/raid1/www/Hosts/bankrupt/TCR_Public/011001.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, October 1, 2001, Vol. 5, No. 191
Headlines
360NETWORKS: Court Extends Rule 9027 Removal Period to March 25
ADVANTICA RESTAURANT: Letter of Intent to Sell FRI-M Terminated
ALADDIN GAMING: Case Summary & 20 Largest Unsecured Creditors
AMERICAN AIRLINES: Senior Executives Accept Voluntary Pay Cuts
AMES DEPARTMENT: Rejecting Disaster Recovery Agreements
AMF BOWLING: Moves to Assume Lease for 34th Avenue Lanes
ARMSTRONG HOLDINGS: Court Okays Campbell As PI Panel's Counsel
AT HOME CORP: Files Chapter 11 Petition in N.D. California
BETHLEHEM STEEL: Vale do Rio Doce Buys Iron Ore Assets for $25MM
BRIDGE INFO: Court Approves Assets Sale to Dow Jones for $4.5MM
BROADBAND WIRELESS: Migrating from Receivership to Chapter 11
COTELLIGENT INC: Fails to Comply with NYSE Listing Requirements
COVAD: GE Wants More Disclosure about Bluestar Litigation
CREDIT CARD CENTER: Tidel and NCR Corp. Acquire ATMs For $8MM
ELCOTEL: Extends Verizon Gemini III Contract to 2004
ETOYS: Wants $2.5 Million Refund from Goldman Sachs
EUPHONIX INC: Nasdaq Delists Shares Effective September 27
EXODUS COMMS: Gets Okay to Pay Prepetition Employee Obligations
HEARME: Shareholders to Consider Plan of Liquidation on Oct. 22
HEILIG-MEYERS: S&P Rates Master Trust 1998-2 Class B Paper at D
LTC: Fitch Downgrades Series 1996-1 Class C, D, & E Certificates
LTV CORP: Cleveland Banks Apply for $250 Million Loan Guarantees
LAIDLAW INC: Asks for Open-Ended Extension of Removal Period
LERNOUT & HAUSPIE: Hopes to Emerge from Chapter 11 by Year's End
MARINER POST-ACUTE: LCT Rejects Leases for Oklahoma Facilities
MCLEODUSA: Denial of Groundless Bankruptcy Rumors Rings Hollow
MIDWAY AIRLINES: Wants Its Cut of $15B Industry Bailout Package
OWENS CORNING: Shintech Demands Payment of $3.6M Admin. Claim
PACIFIC AEROSPACE: Aeromet Gets Over $5.5 Million In New Orders
PACIFIC GAS: Ratepayers Will See Lower Gas Prices in October
PSINET INC: Cisco Seeks Adequate Protection of Lease Payments
RELIANCE GROUP: Gov't Seeks Shield for IRS Re Tax Liabilities
SITE TECHNOLOGIES: Will Make $5.28MM Liquidating Distribution
SUNBEAM: Seeks Extension of Lease Decision Deadline to Feb. 4
SUNTERRA CORPORATION: Announces Senior Management Appointments
TOTAL CARE: AD OPT Technologies To Buy Certain Assets for $3MM
UAL CORP: Will Suspend Stock Dividend in Wake of Industry Slump
UAL CORP: Jake Brace Promoted to Chief Financial Officer Post
U.S. WIRELESS: Taps Gerard Klauer Mattison as Investment Banker
VSOURCE: Nasdaq to Include Delinquent Filing in Delisting Issues
VCAT: Needs New Funds Within 2-3 Months to Continue Operations
WINSTAR COMMS: Intends to Sell Equity Broadcasting Securities
WINSTAR WIRELESS: Sues Savvis Communications for $38.4 Million
WORLDXCHANGE: Court Fixes October 31 Bar Date for Admin. Claims
* BOND PRICING: For The Week of October 1 - 5, 2001
*********
360NETWORKS: Court Extends Rule 9027 Removal Period to March 25
---------------------------------------------------------------
360networks inc. and its debtor-affiliates sought and
obtained from Judge Gropper an extension of the time by which
they may remove civil actions pending on the Petition Date,
until the later to occur of:
(a) March 25, 2002, the day which is 270 days after the
Petition Date; or
(b) the date which is 30 days after entry of an order
terminating the automatic stay with respect to the
particular action sought to be removed.
According to Alan J. Lipkin, Esq., at Willkie Farr & Gallagher,
in New York, New York, the Debtors are party to approximately 40
State Court Actions. Mr. Lipkin explains that the extension
will afford the Debtors a sufficient opportunity to make fully
informed decisions concerning removal of State Court Actions
without prematurely waiving the automatic stay.
The extension, Mr. Lipkin adds, assures that the Debtors do not
forfeit valuable rights under 28 U.S.C. Sec. 1452. Furthermore,
Mr. Lipkin assures Judge Gropper, the rights of the Debtors'
adversaries would not be prejudiced by such an extension because
any party to a State Court Action that is removed may seek to
have it remanded to the state court. (360 Bankruptcy News, Issue
No. 8; Bankruptcy Creditors' Service, Inc., 609/392-0900)
ADVANTICA RESTAURANT: Letter of Intent to Sell FRI-M Terminated
---------------------------------------------------------------
On September 19, 2001, the letter of intent previously reported
as being entered into on August 10, 2001 between FRD Acquisition
Co., the wholly owned subsidiary of Advantica Restaurant Group,
Inc., and Lyon's of California, Inc. with respect to the
purchase and sale of all the outstanding capital stock of FRI-M
Corporation, which operates, through its subsidiaries, the
Coco's and Carrows restaurant chains, terminated pursuant to its
own terms.
On September 20, 2001, FRD, which as previously reported is the
subject of a case under Chapter 11 of the United States
Bankruptcy Code, entered into a new letter of intent with Coco's
and Carrows Acquisition Company, a Delaware corporation formed
by a group led by certain individual members of Coco's and
Carrows' management, with respect to the purchase and sale of
all the outstanding capital stock of FRI-M.
Neither Advantica nor its subsidiary, Denny's, Inc., is a party
to the letter of intent.
Under the terms of this letter of intent, the parties shall have
fourteen (14) days from September 20, 2001 within which to enter
into a definitive agreement for the transaction. If the parties
fail to execute a definitive agreement within the designated
time period, the letter of intent will terminate.
In the event the parties enter into a definitive agreement, the
terms of the definitive agreement shall be subject to higher and
better offers and the approval of the United States Bankruptcy
Court of Delaware.
Additionally, if the parties execute a definitive agreement,
subject to the approval of the Bankruptcy Court, CCAC will,
under certain circumstances, be entitled to the payment of
certain "breakup" fees by FRD. No assurance can be given that
the parties will successfully negotiate a definitive agreement
or that a sale will be authorized and approved by the Bankruptcy
Court or completed on a timely basis or in the manner described.
Under the terms and conditions of the letter of intent, CCAC has
offered to purchase the stock of FRI-M for a cash payment of $38
million and the issuance of a $12 million senior subordinated
note (due five years from the date of issuance and bearing
interest through maturity at a rate equal to prime minus 200
basis points (not to exceed eight percent (8%) per annum)), in
addition to the assumption of $8.6 million in capital leases,
all subject to adjustment as set forth in the letter of intent.
Until the approval or denial of the "breakup" fees by the
Bankruptcy Court, FRD is generally prohibited from soliciting
offers for the stock or any assets of FRD or its direct or
indirect subsidiaries, provided, however, that FRD may respond
to due diligence requests from other persons and entities and
may receive other offers and proposals.
Advantica will provide updates upon (1) entering into a
definitive agreement, (2) termination of the letter of intent
with CCAC, or (3) material changes to the terms of the letter of
intent, but not solely on the basis of extensions thereof.
* * *
Advantica's credit facility with its lenders provides to the
Company (excluding FRD) a working capital and letter of credit
facility of up to $200 million. The Company was in compliance
with the terms of the Advantica Credit Facility at June 27,
2001; however, certain of the financial covenants become more
restrictive as of and for the period ended December 26, 2001.
The Company's ability to comply with such covenants will depend
on (a) FRD completing the sale of Coco's and Carrows prior to
December 26, 2001 and receiving sufficient cash proceeds to
substantially repay Denny's, Inc.'s $56.1 million receivable and
$11.4 million deposit securing outstanding letters of credit
under the Coco's/Carrows Credit Facility, and (b) meeting or
exceeding current operating projections, particularly as it
relates to gains and cash proceeds from restaurant
refranchisings.
If the Company is unable to meet such covenants, the Company
would be required to seek an amendment or negotiate other
arrangements with its lenders. Although no assurances can be
given, the Company believes it would be able to negotiate the
required arrangements on commercially reasonable terms or
otherwise, if needed.
ALADDIN GAMING: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Aladdin Gaming, LLC
dba Aladdin Hotel & Casino
3667 Las Vegas Blvd., So.
Las Vegas, NV 89109
Type of Business: The Company owns and operates a casino/hotel
located in Las Vegas, Nevada.
Chapter 11 Petition Date: September 28, 2001
Court: District of Nevada
Bankruptcy Case No.: 01-20141
Debtor's Counsel: Gerald M. Gordon, Esq.
Gordon & Silver, Ltd.
3960 Howard Hughes Parkway
Ninth Floor
Las Vegas, Nevada 89109
(702) 796-5555
Total Assets: $698,195
Total Debts: $593,457
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Clark County Treasurer $1,325,210
500 S. Grand Central Parkway
1st Floor
PO Box 551220
Las Vegas, NV 89155-1220
Valley Crest $963,050
1941 Mira Loma Avenue
Suite A
Placentia, CA 92870
Nevada Power Company $757,150
PO Box 230
Las Vegas, NV 89151
Aladdin Bazaar, LLC $533,330
3663 Las Vegas Blvd., So. # 900
Las Vegas, NV 89109
Megajackpot Fund $333,650
PO Box 7870
Los Angeles, CA 90088-7870
Taylor International Corp. $278,105
4040 Industrial Rd.
Las Vegas, NV 89103
London Clubs International PLC $189,488
Anchor Games $127,352
State Gaming Control Board $100,000
Mayer Brown & Platt $91,564
Adlink Cable Advertising, LLC $85,255
AVW Audio Visual, Inc. $84,200
IGT $77,720
Hospitality Network, Ltd. $76,100
Bally Gaming, Inc. $73,630
Brady Industries Inc. $65,210
Commercial Group Underwriters $61,500
IPEDX $60,180
Las Vegas Color Graphics, Inc. $58,420
AMERICAN AIRLINES: Senior Executives Accept Voluntary Pay Cuts
--------------------------------------------------------------
Responding to a challenge from American Airlines Chairman and
CEO Donald Carty, the senior executives and all other officers
of American and American Eagle have accepted voluntary pay cuts
of varying percentages, the airline announced.
Earlier this week, in a message to employees addressing the
severe financial crisis that confronts American and the rest of
the industry in the wake of the Sept. 11 tragedies, Carty said
he would forgo any personal compensation, including salary, for
the rest of this year as a way of helping American overcome the
crisis.
In the same message, Carty announced a program that will give
management and all other non-union employees of the company the
opportunity to help in the crisis by accepting voluntary pay
reductions in amounts of their choosing. Details will be
provided to employees shortly, and a special Web site will
be created to allow them to enroll. The company also will
approach its unions about participation by their members.
Under the program, 20 cents of every dollar in salaries saved
will be donated to a special fund American has created to
provide for the educational needs of the children of American
Airlines employees killed in the Sept. 11 events. This fund
will also provide help for unique hardship cases that might
arise from impending job reductions.
"I'm proud of the way our executive management team has
responded so quickly and decisively to the need to reduce
salaries," Carty said. "This sets a compelling example for the
rest of the company and gets our program off to an excellent
start."
AMES DEPARTMENT: Rejecting Disaster Recovery Agreements
-------------------------------------------------------
On March 8, 1991, Ames Department Stores, Inc. and Comdisco
Disaster Recovery Services, Inc. entered into a contract wherein
Comdisco agreed to render certain disaster recovery services for
Ames. The Comdisco Contract calls for monthly payments of
approximately $8,596.32 and has a term scheduled to expire on
October 31, 2001.
On August 25, 1998, Hills Department Store Company and SunGard
Recovery Services, Inc. entered into a similar contract wherein
SunGard agreed to render certain disaster recovery services for
Hills. Pursuant to the SunGard Contract, the term runs for 60
months, terminating on June 30, 2003, with payments of
approximately $10,126.00 due monthly.
The SunGard Contract was assumed by Ames upon the merger of
Hills into Ames in March 1999.
Upon the Hills acquisition, Ames integrated the information from
Hills' data center into the Ames' information system.
Accordingly, even though Ames continued to make the monthly
payments called for under the SunGard Contract, there was and
continues to be no use for the services provided.
By this motion, the Debtors seek entry of an order approving the
Debtors' rejection of two contracts for disaster recovery
services in the event of disruption to the Debtors' ability to
access their computer or data processing equipment.
Martin J. Beinenstock, Esq., at Weil Gotshall & Manges LLP, in
New York, New York, tells the Court that the Debtors no longer
require such services as they have independently initiated
disaster recovery safeguards. Because the Debtors have not
utilized such services, the debtors request that the relief be
granted nunc pro tunc to September 20, 2001, the filing date of
the Motion.
Soon after the Hills acquisition, Mr. Beinenstock relates that
the Debtors upgraded their information systems through an
outsourcing contract with IBM. Disaster recovery services are a
small component of the services that IBM provides for the
Debtors, which similarly renders the services provided under the
Comdisco Contract unnecessary.
Because the Debtors have independently provided for alternative
computer and data processing access in the event a particular
location of the Debtors experiences a temporary and unplanned
interruption of services, Mr. Beinenstock states that the
Debtors no longer require the services called for under the
Contracts and in their business judgment believe that a
rejection is thereby warranted.
Furthermore, Mr. Beinenstock contends that the Debtors will not
realize any ongoing increase in expenditures as a result of such
a rejection and instead, such a rejection will result in
substantial savings for the Debtors and their estates.
Therefore, the Debtors submit that a rejection of the Contracts
at this time is a valid exercise of the Debtors' business
judgment and is in the best interests of the Debtors, their
creditors, and all parties in interest.
Accordingly, Mr. Beinenstock asserts that the Motion should be
granted and the rejection of the Contracts should be approved.
(AMES Bankruptcy News, Issue No. 5; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
AMF BOWLING: Moves to Assume Lease for 34th Avenue Lanes
--------------------------------------------------------
AMF Bowling Worldwide, Inc., seeks to assume an unexpired lease
with Herricks Fore Plan, Inc., relating to the 34th Avenue Lanes
in Woodside, New York.
In connection with the proposed assumption of the Leases, Dion
W. Hayes, Esq., at McGuireWoods LLP, in Richmond, Virginia tells
the Court of Worldwide's intent to cure these Leases' existing
defaults amounting to $499.01. Worldwide have carefully
reviewed their financial condition and ability to reorganize and
have concluded that it is in the best interests of their estates
to assume the Lease.
Mr. Hayes relates that the assumption of these Leases for the
productive Affected Locations will provide a significant benefit
to the estates as cash generated from the Lease will assist the
Debtors in their efforts to reorganize and sustain continued
operations. In light of the foregoing, Mr. Hayes contends that
there is a sound business justification supporting the
assumption of the Leases.
Herricks Objects
Herricks Fore Plan, Inc., as Landlord of the leased property
located at Woodside, New York, objects to the Motion of the
Worldwide to assume certain unexpired leases.
Douglas Scott, Esq., at Durrette Irvin & Bradshaw, P.L.C. in
Richmond, Virginia argues that Worldwide's motion is deficient
since it does not provide for Worldwide's cure of the non-
monetary defaults under the Lease. He says that in 1995,
Worldwide granted to the Landlord under the Lease a continuing
security interest in all trade fixtures and bowling equipment in
their premises.
Mr. Scott contends that this security interest is impaired by
the DIP Order, which granted Worldwide's pre-petition and post-
petition lenders liens on the fixtures and equipment, going
against the Landlord's priority lien. Mr. Scott tells the Court
that this impairment may be removed by way of releases from the
DIP Lenders to the Landlord's interest or by provision of a
security deposit equivalent to the collateral in place of the
impaired security interest.
Mr. Scott details other obligations of the Debtors to the
Landlord, which Worldwide must pay including:
A. Pre-petition taxes owed to New York City amounting to
$294.31, payment of which is an obligation of Debtors under
the Lease agreement.
B. Reimbursement of approximately $4,500 in attorney's fees and
costs in these bankruptcy proceedings.
C. Miscellaneous fees that have not yet been billed to the
Tenant-Debtor amounting approximately to $700.
Mr. Scott also contends that Worldwide's proposed order, which
provides for a release upon cure of Debtor as to the lease is
inappropriate. He says that Worldwide did not even detail the
nature of the release, nor its justifications in their Motion.
* * *
Judge Adams will convene an evidentiary hearing on the Debtors'
motion and Herricks objections on October 22, 2001. (AMF
Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service,
Inc., 609/392-0900)
ARMSTRONG HOLDINGS: Court Okays Campbell As PI Panel's Counsel
--------------------------------------------------------------
Judge Farnan approved the motion of Official Committee of
Asbestos Personal Injury Claimants of Armstrong Holdings, Inc.
to retain the law firm of Campbell & Levine as local counsel
nunc pro tunc to June 16, 2001.
The professional services Campbell & Levine will render are:
(a) providing legal advice as counsel regarding the rules
and practices of this Court applicable to the
Committee's powers and duties as an official
committee appointed under the Bankruptcy Code;
(b) providing legal advice as Delaware counsel regarding
the rules and practices of this Court;
(c) preparing and reviewing as counsel applications,
complaints, motions, answers, orders, agreements and
other legal papers filed against or on behalf of the
Committee for compliance with the rules and practices
of this Court;
(d) appearing in court as counsel to present necessary
motions, applications and pleadings and otherwise
protecting the interests of the Committee and the
asbestos-related personal injury claimants against
the Debtor;
(e) investigating, instituting and prosecuting causes of
action on behalf of the Committee and/or the Debtors'
estates; and
(f) performing such other legal services for the
Committee as the Committee believes necessary and
proper in these proceedings. (Armstrong Bankruptcy
News, Issue No. 10; Bankruptcy Creditors' Service,
Inc., 609/392-0900)
AT HOME CORP: Files Chapter 11 Petition in N.D. California
----------------------------------------------------------
AT&T confirmed that it has signed a definitive agreement to
purchase essentially all of Excite@Home's broadband access
business assets for $307 million in cash. Separately Friday,
Excite@Home announced it has commenced a Chapter 11 case in the
United States Bankruptcy Court, for the Northern District of
California (San Francisco).
AT&T remains committed to working with Excite@Home's management
and the bankruptcy court to provide uninterrupted high-speed
cable Internet service to existing Excite@Home customers, as
well as continuing relationships with other cable companies to
ensure seamless service to their customers on the @Home network.
However, the asset purchase agreement remains subject to higher
and better offers.
If the asset sale is approved, the company also said it plans to
build on the assets it acquires to develop a more robust network
while improving and growing its broadband high-speed Internet
access business for all cable company subscribers.
The boards of directors of both AT&T and Excite@Home have
approved the asset-purchase agreement, which will be filed with
the bankruptcy court and the Securities & Exchange Commission.
The transaction is subject to bankruptcy court approval and
certain other conditions. Subject to such approval, the
companies hope to close the transaction by early next year.
AT&T noted that debtor-in-possession financing was unnecessary,
as Excite@Home believes it has sufficient funds to continue
operations throughout the period prior to closing.
Excite@Home is the leader in broadband, offering consumers
residential broadband services and businesses high-speed
commercial services. Excite@Home has interests in one joint
venture outside of North America delivering high-speed Internet
services and three joint ventures outside of North America
operating localized versions of the Excite portal.
BETHLEHEM STEEL: Vale do Rio Doce Buys Iron Ore Assets for $25MM
----------------------------------------------------------------
Bethlehem Steel Corporation (NYSE: BS) announced that it has
completed the sale of its 5% interest in Mineracoes Brasileiras
Reunidas (MBR) to Companhia Vale do Rio Doce (CVRD), of Rio de
Janeiro, the world's largest iron ore producer.
The transaction is valued at $25 million comprised of $4.4
million in cash that was received at closing and credits which
will be applied against future ore purchases all of which are
expected to be realized within the next nine months.
BRIDGE INFO: Court Approves Assets Sale to Dow Jones for $4.5MM
---------------------------------------------------------------
Judge David P. McDonald on Tuesday approved the sale of some of
Bridge Information Systems Inc.'s news contracts to Dow Jones &
Co. for $4.5 million, $2 million less than previously announced,
Dow Jones reported.
Bridge spokesman Joel Weiden declined to comment on why the
purchase price changed. The approval took longer than expected
because both sides were negotiating some last-minute details and
because of the World Trade Center attacks.
Bridge and Dow Jones entered into a purchase agreement on Aug. 9
and announced later that month that Dow Jones would pay $6.5
million for Bridge' s equities, commodities and energy news
contracts. Bridge expects the deal to close by the end of this
week. Bridge filed for chapter 11 bankruptcy on Feb. 15. (ABI
World, September 27, 2001)
BROADBAND WIRELESS: Migrating from Receivership to Chapter 11
-------------------------------------------------------------
Broadband Wireless International Corporation (OTC Bulletin
Board: BBAN) has taken several steps including restructuring the
compensation plans of several company employees in preparation
to exit the Federal Equitable Receivership it has been operating
under since last year and enter into a planned reorganization.
The changes to employee compensation plans had been implemented
earlier this month and are designed to significantly reduce the
company's total fixed expenses by approximately 65 percent.
"The Board of Directors has endorsed modifications to the
strategic plan which include the deployment of the National ISP
service, focused efforts on pursuing contracts with the
Department of Defense individually and through our Joint Venture
partner, and expanding our Indian Initiatives program
enrollment, and believe the result of the changes in plan
combined with the reduction in fixed expenses will posture the
company to profitably produce a significant increase in revenue
over the next two fiscal quarters," states Albie Shaffer-
Broadband Chairman.
"Additionally in regard to exiting the Federal Receivership, we
are finalizing claims through October 8th against third parties
involved in the original cause of action by the SEC which led to
the Receivership, and anticipate these claims will be successful
in bringing additional cash back into the company. Mr. Peter
Bradford, the Federally appointed Receiver for Broadband,
anticipates filing a report with the court next week which will
provide a review of the Receivership activities and present a
formal request supported by the Board of Directors to exit the
Receivership and transition the company into a Chapter 11
Reorganization," added Shaffer.
The company is continuing to discuss strategic plans with
interested firms for acquisition, funding, and operational
support and has received several non-binding funding commitments
which are expected to be finalized prior to the company entry
into reorganization.
COTELLIGENT INC: Fails to Comply with NYSE Listing Requirements
---------------------------------------------------------------
Cotelligent, Inc. (NYSE: CGZ) announced that the New York Stock
Exchange has determined that trading in the Company's common
stock will be suspended and that the issue will be removed from
the NYSE's trading list as a result of failing to meet NYSE's
continued listing requirements.
As previously announced, the New York Stock Exchange had
notified Cotelligent that it is not in compliance with the
NYSE's continued listing standards relating to total market
capitalization, total stockholders' equity and minimum share
value. The NYSE reserves the right to suspend from trading and
delist shares that do not meet continued listing criteria.
Trading on the NYSE will be suspended prior to the opening on
Thursday, October 11, 2001. The Company expects that its shares
will be traded on the Over the Counter Bulletin Board (OCT BB)
following its delisting from the NYSE and will provide
additional information to investors in due course.
Cotelligent's management examined several options to achieve
continued listing status, including a reverse stock split and a
stock repurchase program of up to 15% of its outstanding shares
of common stock. The Company has decided to terminate the
repurchase program in order to preserve its cash.
The Board of Directors of the Company had the authority to
initiate a reverse stock split of four (4) to one (1) but, upon
the advice of three separate outside advisors and a full
discussion of the issues, concluded that this option failed to
offer a meaningful and permanent solution to the NYSE's listing
requirements.
"Our Company is intensely focused on taking all necessary steps
to grow our business. On May 17th, we announced our entry into
the mobility solutions and services market and we are greatly
encouraged by our progress since that time. As we continue to
make progress, our business model and financial model are
becoming more refined and predictable, which is required for
Cotelligent to reestablish its stature and credibility with the
investor community. Our commitment and ability to manage the
Company to substantially reduce our cash usage by calendar year-
end is an important part of the progress we are making. Growing
revenue and restoring profitability in the near-term are our
highest goals," said Jim Lavelle, Chairman and CEO.
Jim Lavelle further added, "All things considered, the measures
we would have had to take at this time in order to maintain our
NYSE listing, in the judgment of Cotelligent's Board of
Directors, are not in the mid- to longer-term interests of
either the Company or its investors. This announcement has no
impact on our plans to revive our Company's vitality nor does it
interfere with our ability to positively impact the mobility
solutions and services market. While our shares will be traded
on a different exchange, Cotelligent remains a public company
and we are committed to communicating with our stockholders and
potential investors today and into the future."
Cotelligent, Inc. (WWW.COTELLIGENT.COM) delivers mobile business
solutions, services and wireless hosting to keep its clients
productive and competitive. Harnessing its expertise in
developing and implementing complex technology applications and
eBusiness solutions, Cotelligent extends information technology
beyond the desktop to the mobile enterprise.
Cotelligent applies its "ConduIT" consulting methodology to help
clients make confident business and technological decisions.
This methodology, in conjunction with its Pervasive System Data
Center and JASware mobility solutions create the comprehensive,
scalable framework that ensures the integrity and continuity of
information across all enterprise systems and mobile
applications.
COVAD: GE Wants More Disclosure about Bluestar Litigation
---------------------------------------------------------
BlueStar Communications, Inc., BlueStar Networks, Inc. and
BlueStar Communications Group, Inc. are wholly owned
subsidiaries of Covad Communications Group, Inc. As briefly
referred to in Debtor's Disclosure Statement, the Debtor
acquired all of BlueStar's stock in September 2000.
Following this acquisition, the Debtor alleges that it invested
some $95 million dollars in BlueStar. The Debtor states that
because no additional financial investment could be justified,
BlueStar terminated operations and an assignment for the benefit
of creditors was made.
On June 24, 2001, the Debtor and BlueStar entered into an
agreement by which the Debtor acquired the right to solicit
BlueStar's customers and migrate its customers to the Debtor.
The price paid for the acquisitions was grossly inadequate and
far below the fair market value of those assets.
On the same day, the Debtor and BlueStar sent joint letters to
all of the BlueStar's customers informing them that BlueStar's
network was shutting down and directing the customers to move
their services immediately to the Debtor's own network.
GE estimates that BlueStar's network would have a much greater
fair market value in contrast to a discontinued network, which
has virtually no value because the customers have disappeared,
other than the liquidation value of the equipment used to run
the network.
The assignment for the benefit of creditors was approved by a
state circuit court on July 24, 2001. Then, several days later
on August 1, 2001, BlueStar's DSL network was closed down. The
transfer of BlueStar's assets to the Debtor for below market
value together with the closure and dismantling of BlueStar's
network with little or no notice to BlueStar's creditors
constitutes a fraudulent conveyance that detrimentally affected
BlueStar's non-insider creditors.
On or about June 25, 2001, GE, Heller Financial Leasing, Inc.
and ADC Telecommunications joined in filing an involuntary
bankruptcy petition against BlueStar.
General Electric Company complains that the Debtor's Disclosure
Statement is deficient because it fails to disclose adequate
information regarding the BlueStar transaction and the
threatened litigation arising as a result.
R. Karl Hill, Esq., at Seitz Van Ogtrop & Green P.A. in
Wilmington, Delaware, tells the Court that a disclosure
statement should disclose all litigation likely to arise. The
Debtor was aware of the threatened litigation resulting from the
BlueStar assignment and failed to disclose it in its Disclosure
Statement.
Mr. Hill states that the Deputy General Counsel and the
Associate General Counsel of the Debtor were apprised of GE's
intent to file suit against the Debtor as a result of the
BlueStar assignment and conveyance of BlueStar's assets.
Mr. Hill contends that the outcome of the threatened litigation
will dramatically affect any distribution to Debtor's creditors
and GE estimates Covad's liability arising from the BlueStar
assignment to be millions. Failure to disclose this threatened
litigation fails to give Debtor's creditors adequate information
to make an informed judgment about whether to accept or reject
the Debtor's proposed Plan of Reorganization.
Mr. Hill asserts that the Debtor's creditors have a right to
know what assets may be contingent, dependent or conditional and
failure to disclose the threatened litigation arising out of the
BlueStar assignment is a material omission precluding the
approval of the Debtor's Disclosure Statement. (Covad Bankruptcy
News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 609/392-
0900)
CREDIT CARD CENTER: Tidel and NCR Corp. Acquire ATMs For $8MM
-------------------------------------------------------------
Tidel Technologies, Inc. (Nasdaq:ATMS) announced that it has
successfully completed the first step toward recovering a
portion of its losses related to the bankruptcy of Credit Card
Center (CCC), formerly Tidel's largest customer.
In accordance with an agreement approved by the Federal
Bankruptcy Court, Tidel and NCR Corporation have jointly
acquired the entire inventory of Automated Teller Machine
equipment owned by CCC. The inventory consists of more than
4,000 ATMs, together with related parts and supplies, originally
manufactured by Tidel, NCR and several other companies, which is
principally stored in approximately 20 locations throughout the
United States.
In a transaction that closed September 24, 2001, Tidel and NCR
paid a total of $8,000,000 for such inventory, consisting of a
cash deposit by Tidel of $1,000,000 into escrow as well as equal
credits against accounts receivable due to Tidel and NCR from
CCC.
The cash portion of the purchase price will be definitively
determined after resolution of third party claims and liens
against CCC that might ultimately have priority over the claims
of Tidel and NCR.
Based on information available at this time, Tidel believes that
the final allowed claims and liens will aggregate less than
$1,000,000, and in that event, the difference will be refunded
from escrow to Tidel.
Pursuant to a separate but related agreement between Tidel and
NCR, NCR paid Tidel $1,032,300 to purchase certain ATMs
manufactured by NCR which were included in the inventory jointly
acquired from CCC at 10 of the storage locations. NCR will pay
Tidel up to an additional $114,700 of retainage in 30 days
subject to certain conditions.
The inventory purchased from Tidel included 650 new NCR ATMs
from Tidel along with approximately 1000 additional NCR ATMs
that required replacement of parts or refurbishing.
Tidel is also entitled to a contingent payment not to exceed
$400,000 upon resale of the new ATMs by NCR. Tidel is
negotiating to sell the NCR inventory recovered from the
remaining 10 or more locations to NCR in October 2001.
According to James T. Rash, Chairman and CEO of Tidel, "A final
determination of the inventory quantities purchased cannot occur
until receipt of the goods by Tidel from the various storage
locations. We believe, however, that Tidel will recover between
1,500 and 2,000 of its own ATMs, or approximately one-third of
the units not paid for by CCC prior to its collapse. From an
accounting standpoint, Tidel will add its ATMs and parts to
finished goods inventory at Tidel's cost basis, less any
restocking and refurbishing costs. All of the inventory acquired
by Tidel that was manufactured by companies other than Tidel and
NCR may be sold by Tidel in privately negotiated transactions."
Rash added, "Although both of these transactions were important
steps in Tidel's efforts to recoup losses from the CCC
situation, they are merely the first steps. We are continuing to
vigorously pursue additional recoveries of assets from CCC which
represent a significant portion of our collateral package."
Tidel Technologies, Inc. is a manufacturer of automated teller
machines and cash security equipment designed for specialty
retail marketers. To date, Tidel has sold more than 30,000
retail ATMs and 115,000 retail cash controllers in the U.S. and
36 other countries. More information about the company and its
products may be found on the Internet at http://www.tidel.com
ELCOTEL: Extends Verizon Gemini III Contract to 2004
----------------------------------------------------
Elcotel, Inc. (Nasdaq: EWTLQ) said that its contract with
Verizon for Gemini III smart pay telephone chassis has been
extended through 2004.
The multi-million dollar Gemini contract was first signed in
July 1996 and Elcotel has delivered more than 80,000 chassis to
date. The extension calls for Elcotel to continue providing
Verizon with advanced payphone features designed to improve
customer satisfaction and reduce operational expenses.
"Gemini III's advanced technology and design features are proven
as effective solutions for improving Verizon's operational
efficiencies and deliver advanced capabilities across the
Verizon footprint," said Michael Boyle, president and chief
executive officer of Elcotel. "Elcotel values its business
relationship with Verizon and views this contract extension as a
continued sign of confidence and support in our core business."
Based on industry-leading microprocessor technology, the Gemini
III chassis' patented design provides the flexibility to operate
with regulated coin lines or standard (PSP or IPP) lines while
delivering enhanced monitoring, reporting and expanded call
detail recording features.
Elcotel, Inc., based in Sarasota, Florida, is a leader in
providing public access telecommunications networks and
management services for both domestic and international wireline
and wireless communication networks.
On January 22, 2001, Elcotel and its subsidiaries filed in the
United States Bankruptcy Court in the Middle District of Florida
voluntary petitions for relief under Chapter 11 title 11 of the
United States Bankruptcy Code. The Company is presently
operating its business as a debtor-in-possession and is subject
to the jurisdiction and supervision of the Bankruptcy Court.
Visit Elcotel's corporate website at http://www.elcotel.com
ETOYS: Wants $2.5 Million Refund from Goldman Sachs
---------------------------------------------------
Prior to filing for bankruptcy, eToys, Inc., retained Goldman,
Sachs & Co., for the purpose of effecting a sale, merger or
other capital infusion. eToys and Goldman entered into
Engagement Letters dated December 4, 2000, and February 7, 2001,
and eToys transferred $3,150,000 to Goldman. The Debtors and
their Official Committee of Unsecured Creditors want $2.5
million of those funds returned to eToys' estates.
The Debtors and the Committee have asked for the money back.
Goldman hasn't sent a dime. The Debtors' lawyers' hands are
sort of tied because Morris, Nichols, Arsht & Tunnel represents
Goldman in other matters and isn't in a position to start suing
its client.
The Committee, however, represented by Michael S. Fox, Esq., at
Traub Bonaquist & Fox, LLP, and Frederick Rosner, Esq., at Cozen
O'Connor, has no difficulty suing Goldman Sachs, and intends to
do so if Goldman Sachs doesn't turnover the money. Mr. Fox
tells the U.S. Bankruptcy Court in Wilmington that the Committee
has investigated the facts and concludes that (i) the money is
subject to turnover under 11 U.S.C. Sec. 542 and (ii) the
Committee will prevail in a lawsuit to recover the money as a
preferential transfer avoidable under Sec. 547 of the Bankruptcy
Code.
Accordingly, with the Debtors' support, the Committee asks Judge
Walrath for an order authorizing the Committee to step into the
Debtors' shoes in this matter, sue Goldman Sachs, and recover
$2.5 million for the benefit of eToys' estates.
EUPHONIX INC: Nasdaq Delists Shares Effective September 27
----------------------------------------------------------
Euphonix, Inc. (Nasdaq: EUPH), announced that the Company's
securities have been delisted from the Nasdaq National Market,
but will be eligible to trade on the Over-the-Counter Bulletin
Board (OTCBB) effective with the open of business on September
27, 2001. The OTCBB is a regulated electronic quotation service
that displays real-time quotes, last-sale prices, and volume
information for over-the-counter securities.
Over 3,600 securities are traded on the OTCBB. The decision by
the Nasdaq Listing Qualifications Panel to delist Euphonix's
securities was based on the Company's failure to meet Nasdaq's
net tangible assets requirement. Euphonix expects the move from
Nasdaq to the OTCBB to have no impact on its day-to-day
operations.
Based in Palo Alto, California, Euphonix develops, manufactures
and supports networked digital audio systems for film/post
production, broadcast, music, sound reinforcement and multimedia
applications. In addition, Euphonix is developing software,
hardware and support services for Internet-enabled audio
production throughout the entertainment industry.
Founded in 1988, Euphonix has delivered more large format
digital-control mixing consoles worldwide than any other
manufacturer and is the first professional console manufacturer
to deliver the combination of a 24bit 96kHz audio console and 48
track multitrack recorder to the industry. For more information
call 650-855-0400 or visit the Euphonix Web Site at
http://www.euphonix.com
EXODUS COMMS: Gets Okay to Pay Prepetition Employee Obligations
---------------------------------------------------------------
Exodus Communications, Inc. and its debtor-affiliates sought and
obtained approval of their Emergency Motion seeking interim
authority, pending a formal "First Day" hearing, to honor and
pay all employee-related pre-petition obligations to or for the
benefit of their employees and independent contractors.
The Court recognizes that Exodus must hand-out paychecks and
sales commission checks to its Employees this week or, in short,
the Company's workforce will walk and the chapter 11
restructuring will be over.
Payments under this Emergency Motion are capped at $4,350 per
Employee.
Mark S. Chehi, Esq., at Skadden Arps Slate Meagher & Flom LLP,
relates that the Debtors' workforce consisted of approximately
2,600 full-time employees, 25 part-time employees and 25
independent contractors, who are all paid bi-weekly in the
ordinary course of the Debtors' business.
If pre-petition compensation and benefits are not honored and
paid in the ordinary course of business, Mr. Chehi contends,
Exodus' employees will suffer extreme personal hardship and in
many cases will be unable to meet their basic living expenses.
This clearly would severely erode Employee morale and result in
unmanageable Employee turnover during the critical early stages
of the Debtors' chapter 11 cases, Mr. Chechi adds.
The Debtors submit that any significant deterioration in morale
at this time will substantially and adversely impact the Debtors
and their ability to reorganize, thereby resulting in immediate
and irreparable harm to the Debtors and their estates.
Thus, to retain the Employees and maintain their morale under
the difficult circumstances imposed by chapter 11, the Debtors
seek authority to satisfy the Pre-petition Employee Obligations
and to continue to provide the Employee Benefits, on an interim
basis, pending a hearing on the Debtors' "first-day" motions in
these cases.
Prior to the Petition Date, the Debtors offered Employees many
standard employee benefits, including:
A. medical and mental health coverage under the Debtors'
group health care plan,
B. dental and vision coverage,
C. COBRA,
D. basic term life and supplemental life insurance,
E. accidental death and dismemberment,
F. disability insurance,
G. business travel accident and disability insurance,
H. an employee assistance program,
I. flexible spending accounts,
J. a 401(K) plan,
K. incentive awards,
L. tuition reimbursement,
M. an employee stock purchase program and
N. miscellaneous other benefits provided to the Employees
in the ordinary course of business
Within ninety days prior to the Petition Date, Mr. Chehi
relates, that there have been no extraordinary increases in
compensation, bonuses of benefits for which the Debtors seek
authority to pay by this Motion.
Furthermore, Mr. Chehi assures, Exodus has not prepaid any
Employee-related obligations that this Motion is intended to
ratify. In sum, the Debtors submit that the relief requested
herein is appropriate and necessary. Mr. Chehi stresses that
the Debtors would suffer substantial and significant harm if
they failed to meet their Pre-Petition Employee Obligations in
the first week of their chapter 11 cases. (Exodus Bankruptcy
News, Issue No. 1; Bankruptcy Creditors' Service, Inc., 609/392-
0900)
HEARME: Shareholders to Consider Plan of Liquidation on Oct. 22
---------------------------------------------------------------
HearMe (OTCBB: HEAR.OB), announced that it plans to hold its
Annual Meeting of Stockholders, previously scheduled for
September 28, 2001, on Monday, October 22, 2001.
At the meeting, HearMe will, among other matters, seek approval
of the Company's Plan of Liquidation and Dissolution, which has
been unanimously approved by the Board of Directors.
Due in part to delays caused by the recent events at the World
Trade Center and the Pentagon, HearMe believes that it is in the
best interests of the Company and its stockholders to delay the
meeting to afford its stockholders adequate time to review and
respond to the proxy materials relating to the Plan.
Accordingly, HearMe intends to adjourn the Annual Meeting of
Stockholders until 10:00 a.m. local time on Monday, October 22,
2001, to be held at the Sheraton Sunnyvale Hotel, 1100 North
Mathilda Avenue, Sunnyvale, California.
HearMe has filed a definitive proxy statement with the
Securities and Exchange Commission outlining details of the Plan
and the Company's timeline for a wind down of normal business
operations.
Due to the adjourned meeting, the record date for the meeting
remains June 1, 2001, and stockholders of record as of such date
will be entitled to notice of and to vote at the meeting or by
proxy and should receive a copy of the proxy materials, along
with any supplemental proxy materials prepared with respect to
the adjournment of the meeting, by mail. Proxy materials can
also be accessed online at the SEC's web site located at
WWW.SEC.GOV or through various other Web sites offering access
to SEC filing materials.
At the meeting, to approve the Plan of Liquidation and
Dissolution and proceed with the wind-down of the Company's
business, the liquidation of the Company's assets and potential
distributions of cash or other property to the Company's
stockholders (as set forth in the proxy materials and the Plan
of Liquidation and Dissolution), the Plan must receive the
affirmative vote of the holders of a majority of the outstanding
shares of the Company's common stock as of the record date.
The Company's Board of Directors has unanimously approved the
Plan as being in the best interests of the Company's
stockholders and recommends that all stockholders of record as
of the record date for the meeting, including those who may have
subsequently sold shares, vote for the approval and adoption of
the Plan.
HearMe (Nasdaq: HEAR) develops VoIP application technologies
that deliver increased productivity and flexibility in
communication via next generation communications networks. The
Company's PC-to-phone, phone-to-phone, and PC-to-PC VoIP
application platform offers innovative technology and turnkey
applications that simplify the process of bringing
differentiated, enhanced communications services to market.
Communications services supported or enhanced by HearMe
technology include VoIP-based conferencing, VoIP Calling, and
VoIP-enabled customer relationship management (CRM). Founded in
1995, HearMe is located in Mountain View, California, and is
located on the Internet at http://www.hearme.com
HEILIG-MEYERS: S&P Rates Master Trust 1998-2 Class B Paper at D
---------------------------------------------------------------
Standard & Poor's lowered its rating on class B of Heilig-Meyers
Master Trust's floating-rate asset-backed certificates series
1998-2 to 'D' from double-'CC.' The rating assigned to the class
A certificates remains at triple-'C.'
The lowered rating reflects the likelihood of the investor
receiving timely interest and the ultimate repayment of original
principal investment.
In addition, as a result of the significant level of losses
experienced by the underlying collateral pool of retail
installment contracts, all subordinated certificates have been
written down significantly.
As reported on the transaction's September 2001 distribution
report, the class B certificateholders for series 1998-2
experienced a shortfall in terms of interest due to be paid to
the class B certificateholders versus interest actually
distributed to the class B certificateholders equal to
$19,715.44.
This interest shortfall represents a rating default on the basis
of the issuer's failure to pay timely interest to the class B
certificateholders. The class C and class D certificate balances
have been reduced from their original invested amounts of
$31,300,000 and $27,055,000, respectively to zero, and the class
B certificate balance has been written down from its original
invested amount of $50,000,000 to its current amount of
$22,181,103.36.
On August 31, 2000, the ratings on classes A and B were placed
on CreditWatch with negative implications following Heilig-
Meyers Co.'s (Heilig-Meyers) bankruptcy filing on August 16,
2000, and the announcement that the company was exiting the
credit business as an originator and servicer of installment
credit.
On August 10, 2000, Heilig-Meyers announced that it would no
longer service the loans. In the intermediate period, the
trustee went to court to order Heilig-Meyers to continue
servicing until a successor could be appointed. Then in October,
the trustee appointed OSI Portfolio Services Inc. (OSI) as the
successor servicer.
On March 8, 2001, Standard & Poor's lowered its ratings on the
class A certificates to double-'B'-minus from triple-'A', and on
the class B certificates to triple-'C' from single-'A'.
Subsequently, Standard & Poor's had been reviewing OSI's
collection efforts and progress in turning around the
performance of the underlying collateral pool by monitoring the
success of its outbound dialing campaign, as well as other key
risk indicators. Once again, on June 1, 2001, Standard & Poor's
lowered its rating on class A to triple-'C' from double-'B'-
minus and class B to double-'C' from triple-'C', as a result of
continuous deterioration in collateral performance.
LTC: Fitch Downgrades Series 1996-1 Class C, D, & E Certificates
----------------------------------------------------------------
LTC's commercial mortgage pass-through certificates, series
1996-1, are downgraded as follows:
* $7.6 million class C to A- from A
* $5.1 million class D to BBB- from BBB
* the $11.8 million class E to B- from B
By downgrading classes C and D, Fitch removes them from Rating
Watch Negative.
Fitch affirms the following classes:
* $44.9 million class A at AAA
* $784,000 class R at AAA
* $809,000 class LR at AAA
* $8.7 million class B at AA
* the $4.5 million class F at CCC
Fitch does not rate the $5.6 million class G. The rating actions
follow Fitch's annual review of the transaction, which closed in
March 1996.
The certificates are collateralized by 28 loans secured by 46
health care properties. As of September 2001, the collateral
balance had declined 22%, since closing, to $88.1 million.
The pool's top-three geographic concentrations are Georgia (20%
by principal balance), Arizona (15%), and Florida (12%).
The downgrades reflect the continued deterioration in the pool's
performance. A review of full-year 2000 performance reflects a
weaker debt service coverage ratio and the emergence of
delinquencies.
Fitch received year-end (YE) 2000 operating performance for 22
of the 28 loans (or 76% by principal balance). Based on the
reported net operating income, adjusted for a 5% management fee,
and actual debt service, the comparable weighted-average (WA)
debt service coverage ratio (DSCR) declined 5% to 1.48 times
from 1.55x in 1999. Six loans (28% by principal balance) had a
DSCR below 1.0x.
Two loans (10% by principal balance) without YE 2000 performance
had a DSCR below 1.0x during 1999. One loan (2% by principal
balance) was 30-days delinquent. Weak pool performance was
mainly the result of competitive operating environments and
increased operating costs.
Fitch modeled the transaction, taking into account the WA DSCR
trend, the diversity of the pool, and the increased likelihood
of default associated with those loans with a DSCR below 1.0x or
with delinquencies. The results indicated that the transaction's
credit quality had deteriorated and subordination levels had not
increased sufficiently to maintain the original ratings of the
lower classes.
LTV CORP: Cleveland Banks Apply for $250 Million Loan Guarantees
----------------------------------------------------------------
The LTV Corporation (OTC Bulletin Board: LTVCQ) reported that
National City Bank and Key Bank, headquartered in Cleveland,
have submitted applications for federal guarantees for $250
million of loans for LTV Steel. The federal guarantees are
provided under the Emergency Steel Loan Guarantee Program.
"National City and Key have become invaluable partners in our
efforts to save LTV Steel and the jobs and benefits of thousands
of employees, their families and retirees," said William H.
Bricker, chairman and chief executive officer of The LTV
Corporation.
"The combination of the federal government's guarantee and
assistance provided by the City of Cleveland, Cuyahoga County,
the State of Ohio, and a supplier now total 98% of the loan. We
are extremely grateful to these parties for their support of our
company and their confidence in our employees' commitment to
make LTV Steel a viable, profitable asset to this region," he
said.
LTV said that the loan guarantee application must be approved by
the Federal Emergency Steel Loan Guarantee Board. A decision is
expected in 30 to 60 days.
"We are confident, given the unprecedented levels of public and
private support for this loan, that the Loan Guarantee Board
will recognize the critical importance of this loan to thousands
of people in communities throughout the Midwest. LTV Steel,
through an aggressive restructuring plan, is reducing costs to
levels that will enable it to compete in a steel marketplace
that has been forever changed by imports and lower-cost,
non-union domestic competitors. This loan is indispensable to
our efforts to achieve this new level of competitiveness and
long-term success," Mr. Bricker said.
Proceeds from the loan will be used for critical capital
investments and financing related to the Company's restructuring
and operation of the integrated steel business.
LTV Steel employs approximately 4,000 people in the Cleveland
area and about 7,800 people nationwide.
The LTV Corporation is a manufacturing company with interests in
steel and metal fabrication. LTV Steel segment is a leading
producer of high-quality flat rolled steel. LTV-Copperweld is
the largest producer of tubular and bimetallic products in North
America.
LAIDLAW INC: Asks for Open-Ended Extension of Removal Period
------------------------------------------------------------
At the Petition Date, Laidlaw Inc. and its debtor-affiliates
were parties to lawsuits pending in state and Federal courts
across the country.
Pursuant to Rule 9027 of the Federal Rules of Bankruptcy
Procedure, the Debtors ask the Court to extend their 90-day
period of time within which they must decide whether to remove a
legal proceeding from the court in which it is pending to the
Western District of New York for further litigation and final
resolution.
The Debtors argue that they have not yet had a full opportunity
to investigate their involvement in the Pre-petition Lawsuits,
and decisions about the appropriate forum in light of these
chapter 11 filings would be imprudent at this early juncture.
Accordingly, the Debtors ask that the time within which they
must decide whether to remove any Pre-petition Lawsuit be
extended through the later of:
(a) the Confirmation Date; or
(b) 30 days after the entry of an order terminating the
automatic stay with respect to the particular Action
sought to be removed.
A hearing on this motion was held before Judge Kaplan on
September 28, 2001. (Laidlaw Bankruptcy News, Issue No. 7;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
LERNOUT & HAUSPIE: Hopes to Emerge from Chapter 11 by Year's End
----------------------------------------------------------------
Dictaphone Corporation, a leading provider of communications
recording solutions for public safety, financial and trading
organizations and call centers, expressed optimism over
significant progress recently made among L&H, Dictaphone and
their creditors which will allow Dictaphone to once again become
a privately held, independent company.
The emergence agreement, which calls for creditors to exchange
debt for equity in the newly formed Dictaphone Corporation, is
expected to be complete before the end of 2001. The company,
along with its parent, Lernout & Hauspie, has been operating
under Chapter 11 protection since late last year.
"Dictaphone's continued growth and strong product position are
positive indicators of our future potential," said Rob Schwager,
Dictaphone's president and COO. "After the transition,
Dictaphone will be operating with very little debt, the lowest
we've had, in fact, in more than five years, and with a very
strong, comfortable capital structure. I'm happy to say that
throughout the difficulties of the past year, Dictaphone has
remained profitable and healthy. We're poised to move
successfully ahead."
The company's overall R & D spending has remained strong
throughout the period and continues at a rate that is well above
the industry average.
"In communications recording, we today have the largest and
strongest portfolio of products in the group's history," said
Berni Breen, senior vice president and general manager of the
company's Communications Recording Systems (CRS) group. "We have
rolled out and delivered more new products in the last six
months than in any comparable period in memory."
New Freedom System Enjoys Marketplace Success
The CRS group recently launched Freedom FT, whose expanded
channel recording capacity will be attractive to a growing
number of larger organizations, both in public safety and in
financial trading applications. Other products, including
Freedom Select, Freedom QMS and Freedom CallCheck, have also
been launched within the past several weeks. The launches are
just the latest developments in the course of a very successful
product. Freedom has been an important success since its launch
in the fall of 1999. The company has sold over 4,200 Freedom
recorders, which are installed at some 2,000 individual customer
locations around the world.
"Our strength has been particularly remarkable in the context of
today's difficult market conditions," Breen said. "At a time
when our publicly traded competitors are struggling at share-
price levels that in some cases are off ninety percent from
recent highs, we have maintained a strong R&D and product
rollout schedule."
Over the past year, CRS has developed new organizational systems
to increase efficiency in both sales and customer service. With
a strong, technology-driven, inside sales force coupled with a
highly-skilled field force and new e-commerce initiatives, CRS
is reaching prospects and customers more effectively than ever.
As one measure of that efficiency, the average Dictaphone e-
commerce transaction is valued at $22,500. That compares
favorably with an industry average estimated to be $500.
About Dictaphone CRS
A division of Dictaphone Corporation, the Dictaphone
Communications Recording Systems group (CRS) is a leading
provider of communications recording and quality monitoring
systems for public safety, financial services, and call centers,
with over 18,000 installed customers worldwide.
Based on service revenue, Dictaphone is the leading vendor in
the call recording industry, according to independent call
center industry analyst Datamonitor. Dictaphone CRS' principal
product is the Freedom network appliance recording system. The
Freedom system's revolutionary design gives call centers all
types newfound freedom to access and store their voice
information wherever, whenever, and however they want.
Dictaphone Corporation has over a century of experience in voice
technology. Dictaphone is headquartered in Stratford, Conn. For
more information on Freedom FT and Dictaphone, visit
http://www.dictaphone.com
MARINER POST-ACUTE: LCT Rejects Leases for Oklahoma Facilities
--------------------------------------------------------------
In light of the significant loss due to default by the sublessee
RM&G, in cumulative arrearage of approximately $300,000 through
July 31, 2001, excluding penalties and interest, Mariner Post-
Acute Network, Inc. (MPAN), Living Centers of Texas, Inc. (LCT),
and the other Debtors sought and obtained the Court's authority,
pursuant to section 365(a) of the Bankruptcy Code, for LCT's
rejection of 8 leases for nonresidential real property of
skilled nursing facilities located in Oklahoma and 8 subleases
respectively related to the 8 Facilities and Leases.
As of the Petition Date, LCT was a Leassee for the eight skilled
nursing facilities in Oklahoma with the respective lessors.
LCT subsequently entered into a separate sublease for each of
the eight Oklahoma Facilities with RM&G. All of the Subleases
provided that RM&G would be liable for all of LCT's obligations
under the respective Leases, including the payment of the
monthly rental obligations as listed above. Thus, even if RM&G
satisfies all of its obligations under the Subleases, the best
LCT can do is break even under the current lease arrangement.
Pursuant to the Leases, LCT pays monthly rental obligations of
$7,211.00 at the Ringling Facility, $5,338.00 at the Hennessey
Facility, $21,795.00 at the Duncan Facility, $8,833.00 at the
Healdton Facility, $10,048.00 at the Wilson Facility, $7,822.00
at the Regency Facility, $8,077.00 at the Marlow Facility, and
$5,454.00 at the Crescent Facility.
In connection with the parties' entry into the Subleases, RM&G
delivered a "Note" to LCT in the principal amount of $3,150,000.
Since the inception of the Subleases, the Oklahoma Facilities
have been operated solely by RM&G as skilled nursing facilities
under RM&G's licenses. LCT does not operate any of the Oklahoma
Facilities and conducts no business at any of the Oklahoma
Facilities or any other facilities in Oklahoma.
Unfortunately, since the inception of the Subleases, RM&G has
failed to make the required monthly rental payments under the
Subleases and is in substantial default under the Note. From
time to time, RM&G has become current with respect to the
required monthly rental payments under the Subleases only to
later fall behind again. Despite the fact that LCT has not
received sufficient payments from RM&G to cover the monthly
rental payments under the Leases, LCT has nevertheless continued
to pay to the Landlords the monthly rental payments required
under the Leases through and including August 31, 2001.
LCT notes that RM&G's failure to timely make payment to it under
the Subleases thus has resulted in significant losses for LCT.
In LCT's estimate, there is cumulative arrearage of
approximately $300,000.00 through July 31, 2001, excluding
penalties and interest.
LCT therefore determined that a rejection of the Leases and
corresponding Subleases is in the best interest of its estate
and creditors. LCT determined that assuming and assigning the
Leases and Subleases to a third party would not be feasible
because even if RM&G were to remain current on its rental
obligations going forward, there is no value in the current
lease arrangement. Because the Leases and Subleases serve no
useful purpose for LCT, its estate will be benefited by
eliminating unnecessary administrative rent accruals and other
obligations associated with the Leases.
The eight leases and eight respective leases are:
(1) the Healdton Lease, dated April 13, 1993, as amended,
between LCT and HRW, Inc., relating to the real property
commonly known as the Healdton Nursing Home, 406 East Main
Street, Healdton, Oklahoma 73438;
(2) the Healdton Sublease, as amended, dated as of June 30,
1995, between LCT and RM&G, Inc. relating to the Healdton
Facility;
(3) the Ringling Lease, dated as of April 13, 1993, as amended,
between LCT and HRW, relating to the real property commonly
known as the Ringling Nursing Home, 2nd & N Street,
Ringling, Oklahoma 73455;
(4) the Ringling Sublease, as amended, dated as of June 30,
1995, between LCT and RM&G, relating to the Ringling
Facility;
(5) the Wilson Lease, dated as of March 9, 1993, as amended,
between LCT and HRW, relating to the real property commonly
known as the Wilson Nursing Home, 406 East Main, Wilson,
Oklahoma 73463;
(6) the Wilson Sublease, as amended, dated as of June 30, 1995,
between LCT and RM&G, relating to the Wilson Facility;
(7) the Regency Lease, dated as of July 30, 1979, as amended
between LCT, as successor in interest to Oklahoma Care
Centers, Inc., and R&R Associates, relating to the real
property commonly known as the Regency Nursing Home, 615 E.
Morris St., McAlester, Oklahoma 74501;
(8) the Regency Sublease, as amended, , dated as of June 30,
1995, between LCT and RM&G, relating to the Regency
Facility;
(9) the Crescent Lease, as amended, between LCT, as successor
in interest to Marlow Manor, Inc. and Mokla Associates,
relating to the real property commonly known as the
Crescent Nursing Home, 208 E. Sanderson, Crescent, Oklahoma
73028;
(10) the Crescent Sublease, as amended, dated as of June 30,
1995, between LCT and RM&G, relating to the Crescent
Facility;
(11) the Duncan Lease, dated as of March 30, 1979, as amended,
between LCT, as successor in interest to Marlow, and Mokla,
relating to the real property commonly known as the Duncan
Nursing Home, 700 Palm Street, Duncan, Oklahoma 73533;
(12) the Duncan Sublease, as amended, dated as of June 30,
1995, between LCT and RM&G, relating to the Duncan
Facility;
(13) the Marlow Lease, dated as of March 30, 1979, as amended,
between LCT, as successor in interest to Marlow, and Mokla,
relating to the real property commonly known as the Marlow
Nursing Home, 702 South 9th, Marlow, Oklahoma 73055;
(14) the Marlow Sublease, as amended, dated as of June 30, 1995,
between LCT and RM&G, relating to the Marlow Facility;
(15) the Hennessey Lease, dated as of March 30, 1979, as
amended, between LCT, as successor in interest to Marlow,
and Mokla, relating to the real property commonly known as
the Hennessey Nursing Home, 705 E. 3rd, Hennessey, Oklahoma
73742; and
(16) the Hennessey Sublease, as amended,, dated as of June 30,
1995, between LCT and RM&G, relating to the Hennessey
Facility. (Mariner Bankruptcy News, Issue No. 19;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
MCLEODUSA: Denial of Groundless Bankruptcy Rumors Rings Hollow
--------------------------------------------------------------
McLeodUSA Incorporated (Nasdaq:MCLD), the nation's largest
independent competitive local exchange carrier, took the unusual
step of denying rumors the company is near bankruptcy. While
McLeodUSA may not "intend" to file for bankruptcy, the facts
available today point to the need for a major balance sheet
restructuring::
(A) The lenders under McLeodUSA's $1.3 billion Secured
Credit Facility led by The Chase Manhattan Bank are
bailing out of the lending syndicate at less than 80
cents-on-the-dollar.
(B) Bondholders sentiment indicates a loss of confidence.
McLeodUSA's 11-3/8 Notes due 2009 and other bond debt
trade at deep discounts to par;
(C) Liquidity is strained. McLeodUSA's balance sheet at
June 30, 2001, shows $667 million in current assets --
cash and other fairly-liquid assets that will convert
to cash within the next year -- available to pay $658
million of debt coming due within the next year. $8.6
million of working capital provides little comfort to
creditors looking for repayment of more than $4 billion
owed to them.
(D) McLeodUSA is highly leveraged. The Company's June 30,
2001 Balance Sheet shows $4.5 billion in non-goodwill
assets and liabilities topping $4.2 billion.
(E) The Company is not profitable. McLeodUSA's accumulated
shareholder deficit increases steadily quarter-by-
quarter.
"While ordinarily it is the company's policy not to comment on
rumor and speculation," the Company said in a press release
issued last week, "McLeodUSA believes it is in the best interest
of its customers, investors and employees to comment on recent
inaccurate rumors about the viability of the company. The
company believes its stock has been trading irrationally based
on these groundless rumors. McLeodUSA is confident in its future
and has absolutely no intention of filing for bankruptcy.
"Since announcing a 90-day planning process in August, McLeodUSA
has made significant progress in laying out its detailed plans
for continued future success, focusing on these primary
activities:
-- Refining its business strategy for going forward;
-- Analyzing the profitability of each of its markets with
the intent of right-sizing and focusing its sales
organization on profitable revenue growth;
-- Reviewing its capital expenditure requirements while
maintaining full funding;
-- Reviewing each business unit in detail for cost and
operational synergies;
-- Reviewing its asset portfolio to make available for sale
assets which no longer align with the company's revised
strategic plan;
-- Establishing detailed plans for 2002 and 2003 to achieve
profitable growth.
"The company believes it has the fundamentals in place to
navigate through this difficult environment, and in fact,
maximize the company's significant opportunity. McLeodUSA is on
track to complete its detailed review and will communicate its
plans to shareholders in the next several weeks."
About McLeodUSA
McLeodUSA provides integrated communications services, including
local services, in 25 Midwest, Southwest, Northwest and Rocky
Mountain states. The company also provides data and voice
services in all 50 states. McLeodUSA is a facilities-based
telecommunications provider with, as of June 30, 2001, 383 ATM
switches, 49 voice switches, 372 collocations, 512 DSLAMs,
nearly 31,000 route miles of fiber optic network and 10,600
employees. The company's fiber optic network is capable of
transmitting integrated next-generation data, Internet, video
and voice services, reaching 800 cities and approximately 90% of
the U.S. population. In the next 12 months, McLeodUSA plans to
distribute 35 million telephone directories in 26 states,
serving a population of 59 million. McLeodUSA is a Nasdaq-100
company traded under the symbol MCLD. Visit the company's web
site at http://www.mcleodusa.com
MIDWAY AIRLINES: Wants Its Cut of $15B Industry Bailout Package
---------------------------------------------------------------
Bankrupt Midway Airlines hired a Washington, D.C., law firm to
help get funding from the federal government's $15 billion
airline industry bailout, but it may be weeks before the
bankrupt carrier learns if it can get the money it needs to
resume flying, according to The News & Observer.
U.S. Bankruptcy Judge A. Thomas Small on Tuesday gave Midway
approval to hire Fleischman & Walsh LLC to determine if Midway
qualifies for funds under the $15 billion airline aid bill that
lawmakers approved last week. The U.S. Department of
Transportation could begin disbursing $2.5 billion of the aid,
but no determination has been made whether Midway, which has
ceased flights, is eligible.
Midway President and Chief Executive Officer Robert Ferguson did
not know when the Morrisville, N.C.-based carrier might apply
for funds. He said last week that the funds offer Midway a long-
shot chance of resuming flights. In the meantime, Midway is
proceeding with liquidation of its assets. Midway filed for
chapter 11 bankruptcy protection on Aug. 13. (ABI world,
September 27, 2001)
OWENS CORNING: Shintech Demands Payment of $3.6M Admin. Claim
-------------------------------------------------------------
Shintech amends its motion to compel payment of an
administrative claim to reflect that Owens Corning remitted
payments to Shintech in the amount of $4,133,609 and report that
additional information further reduces the total administrative
expense claim to $3,666,329.
Accordingly, Shintech asks the Court to allow administrative
expense claim in the amount of $3,666,329 and requests that the
Court direct the Debtors to pay this administrative claim within
10 days from the date of entry of an Order approving its Motion.
William D. Sullivan, Esq., at Elzufon Austin Reardon Tarlov &
Mondell, P.A. in Wilmington, Delaware, contends that the Debtors
owe Shintech $3,666,329 for post-petition purchases of resin and
rescission of voluntary, post-petition concessions.
Mr. Sullivan argues that Shintech's post-petition performance
under the Contract conferred benefits on the Debtors' estates
and should be allowed in full. Shintech preserved and enhanced
the going concern value of the Debtors' businesses by continuing
to provide resin to the Debtors. Mr. Sullivan asserts that the
Debtors should not be able to accept the benefit of Shintech's
post-petition performance without Shintech being entitled to
payment of an administrative expenses claim for the full value
of those services.
In addition, Mr. Sullican states Shintech's post-petition
performance should be valued in accordance with the rates and
charges set forth in the Contract. (Owens Corning Bankruptcy
News, Issue No. 16; Bankruptcy Creditors' Service, Inc.,
609/392-0900)
PACIFIC AEROSPACE: Aeromet Gets Over $5.5 Million In New Orders
---------------------------------------------------------------
Pacific Aerospace & Electronics, Inc. (OTC Bulletin Board: PCTH)
announced that it has received new orders for over $5.5 million
at its European group (Aeromet International PLC).
These orders were placed in the month of August and cover a wide
range of products for the civil aerospace, military/defense and
autosport markets.
"Business inquiries continue to be high at this group and these
recent contract wins attest to our continuing ability to secure
valuable new business," said Don Wright, President and CEO of
Pacific Aerospace & Electronics.
Pacific Aerospace & Electronics, Inc. is an international
engineering and manufacturing company specializing in
technically demanding component designs and assemblies for
global leaders in the aerospace, defense, electronics, medical,
telecommunications, energy and transportation industries. The
Company utilizes specialized manufacturing techniques, advanced
materials science, process engineering and proprietary
technologies and processes to its competitive advantage.
Pacific Aerospace & Electronics, Inc. has approximately 800
employees worldwide and is organized into three operational
groups -- U.S. Aerospace, U.S. Electronics and European
Aerospace. More information may be obtained by contacting the
company directly or by visiting its Web site at
http://www.pcth.com
The Company, early last month, entered into a lock-up agreement
with the holders of approximately 98% of its 11 1/4% senior
subordinated notes regarding a planned restructuring of the
Company's debt and equity outside of bankruptcy.
The Company has been in default under the $63.7 million Senior
Subordinated Notes for failure to make its semi-annual interest
payment prior to the expiration of a 30-day grace period on
August 31, 2001.
This default also caused an event of default to occur under the
Company's 18% senior secured loan. The lock-up agreement
also considers the sale of UK unit Aeromet International PLC to
pay off the Company's 18% senior secured loan.
PACIFIC GAS: Ratepayers Will See Lower Gas Prices in October
------------------------------------------------------------
The cost of natural gas continues to trend downward, resulting
in a significant decrease in gas bills for customers of Pacific
Gas and Electric Company.
The continuing drop in natural gas prices is expected to
decrease customers' bills by more than 50 percent this October
versus a year ago. The average residential bill for October 2001
should be $14.33 compared to $28.77 in October 2000.
The downward trend in market prices, for Pacific Gas and
Electric Company customers, is the result of an abundant supply,
ample gas in storage (locally and nationwide), a decrease in
demand, and adjustments from prior months. During the summer
months, Pacific Gas and Electric Company sought the best
market prices, mainly from Canada, and began filling its
underground storage facilities.
It is important to note that unlike electricity, customers pay
the full market price for the natural gas they use. Pacific Gas
and Electric Company does not mark up or profit from the price
of gas; state regulation requires that the company pass the cost
directly on to customers.
In October 2001, Pacific Gas and Electric Company customers can
expect to pay 40 cents per therm for baseline usage and 59 cents
per therm above baseline compared to 88 cents per therm for
baseline and $1.07 cents above baseline in October 2000. This
overall cost to customers includes both the cost of natural gas
-- the commodity and transportation of the commodity. The new
rates will take effect on October 5, 2001.
Market costs skyrocketed last year when the average residential
bill was at $77 for December. The costs continued to rise,
hitting a high of $125 in January and $113 in February.
Gas prices began increasing across the country last year because
of tight supplies and high demand. Prices charged by gas
suppliers last winter were especially high because of increased
demand by natural gas-fired power plants. Additionally, cold
weather -- which results in higher demand -- in other parts of
the country tends to drive up prices here because the pipelines
an supply basins in Canada and the Southwest U.S. that serve
California are also connected to other regions.
PG&E Corporation was incorporated in California in 1995 and
became the holding company of Pacific Gas and Electric Company,
a debtor-in-possession, on January 1, 1997. The Utility,
incorporated in California in 1905, is the predecessor of PG&E
Corporation. Effective with PG&E Corporation's formation, the
Utility's interests in its unregulated subsidiaries were
transferred to PG&E Corporation.
The Utility filed a voluntary petition for relief under Chapter
11 of the United States Bankruptcy Code (Bankruptcy Code) in the
United States Bankruptcy Court for the Northern District of
California. Under Chapter 11, the Utility retains control of
its assets and is authorized to operate its business as a
debtor-in-possession while being subject to the jurisdiction of
the Bankruptcy Court.
PSINET INC: Cisco Seeks Adequate Protection of Lease Payments
-------------------------------------------------------------
In a preemptive strike against PSINet, Inc.'s suggestion to
recharacterize certain leases as secured financial arrangements,
and for a stay of their obligations to make rental payments
under 11 U.S.C. section 365(d)(10), Cisco Systems Capital
Corporation submits to the Court its motion for entry of an
order pursuant to 11 U.S.C. Sec. 363(e) granting Cisco adequate
protection of its interests in certain equipment as described to
the Court; Specifically, Cisco asks the Court to require the
Debtors to make adequate protection payments to Cisco on a
monthly basis in an amount equal to the stated rent under the
Master Lease and Equipment Schedules.
Cisco tells the Court that it is currently entitled to receive
$3,181,407.57 in rental payments under the Master Lease and
Equipment Schedules for each month from the petition date
(decreasing pro tanto upon the expiration of any of the
Equipment Schedules.)
"Because Cisco's high-tech equipment is rapidly declining in
value at a pace that corresponds with the term of each equipment
schedule, monthly payments of the contract rent must be paid to
Cisco to adequately protect its interests," attorneys at Murphy
Sheneman Julian & Rogers and Otterburg, Steindler, Houston &
Rosen, P.C. asserts. "Debtors' own Engineering Advisor has
testified that rapid innovation in the computer,
telecommunications, and internet technology industries will
exhaust the economic value of Cisco's equipment within the term
of the leases, and that this exhaustion of value was the
Debtors' intent and understanding at the inception of the
leases," the attorneys cite.
Cisco reminds the Court that, "by their own account, the Debtors
are holding over $300 million of unencumbered funds and will be
receiving much more as the result of the divestiture of
significant assets" "While Debtors stockpile this cash, the
value of Cisco's equipment is declining," the supplier protests,
"If the Debtors truly wished to proceed in good faith, they
should have used some of this cash to make monthly rental
payments to Cisco, since such payments are clearly required
under either Section 363(e) or Section 365(d)(10)." Cisco
requests that the Court remedy this oversight and order Debtors
to commence immediate monthly rental payments to Cisco at the
contract rate. (PSINet Bankruptcy News, Issue No. 8; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
RELIANCE GROUP: Gov't Seeks Shield for IRS Re Tax Liabilities
-------------------------------------------------------------
The United States of America, by its attorney, Mary Jo White,
U.S. Attorney for the Southern District of New York, tells Judge
Gonzalez that the Government takes no position on the
Rehabilitator's motion for abstention, dismissal, and for other
relief, except to the extent that it seeks to protect any and
all rights that the IRS has, and may have, with respect to
consolidated income tax liabilities owed by Reliance Group
Holdings, Inc., and its affiliates, including Reliance Insurance
Company.
The IRS anticipates that it may have claims against RGH and,
inter alia, RIC, for consolidated federal income taxes owed for
the tax years 1988 through 2000. At the present time, the amount
of that potential liability is unknown.
Audits pertaining to the two tentative refunds made to RGH
totaling $45,651,000 have not been completed, and the refunds
have not been approved by the Joint Committee for Taxation.
Therefore, at the present time, the potential deficiency, if
any, that may be assessed with respect to those tentative
refunds, is unknown.
Ms. White reminds the Court that the members of the consolidated
group, by filing a consolidated tax return, agree to be bound by
all of the consolidated return regulations. See 26 U.S.C. 1501.
Such regulations are intended "to prevent avoidance of [a
consolidated group's] tax liability." 26 U.S.C. 1502. According
to the regulations: "[T]he common parent and each subsidiary
which was a member of the group during any part of the
consolidated return year shall be severally liable for the tax
for such year . . . ." 26 C.F.R. 1.1506-6(a); see United States
v. Williams, 959 F. Supp. 210, 212 (S.D.N.Y. 1997).
The Government respectfully requests that in determining the
Rehabilitator's motion for abstention, dismissal, and for other
relief, the Court refrain from making any determination that
would impair the rights of the IRS with respect to the
consolidated tax liabilities of RGH and, inter alia, RIC.
This includes, without limitation, (1) any and all rights
against either or both taxpayers for taxes determined to be owed
that have not been paid, and (2) any and all rights with respect
to the $45,651,000 tentative refund, as the consolidated
taxpayers' right to such refund, or any part thereof, has not
been finally determined. (Reliance Bankruptcy News, Issue No.
10; Bankruptcy Creditors' Service, Inc., 609/392-0900)
SITE TECHNOLOGIES: Will Make $5.28MM Liquidating Distribution
-------------------------------------------------------------
Site Technologies, Inc. (ticker symbol: STCHQ) will make a
partial liquidating distribution totaling $5,280,158, or $0.62,
for every outstanding share of its common stock. The
Distribution will be made to all shareholders of record as of
the close of business on August 14, 2000.
Pursuant to the Company's First Amended Plan of Reorganization
under Chapter 11 of the United States Bankruptcy Code, effective
as of the close of business on the Record Date, the Company's
common stock no longer represents an ownership interest in the
Company and only represents the right to receive a pro rata
share of the Distribution and any subsequent distribution(s), if
any.
Accordingly the Company's common stock is no longer transferable
on the Company's books. Pursuant to the Plan, after payment of
all administrative costs, the Company's remaining funds, if any,
will be distributed to the shareholders of record as of the
Record Date.
SUNBEAM: Seeks Extension of Lease Decision Deadline to Feb. 4
-------------------------------------------------------------
Sunbeam Corporation asks the United States Bankruptcy Court for
the Southern District of New York to extend the period within
which it must decide whether to assume or reject leases of
nonresidential real property to the earlier date of February 4,
2002 or the confirmation of the chapter 11 plan of the Debtors.
George A. Davis, Esq., at Weil Gotshal & Manges LLP, relates
that the Debtors are parties to 67 remaining unexpired leases,
having decided on 3 leases of nonresidential real property.
Mr. Davis tells the Court that the Debtors are reviewing and
analyzing the remaining unexpired lease, which is anticipated to
take considerable amount of time. He adds that the Debtors are
unable to make a decision on the remaining lease due to the
large number of remaining unexpired leases.
Sunbeam Corporation, a manufacturer and distributor of durable
household and outdoor leisure consumer products through mass
market and other consumer channels in the United States and
abroad, filed for chapter 11 protection on February 6, 2001,
reporting $2,959,863,000 in assets and $3,201,512,000 in debt.
SUNTERRA CORPORATION: Announces Senior Management Appointments
--------------------------------------------------------------
Sunterra Corporation has added Jack Myers as Vice President
Human Resources, Paul Bosch as President of RPM, and Ron Frank
RRP as Vice President Sales-East to their current management
staff.
Jack Myers comes to Sunterra from Starwood Hotels, where he held
the position of Corporate Director of Human Resources.
Paul Bosch joins Sunterra after 27 years with Disney, where he
was involved in the launch of the Disney Vacation Club and most
recently, as Director of Resort Operations for Westgate Resorts.
Ron Frank has more than 20 years experience in the timeshare
industry, earning the prestigious RRP designation from ARDA. Ron
was previously with Sunterra from 1998 to 2000, initially
serving as Director of Sales and Marketing in Santa Fe and
eventually handling responsibilities as Regional Vice President
of Sales for the Midwest Region.
"We are extremely pleased to announce these additions to our
team. Each brings their own expertise, solidifying our
commitment to growing our business through the recruitment of
top quality people," said Greg Rayburn, CEO of Sunterra.
Sunterra is one of the world's largest time-share vacation
companies, with about 90 resort locations in the Caribbean,
Europe, and North America. About 300,000 families own interests
in the company's resorts, entitling them to a one-week stay at a
resort each year, as well as "vacation points," which may be
redeemed at participating resorts. Sunterra also offers
financing services and develops and manages resort properties.
It markets properties under the Sunterra name and, through
licensing agreements, the Embassy Vacation Resorts name.
The company has filed for Chapter 11 and hired CEO Greg Rayburn
in an effort to improve its financial standing.
TOTAL CARE: AD OPT Technologies To Buy Certain Assets for $3MM
--------------------------------------------------------------
AD OPT Technologies Inc. (TSE: AOP) a leading developer and
vendor of advanced workforce management applications, announced
that it will acquire certain assets of Total Care Technologies
Inc. and Total Care Holdings Inc. of Kelowna, British Columbia,
a privately owned global leader in the development of staff
scheduling solutions for healthcare organizations.
As per the terms of the agreement, AD OPT will pay approximately
$3 million cash to purchase the assets of Total Care from
receivership. The transaction will close on or before October 9,
2001, subject to court approval.
"The purchase of the assets of Total Care reinforces AD OPT's
commitment to growth via acquisition into new vertical markets,"
said Tom Ivaskiv, President and CEO of AD OPT. "Total Care is a
leader in its field with more than 200 healthcare clients that
are currently employing the company's staff scheduling
solutions. Through this acquisition, AD OPT has seized the
opportunity to leverage the obvious synergies that exist between
our two organizations to achieve greater market penetration."
AD OPT intends to maintain Total Care's facilities in Kelowna,
BC, as well as the company's Australian operations. It is
expected that the majority of Total Care's current management
and employees will agree to stay on and continue to contribute
to the company's ongoing growth and development.
"AD OPT identified Total Care as an acquisition candidate
because of its excellent products and market opportunity,"
continued Mr. Ivaskiv. "We are looking forward to working with
the staff at Total Care and we are determined to take all
reasonable measures to continue serving their valued clientele
in the way they have been accustomed. Furthermore, we aim to
continue to develop and enhance their product offering to ensure
that it remains a premium software solution."
Founded in 1991, Total Care quickly grew to become the world's
largest company focused exclusively on developing staff
scheduling solutions for healthcare organizations. By
complementing its leading-edge software products with
outstanding implementation and support services, Total Care has
been successful in helping clients become more efficient by
facilitating positive organizational change.
In the last five years, the Company has enjoyed explosive growth
as leading healthcare organizations have recognized the value of
a solution that emphasizes "more than just staff scheduling
software." More information on the company can be found on its
website: http://www.total-care.com
AD OPT's products, based on proprietary mathematical algorithms,
serve as workforce planning and scheduling tools that allow
companies with large and complex scheduling functions to
quantify labor costs, enhance planning capabilities, and improve
quality of life for employees. This technology, which is the
result of more than 15 years of continuing research and
development, forms the basis for all the Company's leading
applications: Altitude(TM) and ShiftLogic(TM). Currently, the
Company is pursuing an aggressive growth strategy that will
leverage its workforce scheduling know-how and applications into
new labor-intensive vertical markets.
AD OPT is a Montreal based public company with 11,111,096 shares
outstanding. The Company's common shares trade on the Toronto
Stock Exchange (TSE) under the symbol "AOP." For additional
information, visit AD OPT on the web at http://www.ad-opt.com
UAL CORP: Will Suspend Stock Dividend in Wake of Industry Slump
---------------------------------------------------------------
UAL Corporation (NYSE: UAL), the holding company whose primary
subsidiary is United Airlines, announced decisions on certain
key issues following Thursday's meeting of the company's board
of directors:
Company will suspend dividend on common stock
The board of directors has indefinitely suspended the quarterly
cash dividend on the company's common stock. The dividend rate
was $0.05 per share of common stock.
Board approves suspension of CEO's compensation through year-end
and foregoes board members' compensation through year-end.
The company's board of directors approved a request by James E.
Goodwin, the company's chairman and chief executive officer that
Goodwin forego any further compensation through year-end, 2001.
Additionally, board members agreed that they would forego board
member compensation for the remainder of the year.
Commenting on the decisions, Goodwin said: "As leaders of this
company, we are doing all we can to respond to the industry
environment following the unprecedented terrorist attacks on our
nation on September 11. The tough decisions we have had to take
regarding employment levels at United have been devastating but
necessary for the future survival of this great company. We
will continue to take all the steps that are needed to ensure
the long-term success of this company for our employees,
customers and shareholders."
He added: "As much as we regret having to suspend the dividend,
it is one of the steps we simply have to take at this difficult
time."
UAL CORP: Jake Brace Promoted to Chief Financial Officer Post
-------------------------------------------------------------
The UAL Corporation's board of directors also approved the
appointment of Frederic (Jake) F. Brace as chief financial
officer of UAL Corporation and United Airlines. Brace was
previously United Airlines senior vice president - finance. The
new position takes effect immediately.
Brace will take over his new position from Douglas A. Hacker,
who will now focus on his position as president of United
NewVentures, a UAL Corporation subsidiary.
Under Hacker's leadership, United NewVentures will continue to
create and operate innovative new businesses that will benefit
customers, as well as developing other initiatives to benefit
the airline company and UAL Corporation.
Commenting on Brace's appointment, Goodwin said: "Jake Brace
will be an outstanding chief financial officer for this company.
United has never faced more daunting challenges in its 75-year
history than it does now. In his career at United, Jake has
demonstrated his ability to take on challenges, provide
leadership and contribute significantly to the business. I am
delighted he has accepted this position."
Brace joined United in May, 1988 as manager - operating budgets,
and went on to hold a number of senior-level positions with the
company before being named as senior vice president - finance in
July, 1999. In his career with United he has served as director
- financial planning, vice president - corporate development,
vice president and controller, and vice president - finance.
Brace holds a master's degree in business administration from
the University of Chicago and a bachelor's degree in industrial
engineering from the University of Michigan at Ann Arbor.
U.S. WIRELESS: Taps Gerard Klauer Mattison as Investment Banker
---------------------------------------------------------------
U.S. Wireless Corporation (OTC:USWC; Frankfurt:USP), announced
that it has engaged Gerard Klauer Mattison as its investment
banker, pending approval of the Delaware Bankruptcy Court.
U.S. Wireless, which filed for Chapter 11 bankruptcy protection
in August, is seeking an investment that would allow a
reorganization of the Company or alternatively an investor that
would purchase a substantial portion of the Company as a going
concern. U.S. Wireless and its advisor are evaluating strategic
and financial options.
In connection with this effort, U.S. Wireless is narrowing its
focus to provide traffic related transportation solutions to
Departments of Transportation and similar public traffic
agencies and is reducing its current workforce by approximately
20%, or 12 employees, through layoffs.
The Company provides live, high-resolution location information
including traffic data that enables live traffic monitoring for
expressways and arterials and has successfully secured a number
of trial agreements, memoranda of understanding with
transportation industry partners and commercial contracts.
U.S. Wireless also announced that the Company's securities were
delisted from the NASDAQ Stock Market on September 21, 2001 and
now trades over the counter.
Gerard Klauer Mattison (GKM) is an equity research and
investment banking firm, serving the institutional marketplace.
With over 20 senior, published analysts, the GKM research
department covers more than 200 public companies, with a
principal focus on the healthcare,
technology/telecommunications, media/entertainment, energy and
consumer industries.
GKM offers its investment banking clients the benefits of its
award-winning research coverage, coupled with the depth of the
firm's industry contacts and knowledge base.
Founded in 1989, GKM remains privately held. The firm is
headquartered in New York City, with offices in Boston, Chicago,
Los Angeles, San Francisco, and Tel Aviv. Gerard Klauer Mattison
& Co. is a member of the New York Stock Exchange, the NASD, and
SIPC
U.S. Wireless Corporation is a provider of location and traffic
information and the developer of the RadioCamera(TM) location
pattern matching technology. The RadioCamera(TM) technology
pinpoints the location of cellular callers to enable the
delivery of mobile services, including life saving emergency 911
caller location, live traffic and traveler information,
navigation assistance, localized directory assistance, and
vehicle and asset tracking.
VSOURCE: Nasdaq to Include Delinquent Filing in Delisting Issues
----------------------------------------------------------------
Vsource Inc. (Nasdaq: VSRCE), a market leader in providing
customized Business Process Outsourcing (BPO) and Distribution
Services into Asia-Pacific, announced its financial results for
the second quarter and six months ended July 31, 2001 as
compared to the prior year.
Revenues for the second quarter and six months totaled
$1,135,306 and $1,148,026, respectively, compared to $62,500 and
$62,500, respectively, for the same periods one year ago. Net
loss for the second quarter was $6,469,900 and for the six
months $11,616,552, compared to net losses of $6,891,041 and
$12,699,495, respectively, for the same periods in the prior
year.
Net loss available to common shareholders was $8,565,328 for the
second quarter and $13,711,980 for the six months, compared to
net losses available to common shareholders of $6,891,041 and
$19,567,892, respectively, for the same periods one year ago.
Net loss per common share was $0.44 for the second quarter and
$0.72 for the six months, compared to net losses per common
share $0.43 and $1.24, respectively, for the same periods in the
prior year.
A substantial majority of the revenues recorded in the second
quarter were derived from the resale of Gateway Inc.'s products
in Hong Kong and Singapore. As announced in a separate press
release, Vsource has halted all further sales of Gateway
products after being informed that Gateway will terminate its
reseller arrangement.
Vsource also announced that it has entered a nonbinding
memorandum of understanding with Gateway that appoints Vsource
as the exclusive service and support provider for existing
Gateway customers in Asia-Pacific. Revenues from providing these
services are expected to exceed more than $40 million over the
life of the contract.
Revenues in the first quarter and in the six months of the prior
year are derived from since-terminated service contracts
undertaken by Vsource.
Vsource's net loss in the second quarter includes the write down
of $1,940,853 of goodwill related to the acquisition of Online
Transaction Technologies Inc., and $2,095,428 of non-cash
charges related to the anti-dilution provisions of preferred
stock issued in the prior fiscal year.
The net loss of $6,469,900 for the second quarter represents a
decrease of $421,141, or 6.1 percent from the net loss recorded
in the same period one year ago.
This loss results from a decrease in research and development as
well as in sales, general and administrative expenses, including
a significant reduction in the recognition of stock based
compensation.
Vsource's net loss of $11,616,552 for the six months ended July
31, 2001 represents a decrease of $1,082,943, or 8.5 percent,
from the net loss recorded for the same period one year ago.
This decrease is primarily attributable to the increased
revenues from the resale of Gateway products and service
contracts undertaken by NetCel360, which was acquired by Vsource
on June 22, 2001. The decrease as well is the result of a
reduction in research and development in addition to sales,
general and administrative expenses.
Vsource also announced that it was delinquent in filing its Form
10-Q for the quarter ended July 31, 2001, which was filed on
Sept. 26, 2001. The delay was attributable to a combination of
factors, including the need to restate earlier financial
statements and disruptions caused by the terrorist attacks on
Sept. 11, 2001. The company had initially requested an extension
from the original due date of Sept. 14, 2001 to Sept. 19, 2001
for substantially similar reasons.
The company has received a letter dated Sept. 21, 2001 from
NASDAQ stating that the delinquent filing will be added to the
issues to be considered at the company's oral hearing before a
NASDAQ Listing Qualifications Panel on Sept. 28, 2001 regarding
the delisting of the company's shares from the NASDAQ National
Market System. NASDAQ also has informed Vsource that because of
the filing delinquency, the company's trading symbol was changed
from VSRC to VSRCE, effective Monday, Sept. 24, 2001.
One of the factors that delayed the filing of Vsource's Form 10-
Q was the company's determination that it needed to restate its
audited consolidated balance sheets as of Jan. 31, 2001 (and,
for comparison, Jan. 31, 2000), and its unaudited consolidated
balance sheets as of April 30, 2001 (and, for comparison, April
30, 2000). The restatements, which do not have any effect on the
company's cash position, have been filed as amendments to the
company's Form 10-KSB for the year ended Jan. 31, 2001 and Form
10-Q for the three months ended April 30, 2001.
As a result of the restatements, the company's Series 1-A and
Series 2-A Convertible Preferred Stock has been reclassified
from shareholders' deficit to a separate equity category,
preferred stock, between liabilities and shareholders' deficit,
and a non-cash beneficial conversion feature ("BCF") charge of
$996,707 has been taken with respect to warrants attached to the
company's Series 2-A Convertible Preferred Stock.
Accordingly, preferred stock as of July 31, 2001 and Jan. 31,
2001 now is $12,223,365 and $14,228,828, respectively, and
shareholders' deficit as of July 31, 2001 and Jan. 31, 2001 now
is $2,264,358 and $3,878,315, respectively. The company
elected to restate its financial statements after determining
that they were required under current SEC guidance and newly
issued US GAAP guidance regarding the classification of equity
securities with certain mandatory redemption features.
Vsource Inc., based in Ventura California, focuses on providing
Business Process Outsourcing (BPO) and Distribution Services to
Fortune 500 and Global 2000 organizations wanting to expand into
or across Asia-Pacific or streamline their existing operations
into the region. Vsource's range of services and infrastructure
include traditional BPO services: Payroll and Financial
Services, Customer Relationship Management (CRM) and Supply
Chain Management (SCM), as well as Distribution Services, which
include Sales and Marketing Services, Market Research and
Operations Solutions.
Vsource has offices in Hong Kong, Singapore, Malaysia (including
a 39,000-square-foot-customer center), the United States and
Japan. Vsource's customers include Gateway, AIG, EMC, Network
Appliance, Cosine Communications, Credit Suisse First Boston,
HSBC Investment Bank Asia, Miller Freeman, and other Fortune
500/Global 2000 companies. For more information, visit the
company's Web site: http://www.vsource.com
VCAT: Needs New Funds Within 2-3 Months to Continue Operations
--------------------------------------------------------------
Venture Catalyst Incorporated (OTCBB: VCAT), reported the
financial and operating results for the fourth quarter of and
fiscal year ended June 30, 2001.
Fourth Quarter Results
Revenues for the fourth quarter ended June 30, 2001 totaled
$200,000, a 96% decrease from $5,591,000 reported in the same
period last year. Revenues for services to the Barona Tribe,
currently VCAT's only client, were $200,000, and represent all
of VCAT's revenues during the quarter. This compares to
$3,838,000 earned during the same period in fiscal 2000.
Revenues were adversely affected during the quarter, as compared
to the same period last year, due to significantly higher
operating and financing expenses at the Barona Casino, resulting
in significantly reduced fees to VCAT.
There were no revenues earned in the fourth quarter from other
clients, due to VCAT's restructuring program and VCAT's decision
to stop providing services to non-gaming clients. This compares
to $1,753,000 earned during the same period last year from other
clients.
The cost of revenues decreased 7% to $1,169,000 compared to the
prior year's quarter. General operating and administrative
expenses declined to $892,000, a decrease of 59% from the fourth
quarter of last year.
VCAT reported a net loss for the quarter of $5,651,000, or
$(0.77) per share. This compares with net income of $462,000, or
$0.06 per share, for the fourth quarter in the prior year.
Results for the fourth quarter were negatively effected by non-
recurring charges of $236,000, primarily one-time expenses
related to the continuation of VCAT's restructuring plan,
including lease termination charges and additional severance
obligations.
VCAT also recorded a write down of $1,900,000 to its "deferred
contract costs", as a result of the reduced fees from the Barona
Tribe, and the future outlook for such fees, and VCAT recorded a
net write down of $682,000 of portfolio assets.
Weighted average shares outstanding were 7,366,057 for the
period compared to 8,108,320 for the prior year period.
Results for Fiscal 2001
Revenues for fiscal 2001 totaled $8,840,000. This represents a
40% decrease as compared to $14,843,000 in fiscal 2000. Revenues
for services to the Barona Tribe decreased 33% to $7,069,000
compared to last year, and revenues from other clients decreased
59% to $1,771,000. Revenues were adversely affected during
fiscal 2001 as compared to the fiscal 2000 due to significantly
higher operating and financing expenses at the Barona Casino,
resulting in reduced fees to VCAT. Revenues were also lower due
to VCAT's restructuring plan to focus on gaming clients and
VCAT's decision to stop offering services to non-gaming clients.
Cost of revenues increased 36% to $7,036,000 compared to the
prior year. General operating and administrative costs decreased
by 10% from the prior year to $6,781,000.
VCAT reported a net loss for the fiscal year of $18,510,000, or
$(2.53) per share. This compares with a net loss of $1,029,000,
or $(0.19) per share, for the prior year. Results for the year
were negatively effected by non-recurring charges, primarily
one-time expenses related to VCAT's restructuring, of
$7,235,000.
Also, during the 2001 fiscal year, VCAT recorded a write down of
$1,900,000 to its "deferred contract costs", as a result of the
reduced fees from the Barona Tribe during 2001 as well as VCAT's
current expectations for fees through the end of the consulting
agreement. In addition, VCAT had a net write down of $3,625,000
of portfolio assets during the 2001 fiscal year.
Weighted average shares outstanding in fiscal 2001 were
7,326,301 compared to 5,435,157 for the prior year.
Financial Condition and Liquidity/Going Concern Opinion
VCAT has received an audit report from its independent auditors
containing an explanatory paragraph that expresses substantial
doubt about VCAT's ability to continue as a going concern due to
VCAT's recurring losses from operations, curtailed revenue
expectations from the Barona Tribe and VCAT's net capital
deficiency.
Based upon the recent financial projections provided to VCAT by
the Barona Tribe in August 2001, fees from the Consulting
Agreement with the Barona Tribe are expected to be zero for the
balance of the Consulting Agreement primarily as a result of the
increased expenses related to the expansion project at the
Barona Casino.
As of September 17, 2001, VCAT had $2,041,000 of unrestricted
cash and cash equivalents. VCAT's current available cash on hand
is sufficient to sustain its current operations for
approximately 2-1/2 months. If VCAT receives an income tax
refund that it expects to receive in October 2001, VCAT believes
the additional funds should be enough to sustain its current
operations for an additional two months.
If VCAT's cash needs increase for any reason, such as a change
in VCAT's business strategy or the pursuit of a strategic
transaction, the length of time that VCAT's current cash and any
tax refund would sustain its operations could decrease
significantly.
Accordingly, in order to continue as a going concern beyond that
time, VCAT will likely need to obtain repayment from the Barona
Tribe of advances VCAT made to the Barona Tribe in connection
with the Barona Tribe's expansion project. These advances were
made prior to the Barona Tribe obtaining all outside financing.
Although these advances were not documented as loans, the Barona
Tribe has agreed to repay VCAT these amounts as VCAT requests
them.
"While we are disappointed about VCAT's revenue and revenue
expectations, we are very pleased with the excitement and
traffic at the Barona Casino and are equally pleased with the
development and prospects of the Barona Valley Ranch Resort &
Casino project scheduled for completion in late 2002," stated L.
Donald Speer, Chairman, President and CEO of VCAT.
"In this the period of greatest expansion of the California
gaming market, we continue to believe that the investments
currently being made by the Barona Tribe are essential to their
goal of remaining one of the most successful Native American
gaming operations in California."
Speer continued, "while the Barona Casino continues to enjoy
record levels of revenue and expects this trend to continue,
their projected costs and expenses related to their investment
in the future has resulted and, based upon the Tribe's most
recent revenue and expense projections, will continue to result,
in no consulting fees being paid to us for the remainder of the
term of our current consulting agreement with the Tribe which
extends through March 2004. We continue to support the Tribe's
efforts to expand the Barona Casino's outstanding success in
California." Speer concluded by stating, "management and the
Board are continuing to work diligently to identify and pursue a
strategy to address our current financial position."
Special Committee of the Board of Directors
On May 29, 2001, VCAT's Board of Directors appointed a Special
Committee comprised of independent directors to explore
strategic alternatives to maximize shareholder value and to
report its recommendations to the Board of Directors.
The Special Committee reviewed VCAT's business operations and
prospects, VCAT's financial condition and results of operations,
VCAT's relationships with VCAT's employees and the Barona Tribe,
and other matters. The Special Committee considered various
alternatives for maximizing shareholder value.
On September 12, 2001, the Special Committee reported its
conclusions and made a number of recommendations to the Board of
Directors. Subsequent to the delivery of its report to the Board
of Directors, the Special Committee was of the view that its
work was completed and decided to dissolve.
The Board of Directors has taken the Special Committee's
recommendations under consideration and management and the Board
are currently working together to evaluate VCAT's operations and
strategy in light of the Special Committee's recommendations.
Venture Catalyst Incorporated is a service provider of gaming
consulting, infrastructure and technology integration in the
California Native American gaming market.
WINSTAR COMMS: Intends to Sell Equity Broadcasting Securities
-------------------------------------------------------------
Winstar Communications, Inc. files a motion seeking the court's
approval of a Purchase Agreement with Equity Broadcasting
Corporation involving the sale and transfer of equity and debt
securities of EBC owned by the Debtors, and an accompanying
Release Agreement.
Pauline K. Morgan, Esq., at Young Conway Stargatt & Taylor, LLP,
in Wilmington, Delaware, relates that the Debtors' business plan
requires them to sell their investment in EBC as a means of
raising capital and has been actively seeking to sell the
securities and to fund its operations.
Ms. Morgan tells the Court that towards attainment of this goal,
the Debtors retained Carolina Financial Securities, to market
its investments in EBC. Carolina Securities contacted numerous
potential buyers, which eventually effected the previously
approved sale of EBC shares to Sycamore Ventures.
The Debtors also presented the opportunity to purchase either
all or a portion of its EBC investments to its existing pre-
petition lenders, lenders under the DIP Agreement and the
Creditor's Committee.
In addition to these efforts, the Debtors discussed several
matters with EBC in an attempt to settle outstanding disputes
between them. Ms. Morgan relates that EBC proposed a solution
to the Debtors for all outstanding issues: they would purchase
the Securities for $20,000,000 and effect an exchange of mutual
releases between the parties.
Ms. Morgan explains that the Release Agreement between both
parties provides for the release by the Purchaser of any claims
that it has against the Debtors and the release by the Seller of
any and all claims they may have against the Purchasers. The
claims to be released includes EBC's claim to economic interests
of the Debtors' assets and the disputed Debtors' right to
receive 6 TV stations estimated to be worth approximately
$2,000,000. The Release Agreement, Ms. Morgan says, is
fashioned to achieve finality of the 2 parties' relationships.
Having received no other written or oral offers for the
Securities, Ms. Morgan tells the Court that the Debtors accepted
the EBC's offer and entered into the Purchase Agreement with the
Release Agreement on September 7, 2001.
To ensure that the Purchase Agreement reflects the best
available offer for the Securities, the Purchase Agreement is
subject to higher and better offers in an auction process. Ms.
Morgan adds that the Debtors advertised the Securities for
auction in the Wall Street Journal to solicit higher and better
offers.
EBC agrees to subject its offer to a competitive bidding
process. Any competing offer must top EBC's bid by $100,000,
must be in writing, and must be accompanied by a $2,000,000
deposit. If necessary, the Debtors will hold an auction at
Shearman & Sterling's offices in New York.
Judge Farnan gives the Debtors broad discretion to conduct the
Auction in the manner they determine will achieve the maximum
value for the Securities. They may adopt other such rules for
bidding except those inconsistent with any provisions in the
Bankruptcy Code.
Ms. Morgan also relates that the Debtors shall retain all
deposits of qualified bidders, and all bids will remain open for
48 hours after the auction. Upon failure to consummate the
sale, Ms. Morgan adds that the successful bidder shall forfeit
its deposit and the Sellers may select the next highest or best
bid. Ms. Morgan tells the Court that the proceeds of this sale
transaction of at least $20,000,000 will be used to fund the
Debtors' daily operations and will settle outstanding disputes
between EBC and the Debtors.
Ms. Morgan states that the Debtors' financial advisor, Impala
Partners LLC has overseen the sale and advised the sellers in
the negotiations and the lenders under the DIP Credit Agreement
have provided written consent to the sale of the securities.
The Debtors have concluded the sale of the securities is in the
best interest of the Debtors and their estates. (Winstar
Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service,
Inc., 609/392-0900)
WINSTAR WIRELESS: Sues Savvis Communications for $38.4 Million
--------------------------------------------------------------
Bankrupt broadband services company Winstar Wireless Inc. on
September 25, 2001, sued Savvis Communications Corp. for more
than $38.4 million, which it claims Savvis owes it under certain
agreements, Dow Jones reported. Winstar Wireless, a unit of
bankrupt Winstar Communications Inc., filed the suit in the U.S.
District Court of Wilmington, Del., which is presiding over the
Winstar companies' chapter 11 cases.
According to the complaint, Winstar Wireless and Savvis entered
into a series of commercial agreements in which the two parties
sold goods and services to each other. Winstar Wireless claims
Savvis, a network services provider, owes it $38.4 million under
the agreements.
The complaint also alleges a breach of contract and violation of
automatic stay provisions as a result of Savvis' refusal to turn
over the amounts allegedly due. Savvis is a data service
network spun off from the now-bankrupt Bridge Information
Systems Inc.
In a separate matter, a recent court order shows that Winstar
will maintain the exclusive right to propose a reorganization
plan until at least Dec. 13. The order extends through Dec. 13
the exclusive periods during which only Winstar and its bankrupt
affiliates may propose reorganization plans in their chapter 11
cases.
If they file plans by that date, other parties would be further
prohibited from filing competing plans through Feb. 11, 2002,
while the companies solicit plan votes. The 120-day extensions
are the companies' first such extensions. Judge Joseph J. Farnan
Jr. signed the order. (ABI World, September 27, 2001)
WORLDXCHANGE: Court Fixes October 31 Bar Date for Admin. Claims
---------------------------------------------------------------
IN THE UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF ILLINOIS - EASTERN DIVISION
---------------------------)
IN RE: ) Chapter 11
WORLDxCHANGE ) Case No. 01 B 14637
COMMUNICATION, INC. ) Chief Judge Susan Pierson Sonderby
---------------------------)
NOTICE OF DEADLINE TO FILE APPLICATIONS
FOR PAYMENT OF ADMINISTRATIVE CLAIMS
------------------------------------
PLEASE TAKE NOTICE that on September 19, 2001, the
Honorable Susan Pierson Sonderby, the Chief Judge of the United
States Bankruptcy Court for the Northern District of Illinois,
Eastern Division, entered an Order fixing October 31, 2001 (the
"Administrative Claim Bar Date") as the deadline for any person
or entity who requests payment of an administrative expense of
the kind specified in Section 503(b) of Title 11 of the United
States Bankruptcy Code (the "Bankruptcy Code") and entitled to
priority pursuant to Section 507(a)(1) of the Bankruptcy Code
(but not including professionals retained by the Debtor or the
Official Committee of Unsecured Creditors pursuant to order of
this Court) from the Debtor, and asserts an Administrative Claim
against the Debtor, which arose from and between April 24, 2001
and September 30, 2001 (each, an "Administrative Claim") to, on
or prior to the Administrative Claim Bar Date, file an
application asserting such an Administrative Claim with the
Clerk of the United States Bankruptcy Court for the Northern
District of Illinois, Eastern Division, 219 South Dearborn
Street, Room 710, Chicago, Illinois, 60604 (the "Clerk") and
serve a copy of the Application on: Brian M. Graham, Esq.,
Katten Muchin Zavis, 525 W. Monroe Street, Suite 1600, Chicago,
Illinois 60661-3693; Kathryn Gleason, Esq., Office of the U.S.
Trustee, 227 W. Monroe Street, Suite 3350, Chicago, Illinois
60606, Michael Edelman Esq., Milbank, Tweed, Hadley & McCloy,
One Chase Manhattan Plaza, New York, New York 10005. The
Administrative Claim Bar Date applies to all Administrative
Claims whether matured or unmatured, disputed or undisputed,
liquidated or unliquidated, fixed or contingent, legal or
equitable. Therefore, any creditor having an Administrative
Claim, or potential Administrative Claim against the Debtor, no
matter how remote or contingent, must file an application on or
before the Administrative Claim Bar Date.
IF YOU ARE REQUIRED TO FILE AN APPLICATION AND FAIL TO DO
SO WITHIN THE TIME PRESCRIBED HEREIN, YOU SHALL NOT BE TREATED
AS AN ADMINISTRATIVE CLAIMANT OF THE DEBTOR, AND YOU SHALL BE
FOREVER BARRED FROM: (1) FILING A PROOF OF CLAIM OR APPLICATION
WITH RESPECT TO YOUR ADMINISTRATIVE; (2) ASSERTING YOUR
ADMINISTRATIVE CLAIM AGAINST THE DEBTOR, ITS ESTATE OR PROPERTY;
(3) VOTING ON ANY PLAN OR PLANS FILED IN THIS CASE; AND (4)
PARTICIPATING IN OR RECEIVING ANY DISTRIBUTION ON ACCOUNT OF
SUCH ADMINISTRATIVE CLAIM.
Counsel for WoldxChange Communication, Inc.,
Debtor and Debtor-Possession
Mark K. Thomas, Esq.
Brian M. Graham, Esq.
Katten Muchin Zavis
525 West Monroe Street, Suite 1600
Chicago, IL 60661-3693
* BOND PRICING: For The Week of October 1 - 5, 2001
---------------------------------------------------
Following are indicated prices for selected issues:
Algoma Steel 12 3/8 '05 8 - 12 (f)
Amresco 9 7/8 '05 30 - 33 (f)
Asia Pulp & Paper 11 3/4 '05 22 - 25 (f)
AMR 9 '12 83 - 85
Bethlehem Steel 10 3/8 '03 28 - 32
Chicquita 9 5/8 '04 65 - 67 (f)
Conseco 9 '06 80 - 82
Globalstar 11 3/8 '04 3 - 4 (f)
Level III 9 1/8 '04 42 - 44
Mcleod 11 3/8 '09 35 - 38
Northwest Air 8.70 '07 62 - 66
Owens Corning 7 1/2 '05 32 - 34 (f)
Revlon 8 5/8 '08 43 - 45
Royal Caribbean 7 1/4 '18 66 - 70
Trump AC 11 1'4 '06 62 - 64
USG 9 1/4 '01 72 - 74 (f)
Westpoint 7 3/4 '05 28 - 32
Xerox 5 1/4 '03 85 - 88
*********
Bond pricing, appearing in each Monday's edition of the TCR, is
provided by DLS Capital Partners in Dallas, Texas.
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Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com.
Each Friday's edition of the TCR includes a review about a book
of interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published by
Bankruptcy Creditors' Service, Inc., Trenton, NJ USA, and Beard
Group, Inc., Washington, DC USA. Yvonne L. Metzler, Bernadette
C. de Roda, Ronald P. Villavelez and Peter A. Chapman, Editors.
Copyright 2001. All rights reserved. ISSN: 1520-9474.
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*** End of Transmission ***