/raid1/www/Hosts/bankrupt/TCR_Public/020401.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, April 1, 2002, Vol. 6, No. 63
Headlines
1515 BROADWAY: Will File Prepackaged Chapter 11 to Sell Assets
ACTUANT CORPORATION: T. Rowe Price Discloses 10% Equity Stake
ADELPHIA BUSINESS: Files Chapter 11 Petitions in S.D. New York
ADELPHIA BUSINESS: Case Summary & Largest Unsecured Creditors
AMERICA WEST: Continental Intends to End Code Sharing and Pacts
ARMSTRONG WORLD: Wants More Time to Decide on Leases
BURLINGTON: Panel Asks Court to Reconsider BDO Seidman Retention
CAPITOL COMMUNITIES: Closes Sale of Maumelle Property for $4.4MM
CELLPOINT INC: Creditors Accept Proposed 'Voluntary Composition'
CENTRAL EUROPEAN: December Balance Sheet Upside-Down by $88MM
CLEARLY CANADIAN: EBITDA Loss Drops to $1.8MM for Full-Year 2001
DDI CORP: Moody's Hatchets Low-B Debt Ratings Down to Junk Level
DAVITA INC: S&P Assigns BB- Rating to Proposed $1.15BB Bank Loan
DELTA AIR LINES: Sets Annual Shareholders' Meeting for April 26
DONLAR BIOSYNTREX: Gets $2MM Facility to Meet Cash Obligations
EARLYRAIN: Pursuing Recapitalization Talks with Third Parties
ENRON CORP: Seeks Extension of Exclusive Period until December 1
ENRON CORP: Hearing on Sale of Retail Contracts Set for Thursday
ENRON CORP: Seeks Okay of Proposed Retention & Severance Plan
ETOYS: Creditors Eye Goldman Sachs & Co. as Recovery Source
FEDERAL-MOGUL: Expanding Scope of De Minimis Sale Protocol
FLORSHEIM: Taps Hilco Merchant to Conduct 131-Store Closing Sale
FOAMEX INT'L: Raises $300MM from Sale of 10-3/4% Senior Notes
FOSTER WHEELER: Bank Negotiations Cause Delay in Form 10K Filing
GENTEK: Violations of Fin'l Covenants Under Credit Pact Likely
GLOBAL CROSSING: Proposes Protocol to Pay Bermuda Liquidators
HAYES LEMMERZ: Gets Waiver of Investment & Deposit Requirements
HYBRID NETWORKS: Must Seek New Sources of Financing to Continue
IT GROUP: Rain for Rent Seeks Stay Relief to End Equipment Pact
IBEAM: Wants Zuckerman Spaeder to Represent It in Cisco Dispute
INTEGRATED TELECOM: Taps Lehman Bros. to Seek Strategic Options
JAM JOE: Wants to Stretch Plan Filing Exclusivity to Sept. 30
KAISER ALUMINUM: Looks to MWW Group for PR Consulting Services
KMART: Wells Fargo Wants to Set-Off $4.4MM Prepetition Amount
L-3 COMMS: S&P Rates $1B Senior and Subordinated Shelf at Low-Bs
LAIDLAW INC: Asks Court to Deny IRS' $372MM "Protective" Claims
LARKIN STREET: Voluntary Chapter 11 Case Summary & 7 Creditors
LERNOUT & HAUSPIE: Unit Exits Bankruptcy as Independent Company
LIBERTY OIL: Court Extends CCAA Plan Filing Deadline to April 15
LODGIAN INC: Court Okays PricewaterhouseCoopers as Accountants
MTS/TOWER RECORDS: Seeking to Refinance Maturing Credit Facility
MARINER POST-ACUTE: Court Okays Sale of Desert Sky for $2 Mill.
MASSEY ENERGY: Bank Syndicate Agrees to Amend Loan Covenants
OPTICAL DATACOM: U.S. Trustee Names Rosner as Chapter 11 Trustee
MCLEODUSA INC: Wants Open-Ended Lease Decision Period Extension
MCLEODUSA INC: Creditors Vote to Accept Plan of Reorganization
MICROCELL TELECOM: Consolidating Two Units' PCS Operations
NATIONAL AUTOMOBILE: S&P Assigns 'R' Financial Strength Rating
NATIONAL STEEL: Wins Nod to Pay $4MM Prepetition Shipping Fees
NATIONSRENT INC: Judge Walsh Names Robert Troisio as Fee Auditor
OWENS CORNING: Intercreditor Issue Resolution Protocol Set-Up
PACIFIC GAS: Seeks Okay to Hire Celerity as Claims Consultants
PENNZOIL-QUAKER: Merger Deal Spurs S&P to Assign BB+ Ratings
PHILIPS INT'L: Inks Pact to Sell Illinois Assets for $4MM Cash
PILLOWTEX: Committee Has Until May 30 to Challenge Bank's Liens
POLAROID: Seeks Approval of Revised Employment Retention Plan
POLYMER GROUP: Asks Court to Dismiss Involuntary Chapter 11 Case
PROVANT INC: Taps Jefferies to Assist in Evaluating Alternatives
PROVELL: Amends Financial Covenant Thresholds Under Credit Pact
PUBLICARD INC: Fails to Comply with Nasdaq Listing Requirements
RESIDENTIAL ACCREDIT: Fitch Places Low-B Bonds On Watch Negative
RESPONSE BIOMEDICAL: Closes $1.3M Non-Brokered Private Placement
SAFETY-KLEEN: Court Approves Chemical Services Bidding Protocol
SPECIAL METALS: Voluntary Chapter 11 Case Summary
SUNRISE TECHNOLOGIES: Sr. Lender Agrees to Extend Loan Maturity
USG CORP: Court Okays Gibbons Del Deo as Debtor's NJ Counsel
VINTAGE PETROLEUM: BP Capital Energy Discloses 8.4% Equity Stake
VLASIC: LLC Manager Wants Until Aug. 2 to Offer Cash for Claims
WINSTAR COMMS: Chapter 7 Trustee Signs-Up Parente as Accountant
WOLVERINE TUBE: S&P Changes Outlook on Low-B Rating to Negative
ZENITH INDUSTRIAL: Taps Young Conaway as Bankruptcy Co-Counsel
* BOND PRICING: For the week of April 1 - 5, 2002
*********
1515 BROADWAY: Will File Prepackaged Chapter 11 to Sell Assets
--------------------------------------------------------------
SL Green Realty Corp. (NYSE: SLG) announced that it has entered
into a contribution agreement to acquire 1515 Broadway, New
York, New York in a transaction valued at approximately $480
million.
The property is currently owned by 1515 Broadway Associates,
L.P., whose general partner is an affiliate of The Equitable
Life Assurance Society of the United States. The transaction is
anticipated to close at the end of the 2nd quarter 2002. It will
be accomplished through a prepackaged bankruptcy reorganization
by the 1515 Broadway partnership, to which the parties have
consented. The property is being acquired in a joint venture
with SITQ Immobilier, with SL Green retaining an approximate 55%
interest in the asset.
Located in the heart of New York's Times Square and within
walking distance of Manhattan's main transportation hubs, 1515
Broadway is a 1.75 million square foot, 54-story office tower
located on Broadway between 44th and 45th Streets. It is the
headquarters of Viacom, Inc., one of the world's leading media
and entertainment companies, whose holdings include franchise
brands CBS, MTV Networks (Nickelodeon, MTV and VH1), Paramount
Pictures, Showtime Networks and Infinity Broadcasting.
1515 Broadway is being acquired at a cost of approximately $274
per square foot. The property is 98.2% leased, with current
market rents for office space at a 34% premium to fully
escalated in-place rents. The initial cash NOI yield of the
transaction is approximately 8.2%.
In making the announcement, Stephen L. Green, Chairman and CEO
of SL Green commented, "We are delighted to be acquiring a
premier asset in the heart of Times Square, New York's fastest
growing and most vibrant submarket. Times Square is rapidly
becoming the financial and media capital of the world,
attracting such names as Conde Nast, Ernst & Young, Reuters,
Bertlesman, Lehman Brothers and Morgan Stanley. 1515 has all of
the elements we look for in a building. It is a trophy property
that sits in the very center of one of the great locations in
the world with great street presence, large floor plates, great
light and air and, of course, a world class tenant, Viacom."
Marc Holliday, President of SL Green added, "1515 Broadway
perfectly fits our investment profile of repositioning and
upgrading our portfolio of prime Midtown properties while
recycling our non-core assets. This transaction should keep us
on track to achieve our stated objective of 10% FFO growth in
2002, despite the challenging leasing market and expected asset
sales. At the same time, we are enhancing future earnings growth
and maintaining our corporate liquidity by teaming up with SITQ
to joint venture this signature property. We are particularly
pleased that we were able to structure a transaction that
satisfied the complex legal, tax, financing and insurance issues
we faced in the post-September 11th environment."
"We view the Times Square market with great interest and see a
very exciting opportunity for future growth," explained Denis
Epoh, Vice-President, Investments, SITQ Immobilier. "1515
Broadway is another quality investment in New York, and our
participation in it enables us to strengthen our international
presence in the prestige office buildings sector and expand our
superb relationship with SL Green."
The property is being acquired with $335 million of financing
committed by Lehman Brothers and Bear Stearns. The balance of
the proceeds are being funded from the Company's unsecured line
of credit and from the proceeds of the sale of the joint venture
interest to SITQ. The transaction was arranged by Goldman, Sachs
& Co. Equitable was advised by Lend Lease Real Estate
Investments, Inc.
For further information with respect to the transaction, please
visit the Company's web site at www.slgreen.com.
SL Green Realty Corp. is a self-administered and self-managed
real estate investment trust that primarily owns, manages,
leases, acquires and repositions office properties in Manhattan.
SITQ Immobilier is affiliated with Caisse de depot et placement
du Quebec. A leader in the Canadian real estate industry, SITQ
Immobilier is responsible for investments in assets of $13
billion consisting of more than 469 properties worldwide.
ACTUANT CORPORATION: T. Rowe Price Discloses 10% Equity Stake
-------------------------------------------------------------
T. Rowe Price Associates, Inc. beneficially own 1,113,505 shares
of the common stock of Actuant Corporation, representing 10.0%
of the outstanding common stock of the Company. T. Rowe Price
Associates, Inc. hold sole voting power over 311,160 shares and
sole dispositive power over the entire 1,113,505 shares.
Actuant Corporation (formerly Applied Power) applies its powers
to producing a range of tools and hydraulic equipment. The
company's engineered solutions unit offers hydraulic motion-
control systems to OEMs. Product applications include RV slide-
out and automotive convertible top actuation systems. Actuant
also makes electrical and industrial tools for wholesale and
retail sale. Its Gardner Bender unit makes handtools, wire and
cable, and other products sold through retail outlets. The
company spun off its electronic closures business -- which had
grown through acquisitions to become the largest segment -- to
shareholders as APW Ltd. in 2000. As as result of that
separation, the company changed its name to Actuant. At November
30, 2001, the company had a total shareholders' equity deficit
of about $143 million.
ADELPHIA BUSINESS: Files Chapter 11 Petitions in S.D. New York
---------------------------------------------------------------
Adelphia Business Solutions, Inc. (Nasdaq: ABIZ) announced that
ABS and certain of its wholly-owned subsidiaries have commenced
voluntary cases under chapter 11 of the Bankruptcy Code in the
U.S. Bankruptcy Court for the Southern District of New York.
ABS also announced that it has reached an agreement with
Adelphia Communications Corporation and a Rigas family affiliate
to provide debtor-in-possession (DIP) financing in the aggregate
principal amount of up to $135 million. This DIP financing will
provide an immediate source of funds to ABS, enabling it to
satisfy the customary obligations associated with the daily
operation of its business, including the timely payment of new
inventory shipments, employee wages and other obligations. The
DIP financing is subject to approval of the Bankruptcy Court.
ABS is engaged in advanced negotiations with the holders of its
12-1/4% Senior Secured Notes due 2004 regarding the treatment of
their claims. Any resolution of these negotiations will also be
subject to approval of the Bankruptcy Court.
In commencing these chapter 11 cases, ABS concluded that a
financial restructuring, which could best be achieved through
the chapter 11 process, was the most viable alternative for
resolving its financial difficulties, given its capital
requirements and debt service obligations. ABS voluntarily
commenced these cases as a result of the virtual shutdown of the
telecommunications capital markets and the decline in the
telecommunications industry generally.
Adelphia Business Solutions, Inc. provides integrated
communications services to business customers through its fiber
optic communications network.
ADELPHIA BUSINESS: Case Summary & Largest Unsecured Creditors
-------------------------------------------------------------
Lead Debtor: Adelphia Business Solutions, Inc.
One North Main Street
Coudersport, Pennsylvania 16915-1141
Bankruptcy Case No.: 02-11389
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Adelphia Business Solutions 02-11388
Operations, Inc.
Adelphia Business Solutions 02-11391
of Florida, Inc.
Adelphia Business Solutions 02-11392
of Kentucky, Inc.
Adelphia Business Solutions 02-11390
of Atlantic, Inc.
Adelphia Business Solutions 02-11393
of Tennessee, Inc.
Adelphia Business Solutions 02-11394
of Vermont, Inc.
Type of Business: The Debtors are leading providers of
facilities-based integrated communications
services to customers that include
businesses, governmental, and educational end
users, and other communications services
providers throughout the United States. The
Debtors provide customers with communications
services such as local switch dial tone (also
known as local phone service), long-distance
service, high-speed data transmission, and
Internet connectivity. The customers have a
choice of receiving these services separately
or as bundled packages, which are typically
priced at a discount when compared to the
price of the separate services.
Chapter 11 Petition Date: March 27, 2002
Court: Southern District of New York (Manhattan)
Judge: Stuart M. Bernstein
Debtors' Counsel: Judy G.Z. Liu, Esq.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
(212) 310-8512
Fax : (212) 310-8007
Total Assets: $2,126,334,000 (as per unaudited balance sheet at
September 30, 2001)
Total Debts: $1,654,343,000 (as per unaudited balance sheet at
September 30, 2001)
A. Adelphia Business Solutions' 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Bank of New York Indenture Trustee $303,840,000
Corporate Trust Division - 13% Senior Discount
Mr. Paul J. Schmalzel Notes due 2003
5 Penn Plaza - 13th Floor
New York, New York
10001-1810
(212) 896-7172
Bank of New York Indenture Trustee $300,000,000
Corporate Trust Division - 12% Senior
Mr. Paul J. Schmalzel Subordinated Notes
5 Penn Plaza - 13th Floor due 2007
New York, New York
10001-1810
(212) 896-7172
Bank of New York Indenture Trustee $150,000,000
Corporate Trust Division - 12-1/4% Senior
Mr. Paul J. Schmalzel Secured Notes
5 Penn Plaza due 2004
13th Floor
New York, New York
10001-1810
(212) 896-7172
Sprint Trade Debt $3,498,311
900 Springmill Street
Mansfield, Ohio 44906
(419) 755-7466
Cumberland Promotion Trade Debt $500,000
Tennessee Football LP
Mr. Don Maclachlan
One Titans Way
Nashville, Tennessee 37213
TSI Trade Debt $461,651
Ken Korver
12094 Collections
Center Drive
Lockbox #12094
Chicago, Illinois 60693
350 CW Associates LP Trade Debt $136,354
Verizon Trade Debt $16,420
Verizon Trade Debt $11,083
BellSouth Trade Debt $7,868
De Lage Financial Trade Debt $2,387
Services
MCI Worldcom Trade Debt $1,825
Edward Mioduski PM Trade Debt $1,600
Keystone Business Trade Debt $1,305
Machines
Southwestern Bell Trade Debt $1,062
De Lage Financial Trade Debt $1,022
Services
Verizon Trade Debt $763
Diskriter Inc. Trade Debt $675
Verizon Trade Debt $572
Southwestern Bell Trade Debt $519
Telephone
B. ABIZ Operations' 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Bank of America N.A. Bank Loan $500,000,000
901 Main Street
64th Floor Plaza
Dallas, TX 75283
Attn: Thomas Carter
(214) 209-0924
- and -
Chase Manhattan Bank
270 Park Avenue
37th Floor
New York, NY 10017
Attn: Douglas A. Hurst
(212) 270-1132
Fujitsu Trade Debt $18,475,381
P.O. Box 13730
Newark, NJ 07188-0730
(214) 690-6000
Bank Loan
Verizon Trade Debt $6,309,429
P.O. Box 8585
Philadelphia, PA 19173-0001
Level 3 Com Trade Debt $6,099,660
1025 Eldorado Blvd.
Broomfield, CO 80021
Attn: Tracy Holick
Ameritech Trade Debt $4,947,264
208 S. Akard
Room 504.12
Dallas, TX 75202
Attn: Valerie Fountain
(214) 464-7900
BellSouth Trade Debt $2,225,846
Pro-Cabs
Cabs Payment Receipt
P.O. Box 105373
Atlanta, GA 30348
Grande Communications Inc. Trade Debt $1,783,962
Attn: Revenue Accounting
401 Carlson Circle
San Marcos, TX 78666
Sharon Wigley
(512) 878-5448
Broadwing Communications Serv. Trade Debt $1,341,229
112 Capital of Taxes Highway
Austin, TX 78746-6426
Attn: Ernest Williams
(877) WING-777
Convergent Networks Trade Debt $1,283,266
900 Chelmsford St.
Tower 3
Lowell, MA 01851
(978) 323-3513
Pirelli Cable Corp. Trade Debt $939,943
P.O. Box 360869
Pittsburgh, PA 15251-6869
Attn: Frank
(803) 951-4800
Metromedia Fiber Trade Debt $871,626
Network Services Inc.
P.O. BOX 7247-6887
Philadelphia, PA 19170-6887
(914) 421-6700
SNET Diversified Group Inc. Trade Debt $743,355
P.O. Box 9076
New Haven, CT 06531-0076
Attn: Kathie Kelly
(203) 694-7234
LG International (America) Inc. Trade Debt $712,124
P.O. Box 23527
Newark, NJ 07 189
(201) 816-2235
AT&T Trade Debt $627,439
P.O. Box 78425
Phoenix, AZ 85062-8425
Southwestern Bell Trade Debt $567,548
208 S. Akard
Room 504.12
Dallas, TX 75202
Attn: Valerie Fountain
(214) 464-7900
Qwest Trade Debt $505,864
P.O. Box 3400
Omaha. NE 68103
Tellabs Trade Debt $403,000
P.O. Box 99206
Chicago, IL 60693-9206
Attn: Cindy Cirlincione
Carrier Access Corporation Trade Debt $349,326
Dept 1006
Denver, CO 80263-1006
Attn: Marion Lowstroh
(303) 442-5455 ext. 5558
Ameritech Reseller Services Trade Debt $262,674
P.O. Box 1838
Saginaw, MI 48605-1838
(414) 390-2600
Sprint Trade Debt $249,774
P.O. Box 101465
Atlanta, GA 30392
(800) 366-0548
C. ABIZ Kentucky's 20 Largest Unsecured Creditors
Creditor Nature of Claim Claim Amount
-------- --------------- ------------
Insight Communications Inc. Trade Debt $2,005,581
810 Seventh Avenue
40th Floor
New York, NY 10019
(917) 286-2303
BellSouth Trade Debt $1,498,709
Pro-Cabs
Cabs Payment Receipt
P.O. Box 105373
Atlanta, GA 30348
Fujitsu Trade Debt $1,354,925
P.O. Box 13730
Newark, NJ 07188-0730
(214) 690-6000
AT&T Trade Debt $91,704
P.O. Box 9001310
Louisville, KY 40290-1310
Orius Central Office Services Trade Debt $78,025
LISN Inc.
P.O. Box 402401
Atlanta, GA 30384-2401
(440) 984-2511
Sprint Trade Debt $62,332
P.O. Box 101465
Atlanta, GA 30392
(800) 366-0548
Verizon Trade Debt $58,002
P.O. Box 920041
Dallas, TX 75392-0041
SNET Diversified Trade Debt $37,640
Group Inc.
P.O. Box 9076
New Haven, CT 06531-0076
Attn: Kathie Kelly
(203) 694-7234
Deloitte & Touche Trade Debt $36,250
5550 LBJ Freeway
Dallas, TX 75240
Attn: Karen Manera
(972) 776-6000
Walker & Associates Inc. Trade Debt $29,486
P.O. Box 75 1578
Charlotte, NC 28275
Attn: Teri ext. 2699
(800) 472-1746
Illuminet Inc. Trade Debt $28,094
4501 Inteco Loop S.E.
P.O. Box 2909
Olympia, WA 98507
Insight Communications Trade Debt $24,024
2544 Palumbo Dr.
Lexington, KY 40509
(606) 514-1400
TJ Associates Trade Debt $19,519
41 6 West Muhammad Ali Blvd.
Louisville, KY 40202
(502) 581-8800
Verizon South Trade Debt $19,265
P.O. Box 101687
Atlanta, GA 30392-1687
(800) 483-6222
Broadwing Communications Service Trade Debt $13,491
1122 Capital of Texas Highway
Austin, TX 78746-6426
Attn: Ernest Williams
Intermedia Communications Trade Debt $8,198
P.O. Box 915238
Collections Dept.
Orlando, FL 32891-5238
Attn: Mark Botwinick
Webb Properties Trade Debt $6,287
c/o Haymaker Co., Inc., Receiver
3120 Wall St., Suite 300
Lexington, KY 40513
Austin, TX 78746-6426
ADC Communications Inc. Trade Debt $4,221
P.O. Box 93283
Chicago, IL 60673-3283
Attn: Kris Moyer
(800) 366-3891
Kentucky Towers Trade Debt $4,217
100 Kentucky Towers
Louisville, KY 40202
Domino Partners Trade Debt $4,125
427-429 E. Market St.
Louisville, KY 40202
Attn: Belinda R. Baser
(502) 562-0088
D. ABIZ Vermont's 20 Largest Unsecured Creditors:
Creditor Nature of Claim Claim Amount
-------- --------------- ------------
Fujitsu Trade Debt $742,959
P.O. Box 13730
Newark, NJ 07188-0730
(214) 690-6000
Verizon Trade Debt $208,810
P.O. Box 4430
Albany, NY 12204-0430
SNET Diversified Group Inc. Trade Debt $150,748
P.O. Box 9076
New Haven, CT 06531-0076
Attn: Kathie Kelly
(203) 694-7234
Vermont Dept. of Taxes Trade Debt $138,122
109 State Street
Montpelier, VT 05609-1401
Sprint Trade Debt $54,130
P.O. Box 101465
Atlanta, GA 30392
(800) 366-0548
AT&T Trade Debt $53,419
P.O. Box 78425
Phoenix, AZ 85062-8425
Engineers Construction Inc. Trade Debt $16,928
10 Engineers Drive
P.O. Box 2187
South Burlington, VT 05407
(802) 863-6389
Walker and Associates, Inc. Trade Debt $16,079
P.O. Box 751578
Charlotte, NC 28275
(800) 472-1746
White Mountain Construction Trade Debt $11,756
Nations Bank
225 N. Calvert St.
Lock-Box 631420
Baltimore, MD 21202
(603) 736-4766
Edlund Company Property Acct. Trade Debt $11,501
c/o Investment Properties, Inc.
P.O. Box 929
Burlington, VT 05402-0929
Broadwing Communications Serv. Trade Debt $10,221
1122 Capital of Texas Highway
Austin, TX 78746-6426
Attn: Ernest Williams
Verizon Trade Debt $7,851
P.O. Box 15123
Albany, NY 12212-5123
Catamount/Woodlands LLC Trade Debt $5,454
c/o Redstone Commercial Group
One Main Street
Burlington, VT 05401
(802) 658-7400
Intermedia Communications Trade Debt $4,837
P.O. Box 915238
Collections Dept.
Orlando, FL 32891-5238
Attn: Mark Botwinick
Green Mountain Power Corp. Trade Debt $1,477
P.O. Box 1915
Brattleboro, VT
05302-1915
Jacob Ciborowski Trust Trade Debt $1,275
18 N. Main Street, Suite 203
Concord, NH 03301
Telmar Network Technology Trade Debt $1,206
P.O. Box 911683
Dallas, TX 75391-1683
(800) 326-4949
San-Mar Cleaning Services, Inc. Trade Debt $1,014
147 Edgewood Drive
Colchester, VT 05446
River City Communications, Inc. Trade Debt $853
Box 325
White River Jct, VT 05001
(802) 295-1661
Burlington Seven Associates Trade Debt $700
5 Burlington Square
P.O. Box 119
Burlington, VT 05402
(802) 658-2545
Verizon Trade Debt $431
P.O. Box 15 150
Worchester, MA 01650-0150
AMERICA WEST: Continental Intends to End Code Sharing and Pacts
---------------------------------------------------------------
America West Airlines, Inc. (NYSE: AWA) announced that it had
received notice from Continental Airlines, Inc. of Continental's
intention to terminate the code sharing and related agreements
between the two airlines.
Continental's notice stated that code sharing will cease on
April 26, 2002. Continental's notice also stated that the
airlines' reciprocal frequent flyer and airport club agreements
will be terminated effective September 24, 2002.
"America West and Continental have had a successful partnership
that lasted nearly eight years," said W. Douglas Parker, America
West's chairman and chief executive officer. "However, times
change, and the value of the relationship to both airlines had
dissipated over time. Continental's action gives America West
the opportunity to pursue other alliance opportunities which may
be better suited to our customers' needs. Both America West and
Continental are committed to making the transition easy for our
customers."
The termination of the arrangements with Continental will not
affect America West mainline or America West Express service and
all tickets for America West-Continental code share service will
be honored. America West estimates that the code sharing,
frequent flyer and club arrangements with Continental accounted
for about $15 million to $20 million in incremental revenue
annually for America West.
America West Airlines, the nation's eighth-largest carrier,
serves 88 destinations in the U.S., Canada and Mexico. America
West Airlines is a wholly owned subsidiary of America West
Holdings Corporation, an aviation and travel services company
with 2001 sales of $2.1 billion.
ARMSTRONG WORLD: Wants More Time to Decide on Leases
----------------------------------------------------
Rebecca Booth, Esq., at Richards Layton & Finger, tells Judge
Randall J. Newsome, Armstrong World Industries, Inc. is a party
to approximately 20 unexpired nonresidential real property
leases. These unexpired leases include land use agreements and
lease agreements for warehouse space, office space, land and
parking lots located throughout the United States. These leases
all remain in effect and have neither expired nor terminated.
Each lease may be assumed or rejected by AWI under the
provisions of the Bankruptcy Code.
By this Motion, AWI seeks a third extension of its time within
which to decide whether to assume, assume and assign, or reject
these leases. The Debtors ask for an extension through November
8, 2002, subject to the rights of any lessor to request, for
cause shown, that the period should be shortened as to a
particular lease.
To determine whether "cause" exists to extend this time period,
courts consider:
(i) whether the leases are an important asset of the
estate, such that the decision to assume or reject
would be central to any plan of reorganization;
(ii) whether the case is complex and involves large
numbers of leases; and
(iii) whether the debtor has had sufficient time to
intelligently appraise each lease's value to a plan
of reorganization.
Under these standards, Ms. Booth says cause clearly exists for
the requested extension. AWI stores many of its products, which
are shipped throughout the United States, in the warehouses
subject to these leases. In addition, AWI uses its leased
railway space to transport many of its products and carries out
essential administrative functions out of its leased offices.
Consequently, the unexpired leases are important assets of AWI's
estate and, in certain instances, are integral to the continued
operation of AWI's business. Accordingly, any decisions with
respect to the assumption or rejection of these leases will be
central to any plan of reorganization. Given the importance of
the unexpired leases to AWI's ongoing operations and the number
of issues AWI must consider in deciding whether to assume or
reject each of these leases, it is unreasonable to require AWI
to make decisions about assumption or rejection on each of these
leases at this time.
AWI does not, however, wish to forfeit any lease that could be
potentially valuable as a result of the "deemed rejected"
provision of the Bankruptcy Code so this extension is necessary
to prevent that result.
An extension of time is appropriate in order to allow AWI to
review the unexpired leases in the context of developing a
comprehensive business plan, and ultimately a plan of
reorganization. AWI has been consumed with handling a vast
number of crucial administrative and business decisions and
working diligently to continue to operate its business.
Moreover, AWI has been actively working with its legal and
financial advisors and with the Creditors' Committee and the
Asbestos PI Committee and their respective advisors to explore
the potential for a consensual resolution of its chapter 11 case
and to develop the foundations for a plan of reorganization.
(Armstrong Bankruptcy News, Issue No. 19; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
BURLINGTON: Panel Asks Court to Reconsider BDO Seidman Retention
----------------------------------------------------------------
The Official Committee of Unsecured Creditors, in the chapter 11
cases of Burlington Industries, Inc., and its debtor-affiliates,
asks the Court to reconsider its Order approving BDO Seidman's
employment as the Committee's financial advisor, nunc pro tunc
to January 23, 2002.
Donald J. Detweiler, Esq., at Saul Ewing, in Wilmington,
Delaware, insists that the Court should allow the Committee to
retain BDO Seidman retroactive to November 30, 2001.
According to Mr. Detweiler, BDO Seidman commenced work for the
Committee immediately after the Committee's appointment, with
employees of BDO Seidman starting a thorough review and analysis
of the Debtors' financial data on November 30, 2001. "This was
done to assess and respond to numerous first day motions," Mr.
Detweiler explains. The time sensitive nature of BDO Seidman's
work in this case was extreme and they needed to begin work
immediately on November 30, 2001, Mr. Detweiler adds.
Furthermore, Mr. Detweiler states that BDO Seidman performed
464.9 hours of work from November 30, 2001 through January 22,
2002, representing $128,187 in fees, and $6,469 of out-of-pocket
expenses during that time period. Services performed by BDO
Seidman during that period include:
(i) preparing financial reports;
(ii) participation in the preparation and review of the KERP
Plan prior to the critical Committee meeting;
(iii) preparing business analysis reports of the Debtors prior
to January 22, 2002; and
(iv) in-depth analysis of the Debtors' financing options Akin
Gump presented at the December 6, 2001 meeting as well
as advising the Committee in related matters.
"BDO Seidman substantially benefited both the estates and the
creditors. If the firm were not to receive any compensation for
this time period, it would suffer a manifest injustice," Mr.
Detweiler asserts. (Burlington Bankruptcy News, Issue No. 10;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
CAPITOL COMMUNITIES: Closes Sale of Maumelle Property for $4.4MM
----------------------------------------------------------------
Capitol Communities Corporation (OTC Bulletin Board: CPCY)
announced Capitol's wholly owned subsidiary, Capitol Development
of Arkansas, Inc., has completed the sale of approximately 289
acres of single family residential land and 11 acres of
multifamily land it owns in Maumelle, Arkansas. The buyer is
West Maumelle Limited Partnership, a Maumelle-based land
developer. The Company values the transaction at approximately
$4,450,000. Terms of sale include $2,100,000 cash at the
closing, a 6 month note for $1,070,000, a 3 year note for
$1,030,000, and an interest in the profits derived from
development of the land which the Company and the buyer value at
$250,000. "The cash proceeds of this sale have been used to pay
mortgage debt owed to Bank of Little Rock, First Arkansas Valley
Bank, sales commissions and operating costs of the Company,"
said Michael G. Todd, President of Capitol Communities.
"This quarter, Capitol has completed sales valued at $8,450,000
and has eliminated nearly $7,000,000 in debt. Capitol still
owns $2,100,000 in notes receivable, approximately 700 acres of
land, and a 35% interest in TradeArk Properties, LLC, which owns
an additional 250 acres of Maumelle land. Now that Capitol
Development has satisfied all of its secured creditors, we will
proceed to modify our Plan and seek its confirmation at the
earliest possible date, or seek to voluntarily dismiss the
Chapter 11 proceedings entirely," said Todd. Capitol
Development of Arkansas has filed a voluntary petition for
relief under Chapter 11 of the United States Bankruptcy Code.
The petition was filed in the United States Bankruptcy Court for
the Eastern District of Arkansas, Little Rock Division on July
21, 2000.
Capitol Communities Corporation, through its subsidiary,
currently owns approximately 700 acres of land in the master
planned community of Maumelle, Arkansas. Maumelle is a planned
city with about 12,000 residents. It is located directly across
the Arkansas River from Little Rock. Maumelle contains a full
complement of industrial and commercial development, parks,
lakes, green belts, and jogging trails.
CELLPOINT INC: Creditors Accept Proposed 'Voluntary Composition'
----------------------------------------------------------------
CellPoint Inc. (Nasdaq: CLPT), a global provider of mobile
location software and platforms, announces that more than 75 per
cent of the Company's creditors, representing more than 75 per
cent of total payables, have signed the acceptance of the
Company's offer of 'voluntary composition'. Under Swedish law
with this minimum limit being met, it is possible for the
Company's Swedish subsidiary to enter an 'official composition',
if necessary, which would force the outstanding minority of
creditors to accept the composition.
"The fact that we now have the possibility to enter into an
'official composition' under the Swedish Laws of Company
Restructuring is a good foundation for the successful completion
of the financial reconstruction of CellPoint," said Jan Rynning,
Chairman of CellPoint. "Our work with the composition
settlements for creditors outside of Sweden is also progressing
very well and according to plan." CellPoint issued a press
release on these financial restructuring plans two weeks ago,
also announcing that major debt holders had converted fifty
percent of debt to equity with the remaining debt extended until
March 2004.
CellPoint Inc. (Nasdaq and Stockholmsb"rsen: CLPT) is a leading
global provider of location determination technology, carrier-
class middleware and applications enabling mobile network
operators rapid deployment of revenue generating location-based
services for consumer and business users and to address mobile
E911/E112 security requirements.
CellPoint's two core products, Mobile Location System (MLS) and
Mobile Location Broker (MLB), provide an open standard platform
adapted for multi-vendor networks with secure integration of
third-party applications and content. CellPoint's entry-level
location platform handles over 500,000 location requests per
hour and has a seamless migration path to GPRS and 3G.
CellPoint's early entry and experience with European mobile
operators has allowed the development of products and features
that address key requirements such as active and idle mode
positioning, international roaming, multiple location
determination technologies and consumer privacy.
CellPoint is a global company headquartered in Kista, Sweden.
For more information, please visit http://www.cellpoint.com
CENTRAL EUROPEAN: December Balance Sheet Upside-Down by $88MM
-------------------------------------------------------------
Central European Media Enterprises Ltd. (CME) (OTC Bulletin
Board: CETVF) announced financial results for the three and
twelve months ended December 31, 2001.
CME reduced its operating loss by 41% to $22.1 million for the
year ended December 31, 2001 compared to a loss of $37.5 million
for the year ended December 31, 2000, an improvement of $15.4
million. Consolidated net revenues were $73.2 million for the
year ended December 31, 2001 compared to $76.8 million for the
year ended December 31, 2000. Consolidated net revenues for the
three months ended December 31, 2001 were $23.0 million compared
to $27.5 million for the three months ended December 31, 2000.
Consolidated total station operating costs and expenses
(including amortization of program rights and other intangibles)
decreased by 22% or $17.3 million to $60.5 million.
CME's combined results, which includes the Slovak operations and
certain entities in the Ukrainian operations, showed a 34%
increase in EBITDA to $17.0 million in 2001 compared to $12.7
million in 2000 on a 4% increase in net revenues to $118.8
million in 2001 from $114.1 million in 2000.
Commenting on this announcement, CME President and Chief
Executive Officer Fred Klinkhammer said, "CME's combined full-
year EBITDA improved by 34%, and our net loss decreased by 41%.
All of our operations, except for Pro-TV in Romania, experienced
revenue and EBITDA growth for the year. This continues our
excellent group performance in a weak global advertising
market."
Consolidated total station operating costs and expenses
(including amortization of program rights and depreciation of
fixed assets and other intangibles) decreased by $17.3 million,
or 22%, to $60.5 million for the full-year of 2001. The
decrease in consolidated total station operating costs was
primarily attributable to reductions at the Company's Romanian
and Ukrainian operations, partially offset by an increase at the
Company's Slovenian operations. The reductions at the Romanian
operations is a result of restructuring operations and
implementing cost control measures, while the Ukrainian
operations have lower operating costs and expenses in 2001 due
to the Company writing down the carrying value of goodwill
during 2000. The Company's Slovenian operations increased
operating costs and expenses as a result of additional costs
following the Company's acquisition of Kanal A in October 2000.
The combined total stations operating costs, including
amortization of program rights, were flat at $101.8 million with
a substantial decrease in Romanian expenses due to restructuring
offset by increases in Slovenia and Ukraine.
Consolidated selling, general, and administrative expenses
increased by $590,000 or 3% to $19.9 million for the full-year
of 2001. The increase in consolidated SG&A expenses was
primarily attributable to the increase of $5.2 million in the
bad debt provision at the Romanian operation.
Corporate operating costs and development expenses increased by
$1.6 million or 14% to $13.0 million due to the exceptional
legal costs of the Czech Republic litigation and arbitration in
the amount of $4.5 million.
In 2001 CME consumed more cash than it generated and this will
continue into 2002 to the extent that management cannot be
assured the Company will have sufficient cash to meet all of its
obligations in the event operating estimates for the year are
not achieved. As a result, the Arthur Andersen audit opinion
for the year ended December 31, 2001 contains a going concern
qualification. The Company has performed better than its cash
flow estimates in each of the past two years by a considerable
margin. Under the Senior Notes covenants, the Company's
subsidiaries are permitted to borrow up to $100 million of
secured debt to which the Senior Notes are structurally
subordinate. The Company is now utilizing less than $15 million
of the permitted borrowing and is currently attempting to secure
a line of credit in an effort to improve liquidity.
At December 31, 2001, the company's balance sheet showed a
working capital deficit of about $8 million, and a total
shareholders' equity deficit of $88.8 million.
CLEARLY CANADIAN: EBITDA Loss Drops to $1.8MM for Full-Year 2001
----------------------------------------------------------------
Clearly Canadian Beverage Corporation (TSE:CLV; OTCBB:CCBC)
reported consolidated financial results for the year ended
December 31, 2001.
During the year ended December 31, 2001, the Company's wholly
owned U.S. subsidiary, CC Beverage (U.S.) Corporation, sold
certain of its business assets. The divestiture relates to two
business segments: its home and office five-gallon water
business and its private label co-pack bottling business and
related assets. For reporting purposes, as summarized below,
the results and financial position of the Company reflect the
results of the "Continuing Operations" only, whereas the results
and financial position of the "Discontinued Operations" are
shown separately. Accordingly, prior year figures have been
restated to reflect this change. In determining its results for
the year ended December 31, 2001, Clearly Canadian adopted a new
Canadian Institute of Chartered Accountants (CICA) accounting
standard dealing with discontinued operations.
Continuing Operations
Sales revenues from continuing operations were $23,257,000 for
the year ended December 31, 2001 compared to $23,247,000 for the
year ended December 31, 2000.
Gross profit margins from continuing operations were 36.9% for
the year ended December 31, 2001 compared with 35.4% for the
corresponding period in 2000. This represents gross profit of
$8,586,000 for the year ended December 31, 2001 compared to
$8,225,000 for the corresponding period in 2000.
Selling, general and administrative expenses from continuing
operations were $10,387,000 for the year ended December 31, 2001
compared $10,992,000 for the same period in 2000. The reduction
of SG&A expenses reflects the Company's continuing efforts to
reduce all categories of expense.
The Company's reported loss before interest, taxes,
depreciation, amortization and before non-recurring expenses
of $1,801,000 for the year ended December 31, 2001 compared to
$2,767,000 for the corresponding period in 2000.
Net loss from continuing operations for the year ended December
31, 2001 was $7,174,000 compared to $4,228,000 for the
corresponding period in 2000. Net loss for the year 2001
includes non-recurring expenses of $4,243,000 representing the
writedown of property, plant, equipment, goodwill and the
recovery of restructuring costs.
Discontinued Operations
Sales revenues from discontinued operations were $5,245,000 for
the year ended December 31, 2001 compared to $5,683,000 for the
year ended December 31, 2000.
Net loss from discontinued operations for the year ended
December 31, 2001 was $1,459,000 compared to $2,221,000 for the
corresponding period in 2000.
"In 2001, Clearly Canadian took the necessary steps to return to
its roots as a innovative marketer of premium alternative
beverages. We launched Reebok Fitness Water Beverage, an
innovative new beverage for health conscious consumers.
Beginning in six regions in the United States, Reebok Fitness
Water Beverage was rolled-out to the enthusiastic response of
our distributors and customers. We continued our distribution
efforts throughout the year, gaining numerous new listings for
the brand.
"We also demonstrated our commitment to our shareholders to
reduce costs while improving our financial and operational
position. In the second quarter of 2001, the Company's U.S.
subsidiary sold its home and office water business, which
resulted in a reduction of debt. In the fourth quarter, Clearly
Canadian's U.S. subsidiary entered into an agreement to divest
of its U.S.-based production facility assets and bottling plant
that included a long-term bottling contract with the purchaser
that will provide a long-term supply arrangement and allow
Clearly Canadian to maintain competitive margins on its core
product lines produced at the bottling plant. As part of this
agreement, the Company's U.S. subsidiary also sold its branded
water and private label bottled water business.
"The net result of these significant management decisions is
that Clearly Canadian is now focused on the selling and
marketing of the Company's beverage brands in an effort to
maximize shareholder value and to provide additional working
capital allowing Clearly Canadian to pursue growth
opportunities," said Douglas Mason, President of Clearly
Canadian.
Based in Vancouver, B.C., Clearly Canadian is a leading producer
of premium alternative beverages, including Clearly Canadian(R)
sparkling flavored water, Clearly Canadian O+2(R) and Tr,
Limone(TM), which are distributed in the United States, Canada
and numerous countries worldwide. Clearly Canadian also holds
the exclusive license to manufacture, distribute and sell
certain Reebok beverage products in the United States, Canada
and the Caribbean. Additional information on Clearly Canadian
and CC Beverage may be obtained on the world wide web at
http://www.clearly.ca
Clearly Canadian Beverage Corp., at December 31, 2001, reported
a working capital deficit of about $400,000, and a total
shareholders' equity deficiency of close to $49 million.
DDI CORP: Moody's Hatchets Low-B Debt Ratings Down to Junk Level
----------------------------------------------------------------
Moody's Investors Service downgraded the ratings of DDi Corp.
and its subsidiary, Dynamic Details, Inc.
Rating Actions To From
* Assigned a rating to Proposed Caa1
$75 million convertible
subordinated notes, due 2007;
* $100 million 5-1/4% convertible Caa1 B3
subordinated debentures, due 2008;
* Dynamic Details, Inc.'s $47.6 million B1 Ba3
tranche A term loan, due 2004;
* Dynamic Details, Inc.'s $88.2 million B1 Ba3
tranche B term loan, due 2005;
* Dynamic Details, Inc.'s $75 million B1 Ba3
revolving credit facility, due 2004,
subject to a limitation of $37.5 million
through FY2003Q2 under the fifth amendment
to the credit facility;
* $16 million (maturity value) 12.5% Caa1 B3
senior discount notes, due 2007,
originally issued by Details
Holdings Corp.;
* Senior implied rating B1 Ba3
* Senior unsecured issuer rating Caa1 B3
The lowered ratings are based on Dynamic Details's 62% year-
over-year decline in revenues for its FY2001Q4 ended December
31, 2001 and its expected low revenues for FY2002Q1. The current
poor market condition will continue to erode on the company's
revenues and cash flow, in turn increasing its debt leverage.
Moody's is concerned that the greater the downturn, the more
cost cutting measures will be implemented on the company's
research and development budgets, affecting Dynamic Detail's
design and engineering services.
Dynamic Detail's narrow working capital requirements and the $10
million capital expenditures budgeted for FY2002 weigh
positively in Moody's ratings. And revenues in its European
operations have increased 25% to $84.4 million, year-over-year,
in contrast to the drop to $262.9 million during FY2001 of its
domestic arm.
DDI Corp. provides technologically advanced time-critical
electronics design, development, and manufacturing services to
OEMs and other providers of electronics manufacturing services.
Its headquarters are in Anaheim, California.
DAVITA INC: S&P Assigns BB- Rating to Proposed $1.15BB Bank Loan
----------------------------------------------------------------
On March 25, 2002, Standard & Poor's assigned its 'BB-' secured
bank loan rating to dialysis-services provider DaVita Inc.'s
proposed $1.15 billion senior secured credit facilities due in
seven years. The rating outlook is stable.
The secured credit facility is rated the same as the corporate
credit rating. The $1.15 billion credit facility is secured by
all the assets of the company, including accounts receivable,
equipment, and inventory, and also stock in DaVita's
subsidiaries. Although the credit facility is secured, under
Standard & Poor's simulated default scenario, which stresses
cash flow, there is reasonable confidence of meaningful recovery
of principal, despite potentially significant loss exposure.
The speculative-grade ratings on Torrance, California-based
DaVita (formerly known as Total Renal Care Holdings Inc.)
reflect the company's position as the nation's second-largest
provider of dialysis services, with its stable and growing cash
flow, offset by uncertain reimbursement policy, cost pressures,
and somewhat high debt leverage.
Dialysis services are provided at nearly 500 outpatient centers
in 32 states, where approximately 43,000 patients are served.
Kidney dialysis is a stable, growing business characterized by
recurring demand, since patients must undergo life-sustaining
treatment three times per week.
As a result of higher costs and flat third-party reimbursement,
DaVita had experienced weaker-than-expected earnings, resulting
in write-offs related to asset-impairment and uncollectable
accounts receivable. Now, however, new management has turned the
company around by controlling costs and improving collections of
accounts receivable, generating substantial cash flow from
operations. Tight expense and accounting controls will continue
to be important to the company's success, given the uncertain
nature of third-party reimbursement.
Cash-flow coverage of interest is expected to be adequate for
the rating. The company has paid down over $400 million in debt
associated with past acquisitions with proceeds from asset sales
and improved working capital. Cash on hand and new credit
facilities to fund a share-repurchase expansion should provide
the company with enough financial flexibility for unforeseen
cash needs.
Outlook
The corporate credit rating is not expected to change over the
intermediate term. The expansion of DaVita's share repurchase
authorization utilizes debt capacity consistent with financial
parameters for the company's business risk profile. The major
impact from the initiation of a Department of Justice
investigation regarding past billing practices is not currently
incorporated into the rating or outlook.
DELTA AIR LINES: Sets Annual Shareholders' Meeting for April 26
---------------------------------------------------------------
Delta Air Lines' notice of Annual Meeting of Shareowners lists
the place of meeting to be the Renaissance Mayflower Hotel, 1127
Connecticut Avenue, N.W., Washington, D.C. 20036. Shareowners
will meet there on Friday, April 26, 2002, 10:30 a.m., local
time to consider and vote on the following:
1. to elect nine directors;
2. to ratify the appointment of Deloitte & Touche LLP as
Delta's independent auditors for the year ending
December 31, 2002;
3. to consider and vote on the two shareowner proposals
described in the proxy statement, if those proposals
are presented at the meeting; and
4. to transact such other business as may properly come
before the meeting.
Attendance is limited to Delta shareowners or their
representatives. To be admitted to the meeting, please present
an admission ticket, proof that you own Delta stock, or a proxy
from the shareowner of record. You may vote if you were a
shareowner of record of Delta's common stock or Series B ESOP
Convertible Preferred Stock at the close of business on February
28, 2002, or if you hold a proxy from a shareowner of record.
Stockholder Proposal
Mrs. Evelyn Y. Davis, Watergate Office Building, 2600 Virginia
Avenue, N.W., Suite 215, Washington, D.C. 20037, who is the
beneficial owner of 100 shares of common stock, has given notice
that she intends to introduce the following resolution at the
annual meeting:
"RESOLVED: That the stockholders of Delta Airlines,
assembled in Annual Meeting in person and by proxy, hereby
request the Board of Directors to take the necessary steps to
provide for cumulative voting in the election of directors,
which means each stockholder shall be entitled to as many votes
as shall equal the number of shares he or she owns multiplied by
the number of directors to be elected, and he or she may cast
all of such votes for a single candidate, or any two or more of
them as he or she may see fit."
Stockholder Proposal
Captain Michael H. Messmore, Air Line Pilots Association, 100
Hartsfield Centre Parkway, Suite 200, Atlanta, Georgia 30354,
who is the beneficial owner of 1,500 shares of common stock and
150 shares of ESOP Preferred Stock, has given notice that he
intends to introduce the following resolution at the annual
meeting:
"RESOLVED, that the stockholders of Delta Air Lines, Inc.
(the "Company") urge the Board of Directors to seek shareholder
approval for future severance with senior executives
(specifically, the Chief Executive Officer, President, Chief
Operating Officer, and all Executive Vice Presidents of the
Company) that provide benefits in an amount exceeding two times
the sum of the executive's annual salary and bonus. "Future
severance agreements" include agreements renewing, modifying or
extending existing severance agreements or employment agreements
containing severance provisions. "Benefits" include lump-sum
cash payments (including payments in lieu of medical and other
benefits) and the estimated present value of periodic retirement
payments, fringe benefits and consulting fees (including
reimbursable expenses) to be paid to the executive."
Delta Air Lines, the #3 US carrier (behind UAL's United and
AMR's American), is expanding its US regional operations while
building a global alliance. With hubs in Atlanta, Dallas/Fort
Worth, Cincinnati, New York City (Kennedy), and Salt Lake City,
Delta flies to 205 US cities and about 45 foreign destinations.
It also serves more than 220 US cities and nearly 120
destinations abroad through code-sharing agreements. In the US,
Delta owns regional carriers Delta Express, Atlantic Southeast,
and COMAIR. Internationally, it has formed the SkyTeam alliance
with Air France, AeroMexico, and Korean Air Lines to compete
with rival alliances Star and Oneworld. Delta also owns 40% of
computer reservation service WORLDSPAN.
As reported in the September 25, 2001, edition of the Troubled
Company Reported, Standard & Poor's lowered its corporate
credit, senior secured debt and senior unsecured debt ratings on
Delta Air Lines Inc., to the low-B level, and were placed on
CreditWatch with negative implications.
The downgrades, S&P said, reflected the severe impact of sharply
reduced air traffic since the September 11 terrorist attacks in
New York City and Washington, D.C., with expectations for only a
slow recovery in the coming months. This worsens significantly
an already grim airline industry outlook, with depressed
business travel and higher labor costs.
The extent of the downgrades was determined principally by:
* The risk of a downward rating action prior to the current
crisis, and thus how much credit "cushion" was available
within those ratings;
* The cash and bank lines available to Delta Air Lines Inc.,
as well as the amount of owned, unsecured aircraft that
could be used in secured debt or sale-leasebacks to raise
further funds; and
* The ability of Delta Air Lines to reduce cash operating
expenses and commitments for capital spending.
DebtTraders reports that Delta Air Lines' 9.750% bonds due 2021
(DAL21USR1) are quoted at a price of 93. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=DAL21USR1for
real-time bond pricing.
DONLAR BIOSYNTREX: Gets $2MM Facility to Meet Cash Obligations
--------------------------------------------------------------
Donlar Biosyntrex Corporation (OTC: DBSY), a world leader in
green chemistry, products and technology, announced that the
Company has entered into a $2.1 million loan facility with its
principal lender.
The loan facility, which matures in one year, is being used to
refinance a $252,000 short term note, provide the Company with
working capital, satisfy the majority of accounts payable and to
pay the fees and expenses related to the restructuring
transaction.
Larry Koskan, President and CEO of the Company, said, "We are
happy to report that our revenues have been growing steadily and
that our overall operations are cash flow positive.
Additionally, the Company is now able to reduce its accounts
payable by over $1 million. This loan provides the Company with
a much healthier capital structure, allowing the management team
to focus its energies on building the business. We are delighted
to be able to announce this dramatic improvement in our
financial health."
Donlar Biosyntrex Corporation and Donlar Corporation are at the
forefront of providing a new class of protein biopolymers that
help customers by providing solutions while satisfying
environmental concerns for the creation of non-toxic products
for a wide range of industrial, agricultural and consumer
markets. The Company's non-hazardous, non-toxic, hypoallergenic,
environmentally friendly and biodegradable thermal polyaspartate
(TPA) biopolymers are protected by 140 Company owned patents.
The Company's initial applications for its products include the
markets of oil field operations, fertilizers, detergents and
water treatment. The Company's betaprotein biopolymers are
manufactured in its 50,000 square foot facility located in Peru,
Illinois.
EARLYRAIN: Pursuing Recapitalization Talks with Third Parties
-------------------------------------------------------------
EarlyRain Inc. (CDNX - ERN) Mr. Hal Walker, CEO, announces that
EarlyRain Inc. is continuing to negotiate with various third
parties regarding the restructuring and recapitalization of the
company. The company hopes to be in a position to make a
comprehensive release of all facts surrounding the changes to
the company within the next few weeks.
ENRON CORP: Seeks Extension of Exclusive Period until December 1
----------------------------------------------------------------
Since the Petition Date, most of Enron Corporation and its
debtor-affiliates' time and effort have been devoted to
stabilizing their business operations and completing the
transition to operating as chapter 11 debtors in possession -- a
substantial task in cases of this size and complexity.
Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, in New
York, recaps the Debtors' activities:
(i) the implementation of various forms of relief granted by
the Court on the Petition Date to allow the Debtors to
maintain business as usual to the fullest extent possible;
(ii) the procurement of interim court approval, over
objections, of a financing facility of up to
$1,500,000,000;
(iii) the retention of professionals, over objections, necessary
to the Debtors' reorganization efforts;
(iv) the analysis of various issues relating to executory
contracts, critical vendors, and the sale of certain
assets;
(v) the analysis of the business operations of hundreds of the
Debtors' affiliates to determine whether additional
chapter 11 cases should be commenced;
(vi) the negotiation and consummation of sales of up to
$3,000,000,000 of non-core assets, including the wholesale
trading business, Enron Oil & Gas India, Ltd, NewPower,
and Enron Wind Corp.; and
(vii) the retention of a Chief Restructuring Officer.
In three short months, Mr. Rosen notes that over 2,100 motions,
notices, applications, petitions, and orders have been filed in
the Debtors' chapter 11 cases on behalf of the Debtors and in
many instances against the Debtors, each of which require the
Debtors' attention. These pleadings include:
-- various motions for relief from the automatic stay;
-- motions for Rule 2004 examinations;
-- motions for orders compelling decisions to assume or reject
executory contracts, including requests for performance or
adequate protection;
-- motions to transfer venue to the Southern District of Texas;
-- motions to restrict Enron North America Corp.'s ability to
participate in the Debtors' centralized cash management
system;
-- motions for the appointment of separate committees, trustees,
and examiners;
-- objections to the Debtors' request for approval of DIP
financing;
-- objections to retention of the Debtors' professionals;
-- adversary proceedings seeking a range of relief, including
the action filed against Dynegy, Inc. and Dynegy Holdings,
Inc.; and
-- commencement of chapter 11 cases by additional Debtors'
affiliates, which are being jointly administered with these
cases and which will continue to be filed.
Mr. Rosen points out that the Court has conducted at least 58
hearings and has devoted a significant amount of its own
resources to manage the substantial demands of this case.
In addition, Mr. Rosen continues, substantial time has been
devoted to issues involving the active investigations and
hearings being conducted by various Congressional committees,
federal agencies, and federal departments, including the Pension
Benefit Guaranty Corporation, the Department of Justice, the
Department of Labor, the Internal Revenue Service, and the
Securities and Exchange Commission. "The Debtors are busy
defending class action lawsuits filed on behalf of employees
with respect to the Enron Corporation Savings Plan," Mr. Rosen
adds. Furthermore, Mr. Rosen says, the Debtors are faced with
challenges relating to thousands of foreign affiliates,
including the commencement of voluntary and involuntary
international insolvency proceedings.
On top of that, Mr. Rosen informs Judge Gonzalez that the
Debtors are compiling compliance and reporting information
required by the Federal Rules of Bankruptcy Procedure and U.S.
Trustee Guidelines. According to Mr. Rosen, the Debtors'
initial consolidated monthly operating report is not due to be
filed until March 29, 2002, and each of the Debtors have been
granted extensions until April 19, 2002 to file its schedules of
assets and liabilities and statement of financial affairs. Mr.
Rosen also relates that the initial meeting of creditors
pursuant to section 341 of the Bankruptcy Code will not take
place until May, and a bar date has not been fixed in any of the
cases.
Although the Debtors intend to emerge from chapter 11 as quickly
as possible, Mr. Rosen explains that the implementation of any
restructuring plans and the development and negotiation of plans
of reorganization with various creditor constituencies will
require a substantial amount of time. "Because of the sheer
magnitude of matters that have required and continue to require
the Debtors' and its professionals' attention, as well as many
complex issues and problems that still must be addressed, the
Debtors have not yet had a reasonable opportunity to formulate
long-term business plans," Mr. Rosen tells the Court.
Thus, by this motion, the Debtors ask Judge Gonzalez for an
order extending the period to file and solicit chapter 11 plans
for 8 months -- to and including December 1, 2002 and January
31, 2003, respectively.
The Debtors assert that they could not possibly file a
confirmable reorganization plan by the current April 1, 2002
deadline. The Debtors have identified approximately 350,000
creditors and hundreds of thousands of executory contracts and
unexpired leases to be reviewed and analyzed. "The sheer size
and complexity of these chapter 11 cases alone compel the
requested extension of the Filing and Solicitation Periods," Mr.
Rosen argues. Clearly, Mr. Rosen says, the Debtors need
sufficient time to negotiate chapter 11 plans and prepare
disclosure statements containing adequate information.
Mr. Rosen assures the Court that the requested extension will
not harm the Debtors' creditors.
* * *
Judge Gonzalez will convene a hearing to consider the Debtors'
motion on April 11, 2002 at 10:00 a.m. Accordingly, Enron's
exclusive period during which to propose and file a plan is
extended through the conclusion of that hearing. Objections to
the relief requested must be filed and served no later than 4:00
p.m. (New York City Time) on April 5, 2002. (Enron Bankruptcy
News, Issue No. 17; Bankruptcy Creditors' Service, Inc.,
609/392-0900)
ENRON CORP: Hearing on Sale of Retail Contracts Set for Thursday
----------------------------------------------------------------
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
IN RE: ) Chapter 11
ENRON CORP., ET AL., ) Case No. 01-16034 (AJG)
DEBTORS. ) Jointly Administered
NOTICE OF MOTION FOR AN ORDER UNDER
11 U.S.C. SECS. 105(a), 363(b), (f) AND (m),
365, 541 AND 1146(c) AND
FED. R. BANKR. P. 2002, 6004, 5005 AND 9014
(1) APPROVING PURCHASE AND SALE AGREEMENT WITH OCCIDENTAL
ENERGY MARKETING, INC., (2) AUTHORIZING SALE OF AND
ASSUMPTION AND ASSIGNMENT OF CERTAIN RETAIL CONTRACTS
AND (3) GRANTING RELATED RELIEF
PLEASE TAKE NOTICE, that a hearing will be held before the
honorable Arthur J. Gonzalez, United States Bankruptcy Judge, on
April 4, 2002, at the United States Bankruptcy Court, Alexander
Hamilton Custom House, One Bowling Green, New York, New York
1004, at 10:00 a.m., to consider the motion dated March 8, 2002,
on Enron Energy Services, Inc. and Enron Energy Marketing Corp.,
as debtors and debtors in possession in the above-captioned
jointly administered bankruptcy cases, seeking an Order pursuant
to section 363 (b), (f) and (m), 375, 541 and 1146 (c) of title
11 of the United States Code and Rules 2002, 6004, 6006 and 9014
of the Federal rules of Bankruptcy Procedure, authorizing the
assumption, assignment and sale of certain retail gas supply
contracts, certain service contracts with Southern California
Gas Company, and any Marketer Rights free and clear of all
liens, claims, encumbrances, and other interests (except for the
Contract Liabilities), pursuant to and as described in the
Retail Contracts Purchase and Sale Agreement dated as of March
8, 2002, by and among the Sellers and Occidental Energy
Marketing, Inc. and granting related relief, all as more fully
set forth in the Motion.
PLEASE TAKE FURTHER NOTICE, that the Motion provides
principally that, subject to Court approval, Sellers will
assume, assign and sell the Subject Assets to Purchaser or any
successful bidder, free and clear of liens, claims, encumbrances
and other interests (except for the Contract Liabilities) and
exempt from any stamp, transfer, recording or similar tax, upon
the terms and conditions set forth in the Motion.
PLEASE TAKE FUTHER NOTICE, that the Sale Hearing may be
adjourned from time to time without further notice to creditors
or other parties in interest other than by an oral announcement
of such adjournment in open court. The Motion, and the related
supporting papers, including the Purchase and Sale Agreement,
may be obtained for examination or copying from counsel for
Sellers as listed below.
PLEASE TAKE FURTHER NOTICE, that objections, if any, to the
relief requested in the motion shall be filed with the Court
(with a courtesy copy to Chambers) and served (so as to be
received no later than 10:00 a.m. on April 1, 2002, upon (i)
special counsel to Sellers, LeBoeuf, Lamb, Greene & MacRae,
LLP., 125 West 55th street, New York, New York 10019, Attention:
Carl A. Eklund and Irena Goldstein; (ii) counsel to Purchaser,
Fullbright & Jaworski LLP., 1301 McKinney, Suite 5100, Houston,
Texas 77010-3095, Attention: Zack A. Clement; (iii) counsel to
the Official Committee of Unsecured Creditors, Milbank, Tweed,
Hadley & McCloy, One Chase Manhattan Plaza, New York, New York,
10005, Attention: Luc Despins; and (iv) the Office of the
United States Trustee, 33 Whitehall Street 21st Floor, New York,
New York 10004, Attention: Mary Elizabeth Tom.
PLEASE TAKE FUTHER NOTICE, that Sellers will consider
competitive bids for the Subject Assets. Financial information
concerning the assets to be sold is available, upon execution of
a confidentiality agreement, for inspection through the
undersigned special counsel to Sellers.
Dated: New York, New York
March 22, 2002
LeBOEUF, LAMB, GREENE & MacRAE, LLP.
SPECIAL COUNSEL TO SELLERS
125 West 55 th Street
New York, NY 10019-5389
(212) 424-8000
Carl A. Eklund, Esq.
ENRON CORP: Seeks Okay of Proposed Retention & Severance Plan
-------------------------------------------------------------
Enron Corp. (OTC: ENRNQ) filed a retention and severance plan
with the United States Bankruptcy Court for the Southern
District of New York. The plan, which has been reviewed and
approved by the Creditors' Committee, which the United States
Trustee appointed in the company's bankruptcy proceeding, is
designed to retain employees whose skills and experience are
critical to the successful restructuring of the company.
"For Enron to successfully reorganize the viable power and
pipeline business and to liquidate certain non-core assets to
maximize value for our creditors, we need to ensure that our
critical employees are committed to the completion of these
tasks," said Stephen F. Cooper, Enron interim CEO and chief
restructuring officer. "An incentive program like this
retention and severance plan is common in bankruptcy proceedings
and provides our employees with some certainty in a very
difficult situation, while at the same time providing our
creditors with the assurance that we will successfully sell
viable, cash-producing assets."
The severance component of the plan extends to all eligible
employees in the debtor companies (those in bankruptcy) who are
not covered by other plans. Severance pay will be based on years
of service, with a maximum of eight weeks base pay and a minimum
of $4,500. The retention components of the plan will retain
employees whose skills or knowledge are critical to the
company's liquidation of certain assets and reorganization, so
as to maximize value for the company's creditors.
The total value of the severance and retention plan will range
from $47.4 million to $130 million, depending on asset sales and
other cash collections.
"The types of payments contemplated in this plan are typical in
bankruptcies," said Bob Medlin, partner, PriceWaterhouseCoopers
Business Recovery Services, who is an expert in bankruptcies and
a consultant to Enron. "However, in line with the significant
breadth and complexity of the issues facing Enron, the plan
covers a greater number of employees. Given the thousands of
multi-party contracts to be analyzed, assets to be sold and
partnerships to be unwound, this broad retention plan will be
essential in helping creditors realize the greatest value."
The plan remains subject to the Bankruptcy Court's approval.
Creditors and other interested parties will have a period of
time, set by the court, to comment on the plan. A copy of the
court filing is available at http://www.enron.com
Enron Corp. delivers energy, physical commodities and other
energy services to customers around the world.
ETOYS: Creditors Eye Goldman Sachs & Co. as Recovery Source
-----------------------------------------------------------
The Official Committee of Unsecured Creditors of eToys, Inc.,
sought and obtained authority from the U.S. Bankruptcy Court for
the District of Delaware to employ and retain Pomerantz Haudek
Block Grossman & Gross LLP and Wachtel & Masyr as its special
co-counsel in these chapter 11 case.
Goldman Sachs & Co. was the lead managing underwriter of the
initial public offering of shares of the common stock of eToys,
Inc. The Committee indicates that several issues have arisen
suggesting possible actionable misconduct by Goldman regarding
the underwriting of the IPO. Because of a possible conflict,
the Debtors entered into a stipulation appointing the Committee,
on behalf of the Debtors and their estates to investigate,
commence and pursue any causes of action that may exist against
Goldman and others.
The Committee and the Debtors believe that Pomerantz Haudek and
Wachtel & Masyr, are highly qualified to represent them in
pursuing an action against Goldman. The law firms will be:
i) providing legal advice to the Committee with respect to
potential IPO litigation;
ii) assisting the Committee in its investigation of the
circumstances, acts, and conduct surrounding the IPO;
and
iii) pursuing, if warranted, causes of action against Goldman
and others relating to the IPO.
Pomerantz's expertise in complex securities litigation and
ferreting out fraud and breaches of fiduciary duties will be
complemented with Wachtel's sophisticated and successful
corporate and financial experience, the Committee explains.
Together, the Firms will provide expertise efficiently and
effectively in pursuing claims against Goldman.
The Firms will be paid only if they are successful, from any
settlement fund or judgment award collected in any litigation,
in the aggregate amounts as:
a) 29% of the first $50 million in recovery;
b) 26% of any recovery above $50 million and up to the next
$200 million; and
c) 19% of any recovery above $250 million and up to the
next $200 million.
eToys, Inc. now known as EBC I Inc, is a web-based toy retailer
based in Los Angeles, California. The Company filed for Chapter
11 Petition on March 7, 2001 in the U.S. Bankruptcy Court for
the District of Delaware. Robert J. Dehney, Esq., at Morris,
Nichols, Arsht & Tunnell and Howard Steinberg, Esq., at Irell &
Manella represent the Debtors in their restructuring efforts.
When the company filed for protection from its creditors, it
listed $416,932,000 in assets and $285,018,000 in debt.
FEDERAL-MOGUL: Expanding Scope of De Minimis Sale Protocol
----------------------------------------------------------
Federal-Mogul Corporation, and its debtor-affiliates want to
expand the scope of the order establishing procedures for the
sale of de minimis assets to include transactions involving the
"uses" of estate assets, not merely the "sale" or "lease" of the
estate assets.
James E. O'Neill, Esq., at Pachulski Stang Ziehl Young & Jones
P.C. in Wilmington, Delaware, relates that at the time the
motion was filed, the Debtors were embarking on various
transactions designed to increase the efficiency of their
business operations through the disposition of redundant and
underperforming assets. During the intervening months since
then, the Debtors have negotiated various transactions with
third parties that involve using rather than selling or leasing
estate assets. In some circumstances, the non-debtors parties to
the contemplated transactions have expressed concern over
whether the Debtors need Court authorization to enter into the
transactions because the transactions might not fit within the
Debtors' ordinary course of business. Although the amounts of
these contemplated transactions were within the limits of the de
minimis sale procedure order, the language of the order clearly
did not include the type of transactions that were contemplated.
Mr. O'Neil tells the Court that they anticipate entering into
transactions that involve the use as well as the sale or lease
of the estate assets. Given the monetary value of the
transactions in relation to the magnitude of the Debtors'
overall operations, it would not be an efficient use of
resources to seek Court approval each time the Debtors have an
opportunity to enter into such transactions. The proposed
expansion of the scope of the de minimis sale procedures order
will also save the estates substantial amounts of administrative
expenses.
The Debtors believe that the relief requested will aid in the
Debtors' efforts to reduce expenses and maximize value for the
benefits of their estates, creditors and parties-in-interests.
Mr. O'Neill claims that requiring Court approval of each such de
minimis transaction would be administratively burdensome to the
Court and costly to the Debtors estates, especially in light of
the small size of the assets involved in these transactions. In
certain cases, the cost and delay associated with seeking
individual Court approval of these transactions would
substantially undermine the economic benefits of the
transaction. By granting the relief, Mr. O'Neill contends that
the Debtors will be able to avoid the cost of having their
counsel draft and file numerous motions and send our numerous
hearing notices delaying the transactions involving de minimis
assets and potentially decreasing their market value. Moreover,
the transactions that the Debtors seek to implement will also
reduce the burden on the Court's docket while protecting the
interests of all creditors through the notice and objections
procedures. (Federal-Mogul Bankruptcy News, Issue No. 13;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
FLORSHEIM: Taps Hilco Merchant to Conduct 131-Store Closing Sale
----------------------------------------------------------------
Hilco Merchant Resources, a leading asset disposition company,
has been retained by Florsheim Shoes to assist in the
liquidation of inventory in 131 Florsheim Shoe Stores located in
33 states. The U.S. Bankruptcy Court for the Northern District
of Illinois has approved Hilco Merchant Resources as a
consultant.
In 2000, the Florsheim Group closed unprofitable stores and
shifted manufacturing of all its shoes overseas in an effort to
improve revenue, reduce costs and maximize cash flow, the
company's financial condition continued to deteriorate. Also,
contributing to the decline, company management cited the
economic recession and the impact of the events September 11 had
on the retail apparel and footwear industry.
"We are pleased to be working as Florsheim's strategic partner
in the closing of their retail locations," stated Anton
Caracciolo, executive vice president and principal of Hilco
Merchant Resources. "For over 100 years, the Florsheim brand has
been the benchmark of quality and value in the shoe industry.
Store closing sales will start immediately and will provide
consumers with an excellent opportunity to purchase high-quality
shoes and accessories at liquidation prices!"
Hilco Merchant Resources, LLC, is a leader in store closings and
the liquidation of retail merchandise. Over more than a quarter
century, the principals of Hilco Merchant Resources have closed
thousands of stores and disposed of retail inventories exceeding
$25 billion in value. Headquartered in Chicago, Hilco Merchant
Resources is part of the Hilco Trading Co. organization. Through
its operating units, Hilco provides a broad-spectrum of asset
repositioning services beyond retail liquidations, including
industrial inventory, machinery and equipment appraisals and
dispositions; retail and industrial real estate appraisals and
dispositions; accounts receivable portfolio acquisitions; bulk
acquisitions of wholesale inventory; and, debt and equity
financing. Hilco Trading Co. is also headquartered in Chicago
with offices in Boston, New York, Los Angeles, Miami, Detroit,
Toronto (through affiliate Danbury Sales) and London, England.
For information, visit http://www.hilcotrading.com
FOAMEX INT'L: Raises $300MM from Sale of 10-3/4% Senior Notes
-------------------------------------------------------------
Foamex International Inc. (Nasdaq: FMXI), the leading
manufacturer of flexible polyurethane and advanced polymer foam
products in North America, announced its 2001 fourth quarter and
full-year financial results.
Fourth Quarter 2001 Results
Sales
Net sales for the fourth quarter were $310.6 million, up 4.8%
from $296.3 million in the fourth quarter of 2000. Gross profit
increased 13.7%, to $41.6 million in 2001 from $36.6 million in
2000. Gross profit as a percentage of net sales increased to
13.4% in 2001 from 12.3% in 2000.
Earnings
Net loss for the quarter was $29.4 million compared with income
of $3.5 million in the fourth quarter of 2000. Loss from
operations was $15.1 million for the quarter, compared with
income from operations of $21.5 million in the fourth quarter of
2000. The fourth quarter results included restructuring,
impairment and other charges of $35.4 million ($18.4 million
non-cash), related to Foamex's previously announced Project
Transformation operational restructuring. Excluding the charge,
fourth quarter 2001 income from operations would have been $20.3
million.
Selling, general and administrative (SG&A) expense for the 2001
fourth quarter was $20.9 million, up 40.6% from the fourth
quarter of 2000. EBDAIT for the 2001 fourth quarter was $30.3
million, down 5.9% from the fourth quarter of 2000. The increase
in SG&A was primarily related to increased bad debt expense,
higher professional fees and higher employee and benefit costs.
SG&A was 4% lower in the fourth quarter compared to the third
quarter.
Interest and debt issuance expense for the quarter was $14.1
million, a decrease of 23.8% from the 2000 quarter, due to
reduced debts levels and lower interest rates. The Company's
consolidated debt at December 31, 2001 was $666.6 million, down
$45.3 million from a year earlier.
Commenting on the results, Marshall Cogan, Chairman and founder
of Foamex, said, "Recently, Foamex took three critically
important actions that will significantly improve the Company's
future performance: installing an experienced and talented
senior management team; launching Project Transformation to
increase efficiency and leverage our proprietary VPF technology;
and continuing to deleverage the balance sheet.
"We are also very pleased to have refinanced the Company earlier
this month, strengthening our balance sheet by reducing short-
term obligations and increasing financial flexibility. This is
an important endorsement of Foamex's business strategy and
management team, and will allow us to grow our business and
generate meaningful long-term shareholder value," Cogan added.
Peter Johnson, Foamex's President and Chief Operating Officer,
said, "Foamex delivered solid fourth quarter results despite a
difficult economic environment. Now, as we continue to implement
our operational improvements and invest in our promising
pipeline of new technical and consumer related products, we will
continue to concentrate on better execution and improved
efficiencies in order to enhance our profitability and provide a
strong platform for growth in the future."
Outlook
Commenting on the Company's outlook, Thomas Chorman, Executive
Vice President and Chief Financial Officer of Foamex said, "The
market is beginning to show moderate signs of recovery and the
sales momentum that began during the fourth quarter appears to
have continued into the first quarter of this year. However, we
are planning for only modest growth and remain cautious in our
outlook for the year."
Full-Year 2001 Results
Sales
Net sales were $1.253 billion for the full year of 2001, down
0.3% from $1.258 billion in 2000. Gross profit in 2001 was
$180.1 million, an increase of 4.7% from $172.0 million in 2000.
Gross profit as a percentage of net sales increased to 14.4 % in
2001 from 13.7% in 2000.
Earnings
Net loss for 2001 was $5.6 million compared with net income of
$17.0 million in 2000. Income from operations for the full year
2001 was $63.5 million, down from $96.5 million in 2000. The
full year results included restructuring, impairment and other
charges of $36.1 million, largely due to the fourth quarter
restructuring charge of $35.4 million, which is related to
Foamex's previously announced Project Transformation operational
restructuring. In 2000, restructuring, impairment and other
charges were $6.3 million, principally for severance costs and
plant consolidations. Excluding Project Transformation charges
in full year 2001 income from operations would have been $98.9
million.
SG&A expense was $80.5 million for the full year, up 16.2% from
2000. The increase was primarily due to higher professional
fees, partially associated with a change in accountants,
increased bad debt expense and higher employee and benefits
costs.
For the full year 2001, EBDAIT was $135.2 million, down 4.0%
from $141.0 million in 2000.
Interest and debt issuance expense was $63.2 million for the
year, down $12.0 million from 2000. The decrease was primarily
due to reduced debts levels and lower interest rates.
Business Update
Refinancing
Foamex also announced that on March 25, 2002 it completed the
previously announced sale of senior secured notes and amendment
of its credit facilities. Foamex L.P. raised $300 million of
senior secured notes, increased from an expected $200 million,
in a private placement under rule 144A. These notes bear
interest at the rate of 10-3/4% and are due April 1, 2009. The
net proceeds of the $300 million have been or will be applied to
repay indebtedness.
Of the net proceeds from the offering (approximately $280
million), approximately $231.5 million was applied to reduce the
Company's bank debt, and approximately $48.5 million may be used
to repurchase or redeem the Company's existing senior
subordinated notes within a certain period of time. To the
extent such amount is not used for this purpose, it will be
applied to further reduce the Company's bank term loan
indebtedness.
Additionally, Foamex International contributed all of its equity
interest in Foamex Carpet Cushion LLC to Foamex L.P., making
Foamex Carpet Cushion LLC a wholly-owned subsidiary of Foamex
L.P. As part of this contribution, Foamex L.P. borrowed $31.6
million under a new Term E Loan and used the proceeds to retire
all existing indebtedness of Foamex Carpet Cushion LLC. The new
Term E Loan bears interest at a variable rate and matures on
June 30, 2005.
Foamex L.P. also raised a new $100 million revolving credit
facility. The new revolving credit facility bears interest at a
variable rate and matures on June 30, 2005. Foamex also raised a
new $25 million Term F Loan. The new Term F Loan bears interest
at a variable rate and matures on June 30, 2005. Proceeds of the
Term F Loan were used to repay indebtedness under the existing
revolving credit facility.
Rating Agencies Upgrades
In connection with the refinancing, Foamex L.P. and Foamex
Capital Corporation's credit rating were reviewed by both
Standard & Poor's and Moody's. S&P raised its corporate credit
rating on Foamex L.P. from B to B+. Additionally, S&P raised its
ratings on the Company's senior credit facilities from B+ to BB-
and on the Company's existing senior subordinated notes from
CCC+ to B-, while rating the senior secured notes B. Moody's
changed its rating outlook to positive from stable.
"Project Transformation"
Operational Restructuring Program
Also in December, Foamex announced its comprehensive profit
enhancement plan, Project Transformation, leveraging Foamex's
VPF technology to reduce costs, spur revenue growth, and drive
increased long-term profitability and shareholder value. The
Company expects to realize pre-tax cost savings of approximately
$20 million in 2002 and $30 million in 2003 as a result of this
program.
Project Transformation is well underway and as of today, 79
salaried positions, mostly in corporate and support functions,
have been eliminated. Additionally, as of today Foamex has
closed two rebond operations, one in California and one in
Tennessee. The Company has begun to centralize its purchasing
functions and leverage its scale to negotiate new national
procurement contracts for supplies and services.
Annual Meeting
Foamex will hold its annual meeting June 5, 2002.
Foamex, headquartered in Linwood, PA, is the world's leading
producer of comfort cushioning for bedding, furniture, carpet
cushion and automotive markets. The company also manufactures
high-performance polymers for diverse applications in the
industrial, aerospace, defense, electronics and computer
industries as well as filtration and acoustical applications for
the home. For more information visit the Foamex Web site at
http://www.foamex.com
FOSTER WHEELER: Bank Negotiations Cause Delay in Form 10K Filing
----------------------------------------------------------------
Foster Wheeler Ltd. (NYSE: FWC) announced that it will file with
the Securities and Exchange Commission an extension to file its
Form 10-K for fiscal 2001 to April 12, 2002.
The company cited ongoing negotiations with its bank group to
structure new, long-term credit facilities as the reason for the
extension.
"By delaying the filing of our Form 10-K, we will be able to
provide the market with more current information," said Gilles
A. Renaud, the company's senior vice president and chief
financial officer. "We continue to actively negotiate with our
lenders and we are still optimistic about our chances of
resolving these negotiations within the next few weeks."
As previously announced, the company's waiver on its current
revolving credit facility is in effect until April 15, 2002,
subject to the continuing satisfaction of certain conditions.
The company has also obtained an extension of its $50 million
receivables sale arrangement through April 12, 2002 and received
a forbearance of the exercise of any remedies from February 28,
2002 through April 15, 2002 from the required lenders under its
$33 million lease financing facility, which facility matured on
February 28, 2002.
The company's annual meeting of shareholders will be held on May
22, 2002, at 9:30 a.m. at its office in Perryville Corporate
Park, Clinton, NJ.
Foster Wheeler Ltd. is a global company offering, through its
subsidiaries, a broad range of design, engineering,
construction, manufacturing, project development and management,
research, plant operation and environmental services. The
corporation is based in Hamilton, Bermuda, and its operational
headquarters are in Clinton, N.J. For more information about
Foster Wheeler, visit our World-Wide Web site at
http://www.fwc.com
DebtTraders reports that Foster Wheeler Corporation's 6.75%
bonds due 2005 (FWC) are quoted at a price of 58. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=FWCfor real-
time bond pricing.
GENTEK: Violations of Fin'l Covenants Under Credit Pact Likely
--------------------------------------------------------------
GenTek Inc. (NYSE: GK) reported revenues of $1,244.4 million in
2001, compared with $1,414.2 million in 2000. Excluding
restructuring charges and other adjustments, earnings before
interest, taxes, depreciation and amortization (EBITDA) were
$155.0 million, compared with $247.3 million in 2000.
The 2001 adjusted EBITDA figure excludes restructuring and other
charges totaling $247.4 million ($167.1 million after tax)
recorded during the last three quarters of 2001, and also
excludes $12.9 million ($7.7 million after tax) of operating
costs related to two non-core research and development
facilities which were closed during the fourth quarter.
Adjusted EBITDA for 2000 excludes a one-time charge of $5.8
million ($3.5 million after tax) for purchased in-process
research and development and $11.7 million ($7.1 million after
tax) related to operating costs of the closed research and
development facilities discussed above.
The company's full-year results were negatively affected by the
continuing downturn in the U.S. telecommunications industry, the
general economic slowdown and lower volumes and pricing in the
North American automotive industry.
For the fourth quarter of 2001, GenTek posted revenues of $285.3
million, compared with $344.1 million in the corresponding
quarter of 2000. Excluding restructuring and other charges of
$93.8 million ($66.0 million after tax) and operating costs
related to the closed research and development facilities of
$1.1 million ($0.7 million after tax) for 2001, and $4.0 million
($2.4 million after tax) for operating costs related to the
closed research and development facilities in 2000, EBITDA was
$33.0 million, compared with $55.2 million in the fourth quarter
of 2000.
The company's fourth-quarter performance was adversely impacted
by results in the communications segment, related to the
continuing downturn in the U.S. telecommunications industry, the
general economic slowdown and lower volumes in certain
international markets for telecommunications connectivity.
Excluding restructuring and other charges, both the
manufacturing and performance products segments posted fourth-
quarter operating profit at or above prior-year levels.
According to GenTek chairman Paul M. Montrone, "Fourth-quarter
customer demand in several key end markets, including automotive
and North American communications, generally stabilized at the
reduced levels realized in the prior quarter. GenTek recorded
additional restructuring and other charges in the fourth quarter
in connection with our continuing effort to bring headcount and
infrastructure to levels that are consistent with current levels
of business activity. Restructuring plans enacted during 2001
continue to be executed successfully, resulting in expected
annualized cost savings of $30 million to $35 million."
For the fourth quarter of 2001, GenTek recorded a net loss of
$71.1 million compared with net income of $8.5 million for the
corresponding period of 2000. Excluding restructuring and other
charges discussed above, the company posted a 2001 fourth-
quarter net loss of $4.4 million compared with net income of
$10.8 million for the fourth quarter of 2000.
For all of 2001, GenTek recorded a net loss of $170.8 million
compared with net income of $50.2 million for 2000. Excluding
restructuring and other charges discussed above, the company
posted 2001 net income of $4.0 million compared with $60.6
million for the prior year.
Outlook and Liquidity
The company anticipates that it will not be in compliance with
certain financial covenants contained in its senior credit
facility when results for the quarter ending March 31, 2002, are
finalized. As a result, the company's independent auditors will
issue an auditors' report with an explanatory paragraph with
respect to GenTek's ability to continue as a going concern.
GenTek is in discussions with its lenders regarding amending its
senior credit facility, which the company anticipates will
continue through the late spring.
As a precautionary measure and to demonstrate the company's
operating liquidity to its customers, suppliers and employees,
GenTek drew all remaining amounts available under its revolving
credit facility during the first quarter of 2002. As a result
GenTek currently has cash and short-term investments of
approximately $150 million. Based on its current outlook, the
company believes this level of liquidity will be sufficient to
fund GenTek's operating requirements for the foreseeable future.
The company's non-compliance with its financial covenants will
give its senior lenders the right to accelerate the company's
senior debt repayment obligations. If this were to occur, the
company would have to seek alternative sources of financing. No
assurances can be given as to the availability of such
financing. However, the company believes that it will be able
to reach agreement with its lenders on an acceptable amendment
to its senior credit facility and thereby avoid such
acceleration.
"Despite an encouraging start this year in GenTek's automotive
and appliance markets, continued softness in our communications
business will depress the company's overall profitability for
the next several quarters," said Montrone. "However, we have
taken appropriate measures to ensure that GenTek's businesses
have sufficient liquidity to weather this period of market
turmoil."
GenTek Inc. is a technology-driven manufacturer of
communications products, automotive and industrial components,
and performance chemicals. A global leader in a number of
markets, GenTek provides state-of-the-art connectivity solutions
for telecommunications and data networks, precision automotive
valve-train components, and performance chemicals for
environmental, pharmaceutical, technology and chemical-
processing markets. Additional information about the company is
available on GenTek's Web site at http://www.gentek-global.com
GLOBAL CROSSING: Proposes Protocol to Pay Bermuda Liquidators
-------------------------------------------------------------
In order to promote cooperation and comity among the Bankruptcy
Court and the Bermudian Court and to avoid the possibility of
conflicting orders being made by the two courts with respect to
the payment of the fees and expenses of the Joint Provisional
Liquidators, the JPLs' Professionals and the Chapter 11
Professionals, Global Crossing Ltd., and its debtor-affiliates
seek entry of an Order establishing compensation procedures.
Contemporaneously with the filing of this application, the JPLS
will file a parallel application with the Bermudian Court. The
Debtors request that these procedures be approved:
A. The fees and expenses of the Chapter 11 Professionals shall
be paid, without necessity of further order of the
Bermudian Court, by the appropriate Debtor or Debtors in
accordance with the terms of the order of the Bankruptcy
Court. The Chapter 11 Professionals shall be subject to the
sole and exclusive jurisdiction of the Bankruptcy Court
with respect to their appointment, remuneration and
reimbursement of expenses. The Chapter 11 Professionals,
insofar as they are required to assist in connection with
the provisional liquidations of the Bermudian Companies,
shall not be required to seek approval of their appointment
or remuneration or reimbursement of expenses by the
Bermudian Court.
B. The Bermudian Companies shall pay, without necessity of
further order of the Bankruptcy Court, the fees and
expenses of the JPLs and the JPL Professionals. The JPLs
and the JPL Professionals shall be subject to the sole and
exclusive jurisdiction of the Bermudian Court with respect
to, as applicable, the appointment, remuneration and
reimbursement of the fees and expenses of the JPLs and the
JPL Professionals.
C. The payment of the fees and expenses of the JPLs and the JPL
Professionals is subject to the approval of the Bermudian
Court.
D. The Debtors and their advisors will carefully review the fee
applications of the Chapter 11 Professionals, including
Debtors' attorneys, to ensure against unreasonable,
unnecessary and inappropriate charges. (Global Crossing
Bankruptcy News, Issue No. 6; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
HAYES LEMMERZ: Gets Waiver of Investment & Deposit Requirements
---------------------------------------------------------------
Hayes Lemmerz International, Inc., and its debtor-affiliates
obtained final orders from the Court:
A. to invest and deposit funds in a safe and prudent manner in
accordance with their existing investment guidelines,
notwithstanding that such guidelines may not strictly
comply in all respects with the approved investment
practices set forth in section 345 of the Bankruptcy Code,
B. for the applicable institutions to accept and hold or invest
such funds in accordance with the Debtors' pre-petition
practices.
Kenneth A. Hiltz, the Debtors' Chief Finance Officer and Chief
Restructuring Officer, said that prior to the commencement of
their chapter 11 cases, the Debtors maintained, in the ordinary
course of business, more than 75 bank accounts located in
various states throughout the United States through which Hayes
managed cash receipts and disbursements for the Debtors' entire
domestic corporate enterprise. The Debtors believed that all of
the Bank Accounts, whether located within or outside the
District of Delaware, are in financially stable banking
institutions with Federal Deposit insurance or other appropriate
government-guaranteed deposit protection insurance.
Mr. Hiltz continued that the Debtors maintained three investment
vehicles for the purpose of investing excess cash in the
Debtors' concentration account at the end of a business day: a
securities repurchase account; the Scudder 403 Money Market
Fund; and the Dreyfus Government Cash Management Fund. When
excess cash remains in the Debtors' concentration account at the
end of a business day, the funds are either wired to the Scudder
Account or to the securities repurchase account for overnight
investment, or are automatically swept into the Dreyfus Account.
Mr. Hiltz explained that the Debtors might choose which account
to use in order to maximize their investment return. In
addition, the Debtors maintained a second Scudder 403 Money
Market Fund account for the purpose of segregating the remaining
proceeds of the $300,000,000 11.78% senior unsecured notes issue
due 2006. Mr. Hiltz said that the 7-day average yield of the
Scudder 403 Money Market Fund was 2.39%, and it was a relatively
low-risk investment while the Dreyfus Account is a low-risk
investment as it was guaranteed by the U.S. Government with an
average 7-day yield of 2.50%. The securities repurchase account
invests the Debtors' funds in United States government
securities and is therefore a similarly safe investment. The
remainder of the Bank Accounts contains zero or minimal
operating balances and are not invested overnight. (Hayes
Lemmerz Bankruptcy News, Issue No. 8; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
HYBRID NETWORKS: Must Seek New Sources of Financing to Continue
---------------------------------------------------------------
Hybrid Networks Inc. is a fixed broadband wireless access
equipment company that designs, develops, manufactures and
markets wireless systems that provide high-speed access to the
Internet for businesses and consumers. Its systems provide
consumers with a wireless alternative for high-speed Internet
access. Its products greatly accelerate the response time for
accessing bandwidth-intensive information. Since 1996, Hybrid's
principal product line has been the Hybrid Series 2000, which
consists of base station routers, network and subscriber
management tools and a line of wireless end-user routers or
Customer Premise Equipment (CPE). In the past, the majority of
its products have been sold in the United States and Canada.
The Company incurred net losses for the years ended December 31,
2001, 2000, and 1999, of $10,517,000, $37,203,000, and
$22,192,000, respectively. Accumulated deficit was
$133,481,000 as of December 31, 2001 and the Company expects to
incur losses for the foreseeable future.
Results of Operations - Years Ended
December 31, 2001, 2000, and 1999
After non-cash sales discounts of $740,000 in 2001, $7,129,000
in 2000, and $407,000 in 1999, net sales increased 23% to
$27,926,000 in 2001, from $22,795,000 in 2000, and 115% from
$13,016,000 in 1999. Non-cash sales discounts recorded in 2001
were in connection with the issuance of common stock purchase
warrants issued to Sprint. Broadband wireless system operators
accounted for 99% of net sales in 2001, 94% in 2000, and 48% in
1999.
Gross sales in 2001 declined approximately 4% from 2000 levels.
The increase in net revenues from 2000 to 2001 is due to the
substantial reduction in non-cash sales discounts in 2001 from
2000. In October 2001, Sprint announced that it was not pursuing
any new fixed broadband wireless markets until a second-
generation product could be evaluated. Hybrid does not
currently have this type of second-generation product and in
light of Company liquidity concerns has suspended its efforts to
develop or acquire this technology. In light of Sprint's
decision and the delays Hybrid has encountered in developing
international sales, the Company anticipates that its revenue in
2002 will be dramatically lower than in 2001. International
sales accounted for less than 1% of net sales in 2001, 24% in
2000, and 5% in 1999.
Gross margin was a positive 26% in 2001, negative 1.5% in 2000,
and negative 2.5% in 1999. The improved gross margins from 2000
to 2001 were due to improved margins for customer premises
equipment as a result of a price increase negotiated with
Sprint. The improvement in gross margins from 1999 to 2000 was
primarily due to an increase in the sales volume of higher
margin, at that time, base station equipment as compared to
total sales.
Liquidity Concerns
During 2001, Hybrid Networks Inc. refocused its targeted
opportunities to the international marketplace as it adjusted
to the abrupt downturn in the domestic markets, in particular
Sprint Corporation's and certain other domestic operator's
decisions to cease the expansion of their deployments and to
cease purchasing Hybrid's products as a result. International
opportunities have not developed as rapidly as the Company
anticipated, and Hybrid believes that domestic and international
revenues will be depressed for substantially all of 2002. As a
result, the Company does not foresee sufficient revenues to meet
its operating expenses.
Current liabilities, including a $5.5 million debenture due
April 30, 2002, exceeded the Company's cash and cash equivalents
by approximately $4.2 million at December 31, 2001, and working
capital at that date was only $736,000. If Hybrid cannot
consummate a sale or merger on favorable terms it has indicated
that it may be forced to seek protection under the federal
bankruptcy laws. There is no assurance that it will be able to
consummate a sale or merger or, even if it can do so, that the
holders of its common stock or preferred stock will receive any
net proceeds from such sale or merger.
IT GROUP: Rain for Rent Seeks Stay Relief to End Equipment Pact
---------------------------------------------------------------
Western Oilfields Supply Company d/b/a Rain for Rent wants the
Court to compel The IT Group, Inc. and its debtor-affiliates to
pay postpetition rent or grant it relief from the automatic stay
to terminate equipment agreement and to repossess equipment.
According to William Burnett, Esq., at Blank Rome Comisky &
McCauley LLP in Wilmington, Delaware, the Debtors entered into a
Rain for Rent Master Industrial Rental agreement with Rain for
Rent. The prepetition arrearage due to Rain for Rent under the
Agreement is $322,040.67. This figure takes into account any
postpetition payments made by Debtors on the prepetition
arrearage. In addition, the Debtors have in their possession
equipment owned by Rain for Rent with a value of $887,374.55.
Since the Filing Date, Mr. Burnett alleges that the Debtors have
continued to use Rain for Rent's equipment that was in their
possession without making all postpetition rental payments due
to Rain for Rent. Additionally, Rain for Rent has supplied the
Debtors with new equipment since the Filing Date for which Rain
for Rent has not received full payment.
Mr. Burnett claims that the Agreement is a true lease and, as
such, Rain for Rent is entitled to the protections set forth in
section 365 of the Bankruptcy Code during the Debtors'
bankruptcy case. Rain for Rent should not be forced to continue
to provide equipment to the Debtors when it is unlikely that the
Debtors will be able to pay administrative claims in full at the
time of confirmation of a Plan of Reorganization and when the
Debtors are not in a position to provide any assurance to Rain
for Rent that it will ever receive payment. (IT Group Bankruptcy
News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 609/392-
0900)
IBEAM: Wants Zuckerman Spaeder to Represent It in Cisco Dispute
---------------------------------------------------------------
iBEAM Broadcasting Corporation seeks permission from the U.S.
Bankruptcy Court for the District of Delaware to employ and
retain Zuckerman Spaeder LLP as special counsel in a dispute
with Cisco Systems Capital Corporation.
The Debtor says it requires experienced bankruptcy counsel to
address its dispute with Cisco Systems Capital Corporation in
connection with the Asset Sale. The Debtor believes in
Zuckerman's experience and knowledge in the field of debtors'
and creditors' rights and business reorganizations.
Specifically, Zuckerman is charged:
a) to assist and advise the Debtor in connection with the
Debtor's dispute with Cisco;
b) to assist the Debtor in obtaining approval of its
disclosure statement and confirmation of its plan of
reorganization;
c) to take all necessary action to protect and preserve the
interests of the Debtor in connection with its dispute
with Cisco, including the prosecution of actions on its
behalf, negotiations concerning all litigation in which
the Debtors are involved, and review and analysis of all
claims filed against the Debtors' estates;
d) to appear before this Court and any other Court to
protect the interests of the Debtor; and
e) to perform all other necessary legal services in this
case.
Zuckerman will coordinate with Pepper Hamilton LLP to avoid
duplication of expense to the estates.
Zuckerman attorneys will bill for services at its customary
hourly rates:
Bruce Goldstein $425 per hour
Thomas G. Macauley $330 per hour
Virginia W. Guldi $260 per hour
INTEGRATED TELECOM: Taps Lehman Bros. to Seek Strategic Options
---------------------------------------------------------------
Integrated Telecom Express, Inc. (Nasdaq: ITXI), a leading
provider of ADSL integrated circuits and software, announced
that revenue for the fourth quarter ended December 31, 2001 was
$2.6 million, compared to $22.5 million for the same quarter
last year. The Company reported a net loss of $11.6 million for
the fourth quarter of 2001, compared to a net loss of $3.5
million for the fourth quarter of 2000.
For the full year 2001, revenue was $17.0 million, compared to
$54.1 million for 2000. Net loss for 2001 was $36.2 million
compared to net loss for 2000 of $20.1 million.
At the end of 2001, the Company substantially completed the
restructuring announced last November, which included an
immediate worldwide workforce reduction, streamlining of certain
business functions and closure of the Hsin Chu, Taiwan, R&D
facility. As a result, the Company recorded a one-time
restructuring charge of $2.3 million in the fourth quarter of
2001. In addition, the Company recorded a charge of $1.8
million due to the write-off of license fees and prepaid
royalties, which were related to certain licensed technologies
previously used in R&D projects that were subsequently
discontinued.
"We continue to move forward with a plan designed to maximize
the potential of ITeX's core competencies," stated James Regel,
President and Chief Executive Officer. "We continue to pursue a
course for ITeX that will benefit the Company strategically,
operationally and financially, with the overriding objective of
building shareholder value."
The Company also announced that it has engaged Lehman Brothers
as a financial advisor to evaluate strategic alternatives to
maximize shareholder value. In conjunction with the hiring of
Lehman, the Company said that its Board of Directors has
authorized management to explore various strategic alternatives,
including but not limited to potential acquisitions, mergers or
a liquidation of the Company. The goal of the Company in
exploring these alternatives is to provide the greatest long-
term value to its shareholders. There can be no assurance that
any transaction will result from the exploration of these
alternatives, and any such transaction would be subject to the
review and approval of the Company's Board of Directors.
Integrated Telecom Express, Inc. (ITeX), headquartered in San
Jose, California, designs, manufactures and markets ADSL
integrated circuits and software solutions. ITeX products
include analog and digital semiconductor devices with operating
system drivers and network protocol software. ITeX is a
contributing member of the standards bodies including DSL Forum,
OpenDSL, ITU and T1E1. ITeX is also a member of the University
of New Hampshire InterOperability Laboratory (UNH-IOL), where it
has demonstrated interoperability with equipment from all major
Digital Subscriber Line Access Multiplexer (DSLAM) vendors.
Further information about ITeX is available at
http://www.itexinc.com
JAM JOE: Wants to Stretch Plan Filing Exclusivity to Sept. 30
-------------------------------------------------------------
Jam Joe LLC and its debtor-affiliates ask the U.S. Bankruptcy
Court for the District of Delaware to further extend their
exclusive right to file a chapter 11 plan through September 30,
2002 and their exclusive right to solicit acceptances of that
plan through October 31, 2002.
The Debtors tell the Court that they seek an extension of the
Exclusivity Periods to continue toward an orderly reorganization
and ensure that the plan submitted takes into account the
interests of all of the Debtors, their estates, and their
creditors.
The Debtors relate that the sale of Brandywine Wilmington to Mr.
John Hynansky was a very important event in these cases.
Furthermore, the Debtors were able to obtain Court approval on
the stipulation between the Debtors and Penn resolving two of
the three issues before the Court. The remaining issue is to be
heard on May 31, 2002.
The Debtors clearly made significant strides towards formulating
a Plan but there still remain issues crucial to the formulation
and submission of a Plan. The Debtors convince the Court that a
further Exclusivity extension is crucial to ensure that the
Debtors can address these additional matters without the
distraction and interference from a competing plan.
The Debtors anticipate that the plan that they will ultimately
propose would provide their creditors with the best possible
chance to receive a distribution from the estates.
Jam Joe, L.L.C. filed for bankruptcy protection Under Chapter 11
of the U.S. Bankruptcy Code on July 23, 2001. Christopher S.
Sontchi, Esq., at Ashby & Geddes represents the Debtors in their
restructuring efforts.
KAISER ALUMINUM: Looks to MWW Group for PR Consulting Services
--------------------------------------------------------------
Kaiser Aluminum Corporation, and its debtor-affiliates ask the
Court for authority to employ and retain The MWW Group as their
corporate communication consultant in these chapter 11 cases.
Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger in
Wilmington, Delaware, submits that MWW is particularly well
suited for the task as not only is it one of the twenty largest
public relations firms in the U.S., it is one of the fastest
growing full service marketing and communications firms in the
industry. The firm also has substantial experience providing
corporate communications services to large organizations, such
as McDonald's New York Tri-State Restaurants; Hard Rock Cafe,
International, Nikon, Inc., Bally Total Fitness, Kmart, Inc.,
Continental Airlines, PETsMart, Inc., Lowe's Home Improvement
Centers, and the New Jersey Lottery. The firm also is an
industry leader in restructuring communications, having served
as the lead corporate communications consultants in numerous
bankruptcy cases, including chapter 11 cases of Zany Brainey,
Inc., Bethlehem Steel Corp., Barneys New York, Today's Man,
Inc., Filene's Basement, Inc., and Continental Airlines.
Mr. DeFranceschi contends that MWW is also familiar with the
Debtors' current corporate communications needs having assisted
in the development and implementation of a comprehensive
communications strategy designed to facilitate the smooth
transition of the Debtors' operations into chapter 11 during the
period leading up to the petition date. Pursuant to this
communications strategy, the Debtors made public announcements
of the commencement of these chapter 11 cases and made other
communications to all relevant audiences. Having worked closely
with the Debtors' management, internal communications staff and
other professionals, the firm will be effective and efficient in
providing services in the Debtors.
Among other things, MWW will:
A. Develop and implement communications programs and related
strategies and initiatives for communications with the
Debtors' key constituencies including customers, employees,
vendors, shareholders, bondholders and the media regarding
the Debtors' operations and financial performance and the
Debtor' progress through the chapter 11 process;
B. Develop public relations initiatives for the Debtors to
maintain public confidence and internal morale during these
chapter 11 cases;
C. prepare press releases and other public statements for the
Debtors, including statements relating to major chapter 11
events;
D. Prepare other forms of communication o the Debtors' key
constituencies and the media, potentially including
materials to be posted on the Debtors' websites; and,
E. Perform such other communications consulting services as may
be requested by the Debtors.
The Debtors agree to pay MWW at its customary hourly rates:
Professional Hourly Rate
----------------- -------------
Michael Kemper $500
Carreen Winters $400
Richard Tauberman $300
Jamie Schwartz $250
Mr. DeFranceschi tells the Court that the Debtors made
prepetition payments to the firm. On January 10, 2002, January
25, 2002 and February 7, 2002, the Debtors made three payments
to MWW in the aggregate amount of $250,000, for the services
rendered or to be rendered and expenses incurred or to be
incurred on behalf of the Debtors. The firm has applied
$190,446.71 of the payments to prepetition billings and
$59,553.29 of the payment will be held by the firm as a
postpetition retainer. Other than these payments, the firm has
not received other payments form the Debtors in connection with
the Debtors' bankruptcy cases.
Michael W. Kemper, President and Chief Executive Officer of The
MWW Group, reveals that the firm has provided media relations
services to Royal Bank of Canada in 1998 and Dewey Ballantine
since 1995. (Kaiser Bankruptcy News, Issue No. 4; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
KMART: Wells Fargo Wants to Set-Off $4.4MM Prepetition Amount
-------------------------------------------------------------
Prior to the Petition Date, Kmart Corporation and its debtor-
affiliates obtained approximately $1,100,000,000 of credit
pursuant to:
(i) that certain Three Year Credit Agreement dated December
1999 among Kmart, various banks, Bank of America as
Syndication Agent, Bank Boston, and Bank of New York as
Co-Documentation Agents, Chase Securities as Lead Arranger
and Book Manager, and The Chase Manhattan Bank as
Administrative Agent; and
(ii) that certain 364-Day Credit Agreement dated November 2001
among Kmart, various banks, Credit Suisse First Boston,
Fleet National Bank and The Bank of New York as Co-
Syndication Agents, The Chase Manhattan Bank as
Administrative Bank and JP Morgan Securities as Advisor,
Arranger and Bookrunner.
Wells Fargo Bank N.A. is a lender under both Credit Agreements,
according to Kurt M. Carlson, Esq., at Tishler & Wald Ltd, in
Chicago, Illinois.
Mr. Carlson tells the Court that the Debtors' bankruptcy filing
triggered an event of default under both Credit Agreements and
now, all outstanding obligations are automatically accelerated
and immediately due and payable. As of the Petition Date, Mr.
Carlson reports that Kmart owes in excess of $39,000,000 to
Wells Fargo under the terms of the Credit Agreements.
Mr. Carlson informs Judge Sonderby that Kmart has several
deposit accounts with Wells Fargo that had an aggregate pre-
petition balance of $4,452,435.
Account Number Account Caption Account Balance
-------------- --------------- ---------------
415-9334994 Kmart Corporation $1,889,975
415-9518927 Kmart Corporation 1,994,757
415-9740471 Kmart Corporation 235,819
944-0100089 Kmart Corporation 331,584
---------------
Total: $4,452,435
By this motion, Wells Fargo Bank seeks relief from the automatic
stay in order to setoff the Bank Accounts against debt due and
owing under the Credit Agreements.
Mr. Carlson asserts that the Credit Agreements and the
Bankruptcy Code provides the Debtors with the right to setoff
mutual debts. Besides, Mr. Carlson notes, the Debtors have no
equity in these funds since the debt became immediately due and
owing because of the Debtors' filing under chapter 11.
Moreover, Mr. Carlson adds, Wells Fargo's interest will be
compromised if the bank pays the Debtors the pre-petition
balance of the Bank Accounts without applying a setoff. (Kmart
Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service,
Inc., 609/392-0900)
L-3 COMMS: S&P Rates $1B Senior and Subordinated Shelf at Low-Bs
----------------------------------------------------------------
Standard & Poor's on March 26, 2002, assigned preliminary
ratings to L-3 Communications Corp.'s $1 billion senior and
subordinated shelf registration. Ratings assigned are `BB' and
`B+' respectively. Credit rating is affirmed at `BB'. The rating
outlook is stable.
Ratings on New York City, New York-based L-3 Communications
reflect a slightly below-average business risk profile and
somewhat elevated debt levels, but credit quality benefits from
an increasingly diverse program base and efficient operations.
Acquisitions are very important for revenue growth, and the
balance sheet has become leveraged because of debt-financed
transactions. However, management has a good record of restoring
financial flexibility by issuing equity.
L-3's exposure to a challenging competitive environment is
mitigated by some well-supported programs with a high percentage
of sole-source contracts. The firm provides secure communication
systems, specialized communications devices, and flight
simulation and training. Products include secure, high data rate
communications systems, microwave components, avionics,
telemetry, and instrumentation devices, and simulator training
products and services. The latest acquisition positions L-3 to
better compete in the growing intelligence, surveillance, and
reconnaissance market.
L-3 acquired most of Raytheon Co.'s Aircraft Integration Systems
division (AIS) on March 11, 2001, for $1.1 billion cash. The
transaction was debt-financed, but L-3 has indicated that it was
considering issuing some equity in the first half of 2002. This
deal, which followed a series of smaller acquisitions by L-3 in
late 2001 and early 2002, substantially consumed the company's
debt capacity at current ratings. Debt to total capital was
elevated, in the mid-60% area at December 31, 2001, pro forma
for the AIS transaction.
Outlook
Financial staying power could improve materially due to the
expanded base of profitable businesses. Nevertheless, credit
quality would remain constrained by an aggressive acquisition
program, with potential for large transactions.
LAIDLAW INC: Asks Court to Deny IRS' $372MM "Protective" Claims
---------------------------------------------------------------
Laidlaw Inc., and its debtor-affiliates object to the Internal
Revenue Service's "protective" proof of claim, identified as
Claim No. 907, and ask the Court to deny:
Claim type Amount Year Classification
---------- ------ ---- --------------
Secured claim $ 2,971,782 1997 audit claim
Unsecured priority claim 94,211,163 1997 audit claim
Pre-petition interest 34,068,595 1997 audit claim
Unsecured priority claim 123,566,728 1998 protective claim
Pre-petition interest 29,915,584 1998 protective claim
Unsecured priority claim 4,506,508 1999 protective claim
Pre-petition interest 673,469 1999 protective claim
Unsecured priority claim 78,422,245 2000 protective claim
Pre-petition interest 4,268,813 2000 protective claim
PROTECTIVE CLAIM TOTAL --- $241,353,347
AUDIT CLAIM TOTAL -------- $131,251,540
GRAND TOTAL -------------- $372,604,887
Richard M. Cieri, Esq., at Jones, Day, Reavis & Pogue, in
Cleveland, Ohio, says that the Debtors have filed, in a timely
manner, all federal income tax returns for the 1998-2000 tax
years and owe no federal tax for those years. Accordingly, Mr.
Cieri insists that the IRS has no legal basis in support of the
Protective Claims.
Mr. Cieri asserts that the Claims are created "out of whole
cloth in a hurried effort to beat the bar date" which generally
are amended to correct the exact tax liability. In fact, Mr.
Cieri points out to Judge Kaplan that the IRS has not completed
its audit for 1998-2000 and has informed the Debtors that "it
does not expect to do so until sometime in 2003."
Moreover, Mr. Cieri contends that the recent conduct of IRS
confirms that the Protective Claims have no legal basis because
the IRS is now willing to release the refund it withhold to a
non-debtor affiliate as satisfaction in part of the Debtors' tax
liability for 1999 and 2000 tax years.
Mr. Cieri clarifies that the Debtors do not object to the Audit
Claims, at this time, although it reserves its rights to do so
if a prompt settlement is not reached with the IRS with respect
to those claims. Accordingly, Mr. Cieri maintains that the
Debtors reserve the right to:
(a) respond to any allegation or defense that may be raised
in a response filed by or on behalf of the IRS;
(b) object further to the IRS Claims in the event IRS
provides additional documentation or substantiation; or
(c) object further to the IRS Claims based on additional
information that may be discovered upon further review
by the Debtors or through discovery pursuant to the
applicable provisions of the Bankruptcy Procedure.
(Laidlaw Bankruptcy News, Issue No. 16; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
LARKIN STREET: Voluntary Chapter 11 Case Summary & 7 Creditors
--------------------------------------------------------------
Debtor: Larkin Street Development L.L.C
110 West 9th Street, Suite #218
Wilmington, Delaware 19801
110 Pacific Avenue, San Francisco,
California 94121
Bankruptcy Case No.: 02-10917
Chapter 11 Petition Date: March 27, 2002
Court: District of Delaware (Delaware)
Judge: Mary F. Walrath
Debtors' Counsel: Rene E Peinado
110 West 9th Street #718
Wilmington, Delaware 19801
Total Assets: $5,000,000
Total Debts: $2,100,000
Debtor's Creditors:
Entity
------
Prime Core Mortgage Trust Inc.
99 El Camino Real
Menlo Park, California 94025
Prime Core Funding Group Inc.
Atty. Ben L. Hamburg
99 El Camino Real
Menlo Park, California 94025
MPM Concrete Construction
Menlo Park, California 94026
Adron Beene
6472 Camden Avenue, Suite 204
San Jose, California 95120
United Rentals Inc.
Atty. Dennis Beltram
PO Box 1150
Soquel, California 95073
All Bay Mill and Lumber
Atty. Daniel Gamber
55 Professional Center Parkway Suite H
San Rafael, California 94903
Murray Weber Tractor Service
22 Wayne Court
Redwood City, California 94063
Redwood Sanitary
PO Box 907
Healdsburg, California 95448
LERNOUT & HAUSPIE: Unit Exits Bankruptcy as Independent Company
---------------------------------------------------------------
Dictaphone Corporation, a leader in dictation, speech
recognition and communications recording solutions for medical
and commercial applications, announced that it has formally
emerged from chapter 11 as an independent company, and is no
longer a subsidiary of its former parent Lernout & Hauspie
Speech Products N.V. (L&H).
The official emergence follows the company's recent announcement
that its plan of reorganization had been confirmed on March 13,
2002 by the United States Bankruptcy Court for the District of
Delaware. According to the plan, Dictaphone's unsecured
creditors now own 100% of the common stock of the company, prior
to customary dilution for the company's incentive program. Under
the plan of reorganization, certain creditors received warrants
for the rights to acquire additional shares, and certain other
creditors received, in the aggregate, $27.3 million of
subordinated notes to be newly issued by the company. Dictaphone
has also secured a $30 million commitment from GMAC Business
Credit, LLC under a revolving credit facility to meet its
ongoing working capital needs.
Dictaphone President and CEO Rob Schwager said, "As a newly
independent company, we look forward to leveraging Dictaphone's
unique assets and brand to attain new levels of growth. We are a
stronger, more technology-rich, better-financed company than
before the chapter 11 filing, focused on software systems for
the growing healthcare, public safety, and call center markets.
Once again, we thank our customers and employees for their
continued enthusiasm and support for Dictaphone."
Dictaphone is a leader in the development, manufacture,
marketing, service and support of highly scalable communications
recording and dictation systems which incorporate advanced
speech and natural language technology focused upon the
healthcare, public safety and call center markets. Dictaphone
also owns and operates an electronics manufacturing facility in
Melbourne, Florida, which produces complex electronics products
and components for Dictaphone and third-party customers.
Dictaphone is headquartered in Stratford, Connecticut, and has
worldwide marketing, sales, service and support organizations
throughout United States, the United Kingdom, Canada and Europe.
LIBERTY OIL: Court Extends CCAA Plan Filing Deadline to April 15
----------------------------------------------------------------
Liberty Oil & Gas Ltd. appeared before Mr. Justice D.G. Hart in
Chambers on Tuesday, March 26, 2002 at 9:30 am at the Court
House in the City of Calgary, pursuant to the Companies
Creditor's Arrangement Act (CCAA) and pursuant to the Order
granted in these proceedings on February 25, 2002 (Initial
Order), for an Order approving the process undertaken by Liberty
and the selection of Kinloch Resources Inc. to fund and file a
plan of arrangement.
Numerous parties made representations to the Court that the
process of receiving binding offers during the period March 8,
2002 to March 18, 2002 provided insufficient time for all
interested parties to participate properly. As a consequence,
the Court ruled that the process to consider competing offers
will be extended.
Liberty therefore announces that the Company has a data room
available at the offices of its agent, Jennings Capital Inc. to
solicit restructuring offers by April 8, 2002. Unconditional,
binding offers must be submitted to Jennings Capital Inc. by
10:00 am, Monday, April 8, 2002. The Directors of Liberty will
review and approve a financial restructuring plan from the
offers received, to present to the Court on Monday April 15,
2002 at 9:30 am.
Trading of Liberty shares was halted on February 25, 2002 and is
expected to remain halted for the duration of the restructuring
process.
LODGIAN INC: Court Okays PricewaterhouseCoopers as Accountants
--------------------------------------------------------------
Lodgian, Inc., and its debtor-affiliates obtained authority from
the Court to employ and retain PricewaterhouseCoopers LLP as
their accountants and tax advisors, nunc pro tunc to December
20, 2001.
As stated in the Motion, PricewaterhouseCoopers will work
closely with the Debtors and their counsel as tax compliance
providers and tax consulting advisors in connection with these
Chapter 11 cases. The services of PricewaterhouseCoopers as tax
advisors are necessary in order to enable Lodgian to execute its
duties as Debtors and debtors-in-possession. Thus, the
employment of the said firm is necessary, essential and in the
best interest of the administration of these Chapter 11 cases.
The services expected of PricewaterhouseCoopers include:
A. Completing state and local income tax and franchise tax
returns; preparing annual federal and state income tax
returns for the Debtors beginning with the return for
the year ending December 31, 2001.
B. Consulting on tax matters and other related matters as the
Debtors or their counsel may request; and
C. Performing all other necessary accounting services in
furtherance of its role as tax advisor for the Debtors
PricewaterhouseCoopers will be compensated for services rendered
according to the terms in its engagement letter with the
Debtors. In addition, the firm will also seek reimbursement of
its out-of-the-pocket expenses incurred in connection with the
Debtors' cases. (Lodgian Bankruptcy News, Issue No. 7;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
LUND: Plans to Divest Tubular & Suspension Accessories Units
------------------------------------------------------------
Lund International Holdings, Inc. (OTC Pink Sheets: LUND)
announced its intentions on October 2, 2001, to divest its steel
tubular and suspension accessories business units in combination
or separately. The Company's steel tubular and suspension
accessory products are marketed under the Smittybilt and Trail
Master brand names. Both businesses are located in a leased
manufacturing and distribution facility in Corona, California.
Houlihan Lokey Howard & Zukin continues to act as the Company's
investment banker with respect to the sale.
The Trail Master suspension accessory business was acquired as
part of the Company's acquisition of Deflecta-Shield in late
1997. The Company acquired the Smittybilt steel tubular
accessory business in a separate acquisition in January of 1999.
In the third quarter of 2000, the suspension business relocated
from Coldwater, Michigan to the same facility in Corona,
California where the tubular business is located.
Since the October announcement of its intention to divest, the
Company has continued its support of the businesses with
significant investment of managerial time and capital. In both
businesses, the Company has invested in new products for which
it is currently accepting orders for shipment in the next
quarter. Its restructuring plan for manufacturing Smittybilt
steel tubular products is now substantially completed and
functioning effectively. As well, the Company has increased its
investments in new product development and testing facilities to
accelerate the introduction of new Trail Master products delayed
during the relocation of the business to Corona, CA. In both
businesses, the continuing commitment and support of employees
has contributed to improving results.
The implementation of these strategies together with improving
demand for automotive and light truck accessories substantially
strengthens the outlook for both businesses and enhances the
prospects for securing a satisfactory transaction for their
sale. Discussions are proceeding with interested parties.
The Company will continue to service its customers, provide
strong brand support and invest in new products in order to
allow an orderly transition of these businesses to new owners.
In doing so, the Company intends to maintain a seamless supply
of tubular steel and suspension products to the Company's common
customer base.
Lund International is a leading designer, manufacturer and
marketer of a broad line of accessories for the automotive
aftermarket. Its products are sold under the trade names
"Lund(R)," "Deflecta-Shield(R)," "Deflecta- Shield(R)" Aluminum,
"Autotron(TM)," "Belmor(TM)," "Trail Master(R)," "Auto
Ventshade(R)," and "Smittybilt(R)." The corporate headquarters
are at 3700 Crestwood Parkway, N.W., Suite 1000, Duluth, Georgia
30096.
MTS/TOWER RECORDS: Seeking to Refinance Maturing Credit Facility
----------------------------------------------------------------
For the three months ended January 31, 2002, MTS Inc./Tower
Records Inc.'s consolidated net revenues decreased 9.1% to
$293.7 million from $323.0 million for the three months ended
January 31, 2001, a decrease of $29.3 million (or a decrease of
$15.5 million excluding the effects of U.S. dollar foreign
exchange fluctuations). The Company's net revenues were
comprised of U.S. revenues of $176.0 million and international
revenues of $117.7 million for the three months ended January
31, 2002 compared to $192.9 million in the U.S. and $130.1
million internationally for the three months ended January 31,
2001. The overall decrease in total Company revenues for the
three months ended January 31, 2002 was driven primarily by the
closing of unprofitable stores associated with the Restructuring
Plan in fiscal 2001, the negative impact associated with foreign
exchange fluctuations and the continued effects of the events of
September 11, 2001 through the holiday season. During the three
months ended January 31, 2002, the Company opened four stores
and closed three stores, bringing its total number of owned and
operated retail stores to 173.
For the three months ended January 31, 2002, gross profit
decreased $14.3 million to $80.5 million from $94.8 million for
the three months ended January 31, 2001 (or a decrease of $1.4
million excluding the effects of the U.S. dollar foreign
exchange fluctuations and the impact of the Restructuring Plan).
Management attributes the decline in gross profit, excluding the
effect of the inventory write-downs related to the restructuring
charge, principally to the decrease in revenues as previously
discussed, weaker margins associated with competitive pricing
pressures in the United States and international markets and
adverse fluctuations in foreign exchange rates. Gross profit as
a percentage of net revenues decreased to 27.4% for the three
months ended January 31, 2002, compared to 29.4% for the three
months ended January 31, 2001 (or an increase of 1.3% to 30.7%
excluding the effects of the Restructuring Plan). Management
attributes the percentage decrease primarily to liquidation of
inventory associated with the Restructuring Plan.
The Company's consolidated operating loss for the three months
ended January 31, 2002 was $412,000 compared to income from
operations of $1.7 million for the three-month period ended
January 31, 2001, a decrease of $2.1 million or an increase of
$9.6 million excluding the effects of the Restructuring Plan.
The decrease was primarily attributable to the inventory write-
downs and other costs related to the Restructuring Plan.
* * * *
For the six months ended January 31, 2002, the Company's
consolidated net revenues decreased 10.0% to $520.4 million from
$578.4 million for the six months ended January 31, 2001, a
decrease of $58.0 million (or a decrease of $34.8 million
excluding the effects of U.S. dollar foreign exchange
fluctuations). The Company's net revenues were derived from U.S.
revenues of $302.4 million and international revenues of $218.0
million for the six months ended January 31, 2002, compared to
$340.9 million in the U.S. and $237.5 million internationally
for the six months ended January 31, 2001. The overall decrease
in total Company revenues for the six months ended January 31,
2002 was driven primarily by the closing of unprofitable stores
associated with the Restructuring Plan in fiscal 2001, the
adverse effect of foreign currency fluctuations, a decline in
consumer spending attributed to the events of September 11, 2001
and weak new releases from product manufacturers. During the six
months ended January 31, 2002, the Company opened five stores
and closed five stores, maintaining its total number of owned
and operated retail stores at 173.
For the six months ended January 31, 2002, gross profit
decreased $28.2 million to $151.0 million from $179.2 million
for the six months ended January 31, 2001 (or a decrease of
$10.3 million excluding the effects of the U.S. dollar foreign
exchange fluctuations and the impact of the Restructuring Plan).
Management attributes the decline in gross profit, excluding the
effect of the inventory write-downs related to the restructuring
charge, principally to the decrease in revenues. Weaker margins
associated with competitive pricing pressures in the United
States and international markets and adverse fluctuations in
foreign exchange rates also contributed to the decrease in gross
profits. Gross profit as a percentage of net revenues decreased
to 29.0% for the six months ended January 31, 2002, compared to
31.0% for the six months ended January 31, 2001 (or an increase
of 0.2% to 31.2% excluding the effects of the Restructuring
Plan). Management attributes the percentage decrease primarily
to liquidation of inventory associated with the Restructuring
Plan.
The Company's consolidated operating loss for the six months
ended January 31, 2002 was $4.0 million compared to consolidated
operating income of $8.3 million for the six months January 31,
2001, a decrease of $12.3 million (or an increase of $2.4
million excluding the effects of the Restructuring Plan). The
decrease was primarily attributable to inventory write-downs and
other costs associated with the Restructuring Plan.
* * * *
The Company's principal capital requirements are to fund working
capital needs, to open new stores, to refurbish and expand
existing stores, and to continue development of the Company's
technological infrastructure.
Net cash provided by operating activities was $22.6 million and
$31.8 million for the six months ended January 31, 2002 and
2001, respectively. The net decrease in cash flow from
operations for the six months ended January 31, 2002 was
primarily due to the increased net loss incurred. For the six
months ended January 31, 2002, net decrease in inventory was
$7.8 million, excluding a $11.2 million write-down of inventory
related to the Restructuring Plan. Net decrease in inventory was
$8.2 million for the six months ended January 31, 2001. The
decrease in inventory was the result of working capital
initiatives associated with the Restructuring Plan.
Net cash used in investing activities for the six months ended
January 31, 2002 was focused primarily on store maintenance and
capital expenditure requirements, including store relocations,
refurbishment and technology investments totaling approximately
$5.5 million, with an additional $581,000 used for video rental
acquisition. During the six months ended January 31, 2002, the
Company opened three stores in the U.S.
Net cash used in financing activities for the six months ended
January 31, 2002 was $10.8 million, resulting principally from
pay downs of net borrowings under the Company's credit facility.
Net borrowings under the Company's credit facility decreased
$14.4 million for the six months ended January 31, 2002,
excluding the effects of foreign exchange rates. Net cash
provided by financing for the six months ended January 31, 2001
was $11.2 million, which resulted primarily from net borrowings
under the Company's credit facility.
Total funded debt decreased to $269.4 million as of January 31,
2002 from $315.7 million as of January 31, 2001. Outstanding
debt under the Company's credit facility was $150.3 million on
January 31, 2002, compared to $193.9 million on January 31,
2001. The decrease in bank debt outstanding was the result of
the effects of the Restructuring Plan implemented in fiscal
2001.
Interest payments on the senior subordinated notes and under the
credit facility will continue to impose significant liquidity
demands upon the Company. In addition to its debt service
obligations, the Company will require liquidity for capital
expenditures, lease obligations and general working capital
needs. Total capital expenditures for fiscal 2002 are expected
to be approximately $15.0 million, of which approximately $11.9
million will be related to maintenance and required
technological and capital improvements.
In April 2001, the Company extended and restated on a short-term
basis its outstanding obligations under its credit facility. The
credit facility was further amended in October 2001. The credit
facility provided for initial maximum borrowings of up to $225.0
million, consisting of two sub-facilities (one for an initial
maximum of $98.4 million and one for an initial maximum Japanese
yen of (Yen)15,596,828,718, which was equivalent to $126.6
million at inception), with a maturity date of April 23, 2002.
In accordance with the terms of the credit facility, maximum
borrowings under the credit facility declined $30.0 million
between July and December 2001. Maximum borrowings under the
credit facility are subject to a borrowing base formula, maximum
leverage ratio tests and maintaining a minimum rolling quarterly
EBITDA. As of January 31, 2002, approximately $193.0 million was
available under the credit facility, of which $150.3 million had
been drawn. The $150.3 million includes a decrease of $8.1
million due to Japanese yen debt translated back to U.S. dollars
at the spot rate on January 31, 2002.
The Company's future operating performance and ability to
service its senior subordinated notes and the credit facility
will be subject to the Company's ability to refinance its credit
facility maturing April 23, 2002, future economic conditions and
financial, business and other factors, many of which are beyond
the Company's control. As of January 31, 2002, the Company had
not yet obtained a commitment to refinance the credit facility
but was in negotiations with various financial institutions to
refinance its credit facility. Although the Company believes
that it will be able to refinance the credit facility, no
assurance can be given that the Company will be successful in
refinancing the credit facility or that any refinancing will be
on terms that are favorable to the Company. In the event the
Company is unable to refinance the credit facility or to
refinance the credit facility on terms that are favorable to the
Company, the Company's business, financial condition and results
of operations would be materially and adversely affected.
If the Company is successful in refinancing its credit facility,
the Company believes that the cash flow generated from its
operations, together with amounts available from other financing
alternatives, will be sufficient to fund its debt service
requirements, lease obligations, working capital needs, its
currently anticipated capital expenditures and other operating
expenses for the next twelve months.
The credit facility and the senior subordinated notes impose
certain restrictions on the Company's ability to make capital
expenditures and limit the Company's ability to incur additional
indebtedness. Such restrictions could limit the Company's
ability to respond to market conditions, to provide for
unanticipated capital investments or to take advantage of
business or acquisition opportunities. The covenants contained
in the credit facility and the senior subordinated notes also,
among other things, limit the ability of the Company to dispose
of assets, repay indebtedness or amend other debt instruments,
pay distributions, create liens on assets, enter into sale and
leaseback transactions, make investments, loans or advances and
make acquisitions.
The Company leases substantially all of its retail stores,
warehouses and administrative facilities pursuant to operating
leases that expire on dates through 2024 and generally have
renewal options of one to twenty years. The terms of the leases
provide for fixed or minimum payments plus, in some cases,
contingent rents based on the consumer price index, or
percentages of sales in excess of specified minimum amounts or
other specified increases. The Company is generally responsible
for maintenance, insurance and property taxes. The Company's
minimum obligations in fiscal 2002 on non-cancelable operating
leases are expected to be $38.6 million. Total rental expense
(including taxes and maintenance, when included in rent,
contingent rents and accruals to recognize minimum rents on the
straight-line basis over the term of the lease) relating to all
operating leases for fiscal 2002 is expected to be $77.0
million.
MARINER POST-ACUTE: Court Okays Sale of Desert Sky for $2 Mill.
---------------------------------------------------------------
Mariner Post-Acute Network, Inc., GCI Colter Village, Inc. and
other MPAN Debtors obtained Court's approval for:
(1) the sale of the Desert Sky Nursing and Assisted Living
facility, located at 5125 North 58th Avenue, Glendale, Arizona
85301, free and clear of liens, claims and encumbrances and
other interests;
(2) the Asset Purchase Agreement by and between Sky
Holdings AZ LLC as Buyer and GCI as Seller with respect to the
sale of the Facility.
(3) entry by the Debtors into a Consulting Agreement in
connection with the operation and transition of operations of
the Facility to the Buyer;
(4) the assumption and assignment to Buyer (or its
designee) of the Medicare Provider Agreement between GCI and the
HCFA. Operating losses at the Facility total more than $861,000
before interests, taxes, depreciation, and amortization for the
fiscal year ended September 30, 2001. The operating losses for
the first three months of the present fiscal year already total
more than $500,000.
In the view of the Debtors, sale of the Facility is appropriate
because of the losses sustained. The Debtors told Judge Walrath
they did not consider the Facility strategically in their lease
portfolio. Moreover, GCI's marketing efforts since July 2001 has
resulted in only one offer, that of the Buyer.
The Buyer has agreed to pay approximately $1,925,000.00, subject
to adjustments, to purchase assets of the Facility pursuant to
the Purchase Agreement. The Buyer will escrow a deposit of
$75,000 to be credited against the Purchase Price. The Deposit
is non-refundable unless the Debtors cannot obtain the required
approval.
The remainder of the Purchase Price will be paid in the form of
a promissory note in the principal amount of approximately
$1.88 million.
Pursuant to the Asset Purchase Agreement, GCI has agreed to sell
and assign to the Buyer all of GCI's right, title and interest
in and to the following, among other things:
(a) The Prepaids not to exceed $10,000 in the aggregate;
(b) The Inventory;
(c) The Personal Property owned by GCI for the exclusive
use of the Facility subject to certain specific terms
in the Asset Purchase Agreement;
(d) The Real Property;
(e) The Business Records;
(f) The Permits;
(g) The Intellectual Property Rights associated with the
Facility, excluding any right to use the name "Mariner
Post-Acute Network," "Mariner Health Group" or any
derivation of these;
(h) The going concern of the business.
In connection with the sale, GCI will assume and assign to the
Buyer (or its designee) the Medicare Provider Agreement between
GCI and HCFA relating to the Facility because GCI intends to
sell the Facility and thereafter cease being responsible for the
operation of it, the service contracts related to the Facility
will be unnecessary and burdensome to GCI's estate. GCI and the
Buyer have agreed that GCI is not and will not be obligated to
assume or assign to the Buyer the Contracts, and the Service
Contracts will be deemed rejected as of the Closing Date as
defined in the Purchase Agreement. (Mariner Bankruptcy News,
Issue No. 27; Bankruptcy Creditors' Service, Inc., 609/392-0900)
MASSEY ENERGY: Bank Syndicate Agrees to Amend Loan Covenants
------------------------------------------------------------
Massey Energy Company (NYSE: MEE) announced that its bank
syndicate unanimously approved the amendment of the financial
covenants related to its $400 million credit facility. As
previously reported, the bank group had granted a temporary
waiver of Massey's maximum leverage ratio covenant through March
29, 2002. With the approval of this amendment, Massey expects to
remain in compliance with all of the covenants in the credit
agreements.
Massey's $400 million credit facility consists of $150 million
364-day and $250 million 3-year revolving credit facilities that
serve primarily to provide a liquidity backstop to Massey's
commercial paper program.
Massey Energy Company, headquartered in Richmond, Virginia, is
the fifth largest coal producer by revenues in the United
States.
OPTICAL DATACOM: U.S. Trustee Names Rosner as Chapter 11 Trustee
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware granted
the request of the Official Committee of Unsecured Creditors to
appoint a Chapter 11 Trustee in the chapter 11 case of Optical
Datacom, LLC.
The Court makes it clear that upon the appointment of a Chapter
11 Trustee, the employment of the professionals retained by the
Debtor shall be deemed terminated.
In this connection, Mr. Donald F. Walton, the acting U.S.
Trustee appoints Mr. Frederick B. Rosner as the Trustee in this
chapter 11 case.
Mr. Walton assures the Court that he has consulted these
parties-in-interest regarding the appointment of the Trustee:
a) Joel Waite, Esq. of Young Conaway, Stargatt & Taylor, on
behalf of the Debtor;
b) John H. Knight, Esq. of Richards, Layton & Finger, on
behalf of the lender Wachovia Bank;
c) Steven Yoder, Esq. of The Bayard Firm on behalf of the
Official Committee of Unsecured Creditors.
Mr. Rosner's verified statement stipulates that he has no
connections with the Debtor, creditors, any other parties in
interest, their respective attorneys and accountants, the United
States Trustee, or any person employed in the Office of the U.S.
Trustee.
Optical Datacomm, LLC's filed for chapter 11 protection on
November 17, 2001. H. Jeffrey Schwartz, Esq. at Benesch,
Friedlander, Coplan & Aronoff, LLP and Joel A. Waite, Esq. at
Young Conaway Stargatt & Taylor represent the Debtors in their
restructuring efforts. In its petition, the Company listed
estimated assets of $10 million to $50 million and estimated
debts of $50 million to $100 million.
MCLEODUSA INC: Wants Open-Ended Lease Decision Period Extension
---------------------------------------------------------------
McLeodUSA Inc. seeks to extend its time to assume or reject
unexpired leases of nonresidential real property through the
effective date of the Plan of Reorganization.
Gregg Galardi, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, says the Debtor's unexpired leases, which mostly cover
properties which house the Debtor's offices and network-
switching centers, are deemed assumed under the Plan.
Mr. Galardi says the provision of the Plan that contemplates
assumption of all executory contracts would be defeated if the
unexpired leases are allowed to expire before the Plan is heard
or approved. Confirmation of the Plan will constitute approval
of lease assumptions.
Courts have historically assessed grounds for extensions of
assumption or rejection time period on whether:
(a) the case is complex and involves a large number of
leases;
(b) the leases are primary among the assets of the Debtor;
and
(c) the lessor continues to receive postpetition rental
payments.
The Debtor has remained current on all its postpetition rent
obligations. Mr. Galardi says the unexpired leases are integral
to the Debtor's continued operations as it seeks to reorganize
because they cover premises that the Debtor used for its offices
and network-switching centers.
If the Lease Decision Period is not extended, the Debtor will be
compelled prematurely to assume substantial, long-term
liabilities under the leases, potentially creating
administrative expenses claims, Mr. Galardi says. (McLeodUSA
Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service,
Inc., 609/392-0900)
MCLEODUSA INC: Creditors Vote to Accept Plan of Reorganization
--------------------------------------------------------------
McLeodUSA Incorporated, one of the nation's largest independent
competitive local exchange carriers, announced that its pre-
negotiated Plan of Reorganization has been accepted by all
classes entitled to vote on the Plan.
According to the unaudited tally of votes received by the March
27, 2002 voting deadline, the Plan was accepted by more than 98%
of the senior notes that voted, in terms of both principal
amount voted and number of holders voting. The Plan was also
accepted by more than 98% of the shares of the Company's
preferred stock that voted on the Plan. The final voting report
will be filed next week with the United States Bankruptcy Court
for the District of Delaware.
The Plan remains subject to confirmation by the Bankruptcy
Court. A hearing on confirmation of the Plan is scheduled for
April 5, 2002.
As previously announced, under the terms of the Plan:
-- Holders of the Company's senior notes will receive
their pro rata share of a cash payment in an amount up to $670
million. This cash payment will be funded by (i) $570 million of
the $600 million of aggregate proceeds to be received from the
Company's previously announced agreement for the sale of its
directory publishing business to Yell Group (subject to a price
reduction of $200,000 per day if the transaction closes after
April 30, 2002, but prior to August 1, 2002); and (ii) $100
million in cash from a new equity investment of $175 million by
Forstmann Little. Bondholders will also receive their pro rata
share of (i) $175 million of new convertible preferred stock
which is convertible into common stock representing 15% of the
reorganized McLeodUSA common stock and which carries a
cumulative dividend of 2.5% per annum and (ii) 5-year warrants
to purchase an additional 6% of common stock for $30 million.
-- The $175 million new equity investment in the Company
by Forstmann Little will be in exchange for (i) approximately
23% of the reorganized McLeodUSA common stock and (ii) 5-year
warrants to purchase an additional 6% of common stock for $30
million.
-- The Company's existing Series D and Series E preferred
stock will be converted into approximately 35% of the
reorganized McLeodUSA common stock. The Company's Series A
preferred stock will be converted into approximately 10% of the
reorganized McLeodUSA common stock.
-- Holders of the Company's existing Class A common stock
are expected to retain approximately 17% of the shares of the
reorganized McLeodUSA common stock.
-- Forstmann Little will be the largest shareholder of
McLeodUSA after the recapitalization with an approximate 58%
stake in the Company.
It is expected that the Plan, if confirmed, would be implemented
in April 2002.
McLeodUSA provides integrated communications services, including
local services, in 25 Midwest, Southwest, Northwest and Rocky
Mountain states. The Company is a facilities-based
telecommunications provider with, as of December 31, 2001, 42
ATM switches, 60 voice switches, 485 collocations, 525 DSLAMs,
over 31,000 route miles of fiber optic network and more than
8,600 employees. Visit the Company's Web site at
http://www.mcleodusa.com
MICROCELL TELECOM: Consolidating Two Units' PCS Operations
----------------------------------------------------------
Microcell Telecommunications Inc. (TSE: MTI.B; Nasdaq: MICT)
announced that it is consolidating the PCS (Personal
Communications Services) operations of its two wholly owned
subsidiaries, Microcell Connexions Inc. and Microcell Solutions
Inc. Both companies will be brought together under the same
corporate entity once regulatory approvals have been obtained.
"The consolidation of our PCS operations represents the
culmination of strategic choices we have made over the last year
in order to realign our business priorities with new market
realities," stated Andre Tremblay, President and Chief Executive
Officer, Microcell Telecommunications Inc. "This consolidation
enhances our ability to fulfil our business objectives and
provides us with greater flexibility to operate in the highly
competitive wireless communications market."
"Our objective is to optimize our organizational efficiency
while maintaining our focus on serving our growing customer
base," said Alain Rheaume, President and Chief Executive
Officer, Microcell PCS. "The greater integration of our network
operations, marketing, and customer service activities should
allow us to better compete and to continue playing a leading
role in the Canadian wireless industry."
The creation of the PCS Division in February 2001 was designed
to maximize the growth and development of Microcell's PCS
activities while continuing to implement its strategy to become
a fully integrated telecommunications company. Mr. Rheaume added
that the Decision to consolidate PCS operations represents a
natural evolution of the PCS division. While the purpose of the
regrouping of activities is not to reduce the company's
workforce, the position of President and Chief Operating Officer
in both of the affected subsidiaries will be eliminated as a
result.
Microcell Telecommunications is a Canadian wireless
communications company active in three primary areas: Personal
Communications Services (PCS), wireless Internet, and
investments. Microcell PCS, a division of Microcell
Telecommunications, is responsible for the marketing of Fido(R)
Service in Canada and had over 1.2 million retail customers as
at December 31, 2001. Microcell Telecommunications has been a
public company since October 15, 1997, and is a member of the
TSE 300, TSE 200 and S&P/TSE Canadian SmallCap indices.
Microcell's head office is located in Montreal and the Company
employs more than 1,900 people across Canada. For more
information, visit its Web site at http://www.microcell.ca.
At September 30, 2001, the company's total liabilities exceeded
its total assets by about $600 million.
NATIONAL AUTOMOBILE: S&P Assigns 'R' Financial Strength Rating
--------------------------------------------------------------
Standard & Poor's said it assigned its 'R' financial strength
rating to National Automobile & Casualty Insurance Co. after
learning that California Insurance Commissioner Harry W. Low put
the company into conservation because of its insolvency.
National Auto's Dec. 31, 2001, annual statement reported that
the company was insolvent by about $1.6 million. The
conservation order was obtained from the Los Angeles Superior
Court.
The company is a property/casualty insurer specializing in
private passenger auto, automobile liability and physical
damage, and homeowner insurance. It is licensed in Arkansas,
Arizona, California, Indiana, Missouri, Nevada, Texas, and
Washington.
As conservator, the commissioner preserves and protects the
assets of the company for the benefit of policyholders,
creditors, and shareholders. The Conservation & Liquidation
Office (CLO) will be responsible for operations of the company.
An insurer rated 'R' is under regulatory supervision owing to
its financial condition. During the pendency of the regulatory
supervision, the regulators may have the power to favor one
class of obligations over others or pay some obligations and not
others. The rating does not apply to insurers subject only to
nonfinancial actions such as market conduct violations.
NATIONAL STEEL: Wins Nod to Pay $4MM Prepetition Shipping Fees
--------------------------------------------------------------
National Steel Corporation, and its debtor-affiliates sought and
obtained the Court's authority to pay pre-petition shipping,
processing and warehousing obligations.
Mark A. Berkoff, Esq., at Piper Marbury Rudnick & Wolfe, in
Chicago, Illinois, explains that in the normal course of
business, the Debtors pay certain commercial common carriers,
including trucking companies, railroads and barge operators to
transport goods, equipment and work-in process to various
facilities and to deliver finished goods to their customers.
"The Shippers are generally not paid in advance, but rather
invoice the Debtors for shipping services previously rendered,"
Mr. Berkoff says. Thus, Mr. Berkoff notes, the Shippers may
withhold the delivery of raw materials or fail to complete the
delivery of finished goods to the Debtors' customers if the
Debtors fail to pay prior shipping charges. "As of the Petition
Date, the Debtors estimate that outstanding pre-petition
shipping charges total approximately $4,000,000," Mr. Berkoff
adds.
Furthermore, Mr. Berkoff reports that the Debtors use the
services of third-party vendors who received the unfinished
goods and materials and perform a variety of processing services
required to finish the Debtors' products. The Debtors also use
third parties to store the Debtors' finished and unfinished
goods and other materials used in their manufacturing facilities
until such materials are to be shipped to the Processors or the
Debtors' customers. "As of the Petition Date, the Debtors
estimate that the combined outstanding pre-petition charges of
the Processors and the Warehousemen total approximately
$6,000,000," Mr. Berkoff states.
Mr. Berkoff tells the Court that the Shippers, the Processors
and the Warehousemen are part of a highly integrated
transportation and finishing system that allows the Debtors to
receive raw materials and other goods as well as provide goods
that meet the quality and quantity specifications of their
customers. The Debtors have to pay the pre-petition claims of
the Shippers, Processors and Warehousemen because:
(i) if the pre-petition transit claims are not paid, many
Shippers, Processors and Warehousemen may refuse to
perform additional services. Finding new Shippers,
Processors and Warehousemen as replacement will delay the
finishing, transporting and delivery of goods to the
Debtors and their customers, which in turn, delay the
Debtors' ability to obtain payment for their services and
jeopardize future orders;
(ii) the Shippers, Processors and Warehousemen are likely to
assert possessory or other liens on supplies and goods
currently in their possession. The value of these
supplies and goods will likely exceed the amount of
outstanding pre-petition transit claims. Thus, the
Debtors believe that most of the Shippers, Processors and
Warehousemen will be entitled to be paid in full for their
claims. "The mere assertion of possessory and other liens
will delay delivery of goods and equipment to the Debtors
and their customers, which may irreparably damage the
Debtors' business," Mr. Berkoff notes.
Mr. Berkoff relates that in return for payment of the Transit
Claims in the ordinary course of business, the Debtors will
require the Shippers, Processors and Warehousemen to continue to
provide services during the pendency of these chapter 11 cases
on the same terms as existed prior to the Petition Date. If any
Shipper, Processor or Warehouseman accepts payment and does not
continue to provide services on customary trade terms, then any
payment made by the Debtors shall be deemed an avoidable post-
petition transfer and shall be recoverable in cash upon written
request; subject to a Shipper, Processor or Warehouseman's right
to contest. "Upon recovery by the Debtors, the claim shall be
reinstated as a pre-petition claim in the amount so recovered,"
Mr. Berkoff adds.
Judge Squires orders all applicable banks and other financial
institutions to receive, process and honor all checks evidencing
amounts paid by the Debtors with regards to this motion whether
presented prior to or after the Petition Date. In addition, the
Court authorizes the Debtors to issue post-petition checks, or
to effect post-petition fund transfer requests, in replacement
of any pre-petition checks or fund transfer requests dishonored
or rejected as of the Petition Date. (National Steel Bankruptcy
News, Issue No. 3; Bankruptcy Creditors' Service, Inc., 609/392-
0900)
NATIONSRENT INC: Judge Walsh Names Robert Troisio as Fee Auditor
----------------------------------------------------------------
Considering that the size, complexity and duration of
NationsRent Inc. and its debtor-affiliates' jointly administered
cases will result in the filing of numerous interim payment
applications of professionals and reimbursement expenses in
significant amounts, Judge Walsh appoints Robert F. Troisio of
the McShane Group as fee auditor. Mr. Troisio will also act as a
special consultant to the Court for professional fee and expense
review analysis.
Mr. Troisio's duties as Fee Auditor are:
A. Review in detail interim and final fee applications;
B. Consult with each Applicant concerning Applicant's interim
and final fee application if it denotes areas of concern
regarding reasonable, actual and necessary fees and expenses;
C. Review any filed documents for these cases and be generally
familiar with the docket on these Chapter 11 cases. The
Auditor will be deemed to have filed a request for notice of
papers filed in these cases and shall be served with all such
papers;
D. Provide, within 30 days after service of a fee application
(since each Applicant serves each of its fee applications on
the Auditor), an Initial Report in writing to the affected
Applicant concerning the Auditor's findings about the fee
application;
E. Provide within 15 days after the date of the Initial Report
any issues noted in the Initial Report regarding an
Applicant's fee application. The Auditor must contact the
affected Applicant concerning the Initial Report. The
Auditor and the affected Applicant will engage in an informal
response process to resolve matters raised in the Initial
Report;
F. Conclude the informal response process, within 45 days after
the date of the Initial Report, by filing with the Court a
final report with respect to each Fee Application;
G. Serve each Final Report upon the affected Applicant and the
Notice Parties. The Final Report must be in a format designed
to opine whether the requested fees of the applicable
Applicant meet the applicable standards of Section 330 of the
Bankruptcy Code and Local Rule 2016-2;
H. Within 20 days after the date of the Final Report, the
subject Applicant may file with the Court a response to the
Final Report. Hearings on all fee applications for a
particular interim fee application period will be scheduled
by the Court in consultation with the Debtors' counsel after
the Auditor has filed a Final Report for a particular Fee
Application filed for such period;
I. The Auditor must be available for deposition and cross-
examination by the Debtors, each of the Committees, the U.S.
Trustee and other interested parties;
Mr. Troisio fees and expenses are subject to application and
review pursuant to Section 330 of the Bankruptcy Code. Upon
approval by the Court, fees and expenses will be paid from the
Debtors' estates as an administrative expense. For his services,
Mr. Troisio's compensation is $250 per hour plus reimbursement
of expenses. Mr. Troisio assures the Court that neither he nor
McShane has any connection to the Debtors, their creditors or
any other party in interest in these cases. (NationsRent
Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service,
Inc., 609/392-0900)
OWENS CORNING: Intercreditor Issue Resolution Protocol Set-Up
-------------------------------------------------------------
Judge Fitzgerald sets this schedule for the resolution of the
inter-creditor issues in the chapter 11 cases of Owens Corning
and its debtor-affiliates:
A. Owens Corning Fiberglass Technology:
May 15, 2002 - Debtors shall submit to the other
participating parties proposed factual stipulation
concerning OCFT's assets, corporate history and governance;
overall management and business operations including
licensing and sub-licensing activities with affiliates and
third parties and product development and testing
activities; financial condition at relevant dates including
dates of guaranties and drawdowns under the June 26, 1997
Credit Agreement; financial relationships with affiliates
including issuance of 1997 dividend note; inter-company
advances and repayments; third party borrowings before and
after the Credit Agreement; royalty calculation; bank due
diligence and compliance review; and identity and use of
assets, if any, traceable to asbestos containing products.
June 14, 2002 - The non-debtor participating Parties shall
provide the Debtors with responses and comments to the
proposed factual stipulations.
July 15, 2002- the Debtors shall circulate a revised
version of the proposed factual stipulations.
B. IPM Inc.
June 14, 2002 - Debtors shall submit to the other
Participating Parties proposed factual stipulations
concerning IPM's factual history and governance, overall
management and business operations of foreign subsidiaries
at relevant dates including dates of guaranties and of
drawdowns under the credit agreement; separate operations
if any of IPM as parent; financial relationships with
affiliates; inter-company advances and repayments; third
party borrowings; income tax treatment; bank due diligence
and compliance review; and identity and use of assets, if
any, traceable to asbestos containing products.
July 15, 2002 - The non-debtor Participating Parties shall
provide Debtors with responses and comments to the proposed
factual stipulations.
August 15, 2002 - Debtors shall circulate a revised version
of the proposed factual stipulations.
C. Owens Corning organization and management accounting and cash
management policies and procedures and credit facilities;
June 14, 2002 - Debtors shall submit to the other
Participating Parties proposed factual stipulations
concerning OC's corporate history, organization and
governance; overall management and business operations
including organizations and management of business lines;
execution, and to the extent applicable, the
interpretation and enforceability of the Credit Agreement
including guaranties; financial condition, including
estimates of total asbestos liabilities at relevant dates;
financial relationship with affiliates including inter-
company advances and repayments; third party borrowings,
including use of borrowed funds; and financial accounting
systems for corporate group and individual affiliates.
July 14, 2002 - The non-debtor Participating Parties shall
provide the Debtors with responses and comments to the
proposed factual stipulations.
August 15, 2002- Debtors shall circulate a revised version
of the proposed factual stipulations.
D. Integrex
July 15,2002 - the Debtors shall submit to the other
Participating Parties proposed factual stipulations
concerning Integrex's corporate history and governance;
overall management and business operations including
asbestos claims settlement and accounting for the same;
involvement in various joint ventures; financial condition
at relevant dates including dates of guaranties and of
drawdowns under the Credit Agreement; bank due diligence
and compliance review; identity and use of assets, if any,
traceable to asbestos-containing products and purpose and
intended limitations of the Contribution Agreement.
August 15, 2002 - The non-debtor Participating Parties
shall provide Debtors with responses and comments to the
proposed factual stipulations.
September 16, 2002 - Debtors shall circulate a revised
version of the proposed factual stipulations
E. Fireboard Corporations and affiliated companies and Exterior
Systems Inc.
August 15, 2002 - Debtors shall submit to the other
Participating Parties proposed factual stipulations
concerning Fireboard's and ESI's corporate histories and
governance; overall management and business operations,
financial condition at relevant dates including dates of
guaranties and of drawdowns under the Credit Agreement;
financial relationships with affiliates including inter-
company advances and repayments; third party borrowings
before and after the Credit Agreement; bank due diligence
and compliance review; identity and use of assets, if any,
traceable to asbestos-containing products; identity of
assets and operations traceable to predecessor Fireboard
Corporation; relationship to Fireboard Trust and treatment
of the swap of AmeriMark and Cultured Stone.
September 16, 2002 - The non-debtor Participating Parties
shall provide Debtors with responses and comments to the
proposed factual stipulations.
October 15, 2002 - Debtors shall circulate a revised
version of the proposed factual stipulations.
A status conference will be held on June 20, 2002 to assess the
progress of the Inter-Creditor Investigation, including whether
the schedule for the proposed stipulations should be modified.
Judge Fitzgerald mandates that the Debtors submit -- on November
15, 2002 -- to the Court and to the other Participating Parties
stipulations enumerating undisputed facts and issues that remain
in dispute. These proposed stipulations may be filed under seal
and copies of such stipulations should be given only to
Participating Parties and other parties that have signed a
Confidentiality Agreement. Another status a status and
scheduling conference will be held on November 25, 2002. (Owens
Corning Bankruptcy News, Issue No. 29; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
PACIFIC GAS: Seeks Okay to Hire Celerity as Claims Consultants
--------------------------------------------------------------
Approximately 13,000 claims have been filed in an aggregate face
amount of approximately $44 billion, of which Pacific Gas and
Electric Company believes over $30 billion is subject to
disallowance. As the Disclosure Statement indicates, by June 30,
2002, PG&E anticipates resolving or filing objections to
virtually all claims to which it objects.
Because of the volume and complexity of claims in this case,
PG&E anticipates that the claims resolution process will be
time-consuming and require a great deal of effort on the part of
its business and legal staff, along with substantial assistance
from outside professionals.
In this connection, PG&E requests authority, pursuant to Section
327(a) of the Bankruptcy Code and Rule 2014(a) of the Bankruptcy
Rules, to employ Celerity Consulting Group, Inc. to conduct
various consulting services including claims review, analysis,
classification and resolution including the MLX contract claims.
Celerity specializes in complex and voluminous data management.
Celerity's areas of expertise include complex information
retrieval systems, claims tracking systems and databases used to
evaluate liability. PG&E believes Celerity is able to
competently assist it in handling the claims management issues
at hourly rates that are substantially lower than those
typically charged by legal or accounting professionals. Although
Celerity will not be performing any legal functions, PG&E takes
the view that their services are a critical first step in the
claims management process for facilitating the efficient and
timely resolution of claims.
Celerity's president, Christopher Yowell, will oversee all of
Celerity's projects for PG&E. PG&E is familiar with Mr. Yowell's
expertise through his prior work for PG&E while he was employed
by ZIA information Analysis Group, Inc.
Celerity began performing services for PG&E on September 18,
2001. PG&E seeks authority to employ Celebrity nunc pro tunc to
September 18, 2001. PG&E explains that the application is
delayed because until recently, PG&E did not believe that the
nature of Celerity's services fell within the meaning of a
"professional person" under Bankruptcy Code Section 327(a), both
because Celerity's services primarily consist of data management
and because such services do not clearly constitute a role
central to the administration of the case. Due to Celerity's
expanding role in bankruptcy-related matters and, in particular,
the nature of Celerity's services with respect to claims review
and analysis, PG&E and Celerity have decided to seek Court
approval even though it is unclear whether Celerity should
indeed be considered a professional person under Bankruptcy Code
Section 327.
Terms Of Employment
PG&E has entered into a Master Contract with Celerity dated
November 1, 2001. Subject to the Court's approval, Celerity has
been authorized to perform the following services under the
Master Contract:
1. Bankruptcy Claims.
Celerity performs information management services in
connection with the management of the claims resolution
process.
2. Plan of Reorganization.
Celerity performs information management services in
connection with the Plan, including gathering and storing
all data used in connection with preparation of the Plan,
analysis and prosecution of the Plan, and implementation
of the Plan.
3. Data Repository.
Celerity manages a repository of records obtained pursuant
to Bankruptcy Rule 2004 requests by PG&E for market, data
from the California Independent System Operator and the
California Power Exchange, which records PG&E must retain
pursuant to the terms of a protective order.
4. Information Requests Related to the Energy Crisis.
Celerity performs information management services and
assists PG&E in responding to requests for information
from third parties and governmental entities related to
the energy crisis.
5. 2003 General Rate Case.
Celerity performs information management services and
assists in managing discovery requests for PG&E in
connection with the General Rate Case for 2003.
6. 1999 General Rate Case.
Celerity performs information management services and
assists in managing discovery requests for PG&E in
connection with the Distribution Engineering Practices
Audit related to the 1999 General Rate Case, as directed
by the Energy Division of the CPUC.
7. Reconciliation and Reimbursement of MLX Contracts.
Celerity is gathering all non-automated field data from
throughout PG&E's service territory in connection with the
MLX contracts and creating a computerized database for
such information, in order to facilitate the process of
calculating, managing and tracking the potential amounts
due under the MLX contracts.
8. MLX Contract Review and Claims Resolution.
Celerity performs information management services for PG&E
in connection with the assumption and cure of the MLX
contracts, including: (i) the organization of the data
gathered under Project 6 described above, along with other
MLX-related data; (ii) the calculations of amounts due for
refund payments, project deposits and reimbursements; and
(iii) assistance with the claims resolution process.
9. Base Annual Revenue Calculation.
Celerity performs information management services and
assists PG&E in connection with the base annual revenue
calculations required by the MLX contracts. This project
is governed by a separate consulting agreement between
PG&E and Celerity.
10. Additional Projects.
PG&E contemplates that Celerity will perform additional
information management-type services on other projects as
the need arises, and requests that any suck additional
projects be covered by this Application. For example, this
additional work may include the development of a database
of all permits associated with PG&E's business.
As set forth in the Master Contract and the Consulting
Agreement, PG&E has agreed to the following hourly billing
rates:
$200 for Christopher Yowell (President),
$150 for Rachelle Yowell (Principal),
$125 to $140 for Project Managers,
$90 to $105 for Senior Consultants,
$85 to $105 for IT Consultants,
$75 to $85 for Staff Consultants,
$40 to $55 for Document Supervisors, and
$35 to $40 for Case Clerks.
Payment Of Fees And Expense Reimbursement
PG&E requests authority to compensate Celerity according to the
following procedures for interim payment and final allowance.
PG&E believes these are appropriate in light of the nature of
Celerity's role in this case.
A. Interim Payments.
Beginning with the fees and expenses incurred for the month
of January 2002, PG&E requests authority to pay Celerity on
a monthly basis on an interim basis, and subject to final
allowance by the Court provided that neither the Committee
nor the UST, on receiving the invoice, provides PG&E with a
written objection within seven days of transmittal.
In the event that the UST or the committee timely objects,
and such objection is not resolved consensually, then
counsel for PG&E shall obtain a hearing date on such
objection as promptly as the Court's calendar may permit.
B. Fees and Expenses Incurred Through December 31, 2001.
Celerity has incurred $1,629,789.50 in total fees and
expenses through December 31, 2002 in connection with its
services performed for PG&E since September 18, 2001. PG&E
has paid $1,625,073.25 to Celerity in connection with fees
and expenses incurred through December 31, 2001. PG&E
acknowledge that such fees and expenses incurred or paid
shall be subject to final allowance by the court as set
forth below.
C. Final Allowance.
All fees and expenses incurred by Celerity shall be subject
to final allowance by order of the Court at the conclusion
of the case, upon filing of an appropriate application for
compensation and reimbursement of expenses in accordance
with Section 330 of the Bankruptcy Code, the Court's
Guidelines for Compensation and Expense Reimbursement of
Professionals and any other applicable rules or orders,
after notice and a hearing.
D. Variances from Guidelines.
In light of contemporaneous time records maintained by
Celebrity on a project by project basis, PG&E and Celerity
request approval of variances from the Guidelines in the
form of Celerity's time records such that the task
descriptions are general (such as "claims analysis" and
"project management") and lack the specificity ordinarily
required by the Court. In addition, discreet tasks such as
telephone calls or meetings are neither described nor
divided into separate time entries on a single day. P&E
believes that it is appropriate for a variance to be granted
to Celerity based on the nature of the information
management services, and given the relatively low
billing rates charged by Celerity, with the majority of
Celerity's consultants billing PG&E at rates under $100 per
hour.
Professional Disclosure
Christopher R. Yowell, president of Celebrity, reveals that he
was previously employed by ZIA Information Analysis Group, Inc.
which provided similart services to PG&E and holds a pre-
petition claim against PG&E for approximately $460,000. However,
neither Celebrity nor any of its employees hold any interest in
the ZIA claim, Mr. Yowell submits.
To the best of PG&E's knowledge, and based upon the declaration
of Mr. Yowell, PG&E believes that Celerity does not hold or
represent any interests adverse to the estate and has no
connection with PG&E, PG&E's creditors, shareholders or any
other parties in interest, or their respective attorneys and
accountants. In addition, PG&E is informed and believes that
Celerity has no connection with the United States Trustee or any
person employed in the office of the United States Trustee.
Both PG&E and Mr. Yowell believe that Celebrity is a
disinterested person under Section 101(14) of the Bankruptcy
Code. (Pacific Gas Bankruptcy News, Issue No. 27; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
PENNZOIL-QUAKER: Merger Deal Spurs S&P to Assign BB+ Ratings
------------------------------------------------------------
Standard & Poor's affirmed its triple-'A' corporate credit
rating on Shell Oil Co. and the Royal Dutch/Shell Group of
Companies, one of the world's largest integrated oil companies.
At the same time, Standard & Poor's placed its double-'B'-plus
senior secured and senior unsecured ratings for Pennzoil-Quaker
State Co. on CreditWatch with positive implications. PQS'
double-'B'-plus corporate credit rating, which is also on
CreditWatch positive, will be withdrawn upon completion of the
transaction.
The rating actions follow the announcement that Shell has
entered into a definitive agreement to acquire PQS in a
transaction valued at about $2.9 billion, which includes the
assumption of about $1.1 billion in debt.
PQS, based in Houston, Texas, is a worldwide automotive consumer
products company with leading market share in branded motor
oils. Shell Oil benefits from the size and scale of its
corporate parent, Netherlands-based Royal Dutch/Shell Group.
"The CreditWatch listing for PQS reflects that on closing of the
transaction, PQS' ratings will be upgraded as it becomes part of
Royal Dutch/Shell," noted Standard & Poor's credit analyst Jean
Stout.
Standard & Poor's will examine PQS' inclusion in the Shell
family to determine whether existing PQS debt will be
structurally subordinated.
Resolution of the CreditWatch listing will likely occur in the
second half of 2002, which is the time frame that the
transaction is expected to be completed.
PHILIPS INT'L: Inks Pact to Sell Illinois Assets for $4MM Cash
--------------------------------------------------------------
Philips International Realty Corp. (NYSE-PHR), a real estate
investment trust, announced that it has entered into an
agreement to sell its McHenry, Illinois property for
approximately $4 million in cash.
The buyer has completed its due diligence investigation and
closing is scheduled for April 16th.
In another matter, the Company announced that Carl Kraus has
resigned as chief financial officer effective March 31st. Upon
Kraus' departure, Lou Petra, the Company's former president,
will actively consult with the Company's Board and executive
officers with regard to completion of the plan of liquidation.
On October 10, 2000, the Company's stockholders approved the
plan of liquidation, which at that time was estimated to
generate approximately $18.25 in the aggregate in cash for each
share of common stock in two or more liquidating distributions.
To date, a total of $15.25 per share has been distributed. The
Company's four remaining assets are currently being offered for
sale.
PILLOWTEX: Committee Has Until May 30 to Challenge Bank's Liens
---------------------------------------------------------------
In a stipulation presented to the Court, the Pre-petition
Secured Lenders and the Official Committee of Unsecured
Creditors, in the chapter 11 cases of Pillowtex Corporation and
its debtor-affiliates, agree to extend the Committee's deadline
for filing challenges to pre-petition obligations to May 30,
2002, at 4:00 p.m. Eastern Time.
Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor, LLP,
in Wilmington, Delaware, acted on behalf of the Committee, while
John H. Knight, Esq., at Richards, Layton & Finger, P.A.
represented the Pre-petition Secured Lenders in this matter.
(Pillowtex Bankruptcy News, Issue No. 24; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
POLAROID: Seeks Approval of Revised Employment Retention Plan
-------------------------------------------------------------
Polaroid Corporation, and its debtor-affiliates have revised
their Key Employee Retention Program since the withdrawal of the
first proposal in January. Accordingly, the Debtors ask the
Court to approve the implementation of the revised Key Employees
Retention Program for 42 of its employees.
Gregg M. Galardi, Esq., at Skadden, Arps, Slate, Meagher & Flom,
LLP, in Wilmington, Delaware, relates that about 300 employees
or 15% of the workforce have resigned since the Petition Date.
"This does not include the 470 employees that were involuntarily
terminated by the Debtors and the 90 employees terminated due to
asset sales," Mr. Galardi adds.
With the uncertainty surrounding the Debtors' business and
deteriorating revenue base, Mr. Galardi reports that employee
morale has significantly deteriorated. Mr. Galardi also notes
that many current employees are now "acting in broader or more
senior roles" than prior to Petition Date.
Without the Retention Program, Mr. Galardi asserts that it would
be difficult to hire new employees if key managers resign.
"Especially now that the economy is rebounding, employment
offers from debtors-in-possession are not highly desirable," Mr.
Galardi says.
Mr. Galardi contends that it is "imperative that the Debtors
retain critical employees to maintain operational integrity
during the chapter 11 reorganization process".
The Debtors' revised Key Employee Retention Program has these
key points:
(1) Eligibility:
Tier One: covers two senior executives (unidentified) and
excludes the Debtors' Chief Executive Officer
Tier Two: covers approximately 40 employees identified by
the Debtors' management
* Participation in the Retention Program is in lieu of
all other incentive compensation programs that may be
offered by the Debtors.
* Any Participant who voluntarily resigns or is terminated
for Cause forfeits Participation rights.
* Any forfeited amounts may be made available to individuals
that are not yet participants. The identification of the
additional participants is at the sole discretion of
the Debtors' management, with approval from the counsel
to the agent for the Debtors' pre-petition and post-
petition lenders and the Committee.
* Except for the entitlement to payment of accrued, unpaid
vacation pay, the Participants are not eligible for any
payments under any other severance program, retention
program or other incentive compensation program offered
by the Debtors.
(2) Payments to be made under the Retention Program:
* The Program is capped at $4,500,000;
* The Retention Program consists of two payments:
Participant Retention Payment Severance Payment
----------- ----------------- -----------------
Tier One 62.5% of annual 62.5% of annual
base salary base salary
Tier Two 25% of annual 25% of annual
base salary base salary
Payment of Retention Payments for Tier One is in a lump sum
on the earlier of:
(a) the day the Reorganization Plan or sale of Debtors'
assets is consummated, or
(b) the separation date of the Participant
Tier Two Participants may receive in lump sum their
Retention Payments on the day the Plan of Reorganization
or sale of substantially all of the Debtors' assets is
consummated.
Severance Payments to Tier One Participants is made
in equal bi-weekly installments over a period of 7 1/2
months. Any Severance Payments to these participants will
be reduced by any consulting income or base salary payable
to such Tier One Participant during the Severance Payment
Period.
The Severance Payment to Tier Two Participants is in
a lump sum on the Participant's separation date if such
Participant is not terminated for Cause and does not
receive a substantially similar offer of employment from
a successor entity to or asset purchaser of the Debtors.
Severance Payment of these Participants are not subject to
mitigation provisions.
* The Debtors may increase the Retention or Severance Payment
payable to any Tier Two Participant to an amount not to
exceed 50% of the Participant's annual base salary,
provided that the increase is approved by the Agent and
the Committee. However, the increase shall in no way cause
the total payments made under the Retention Program to
exceed the Cap. In the event the Tier Two Participant
receives a Severance Payment in excess of 25% of the
annual base salary, the total amount of the Severance
Payment will be paid out in bi-weekly installments over
a six month period in accordance with normal payroll
practice.
* The Retention Program includes a Supplemental Fund equal to
the difference between:
-- $4,500,000 and
-- the sum of the Retention Payment and Severance Payment
allocated to be paid to Participants.
The Debtors' management may make special awards to
employees of the Debtors who are not Participants. These
special awards will be paid out of the Supplemental
Fund. However, special awards to any individual in excess
of $15,000 in the aggregate should be approved by the Agent
and the Committee.
* The Debtors waive any and all claims arising under Section
547 of the Bankruptcy Code that may exist against
Tier One Participants and which were set forth on the
Debtors' schedules and statements of financial affairs as
originally filed.
Mr. Galardi asserts that the request should be approved as it is
within the context of Section 363(b)(1) and 105(a) of the
Bankruptcy Code. Furthermore, Mr. Galardi adds that the Debtors
have determined that the costs associated with the adoption of
the Retention Program are more than justified when weighted
against the turmoil and loss of value that would be attendant to
mass defection of the Key Employees. (Polaroid Bankruptcy News,
Issue No. 13; Bankruptcy Creditors' Service, Inc., 609/392-0900)
POLYMER GROUP: Asks Court to Dismiss Involuntary Chapter 11 Case
----------------------------------------------------------------
Polymer Group, Inc. (NYSE: PGI) announced that while the Company
continues to explore the possible consensual
dismissal/withdrawal of the involuntary petition filed on March
25, 2002, it has filed a motion to dismiss the involuntary
chapter 11 filing in Federal Court in Columbia, South Carolina.
The motion to dismiss is based on existing legal precedents, and
is seeking a hearing before the Federal Court in Columbia at the
earliest possible date. The motion to dismiss is consistent
with PGI's desire to implement the out-of-court restructuring
and exchange offer announced on March 15, 2002.
Polymer Group, Inc., the world's third largest producer of
nonwovens, is a global, technology-driven developer, producer
and marketer of engineered materials. With the broadest range
of process technologies in the nonwovens industry, PGI is a
global supplier to leading consumer and industrial product
manufacturers. The Company employs approximately 4,000 people
and operates 25 manufacturing facilities throughout the world.
Polymer Group, Inc. is the exclusive manufacturer of Miratec(R)
fabrics, produced using the Company's proprietary advanced
APEX(R) laser and fabric forming technologies. The Company
believes that Miratec(R) has the potential to replace
traditionally woven and knit textiles in a wide range of
applications. APEX(R) and Miratec(R) are registered trademarks
of Polymer Group, Inc.
DebtTraders reports that Polymer Group Inc.'s 9.000% bonds due
2007 (PGI1) are trading between 32 and 36. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=PGI1for
real-time bond pricing.
PROVANT INC: Taps Jefferies to Assist in Evaluating Alternatives
----------------------------------------------------------------
Provant, Inc. (NASDAQ: POVT), a leading provider of performance
improvement training services and products, announced that it
has retained investment banking firm Jefferies & Company, Inc.
to assist its Board of Directors in reviewing strategic
alternatives, including a possible sale of the Company.
Jefferies will assist the Board in evaluating several proposals
that the company has received recently.
John E. Tyson, Provant Chairman, said, "Provant's Board of
Directors has believed for some time now that the public market
does not properly reflect the value of Provant's high quality
assets and its business, industry position and prospects. Over
the last several months we have been contacted by several
parties interested in pursuing a transaction with us. Several of
these parties have submitted proposals, including one that was
made public. Provant's Board of Directors has retained Jefferies
to assist it in reviewing these proposals and others that we may
receive. We are committed to reviewing our strategic
alternatives and, if appropriate, pursuing a transaction."
The Company will have no further obligation to publicly comment
on this subject unless there is a proposed transaction that is
recommended by the Board. There can be no assurance that there
will be any such transaction or that, if one is recommended, it
will be completed.
As a leading provider of performance improvement training
services and products, Provant helps its clients maximize their
effectiveness and profitability by improving the performance of
their people. With over 1,500 corporate and government clients,
the Company offers blended solutions combining web-based and
instructor-led offerings that produce measurable results by
strengthening the performance and productivity of both
individual employees and organizations as a whole.
At September 30, 2001, Provant Inc.'s total current liabilities
eclipsed its total current assets by about $40 million.
For the latest Provant news, or to request faxed or mailed
information about Provant, call the Company's toll-free
shareholder communications service at 1-877-PROVANT. This
service is available 24 hours a day, seven days a week.
Shareholder information is also available on the World Wide Web
at www.provant.com.
Jefferies & Company, Inc., the principle operating subsidiary of
Jefferies Group, Inc., (NYSE: JEF), is an institutional
brokerage firm and an investment bank. The firm provides
outstanding trading execution in equity, high yield, convertible
and international securities as well as fundamental research for
institutional investors. As an investment bank, Jefferies offers
capital raising, mergers and acquisitions, and restructuring
services for middle market companies. The firm also provides
prime brokerage and securities lending services. Jefferies'
leadership in equity trading is recognized by numerous
consulting and survey organizations.
Jefferies employs more than 1,200 people in 20 offices
worldwide, including Atlanta, Boston, Chicago, Dallas, Hong
Kong, London, Los Angeles, New York, Paris, San Francisco, Tokyo
and Zurich. Further information about Jefferies, including a
description of trading, research and investment banking
services, can be found at http://www.jefco.com
PROVELL: Amends Financial Covenant Thresholds Under Credit Pact
---------------------------------------------------------------
Provell, Inc. (Nasdaq:PRVL) announced that it has amended its
senior credit facility, amending certain loan covenant
thresholds and extending the facility's maturity date to January
31, 2003. The facility is underwritten by Foothill Capital
Corporation, a wholly-owned subsidiary of Wells Fargo & Company
(NYSE:WFC), and will be used to support the working capital
needs of the Company and for other general corporate purposes.
"We are extremely pleased to have amended and extended our
current revolving credit facility," said George S. Richards,
Provell's Chairman, President and Chief Executive Officer, "and
we look forward to continuing to provide the highest program
values in the membership services industry."
Provell, Inc., develops, markets and manages an extensive
portfolio of unique and leading-edge membership and customer
relationship management programs. Members of the Company's
proprietary programs receive value-added benefits, insightful
information, and exclusive savings opportunities on a wide range
of related products and services in the areas of shopping,
travel, hospitality, entertainment, health/fitness, finance, and
affinity activities such as cooking and home improvement. As of
December 31, 2001, nearly 2.8 million consumers enjoyed benefits
provided through Provell's membership programs. The Company was
founded in 1986 and is headquartered in Minneapolis, Minnesota.
At September 30, 2001, the company reported an upside-down
balance sheet showing a total shareholders' equity deficit of
$36.6 million.
Foothill Capital Corporation is a leading provider of asset-
based financing to middle market companies throughout North
America. Foothill Capital is a subsidiary of Wells Fargo &
Company, a $308 billion diversified financial services company
providing banking, insurance, investments, mortgage and consumer
finance through more than 5,400 stores, the Internet
(wellsfargo.com) and other distribution channels across North
America and elsewhere internationally. For more information,
visit Foothill Capital on the Internet at
http://www.foothillcapital.com
PUBLICARD INC: Fails to Comply with Nasdaq Listing Requirements
---------------------------------------------------------------
PubliCARD, Inc. (Nasdaq: CARD) reported its financial results
for the fourth quarter and year ended December 31, 2001.
Revenues for the fourth quarter of 2001 were $1,218,000,
compared to $1,328,000 a year ago. The net loss from continuing
operations for the quarter was $1,353,000 compared with
$4,243,000 a year ago. The decline in the net loss is
attributable primarily to work force reductions and other cost
containment measures associated with the Company's exit from the
smart card reader and chip business announced in July 2001.
For the year ended December 31, 2001, revenues totaled
$5,652,000, comparable to $5,543,000 a year ago. The net loss
from continuing operations for the year ended December 31, 2001
was $17,171,000 compared with a loss of $19,675,000 a year ago.
Excluding a repositioning charge of $7,317,000, the net loss
from continuing operations for 2001 was $9,854,000, or $0.41 per
share. In 2001 and 2000, the Company recorded income from
discontinued operations of $2,350,000 and $4,275,000,
respectively, resulting from revisions to estimated expenses and
proceeds associated with prior disposition activities. The net
loss, including the repositioning charge and income from
discontinued operations, was $14,821,000 in 2001 compared to
$15,400,000 in 2000. As of December 31, 2001, cash and short-
term investments totaled $4,479,000, exclusive of approximately
$2,200,000 of escrow deposits established in connection with
prior dispositions.
"We are continuing our acquisition search for businesses focused
in areas outside the technology sectors in which the Company has
recently been engaged, so as to diversify our asset base," said
Tony DeLise, President and COO. "In addition to the challenging
exercise of identifying and financing an acquisition, we are
expanding the market reach of our Infineer Ltd. business. We
recently signed an agreement with Datacard Group to distribute
our smart card based solutions in the United States and are
increasing our efforts to market these solutions to educational
and corporate sites in the U.K."
Separately, the Company announced that it recently received
notices from The Nasdaq Stock Market that the Company has failed
to comply with the minimum $1.00 bid price-per-share and the $5
million market value of publicly held shares requirements for
continued listing on the Nasdaq National Market. If PubliCARD
does not regain compliance with the minimum $1.00 bid price-per-
share on or before May 15, 2002 and the $5 million market value
of publicly held shares on or before May 28, 2002, its common
stock will be subject to delisting from the Nasdaq National
Market. Until May 15, 2002, PubliCARD's common stock will
continue to trade on the Nasdaq National Market. If its
securities are delisted, PubliCARD may request a hearing before
a Nasdaq Listing Qualifications Panel to review the staff
determination, or it may apply to transfer its common stock to
the Nasdaq SmallCap Market. If PubliCARD chooses to appeal the
staff determination, there can be no assurance that the appeal
will be successful, nor can there be any assurance that its
securities will be approved for listing on the Nasdaq SmallCap
Market if it applies for a transfer. If the Company's common
stock were delisted, the liquidity of its common stock would be
adversely affected. For further information concerning the
possible delisting of the Company's common stock and the
possible consequences of such an action, see Item 7 of the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2001, which has been filed with the SEC.
Headquartered in New York, NY, PubliCARD, through its' Infineer
Ltd. subsidiary, designs smart card platform solutions for
educational and corporate sites. PubliCARD's future plans
revolve around an acquisition strategy focused on businesses in
areas outside the high technology sector while continuing to
support the expansion of the Infineer Ltd. business. More
information about PubliCARD can be found on its Web site
http://www.publicard.com
RESIDENTIAL ACCREDIT: Fitch Places Low-B Bonds On Watch Negative
----------------------------------------------------------------
Fitch Ratings places the following Residential Accredit Loans
Inc. mortgage pass-through certificates on Rating Watch
Negative:
* Series 1999-QS14 class B-2 'B';
* Series 2000-QS1 class B-2 'B';
* Series 2000-QS2 class B-2 'B';
* Series 2000-QS3 class B-2 'B';
* Series 2000-QS5 class B-2 'B'.
These actions are taken due to higher than expected credit
losses as well as the high level of severely delinquent loans in
the pipeline in relation to the applicable credit support levels
as of the February 25, 2002 distribution.
RESPONSE BIOMEDICAL: Closes $1.3M Non-Brokered Private Placement
----------------------------------------------------------------
Response Biomedical Corp. (RBM: CDNX), developer of the RAMP(TM)
diagnostic system, has closed the non-brokered private placement
announced on March 1 and amended March 14, 2002 with gross
proceeds raised of $1,327,350.
As previously announced, proceeds of the financing are being
used to scale-up manufacturing of RAMP Readers and Anthrax Tests
for near term commercialization of the world's only reliable
rapid on-site detection system for anthrax. In addition, the
Company is advancing the late-stage development of two
additional cardiac tests (CK-MB and troponin I) for the rapid
detection of heart attack, prior to launching the cardiac panel
in the first quarter of 2003.
The Company will issue 2,413,364 units, each unit consisting of
one common share and one-half of one common share purchase
warrant. Each whole warrant entitles the holder to purchase one
common share at a price of $0.62 ($0.63 for units exceeding the
amount announced on March 1, 2002) for a period of 12 months
from the closing date of the private placement. The shares have
a four month hold period from the date issued. A commission and
finder's fees totaling $10,000 is payable to two arm's length
parties. The placement is subject to final acceptance by the
CDNX.
Response Biomedical Corp. develops on-site rapid diagnostic
tests for use with its FDA cleared RAMP(TM) Reader intended for
clinical and environment applications, such as tests for the
detection of heart attack and biological agents including
anthrax.
The RAMP System consists of a portable fluorescence reader and
disposable test cartridges. The Company's platform technology
delivers reliable results in less than fifteen minutes, and has
the potential to be used with more than 250 tests currently
performed in laboratories.
On January 8, 2002, the U.S. Food and Drug Administration
provided marketing clearance of the RAMP Reader for general
clinical use, and also the Myoglobin test - a cardiac marker
used in the early diagnosis of heart attack. Approval in Canada
is pending, and two other cardiac markers are in late-stage
development.
Response Biomedical's shares are listed on the Canadian Venture
Exchange under the trading symbol "RBM". For further
information, visit the Company's Web site at
http://www.responsebio.com.
In November 2001, Response Biomedical announced that one hundred
percent of the voting creditors of the Company voted to accept
the proposal filed with the British Columbia Supreme Court under
the Bankruptcy and Insolvency Act. The Company is now seeking
court approval and moves to fulfill the terms of the proposal to
the satisfaction of the trustee.
SAFETY-KLEEN: Court Approves Chemical Services Bidding Protocol
---------------------------------------------------------------
Judge Peter Walsh, on the record before him, finds that the
bidding procedures proposed by Safety-Kleen Corp., and its
debtor-affiliates are reasonable and appropriate and
represent the best method for maximizing the value of the "Blue
Business" Assets, and that the bidding procedures are in the
best interests of the estates and the Debtors' creditors.
Judge Walsh authorizes the Debtors to distribute and publish the
auction date and sale hearing notice in the media and to the
parties described in the Motion. If the Debtors receive at
least one qualified bid or combination of qualified bids in
addition to that of Clean Harbors, they may determine, in their
business judgment, which bid is the highest and best offer, and
reject, at any time before any Order approving a qualified bid,
any bid that, in the Debtors' sole discretion, is inadequate or
insufficient, not in conformity with the requirements of the
Bankruptcy Code or these now-approved bidding procedures, or
contrary to the best interests of the Debtors, their estates,
and their creditors. If the Debtors do not receive any
qualified bids, they will report the same and the matter will go
directly to the sale to Clean Harbors.
The sale hearing is scheduled for June 13, 2002, at 3:30 p.m.
Eastern Time. Objections, if any, to the sale must be filed and
served so as to be actually received no later than May 29, 2002,
at 4:00 p.m. Eastern Time. Judge Walsh warns that only
objections properly filed and served will be considered at the
hearing.
Judge Walsh authorizes the Debtors to take such actions as
specified by law to initiate the process with the appropriate
implementing agency to transfer the permits issued by the
Resource Conservation and Recovery Act (or the authorized
state's hazardous waste programs) and the approvals issued under
the Toxic Substances Control Act to Clean Harbors or the
successful bidder, as applicable.
On or before the 23rd day before the sale hearing, the Debtors
are ordered to serve on each non-debtor party to a designated
contract a notice of the proposed cure amounts under contracts
and leases proposed to be assumed and assigned to Clean Harbors
or the successful bidder. The non-debtor party has until the 5th
business day before the sale hearing to object to the proposed
cure amounts and the assumption and assignment. If no
objections are timely received, the contracts will be deemed
assumed and assigned to Clean Harbors or the successful bidder,
and the cure amounts will be fixed to those amounts stated by
the Debtors. The effective date of assumption will be the
closing date of the sale. (Safety-Kleen Bankruptcy News, Issue
No. 30; Bankruptcy Creditors' Service, Inc., 609/392-0900)
SPECIAL METALS: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Special Metals Corporation
4317 Middle Settlement Road
New Hartford, New York 13413
Bankruptcy Case No.: 02-10335
Type of Business: Special Metals makes nickel-based alloys and
superalloys for aircraft engine rotating
components and other high-performance
systems. The company's superalloys and
special alloys are designed to withstand
extreme heat, stress, and corrosion. Its
product forms include billet, plate, and tube
forms; extruded shapes; and wire and welding
consumables. Special Metals' Premium Alloys
Division makes wrought superalloys and
superalloy powder. The aerospace industry is
Special Metals' primary customer. Special
Metals operates plants in the US and Europe.
Chapter 11 Petition Date: March 27, 2002
Court: Eastern District of Kentucky (Ashland)
Judge: William S. Howard
Debtors' Counsel: Gregory R. Schaaf, Esq.
Greenebaum Doll & McDonald PLLC
333 W Vine Street #1400
Lexington, Kentucky 40507
859-231-8500
and
Mark E. Freedlander, Esq.
McGuireWoods LLP
625 Liberty Avenue
23rd Floor Dominion Tower
Pittsburgh, Pennsylvania 15219
412-667-6000
Total Assets: $790,462,000 (as per Form 10-Q Report for the
quarter ended September 30, 2001)
Total Debts: $774,306,000 (as per Form 10-Q Report for the
quarter ended September 30, 2001)
SUNRISE TECHNOLOGIES: Sr. Lender Agrees to Extend Loan Maturity
---------------------------------------------------------------
Sunrise Technologies International, Inc. (OTC Bulletin Board:
SNRS) announces that it has reached agreement in principle with
the Company's senior lender, Silicon Valley Bank. Silicon
Valley Bank is owed approximately $3.5 million, and has a first
lien on all tangible assets of the Company and a first lien of
up to $1.5 million on the Company's intellectual property.
Silicon Valley Bank has agreed in principle to extend the
maturity of its loan until December 31, 2002, subject to certain
conditions including obtaining a term sheet from an equity
sponsor or a registration statement to raise at least $5 million
by September 30, 2002. The parties expect to execute a
definitive extension agreement prior to March 31, 2002.
According to David Brewer, manager of the Company, "I am
gratified that our senior lender has agreed in principle to our
restructuring plan. I think they share my confidence in the
Company and in its new management. More importantly, their
actions will help the Company to survive, which in turn will
help the Company meet its obligations to the ophthalmologists
and patients."
Brewer went on to say, "I want everyone to know that if the
restructuring plan goes into effect, Aragon Ventures is in it
for the long term. And, despite a conjecture I have heard to
the contrary, my associates and I have never shorted the stock
and don't plan to. We have too much faith in this technology!"
Internet users can access Sunrise's World Wide Web site at
http://www.sunrise-tech.com
USG CORP: Court Okays Gibbons Del Deo as Debtor's NJ Counsel
------------------------------------------------------------
USG Corporation, and its debtor-affiliates obtained Court
approval and authority to employ Gibbons, Del Deo, Dolan,
Griffinger & Vecchione, P.C., as local New Jersey Counsel in
connection with the prosecution of their chapter 11 cases, nunc
pro tunc to December 20, 2001.
However, Judge Newsome limits Gibbons Del Deo fees to $30,000
per month absent further order of the Court.
Specifically, Gibbons, Del Deo will:
-- take necessary action to protect and preserve the Debtors'
estates, including the prosecution of actions on the Debtors'
behalf, the defense of any actions commenced against the
Debtors, the negotiation of disputes in which the Debtors are
involved, and the preparation of objections to claims filed
against the Debtors' estates, as may be requested by the
Debtors;
-- prepare on behalf of the Debtors, as debtors in
possession, the necessary motions, applications, answers,
orders, reports and papers in connection with the administration
of the Debtors' estates, as may be requested by the Debtors in
consultation with its other counsel in these cases; and
-- perform all other necessary legal services in connection
with the Debtors' chapter 11 cases, as may be requested by the
Debtors in consultation with its other counsel in these cases.
Gibbons, Del Deo will bill for its professional services at it's
customary hourly rates, subject to periodic adjustments to
reflect economic and other conditions:
Paul R. DeFilippo (Director) $450/hour
Elizabeth S. Kardos (Director) $300/hour
Brendan P. Langendorfer (Assoc.) $165/hour
In addition, other professionals and paraprofessionals may
perform services for the Debtors at their current standard
hourly rates. (USG Bankruptcy News, Issue No. 21; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
VINTAGE PETROLEUM: BP Capital Energy Discloses 8.4% Equity Stake
----------------------------------------------------------------
BP Capital Energy Equity Fund, L.P. and BP Capital Energy Equity
International Holdings I, L.P. beneficially own 5,293,700
shares, (which is approximately 8.4% of the shares of common
stock outstanding on March 15, 2002), of Vintage Petroleum Inc.
BP Capital Energy Equity Fund, L.P. holds sole voting and
dispositive powers over 4,228,544 shares and BP Capital Energy
Equity International Holdings, L.P. holds sole voting and
dispositive power over the remaining 1,065,156 shares. Both
entities are Delaware limited partnerships with principal
business address in Dallas, Texas.
The general partner of Energy and International is BP Capital
Management, L.P., a Delaware limited partnership. Management's
general partner is TBP Investments Management LLC, a Delaware
limited liability company. TBPIM's Chairman and Chief Executive
Officer is Thomas Boone Pickens, Jr. TBPIM's managing directors
are Ronald D. Bassett, G. Michael Boswell, M. Garrett Smith and
Robert L. Stillwell. Mr. Smith is TBPIM's Chief Financial
Officer. TBPIM is wholly owned by Messrs. Pickens, Bassett and
Stillwell. In the aforementioned capacities, each of the
foregoing may be deemed the beneficial owner of the shares
beneficially owned by other members of the group.
The principal business of Energy and International is investing
in securities of companies engaged in the energy and natural
resources industries. The total amount of funds required by
Energy for the purchase of 4,228,544 shares was approximately
$61,074,491 and was obtained from working capital and, from time
to time, in part by margin account loans from Bear, Stearns
Securities Corp., extended in the ordinary course of business.
The total amount of funds required by International for the
purchase of 1,065,156 shares was approximately $14,041,093 and
was obtained from working capital and, from time to time, in
part by margin account loans from Bear, Stearns Securities
Corp., extended in the ordinary course of business.
Equity and International have acquired the shares because they
believe that investor assessment of Vintage Petroleum's
intrinsic value as reflected in the market price of the shares
is too low. They also believe that Vintage Petroleum may or
should be a candidate for a transaction involving a leveraged
buy-out or sale of the company. They indicate they have no
knowledge that any such transaction is or may be under
consideration by Vintage or any third party. Equity and
International are, however, in the process of reviewing the
feasibility of making a proposal to acquire all or a substantial
portion of the equity in Vintage Petroleum and may make such a
proposal based on their assessment of the factors described
below; however, there is no assurance that any such proposal
will be made.
Equity and International intend to review, on a continuing
basis, their investment in Vintage. Depending upon the factors
discussed below and any other factors that are or become
relevant, they may acquire additional shares in open market or
privately negotiated transactions; may sell all or part of their
shares in open market or privately negotiated transactions; may
recommend to management of Vintage one or more transactions
involving the sale of all or a part of the equity interest in
the Company; may make to the management of Vintage a proposal
for acquisition by them and others of all or a part of the
equity interest in Vintage; may distribute shares to various of
their partners; or may engage in any combination of the
foregoing. Any open market or privately negotiated purchases or
sales, acquisition recommendations or proposals, distributions
or other transactions may be made at any time without additional
prior notice. Although the foregoing reflects activities
presently contemplated by Equity and International with respect
to Vintage, the foregoing is subject to change at any time, and
there can be no assurance that they will take any of the actions
set forth above.
Vintage Petroleum, Inc., specializes in buying producing
properties in North and South America and trying to increase
their yields through various reworking techniques. It owns
stakes in producing wells in the East Texas, Gulf Coast, West
Coast, and midcontinent regions of the US and in Canada; North
America accounts for 44% of the company's proved reserves.
Vintage is focusing its overseas efforts on Argentina, Bolivia,
and Ecuador, but it also has interests in Trindad and Yemen. The
company has proved reserves of about 550 million barrels of oil
equivalent, of which oil accounts for more than 60%. At
September 30, 2001, the company had a working capital deficit of
about $34 million.
VLASIC: LLC Manager Wants Until Aug. 2 to Offer Cash for Claims
---------------------------------------------------------------
Vlasic Foods International, Inc., and its debtor-affiliates seek
an order from the Court extending the time during which the LLC
Manager appointed under the company's liquidating plan may offer
to redeem claims for cash at a rate of 20% to 25% of their face
amounts. The Debtors ask for an additional 120 days, through
and including August 2, 2002.
Robert A. Weber, Esq., at Skadden, Arps, Slate, Meagher & Flom,
in Wilmington, Delaware, relates that the current deadline to
offer redemption expires on April 4, 2002. To date,
approximately 1,200 proofs of claim have been filed against the
Debtors' estates.
The Debtors and their advisers have already begun a
reconciliation of the proofs of claim. However, Mr. Weber
explains, until the claims reconciliation procedure is
substantially complete, the analysis necessary to determine the
offer amount and redemption percentage will remain incomplete.
The Debtors and their advisers believe that they have
insufficient time to complete the analysis and make the offer of
redemption before April 4, 2002.
"The Debtors have estimated that an additional 120 days will
provide sufficient time to advance the claims reconciliation
process and establish the redemption offers contemplated in the
Plan," Mr. Weber says. (Vlasic Foods Bankruptcy News, Issue No.
21; Bankruptcy Creditors' Service, Inc., 609/392-0900)
WINSTAR COMMS: Chapter 7 Trustee Signs-Up Parente as Accountant
---------------------------------------------------------------
Winstar Communications, Inc., and its debtor-affiliates' Chapter
7 Trustee Christine C. Shubert asks the Court to approve her
employment and retention of Parente Consulting as accountant,
nunc pro tunc to January 25, 2002.
Michael G. Menkowitz, Esq., at Fox Rothschild O'Brien & Frankel
LLP in Wilmington, Delaware, submits that Parente is well
qualified to perform accounting services required by the Trustee
because of the Firm's considerable experience in matters related
to Chapter 7 cases.
Parente will provide:
A. General accounting services to the Trustee regarding the
operation of the Debtors' business;
B. Advice to the Trustee in financial issues concerning the
Debtor; and
C. Assistance to the Trustee in performing other services that
may be necessary and proper in the Debtors' Chapter 7
proceedings.
Apart from reimbursement of actual, necessary expenses and other
charges incurred, Parente will be compensated based on the
hourly rates of its professionals. Currently, these rates are:
Professional Rate
----------------- ------------
Principals $185 to $325
Managers $110 to $220
Senior Associates $110 to $220
Staff $ 75 to $115
Paraprofessionals $ 50 to $ 75
Parente Accountant, Stephen J. Scherf, assures the Court that
the firm or its employees hold no interest materially adverse to
the Debtors estates and have no connection with the Debtors,
their creditors or other parties-in-interest in connection with
these cases. (Winstar Bankruptcy News, Issue No. 25; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
WOLVERINE TUBE: S&P Changes Outlook on Low-B Rating to Negative
---------------------------------------------------------------
Standard & Poor's affirmed Wolverine Tube Inc.'s 'BB-' corporate
credit rating and removed it from CreditWatch on March 25, 2002,
after the company sold $120 million of senior unsecured notes
and obtained a new $37.5 million revolving credit facility
maturing in 2005. Rating outlook is negative.
The rating reflects a business profile with defensible positions
in niche segments, offset by a narrow product line, cyclical
markets, significant customer concentration, and moderately
aggressive use of debt. Wolverine, a major manufacturer of
custom engineered, value-added copper and copper alloy tubing,
holds leading market shares in commercial products, which
account for about 68% of pounds shipped and roughly 80% of gross
profits. The largest market is the heating, ventilation, and air
conditioning industry, with a significant amount of activity
related to the ordinary replacement of unitary air conditioners,
sales of which are sensitive to summer weather patterns.
Wolverine also holds a large share of the global market in
copper technical tubing used to increase the transfer of heat in
large commercial chiller systems. Still, more than 55% of sales
are derived from consumer appliance, automotive, industrial and
heavy equipment, plumbing wholesale, and other industries.
Key business drivers include:
* Ongoing demand for environmentally friendly refrigerants
and more energy-efficient equipment;
* Increasing demand for fabricated products because of the
trend toward outsourcing by many of Wolverine's customers;
* General economic conditions; and
* Further globalization of activities (25% to 30% of sales
are outside the U.S.) at the request of North American
customers.
Recessionary conditions in the U.S. severely penalized earnings
in 2001, especially hurting a number of markets including large
commercial air conditioning equipment and heavy industrial and
general industrial applications. Continuing economic weakness
will probably prevent results from experiencing any significant
recovery this year. An earnings rebound is expected in 2003
because of better economic conditions and the resulting benefits
on all product lines.
Operating margins have eroded in recent years to less than 9%,
reflecting in part lower volumes and pricing for technical
tubing. But on the plus side, a considerable portion of the cost
of goods sold reflects the cost of copper, which is generally
passed along to customers. Return on capital has experienced
sharp deterioration, to about 6%, as a result of depressed
profitability and elevated debt.
Capital outlays for 2002 are expected to be in the $15 million
to $17 million range, versus the $28 million of 2001. Given the
current earnings environment, debt reduction from its currently
aggressive level will, nevertheless, be difficult this year.
Consequently, funds from operations to total debt is expected to
remain at the low end of the 10% to 15% range for the near term.
An economic rebound should lift that measure to the appropriate
15% to 20% range in the next few years. Total debt to EBITDA is
also expected to improve from the aggressive 5.0 times to less
than 3.5x, an appropriate level for the rating. The new, much
smaller $37.5 million revolving credit agreement appears to be
adequate to meet working capital requirements, and the company's
liquidity is enhanced by cash on hand of about $30 million,
which could build with an earnings recovery.
Outlook
Maintenance of the company's competitive position should be
sustained by its technical expertise, breadth of product
offerings, long-established customer relationships, and an
expanding global presence. A significant earnings rebound over
the next few years will be necessary to help strengthen cash
flow protection and debt leverage measures to appropriate
levels. The rating could be lowered unless Wolverine's financial
profile shows steady improvement during the next few years.
ZENITH INDUSTRIAL: Taps Young Conaway as Bankruptcy Co-Counsel
--------------------------------------------------------------
Zenith Industrial Corporation asks for authority from the U.S.
Bankruptcy Court for the District of Delaware to employ and
retain Young Conaway Stargatt & Taylor, LLP as their co-counsel.
A hearing on the Company's application is currently scheduled
for April 2, 2002.
The Debtor relates to the Court that it chose Young Conaway
because of the Firm's extensive experience and knowledge in this
field plus their experience in practicing before the Delaware
Court.
Young Conaway attorneys will bill for services at its customary
hourly rates:
Robert S. Brady $400 per hour
Edward J. Kosmowski $280 per hour
Joseph A. Malfitano $260 per hour
Steve Kirsch (paralegal) $110 per hour
Young Conaway is expected to assist the Debtors by:
a) providing legal advice with respect to its powers and
duties as a debtor in possession in the continued
operation of its business and management of its
properties;
b) negotiating, prepare and pursue confirmation of a plan
and approval of a disclosure statement, and all related
reorganization agreements/documents;
c) preparing on behalf of the Debtors necessary
applications, motions, answers, orders, reports, and
other legal papers;
d) appearing in Court and to protect the interests of the
Debtors before the Court; and
e) performing all other legal services for the Debtors
which may be necessary and proper in this proceeding.
By separate application, the Debtor is also seeking authority to
retain Sidley Austin Brown & Wood as their co-counsel. The
Debtor assures the Court that attorneys from the two firms have
conferred regarding the division of responsibilities in an
effort to avoid duplication of tasks.
Zenith Industrial Corporation, a leading worldwide, full-service
Tier 1 supplier of highly engineered metal-formed components,
complex modules and mechanical assemblies for automotive OEMs
filed for chapter 11 protection on March 12, 2002. Joseph A.
Malfitano, Esq., Edward J. Kosmowski, Esq., Robert S. Brady,
Esq. at Young Conaway Stargatt & Taylor, LLP and Larry S. Nyhan,
Esq., Matthew A. Clemente, Esq., Paul J. Stanukinas, Esq. at
Sidley Austin Brown & Wood represent the Debtor in its
restructuring efforts. When the Company filed for protection
from its creditors, it listed estimated debts and assets of more
than $100 million.
* BOND PRICING: For the week of April 1 - 5, 2002
-------------------------------------------------
Following are indicated prices for selected issues:
Amresco 9 7/8 '05 25 - 26(f)
AES 9 1/2 '09 79 - 81
AMR 9 '12 96 - 98
Asia Pulp & Paper 11 3/4 '05 24 - 25(f)
Bethlehem Steel 10 3/8 '03 12 - 14(f)
Enron 9 5/8 '03 13 - 15(f)
Global Crossing 9 1/8 '04 3 - 4(f)
Level III 9 1/8 '04 43 - 45
Kmart 9 3/8 '06 49 - 51(f)
McLeod 11 3/8 '09 23 - 25(f)
NWA 8.70 '07 92 - 94
Owens Corning 7 1/2 '05 39 - 41(f)
Revlon 8 5/8 '08 47 - 49
Trump AC 11 1/4 '06 70 - 72
USG 9 1/4 '01 80 - 82(f)
Westpoint 7 3/4 '05 48 - 50
Xerox 5 1/4 '03 94 - 95
*********
Bond pricing, appearing in each Monday's edition of the TCR, is
provided by DLS Capital Partners in Dallas, Texas.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com.
Bond pricing, appearing in each Thursday's edition of the TCR,
is provided by DebtTraders in New York. DebtTraders is a
specialist in global high yield securities, providing clients
unparalleled services in the identification, assessment, and
sourcing of attractive high yield debt investments. For more
information on institutional services, contact Scott Johnson at
1-212-247-5300. To view our research and find out about private
client accounts, contact Peter Fitzpatrick at 1-212-247-3800.
Real-time pricing available at http://www.debttraders.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, Donnabel C. Salcedo, Ronald P. Villavelez and Peter
A. Chapman, Editors.
Copyright 2002. All rights reserved. ISSN: 1520-9474.
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*** End of Transmission ***