served are state and
local government and education, insurance, finance and
healthcare organizations nationwide. The Pomeroy Companies
employ approximately 2,000 individuals, more than half of whom
are technical personnel, and maintain 31 regional facilities in
Alabama, Arkansas, Florida, Georgia, Indiana, Iowa, Kentucky,
Michigan, Minnesota, North Carolina, Ohio, Oklahoma,
Pennsylvania, South Carolina, Tennessee, and West Virginia. For
the year ended January 5, 2001, Pomeroy reported revenues of
$925 million.
OWENS CORNING: Creditors Ask Court To Permit Securities Trading
---------------------------------------------------------------
The Official Committee of Unsecured Creditors of Owens Corning,
and certain financial institutions that are creditors of the
Debtors asked Judge Fitzgerald to permit members of the
Committee, including any future members, and their affiliates,
to trade in the stock of the Debtors upon the establishment and
implementation of ethical walls, and permitting the applicant
financial institutions and their affiliates and other
institutions which are not now, but might become, creditors
of the Debtors, and who are not now members of the Committee to
trade in the Debtors' securities upon the establishment and
implementation of ethical walls.
The applicant institutions now members of the Committee are:
Barclays Bank PLC
Credit Suisse First Boston
Enron Energy Services Operations Inc.
Fleet national Bank
Jackson National Life Insurance Co.
John Hancock Life Insurance Co.
Metropolitan Life Insurance Co.
Minnesota Mining & Manufacturing Co.
The Chase Manhattan Bank
The entities entering into a credit agreement with Owens Corning
are:
Credit Suisse First Boston
The Chase Manhattan Bank NA
Arab Bank PLC
The Bank of Tokyo-Mitsubishi, Ltd.
Bank One NA
Banque Nationale (BNP Paribas)
Barclays Bank PLC
Bank of America
Bank of Nova Scotia
California Bank & Trust
Chuo Mitsui Trust & Banking Co.
CIBC Inc.
Citibank NA
Credit Agricole Indosuez
Credit Industriel et Commercial
Credit Lyonnais
The Dai-Ichi Kangyo Bank Ltd.
Dexia Bank
Dresdner Bank AG
Fleet national Bank
Firstar Bank NA
Fortis (USA) Finance LLC
The Fuji Bank Limited
GE Capital Commercial Finance
The Industrial Bank of Japan Limited
KBC Bank NV
Keybank national Association
Mellon Bank NA
The Mitsubishi Trust & Banking Corporation
Morgan Guaranty Trust Company of New York
Natexis Banque
The Northern Trust Company
PNC Bank NA
Royal Bank of Canada
The Sakura Bank Limited
San Paolo Imi SPA
The Sanwa Bank Limited
Societe Generale
Standard Chartered Bank
The Sumitomo Bank Ltd.
STB Delaware Funding Trust I
Suntrust Bank
Toronto Dominion Bank
Wachovia Bank NA
Wells Fargo NA
Westdeutsche Landesbank Birozentrale
The Committee asked for entry of what it describes as "by
now . . . a conventional order in public-company chapter 11
cases," namely an order determining that the members of the
Committee acting in any capacity will neither violate their
duties as members, nor subject their claims to possible
disallowance, subordination or other adverse treatment by
trading in the stock, notes, bonds or debentures of any one or
more members of the Debtors, or buying or selling participations
in any of the debt obligations or any other claims against or
interests in any one or more members of the Debtors during the
pendency of these cases, as long as any member that engages in
any such transactions establishes and effectively implements
ethical wall policies and procedures to prevent the misuse of
any material nonpublic information that may be obtained through
its activities as a member. The applicant financial institutions
also ask that the order contain a determination that any
financial institution will not subject its claims to possible
disallowance, subordination or other adverse treatment by
trading in the securities of the Debtors during the pendency of
these cases, as long as the financial institution establishes
and effectively implements ethical wall policies and procedures
to prevent the misuse of any material nonpublic information that
may be obtained through its activities in relation to the
Committee or from material nonpublic information supplied by the
Debtors.
The Committee advised Judge Fitzgerald that Barclays, Chase,
Credit Suisse, John Hancock Life, Metropolitan Life, Fleet Bank,
and Jackson National Life and many if not all, of the financial
institutions listed in the Motion are directly themselves, or
are affiliated with, investment advisors or managers that
provide investment-advisory services to institutional, pension,
mutual fund and high net-worth clients and affiliated funds and
accounts. The financial institutions, the institutional members,
and possibly, the other members, may buy and sell securities and
other financial assets for their own portfolios. As part of
these regular business activities the members and the financial
institutions have duties to maximize returns for their clients
or shareholders through the buying and selling of securities and
other financial assets. By this motion, the members and the
financial institutions acknowledge that they have certain legal
duties regarding material nonpublic information about the
Debtors. In addition, they acknowledge that trading in
securities by members or the financial institutions may
implicate various federal laws limiting or attaching
consequences to trading in securities on the basis of material
nonpublic information. If the members are barred from trading
securities during the pendency of these cases because of their
service on the Committee, they risk the loss of potentially
beneficial investment opportunities for their clients and
themselves. If the financial institutions are barred from
trading securities during the pendency of these cases because of
their involvement with the committee and the reorganization
process they will face a similar risk of loss. Alternatively, if
members resign from the Committee, their clients' interests may
be compromised by virtue of the members taking a less active
role in the reorganization process. In addition, if financial
institutions are forced to refrain from involving themselves
with the Committee and its members, their clients' interests may
be similarly compromised.
Many institutions have faced the same dilemma with respect to
committee memberships in other chapter 11 cases in recent years.
To resolve this issue, bankruptcy courts, with increasing
regularity, permit committee members of official committees to
trade in the securities of a debtor while incumbent. Such
authorization, however, typically is conditioned on
establishment of ethical walls.
Citing Judge Aug's decision in the case of Federated Department
Stores, Inc., the Committee urged Judge Fitzgerald to adopt the
same procedures for establishment of ethical walls, including:
(a) written acknowledgment by personnel performing
committee work that they could receive nonpublic information and
are aware of the ethical wall procedures in effect;
(b) a prohibition on the sharing of nonpublic committee
information with employees that are not responsible for
performing any committee-related functions (except in-house
legal counsel);
(c) creation of separate file space for committee work that
is inaccessible to employees that are not responsible for
performing any committee-related functions;
(d) restrictions on committee personnel's access to trading
information; and
(e) establishment of a compliance review process.
The Committee believes that any current or future members that
engage in the business of trading securities should not be
precluded from trading in the securities of any member of the
Debtors during their tenure on the Committee. The members have
resources and experience, including knowledge of the Debtors'
business, industry and capital structure, that render them
particularly valuable for official creditors' committee service.
In addition, because the members are among the Debtors' largest
creditors, they have a great incentive to pursue the Committee's
work diligently toward the goal of promptly confirming a Chapter
11 plan. Denial of the requested relief would discourage large
creditors with expertise and experience in reorganizations from
joining creditors' committees in other cases, despite the
presumption in the Bankruptcy Code that the committee will
"ordinarily" consist of the largest creditors. Creditors that
perform investment advisory services or who buy and sell
securities and other financial assets for their own account
simply should not be forced into the choice of serving on the
Committee and risking the loss of beneficial investment
opportunities for their clients, or foregoing service and
possibly compromising those same responsibilities by taking
a less active role in the reorganization.
Accordingly, the Committee sought entry of an order that will
permit a mechanism for the authorized trading of securities by
the members and applicant financial institutions. (Owens Corning
Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service,
Inc., 609/392-0900)
PACIFIC GAS: Obtains Nod To Refund Residential Customer Deposits
----------------------------------------------------------------
Upon receipt of an application for residential utility service,
Katheryn Fong, Vice President of Customer Revenue Transactions,
explained, Pacific Gas and Electric Company requests a third-
party credit service to check the applicant's credit history. If
the investigation reveals that the customer represents a credit
risk, PG&E requires the customer to establish credit through one
of a variety of means, including the payment of a security
deposit. In addition, PG&E requires customers who fail to pay
bills within five days of receiving a notice of discontinuance
of service for nonpayment to reestablish credit by submitting a
security deposit in accordance with Rule 6 of PG&E's Tariff
Schedule. Residential customers required to establish credit
through the payment of a deposit pay twice the average monthly
bill of the customer's residence, as estimated by PG&E. The
average deposit submitted by residential customers is
$157.
Pursuant to Rule 7 of PG&E's Tarrif Schedule, the Company
refunds the deposit if: (1) the customer has paid all bills
without delinquency for the past 12 months; or (2) the customer
cancels service without reestablishing PG&E service at another
location. Delinquency is defined as more than two 48-hour
notices of a past due payment within the past 12 months. Once
the Company determines that the customer is entitled to a
refund, the deposit is first used to satisfy the customer's
outstanding bill or credited to the customer's open account. If
the customer has closed his or her account and the deposit
exceeds the amount of the outstanding bill, the Company refunds
the remainder in the form of a direct payment by check. The
Debtor is required to pay interest on all deposits, unless
service is discontinued for non-payment of bills.
PG&E collected approximately $45.7 million in customer deposits
in 2000, $24.8 million of which were paid by residential
customers. The Company refunded $31.2 million to approximately
222,180 residential and commercial customers in 2000, either in
the form of a credit to the customer's account or direct payment
by check. As of the Petition Date, the Debtor held approximately
$28.1 million in residential customer deposits. Approximately
$5.3 million of this amount was due to be refunded to
approximately 27,706 residential customers, either in the form
of a credit or a direct payment by check. These refunds range in
amount from $10 to $5,400.
Some of the customers to whom refunds are owed, Ms. Fong
indicated, qualify as low-income individuals. Approximately 11%
of the residential customers are owed refunds because they have
moved out of PG&E's service area or are changing utility service
providers. It is likely that these former customers will be
required to post security deposits with their new utility
service providers, as well. In addition to these pre-petition
obligations, some of the customer deposits received before the
Petition Date will become refundable to customers prior to
confirmation of the Debtor's reorganization plan. Past
experience suggests that under the Debtor's deposit refund
policy as incorporated into its existing tariff, the Debtor will
be required to refund approximately $1.7 million in residential
customer deposits per month. The average refund amount is
expected to be approximately $148 per residential customer.
By this Motion, the Debtor sought and obtained authority from
Judge Mondali to refund Residential Customer Deposits in the
ordinary course of business. The relief requested is necessary
and appropriate, permissible in light of the Court's broad
equitable powers under 11 U.S.C. Sec. 105, and warranted in
light of applicable case law teaching the "doctrine of
necessity." Residential customers were forced to post deposits
in exchange for essential goods and services. They did so in
reliance on assurances that the deposits would be preserved and
refunded to them should they otherwise establish credit or leave
the Debtor's service area. Moreover, most of the deposits are
entitled to priority pursuant to 11 U.S.C. Sec. 507(a)(6).
Payment of the deposit refunds will leave the Debtor's general
unsecured creditors largely unaffected. The benefits derived
from enhancing the Debtor's ability to preserve customer
confidence are clear to the Court. (Pacific Gas Bankruptcy News,
Issue No. 2; Bankruptcy Creditors' Service, Inc., 609/392-0900)
PENN TREATY: Shareholder Files Lawsuit Alleging Securities Fraud
----------------------------------------------------------------
A shareholder sued Penn Treaty American Corporation (NYSE: PTA),
accusing the company and two top officers of illegally
misleading investors, the law firm of Berman DeValerio & Pease
LLP said.
The class action, captioned Sullivan v. Penn Treaty American
Corp., seeks damages under federal securities laws for anyone
who bought Penn Treaty stock between November 7, 2000 and March
29, 2001. Berman DeValerio & Pease filed the lawsuit in U.S.
District Court for the Eastern District of Pennsylvania.
Berman DeValerio & Pease has represented defrauded investors in
class actions for nearly two decades. To review the complaint
and learn more about becoming a lead plaintiff, visit our
Website at www.bermanesq.com.
The complaint charges Penn Treaty, which underwrites and sells
insurance products through its subsidiaries, with defrauding
investors by issuing false and misleading statements about the
company's financial health.
According to the lawsuit, the defendants reported during the
class period that Penn Treaty was experiencing a tremendous
growth in sales. Furthermore, they repeatedly said that the
growth was not jeopardizing the company's health, and that it
had adequate reserve for the increased level of business.
In fact, the company continued selling policies during its
fourth quarter of 2000 despite an ability to maintain adequate
reserve levels, and despite the fact that the company's growth
put its solvency at risk. In effect, Penn Treaty sold itself out
of existence. Premiums grew by 22% during the fourth quarter of
2000. But instead of the $40 million in reserves required by
regulators, the company had just $17.2 million in capital by the
end of the year.
On March 30, 2001, Penn Treaty issued a news release saying
that, among other things, its reserves had sunk so far below the
statutory minimum that it faced possible liquidation and that
its independent accountants were questioning the company's
ability to remain a viable entity. After the announcement, Penn
Treaty stock fell from a closing price of $17.46 on March 29,
2001 to $10.17 the next day - a 42% decline. Further revelations
about the company's inadequate reserves and financial problems
drove down the stock price to nearly $3 a share by April 2,
2001.
PLANET HOLLYWOOD: Losses Cause PwC to Raise Going Concern Doubts
----------------------------------------------------------------
Planet Hollywood International Inc.'s independent auditor,
PricewaterhouseCoopers LLP, said it has substantial doubt about
the company's ability to continue, according to Dow Jones.
Although Planet Hollywood emerged from bankruptcy last year,
PricewaterhouseCoopers said the restaurant chain continues to
have "significant" operating losses, according to Planet
Hollywood's 2000 annual report filed Monday with the Securities
and Exchange Commission.
Planet Hollywood said its operating losses were the result of
declines in comparative restaurant revenue, overall
disappointing operating results, expenses due to the development
of its now-discontinued Sound Republic concept, and losses from
major concepts such as the Official All Star Cafe and Cool
Planet. To make up for the loss, Planet Hollywood said it has
entered into a multifaceted "concept revitalization" which
includes a new menu, new merchandise, new retailing strategies
and operational improvement programs designed to increase guest
counts, sales and profits. (ABI World, April 17, 2001)
PSINET INC.: Publishes Fourth Quarter Financial Results
-------------------------------------------------------
PSINet Inc. (NASDAQ: PSIX) announced results for the fourth
quarter of 2000. While the results of the fourth quarter, as
described in further detail below, may show some indicators of
growth, there continue to be rapidly changing circumstances that
are negatively impacting the Company.
As previously announced, the Company's cash, cash equivalents,
short-term investments and marketable securities, including the
proceeds from the sale of PSINet Transactions Solutions on April
3, 2001, are not expected to be sufficient to meet the Company's
anticipated cash needs. The Company and its advisors continue to
analyze and pursue certain financial and strategic alternatives,
including the possible sale of all or a portion of the Company,
while also exploring alternatives to restructure the Company's
obligations to its bondholders and other creditors. These
efforts are likely to involve reorganization under the federal
bankruptcy code. Even if one or more of these alternatives can
be successfully implemented, there can be no assurance that the
Company will not run out of cash.
Total revenues for the fourth quarter of 2000 were $291.1
million compared to $305.4 million in the third quarter of 2000
and $164.8 million for the fourth quarter of 1999. EBITDA
(earnings before interest, taxes, depreciation and amortization
and unusual charges) was a negative $92.3 million compared to a
negative $25.6 million in the third quarter of 2000 and a
negative $25.1 million for the fourth quarter of 1999. Net loss
from continuing operations was $2.7 billion for the fourth
quarter of 2000, compared to $682.5 million in the third quarter
of 2000 and $134.8 million a year ago.
Net loss available to common shareholders was $3.2 billion for
the fourth quarter of 2000 compared to $1.4 billion in the third
quarter of 2000 and $223.5 million in the fourth quarter of
1999. Included in the net loss for the fourth quarter were
$465.1 million for the results and expected loss on disposal of
discontinued businesses, $45.2 million of net restructuring
charges, $2.1 billion for the impairment of certain long-lived
assets and $97.0 million in other asset write-offs. Including
these charges, PSINet reported a basic and diluted loss per
share of $16.83 for the fourth quarter of 2000 compared to $7.34
in the third quarter of 2000 and $1.63 in the fourth quarter of
last year.
For the full year, PSINet had revenues of $995.5 million in 2000
compared to $534.1 million last year. EBITDA was a negative
$173.1 million for 2000 compared to a negative $32.5 million a
year ago. Net loss from continuing operations was $3.8 billion
compared to last year's $334.0 million. Net loss available to
common shareholders for 2000 was $5.0 billion, and included $1.2
billion for the results and expected loss on disposal of
discontinued businesses, $78.0 million of net restructuring
charges, $2.6 billion for the impairment of certain long-lived
assets and $156.0 million in other asset write-offs. PSINet's
basic and diluted loss per share was $28.92 for 2000 compared to
$3.49 for 1999.
As of April 10, 2001, the Company had cash, cash equivalents,
short-term investments and marketable securities held in
financial institutions of approximately $520 million, of which
approximately $27 million supports obligations under letters of
credit and similar obligations. As of December 31, 2000, the
Company has outstanding $2.9 billion principal amount of senior
notes, $227.0 million principal amount at maturity of
convertible subordinated notes, $503.5 million of capital lease
obligations and $66.8 million of other notes payable.
PSINet has filed its Form 10-K for the year ended December 31,
2000, with a going concern qualification in the audit opinion
from PricewaterhouseCoopers LLP. There exists substantial doubt
about the Company's ability to continue as a going concern and,
therefore, its ability to realize its assets and discharge its
liabilities in the normal course of business. The Company's
financial statements do not include any adjustments relating to
the recoverability and classification of recorded amounts or to
amounts and classification of liability that may be necessary if
the entity is unable to continue as a going concern.
As of April 10, 2001, the Company had received notices of
default from equipment lessors with respect to $68.1 million in
equipment leases. The Company is seeking to resolve issues
outstanding with these lessors who have currently agreed to
forbear from taking any action. There can be no assurance as to
how long any lessor will continue to forbear. With respect to
certain leases, the forbearance period could potentially expire
as early as April 27, 2001 if the Company does not meet certain
requirements. Additionally, on April 3, 2001, one of the lessors
notified the Company that it had accelerated the Company's
obligations under its leases. Following negotiations with the
Company, this lessor withdrew its notice of acceleration
provided that the Company satisfies certain payment obligations
by April 20, 2001. An event of default under an equipment lease
facility could result in related events of defaults under each
of the Company's indentures governing its senior notes, which
could cause all of those notes to become due and payable. As a
result of such withdrawal, the Company believes that the event
of default under the indentures relating to its senior notes
arising from such acceleration event is no longer a continuing
event of default. There can be no assurance that the Company
will be able to cure any events of default or that the lessors
will not seek other remedies that are available to them. Any
such events could have a material adverse effect upon the
Company and the factors discussed above threaten the Company's
ability to continue as a going concern.
On April 3, 2001, the Nasdaq Stock Market announced that trading
was halted in PSINet's common stock, at last price of 3/16, and
in PSINet's Series C preferred stock, at last price of 1-3/16.
The Nasdaq has informed PSINet that trading will remain halted
until PSINet has fully satisfied Nasdaq's request for additional
information. The Company had previously announced that it is
likely that its common stock and preferred stock will have no
value, and the indebtedness of the Company will be worth
significantly less than face value.
Headquartered in Ashburn, VA, PSINet is a leading provider of
Internet and IT solutions offering flex hosting solutions,
global eCommerce infrastructure, end-to-end IT solutions and a
full suite of retail and wholesale Internet services through
wholly-owned PSINet subsidiaries. Services are provided on
PSINet-owned and operated fiber, web hosting and switching
facilities, currently providing direct access in more than 900
metropolitan areas in 27 countries on five continents.
RELIANT BUILDING: Alenco Holding Acquires Assets
------------------------------------------------
Alenco Holding Corporation, a Delaware corporation, formed by an
investor group led by Equus II Incorporated (NYSE: EQS) of
Houston, Texas, has purchased the assets of Reliant Building
Products, Inc. (RBPI) of Dallas, Texas on Friday, April 13, 2001
pursuant to a Plan of Reorganization confirmed in the Bankruptcy
Court for the Northern District of Texas.
The assets purchased include the window manufacturing facilities
in Bryan, Texas, Gallatin, Tennessee, and Peachtree City,
Georgia; the aluminum extrusion facility in Bryan, Texas; the
vinyl extrusion facility in Peachtree City, Georgia; and the
distribution facilities in Dallas, Texas, Phoenix, Arizona, Las
Vegas, Nevada, and Ontario, California. The Equus led investor
group and Foothill Capital Corporation of Santa Monica,
California financed the asset purchase. Foothill is also
providing ALENCO with working capital through a revolving line
of credit.
RBPI, formed through acquisitions of Redman Building Products,
Inc. and Care Free Window Products, Inc. in January of 1998,
filed for protection under Chapter 11 of the US Bankruptcy laws
on July 11, 2000. While in bankruptcy in 2000, RBPI sold its
manufacturing facilities in Bothel, Washington, Charlotte,
Michigan, and Asheville, North Carolina and closed manufacturing
facilities in Hackensack, New Jersey and Fresno, California.
RBPI, through its predecessors, has manufactured residential
windows since the 1950s, and was the largest aluminum and vinyl
window manufacturer in the United States for a short time after
the merger of Redman and CareFree.
The manufacturing facilities purchased by ALENCO were the core
plants of Redman as the company existed before the Care Free
merger. These plants provided years of sales and income growth
and were the leading window manufacturers in their markets.
Brian Redpath, CEO and President of Alenco said "It is the goal
of ALENCO and its employees to provide value to its customers, a
significant return to its shareholders, and to regain the
leadership in its markets."
SACO SMARTVISION: Canadian Court Grants Extension To File Plan
--------------------------------------------------------------
Saco SmartVision Inc. announced that its motion for the
extension of the initial order issued on March 15, 2001 pursuant
to the Companies' Creditors Arrangement Act was granted by the
Bankruptcy and Insolvency division of the Superior Court in the
district of Montreal. The interim order extends the initial
order until June 15, 2001. The initial order, as confirmed by
this interim order, provides fora stay of all proceedings
against Saco and authorizes Saco to file a plan of compromise
and arrangement with its creditors in accordance with the Act.
Ernst & Young Inc. continues to act as Monitor under the
relevant provisions of the Act in order to assist Saco in
discussions with its creditors and in the preparation and filing
of the plan of compromise and arrangement. Saco is currently in
the process of preparing a plan of compromise and arrangement to
be presented to its creditors and shareholders.
Saco also announced that it has applied to the provincial
securities commissions for an extension in the delay for the
filing of its annual financial statements and first quarter
financial statements. Saco expects a decision from the
provincial securities commissions shortly.
Saco's shares are listed on the Toronto Stock Exchange.
SAVVIS: May File For Bankruptcy If Unable To Raise More Funds
-------------------------------------------------------------
SAVVIS Communications Corporation (NASDAQ: SVVS) announced
fourth quarter revenues increased 825% to $58.8 million from
$6.4 million in the fourth quarter of 1999.
SAVVIS' net loss for the quarter increased to $(51.8) million or
$(0.57) per share versus a $(16.0) million loss or $(0.22) per
share for the same quarter in 1999.
Managed data network revenues were $49.2 million in the fourth
quarter, reflecting the initiation of service under the Bridge
Network Services Agreement on February 18, 2000 following the
completion of the Company's initial public offering of common
stock. Internet access revenues increased 51% to $9.1 million in
the fourth quarter of 2000, compared to $6.0 million for the
comparable period in 1999. Other revenues, principally
consisting of installation and equipment sales, increased to
$0.5 million in the fourth quarter of 2000 from $0.3 million in
the comparable period in 1999.
The fourth quarter consolidated loss before interest, taxes,
depreciation, amortization, non-cash compensation and asset
impairment and write-down charges (Adjusted EBITDA) was $(24.9)
million, compared with $(9.4) million in the comparable period a
year ago. The $15.5 million change was due to costs associated
with the expansion of the Company's network, increased sales and
marketing charges for attracting new customers, and increased
facilities and infrastructure costs. The consolidated net loss
increased from $(16.0) million to $(51.8) million. The change in
net loss resulted principally from four factors: $14.1 million
of increased depreciation and amortization charges associated
with the acquisition of the Bridge network assets in February
2000 and the subsequent network equipment acquisitions; the
$15.5 million increase in the Adjusted EBITDA loss; $3.6 million
in net interest expense related to interest charges on the
financed equipment and a note payable to an affiliate; and $2.0
million related to the adjustment of our investment in
specialized customer application software to its estimate net
realizable values.
For the year ended December 31, 2000, revenues increased 677% to
$186.3 million from $24.0 million in 1999. Managed data network
revenues increased $151.7 million, primarily reflecting the
initiation of service under the Bridge Network Services
Agreement on February 18, 2000, following the completion of the
Company's initial public offering of common stock. Internet
access revenues increased 43% to $32.5 million for the year
2000, compared to $22.8 million for the comparable period in
1999. Other revenues, principally consisting of installation and
equipment sales, increased from $1.2 million to $2.0 million.
The consolidated loss before interest, taxes, depreciation,
amortization, non-cash compensation and asset impairment and
write-down charges (Adjusted EBITDA) was $(83.7) million for the
full year of 2000, compared with $(27.2) million in 1999. The
$56.5 million change was due to costs associated with the
expansion of the Company's network, increased sales and
marketing charges for attracting new customers, and increased
facilities and infrastructure costs. The consolidated net losses
for the year ended December 31, 2000 are not comparable to the
year 1999's losses due to a change in the basis of accounting
upon the acquisition of the company by Bridge in April 1999.
On February 15, 2001, Bridge's U.S. operating entity filed a
voluntary petition to reorganize under Chapter 11 of the United
States Bankruptcy Code. Bridge has stated that such protection
under Chapter 11 may allow that the domestic company to operate
in the ordinary course of business while its management seeks to
sell all or substantially all of its assets to a third party
investor. Bridge presently owns approximately 48% of the
outstanding common stock of SAVVIS and accounted for 81% and 73%
of its 2000 total revenues and domestic revenues, respectively.
During the year 2000, the Company entered into a $235 Million
advancing term loan facility with Nortel Networks, Inc. This
agreement was entered into for the purpose of financing a
portion of the Company's costs to purchase network expansion
equipment and installation services from Nortel and to pay
certain third-party expenses. The Bridge bankruptcy filing on
February 15, 2001 constituted an Event of Default under the
facility, causing the unused portion of the facility to
terminate, and all amounts owed to become immediately due and
payable. SAVVIS has requested a waiver of default from Nortel to
enable SAVVIS to continue borrowing in order to support its
network expansion. Also, on March 31, 2001, SAVVIS did not make
the scheduled interest payment to Nortel on the term loan
facility as well as other scheduled payments.
SAVVIS is presently in discussions with both financial and
strategic investors to procure its cash funding requirements for
at least the remainder of 2001, which the Company believes to
approximate $80 million. As a result of not having procured such
funding, SAVVIS will have a going concern opinion accompanying
its 2000 financial statements. As of March 31, 2001, SAVVIS had
approximately $10 million of unrestricted cash on hand. Assuming
Bridge continues to make payments to SAVVIS under the network
services agreement, the Company currently has enough cash to run
its business into May 2001. Should the Company be unsuccessful
in its efforts to raise additional funding by then, it may be
required to cease operations or declare bankruptcy. SAVVIS has
retained Merrill Lynch as financial advisor to assist in
exploring financing alternatives.
In order to continue being listed on the Nasdaq National Market,
our common stock must maintain a closing bid price of $1.00 per
share. March 9, 2001 was the last day on which the closing bid
price of our common stock was $1.00. If the Company's common
stock trades below $1.00 for thirty consecutive trading days,
the Company will receive a warning letter from Nasdaq. If the
Company's closing bid is not $1.00 or above for ten consecutive
days in the ninety-day period following the letter, the
Company's stock may be delisted from Nasdaq.
About SAVVIS
SAVVIS Communications (NASDAQ: SVVS) is the premier service
provider of Intelligent IP solutions, and the first to deliver
Internet economics to private IP networks. As a result, the
benefits of high-end private networks are now accessible to
small and medium-sized businesses, while the Fortune 1000 can be
more nimble in the execution of their e-commerce strategies.
SAVVIS' state-of-the-art global IP platform provides a full
range of customer-specified Internet, intranet and extranet
networks, combining the flexibility and fast time-to-market of
the Internet, with the QoS, security and reliability of Private
IP networks. The company also provides managed hosting and
colocation services.
SNOWBALL: Receives Nasdaq Notice Of Delisting
---------------------------------------------
Snowball (Nasdaq:SNOW), the leading online network for
Gen i(TM) -- the generation of Web-centric young adults who have
grown up using the Internet -- received notification from Nasdaq
on April 10, 2001 that its common stock is subject to delisting
from the Nasdaq National Market for failure to comply with
Marketplace Rule 4450(a)(5), requiring maintenance of a minimum
bid price of $1.00 per share.
Snowball has requested a hearing before the Nasdaq Listings
Qualification Panel to review Nasdaq's decision. This request
will stay any delisting pending the panel's decision.
There can be no assurance that the panel will grant the
company's request for continued listing. If the company's common
stock ceases to be listed on the Nasdaq National Market,
Snowball expects that its common stock would then be traded on
the NASD Over-The-Counter Bulletin Board.
About Snowball http://www.snowball.com/
Snowball (Nasdaq: SNOW) is the leading Gen i network for Web-
centric young adults who have grown up using the Internet.
Consistently ranked by Media Metrix as one of the 40 most-
visited Internet properties, Snowball has a great deal to offer
both its users and its business customers. The company produces
and aggregates top Gen i Web sites, attracting millions of
unique visitors with its award winning content and resources.
Snowball delivers its large Net-centric audience to companies
that offer products and services targeted to the demographic.
Snowball offers its customers a full spectrum of integrated
marketing solutions: impression-based advertising and
sponsorships, permission marketing, custom publishing,
contextual e-commerce, direct e-mail marketing and content
syndication. Snowball's networks - IGN, ChickClick and
HighSchoolAlumni - partner with a collection of affiliate sites
delivering a diverse selection of content, community and
commerce for Snowball's users. The company is headquartered in
San Francisco, with sales offices in New York, Chicago and Los
Angeles.
SYNERGY: Board Okays Reverse Split to Meet Nasdaq Requirements
--------------------------------------------------------------
Synergy Brands, Inc. (Nasdaq:SYBR) disclosed that the board of
directors has approved a 1 for 5 reverse split to take effect on
April 20, 2001. Synergy Brands received majority shareholder
consent for the reverse split after the Company received notice
from NASDAQ in October of 2000 which indicated that they where
subject to delisting from the NASDAQ Small Cap Market for
failing to comply with the minimum bid price requirement.
"The Company would have much preferred to wait until after our
annual shareholders meeting in June," said Mair Faibish,
Chairman and CEO. "The Board of Directors, which had originally
asked NASDAQ for an extension until our stockholder meeting, has
decided that the Company needs to insure continued listing on
the NASDAQ," stated Mr. Faibish.
A 1 for 5 reverse stock split should reduce public float to
approximately 2.5 million shares with approx. 3.5 million shares
outstanding.
Management maintains that revenue growth in fiscal 2001 should
reach the 100% rate. "We believe that fiscal 2001 will produce a
Pro Forma profit, our first since 1995," said Faibish. "With 1st
Quarter 2001 results expected later this week and the success of
DealByNet and its attraction to larger corporate companies,
along with a more attractive capitalization, Synergy Brands
should be more appealing to a broader group of institutions and
investors in the tiers one and two brackets. These groups would
otherwise be prohibited from purchasing our stocks at their
current rate," concluded Faibish.
About Synergy Brands, Inc.
Synergy Brands, Inc. develops Internet properties that
strategically partner with off-line and on-line media companies
to capture e-commerce markets within the B2B and B2C Internet
arena. The company has developed the following Web sites:
Netcigar.com, BeautyBuys.com, and DealByNet.com. Synergy Brands
can be visited at http://www.synergybrands.com.
TRICO STEEL: Gets Interim Approval To Use Cash Collateral
---------------------------------------------------------
The U.S. Bankruptcy Court in Wilmington, Del., has authorized
Trico Steel Co. to use the cash collateral of its pre-petition
lenders on an interim basis through April 30. The company's
motion said Trico Steel negotiated with its pre-petition
lenders, led by Chase Manhattan Bank, to use their cash
collateral "to fund the administration and orderly wind-down" of
its estate. (ABI World, April 17, 2001)
V3 SEMICONDUCTOR: Filing Chapter 11 Petition To Facilitate Sale
---------------------------------------------------------------
V3 Semiconductor Inc. (NASDAQ:VVVIE), the Embedded Intelligence
Company, a provider of high-performance interconnect and
controller solutions for the rapidly expanding Network and
Internet infrastructure markets, t has entered into a definitive
agreement for the sale of V3 assets to QuickLogic Corporation
(Nasdaq:QUIK).
Under the terms of the agreement, V3 will receive approximately
2.5 million shares of QuickLogic common stock (US$11.5 million
based on the closing price on April 17, 2001). All V3 employees
have been offered employment with QuickLogic.
Pending the closing of the sale, V3 and QuickLogic have entered
into a manufacturing and distribution agreement in order to
ensure an uninterrupted supply of V3 products to customers.
Under the terms of this agreement, the parties will share gross
profits from the sale of the products.
To facilitate the sale, V3 will file for reorganization under
Chapter 11 of the United States Bankruptcy Code. V3 anticipates
that all of its creditors will be paid in full and that the
remaining shares of QuickLogic stock will be distributed to V3
shareholders. The sale is subject to approval of the bankruptcy
court and is intended to be complete within 90 days.
"We believe that QuickLogic will provide an excellent platform
for our employees and technology, with significant opportunities
for new products that will allow QuickLogic to be a leader in
the market for embedded standard products," said Carl Mitchell,
president and chief operating officer of V3.
Wit Soundview acted as financial advisor in connection with an
assessment of strategic alternatives for the Company as well as
this transaction.
About V3 Semiconductor
V3 Semiconductor Inc. (NASDAQ: VVVI), the Embedded Intelligence
Company, designs, develops and markets semiconductor silicon
solutions. V3's mission is to create high-performance
interconnect and controller solutions that enable our customers
to build the next-generation networking and Internet
infrastructure. V3 targets leading manufacturers of
communications network infrastructure equipment, network edge
connectivity devices, Internet appliances, set top boxes,
residential gateways, mass-storage sub-systems and industrial
embedded computers. V3 enables its customers to develop systems
faster than ever before, by providing rapid time-to-market
solutions comprised of high-performance silicon, supporting
software, evaluation platforms, reference designs and
applications support. V3's products include highly integrated
system controllers, bridge controllers and memory controllers
that deliver high throughput through efficient bus management
between processor, memory and I/O sub-systems. V3's sales
channel includes a direct sales force, manufacturers'
representatives and electronics distributors worldwide
VENCOR INC.: Transferring Montvue Operations To Shenandoah Inc.
---------------------------------------------------------------
The previous prospective purchaser Pinnacle Services Winchester,
Inc., the Vencor, Inc. Debtors and the Health Care Financing
Administration previously said that they would negotiate for the
terms of a Stipulation and Order in respect of the Debtors'
proposed transfer of Montvue to Pinnacle and the assumption and
assignment of the Medicare Provider Agreement. However, this did
not materialize. The Debtors have not revealed specifically what
happened but have now sought and obtained the Court's approval
for the transfer of the operations of MontVue to a new
operator, Shenandoah Valley Care, Inc. pursuant to the terms of
the Operations Transfer Agreement dated February 9, 2001.
The Debtors will sell the Inventory and the name of the Facility
to the new operator at a cost of $10.00. Any rights the Debtors
may have in the name of the Facility will be transferred to the
new operator for no additional consideration. Vencor will assign
its Medicare and Medicaid Provider Agreements for the Facility
to Shenandoah.
Additionally, the Debtors, Shenandoah, Excelsior and the United
States of America, on behalf of the United States Department of
Health and Human Services (HHS), and its designated component,
the Health Care Financing Administration (HCFA), which
implements the Medicare program, have entered into a Stipulation
and Order regarding the transfer. Pursuant to the Stipulation
and Order, on the date of transfer, Excelsior shall pay to the
United States $50,000 as Cure Amount which fully satisfies,
discharges and constitutes a release of any claim under the
Medicare Provider Agreement that HCFA has against Excelsior, and
its successors and assigns, as owner or operator of the Facility
or against Shenandoah, as a successor to the Debtors.
Vencor will receive all payments made by the Virginia Medicaid
agency for reimbursements with respect to payments for services
rendered while Vencor was operating the Facility. Moreover,
Vencor agreed in the Transfer Agreement to indemnify Shenandoah
for any overpayment claim by the state of Virginia. The Debtors
do not believe that they were overpaid by Virginia Medicaid.
Vencor owes a pre-Petition amount of $157.00 to Virginia
Medicaid and is owed $64,664.00 by Virginia Medicaid for a pre-
Petition amount, resulting in a net amount owed to Vencor of
$64,507.00.
The Transfer Agreement also provides that:
-- Vencor is to provide Shenandoah with an accounting of
the Patient Trust Funds (residents' money held by the operator
of the facility) and to transfer those funds to Shenandoah in
accordance with the applicable statutory and regulatory
requirements;
-- Vencor will file its cost reports with respect to the
Facility as soon as practicable but in no event later than the
date on which they are due by law and Vencor is required to
indemnify Shenandoah for any reimbursement of overpayments to
the federal or state agencies who may so demand, and is entitled
to any further reimbursements for the periods in which Vencor
operated MontVue;
-- Shenandoah will hire at least sixty-eight percent of
Vencor's Facility's employees and Vencor is required to make
available COBRA and to pay earned health benefits through the
Effective Date as required by law;
-- Vencor will retain its right to all unpaid accounts
receivable with respect to the Facility which relates to the
period prior to the Effective Date;
-- utility charges, real and personal property taxes and
prepaid expenses will be prorated as of the Effective Date and
all amounts owing from one party to the other party that require
adjustment after the Effective Date will be settled within
thirty days;
-- Vencor will deliver and assign to Shenandoah all of the
records of the Facility, including, but not limited to patient
records and employee records;
-- Vencor will remove its computer systems from the
Facility after a 120 day period from the Effective Date; and
-- Vencor indemnifles Shenandoah for breach of its
obligations under this agreement and the leasing or operation of
the Facility prior to the Effective Date and Shenandoah
indemnifies Vencor for breach of its obligations under this
agreement and the leasing or operation of the Facility after the
Effective Date.
Shenandoah has applied to the state government for a new
license, and it is Vencor and Shenandoah's understanding that
the application will be approved on the Effective Date, enabling
Shenandoah to assume operating responsibility.
The Debtors noted that the assumption and assignment of the
MontVue Provider Agreements is less costly than the cost to
shutdown the facility, which Vencor believes is approximately
$435,377.00. Once the entry into the Transfer Agreement is
approved then the Debtors will only have an obligation to
indemnify Shenandoah for overpayments, if any, made by Medicaid
or Medicare while the Debtors operated MontVue. Therefore, in
their business judgment, the Debtors have determined that the
Transfer Agreement should be entered into, which requires the
Provider Agreements to be assumed and assigned.
In the order granting the motion, Judge Walrath made it clear
that nothing in the motion, the order or the Transfer Agreement
will alter, amend or affect the rights of the Virginia
Department of Medical Assistance Services (DMAS) under the
Medicaid Provider Agreement including, without limitation, any
rights DMAS may have to recoup and/or offset any overpayments
made under the Medicaid Provider Agreement against any payments
due under the Medicaid Provider Agreement. (Vencor Bankruptcy
News, Issue No. 27; Bankruptcy Creditors' Service, Inc.,
609/392-0900)
W.R. GRACE: Judge Okays Continued Use Of Cash Management System
---------------------------------------------------------------
W. R. Grace & Co. employs an integrated centralized cash
management system to collect, transfer and disburse funds
generated by their operations and to accurately record all such
transactions as they are made. This Cash Management System is
managed by Grace's Treasury Department and includes, among other
things, centralized cash forecasting and reporting, collection
and disbursement of funds and administration of the company's
Bank Accounts required to effectuate the Debtors' collection,
disbursement and movement of cash.
David B. Siegel, W.R. Grace's Vice President and General
Counsel, explained that the Debtors' cash receipts are
concentrated at JP Morgan Chase as incoming checks make their
way through Wachovia and Bank of America-managed lockbox
collection systems. That Main Concentration Account then funds
various Operating Accounts at First Union, Allfirst, Bank
Boston/Fleet, State Street Bank, Hibernia Bank, Citibank, Civic,
and Business Bank of California. Funds for foreign affiliates
flow through Grace-Conn or through Grace International Holdings
and are accounted for as intercompany loans.
On a daily basis, substantially all of the cash remaining in the
Debtors' Cash Management System is consolidated in the
Concentration Accounts. To the extent that cash remains in the
Concentration Accounts in excess of amounts needed to fund daily
disbursements, such cash is transferred to the investment
account and invested with or by Merrill Lynch in money market
funds and/or overnight investment-grade securities.
The Debtors have used this Cash Management System for years. The
Cash Management System is highly automated and computerized and
includes the necessary accounting controls to enable the
Debtors, as well as creditors and the Court, if necessary, to
trace funds through the system and ensure that all transactions
are adequately documented and readily ascertainable. The Debtors
will continue to maintain detailed records reflecting all
transfers of funds including, but not limited to, intercompany
transfers.
The Debtors' cash management procedures are ordinary, usual and
essential business practices, and are similar to those used by
other major corporate enterprises. The Cash Management System
provides significant benefits to the Debtors, including the
ability to (a) control corporate funds centrally, (b) invest
idle cash, (c) ensure availability of funds when necessary and
(d) reduce administrative expenses by facilitating the movement
of funds and the development of more timely and accurate balance
and presentment information. In addition, the use of a
centralized Cash Management System reduces interest expenses by
enabling the Debtors to better utilize funds within the system
rather than relying upon short-term borrowing to fund cash
requirements.
The operation of the Debtors' businesses requires the continued
use of the Cash Management System during the pendency of these
chapter 11 cases. Requiring the Debtors to adopt new, segmented
cash management systems at this critical stage of these cases
would be expensive, would create unnecessary administrative
burdens, and would be much more disruptive than productive,
adversely impacting the Debtors' ability to confirm a
reorganization plan. Consequently, maintenance of the existing
Cash Management System is in the best interests of all creditors
and other parties-in-interest.
Considering the merits of the Debtors' arguments, Judge Newsome
granted the Debtors' request to maintain their existing cash
management system. Additionally, Judge McDonald ruled, to the
extent that money within the cash management system is lent from
one Debtor or non-debtor affiliate to one of the Debtors, those
Intercompany Transactions shall constitute superpriority
administrative claims against the borrower pursuant to 11 U.S.C.
Sec. 364(c)(1). (W.R. Grace Bankruptcy News, Issue No. 2;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
WHEELING-PITTSBURGH: Gets New Funding With Passage Of State Bill
----------------------------------------------------------------
James G. Bradley, President and CEO of Wheeling-Pittsburgh Steel
Corporation, thanked Governor Bob Wise for initiating
legislation that will provide funding to help complete work on a
second paint line at the company's Beech Bottom, WV, facility.
"I speak for all Wheeling-Pittsburgh Steel employees when I
express my sincere thanks to Gov. Wise for initiating this bill
and to the state legislature for passing it," Bradley said. "It
will provide $400,000 to complete this paint line, contributing
immediate benefits to the company."
Bradley added that, "Gov. Wise understands the importance of the
steel industry to the Northern Panhandle and has reacted with
urgency to assist Wheeling-Pittsburgh Steel as we work through
the bankruptcy process and continue our fight against dumped
steel."
Beech Bottom currently has one paint line that paints steel
coils that are then used to manufacture a variety of Wheeling
Corrugating Company deck and roof products. Work on the second
paint line was begun early in 2000, but interrupted when the
company filed for Chapter 11 bankruptcy protection. When
complete, the second line will allow Wheeling Corrugating
Company to have all its painting requirements done internally,
saving hundreds of thousands of dollars each month. In addition,
the second paint line will increase employment at Beech Bottom
by about 15, to more than 110 employees.
The West Virginia State Legislature appropriated the funds late
last week, which will be given through the governor's
contingency fund.
WHX CORPORATION: Posts $181.0 Million Net Loss For 2000
-------------------------------------------------------
WHX Corp. (NYSE: WHX) reported a net loss of $181.0 million, on
net sales of $1.75 billion, for the year ended December 31,
2000, compared with a net loss of $14.9 million, on net sales of
$1.77 billion, for the year ended December 31, 1999. After
deducting preferred stock dividends, basic and diluted net loss
per common share was $14.10 for 2000 compared with a $2.24 loss
per common share for 1999. There were no extraordinary items in
2000 as compared to $.9 million (net of tax), or $.06 per
diluted share in 1999, which represents the discount on the
purchase of $20.5 million aggregate principal amount of the
Company's 10-1/2% Senior Notes in the open market.
For the fourth quarter of 2000, the Company reported a net loss
of $189.5 million, on sales of $329.1 million compared with a
net loss of $5.9 million on sales of $471.2 million for the
fourth quarter of 1999. After deducting preferred dividends,
basic and diluted net loss per common share was $13.55 for the
fourth quarter of 2000, compared with a $.78 net loss per share
for the fourth quarter of 1999.
On November 16, 2000, Wheeling-Pittsburgh Corporation (WPC), one
of the Company's wholly owned subsidiaries, and its
subsidiaries, filed petitions seeking reorganization under
Chapter 11 of the United States Bankruptcy Code. As a result of
the Bankruptcy Filing, the Company has, as of November 16, 2000,
deconsolidated the balance sheet of WPC and its subsidiaries. As
a result of such deconsolidation, the consolidated balance sheet
at December 31, 2000 does not include any of the assets or
liabilities of WPC and its subsidiaries, and the accompanying
December 31, 2000 Profit and Loss data includes the operating
results of WPC and its subsidiaries for the period January 1,
2000 through November 16, 2000. Since November 16, 2000, the
Company has accounted for its investment in WPC and its
subsidiaries on the cost method. The Bankruptcy Filing and the
resultant deconsolidation of WPC as of November 16, 2000 have
affected comparisons between year 2000 and year 1999 results.
The Company's Annual Report on Form 10-K was not filed on a
timely basis primarily due to difficulties in gathering
information relating to the Bankruptcy Filing of WPC and its
subsidiaries. The Company anticipates filing the Form 10-K
within the next week.
Operating Results
For the year ended December 31, 2000, loss from operations was
$5.1 million, compared to operating income of $39.2 million in
the year ended December 31, 1999. Unimast Incorporated reported
operating income of $14.6 million in 2000 compared to $18.6
million in 1999. Handy & Harman (H&H) reported operating income
of $36.0 million for 2000, compared to $40.2 million for 1999.
WPC reported an operating loss of $49.6 million for 2000
compared to $17.6 million of operating income for 1999. For the
fourth quarter of 2000, the consolidated loss from operations
totaled $31.9 million, compared to operating income of $21.1
million in the 1999 fourth quarter.
Other income/loss totaled a loss of $16.1 million in 2000,
compared to income of $26.4 million in 1999. For the fourth
quarter of 2000, other loss was $14.3 million, compared to $7.5
million of other loss in the 1999 fourth quarter.
Earnings before interest, taxes, depreciation and amortization,
non-cash pension and OPEB benefits, other income and
extraordinary items totaled $90.9 million in 2000, compared to
$140.3 million in 1999.
Liquidity and Capital
At December 31, 2000, total liquidity, comprising cash, short-
term investments (net of related investment borrowings) and
funds available under the Company's bank credit arrangements
(excluding liquidity of WPC and its subsidiaries), totaled
$129.5 million, compared with $255.4 million (excluding
liquidity of WPC and its subsidiaries) at December 31, 1999. At
December 31, 2000, total liquidity, comprising cash, short-term
investments (net of related investment borrowings) and funds
available under WPC's bank credit arrangements, totaled $80.1
million compared with $32.7 million available at December 31,
1999. At December 31, 2000, funds available under the Company's
committed credit arrangements (excluding credit arrangements of
WPC and its subsidiaries) totaled $55.4 million compared with
$80.8 million in 1999. The decrease is due primarily to the
expiration of H&H's $25.0 million delayed draw facility. At
December 31, 2000, funds available under WPC's and its
subsidiaries committed credit arrangements totaled $65.1
million. In 2000, the Company did not repurchase any shares of
Common Stock or any 10-1/2% Senior Notes.
The Company continues to pursue strategic alternatives to
maximize the value of its portfolio of businesses. Some of these
alternatives have included, and will continue to include,
selective acquisitions, divestitures and sales of certain
assets.
WHX (http://www.whxcorp.com)is a holding company that has been
structured to invest in and/or acquire a diverse group of
businesses on a decentralized basis. WHX's primary businesses
currently are: H&H, a diversified manufacturing company whose
strategic business segments encompass, among others, specialty
wire, tubing, and fasteners, and precious metals plating and
fabrication; Unimast Incorporated, a leading manufacturer of
steel framing and other products for commercial and residential
construction; and WHX Entertainment Corp., a co-owner of a
racetrack and video lottery facility located in Wheeling, West
Virginia. WHX's other business consists of WPC and its
subsidiaries including Wheeling-Pittsburgh Steel Corporation, a
vertically integrated manufacturer of value-added and flat
rolled steel products.
WINSTAR COMM.: Fitch's Ratings On Senior Notes Dive To D Levels
---------------------------------------------------------------
Fitch has downgraded Winstar Communications' senior secured
rating of `B+' to `DD' and its senior unsecured rating of `B-'
to `D' due to the company's inability to make timely interest
payments of approximately $75 million on its senior debt
securities.
The company has 30 days from the April 16, 2001 payment date to
cure this default.
In addition, Lucent Technologies declared Winstar in default
under its $1 billion vendor agreement, of which the company had
drawn approximately $600 million. The company is disputing this
default. The default triggered cross defaults under other
agreements, including its fully drawn $1.35 billion credit
facility. The company had intended to use the proceeds available
under its vendor facilities to finance its operations through
2001.
Fitch believes senior secured creditors will likely recover
between 50-90% of the value of their obligations, which totals
approximately $2 billion, from the sale of the company's
property, plant and equipment and licenses. Due to the magnitude
of senior secured debt, Fitch believes the likelihood of any
recovery for senior unsecured note holders is small. This
assessment is subject to a great degree of uncertainty relating
to the potential recovery values of fixed wireless assets and
licenses.
The public debt securities affected include:
--$325 million 12.5% senior notes due 2008
--$638 million 12.75% senior notes due 2010
--$454 million (at issuance) 14.75% senior discount notes
due 2010
--EUR200 million 12.75% senior notes due 2010
The Blackstone Group has been retained to advise the company on
debt restructuring, and Winstar is considering reorganizing
under Chapter 11.
WORLD CYBERLINKS: Needs More Money To Continue Operations
---------------------------------------------------------
World Cyberlinks Corp. was incorporated in New York on August 2,
1995. The Company provides docking station solutions and
communications software for mobile data collection and computing
devices. To date, operations principally have involved research
and development, market analysis and other business planning
activities. The Company has no subsidiaries.
Company products include the ConXemDock and ConXem EtherDock
docking station solutions, and ConXem and ConXem Pro software.
The docking station solutions and software products provide
users the ease of movement and control of files between mobile
devices and a personal computer ("PC") or network server.
Multiple mobile computer users such as delivery personnel,
utility meter readers, and field sales representatives can
update, send and receive data simply by attaching their mobile
computing devices to the docking station. Once the information
has been sent, the scripti ng engine on the software provides
the user with the ability to designate the location for each
file to be delivered to the PC or network and then identifies
information (or files) that should be sent back to the mobile
computer. The scripting engine also provides for automatic
updating of mobile computer applications and databases.
The Company incurred losses of $840,930 and $940,758 for the
three months ended January 31, 2001 and 2000, respectively. The
cost of shares issued as compensation for employees, outside
counsel and financial and public relations firm made up the
significant portion of the losses.
Net losses were incurred of $4,136,952 and $5,162,584 for the
years ended July 31, 2000 and 1999, respectively. Again, the
cost of shares issued as compensation for employees, outside
counsel and financial and public relations firm made up the
significant portion of the losses.
In their report dated February 1, 2001 in connection with their
audit of World Cyberlinks' financial statements for the years
ended July 31, 2000 and 1999 and for the period August 2, 1995
(inception) through July 31, 2000, the Company's auditors have
indicated that there is a substantial doubt about World
Cyberlinks ability to continue as a going concern. At January
31, 2001, the Company had a working capital deficiency of
$734,180. In addition, the Company is in need of financing to
continue operations and begin manufacturing. It is estimated by
the Company that it will require at least $100,000 to fund
continued operations for the next twelve months, exclusive of
any cash requirements for manufacturing. In addition, there will
be required a cash infusion of at least $1,000,000 to complete
tooling and manufacture 1,000 docking station units for sale.
World Cyberlinks currently is seeking to raise funds through the
public markets. However, there is no assurance that the Company
will be able to procure financing on commercially acceptable
terms, if at all. If World Cyberlinks is not able to procure any
financing, the Company indicates it may have to curtail
operations.
*********
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For copies of court documents filed in the District of
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9911. For bankruptcy documents filed in cases pending outside
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Research & Consulting at 207/791-2852.
*********
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Copyright 2001. All rights reserved. ISSN: 1520-9474.
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