/raid1/www/Hosts/bankrupt/TCR_Public/020514.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, May 14, 2002, Vol. 6, No. 94
Headlines
360NETWORKS: Committee Signs-Up Bragar Wexler as Special Counsel
ANC RENTAL: Secures Approval to Consolidate Ops. at 16 Airports
APW LTD.: Says 83% of Senior Lenders Agree to Prepackaged Plan
APPLIEDTHEORY: Gets Approval to Sell Access Business to FASTNET
BERGSTROM CAPITAL: Liquidation Likely if Merger Plan Fails
BETHLEHEM STEEL: Selling Weyhill Guest House To Saucon for $4.2M
BURNHAM PACIFIC: Winding-Up Affairs and Liquidating Assets
DT INDUSTRIES: Executes Recapitalization Pacts With Creditors
ENRON CORP: Bayerische Moves to Initiate Rule 2004 Exam
ENRON CORP: Sonoco Asks Court to Lift Stay to Permit Setoff
ENRON CORP: GE Power Completes Acquisition of Wind Unit's Assets
EXODUS COMMS: Hearing to Confirm 2nd Amended Plan Set for May 30
FRIEDE GOLDMAN: J.L. Holloway Steps Down as Board's Chairman
GAP INC: S&P Revises Outlook on Low-B Credit Ratings to Negative
GLOBAL CROSSING: Employs Gloster as Special Bermuda Counsel
GOLDMAN INDUSTRIAL: Committee Taps Walsh Monzack as Counsel
IT GROUP: Walking Away From Coleman Evans Project Contracts
J. CREW GROUP: Annual Revenues Decrease 5.8% to $778 Million
KEY3MEDIA: S&P Drops Rating to CCC+ Over Profitability Concerns
KAISER ALUMINUM: Committee Retains Ashby as Delaware Counsel
KASPER ASL: Hires Togut Segal as Conflicts Counsel for Weil
KIRCHPAYTV: Goes Bankrupt After Failing To Raise Funds
KMART CORPORATION: Proposes Personal Injury Claims Procedures
KMART CORP: Launches New Ad Campaign Focused on Exclusive Brands
LTV CORP: Expands Scope & Alters Fee Structure for Jay Alix
LERNOUT & HAUSPIE: Holdings Submits 1st Amended Liquidating Plan
LASON INC.: Dismisses PricewaterhouseCoopers as Auditors
LEINER HEALTH: Obtains Court Nod to Hire Levene Neale as Counsel
LIFEF/X INC: Files for Chapter 11 Protection to Sell All Assets
LIFEF/X INC: Voluntary Chapter 11 Case Summary
METACHEM PRODUCTS: Case Summary & Largest Unsecured Creditors
METALS USA: Seeks Second Extension of Lease Decision Period
NATIONSRENT INC: Proposes Bar Dates For Filing Proofs of Claim
NEWCOR INC: Engages Mr. Fortgang as Legal and Financial Advisor
NEWCOR: Committee Bringing-In Klett Rooney as Co-Counsel
NUCENTRIX: Meets Nasdaq's Continued Listing Requirements
N-VIRO INT'L: Nasdaq Delists Shares from SmallCap Market
OWENS CORNING: Signs-Up Cap Gemini E&Y & E&Y LLP as Advisors
PACIFIC GAS: Objects to Baldwin Associates' $5 Billion Claim
PAPER WAREHOUSE: Grant Thornton Expresses Going Concern Doubts
POLYMER GROUP: Files Prepackaged Chapter 11 in South Carolina
PRANDIUM: Look for Debtors' Schedules & Statements on May 22
PRINTING ARTS: Wants Exclusive Period Extended to July 31
RESPONSE ONCOLOGY: Tennessee Court Approves Disclosure Statement
ROUNDY'S INC: S&P Rates $200MM Senior Subordinated Notes at B
SAFETY-KLEEN CORP: Dai-Ichi Presses for Payment of $1.8MM Claim
SEEHAFEN ROSTOCK: Fitch May Withdraw BB Senior Rating
SPECIAL METALS: Wins Final Court Nod For $60 Mil DIP Financing
SUNRISE TECH.: Creditors Okay Proposed Debt-for-Equity Swap
SUNTERRA: Makes Adjustments to Previous Financial Statements
SWAN TRANSPORTATION: Wants to Continue Jackson Walker Retention
SWAN TRANSPORTATION: Seeks To Hire National Economic Research
TRUMP CASINO: S&P Gives CCC Rating to $130M 2nd Mortgage Notes
TOUCHSTONE RESOURCES: Davidson & Co. Airs Going Concern Doubts
UNITED COMPANIES: Fitch Downgrades Manufactured Housing Bonds
UNITED INDUSTRIES: S&P Revises Outlook on B Rating to Positive
VERADO HOLDINGS: Delaware Court Sets June 3 as Claims Bar Date
VERADO HOLDINGS: Gets Permission to Hire Klett Rooney as Counsel
WARNACO GROUP: Valentino Asks to Allow Late Filing of Claims
WHEELING-PITTSBURGH: Asks Court To Continue Tatum's Employment
WINSTAR COMMS: Chapter 7 Trustee Engages Fox as Counsel
WORLDCOM INC: S&P Drops Corporate Credit Ratings to Low-B Level
ZENITH INDUSTRIAL: Court Approves Sidley Austin Employment
ZENITH INDUSTRIAL: Signs-Up Plante & Moran as Auditor
*********
360NETWORKS: Committee Signs-Up Bragar Wexler as Special Counsel
----------------------------------------------------------------
Judge Gropper approves the retention of Bragar Wexler as Special
Counsel to the Official Committee of Unsecured Creditors in
360networks Inc.'s chapter 11 cases. The Court provides these
modifications:
-- Fees for Services Rendered
Bragar Wexler's fees for legal services by its various
attorneys, law clerks, and paralegal assistants will be
based principally on the amount of time devoted,
multiplied by each individual's current hourly billing
rate, subject to annual adjustment at the discretion of
the firm. Current hourly rates of Bragar Wexler's
attorneys and staff ranges from $225-$500 for attorneys
and $150 for legal assistants.
-- the firm is retained, with compensation and reimbursement
of expenses to be determined in accordance to the Letter
Agreement and the applicable rules as well as subject to
objections to the amount of compensation and
reimbursement of expenses.
-- the Bragar firm may investigate, initiate, commence and
prosecute any claims and defenses which the Committee
determines as appropriate and the fees and expenses of
the Debtors will pay the firm on the same terms as all
other professionals retained in the Debtors' cases. If
the Debtors have no cash, which is not subject to a
security interest in favor of the Banks, the Debtors will
pay the fees from lender funds up to the amount of
$500,000, which may be increased without prior order
order from the Court if all parties agree upon it. This
is provided, however, that the Banks are granted a lien
against any amounts distributable in the Debtors' cases
to general unsecured creditors represented by the
Committee in the full amount of the Bragar fees actually
awarded and paid, to the extent the payments have been
made out of lender funds, which amounts will be paid to
the Banks prior to any distributions to general unsecured
creditors. The Banks will bear the risk that the
unsecured creditor distributable amounts may not be
sufficient to reimburse the Banks for the full amount of
the Bragar fees.
-- the Bragar fees may not exceed the sum of $25,000 for the
period from the Retention Date through the date of
service of the Termination Notice unless otherwise agreed
by the parties.
-- the terms of the Third Stipulation are amended to provide
that the deadline for the Committee and the Debtors to
assert claims and defenses, which currently expires nunc
pro tunc to May 1, 2002, is extended without date.
However, if the parties elects to re-impose a deadline
with a written notice, the agreed deadline shall be
deemed reinstated.
-- neither the Bragar firm nor any person acting on behalf
of the Committee may seek further formal discovery of any
claims and defenses on or before the deadline unless such
discovery is in defense of any application, motion,
adversary proceeding or any proceeding commenced by the
Debtors or the Banks.
According to Alan J. Lipkin, Esq., at Willkie Farr & Gallagher,
in New York, 360networks Inc. and its debtor-affiliates have
serious concerns about the adequacy of disclosure in Sidley
Austin's ability to handle the investigation. The Debtors are
also concerned about duplication of services between Sidley and
Bragar Wexler.
However, the Debtors do not object to the application, as
modified and reserves their rights in connection to such
matters.
* * * * *
As previously reported, the Official Committee of Unsecured
Creditors asked to employ and retain Bragar Wexler Eagel &
Morgenstern as their special counsel to perform these services:
(a) to assist and advise the Committee in connection with the
Committee's investigation of the security interests,
liens and claims of the Banks;
(b) to commence, if necessary, and prosecute adversary
proceedings against the Banks and other necessary
parties, which shall include all aspects of discovery;
(c) in connection with any matter in which the Bragar Firm is
involved on behalf of Committee, to attend meetings and
negotiate with the representatives of the Debtors and/or
any party which is the subject of investigation by the
Committee or against which the Committee may commence an
adversary proceeding;
(d) in connection with any matter in which the Bragar Firm is
involved on behalf of Committee, to take all necessary
action to protect and preserve the interests of the
Committee concerning:
-- the prosecution of actions on their behalf, and
-- negotiations concerning all litigation in which the
Debtors are involved;
(e) in connection with any matter in which the Bragar Firm is
involved on behalf of Committee, to prepare on behalf of
the Committee all necessary adversary complaints and
related motions, applications, answers, orders, reports
and other papers in support of positions taken by the
Committee in any adversary proceeding;
(f) in connection with any matter in which the Bragar Firm is
involved on behalf of Committee, to appear, as
appropriate, before this Court, the Appellate Courts,
State Courts and the United States Trustee and to protect
the interests of the Committee before said Courts and the
United States Trustee; and
(g) to perform all other necessary legal services in these
Cases as is appropriate given the purpose and scope of
the Bragar Firm's retention, with those services
primarily related to present or former clients of Sidley.
Peter D. Morgenstern, Esq., a partner of the Bragar firm,
reported that, subject to this Court's approval, the Firm will
calculate its fees for professional services based on its
customary hourly billing rates. These rates are subject to
revision in the normal course of business. The current range of
customary hourly rates charged by the Bragar Firm is:
Partners: $300 to $500
Associates: $225 to $300
Legal Assistants and Staff: $100 to $150
(360 Bankruptcy News, Issue No. 23; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
ANC RENTAL: Secures Approval to Consolidate Ops. at 16 Airports
---------------------------------------------------------------
Friday, May 10, ANC Rental Corporation had its second Federal
Court win in as many weeks, when Federal Bankruptcy Court Judge
Mary Walrath approved its motion to consolidate operations at 16
airports nationwide.
This ruling brings to twenty-seven the number of airports
nationwide where ANC can operate its Alamo and National brands
under a single concession agreement, among them, Las Vegas,
Memphis, Houston Hobby, Detroit, Hartford, Jacksonville,
Pittsburgh, Springfield, MO., Melbourne, FL., and Huntsville,
AL. Airports approved in Friday's ruling are Cleveland, Key
West, Kansas City, Austin, Dallas-Love, Daytona, Savannah,
Tallahassee, Panama City, Fl., Fresno, CA., Syracuse, NY.,
Medford, OR., Harlingen, TX., Greensboro, NC., Birmingham, AL.,
and Santa Barbara, CA. The first consolidated airport, the
Cincinnati/Northern Kentucky International Airport, was approved
for consolidation on January 10.
Judge Walrath also approved the company's agreement with MBIA
Insurance Corporation to use on a revolving basis up to $2.3
billion of financing capacity provided by ARG Funding
Corporation, a wholly-owned subsidiary of ANC, to purchase new
vehicles. MBIA insures a portion of the debt issued by ARC
Funding Corporation, which is ANC's domestic fleet financing
subsidiary. She also extended the time the company had to review
its real estate contracts. Further, she enforced her ruling of
last week by precluding Hertz and Avis from attempting to block
ANC's consolidation motions that were approved Friday.
Friday's approval of the financing agreement secures the
company's access to fleet financing through late in the year
including the summer peak. The $2.3 billion of available
financing augments the previously approved $750 million in
medium-term notes, which are expected to be issued in the late
second quarter or early third quarter. The $2.3 billion, which
is insured by MBIA, brings the total fleet financing to $3
billion dollars for ANC. This financing will ensure that the
company continues to restock and build its fleet with new
automobiles from several major automobile manufacturers,
including GM, Chrysler, Mitsubishi, Nissan, Isuzu, Suzuki,
Toyota, and Subaru, among others.
"This is a tremendous step in our reorganization effort," said
Larry Ramaekers, President and CEO, ANC Rental Corporation. "The
airport consolidation win allows us to accelerate our
FastForward plan at airports across the country. And with the $3
billion in available financing, we will continue to add to our
fleet, assuring a wider choice of new cars for our customers in
the upcoming summer peak, and for the remainder of this year."
ANC also won a motion in court, granting the company an
additional 60 days to review and then assume or reject its real
estate leases.
ANC Rental Corporation, headquartered in Fort Lauderdale, is one
of the world's largest car rental companies with annual revenue
of approximately $3.2 billion in 2001. ANC Rental Corporation,
the parent company of Alamo and National, has more than 3,000
locations in 69 countries. Its more than 17,000 associates serve
customers worldwide with an average daily fleet of more than
275,000 automobiles.
APW LTD.: Says 83% of Senior Lenders Agree to Prepackaged Plan
--------------------------------------------------------------
APW Ltd., is circulating a Disclosure Statement to all of its
Senior Lenders and general unsecured creditors asking for their
votes in favor of a plan of reorganization that, through a
prepackaged or substantially prenegotiated chapter 11 filing,
will implement a major financial restructuring and without
affecting its operating subsidiaries' day-to-day business
operations.
A group of APW's senior secured bank lenders holding more than
66-2/3% in amount and a majority in number of claims
representing the senior secured bank debt, have indicated that
they will vote for the Plan. Currently, Oaktree Capital
Management, J.P. Morgan Chase Manhattan, Royal Bank of Scotland,
Bank of America and Credit Lyonnais, hold approximately 83% of
the indebtedness outstanding under the Amended and Restated
Multicurrency Credit Agreement, dated as of May 15, 2001, as
amended, among APW Ltd., the financial institutions party
thereto and Bank of America, National Association, as
administrative agent, and the Revolving Credit Agreement, dated
as of May 15, 2001, among APW Electronics Group PLC, certain
affiliates, the financial institutions party thereto and The
Royal Bank of Scotland, as agent.
The Plan provides that the Senior Lenders will recover 73.1% of
$225,000,000 owed in the form of:
* 200 million common shares of reorganized APW and warrants
to purchase up to 40,569,359,830 APW Common Shares in
reorganized APW, representing 99.9% of the equity
interest in reorganized APW on an as-converted and fully
diluted basis, and
* $100 million of New 5-Year Secured Notes, which will be
guaranteed by all of reorganized APW's subsidiaries and
secured by substantially all of APW's and the
subsidiaries' assets.
APW's general unsecured creditors, owed $2,000,000 will receive
a pro rata distribution from a $300,000 pool, and recover 15% on
account of their claims. Holders of general unsecured claims
against Vero Electronics, Inc. will receive a pro rata
distribution from a $200,000 pot in full compromise and
satisfaction of their $1,100,000 claims, seeing an 18.2%
dividend.
Also, to the extent available, up to $10,000,000 under the
Company's existing directors' and officers' liability insurance
policy will fund distributions to holders of Securities
Litigation Claims arising out of three lawsuits against the
Company, one current and one former executive, before the United
States District Court for the Eastern District of Wisconsin in
connection with alleged violations of Federal securities laws
which preceded a drop in the price of its common stock ending on
March 20, 2001. The first of these suits, captioned Stewart
Norman Hicks v. APW Ltd., et al., was filed on December 10,
2001. The subsequently filed suits are captioned Robert Betz v.
APW Ltd., et al., and Market Street Securities v. APW Ltd., et
al. The complaints for all three suits allege violations of the
Federal securities laws and seek certification of a plaintiff
class consisting of all purchasers of the Company's common stock
between September 26, 2002 and March 20, 2001, inclusive. The
complaint does not quantify the damages. The Company has not yet
been served with the complaints but understands that the
plaintiffs intend to seek consolidation of the suits. At this
time, APW says it cannot evaluate the merits of these claims --
but if D&O insurance is available to pay these claims, the
Plaintiffs will get it.
All holders of APW Common Shares will retain their APW Common
Shares and will be granted warrants to purchase 2,473,343,636
APW Common Shares, which is equal to 4% of the equity interest
in the reorganized APW on a fully diluted basis. The Plan
provides that existing warrants and shares will be terminated
and no distribution will be made on account of those interests.
APW is being advised in its restructuring transaction by:
Richard P. Krasnow, Esq.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Telephone (212) 310-8000
Fax (212) 310-8007
- and -
Mr. Phil Jacob
Credit Suisse First Boston
Restructuring Group
Eleven Madison Avenue
New York, New York 10010
Telephone (212) 325-2000
APW's President and CEO Richard G. Sim and Vero Electronics'
President Susan M. Hrobar are convinced that this Plan is in the
best interests of all creditors. They urge all creditors to
join the Senior Lenders in supporting the Plan. In the event
that the Company were liquidated, the executives note, unsecured
creditors would receive nothing. A liquidation of the Estates
would generate roughly $191 million in cash -- not even close to
paying off secured creditors' claims. This Plan -- with a
target July 15, 2002 Effective Date -- delivers superior
recoveries to all stakeholders.
APW does not have the resources to pay the existing senior bank
debt and maintain sufficient liquidity for business operations.
By eliminating that indebtedness, the Plan will both improve the
Plan Proponents' financial condition and overall
creditworthiness and enhance APW's ability to maintain its
position in the market. The Plan Proponents are seeking your
vote on the Plan prior to the commencement of their chapter 11
cases. By using this "prepackaged chapter 11 reorganization"
method, the Plan Proponents anticipate that day-to-day business
operations will not be impacted, the chapter 11 cases will be
significantly shortened, and the administration of the cases
will be simplified and less costly.
Once the Plan takes effect, APW's long-term debt will include
a New $110,000,000 Working Capital Facility and the New
$100,000,000 Secured Loan Agreement. After writing-off all
goodwill, Reorganized APW's balance sheet will show roughly
$478 million in assets and $394 million in total liabilities.
Shareholder equity will swing from negative $165 million to
positive $84 million. Reorganized APW projects increasing sales
and future profits:
For the Year Ending Net Sales Net Income EBITDA
------------------- --------- ---------- ------
August 31, 2002 $840,684,000 ($90,965,000) $7,155,000
August 31, 2003 $820,000,000 ($13,874,000) $38,881,000
August 31, 2004 $955,000,000 $7,904,000 $62,002,000
August 31, 2005 $1,110,000,000 $27,093,000 $84,356,000
August 31, 2006 $1,245,000,000 $46,652,000 $108,306,000
August 31, 2007 $1,375,000,000 $60,974,000 $123,813,000
APW believes that its financial difficulties are attributable
primarily to the downturn experienced by the technology markets
the Company serves. Sales slowed and cash flows weakened more
than expected in 2001. On March 19, 2001, APW announced that it
was in breach of financial covenants under the Senior Credit
Facilities and began discussions with the Senior Lenders to
amend the credit agreements. On May 15, 2001, APW amended the
terms of the Senior Credit Facilities for the first time. At
that time, the Senior Lenders received warrants to purchase APW
Common Shares representing 5% of the equity interest in APW. As
part of the Company's attempt to restructure operations to
reduce fixed cost base and return to profitability, the Company
reduced its employee headcount by approximately 40% from March
2001 through March 2002. Additionally, the Company closed or
consolidated, or was in the process of closing or consolidating,
18 facilities and has reduced fixed cost base by approximately
30%. For the months of April through August of 2001, the
Company's sales had effectively stabilized at approximately $95
million per month. During the fourth fiscal quarter ended
August 31, 2001, the Company generated approximately $17 million
of EBITDA with sales of $290 million, compared to $7 million of
EBITDA with sales of $300 million for the third fiscal quarter
ended May 31, 2001. However, with the events of September 11,
2001, sales fell dramatically. Subsequent to September 11,
2001, sales have stabilized at approximately $70 million per
month. The Company inked another handful of amendments to the
Senior Credit Agreement. The Plan is the culmination of months
of negotiations and, the Company believes, implements a
permanent solution to APW's financial difficulties.
APW, based in Waukesha, Wisconsin (but incorporated in Bermuda),
is a leading global provider of technically enabled
manufacturing services, focused on designing and integrating
large electronic products. The Company has the ability to
design and manufacture various subsystems for electronic
products, including enclosures, thermal management systems,
backplanes, power supplies, printed circuit board assemblies,
and cabling, either as integrated custom systems or as
individual subsystems. APW Customers include industry leaders
such as Applied Materials, Compaq, Cymer, EMC, Ericsson,
Fujitsu, Hewlett-Packard, IBM, Lucent, Motorola, NCR, Nortel
Networks and Sun Microsystems. The Company's ten largest
customers comprised 42% of net sales in fiscal 2001. As of
March 31, 2002, APW's subsidiaries employed approximately 6,700
people in 35 locations strategically located around the world to
service its international customer base.
APPLIEDTHEORY: Gets Approval to Sell Access Business to FASTNET
---------------------------------------------------------------
AppliedTheory Corporation (Nasdaq: ATHYQ), an Internet
knowledge, development and managed hosting partner for hundreds
of large corporations and government agencies, announced that it
is proceeding with an auction process to sell its assets
following court approval of contracts to sell the company's
access business to FASTNET Acquisition Corp., and its managed
hosting and development services business to ClearBlue
Technologies Management, Inc.
AppliedTheory filed voluntary petitions for reorganization under
Chapter 11 of the U.S. Bankruptcy Code on April 17, entering
into what are commonly referred to as "stalking horse" contracts
to sell its Internet access and managed hosting and development
business units. After other companies have the opportunity to
make competitive bids, the court will ultimately determine the
winning "highest or best" bid based on the price offered and a
number of other factors.
AppliedTheory has created a Web-based document delivery system
to provide qualified, potential bidders with easy access to the
pending asset purchase agreements with associated schedules and
other related due diligence information. Potential bidders may
register to qualify for access to the site at
http://www.appliedtheory.com/APArequest
AppliedTheory CEO Danny E. Stroud said he has been encouraged by
the speed and focus of the reorganization process so far, and
expects the winning bid to be determined within the month. The
company maintains a significantly strong leadership position in
the managed hosting services and related applications
development industry with large enterprise customers including
federal and state government agencies, large corporations,
health care organizations and education institutions.
"We expect our customers will continue to be served with an even
stronger and richer product offering," Stroud said. "Our
intention all along has been to enhance the operational
strengths and legacy of our world-class service offering and
customer service that have earned AppliedTheory the trust and
confidence of some of the nation's largest and most complex
Internet services customers."
Industry pioneer AppliedTheory combines its unparalleled
knowledge base with the ability to build, integrate and manage
Internet business solutions in an increasingly complex online
economy. AppliedTheory's proactive responsiveness to changing
business requirements has earned the company a 95 percent
retention rate. The company offers a comprehensive and fully
integrated suite of managed hosting, connectivity and security
services, providing one of the industry's most reliable single
sources for large enterprise Internet needs. For additional
information about the company, visit
http://www.appliedtheory.com
BERGSTROM CAPITAL: Liquidation Likely if Merger Plan Fails
----------------------------------------------------------
On March 15, 2002, Bergstrom Capital Corporation (AMEX:BEM)
reported that its Board of Directors had engaged a financial
consultant, Lipper Consulting Services, Inc., to assist the
Company in seeking a tax-free merger or other business
combination with a larger registered investment company. Any
such combination would require a two-thirds vote of the
stockholders.
The Board of Directors decided to take this action in view of
the relatively small size of the Company and the increasing
expense and effort required to operate it. In addition, members
of the Board, including the Chairman and the President of the
Company, have indicated their desire to pursue other interests.
If an appropriate combination cannot be achieved, the Board will
consider other alternatives, including the liquidation of the
Company.
In order to preserve the Company's flexibility in structuring a
possible transaction, the Board of Directors, on May 6, 2002,
suspended the Company's distribution policy, which was adopted
by the Board of Directors on May 12, 1997. That policy provided
for an annual distribution to the Company's stockholders, during
the month of June each year, of a cash dividend at the rate of a
minimum of 6% of the Company's net asset value per share as
calculated on the last business day in March of that year. As a
result of the suspension of the distribution policy, no annual
distribution will be made in June 2002. Instead, the annual
distribution may be made at a later date in 2002 or a special
distribution, to comply with the minimum distribution
requirements of the Internal Revenue Code, may be made in
connection with a possible transaction. The date and amount of
any distribution will be announced at a later date.
Further, in order to preserve the Company's flexibility in
structuring a possible transaction, the Board has instructed the
Company's investment adviser to refrain from making new equity
investments. A consequence of this action is that the Company's
holdings of cash equivalents and other short-term investments
are likely to increase.
The Company is a closed-end, non-diversified investment company
whose principal investment objective is long-term capital
appreciation, primarily through investment in equity securities.
The Company's shares are traded on the American Stock Exchange
under the symbol BEM.
BETHLEHEM STEEL: Selling Weyhill Guest House To Saucon for $4.2M
----------------------------------------------------------------
Bethlehem Steel Corporation and its debtor-affiliates own the
Weyhill Guest House located at the Upper Saucon Township in
Lehigh County, Pennsylvania. This is adjacent to the Weyhill
Golf Course owned by Saucon Valley Country Club. The Debtors
use the Guest House as a business meeting and entertainment
center.
On July 26, 2001, the Debtors engaged the services of Legg Mason
Real Estate Services to evaluate the potential value of the sale
of the Premises and the Caretaker House. On September 24, 2001,
Legg Mason completed its marketing assessment and valuation with
these results, if the Original Property is subdivided and sold
separately and exclusive of furnishings:
Property Market Value
-------- ------------
Guest House $3,300,000 - $3,600,000
3 adjacent lots $900,000 - $1,050,000
Caretaker House $300,000 - $350,000
With the proximity of the golf course, the Debtors marketed the
property to Saucon Valley because:
(a) Saucon Valley would likely comply with the deed of
restriction on the Premises which limits its use to the
current use or residential use by charging its members
and guest for the use of the Guest House; and
(b) Saucon Valley would likely be willing to accommodate the
Debtors' desire for limited continued use of the Guest
House for their Board of Directors meetings and other
functions.
On January 23, 2002, Saucon Valley offered to purchase the
Original Property, including all furnishings for $4,500,000 but
the Debtors rejected the offer.
On January 30, 2002, the Debtors accepted the offer of M.J.
Caruso to buy the Caretaker House for $400,000.
Subsequently, Saucon Valley revised its offer, excluding the
Caretaker House, which states:
(a) $4,200,000 for the Guest House and the surrounding
property;
(b) under a separate Agreement, the Debtors are allowed to
use up to 84 room rentals per month for up to one year,
the value of which is $150,000; and
(c) under a separate Agreement, Saucon Valley will have the
right to purchase certain personal property on the
Premises having a current, total fair market value of
$50,000.
Prior to accepting the offer, the Debtors tried to get better
offers from seven individuals who previously showed interest in
acquiring the Property. However, no better offer was received,
so the Debtors accepted Saucon Valley's offer as the best and
highest offer on February 7, 2002.
Accordingly, the Debtors seek the Court's authority to sell the
Weyhill Guest House, the surrounding property and certain
furnishings, free and clear of any claims and encumbrances to
Saucon Valley and to enter into three separate Agreements
relating to the sale.
Jeffrey L. Tanenbaum, Esq., at Weil, Gotshal & Manges, LLP, in
New York, discloses to Judge Lifland the salient terms of the
three Agreements:
(1) Sale Agreement
(a) Property to be Sold:
-- a tract of land containing approximately 24.8 acres
located at Upper Saucon Township, Lehigh County,
Commonwealth of Pennsylvania,
-- all appurtenant rights thereto, if any, and
-- all real improvements thereon;
(b) Purchase Price: $4,200,000 to be paid to the Debtors
upon settlement;
(c) Settlement: In no event will settlement be later than
June 14, 2002 unless otherwise agreed to by both
parties;
(2) The Furnishings Agreement
(a) Property to be Sold: The Debtors have inventoried and
identified all personal property in the Guest House,
including furniture, bedding, kitchen and dining
supplies, appliances, rugs and floor coverings,
shelving, and storage units, a list of which is attached
to the Furnishings Agreement;
(b) Consideration: For good and valuable consideration
associated with the purchase of the Guest House, Saucon
Valley is entitled to select and retain specifically-
valued items of personal property identified on the
Furnishings Agreement, up to a total valuation of
$50,000, based on the appraised fair market values set
forth thereon. Saucon Valley will pay the Debtors
$50,000 contemporaneously with settlement on Saucon
Valley's purchase of the Guest House.
(c) Option to Purchase: After its selection and retention of
personal property with a total valuation of $50,000,
Saucon Valley will be afforded the sole and exclusive
first right to identify additional items of personal
property for which Saucon Valley will pay the stated
appraised valuation to the Debtors. The Debtors will
afford Saucon Valley the first right to purchase such
items, prior to other auction or sale to third parties
or otherwise. Saucon Valley will identify and select
such additional items within seven business days prior
to the settlement on the Guest House;
(d) Unique Property. Any items deemed to be "unique" by the
Debtors, which the Debtors wish to retain, is not to
be subject to Saucon Valley's option to purchase, but
will be removed by the Debtors prior to the settlement
on the Guest House. Saucon Valley will allow the Debtors
to retrieve items not designated as "unique" for one
year from the date of settlement. Each party must
insure its interests with respect to the personal
property not acquired by Saucon Valley. To the extent
possible, the Debtors' personal property will be
insured under policy and the Debtors shall pay any
additional premium as a result thereof;
(e) Representations: All items of personal property
addressed in the Furnishings Agreement are to be taken
or purchased by Saucon Valley in their "as is, where is"
condition.
(3) Lodging Agreement
(a) Saucon Valley's Continuing Obligations: Saucon Valley
will continue to operate the Guest House in a first-
class and professional manner, similar to such as was
operated by the Debtors prior to the time of closing;
(b) Available Rooms: The parties acknowledge there are
twelve guest rooms or suites available in the Guest
House. For each of the twelve full months after
settlement on Saucon Valley's acquisition of the Guest
House, Saucon Valley will provide the Debtors with a
total of 84 room nights per month. The Debtors are to
reserve these room nights at least fourteen days prior
to the Debtors' need for such room nights. With the
exception of dates when the Guest House is used for the
Debtors' Board of Director meetings, Saucon Valley
retains the right and privilege to utilize all other
guest rooms not reserved by the Debtors for the purposes
of Saucon Valley and its members. Saucon Valley is under
no obligation to restrict duly-reserved Saucon Valley
room nights to accommodate the Debtors' room reservation
requests. Saucon Valley is to provide a maximum of
eighty-four room nights per month for the benefit of
the Debtors, and the Debtors agree that such room
nights may not be "carried over" or accumulated by the
Debtors.
(c) Use of Guest Rooms: The Debtors have identified specific
dates during which time the Debtors' Board of Directors
will hold meetings and business-related activities at
the Guest House. Because such meetings are confidential
and require that the Guest House be utilized only for
Debtors' purposes, Saucon Valley will not utilize or
allow occupancy of guest rooms for any purposes other
than for the use of the Debtors and its Board of
Directors on the dates agreed on the Lodging Agreement.
The Debtors may change the dates by giving Saucon Valley
at least thirty days prior notice of the modifications,
subject to Saucon Valley's rights in the preceding
paragraph.
(d) Amenities and Services: In providing room nights to
the Debtors, Saucon Valley will afford the Debtors these
amenities and services:
-- Food Service: Continental breakfast and evening snack
arrangements, a la carte, and bar service which will
be charged to the Debtors;
-- Linens and Cleaning: All linens, towels, and cleaning
services will be provided by Saucon Valley in
accordance with good lodging practices; and
-- Other: Use of amenities located on the site,
including pool room, card room, locker facilities,
and patios;
(e) Additional Charges: The Debtors will pay Saucon Valley,
at its published rates or charges, for all additional
amenities, food or beverage services, and the like, as
well as all standard service charges and taxes related
thereto. Saucon Valley will bill the Debtors for such
charges and expenses on a monthly basis.
(f) Fair Market Value: Both Parties agree that the fair
market value of the Lodging Agreement is established to
be $150,000; and
(g) Conditions to Closing: The Lodging Agreement, and all
rights and obligations of the parties thereunder, are
expressly conditioned and contingent upon Saucon
Valley's closing on the purchase and acquisition of the
Guest House from the Debtors.
Pursuant to Section 363(b) of the Bankruptcy Code, Mr. Tanenbaum
contends that the sale is advantageous to the Debtors' estate
because:
(a) the Agreements represent substantial value to the
Debtors' estates, providing favorable terms for the
disposition of assets that are not necessary to the
Debtors' successful reorganization;
(b) the Lodging Agreement allows the Debtors to sell an asset
they can no longer afford to maintain while retaining
certain benefits of the asset;
(c) the use restriction on the Premises could render the sale
of the Premises to another entity unlikely. Moreover,
current zoning precludes a multitude of uses that may be
desirable to other potential purchasers, and access to
the Guest House is by way of a private roadway system
owned and operated by Saucon Valley; and
(d) the terms and condition of the Agreements were negotiated
by the Parties at arms' length and in good faith. Saucon
Valley does not hold any interest in any of the Debtors
and is not otherwise affiliated with the Debtors or their
officers or directors.
If the sale is not approved, Mr. Tanenbaum fears that the
Debtors may not be able to find another purchaser willing to
provide the same value.
Mr. Tanenbaum argues that selling the Property free and clear of
liens, claim and encumbrances, pursuant to Section 363(f) of the
Bankruptcy Code is only appropriate because the Property is to
be sold at fair market value. Thus, the holder of any lien can
be compelled to accept money in satisfaction of the lien.
Furthermore, pursuant to Section 1146(c) of the Bankruptcy Code,
the Debtors ask the Court to categorize the sale to be exempted
from applicable transfer taxes because the sale will take place
prior to the confirmation of any plan.
Mr. Tanenbaum believes that the private sale of the Property is
appropriate because the Agreements represent the highest and
best offer that the Debtors have received to date.
Nevertheless, Mr. Tanenbaum states, the sale will remain subject
to higher and better offers.
However, the Debtors request the Court to consider the extensive
marketing made as enough effort to get the best offer for the
sale so that no further marketing and auction should be made. To
obtain further offers, Mr. Tanenbaum believes that the Motion
and its annexes provide the potential bidders sufficient
information to make a bid. (Bethlehem Bankruptcy News, Issue No.
15; Bankruptcy Creditors' Service, Inc., 609/392-0900)
DebtTraders reports that Bethlehem Steel Corporation's 10.375%
bonds due 2003 (BS03USR1) are quoted between 10 and 13.5. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=BS03USR1for
some real-time bond pricing.
BURNHAM PACIFIC: Winding-Up Affairs and Liquidating Assets
----------------------------------------------------------
Burnham Pacific Properties, Inc. (NYSE: BPP) announced that, in
accordance the Plan of Complete Liquidation and Dissolution
previously approved by its stockholders, Burnham intends to
enter into a liquidating trust agreement on June 28, 2002 for
the purpose of winding up Burnham's affairs and liquidating
Burnham's assets. It is currently anticipated that, on June 28,
2002, Burnham will transfer its then remaining assets to (and
its then remaining liabilities will be assumed by) the Trustees
of the BPP Liquidating Trust, and Burnham will be dissolved.
June 27, 2002 will be the last day of trading of Burnham common
stock on the New York Stock Exchange, and Burnham's stock
transfer books will be closed as of the close of business on
such date.
Under the terms of the proposed Trust Agreement, on June 28,
2002, each stockholder of Burnham on the Record Date
automatically will become the holder of one unit of beneficial
interest in the BPP Liquidating Trust for each share of Burnham
common stock then held of record by such stockholder. After June
28, 2002, all outstanding shares of Burnham common stock
automatically will be deemed cancelled, and the rights of
beneficiaries in their Units will not be represented by any form
of certificate or other instrument. Stockholders of Burnham on
the Record Date will not be required to take any action to
receive their Units. The Trustees will maintain a record of the
name and address of each beneficiary and such beneficiary's
aggregate Units in the BPP Liquidating Trust. Subject to
certain exceptions related to transfer by will, intestate
succession or operation of law, the Units will not be
transferable, nor will a beneficiary have authority or power to
sell or in any other manner dispose of any Units.
It is currently contemplated that the initial co-trustees of the
BPP Liquidating Trust will be Scott C. Verges and an
unaffiliated third party appointed by the board of directors of
Burnham. Successor trustees may be appointed to administer the
BPP Liquidating Trust in accordance with the terms of the Trust
Agreement. It is expected that from time to time the BPP
Liquidating Trust will make distributions of its assets to
beneficiaries, but only to the extent that such assets will not
be needed to provide for the liabilities (including contingent
liabilities) assumed by the BPP Liquidating Trust. No
assurances can be given as to the amount or timing of any
distributions by the BPP Liquidating Trust.
For federal income tax purposes, on June 28, 2002, stockholders
of Burnham on the Record Date will be deemed to have received a
pro rata share of the assets of Burnham to be transferred to the
BPP Liquidating Trust, subject to such stockholder's pro rata
share of the liabilities of Burnham assumed by the BPP
Liquidating Trust. Accordingly, each stockholder will recognize
gain or loss in an amount equal to the difference betweenthe
fair market value of such stockholder's pro rata shCT: Daniel
B. Platt, Chief Financial Officer of Burnham Pacific.
DT INDUSTRIES: Executes Recapitalization Pacts With Creditors
-------------------------------------------------------------
DT Industries, Inc. (Nasdaq: DTII), an engineering-driven
designer, manufacturer and integrator of automation systems and
related equipment used to manufacture, assemble, test or package
industrial and consumer products, has executed the
recapitalization agreements with its senior creditors,
subordinated debt holders and equity purchasers. Previously,
the company announced agreements-in-principle covering these
transactions.
The company also said that it has filed its preliminary proxy
statement on Schedule 14A with the Securities and Exchange
Commission with respect to the special meeting of stockholders,
which is expected to be held in mid-June, in connection with the
issuance of 6,260,658 shares in conjunction with the exchange of
$35,000,000 of 7.16% Convertible Preferred Securities of DT
Capital Trust plus all accrued and unpaid interest through March
31, 2002 at an exchange price of $8.00 per share and the sale of
7,000,000 shares in a private placement to several current
stockholders at $3.20 per share.
The Company's stockholders are urged to read the preliminary
proxy statement, and any other relevant documents filed by the
Company with the SEC, because they contain or will contain
important information about the Company and the proposed
transactions. You may obtain these documents free of charge at
the web site maintained by the SEC at http://www.sec.gov In
addition, you may obtain these documents free of charge by
making your request to the Company's General Counsel, Dennis
Dockins, at 907 West Fifth Street, Dayton Ohio 45407, telephone
number: 937/586-5600.
The Company and its directors and executive officers may be
deemed to be participants in the solicitation of proxies from
the Company's stockholders with respect to the issuance of
common stock in the private placement and the TIDES
restructuring. Information regarding the Company's directors
and executive officers is included in the Company's proxy
statement for its 2001 Annual Meeting, which was filed with the
SEC on October 4, 2001. More recent information regarding the
beneficial ownership interests in Company common stock of the
Company's directors and executive officers and information
regarding the Company is included in the preliminary proxy
statement regarding the proposed issuance of common stock in the
private placement and the TIDES restructuring filed with the
SEC.
ENRON CORP: Bayerische Moves to Initiate Rule 2004 Exam
-------------------------------------------------------
Bayerische Hypo-und Vereinsbank AG asks the Court for an order
pursuant to Rule 2004 of the Federal Rules of Bankruptcy
Procedure authorizing the issuance of a subpoena duces tecum as
to Enron Corporation and Williams Energy Marketing & Trading
Company in order to compel the production of certain documents.
Brian M. Cogan, Esq., tells the Court that Enron and Bayerische
are parties to Letter of Credit and Reimbursement Agreement.
Under the Agreement, Enron could request one or more letters of
credit to "support the performance of its obligations to one or
more beneficiaries." In turn, Mr. Cogan says, Bayerische could
(but was not obligated to) issue letters of credit for that
purpose.
On September 7, 2001, Bayerische issued to Enron -- on behalf of
Enron Power Marketing -- a Standby Letter of Credit in the
amount of $54,000,000 for the benefit of Williams Energy
Marketing & Trading Company. The Letter of Credit had an
expiration date of October 31, 2001. Mr. Cogan relates that
Bayerische was not provided with the agreements or other
documentation between Enron and Williams to which the Letter of
Credit corresponded.
Late October 2001, Enron asked for an extension of the Letter of
Credit's expiry date to November 30, 2001. Accordingly, Enron
and Bayerische executed a letter agreement that:
(a) established a cash collateral account of $27,000,000,
(b) gave Bayerische a security interest and a lien upon that
account,
(c) authorized Bayerische to file a statement in the UCC
filing office naming Enron as a debtor and setting the
cash collateral account as collateral, and
(d) extended the expiration date of the Letter of Credit to
November 30, 2001.
On November 30, 2001, Mr. Cogan recounts that Williams requested
payment from Bayerische on the Letter of Credit. According to
Mr. Cogan, Williams made two drafts on the Letter of Credit, one
in the amount of $11,200,000, and the second in the amount of
$42,800,000. Along with these drafts, Mr. Cogan says, Williams
provided Bayerische with a Beneficiary Statement, alleging that
Enron had failed to remit payment to Williams under the terms of
their contract and invoices.
In light of these events, Bayerische believes it is necessary
and appropriate to obtain documentary discovery from Enron and
from Williams, pursuant to Bankruptcy Rule 2004, in order to
determine:
-- whether Williams was rightfully a Beneficiary and
therefore a proper creditor under the Agreement and under
the transaction between Williams and Enron;
-- whether Enron actually defaulted on the underlying
agreements between Williams and Enron, thereby triggering
payment under the Letter of Credit;
-- whether Williams was thus entitled to draw upon the Letter
of Credit in the amount of $54,000,000 as a result of
Enron's alleged default; and
-- whether, given the outcome of these issues, Bayerische is
a proper creditor of Enron under the Agreement.
Mr. Cogan explains that examination of these matters will also
assist Bayerische in preparing its proof of claim or possibly
allow recovery from non-debtor sources. (Enron Bankruptcy News,
Issue No. 26; Bankruptcy Creditors' Service, Inc., 609/392-0900)
ENRON CORP: Sonoco Asks Court to Lift Stay to Permit Setoff
-----------------------------------------------------------
Sonoco Products Company entered into a Commodity Management
Agreement with Enron Energy Services Inc. on April 12, 2000,
wherein EESI supplied electricity and related services to
Sonoco.
With the Debtors' rejection of the Electricity Agreement,
Michael J. Venditto, Esq., at Kensington & Ressler LLC, in New
York, relates that it gave rise to Sonoco's pre-petition claim
against EESI in the amount of $1,722,326.
Sonoco and EESI are also parties to an Enovative Lite Energy
Services Agreement for the supply of gas to the Tiffon Ohio
Plant of Sonoco. According to Mr. Venditto, Sonoco has received
or anticipates receiving invoices from EESI for gas supplied
under the Tiffon Gas Agreement:
Invoice No. Invoice Date Period Covered Amount
----------- ------------ -------------- ------
435438 3/23/02 10/31/01 to 12/03/01 $3,945
435439 3/23/02 12/03/01 to 01/04/02 $3,695
Not Available January 2002
Not Available February 2002
Furthermore, Sonoco also entered into a Platform Agreement with
Enron Energy Services Operations Inc. and a Commodity Management
Agreement dated June 29, 2001 with EESI, by which EESI supplied
natural gas and related services to Sonoco. Mr. Venditto
reminds the Court that the Debtors also rejected the Platform
Agreement and the Gas Management Agreement. But Enron continued
to provide gas to certain facilities of Sonoco pursuant to the
terms of a Revised Natural Gas Pricing Confirmation. Sonoco has
received or anticipates to receive these invoices from EESI for
gas deliveries pursuant to the Gas Confirmations:
Invoice
Invoice No. Date Site Period Covered Amount
----------- ------- ---- -------------- ------
Not Available Sumner September 2001
Not Available Sumner October 2001
S-112001-00002639 02/22/02 Sumner November 2001 $68,250
S-122001-00000081 01/17/02 Rockton December 2001 43,200
S-122001-00001917 03/13/02 Industry December 2001 34,925
Not Available Franklin December 2001
S-012002-00000634 03/13/02 Industry January 2002 246
S-012002-00000742 03/15/02 Franklin January 2002 13,622
Not Available Franklin February 2002
Not Available Bolton November 2001
Not Available Richmond November 2001
Not Available Morristown November 2001
Not Available Fulton February 2001
Sonoco and Enron North America are also parties to a Contract
for Pulp Paper and Wood Products dated August 21, 2000. Mr.
Venditto relates that Sonoco is owed the sum of $110,866 by
Enron North America for pre-petition deliveries of paper
products under the Newsprint Agreement.
Sonoco also entered into an ISDA Master Agreement with Enron
North America related to the fixing of prices for old corrugated
containers. This OCC Swap Agreement was terminated by Sonoco on
February 21, 2002. Mr. Venditto admits that Sonoco may owe
Enron North America $179,469 pursuant to this Agreement.
Mr. Venditto asserts that these agreements contractually allow
for the setoff of debts and claims arising between Sonoco and
the Enron Affiliates:
Setoff 1 -- Tiffon Gas Agreement v. Electricity Agreement
Mr. Venditto notes that Section 5 of the Tiffon Gas
Agreement allows the setoff of any amounts owed by
Sonoco to EESI against claims for amounts owed by
EESI to Sonoco upon the occurrence of an "Early
Termination Date," which includes the filing of a
bankruptcy petition by EESI. Mr. Venditto contends
that the debts of Sonoco to EESI under the Tiffon
Gas Agreement and the claims of Sonoco against EESI
under the Electricity Agreement are mutual
obligations. Thus, Mr. Venditto says, Sonoco is
entitled to setoff the amount due EESI under the
Tiffon Gas Agreement against the claim of Sonoco
against EESI under the Electricity Agreement in the
amount of approximately $1,722,326.
Setoff 2 -- Gas Confirmations v. Electricity Agreement
Mr. Venditto relates that Paragraph 6 of Section 3
of the Gas Management Agreement allows the setoff of
amounts owed by Sonoco to EESI against any amounts
owed to Sonoco upon the occurrence of an "Early
Termination Date," which includes the filing of a
bankruptcy petition by EESI. Accordingly, Mr.
Venditto asserts that Sonoco is entitled to setoff
any amount due EESI under the Gas Confirmations
against the $1,722,326 claim of Sonoco against EESI
under the Electricity Agreement (or such claim
amount as may remain after allowing any other
setoffs).
Setoff 3 -- OCC Swap Agreement v. Newsprint Agreement
Mr. Venditto tells the Court that Section (g) of
Part 5 of the Schedule to the OCC Swap Agreement
allows the setoff of any amounts owed by Sonoco to
Enron North America against claims for any amounts
owed by Enron North America to Sonoco upon the
occurrence of "Early Termination Date," which
includes the filing of a bankruptcy petition by
Enron North America. Mr. Venditto points out that
the debt of
Sonoco to Enron North America under the OCC Swap
Agreement and claim of Sonoco against Enron North
America under the Newsprint Agreement are clearly
mutual obligations. Thus, Mr. Venditto contends
that Sonoco is entitled to setoff the $179,469 due
to Enron North America by Sonoco under the OCC Swap
Agreement against the $110,866 claim of Sonoco
against Enron North America under the Newsprint
Agreement, with the $68,603 balance remaining owed
by Sonoco to Enron North America being available for
other setoffs as may be allowed.
Setoff 4 -- OCC Swap Agreement v. Electricity Agreement
Because EESI is an "Affiliate" of Enron North
America, by virtue of Section (g) of Part 5 of the
Schedule to the OCC Swap Agreement, Mr. Venditto
says, the debt of Sonoco to Enron North America
under the OCC Swap Agreement and claim of Sonoco
against EESI under the Electricity Agreement are
mutual obligations. Mr. Venditto asserts that
Sonoco is entitled to setoff the remaining debt of
$68,603 due Enron North America by Sonoco under the
OCC Swap Agreement (after allowance of the setoff
Against Sonoco's claim under the Newsprint
Agreement) against the $1,722,326 claim of Sonoco
against EESI under the Electricity Agreement (or
such claim amount as may remain after allowing any
other setoffs).
Accordingly, Sonoco asks Judge Gonzalez to modify the automatic
stay to allow it to exercise its right of setoff:
1. Setoff the debt due from Sonoco to EESI under the Tiffon
Gas Agreement against the $1,722,326 claim of Sonoco
against EESI under the Electricity Agreement;
2. Setoff any amount owed by Sonoco to EESI under the Gas
Confirmations against the $1,722,326 claim of Sonoco
against EESI under the Electricity Agreement (or such
claim amount as may remain after allowing any other
setoffs);
3. Setoff the $110,866 claim due to Sonoco by Enron North
America under the Newsprint Agreement against the $179,469
debt due Enron North America by Sonoco under the OCC Swap
Agreement;
4. Setoff the $68,603 of debt still owed by Sonoco to Enron
North America under the OCC Swap Agreement (after
application of the setoff for Sonoco's claim under the
Newsprint Agreement) against the $1,722,326 claim of
Sonoco against EESI under the Electricity Agreement (or
such claim amount as may remain after allowing any other
setoffs);
In the alternative, Sonoco seeks the right to setoff any post-
petition debts due Enron Affiliates against any claim of Sonoco
against Enron Affiliates, which is determined to be a post-
petition claim. (Enron Bankruptcy News, Issue No. 26; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
ENRON CORP: GE Power Completes Acquisition of Wind Unit's Assets
----------------------------------------------------------------
GE Power Systems officially entered the wind power industry,
announcing that its acquisition of certain assets of Enron Wind
Corp. has been completed.
The new GE business, GE Wind Energy --
http://www.gewindenergy.com-- will be headed by Steven
Zwolinski, who has been serving as general manager of GE
Global Hydro.
GE announced in February its intent to acquire the global
supplier of wind turbine generators. Over the past three months,
all bankruptcy court and regulatory approvals required to
complete the acquisition have been received.
"The wind power industry offers tremendous opportunities for
growth and continued technology development," said Zwolinski.
"There are synergies from several GE businesses, in areas such
as plastics, transportation gearing applications and power
controls, that can be applied to wind turbine technology. Our
Six Sigma quality procedures can drive further improvements in
wind turbine generators. And our global sales force can deliver
the latest wind power technologies to regions throughout the
world."
Zwolinski continued, "Adding these valuable wind resources to GE
Power Systems' line of environmentally friendly power generation
options supports our on-going commitment to provide customers
with the broadest possible range of clean energy solutions for
the 21st century."
The wind energy sector is expected to grow about 20 percent a
year, with an emphasis on Europe, the U.S. and Latin America.
While Europe has been a focus of wind power activity,
opportunities remain in places like France and Italy, which have
very little wind power at this point. GE also will look for
opportunities to expand wind power technology into other regions
of the world, such as Japan and China, Zwolinski noted.
GE has acquired Enron Wind's fully integrated wind power
capabilities including power plant design, engineering and site
selection, and operation and maintenance services. Enron's line
of wind turbine generators includes units with outputs of 750
and 900 kilowatts and 1.5 megawatts, while larger systems of 3.2
and 3.6 megawatts are in development. Existing wind farm assets
will remain with Enron.
The advanced technology acquired by GE has played a key role in
the development of large turbines for on-shore and off-shore
applications. The company's largest machine, a 3.6-megawatt
system, is being tested on the coast of Spain. The development
of larger and more efficient wind power systems is making the
technology a more cost-competitive power generation option.
The headquarters location of GE Wind Energy has not been
finalized but the acquired business has 1,600 employees
worldwide with operations in Tehachapi, California and
manufacturing operations there and in Germany, Spain and the
Netherlands.
Zwolinski, who has a Bachelor of Science in Mechanical
Engineering and a Masters of Business Administration from
Rensselaer Polytechnic Institute in Troy, NY, joined GE in 1982.
In addition to GE Hydro, his recent positions have included
president and CEO of GE Energy Parts, Inc., general manager of
GE's Global Service Center Network, and Quality Leader for the
Six Sigma initiative.
GE Power Systems (www.gepower.com) is one of the world's leading
suppliers of power generation technology, energy services and
management systems with 2001 revenues exceeding $20 billion. GE
Power Systems provides equipment, services and management
solutions across the power generation, oil and gas, distributed
power and energy rental industries.
EXODUS COMMS: Hearing to Confirm 2nd Amended Plan Set for May 30
----------------------------------------------------------------
On April 24, 2002, EXDS, Inc., f/k/a Exodus Communications, Inc.
and certain of its subsidiaries filed a Second Amended
Disclosure Statement With Respect to Second Amended Joint Plan
of Reorganization of EXDS, Inc. and its Debtor Affiliates with
the United States Bankruptcy Court for the District of Delaware,
including the Second Amended Joint Plan of Reorganization of
EXDS, Inc. and its Debtor Affiliates. The Second Amended
Disclosure Statement was approved by the Bankruptcy Court on
April 24, 2002. The Company has commenced the solicitation of
votes of its creditors for approval of the Second Amended Plan.
Under the Second Amended Plan, upon confirmation of the Second
Amended Plan, the Company's common stock will be cancelled and
the holders of the Company's common stock will not be entitled
to, and shall not, receive or retain any property or interest in
property on account of such common stock. Accordingly, holders
of the Company's common stock will not receive any amounts with
respect to their shares.
The Second Amended Plan specifies estimated recovery amounts
allocated to the holders of the Company's senior notes,
subordinated notes and unsecured claims:
Class Description Treatment
----- ----------- ---------
1 Non-Tax Priority Claims 100% in Cash on the
Estimate: $200,000 Effective Date
2 Secured Claims 100% in Cash
Estimate: $5,000,000 to
$10,000,000
3 Senior Note Claims -- After giving effect to
holders of Exodus' a Subordination
* 11-5/8% Dollar Redistribution mechanism,
Denominated Senior Notes 14% to 24% in Cash
* 11-1/4% Dollar
Denominated Senior Notes
* 11-3/8% Euro Denominated
Senior Notes
* 10-3/4% Dollar
Denominated Senior Notes
* 10-3/4% Euro Denominated
Senior Notes.
Estimate: $1,919,442,500
4 Subordinated Note Claims -- $5,000,000 if Class 4 votes
holders of Exodus' to accept the Plan; otherwise
* 5-1/4% Convertible zero recovery
Subordinated Notes
* 5% Convertible
Subordinated Notes
* 4-3/4% Convertible
Subordinated Notes
Estimate: $992,861,000
5 General Unsecured Claims 9.3% to 16% from a pool of
Estimate: $250,000,000 to Available Cash
$750,000,000
6 Intercompany Claims Zero
7 Old Equity Cancelled
The confirmation hearing for the Second Amended Plan is
scheduled to take place on May 30, 2002.
DebtTraders reports that Exodus Communications Inc.'s 11.625%
bonds due 2010 (EXDS3) are trading between 17.75 and 18.5. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=EXDS3for
real-time bond pricing.
FRIEDE GOLDMAN: J.L. Holloway Steps Down as Board's Chairman
------------------------------------------------------------
Friede Goldman Halter, Inc. (OTCBB:FGHLQ) said that J.L.
Holloway has resigned from the Company's Board of Directors.
Mr. Holloway, 57, has been the Chairman of the Board since April
1997. He served as the Chief Executive Officer and President of
Friede Goldman Offshore, Inc. (formerly HAM Marine, Inc.) from
its formation in 1982 until April 1997.
"The Board has accepted J.L.'s resignation and is grateful for
the many years of service he has given to Friede Goldman Halter
and its predecessors," said T. Jay Collins, Board Member and
Chairman of the Restructuring Committee; "We wish J.L. the best
in his endeavors."
Friede Goldman Halter is a leader in the design and manufacture
of equipment for the maritime and offshore energy industries.
Its core operating units are Friede Goldman Offshore
(construction, upgrade and repair of drilling units, mobile
production units and offshore construction equipment) and
Halter Marine, Inc. (a significant domestic and international
designer and builder of small and medium sized vessels for the
government, commercial, and energy markets). As previously
announced, Friede & Goldman Ltd. (naval architecture and marine
engineering) is expected to be sold in early May, subject to a
bankruptcy court approved auction process.
GAP INC: S&P Revises Outlook on Low-B Credit Ratings to Negative
----------------------------------------------------------------
The outlook on The Gap Inc. was revised to negative from stable
on May 9, 2002. The 'BB+' long-term and 'B' short-term corporate
credit ratings on the company were also affirmed at that time.
The outlook revision was based on continuing negative sales
trends in the company's Old Navy and Gap divisions. The
company's same-store sales declined 17% in the first quarter,
with Gap Domestic falling 20% and Old Navy down 18%. Standard &
Poor's had expected The Gap's comparable-store sales to be
negative in the first quarter, but it had not anticipated a
sales decline of this magnitude.
The ratings on the San Francisco, California-based company
reflect management's challenge to improve business fundamentals
in its three brands in an industry that will continue to
experience intense competition, and to improve its weakened
credit protection measures. These factors are partially offset
by the company's strong business position in casual apparel, its
geographic diversity, and strong cash flow before capital
expenditures.
The Gap is a specialty retailer that operates stores selling
casual apparel, personal care products, and other accessories.
The company had about $2 billion of funded debt as of Feb. 2,
2002.
The Gap's operating performance has been poor for the past two
years. Operating margins have been declining since 1999, to
14.0% in 2001 from 19.9% in 2000 and 24.1% in 1999, and there
has been a commensurate fall in return on capital to only 8.4%
in 2001 versus an average of 32.0% from 1996 to 1999. Same-store
sales declined 17% through April 2002 after falling 13% in 2001
and 5% in 2000. The weak operating results were due to the
company's loss of focus on its core customer, merchandising and
execution mistakes, an aggressive store expansion program,
increased competition, and new entrants effectively copying The
Gap's historically successful business model. Standard & Poor's
believes the company has a significant opportunity to improve
operating performance later in 2002. Margin improvement could be
driven by lower markdowns or increased sales.
The Gap's credit protection measures have weakened substantially
due to the company's poor operating results and increased
leverage since 1997. EBITDA coverage of interest declined to 3.0
times (x) in 2001, from 5.2x in 2000 and 7.3x in 1999. The Gap
should generate greater cash flow in 2002 through its
substantial planned reduction of capital expenditures. The
company's debt leverage is high, with lease-adjusted total debt
to EBITDA at 4.7x in 2001 (pro forma for the $1.38 billion
senior unsecured convertible note offering). Nevertheless, The
Gap still has adequate financial flexibility. The company had
more than $1 billion of cash on the balance sheet at Feb. 2,
2002. Moreover, the recent issuance of $1.38 billion in
convertible notes bolsters liquidity.
Outlook
Standard & Poor's believes that The Gap will be challenged to
successfully execute its turnaround strategy within the context
of the weak U.S. retail environment and intense competition
within the sector. Ratings could be lowered if the company does
not improve operating performance, especially during the second
half of 2002.
Ratings List
The Gap Inc.
* Corporate credit rating BB+/Negative/B
* Senior unsecured debt BB+
* Senior secured bank loan BBB-
* Commercial paper B
DebtTraders reports that Gap Inc.'s 5.625% bonds due 2003 (GPS1)
are trading between 97 and 98.5. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=GPS1for
real-time bond pricing.
GLOBAL CROSSING: Employs Gloster as Special Bermuda Counsel
-----------------------------------------------------------
Global Crossing Ltd. and its debtor-affiliates asks and gains
permission to retain Elizabeth Gloster, Queen's Counsel (QC) as
their special Bermuda counsel in their Chapter 11 cases,
pursuant to Sections 327(e) and 328 of the Bankruptcy Code, and
effective as of the Petition Date.
* * *
As previously reported, Ms. Gloster will perform certain legal
services necessary during these Chapter 11 cases, and will
assist special counsel Appleby Spurling & Kempe in addressing
relevant issues arising under Bermuda law and with issues
arising pursuant to the coordination of proceedings thereunder.
The Debtors selected Elizabeth Gloster, QC as special Bermuda
counsel based on her special expertise in Bermuda law and the
international aspects of the Bermuda restructuring proceedings.
Elizabeth Gloster, QC will work closely with the Debtors' other
attorneys to ensure that there is no duplication of services
performed for or charged to the Debtors' estates.
Elizabeth Gloster, QC, informed the Court that the Debtors paid
her a total of 15,000 pounds for pre-petition services rendered
and related expenses. Ms. Gloster will also apply to the U.S.
Court for allowance of compensation and reimbursement of
expenses in accordance with applicable provisions of the
Bankruptcy Code, the Bankruptcy Rules and Orders of this Court.
The Debtors proposed to pay Elizabeth Gloster, QC her of 600
pounds (approximately $860 today) per hour, subject to periodic
adjustments. (Global Crossing Bankruptcy News, Issue No. 9;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
GOLDMAN INDUSTRIAL: Committee Taps Walsh Monzack as Counsel
-----------------------------------------------------------
The Unsecured Creditors' Committee of the chapter 11 cases of
Goldman Industrial Group, Inc. asks the U.S. Bankruptcy Court
for the District of Delaware for permission to retain the legal
services of Walsh, Monzack and Monaco, PA, nunc pro tunc to
April 3, 2002.
The Committee selected Walsh Monzack because of its attorneys'
experience and knowledge and because of the absence of any
conflict in interest.
Walsh Monzack will:
a) generally attend hearings pertaining to the cases, as
necessary;
b) periodically review applications and motions filed in
connection with the cases;
c) communicate with Miller Canfield, the Committee's lead
counsel, as necessary;
d) communicate with and advise the Committee and
periodically attend meetings of the Committee, as
necessary;
e) provide expertise on the substantive law of the State of
Delaware procedural rules and regulations applicable to
these cases; and
f) perform all other services for the Committee that are
necessary for the co-counsel to perform in these cases.
Walsh Monzack advises the Committee that its current hourly
rates of the professionals proposed to represent these cases
are:
a) Francis A. Monaco, Jr. $350 per hour
b) Joseph J. Bodnar $270 per hour
c) Kevin J. Mangan $240 per hour
d) Heidi Sasso $110 per hour
e) S. Lee Sobiocinski $110 per hour
Goldman Industrial Group, Inc., with its affiliates, provide
metalworking machinery to manufacturers; marketing and selling
original equipment primarily to the aerospace, automotive,
computer, defense, medical, farm, construction, energy,
transportation and appliance industries. The Company filed for
chapter 11 protection on February 14, 2002. Victoria W. Counihan
at Greenberg Traurig, LLP represents the Debtors in their
restructuring efforts.
IT GROUP: Walking Away From Coleman Evans Project Contracts
-----------------------------------------------------------
According to Gary A. Rubin, Esq., at Skadden, Arps, Slate,
Meagher & Flom LLP in Wilmington, Delaware, The IT Group, Inc.,
and its debtor-affiliates, and the United States Army Corps of
Engineers (the Debtors largest client), have since March 8,
2002 reached an Army Resolution regarding the allocation between
the Army Corps and the Debtors of the potential claim asserted
by Roy Weston. The amount of the claim is $9,600,000. Among
other things, the resolution limits the Debtors liability with
respect to the Weston claim to $500,000. Weston's counsel was
fully aware of the Debtors' ongoing negotiation with the Army
Corps.
Mr. Rubin assures the Court that dismissal of the Rejection
Motion will cause no legal prejudice to interested parties
because of the Army resolution and because Weston cannot show
actual legal prejudice as a result of the withdrawal.
Debtors Want to Assume Certain Contracts
The Debtors ask the Court for authority to assume certain
projects with the US Army Corps of Engineers, namely, PRAC I,
PRAC I and RAPID III.
Gary A. Rubin, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP
in Wilmington, Delaware, submits that assumption of the
executory contracts is appropriate due to Shaw's designation of
the Coleman Evans Project as part of the assets it desires to
purchase. The Debtors seek to assume and assign these contracts
effective as of the closing date of the sale of substantially
all of the Debtors' assets to Shaw.
* * * *
The Debtors asked the Court's authority to walk away from the
Coleman Evans Project as well as all related subcontracts and
other executory contracts effective as of the earlier of a
hearing on March 26, 2002 or the date of entry of the Court's
entry approving the Motion. The Debtors also seek authority to
require any party asserting a claim for rejection damages
relating to the rejection of these agreements to file a proof of
claim for rejection damages no later than 30 days following the
entry of an order approving the rejection of these agreements or
be forever barred from doing so.
In an effort to advance the Debtors' postpetition restructuring
and in the exercise of business judgment, Gregg M. Galardi,
Esq., at Skadden, Arps, Slate, Meagher & Flom LLP in Wilmington,
Delaware, tells the Court that the Debtors have determined that
it is in their best interests to reject the executory contracts.
The rejection of the Project is appropriate because The Shaw
Group Inc. has designated the Project and all related executory
contracts as part of the assets it desires to exclude from the
assets of the purchaser pursuant to the terms of that certain
Asset Purchase Agreement. Besides, the costs and risks
associated with completing this Project are high and the cost of
continuing with the Project would be burdensome to the Debtors'
estates. By rejecting the Executory Contracts, the Debtors can
minimize administrative costs. Mr. Galardi informs the Court
that the agreements to be rejected are the following:
Nondebtor Party Contract Address
------------------ ---------------- -----------------
US Army Corp of Engrs. PRIME CONTRACT Jacksonville, FL
Accutest Rapid III Orlando, FL
Baker Tanks Rapid III Jacksonville, FL
C & J Portables Rapid III & PRAC II Jacksonville, FL
Gray's Security Rapid III & PRAC II Jacksonville, FL
Harding ESE Rapid III Newberry, FL
Infinite Energy PRAC II Gainesville, FL
LWD, Inc. Rapid III Calvert City, KY
Mr Copy Rapid III Jacksonville, FL
Neff Rentals Rapid III Jacksonville, FL
Onyx Environmental Rapid III Chicago, IL
Pace Analytical Rapid III Minneapolis, MN
Pace Van Leasing Rapid III Indianapolis, IN
Pumping Solutions Rapid III Jacksonville, FL
Teco Peoples Gas PRAC II Tampa, FL
Roy Weston, Inc. PRAC II West Chester, PA
Williams-Scottsman Rapid III Jacksonville, FL
Waste Mgt Rapid III Jacksonville, FL
Wills Trucking Rapid III Richfield, Oh
(IT Group Bankruptcy News, Issue No. 9; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
J. CREW GROUP: Annual Revenues Decrease 5.8% to $778 Million
------------------------------------------------------------
Revenues for the J. Crew Group, Inc., (retailer of women's and
men's apparel, shoes and accessories operating under the J. Crew
(R) brand name), in the fiscal year ended February 2, 2002
decreased 5.8% to $778.0 million from $826.0 million in the
fiscal year ended February 3, 2001. The fiscal year ended
February 2, 2002 consisted of 52 weeks compared to 53 weeks in
fiscal year 2000. Net sales for the fifty-third week were $10.8
million. The net loss for fiscal 2001 was $11,011 while in
fiscal 2000 the Company experienced a net gain of $11,929.
Retail net sales decreased by 2.2% from $406.8 million in fiscal
2000 to $398.0 million in fiscal 2001. The percentage of the
Company's total net sales derived from J. Crew Retail increased
to 53.7% in fiscal year 2001 compared to 51.6% in fiscal 2000.
The decrease in net sales was due to a decrease of 15.5% in
comparable store sales. This decrease offset a 30% increase in
the number of stores from 105 at February 3, 2001 to 136 at
February 2, 2002.
J. Crew Direct net sales (which includes net sales from catalog
and internet operations) decreased by 9.3% from $284.8 million
in fiscal 2000 to $258.2 million in fiscal 2001. The percentage
of the Company's total net sales derived from J. Crew Direct
decreased to 34.8% in fiscal 2001 from 36.2% in fiscal 2000.
Catalog net sales decreased to $135.3 million in fiscal 2001
from $177.5 million in fiscal 2000. Pages circulated decreased
from 8.7 million in fiscal 2000 to 8.2 billion in fiscal 2001.
Internet net sales increased to $122.9 million in fiscal 2001
from $107.3 million in fiscal 2000 as the Company continued to
migrate catalog customers to the Internet.
J. Crew Factory net sales decreased from $96.1 million in fiscal
2000 to $85.1 million in fiscal 2001. The percentage of the
Company's total net sales derived from J. Crew Factory decreased
to 11.5% in fiscal 2001 from 12.2% in fiscal 2000. Comparable
store sales for J. Crew Factory decreased by 10.5% in fiscal
2001. There were 41 J. Crew Factory outlet stores at February 2,
2002 and February 3, 2001.
Other revenues which consist of shipping and handling fees and
royalties decreased to $36.7 million in fiscal 2001 from $38.3
million in fiscal 2000, primarily as a result of a decrease in
shipping and handling fees which is attributable to the decrease
in net sales of J.Crew Direct.
Management believes that cash flow from operations and
availability under the Revolving Credit Facility will provide
adequate funds for the Company's foreseeable working capital
needs, planned capital expenditures and debt service
obligations. The Company's ability to fund its operations and
make planned capital expenditures, to make scheduled debt
payments, to refinance indebtedness and to remain in compliance
with all of the financial covenants under its debt agreements
depends on its future operating performance and cash flow, which
in turn, are subject to prevailing economic conditions and to
financial, business and other factors, some of which are beyond
its control.
J. Crew sells classic-styled jeans, khakis, and other basic (but
pricey) items to young professionals through its catalogs, Web
site, and in about 140 retail and factory outlets in the US. It
also has about 70 outlets in Japan through a joint venture with
Itochu. The company has sold off its two non-J.Crew brand
catalogs and now its sales come entirely from J. Crew brand
items.
KEY3MEDIA: S&P Drops Rating to CCC+ Over Profitability Concerns
---------------------------------------------------------------
On May 9, 2002, Standard & Poor's lowered its corporate credit
rating on trade show organizer Key3Media Group, Inc. and its
operating subsidiary, Key3Media Events Inc., to triple-'C'-plus
from double-B'-minus due to concerns about its profitability in
light of the severity of the economic problems in its technology
end markets. All ratings remain on CreditWatch with negative
implications where they were placed on September 26, 2001.
Key3Media is headquartered in Los Angeles, California and is one
of the largest exhibition organizers in the world and the
largest focusing exclusively on the technology industry. The
company's key trade shows are COMDEX and Networld + Interop
(N+I), which represented about two-thirds of its revenue in
2001.
Key3Media's exclusive focus on the technology industry is a
significant risk since it remains one of the most troubled
sectors of the economy and there is little evidence that
conditions will improve in the near term. Key3Media's revenue
and cash flow are likely to remain meaningfully under pressure
in coming quarters as its customers lower their already reduced
marketing and training budgets. Furthermore, mounting problems
in the telecommunications sector should impair Key3Media's N+I
events, which accounted for 40% of its revenue in 2001.
Key3Media's EBITDA, adjusted for certain noncash charges,
declined 42% in 2001 due to the problems being experienced by
the technology industry and the decline of several large events
following the terrorist attacks on September 11. The aftermath
of September 11 was particularly damaging to Key3Media because
it held several of its largest and most profitable events during
or shortly after this date, including its COMDEX Fall show, the
largest trade show in the U.S. Earnings pressure should ease in
the fourth quarter due to easy comparisons. However, cash flow
could drop materially in the meantime, notwithstanding annual
cost reductions of $10 million to $15 million.
Key3Media raised $74.5 million in 5.5% PIK preferred stock in
the fourth quarter of 2001, which enabled it to reduce its debt
by $40 million, modestly increase its cash balances, renegotiate
its bank loan, and alleviate some of the financial pressure
resulting from acquisitions of more than $100 million last year.
The new bank agreement caps the company's revolving credit
facility at $120 million and its total debt at $410 million. In
addition, its previous financial covenants were replaced with a
minimum fixed charge ratio of 1.1 times. Key3Media will need to
generate EBITDA on a trailing 12-month basis of about $48
million to $50 million to maintain compliance with this
covenant. The company has stated that it was in compliance with
this test at the end of the first quarter. Key3Media's ability
to remain in compliance during this difficult operating period
is critical to preserving its credit ratings.
The bank loan rating of single-'B'-minus is one-notch higher
than the corporate credit rating. The bank loan consists of a
$120 million revolving credit facility and is secured by a first
lien on substantially all of Key3Media's assets. Standard &
Poor's simulated default scenario assumed that the revolving
credit facility was fully drawn and that cash flows and resale
multiples were at distressed levels. Elements of a default
scenario could include a continued decline in the performance of
its key trade shows due to the weak information technology and
telecommunications industry environments, intensified
competition, stress from further leveraged acquisitions that
prove unsuccessful, inability to fully realize cost reductions,
or a combination of these factors. Even under such conditions,
Standard & Poor's expects that the value of Key3Media's well
established, leading event brands would provide full coverage of
the company's bank loan.
The ratings remain on CreditWatch with negative implications due
to uncertainty about Key3Media's ability to maintain compliance
with its financial covenants as a result of the lack of revenue
visibility in this current environment. Ratings will be lowered
if it becomes clear that Key3Media will not be able to maintain
compliance with its covenants.
Ratings List: To: From:
* Corporate credit rating CCC+/Watch Neg BB-/Watch Neg
* Senior secured debt B- BB-
* Subordinated debt CCC- B
KAISER ALUMINUM: Committee Retains Ashby as Delaware Counsel
------------------------------------------------------------
The Official Committee of Unsecured Creditors in the Chapter 11
cases of Kaiser Aluminum Corporation and its debtor-affiliates,
gains the Court's permission to employ and retain the firm
Ashby & Geddes as its Delaware counsel effective February 22,
2002.
The professional services that Ashby & Geddes will render
include, but are not limited to:
A. providing legal advice as Delaware counsel regarding the
rules and practices of the Court applicable to the
Committee's powers and duties as an official committee;
B. providing legal advice as Delaware counsel regarding any
disclosure statement and plan filed in this case and with
respect to the process for approving or disapproving
disclosure statements and confirming or denying confirmation
of a plan;
C. preparing and reviewing as Delaware counsel the present
necessary motions, applications and pleadings and otherwise
protecting the interests of the Committee and unsecured
creditors of the Debtors; and,
D. performing other legal services for the Committee as the
Committee believes necessary in these proceedings.
According to Mr. Prusak, subject to the Court's approval, Ashby
& Geddes are to be compensated for services on an hourly basis,
plus reimbursements for the actual, necessary expenses it
accrues. The firm's principal attorneys and paralegals proposed
to represent the Committee and their respective hourly rates
are:
Attorney Position Rate
------------------------- --------- -------------
William P. Bowden Partner $350 per hour
Rafael Zahralddin-Aravena Associate $250 per hour
Gregory A. Taylor Associate $180 per hour
Tammie Bello Paralegal $120 per hour
William P. Bowden, Partner of the firm Ashby & Geddes, P.A.,
submits that the firm is currently representing or has
represented these interested parties for the last 5 years in
matters not related to the Debtors' Chapter 11 cases:
A. Current Representations: Charles E. Hurwitz and Ezra G.
Levin, JP Morgan Chase, The CIT Group and other entities,
Congress Financial, Merrill Lynch, Cytec Industries, Inc.,
Houlihan, Lokey, Howard & Zukin, and Latham & Watkins; and,
B. Former Representations Within the Last 5 Years: Bank One
Trust Company, Connecticut General Life Insurance Co. and
CIGNA Corp., IMCO Recycling, Offitbank Holdings, Inc. and
Prudential Insurance Company of America. (Kaiser Bankruptcy
News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 609/392-
0900)
KASPER ASL: Hires Togut Segal as Conflicts Counsel for Weil
-----------------------------------------------------------
Kasper ASL, Ltd., together with its debtor-affiliates ask the
United States Bankruptcy Court for the Southern District of New
York to employ Togut, Segal & Segal LLP, as special counsel.
Togut Segal will represent the Debtors in connection with the
assertion of claims, or causes of action against, or the defense
of, or objections to any claims against the Debtors by entities
that are or have been clients of Weil Gotshal & Manges LLP in
matters unrelated to these Chapter 11 cases, to avoid potential
conflicts.
The Debtors assert that their interests and the interests of
their estates would be best served by the retention of Togut
Segal as special counsel to render such additional legal
services as may be required from time to time.
Subject to annual adjustment in January, in accordance with the
firm's billing practices, the rates to be charged by Togut Segal
for their services are:
partners $510 to $625 per hour
paralegals and associates $100 to $425 per hour
Kasper A.S.L., Ltd., one of the leading women's branded apparel
companies in the United States filed for chapter 11 protection
on February 5, 2002. Alan B. Miller, Esq. at Weil, Gotshal &
Manges, LLP represents the Debtors in their restructuring
efforts. When the Company filed for protection from its
creditors, it listed $308,761,000 in assets and $255,157,000 in
debts.
KIRCHPAYTV: Goes Bankrupt After Failing To Raise Funds
------------------------------------------------------
KirchPayTV was forced into bankruptcy after it failed to entice
Rupert Murdoch and Hollywood studios to fund a bailout,
according to Dow Jones. The insolvency had been widely
anticipated after KirchMedia, Kirch Group's core broadcasting
and film-rights division, went into administration last month.
With both of its operating units now bankrupt, Kirch Group's
umbrella company, Taurus Holding, is likely to follow within
days, reported the newswire. KirchPayTV Chief Georg Kofler had
hoped to stave off bankruptcy by wooing Murdoch and other
investors, including the Hollywood studios who supply the
business with its programming. Kirch's company faced a debt
load of more than $5.95 billion. This is Germany's largest
corporate collapse in the country's postwar history. (ABI World,
May 10, 2002)
KMART CORPORATION: Proposes Personal Injury Claims Procedures
-------------------------------------------------------------
Kmart Corporation and its 37 debtor-affiliates ask the Court to
establish procedures for:
(a) liquidating and settling Personal Injury Claims, and
(b) modifying the automatic stay to allow the orderly
liquidation of the Personal Injury Claims.
John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher &
Flom, in Chicago, Illinois, explains that the Claims Resolution
Procedure is intended to promote cost-effective and timely
liquidation and settlement of the Personal Injury Claims.
At least 20,000 Claimants are expected to assert personal injury
tort claims in these Chapter 11 cases. The Debtors estimate
that the Personal Injury Claims could easily exceed $100,000,000
and yet 97% of all Personal Injury Claims may be less than
$50,000.
As of the Petition Date, Mr. Butler reports that some 3,500
Claimants had already commenced litigation against the Debtors.
Since these proceedings were stayed pursuant to Section 362(a)
of the Bankruptcy Code, Mr. Butler notes that thousands of
asserted Personal Injury Claims remain contingent, disputed and
unliquidated. The Debtors believe they have no liability in
most of these claims, or the asserted amounts are incorrect.
Thus, the Debtors expect to file objections to these Personal
Injury Claims.
Mr. Butler points out that it would be time-consuming, unduly
burdensome and expensive for the Debtors to defend against and
liquidate thousands of relatively small Personal Injury Claims
in other tribunals and fora. As a result, Mr. Butler fears, it
may delay the resolution of these Chapter 11 cases and cause
significant administrative expenses.
According to Mr. Butler, the Debtors were parties to two general
liability insurance policies that may cover portions of the
Personal Injury Claims in excess of $2,000,000. "Thus, the
Debtors are self-insured for an initial $2,000,000 per
occurrence," Mr. Butler says.
Furthermore, Mr. Butler continues, the Debtors may also be
entitled to be indemnified from other third parties. To the
extent the Debtors are entitled to indemnity for a particular
Personal Injury Claim from a Third Party Indemnitor, the Debtors
seek authority to invite such Third Party Indemnitor to
participate in the liquidation of the Personal Injury Claim.
However, Mr. Butler emphasizes that the Debtors have no
obligation vis a vis the Claimants to take any such action.
The principal features of the proposed Claims Resolution
Procedure are:
Teleconference: On August 1, 2002, the Debtors will begin to
contact by telephone known Claimants that have
Personal Injury Claims with which Debtors have
reserved amounts of $5,000 or less -- the Small
Claims Claimants -- for the purposes of settling
and liquidating these small claims in the most
efficient, cost-effective method. After
September 30, 2002, Small Claims Claimants that
have not settled their Personal Injury Claims
with the Debtors will be required to complete
the remaining Claims Resolution Procedure. With
respect to these unsettled Personal Injury
Claims, the Debtors will serve the Small Claims
Claimants with a copy of the Questionnaire on or
before October 10, 2002.
Questionnaire: On or before August 10, 2002, the Debtors will
serve upon known Claimants excluding the Small
Claims Claimants a copy of the Questionnaire. On
or before November 15, 2002, known Claimants
with unsettled claims must complete the
Questionnaire, requesting certain basic
information, and serve it upon the Debtors.
Response
Statement: On or before February 15, 2003, the Debtors will
send the Claimant a Response Statement. The
Response Statement may include a proposed
settlement.
Claimant Reply: On or before April 15, 2003, the Claimant must
serve a Reply to the Debtors' Response
Statement. If the Debtors' Response Statement
included a settlement proposal, the Claimant's
Reply must accept or reject the Debtors'
settlement proposal.
Stay Relief: Upon receipt of a Claimant's Reply that rejects
a proposed settlement, the Debtors may further
negotiate a settlement with the Claimant. If
any claims remain unsettled as of June 1, 2003,
the Claimant may file a motion for relief from
the automatic stay to pursue litigation, only
for the purposes of liquidation of the Personal
Injury Claim, in an appropriate non-bankruptcy
forum. However, the Claimant will be entitled to
relief if they have first exhausted, in good
faith, the Claims Resolution Procedure. The
Debtors will have the opportunity to object to
any such motion only on the grounds that the
Claimant either failed to participate in good
faith or failed to exhaust the Claims Resolution
Procedure.
Election
to Opt Out: At any time, a Claimant may opt out of the
Claims Resolution Procedure and obtain expedited
Relief from the automatic stay by agreeing to
waive any right to have an allowed claim against
the Debtors' estates or any Related Non-Debtor
Party and/or any right to participate in any
distribution in these cases -- the Opt-Out
Procedure.
"Any Claimant that fails or refuses to comply with the Claim
Resolution Procedure should be denied relief from the automatic
stay until the Claimant complies with the applicable Claims
Resolution Procedure," Mr. Butler asserts. Accordingly, Mr.
Butler adds, the Claimant will not have an allowed claim for
purposes of voting on any proposed plan of reorganization or for
purposes of distribution under any confirmed plan of
reorganization.
Mr. Butler further explains that the underlying rationale for
the Claims Resolution Procedure is "the practical fact that most
Personal Injury Claims are settled prior to trial, but only
after each side has had an opportunity to analyze the merits of
its and its opponent's case. By requiring Claimants to comply
with the Claims Resolution Procedures, Mr. Butler says, each
Claimant will be required to analyze, present and document the
alleged Personal Injury Claim in an informal inexpensive way
that will result in a large percentage of such Personal Injury
Claims being resolved without the need of further litigation.
Thus, Mr. Butler asserts, the Claims Resolution Procedure will
lead to cost-effective settlement and liquidation of many
Personal Injury Claims, without the administrative expense of
multi-forum, full trial litigation.
Moreover, Mr. Butler assures the Court that the Claims
Resolution Procedure will treat the Claimants fairly considering
that it:
-- is a non-judicial procedure for liquidating Personal
Injury Claims more quickly than full trial litigation in
state, federal or bankruptcy court;
-- does not require that a Claimant settle its Personal
Injury Claim pursuant to the Claims Resolution Procedure,
but only that a Claimant be required to comply, in good
faith, with the Claims Resolution Procedure before being
entitled to seek relief from the automatic stay to fully
litigate its Claim; and
-- provides that the Claimants retain whatever rights they
have to liquidate their Personal Injury Claims through
litigation in an alternative forum and tribunal if the
parties cannot resolve the Personal Injury Claim by the
less expensive and less time-consuming process of direct
negotiation.
For these reasons, the Debtors ask Judge Sonderby:
1) for authority to settle Personal Injury Claims for
settlement amounts in excess of $50,000 upon 10 days'
notice to the Committees, the post-petition lenders, the
United States Trustee, and any other party that requests
such notice. In the event of such a settlement, the
settling Claimant will be deemed to hold an allowed, pre-
petition general unsecured non-priority claim against the
Debtors in the settled amount, to be paid in accordance
with the confirmed plan of reorganization in these Chapter
11 cases;
2) for authority to settle small claims, settlement amounts
equal to or less than $50,000, up to a cap of $50,000,000
in the aggregate without further order of the Court or
notice to any parties. In the event of this form of
settlement, the settling Claimant will be deemed to hold
an allowed, pre-petition general unsecured non-priority
claim against the Debtors in the settled amount, to be
paid in accordance with the confirmed plan of
reorganization in these Chapter 11 cases. The Debtors
propose to periodically submit orders to the Court to
confirm settlements of small claims;
3) for authority to implement the Opt-Out Procedure, which
consists of executing and filing the Stipulation Lifting
the Automatic Stay that:
-- provides the Debtors a full release, and
-- grants relief from the automatic stay to permit the
Claimant to pursue its state law remedies against a
Third Party Indemnitor, if any;
4) not to modify the automatic stay applicable to the
Personal Injury Claims, except in connection with the
Claims Resolution Procedure. If relief from the automatic
stay were granted to a Claimant on an ad hoc basis before
such Claimant had complied with the Claims Resolution
Procedure, the Debtors would be forced to expend their
limited resources and time in defense of pre-petition
lawsuits in other for a;
5) to immediately modify the automatic stay such that it will
be deemed lifted upon the filing of a Stipulation Lifting
the Automatic Stay pursuant to the Opt-Out Procedure; and
6) to deny a Claimant's motion requesting a modification or
termination of the automatic stay that is filed prior to
June 1, 2003, without prejudice to its renewal until after
the Claims Resolution Procedure is exhausted. Upon
exhaustion of the Claims Resolution Procedure, the
Claimant may file a request for a determination on the
pending stay relief motion. (Kmart Bankruptcy News, Issue
No. 21; Bankruptcy Creditors' Service, Inc., 609/392-0900)
KMART CORP: Launches New Ad Campaign Focused on Exclusive Brands
----------------------------------------------------------------
As a follow up to its recent corporate brand advertising
campaign, Kmart Corporation (NYSE: KM) will unveil a new round
of commercials focused on two of its key assets -- its high-
quality, exclusive brand labels and its across-the-store value
proposition. The latest commercials in its "Stuff of Life"
advertising campaign will include the Martha Stewart Everyday(R)
brand label featuring Martha Stewart and the Jaclyn Smithr brand
label featuring Jaclyn Smith, and will again be directed by
award-winning film maker Spike Lee. The spots will begin
running nationwide the week of May 12.
Kmart's corporate brand advertising campaign, which was unveiled
in February, focused on establishing a competitive and
defendable positioning for the company as the store that
features "The Stuff of Life" -- a unique blend of value,
convenience and exclusive brands under one roof that meets the
everyday needs and wants of the American consumer. The new
commercials support that positioning by highlighting two of
Kmart's strongest competitive advantages -- high-quality
national premium brand labels that can't be found at any other
retailer, and a value-for-the-money proposition on every product
across the store.
"With our 'Stuff of Life' advertising campaign, we are
establishing a strong corporate identity in the minds and hearts
of our customers," said Steven Feuling, SVP of marketing for
Kmart. "We first declared our positioning as the store that
understands what really matters in the everyday life of the
American consumer. Now, we are showing how we do that by
focusing on what makes Kmart different from other retailers -- a
distinctive combination of high-quality, exclusive products and
value across the store." The seven new commercials were directed
by Academy-Award(R) nominee Spike Lee and produced by
TBWA\Chiat\Day in New York. The first five will promote the
company's top-selling brands: Martha Stewart Everyday, Jaclyn
Smith, Disney(R), Sesame Street(R) and Route 66(R). Both Martha
Stewart and Jaclyn Smith will appear in the commercials for
their respected brand labels. A fifth spot will focus on
Kmart's outstanding value-for-the-money proposition. The final
commercial will continue the corporate branding message, but
with a seasonal theme, positioning Kmart as the one store where
consumers can get all their everyday needs and wants for the
warm, summer months.
"As we move strategically through our restructuring, we are
going to place an increased emphasis on those core assets Kmart
owns that no other retailer can claim," said James B. Adamson,
chairman and CEO of Kmart Corporation. "We have an amazing
family of trusted, exclusive brand labels to leverage with
consumers, along with an excellent value and convenience
proposition."
The 30- and 15-second Kmart spots will run concurrently and will
feature the same tagline found in the previous commercials --
"Kmart. The Stuff of Life." They will be seen on broadcast and
cable outlets nationwide.
Kmart Corporation is a $37 billion company that serves America
with more than 2,100 Kmart and SuperCenter retail outlets, and
through its e-commerce shopping site http://www.bluelight.com
LTV CORP: Expands Scope & Alters Fee Structure for Jay Alix
-----------------------------------------------------------
The LTV Corporation and its debtor-affiliates ask Judge Bodoh's
approval of a revised scope of engagement and fee structure for
Jay Alix & Associates, the Debtors' financial consultants,
crisis managers and restructuring accountants. Judge Bodoh has
previously authorized Jay Alix's retention and employment.
Now, as Judge Bodoh is aware, the Debtors have concluded that
the value of their respective estates will be best preserved,
and the recovery of their respective creditors will be
maximized, by the sale of substantially all of the assets of the
integrated steel business. Accordingly, the Debtors no longer
are pursuing the implementation of a restructuring plan, the
development and confirmation of which was the primary objective
of JA&A's employment at the time that the prior engagement
letters were signed.
By contrast, the Debtors now ask JA&A to (a) take a significant
role in advising and assisting the Debtors with respect to the
implementation of the APP, including the preservation of assets
of the integrated steel business for sale; (b) assist in
coordinating the cash management process under the APP; (c)
assist the Debtors in the liquidation of inventory and accounts
receivable; (d) provide detailed cash reporting in connection
with the implementation of the APP; and (e) be primarily
responsible for APP reporting and updates that are required by
the Debtors' postpetition lenders and the Committees.
Accordingly, in light of the APP, the focus of JA&A's consulting
services has changed considerably.
The Debtors therefore ask that Judge Bodoh approve a revised
scope of engagement and fee structure with JA&A. JA&A has
agreed to perform and continue to perform the services requested
by the Debtor in connection with the APP, and will continue to
bill its hourly fees and expenses, but the Success Fee of
$3,500,000 would be replaced with a new contingent success fee
based on JA&A's achievements in implementing the APP.
The contingent success fee is comprised of two components.
First, the revised fee structure provides for a contingent
success fee based on a percentage of "net recoveries" achieved
in the APP liquidation process. "Net recoveries" is defined as
(a) cash receipts (exclusive of amounts deposited in reserve
accounts under the APP) plus letter of credit recoveries, plus
cash on hand at December 7, 2001, less cash disbursements. For
example:
Net Recoveries Incremental Recovery Cumulative
(In Millions) Fee Percentage Recovery Fee
-------------- -------------------- ------------
Under $350 None stated None
$350-$400 1% $ 500,000
$400-$450 2% of next $50M $1,500,000
$450-$500 3% of next $50M $3,000,000
$500-$550 4% of next $50M $5,000,000
$550 + 5% over $550M >$5,000,000
The recovery fee is designed to compensate JA&A for maximizing
recoveries for the Debtors' creditors and estates during the APP
Period. As such, the Recovery Fee provides financial incentives
consistent with JA&A's current role in these cases and is in the
best interest of the Debtors' estates.
The second component of the Contingent Success Fee provides that
JA&A earns a success fee of $4,500,000 if LTV Steel (a) confirms
a plan of reorganization, or (b) completes one ore more
transactions in which substantially all of the assets of either
LTV Steel's (i) Cleveland East facility, or (ii) Indiana Harbor
and Hennepin facilities are sold before July 31, 2002. After
July 31, 2002, the Transaction Fee will be reduced at a rate of
$100,000 per month, until it reaches a minimum of $2,500,000.
The Transaction Fee is designed to compensate JA&A for its
efforts to preserve the assets of the integrated steel business
and, in turn, to maximize the value of any sale of activities
within the integrated steel business. The Transaction Fee
structure is based on the Success Fee but has been modified from
the former structure to recognize that any sale under the APP
will be comprised of one or more facility sales rather than the
sale of LTV Steel as an operating business. As with the
Recovery Fee, the Transaction Fee provides financial incentives
to JA&A to maximize the value to the Debtors' creditors and
estate consistent with JA&A's current role.
To avoid any overlap between the Recovery Fee and the
Transaction Fee and to ensure that JA&A does not earn two
success fees for the same services, the Amendment Letter
provides that any Recovery Fee earned by JA&A will be credited
against any Transaction Fee earned by JA&A, and vice versa. In
addition, to provide additional security to JA&A, the Amendment
Letter calls for the Debtors to provide JA&A with an additional
retainer of $200,000, which, together with the existing $300,000
retainer held by JA&A, will be applied toward any unpaid hourly
fees and expenses, then to the earned and unpaid Contingent
Success Fee and, if not otherwise applied, returned to the
Debtors.
Judge Bodoh grants this Motion, expanding the scope and altering
the fee structure for JA&A as requested in the Motion. (LTV
Bankruptcy News, Issue No. 29; Bankruptcy Creditors' Service,
Inc., 609/392-00900)
LERNOUT & HAUSPIE: Holdings Submits 1st Amended Liquidating Plan
----------------------------------------------------------------
L&H Holdings USA, Inc., presents Judge Judith Wizmur and its
creditors and parties in interest with its long-promised Plan of
Liquidation.
In short, the Plan proposes to pay all creditors in full, in
cash, on its Effective Date. Claims arising from public
shareholders' securities fraud suits are subordinated to general
unsecured creditors and share $1.2 million. Anything left over,
including Holdings' causes of action, will be delivered to L&H
NV. Holdings, thereafter, will be dead and gone.
Distribution to Administrative and Priority Claimants
The Plan's distribution provisions are:
(1) Administrative Expense Claims.
Each holder of an Administrative Expense Claim will be paid in
full by the Debtor or its successor:
(a) Upon the later of:
(i) the Effective Date of the Plan, or as soon
as practicable after that date, or
(ii) as soon as practicable after the Claim
becomes an Allowed Administrative Expense
Claim if the date of allowance is later
than the Effective Date;
(b) Upon such terms as may be mutually agreed upon
between the holder of an Allowed Administrative
Expense Claim and the Debtor or Post-Effective
Date Holdings, or
(c) according to the ordinary business terms of the
holder and the Debtor. All post-Effective Date
professional fees and related expenses accrued
by professionals will be paid by the Debtor
within 10 business days of the submission by any
professional of an invoice to the Debtor. In
the event that the Debtor objects to the payment
of a professional's post-Effective Date invoice,
in whole or part, and the parties cannot resolve
the objection after good-faith negotiation, the
Bankruptcy Court will retain jurisdiction to
review the disputed invoice and make a
determination as to the extent of which the
invoice will be paid by the Debtor.
(2) Priority Tax Claims.
Allowed Priority Tax Claims will be paid:
(a) In cash, in full, on the Effective Date or as
soon thereafter as practicable, or as soon
thereafter after the Claim becomes an Allowed
Claim if the date of allowance is later than the
Effective Date, or
(b) In such amounts and on such other terms as may
be agreed on between the holder of the Claim and
the Debtor or Post-Effective Date Holdings, as
the case may be, in full satisfaction,
settlement, release and discharge of and in
exchange for the Allowed Priority Tax Claim.
Distribution to Claimants Not Entitled to Priority,
Unsecured Claims, Stock Interests and Securities Law Claims
Holdings divides its remaining creditors into four classes and
summarizes their proposed plan voting status:
Class Class Name Voting Est. Est.
Number Class Name Status Amt. Recovery
----- ---------- ------ ---- --------
1 Priority Non-Tax Claims Unimpaired $ 7,000 100%
2 Unsecured Claims Impaired 7,500,000 100%
3 Common Stock Impaired -- --
4 Securities Law Claims Impaired 820,267,000 0.15%
Holdings notes that as to the recovery for holders of Unsecured
Claims, this "preliminary estimate" relates only to the
principal amounts of the claims and does not include any
interest. No interest will be paid to Class 2 claimants.
The proposed payments by class under the Amended Plan are:
Class 1: Priority Non-Tax Claims
On the Effective Date of the Amended Plan, or as soon after that
as practicable, or if the Priority Non-Tax Claim becomes an
Allowed Priority Non-Tax Claim after the Effective Date, on the
next Quarterly Distribution Date after such Priority Non-Tax
Claim becomes an Allowed Priority Non-Tax Claim, a holder of an
Allowed Class 1 Priority Non-Tax Claim shall receive, in full
satisfaction, settlement, release, and discharge of and in
exchange for such Allowed Class 1 Priority Non-Tax Claim:
(a) Cash equal to the amount of such Allowed Class 1
Priority Non-Tax Claim, or
(b) such other treatment as to which Post Effective
Date L&H Holdings and such holder shall have
agreed upon in writing.
Class 2: Unsecured Claims
On the Effective Date, or as soon as practicable thereafter, or,
if such Unsecured Claim becomes an Allowed Unsecured Claim after
the Effective Date, on the next Quarterly Distribution Date
after such Unsecured Claim becomes an Allowed Unsecured Claim,
each bolder of an Allowed Class 2 Unsecured Claim shall receive,
in full satisfaction, settlement, release, and discharge of, and
in exchange for such Allowed Class 2 Unsecured Claim:
A Distribution of Available Cash in an amount equal to its
Ratable Portion of Available Cash not to exceed 100% of the
principal amount of its Allowed Class 2 Unsecured Claim.
After all holders of Allowed Class 2 Unsecured Claims have
received 100% repayment of the principal amount of their Allowed
Unsecured Claims through Distributions of Available Cash, all
further Distributions of Available Cash shall be distributed to
holders of Allowed Class 3 Common Stock Equity Interests and the
holders of Allowed Class 4 Securities Law Claims in accordance
with later Sections of the Plan, respectively.
No interest shall be paid on any Class 2 Unsecured Claim.
For purposes of this Plan, "Available Cash" means at any time
the cash held by the Post-Effective Date L&H Holdings on account
of the L&H Holdings' assets (including the net proceeds from any
asset sales and any distributions received, either directly or
derivatively, from L&H Holdings under the Plan, including
further the proceeds from the transfer of the common stock of
ScanSoft, Inc., owned by Holdings, along with non-cash proceeds
of any asset transfers - but these non-cash proceeds, while
including the stock of ScanSoft, are reduced by (i) the amount
of cash necessary to satisfy or reserve for all Allowed
Administrative Expense Claims of Holdings and all Class 1
Claims, as well as all priority tax claims of the Holdings
estate, and cash held in a Disputed Claims Reserve account with
respect to Holdings, and also the amount of cash determined from
time to time by the Post-Effective Date Holdings or the Plan
Administrator to be necessary to fund adequately the
administration of this Plan as it relates to Holdings
and Post-Effective Date Holdings, and the chapter 11 case on and
after the Effective Date, including all amounts necessary to
fund the retention of the Plan Administrator and the performance
of duties of Post-Effective Date Holdings.
Class 3: Common Stock
Subject to the payment obligations to the holders of
Administrative Claims, Priority Claims, Priority Non-Tax Claims,
and Unsecured Claims, on the Effective Date, or as soon as
practicable thereafter, L&H NV, as the bolder of all Allowed
Class 3 Common Stock Equity Interests, shall receive, in full
satisfaction, settlement, release, and discharge of, and in
exchange for such Allowed Class 3 Common Stock Equity Interests:
(i) 75% of the Excess Available Cash, and
(ii) any and all of the Debtor's Assigned Causes of
Action; provided, however, that this assignment
shall not include any Causes Of Action asserted
against any third party who has asserted a
Claim against L&H Holdings unless and until:
(a) L&H Holdings has asserted any and all of
L&H Holdings' counterclaims against such
third party or rights to setoff or
recoupment against such third party,
including L&H Holdings' rights under
section 502(d) of the Bankruptcy Code, and
(b) such counterclaims, rights to setoff or
recoupment, or rights under section 502(d)
of the Bankruptcy Code have been
determined by a Final Order.
Excess Available Cash is cash left over after Claims through and
including this Class have been paid.
The Debtor's Assigned Causes of Action include all causes of
action belonging to Holdings, but does not include any causes of
action which are or may be asserted against a third party who
has asserted a claim against Holdings until and unless:
(i) Holdings has asserted any and all counterclaims
or rights of setoff or recoupment it may have
against the third party, and
(ii) these rights have been determined by a final
Order.
Class 4: Securities Law Claims
Post Effective Date L&H Holdings shall have absolute discretion
to pursue or not to pursue any and all claims, rights, defenses,
or Causes of Action that it retains pursuant to this Plan, as it
determines in the exercise of its business judgment, and shall
have no liability for the outcome of its decision.
Subject to payment of the Administrative Claims, Priority
Claims, and all of the preceding classes, on the Effective Date,
or as soon as practicable thereafter, or, if such Securities
Law Claim becomes an Allowed Securities Law Claim after the
Effective Date, on the next Quarterly Distribution Date after
such Securities Law Claim becomes an Allowed Securities Law
Claim, and thereafter each bolder of an Allowed Securities Law
Claim shall receive, in full satisfaction, settlement, release,
and discharge of and in exchange for such Allowed Class 4
Securities Law Claim, a Ratable Portion of twenty-five percent
(25%) of the Excess Available Cash. No interest shall be paid
on any Class 4 Securities Law Claim.
Securities Law Claims arise from rescission of the purchase or
sale of a security of the Debtor or an Affiliate of the Debtor,
for damages arising from the purchase or sale of such a
security, for reimbursement, indemnification or contribution on
account of a claim of damages or rescission of the purchase or
sale of a security of the Debtor or an Affiliate of the Debtor,
or for similar violations of the securities laws,
misrepresentations, or similar claims, including, to the extent
related to these claims or subject to subordination under the
Bankruptcy Code, the U.S. Merger Claims described in the
Stipulation and Order between L&H NV and Holdings, and the Baker
Parties, which claims were assigned in that Stipulation to L&H
NV.
Holders of Claims and Equity Interests Entitled to Vote
(a) Each holder of an Allowed Claim or Allowed Equity
Interest, or the holder of a Claim or Equity Interest that has
been temporarily allowed for voting purposes only under
Bankruptcy Rule 3018(a), in an impaired Class of Claims against
or Equity Interests in the Debtor, shall be entitled to vote
separately to accept or reject the Plan as provided in the
Disclosure Statement Approval Order.
Any unimpaired Class of Claims shall be deemed to have accepted
the Plan. Any Class of Claims or Equity Interests that will not
receive or retain any property on account of such Claims or
Equity Interests under the Plan shall be deemed to have rejected
the Plan.
(b) Classes 2, 3 and 4 are impaired by the Plan and the
holders of Allowed Claims in such Classes are entitled to vote
on this Plan. Class 3 Common Stock in L&H Holdings is held by
L&H NV, an "insider" as defined under section 101(31) of the
Bankruptcy Code, and L&H NV has indicated that it will accept
the Plan.
Acceptance by Unimpaired Classes
Class 1 is unimpaired under the Plan and each such Class is
conclusively presumed to have accepted the Plan pursuant to the
Bankruptcy Code.
Elimination of Vacant Classes
Any Class of Claims that is not occupied as of the date of the
commencement of the Confirmation Hearing by an Allowed Claim or
a Claim temporarily allowed under Bankruptcy Rule 3018 shall be
deemed deleted from the Plan for purposes of voting on or
rejection of the Plan, and for purposes of determining
acceptance or rejection of the Plan by such Class under section
1129(a)(8) of the Bankruptcy Code.
Non-consensual Confirmation
In the event that any of Classes 2, 3 or 4 fail to accept the
Plan, the Debtor reserves its right:
(i) to modify the Plan and/or
(ii) to request that the Bankruptcy Court confirm the Plan
in accordance with section 1129(b) of the Bankruptcy
Code notwithstanding such lack of acceptance by
finding that the Plan provides fair and equitable
treatment to any impaired Class of Claims and Equity
Interests voting to reject the Plan.
Revocation of the Plan
The Debtor may revoke and withdraw the Plan at any time prior to
entry of the Confirmation Order. If the Plan is so revoked or
withdrawn, then it shall be deemed null and void.
Means Of Implementation Of The Plan
a. Transactions on the Effective Date.
On the Effective Date, these events shall occur (and shall be
deemed to have occurred simultaneously):
(1) the Plan Administrator shall be appointed in
accordance with the Plan; and
(2) the Equity Interests (including the Old Capital Stock)
of L&H Holdings shall be extinguished.
In no event shall any of these events occur unless all events
occur on the same Business Day.
b. Post Effective Date L&H Holdings.
(1) Continued Existence. L&H Holdings shall continue in
existence after the Effective Date for the purpose of effecting
the Transfer of all assets of L&H Holdings either for cash or
other consideration in such manner as will maximize its Estate.
Upon the Transfer of assets, Post Effective Date L&H Holdings
shall distribute the proceeds from such Transfer in accordance
with the provisions of of the Plan. L&H Holdings and its
successor, Post Effective Date L&H Holdings, shall complete the
Transfer of their respective assets as soon as reasonably
practicable after the Effective Date.
(2) From and after the Confirmation Date, Post Effective
Date L&H Holdings shall continue in existence for the purposes
of:
(a) effecting the sale, Transfer or other
disposition of its assets as expeditiously as
reasonably possible,
(b) distributing the proceeds from such Transfers in
accordance with the provisions of the Plan, as
expeditiously as reasonably possible,
(c) enforcing and prosecuting Causes of Action,
claims, defenses, interests, rights and
privileges of L&H Holdings (to the extent not
assigned to holders of Allowed Class 3 Common
Stock Equity Interests),
(d) reconciling Claims and resolving Disputed
Claims,
(e) administering the Plan,
(f) filing appropriate tax returns, and
(g) taking such other action as may be necessary or
appropriate to effectuate this Plan.
Post Effective Date L&H Holdings may incur and pay any
reasonable and necessary expenses in performing the foregoing
functions. As soon as practicable after the Effective Date, but
subject to the completion of its duties under the Plan, Post-
Effective Date L&H Holdings shall distribute all of its assets
in accordance with the terms of the Plan.
Periodic Distributions of Available Cash
Post Effective Date L&H Holdings shall make distributions as
provided under the Plan from the net proceeds it has obtained or
obtains from the Transfers of its assets for a period of up to
twelve months after the Effective Date.
Quarterly Distributions of
At Least $500,000
To the extent that Post Effective Date L&H Holdings receives
consideration that is neither cash nor cash equivalents, Post-
Effective Date L&H Holdings shall endeavor to distribute such
non-cash consideration in such manner as to give effect to the
distribution scheme contemplated under the Plan. To effect this,
Post-Effective Date L&H Holdings shall make distributions of
Available Cash on the first Business Day of each calendar
quarter; provided, however, that, except with respect to the
final Distribution, Post-Effective Date L&H Holdings shall not
make any such Distributions unless the amount of Available Cash
is in excess of $500,000. Such distributions shall continue
until Post Effective Date L&H Holdings has Transferred all of
its assets and there is no additional Available Cash for
Distributions under the Plan.
Discontinuation of Businesses:
Liquidation and Dissolution of L&H Holdings
Except as specifically provided in the Plan, Post Effective Date
Holdings intends to cease operations as soon as reasonably
practicable after the Effective Date. Upon the Distribution of
all assets of Post-Effective Date L&H Holdings and its Estate
pursuant to this Plan and the filing by Post-Effective Date L&H
Holdings of a certification to that effect with the Bankruptcy
Court, L&H Holdings (and its successors in interest) shall be
dissolved for a purposes without the necessity for any other or
further actions to be taken by or on behalf of such entities or
payments to be made in connection therewith; provided however
that each such Entity may, if it so elects, file a certificate
of dissolution for L&H Holdings in its jurisdiction of
incorporation; and provided further that L&H Holdings, Post-
Effective Date L&H Holdings or the Plan Administrator may (but
is not required to) file certificates of dissolution with
respect to the wholly owned subsidiaries of L&H Holdings after
having provided counsel to the L&H Creditors' Committee with ten
days' notice of such filing. Such certificates of dissolution
may be executed by Post-Effective Date L&H Holdings without the
need for any action or approval by the shareholders or board of
directors of any of such Entities.
From and after such date of dissolution, L&H Holdings:
(i) for all purposes shall be deemed to have dissolved and
withdrawn its business operations from any state or country in
which it was previously conducting, or is registered or licensed
to conduct, its business operations, and shall not be required
to file any document, pay any sum or take any other action, in
order to effectuate such withdrawal,
(ii) shall be deemed to have cancelled pursuant to this
Plan all of its Equity Interests, and
(iii) shall not be liable in any manner to any taxing
authority for franchise, business, capital, license or similar
taxes accruing on or after such date.
From and after the Effective Date, to the extent the bylaws,
certificate of incorporation or other charter and corporate
documents of L&H Holdings are inconsistent with the terms and
provisions of the Plan, the Plan shall supersede the bylaws,
certificate of incorporation, or other charter and other
corporate documents, as the case may be.
The dissolution of L&H Holdings shall not have any effect upon
any of the Debtor's Assigned Causes of Action that are assigned
to holders of Allowed Class 3 Common Stock Equity Interests.
From and after the Effective Date, as set forth herein, Post-
Effective Date L&H Holdings and the Plan Administrator, as the
case may be, shall perform the corresponding obligations under
the Plan of its predecessors or predecessors-in-interest. The
Plan shall be administered and actions shall be taken in the
name of the Debtor and Post-Effective Date L&H Holdings through,
in accordance with the terms of the Plan, Post-Effective Date
L&H Holdings and the Plan Administrator, irrespective of whether
the Debtor is dissolved. From and after the Confirmation Date,
Post Effective Date L&H Holdings shall continue in existence for
the purpose of:
(a) administering the Plan and to take all steps and
execute all instruments and documents necessary to effectuate
the Plan;
(b) selling or otherwise disposing of the Debtor's assets
and winding up its affairs as expeditiously as reasonably
possible;
(c) taking any actions to liquidate, and maximize the
value of, Post-Effective Date L&H Holdings;
(d) assigning all the Debtor's Assigned Causes of Action,
and all claims, interests, rights and privileges of L&H Holdings
relating thereto to holders of Allowed Class 3 Common Stock
Equity Interests for enforcement, prosecution and settlement by
such holders of Allowed Class 3 Common Stock Equity Interests in
accordance with the terms of this Plan; p12yijded however, that
Post Effective Date L&H Holdings shall retain an interest in the
Debtor's Assigned Causes of Action solely to assert a defense to
a Claim or Equity Interest based upon such Debtor's Assigned
Causes of Action;
(e) reconciling Claims and resolving Disputed Claims, and
administering the Claims allowance and disallowance processes as
set forth in the Plan, including objecting, prosecuting,
litigating, reconciling, settling and resolving Claims and
Disputed Claims in accordance with the Plan;
(f) making decisions regarding the retention, engagement,
payment and replacement of professionals, employees and
consultants;
(g) cooperating with holders of Allowed Class 3 Common
Stock Equity Interests with regard to the pursuit of the
Debtor's Assigned Causes of Action;
(h) administering the Distributions under the Plan,
including:
(i) making Distributions in accordance with the
terms of the Plan,
(ii) establishing and maintaining the various
Disputed Claims Reserves, and
(iii) filing with the Bankruptcy Court semi-annual
reports regarding the Distributions to be made to the holders of
Allowed Claims and Allowed Class 3 Common Stock Equity
Interests;
(i) exercising such other powers as necessary or prudent
to carry out the provisions of the Plan;
(j) investing any Cash in any reserves or pending
distribution in accordance with reasonable business judgment for
any such Entity;
(k) filing appropriate tax returns; and
(1) taking such other action as may be necessary or
appropriate to effectuate this Plan.
Payment of Costs
Each of Post-Effective Date L&H Holdings and the Plan
Administrator may incur and pay any reasonable and necessary
expenses in performing these functions, subject to the terms of
the Plan. For purposes of exercising its powers, each of Post-
Effective Date L&H Holdings and the Plan Administrator shall be
deemed to be a representative of the Estate pursuant to the
Bankruptcy Code.
Acquisition of Debtor's Assigned Causes of Action
and Post-Acquisition Duties of Debtor
On the Effective Date, the Estate and the Debtor shall be deemed
to have, and shall have, irrevocably assigned and transferred to
holders of Allowed Class 3 Common Stock Equity Interests all of
its rights, title and interest in and to any and all of the
Debtor's Assigned Causes of Action and any proceeds thereof
received by the Estate. Each of the Debtor's Assigned Causes of
Action, except as otherwise provided in the Plan, shall be free
and clear of all Liens, claims, encumbrances and other
interests. The Debtor shall not have any further rights, title
or interest in any of the Debtor's Assigned Causes of Action,
and neither the Debtor nor Post Effective Date L&H Holdings
shall be entitled to receive any portion of any amounts
recovered on account of any of the Debtor's Assigned Causes of
Action.
Except as specifically set forth in the Plan, with respect to
the Debtor's Assigned Causes of Action, Post-Effective Date L&H
Holdings shall have no obligation to holders of Allowed Class 3
Common Stock Equity Interests other than its obligations to
reasonably cooperate as a party to the Debtor's Assigned Causes
of Action assigned to such holders of Allowed Class 3 Common
Stock Equity Interests.
With respect to the Debtor's Assigned Causes of Action, holders
of Allowed Class 3 Common Stock Equity Interests shall not act
for the benefit of or have any obligations to or on behalf of
the Debtor or Post-Effective Date L&H Holdings. In addition,
such holders of Allowed Class 3 Common Stock Equity Interests
shall be empowered:
(a) to employ, retain or replace professionals to
represent it with respect to its responsibilities,
(b) to waive or enforce, to the fullest extent permitted
by law, any existing client privilege of the Debtor relating to
the disclosure of information or the giving of evidence,
(c) to investigate any claims, rights, Debtor's Assigned
Causes of Action or other Causes of Action as assigned, and
(d) to prosecute, litigate, settle, adjust, retain,
enforce or abandon any claims, rights, Debtor's Assigned Causes
of Action or other Causes of Action assigned thereto, including
any counterclaims to the extent such counterclaims are setoff
against the proceeds of any such Causes of Action.
Holders of Allowed Class 3 Common Stock Equity Interests shall
have sole and absolute discretion to bold, pursue, prosecute,
release, settle or abandon, as the case may be, any and all
claims, rights, Debtor's Assigned Causes of Action or other
Causes of Action assigned thereto pursuant to this Plan, as they
determine in the exercise of their business judgment, and shall
have no liability for the outcome of their decisions. For
purposes of exercising such powers, holders of Allowed Class 3
Common Stock Equity Interests shall be deemed to be
representatives of the Estate pursuant to the Bankruptcy Code.
In accordance with the Plan, such assignment shall not include
any Causes Of Action asserted against any third party who has
asserted a Claim against L&H Holdings unless and until:
(a) L&H Holdings has asserted any and all of L&H Holdings'
counterclaims against such third party or rights to setoff or
recoupment against such third party, including L&H Holdings'
rights under section 502(d) of the Bankruptcy Code, and
(b) such counterclaims, rights to setoff or recoupment, or
rights under section 502(d) of the Bankruptcy Code have been
determined by a Final Order or otherwise.
L&H NV's Authority To Settle Causes of Action
L&H NV shall be empowered and authorized, without approval of
the Bankruptcy Court or notice to any other Person, to settle,
adjust, dispose of or abandon any claims, rights, Debtor's
Assigned Causes of Action or other Causes of Action assigned to
L&H NV, including any counterclaims to the extent such
counterclaims are setoff against the proceeds of any such Causes
of Action; provided however, that, in accordance with the Plan,
that the assignment shall not include any Causes Of Action
asserted against any third party who has asserted a Claim
against L&H Holdings unless and until:
(a) L&H Holdings has asserted any and all of L&H Holdings'
counterclaims against such third party or rights to setoff or
recoupment against such third party, including L&H Holdings'
rights under the Bankruptcy Code, and
(b) such counterclaims, rights to setoff or recoupment, or
rights under the Bankruptcy Code have been determined by a Final
Order or otherwise.
Cancellation of Equity Interests
Except to the extent specifically provided otherwise in the
Plan, on the Effective Date, all existing Equity Interests
shall, without any further action, be cancelled, annulled and
extinguished and any certificates representing such Equity
Interests shall be null and void; however, cancellation shall
not impair the rights of holders of Equity Interests as of the
Record Date, if any, to receive Distributions on account of such
Equity Interests to the extent provided in the Plan.
(L&H/Dictaphone Bankruptcy News, Issue No. 23; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
LASON INC.: Dismisses PricewaterhouseCoopers as Auditors
--------------------------------------------------------
On February 28, 2002 and March 14, 2002, Lason, Inc. disclosed
the termination of its relationship with its auditors,
PricewaterhouseCoopers. The termination was effectuated by a
dismissal of PwC by the Company.
In PwC's March 11, 2002 letter to the Securities and Exchange
Commission PWC stated that in addition to the events reported by
Lason to the SEC on February 28, 2002, with which it agreed,
additional events should have been reported. These events
consisted of the additional material weaknesses in internal
controls set forth below, of which it advised management in
March 2001 in connection with its audit of the Company's
financial statements for the year ended December 31, 2000.
According to the Company that audit has not been completed:
1. Failure to reconcile intercompany accounts during the
year.
2. Lack of control over cash applications to accounts
receivable.
3. Lack of control over fixed assets in particular related
to dispositions.
4. Lack of controls over the earnings and procedures used
in earnout calculations.
5. Weak computer software applications primarily related
to job costing and other production tracking systems.
6. Failure to follow policy on capitalized start up and
software costs.
7. Local management's inability to assume responsibility
for operating results due to the numerous accounts and
entries directed by corporate.
It is Lason's position, however, that what it received from PwC
in March 2001, consisting of an incomplete draft entitled
"Lason - Board of Directors Meeting, March 26, 2001, Preliminary
2000 Audit Findings" and which set forth the above matters, was
never discussed or followed up with management by PwC, or
presented to Lason in final form, and did not and does not
constitute "the accountant having advised the registrant" as
contemplated by Rule 304 (a)(1)(v) of Regulation S-K,
notwithstanding the disclosure of such matters herein.
LEINER HEALTH: Obtains Court Nod to Hire Levene Neale as Counsel
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approves
the retention of Levene, Neale, Bender, Rankin & Brill, LLP as
bankruptcy co-counsel in the chapter 11 cases of Leiner Health
Products Group, Inc. and its debtor-affiliates.
The professional services that Levene Neale will render to the
Debtors are:
a. to provide legal advice with respect to the Debtors'
powers and duties as Debtors-in-possession in the
continued operation of their businesses and management
of their properties;
b. to prepare and pursue confirmation of a plan of
reorganization and approval of a disclosure statement;
c. to prepare on behalf of the Debtors necessary
applications, motions, answers, orders, reports and
other legal papers;
d. to appear in Court and to protect the interests of the
Debtors before the Court; and
e. to perform all other legal services for the Debtors
which may be necessary and proper in these proceedings.
Compensation will be payable to Levene Neale on an hourly basis,
plus reimbursement of actual, necessary expenses incurred by the
Firm. The specific attorneys and legal assistants presently
designated to represent the Debtors and their rates are:
David W. Levene Partner $450 per hour
Anne E. Wells Sr. Counsel $350 per hour
Nelwynn W. Voorhies Associate $350 per hour
Jacqueline Rodriquez Associate $225 per hour
Leiner Health Products Group, Inc. manufacture vitamins,
minerals and nutritional supplements. The Company filed for
chapter 11 protection on February 28, 2002. Mark D. Collins,
Esq. at Richards, Layton & Finger, PA and David W. Levene, Esq.
at Levene, Neale, Bender, Rankin & Brill LLP represent the
Debtors in their restructuring efforts. When the Debtors filed
for protection from their creditors, they listed $353,139,000 in
total assets and $493,594,000 in total debts.
LIFEF/X INC: Files for Chapter 11 Protection to Sell All Assets
---------------------------------------------------------------
LifeF/X, Inc. (OTCBB:LEFX) has signed a Letter of Intent, to
sell substantially all of its assets to Safeguard Scientifics,
Inc., and has, together with its subsidiary, filed for
protection under Chapter 11 of the U.S. Bankruptcy Code in the
United States Bankruptcy Court for the District of Nevada.
Subject to Bankruptcy Court approval, Safeguard also agreed to
provide up to $1.5 million of debtor-in-possession (DIP)
financing. LifeFX intends to continue operating its businesses
normally during the reorganization process, fulfilling customer
support services, and developing new opportunities.
"This agreement with Safeguard represents a key aspect of
LifeFX's go forward plan," said Dennis J. Crane, acting CEO.
"Safeguard has been a supporter of our unique technology and our
benefits proposition for enhancing Web sites and other digital
platforms. This step will allow LifeFX to operate in a manner
better aligned with current market realities, and to
increase our focus on delivering value to customers."
"Safeguard has worked closely with LifeFX over the past 18
months. We believe the company has a timely opportunity to
convert its proprietary technology into an appealing and
valuable product offering", noted Bob Crowley, Managing Director
of Software Operations of Safeguard. "This reorganization will
give the Company the time and resources needed to continue
validating its offering in the market, and to build the volume
and market momentum essential to sustained, profitable growth."
Under the terms of the Letter of Intent and pursuant to Sections
363 and 365 of the Bankruptcy Code, Safeguard has agreed to
acquire substantially all of the assets in exchange for the
obligations owing under Safeguard's pre-bankruptcy loans to
LifeFX, the $1.5 million DIP financing and cash in the amount of
$200,000.
In addition, Safeguard will be assuming certain contracts,
paying the cure amounts on such contracts and employing many of
LifeFX's employees. LifeFX expects that the purchase price
payable by Safeguard will be insufficient to cover all of the
Company's liabilities and therefore, LifeFX does not anticipate
that stockholders will receive any distribution upon completion
of the bankruptcy proceedings.
Consummation of the transaction is subject to negotiation of a
definitive purchase agreement, as well as the completion of a
bankruptcy court supervised auction process and bankruptcy court
approval.
The Letter of Intent also provides that if LifeFX completes an
alternate transaction with another bidder, it must pay Safeguard
a fee of $300,000 and reimbursement of expenses
LifeFX, Inc., a Safeguard Scientifics partner company, is the
leading developer of extraordinary, life-like Stand-InT Digital
People for the Internet.
LifeFX's FaceXpress(TM) software enables Web designers and
developers to dramatically enhance new and existing Web sites.
FaceXpress(TM) makes sites more engaging and effective by
conveniently managing the content, expressions and motions of
Stand-Ins. For more information about LifeFX, and to download a
free trial of the FaceXpress software, visit
http://www.lifefx.com
Safeguard Scientifics (NYSE:SFE) (http://www.safeguard.com)is
an operating company that creates long-term value by focusing on
technology-related companies that are developed through superior
operations and management support. Safeguard acquires and
operates companies in three principal areas: business and IT
services, software and emerging technologies.
LIFEF/X INC: Voluntary Chapter 11 Case Summary
----------------------------------------------
Lead Debtor: Lifef/X, Inc.
153 Needham Street, Building 1
Newton, Massachusetts 02464
Bankruptcy Case No.: 02-51525
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Lifef/x Networks, Inc. 02-51526
Type of Business: The Debtor develops software products and
services.
Chapter 11 Petition Date: May 9, 2002
Court: District of Nevada (Reno)
Judge: Gregg W. Zive
Debtors' Counsel: Stephen R. Harris, Esq.
Belding, Harris & Petroni, Ltd.
417 West Plumb Lane
Reno, Nevada 89509
Phone: (775) 786-7600
Total Assets: $5,931,000
Total Debts: $3,991,000
METACHEM PRODUCTS: Case Summary & Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Metachem Products, LLC
745 Governor Lea Road
New Castle, Delaware 19720
fka Standard Chlorine of Delaware, Inc.
fka Standard Chlorine Chemical Company, Inc.
fka Cloroben Chemical Company
Bankruptcy Case No.: 02-11375
Chapter 11 Petition Date: May 10, 2002
Court: District of Delaware (Delaware)
Judge: Mary F. Walrath
Debtors' Counsel: Mark D. Collins, Esq.
Rebecca L. Booth, Esq.
Richards, Layton & Finger
One Rodney Square
P.O. Box 551
Wilmington, Delaware 19899
302-651-7700
Fax : 302-651-7701
Estimated Assets: $10 Million to $50 Million
Estimated Debts: $50 Million to $100 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Stolt Nielsen Rail Trade Debt $307,188
Services
PO Box 7247
Philadelphia, Pennsylvania
197170
State of Delaware Regulatory $290,285
89 Kings Highway
Dover, Delaware 19901
Conestoga-Rover and Consulting $285,581
Associates
559 West Uwchlan Avenue
Suite 120
Exton, Pennsylvania 19341
JP Morgan Chase Bank Bank Loan $195,858
Wonderware/Marcam Trade Debt $173,234
Solutions, Inc.
Thompson, Hine & Flory LLP Legal Services $168,749
Koch-Glitsch, Inc. Trade Debt $147,447
Dana Railcare Inc. Trade Debt $117,354
Onyx Environmental Services Trade Debt $115,282
Stolt parcel Tankers, Inc. Trade Debt $102,135
Occidental Chemical Corp. Trade Debt $100,517
Dana Leasing Trade Debt $98,799
Chemtreat Incorporated Trade Debt $82,271
Connectiv Power Delivery Utility $78,923
Sprintank Trade Debt $78,192
Global Mechanical Trade Debt $79,015
GATX Terminal Corp. Trade Debt $74,487
Potts Welding & Boiling Trade Debt $74,314
Repair
Global Mechanical Trade Debt $72,846
Union Tank Car Company Trade Debt $67,851
METALS USA: Seeks Second Extension of Lease Decision Period
-----------------------------------------------------------
For the second time, Metals USA, Inc., and its debtor-affiliates
are asking the Court to extend the time within which they must
elect to assume or reject unexpired leases of non-residential
property until November 30, 2002 or the Effective Date of the
Reorganization Plan. This is without prejudice to a landlord's
right to compel assumption or rejection at an earlier date.
Zack A. Clement, Esq., at Fulbright & Jaworski LLP in Houston,
Texas, tells the Court the Debtors are battling for a second
extension because the Debtors are still unable to determine
which leases should be assumed and which should be rejected. So
far though, the Debtors has filed 12 motions to assume or reject
un-expired leases. However, Mr. Clement admits that the Debtors'
requested extension is also to accommodate the request of the
Creditors' Committee not to assume contracts generally before
the effective date of a plan of reorganization.
Mr. Clement goes on to say that the requested relief is
warranted because:
A. the Debtor's case is complex and involves a large number
of leases;
B. the leases are primary among the assets of the Debtors;
and
C. the lessors continue to receive post-petition rental
payments.
In addition, the Debtors are focusing primarily on negotiating
the sale of eleven non-core business assets for $100,000,000 and
the formulation of a Reorganization Plan. Mr. Clement submits
that such activities make it impossible for the Debtors to
adequately assess whether to assume or reject the un-expired
leases within the period provided for in the Court's prior
Order.
Until the Debtors have had the opportunity to complete a
thorough review of all these additional un-expired leases, Mr.
Clement warns that the Debtors cannot determine exactly which
un-expired leases should be assumed, assigned, or rejected. He
fears that if the present time-period to assume or reject un-
expired leases is not extended, the Debtors will be prematurely
compelled to either assume substantial, long-term liabilities
under the un-expired leases or forfeit benefits associated with
some leases. This would be to the detriment of the Debtors'
ability to operate and preserve the going-concern value of their
business for the benefit of their creditors and other parties-
in-interest. (Metals USA Bankruptcy News, Issue No. 12;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
NATIONSRENT INC: Proposes Bar Dates For Filing Proofs of Claim
--------------------------------------------------------------
NationsRent Inc. and its debtor-affiliates seek to establish
these deadlines for potential claimants to file their proofs of
claim:
A. General Bar Date: This is the deadline by which the claimants
holding pre-petition claims must file the proofs of claim.
This date is normally no fewer than 60 days after the
Debtors' service of notice of the Bar Dates and a proof of
claim form to these claimants. The Debtors intend to serve
notice and the proof of claim form within 15 days after the
entry of the Bar Date Order;
B. Rejection Bar Date: Deadline for filing proofs of claims
relating to the Debtors' rejection of executory contracts or
un-expired leases. The Rejection Bar Date will be the later
of the General Bar Date and 30 days after the date of the
Rejection Order; and,
C. Amended Schedule Bar Date: Deadline by which entities with
potential claims resulting from the Debtors' amendment of
their schedule of assets and liabilities. The Amended
Schedule Bar Date will be the later of the General Bar Date
or 30 days after the date that notice of the applicable
amendment to the Schedules is served on the claimant.
The Debtors also seek approval of the form and manner of notice
of the Bar Dates.
Michael J. Merchant, Esq., at Richards, Layton & Finger P.A. in
Wilmington, Delaware, tells the Court that setting deadlines for
filing claim proofs will help the Debtors complete the
reorganization process and make distributions under any plan or
plans of reorganization confirmed in these cases. The Debtors
require among other things, complete and accurate information
regarding the nature, validity and amount of all claims that
will be asserted in these Chapter 11 cases. The intended
deadlines will also provide potential claimants with ample time
after mailing of the Bar Date Notice within which to review the
Schedules and to compare the information contained in the notice
with their own books and records.
Mr. Merchant cites the entities that must file proofs of claim
by the General Bar Date:
A. any entity whose pre-petition claim against the Debtors is
not listed in the applicable Debtors' schedules or listed as
disputed, contingent or un-liquidated and that desires to
participate in any of these Chapter 11 cases or share in any
distribution in any of these Chapter 11 cases; and,
B. any entity that believes that its pre-petition claim is
improperly classified in the Schedules or listed in an
incorrect amount and that desires to have its claim allowed
in a classification or amount other than that identified in
the Schedules.
Similarly, the entities not required to file proofs of claim by
the General Bar Date are:
A. any entity that already has properly filed a proof of claim
against one or more of the Debtors in accordance with the
procedures set forth;
B. any entity whose claim against a Debtor is not listed as
disputed, contingent or un-liquidated in the Schedules and
that agrees with the nature, classification and amount of its
claim as identified in the Schedules;
C. any entity whose claim against a Debtor previously has been
allowed by, or paid pursuant to, an order of the Court;
D. any of the Debtors, including any Debtors that holds claims
against one or more of the Debtors; and,
E. any entity whose claim is limited exclusively to a claim for
the repayment by the applicable Debtor of principal, interest
and other applicable fees and charges on or under the
Debtors' Fifth Amended and Restated Credit and Term Loan
Agreement, dated as of August 2, 2000 or the Debtors'
Indenture, dated December 1, 1998; provided, however, that:
a. the administrative agent bank under the Credit Facility
will be required to file a proof of claim on account of
Debt claims on or under the Credit Facility on or before
the General Bar Date;
b. the indenture trustee under the Indenture will be required
to file proofs of claim on account of Debt Claims on or
under the Indenture on or before the General Bar Date;
and,
c. any holder of a Debt Claim under the Credit Facility that
wishes to assert a claim arising out of or relating to the
Credit Facility, other than a Debt Claim, and any holder
of a Debt Claim under the Indenture, other than a Debt
Claim, will be required to file a proof of claim on or
before the General Bar Date.
In addition, Mr. Merchant informs the Court that any entity
holding an interest in any Debtor, and that interest is based
exclusively upon the ownership of common or preferred stock in a
corporation, membership interest in a limited liability
partnership or warrants or rights to purchase, sell or subscribe
to such a security or interest, need not file a proof of
interest on or before the General Bar Date. However, if interest
holders wish to assert a claim against any of the Debtors they
must file proofs of claim on or before the General Bar Date.
Mr. Merchant suggests that any entity that is required to file a
proof of claim but fails to do so by the applicable Bar Date,
should be forever barred, estopped and enjoined from:
A. asserting a claim against the Debtors that:
a. is in an amount that exceeds the amount, if any, that is
identified in the Schedules on behalf of the entity as
disputed, non-contingent and liquidated; or,
b. is of a different nature or a different classification
than any claim identified in the Schedules on behalf of
such entity, or
B. voting upon, or receiving distributions under, any plan or
plans of reorganization in the Chapter 11 cases in respect
of an Unscheduled Claim.
According to Mr. Merchant, the Bar Date Notice will indicate
that proof of claim must be filed with Logan on or before the
applicable Bar Date. As soon as practicable, but in any event no
later than 15 days after the entry of the Bar Date Order, the
Debtors intend to mail the Notice package by first class US
mail, postage prepaid, to all known potential claimants and
their counsel, all equity security holders, all indenture
trustees, the US Trustee and all taxing authorities for the
jurisdictions in which the Debtors do business.
Mr. Merchant continues that for any claim to be valid and
properly filed, there must be a signed original of a completed
proof of claim, together with accompanying documentation
required by Bankruptcy Rule 3001(c) and 3001(d), delivered to
Logan at the identified Bar Date notice no later than the
applicable Bar Date. Proofs of claims must be submitted in
person or by courier service, hand delivered or mailed.
Facsimile and e-mail submissions will not be accepted. Only
claims actually delivered and received will be deemed as filed.
If a claimant wishes to receive acknowledgment of Logan's
receipt with the original, the holder must submit, along with
the original, an extra copy of the proof of claim and a self-
addressed, stamped envelope.
In addition, Mr. Merchant says that all entities asserting
claims against more than one Debtor will be required to file a
separate proof of claim with respect to each such Debtor so that
Logan will not be burdened in maintaining separate claim
registers for each Debtor. This requirement will greatly
expedite the Debtors' review of proofs of claims in these cases
and will not be unduly burdensome on claimants since those
entities will know the identity of the Debtor against which they
are asserting a claim.
Mr. Merchant admits that, in the light of the size, complexity,
geographic diversity and extensive history of the Debtors'
businesses, potential claims against the Debtors may exist that
the Debtors are unable to identify on the Schedules. Such
unknown potential claims may include:
a. claims of trade vendors that failed to submit invoices to the
Debtors;
b. claims of former employees;
c. claims of entities with potential unasserted causes of action
against the Debtors; and,
d. claims that, for various reasons, are not recorded in the
Debtors' books and records.
Accordingly, Mr. Merchant proposes to publish notice of the Bar
Dates on or before the Service Date in The Miami Herald and the
national editions of The Wall Street Journal and The New York
Times. (NationsRent Bankruptcy News, Issue No. 11; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
NEWCOR INC: Engages Mr. Fortgang as Legal and Financial Advisor
---------------------------------------------------------------
The Official Committee of Unsecured Creditors of the chapter 11
cases of Newcor, Inc. and its debtor-affiliates, asks authority
to retain Chaim J. Fortgang as its legal and financial advisor
effective March 11, 2002.
The Committee selected Mr. Fortgang primarily because of his
extensive experience in the bankruptcy and creditors' rights
fields. Included among the professional services, which Mr.
Fortgang may be called upon to render to the Committee, are:
-- providing senior legal and financial consulting services
to the Committee;
-- leading the Committee's negotiation of the major deal
points of a plan of reorganization and advising the
Committee with respect to such plan;
-- representing the Committee with respect to other
transactions which may be proposed;
-- assisting in the review of the Debtors' operations and
examination of the Debtors' affairs; and
-- generally advocating positions and performing other
professional services that further the interests of the
creditors represented by the Committee.
In addition to Mr. Fortgang, the Committee also seeks to retain
Kramer Levin as co-counsel and Klett, Rooney, Lieber and
Schorling, P.C. as Delaware counsel. The Committee explains that
the retentions of Kramer Levin and Mr. Fortgang are intended to
address different needs of the Committee and it is expected that
Kramer Levin and Mr. Fortgang will provide different, but
complementary, services to the Committee.
More specifically, the Committee illustrates that Mr. Fortgang
will provide senior legal and financial consulting services to
the Committee, and will lead, on behalf of the Committee, the
negotiation of the major deal points of a plan of
reorganization. Kramer Levin, on the other hand, will handle the
day-to-day duties of counsel to the Committee.
Mr. Fortgang will be acting as both counsel and financial
advisor to the Committee. The Committee believes that the most
efficient mechanism for compensating Mr. Forgang for this mix of
services is to make Mr. Fortgang's compensation dependent in
part upon the recoveries achieved by unsecured creditors in
these cases.
Mr. Fortgang will bill the Committee at his normal rate of $750
per hour plus a contingent fee upon the effective date of a plan
of reorganization, a 1% of non-cash distributions paid to
unsecured creditors.
Newcor, Inc., along with its subsidiaries, design and
manufacture a variety of products, principally for the
automotive, heavy-duty, capital goods, agricultural and
industrial markets. The Company filed for chapter 11 protection
on February 25, 2002 Laura Davis Jones, Esq. at Pachulski,
Stang, Ziehl Young & Jones P.C. represents the Debtors in their
restructuring efforts. When the Debtors filed for protection
from its creditors, it listed $141,000,000 in total assets and
$181,000,000 in total debts.
NEWCOR: Committee Bringing-In Klett Rooney as Co-Counsel
--------------------------------------------------------
The Official Committee of Unsecured Creditors of the chapter 11
cases of Newcor, Inc., wants the Court to give it authority to
retain Klett Rooney Lieber & Schorling, A Professional
Corporation, as co-counsel.
The Committee desires to retain Klett Rooney as co-counsel
because of the firm's expertise and knowledge of debtor and
creditor representation under the Bankruptcy Code, its frequent
practice before this Court and other courts, and its extensive
experience representing parties-in-interest in bankruptcy
proceedings. The Committee believes that Klett Rooney is well
qualified to represent it in these Chapter 11 cases.
In its role as co-counsel, Klett Rooney will provide various
legal services to the Committee including:
A. Rendering legal advice with respect to the powers and
duties of the Committee and the other participants in
the Debtors' cases;
B. Assisting the Committee in its investigation of the
acts, conduct, assets, liabilities and financial
condition of the Debtors, the operation of the Debtors'
businesses and any other matter relevant to the Debtors'
cases, as and to the extent such matters may affect the
Debtors' creditors;
C. Participating in negotiations with parties-in-interest
with respect to any disposition of the Debtors' assets,
plan of reorganization and disclosure statement in
connection with such plan, and otherwise protecting and
promoting the interests of the Debtors' creditors;
D. Preparing all necessary applications, motions, answers,
orders, reports and papers on behalf of the Committee,
and appearing on behalf of the Committee at Court
hearings as necessary and appropriate in connection with
the Debtors' cases;
E. Rendering legal advice and performing general legal
services in connection with the foregoing; and
F. Performing all other necessary legal services in
connection with these chapter 11 cases.
Subject to this Court's approval, Klett Rooney will charge for
its legal services basing on their customary hourly rates. The
attorneys who will primarily represent the Committee and their
standard hourly rates are:
Teresa K.D. Currier Shareholder $395 per hour
Richard S. Cobb Shareholder $270 per hour
Jeffrey R. Waxman Associate $160 per hour
Other attorneys and support staff may provide services to the
Committee in connection with these bankruptcy proceedings,
within the ranges of:
shareholders $270 to $470 per hour
associates $140 to $270 per hour
paralegals $120 per hour
NUCENTRIX: Meets Nasdaq's Continued Listing Requirements
--------------------------------------------------------
Nucentrix Broadband Networks, Inc. (Nasdaq:NCNX), a provider of
broadband wireless services in medium and small markets, said
that the Company had been notified by The Nasdaq Stock Market,
Inc. that the Company meets all requirements for continued
listing and that Nasdaq will close its proceeding regarding
potential delisting of the Company's common stock.
As previously reported, Nasdaq earlier had informed the Company
that the Company's common stock was subject to potential
delisting as a result of the Company not timely filing its 2001
Annual Report on Form 10-K. The Company filed its 2001 Form 10-K
on May 8, 2002 and, on May 9, 2002, Nasdaq notified the Company
that this filing had eliminated the need for the proceeding. As
of the open of business on May 10, 2002, the Company's trading
symbol has been changed back to NCNX.
The Company previously reported cash on hand of $13.7 million at
April 30, 2002, which together with cash generated from
operations, management believes will allow the Company to
continue to operate in the normal course of business at least
through the first quarter of 2003.
Nucentrix Broadband Networks, Inc. provides broadband wireless
Internet and multichannel video services using up to 200 MHz of
radio spectrum at 2.1 GHz and 2.5 GHz, commonly referred to as
Multichannel Multipoint Distribution Service (MMDS) and
Instructional Television Fixed Service (ITFS). Nucentrix offers
high-speed Internet services in Austin and Sherman-Denison,
Texas. Nucentrix holds the rights to an average of approximately
150 MHz of FCC-licensed spectrum, covering an estimated 9
million households, in 95 primarily medium and small markets
across Texas, Oklahoma and the Midwest. Nucentrix also holds 20
MHz of Wireless Communications Services (WCS) spectrum at 2.3
GHz in 19 markets in Texas and Louisiana. For more information,
please visit http://www.nucentrix.com
N-VIRO INT'L: Nasdaq Delists Shares from SmallCap Market
--------------------------------------------------------
N-Viro International Corp. (OTC Bulletin Board: NVIC) has been
notified that the Company's common stock has been removed from
trading from the NASDAQ Small Cap Market (formerly NASDAQ ticker
symbol NVIC). The Company is entitled to appeal and is
evaluating its options. N-Viro's securities are currently
trading on the OTC Bulletin Board, pursuant to SEC rules. In
its delisting letter to the Company, NASDAQ stated, "The panel
was of the opinion that the Company's plan to regain compliance
with the net tangible assets/shareholders' equity requirement is
not yet sufficiently definitive in nature and will likely
require significant additional time to implement." The Company
had requested a delay in delisting until June 30, 2002, the end
of the current fiscal quarter. The Company maintains that it
provided NASDAQ with substantial evidence that specific material
events are likely to occur prior to June 30, 2002 that would
have brought N-Viro into compliance with NASDAQ standards. The
Company disputes the NASDAQ assertion that the Company "will
likely require significant additional time to implement."
At the annual meeting of its shareholders held Thursday at 3:00
p.m., the Company announced that the Board of Directors had
unanimously elected Dr. Terry Logan as President and Chief
Executive Officer, Michael Nicholson as Senior Vice-President
and Chief Operating Officer, and James McHugh as Chief Financial
Officer, Secretary and Treasurer.
Dr. Logan stated, "We are, of course, disappointed with the
NASDAQ decision. This small company and its investors have spent
over $2 million qualifying for and maintaining our position on
NASDAQ. We offered a solid plan to NASDAQ and our future has
never looked brighter. [Thurs]day at our annual meeting, we
advised our shareholders that N-Viro's new alternative and
sustainable fuel technology, using conventional N-Viro products,
has been patented by the U.S. Patent and Trademark Office.
Moreover, and equally important, N-Viro is in late-stage
negotiations with a major Midwestern power utility to jointly
develop the technology.
"The N-Viro Soil synthetic fuel not only provides low cost
BTU's, the product may effectively scrub nitrous oxide and
sulfur dioxide and provide large scale carbon credits."
Also at the annual meeting, Dr. Logan announced his belief that,
if the Company is successful in selling its interest in Florida
N-Viro, L.P., both net worth and working capital could increase
by about $3 million in 2002 without dilution of stock and with
the retirement of practically all long-term debt. And, the
Company anticipates its first quarter 2002 results will reflect
a small net profit representing an improvement of over $200,000
from a net loss in the same period of 2001. The Company expects
to release full financial results for the first quarter
contemporaneously with the filing with the Securities and
Exchange Commission of its Form 10-Q for the quarter ended March
31, 2001. The Company expects to file its Form 10-Q on or
before Wednesday, May 15, 2002.
N-Viro International Corporation develops and licenses its
technology to municipalities and private companies. N-Viro's
patented processes use lime and/or mineral-rich, combustion
byproducts to treat, pasteurize, immobilize and convert
wastewater sludge and other bio-organic wastes into bio-mineral
agricultural and soil-enrichment products and sustainable bio-
fuel energy products with real market value. More information
about N-Viro International can be obtained by contacting the
office or on the Internet at http://www.nviro.comor by e-mail
inquiry to info@nviro.com
OWENS CORNING: Signs-Up Cap Gemini E&Y & E&Y LLP as Advisors
------------------------------------------------------------
Owens Corning and its debtor-affiliates sought and obtained
Court approval to retain and employ Cap Gemini Ernst & Young
U.S. LLC as information technology advisors and Ernst & Young
LLP as accounting and business advisors for Phases V, VI and VII
of the 2001 Financial Initiatives Project.
Maria Aprile Sawczuk, Esq., at Saul Ewing LLP in Wilmington,
Delaware, relates that the Financial Initiatives Project was
undertaken in conjunction with the Debtors' filing for Chapter
11 protection. This case is currently composed of four phases:
Phase I Planning; Phase II Information Gathering; Phase III
Opportunity and Solution Generation; and Phase IV Implementation
Planning. During the course of the 2001 Financial Initiatives
Project, the Debtors, Ernst & Young and Cap Gemini have
determined that three additional phases should be added. These
phases include: Phase V Define and Design Validation; Phase VI
Develop and Execute; and Phase VII Training and Roll-Out.
The Debtors desire to retain Cap Gemini and Ernst & Young
because they believe the firm possesses the requisite resources
and qualifications to perform the services required in the
Debtors' cases effectively, expeditiously and efficiently. In
addition, Cap Gemini and Ernst & Young are knowledgeable about
the Debtors' business operations. They have provided many
services to the Debtors, including the first four phases of the
2001 Financial Initiatives Project.
Ernst & Young will be charging the Debtors based on these hourly
rates of its professionals:
Accounting, Business Process
and Data Analysis
Staff $110-120
Senior 140-155
Manager 185-210
Senior Manager 275-315
Principal/Partner 325-350
Tax Consulting
Staff $110-120
Senior 150-175
Manager 225-275
Senior Manager 300
Principal/Partner 300-500
Cash Management
Staff $175-200
Senior 250
Manager 335
Senior Manager 450
Principal/Partner 600-650
Enrst & Young's estimated fees and expenses for the additional
phases of the project are:
Phase V $ 375,000
Phase VI $1,419,000
Phase VII $ 292,000
Ernst & Young, in addition, will also seek reimbursement for
reasonable and necessary expenses incurred in connection with
the Debtors' cases including, but not limited to,
transportation, lodging, food, telephone, copying, messenger and
overnight delivery.
As to Cap Gemini's engagement as information technology advisors
for the additional phases of the 2001 Financial Initiatives
Project, the firm's professionals will be paid these hourly
rates:
Vice Presidents $384-670
Senior Managers 256-580
Managers 189-410
Senior Staff 128-300
Staff 104-200
Cap Gemini's estimated fees and expenses for the additional
phases of the Project are:
Phase V $ 422,000
Phase VI $1,596,000
Phase VII $ 329,000
Ms. Sawczuk admits that a reallocation of resources may become
necessary to accommodate the phases of the project or among
Ernst & Young and Cap Gemini. However, in no event will the
total amount expended by the Debtors for the final three phases
of the Project exceed $4,433,000. (Owens Corning Bankruptcy
News, Issue No. 31; Bankruptcy Creditors' Service, Inc.,
609/392-0900)
PACIFIC GAS: Objects to Baldwin Associates' $5 Billion Claim
------------------------------------------------------------
Baldwin Associates, Inc. filed a Claim (no. 0010860) against
Pacific Gas and Electric Company in the total amount of "at
least $5,000,0000,000."
The Claim is a one-page, handwritten claim showing:
Name of Creditor: "A California Tax Payer under California
Code of Civil Procedure 526a on Behalf
of All California Tax Payers."
Basis for Claim: "Economic and Personal Injury"
Date debt was incurred: "beginning at least September 6,
2000."
No further explanation or description of the Claim is provided.
No supporting documentation is attached either.
The form is filed by Steven J. Stanwyck, Lawyer. The name and
address where notices should be sent is stated on the form as:
"Steven J. Stanwyck, Esq. (048228), The Stanwyck Firm, APC, 1925
Century Park East 500, Century City, CA 90067.
Debtor objected to the Claim asking the Court to disallow it in
its entirety pursuant to 11 U.S.C. Section 502(b)(1) on the
ground that the Claim is unintelligible, fails to state any
claim upon which relief can be granted, and is wholly
insufficient as a matter of law. Claimant is not a governmental
entity to which taxes are or could be due by the Debtor, Debtor
tells the Court. Neither is the Claim assertable by "a
California taxpayer under California Code of Civil Procedure
[sic] 526a . . . ," the Debtor adds. Section 526a of the
California Code of Civil Procedure confers standing on state
taxpayers to seek injunctive relief against illegal expenditures
or waste of public funds, Debtor explains. Thus, an action may
be brought under that statute only against an officer or agent
of a public entity but PG&E is not "a county, town, city or city
and county of the [S]tate," nor an officer, agent or other
person acting on behalf of such an entity, and is not subject to
suit under Section 526a, Debtor argues.
Furthermore, Claimant was formed as a California corporation on
February 16, 2001, but the Claim asserts that the debt was
incurred "beginning at least September 6, 2000," Debtor points
out.
The Court, having scrutinized the claim form and considered the
Debtor's objection, issued an order sustaining Debtor's
objection to the Claim. The Court ordered that the Claim is
disallowed in its entirety and granted Debtor its costs and
attorneys' fees to the extent authorized by applicable law. The
Court also directed Claimant to file an Amended Claim by a
deadline and stated that it would hold a further hearing. The
deadline passed and Baldwin did not file the Amended Claim.
Neither did Attorney for Claimant, Mr. Stanwyck, attend the
further hearing. As a result, the Court sustained Debtor's
objection to the claim.
After that, Baldwin appealed against the Court's Order
sustaining
Debtor's objection. Baldwin also elected to appeal to the
District Court pursuant to 28 Sec. 158(c)(1). Accordingly, the
matter was transmitted to the District Court.
The Debtor, as Appellee, filed a motion to dismiss
Claimant/Appellant's appeal on the grounds that the appeal was
untimely filed. Debtor points out that Mr. Steven J. Stanwyck
has been "adjudicated by at least two courts to be a vexatious
litigant". Debtor accuses that Claimant/Appellant and its
counsel "deliberately ignored controlling authority when it was
brought to their attention by "PG&E". Thus, Appellee argues that
Claimant/Appellant "forced PG&E unnecessarily to incur
attorneys' fees and costs in bringing this motion ... to date
those fees and costs total over $7,018, and they are likely to
increase by the time of the hearing on this motion." Therefore,
Appellee seeks dismissal of the appeal and damages and costs
incurred as a result of the frivolous appeal.
Baldwin filed an Opposition to Dismissal on Appeal with the
Bankruptcy Court through "Barry Fischer of Counsel for Attorney
for Appellant/Respondent".
In this pleading, Claimant/Appellant argues that the appeal
should not be dismissed and no sanctions should be awarded
against it because the Notice of Appeal was timely filed based
on excusable neglect. Claimant/Appellant further requests
sanctions against PG&E attorneys for filing this frivolous
motion in the amount of $6,300 for 21 hours at $300.00 per hour
for preparing the opposition.
The excuses cited by Claimant/Appellant were: severe illness of
Claimant/Appellant's attorney Steven J. Stanwyck and mailing of
the Court's order by Debtor to a wrong address, thus causing
delay in actual time of receipt.
Specifically, Mr. Barry Fischer, on behalf of
Claimant/Appellant, argues for excusable neglect on the
following grounds:
(1) Due to the severe illness of Mr. Steven J. Stanwyck, the
proof of claim was allegedly not properly filled out.
(2) Due to the continued severe illness of Mr. Stanwyck,
Appellant did not file the amended proof of claim by the
deadline set by the Court.
(3) Mr. Stanwyck was too ill to attend the further hearing on
the objection.
(4) Appellant did not receive notice of the Court's order
sustaining Debtor's objection to the claim until more than
10 days after the Court's order was entered and had no days
to prepare its Notice of Appeal because Debtor mailed the
Court's order to the wrong address and in an untimely
manner.
According to Claimant/Appellant, Debtor states that notice
was served to Claimant/Appellant at the following address:
"Barry Fischer, Of Counsel for The Stanwyck Firm APC, 1925
Century Park East, Suite 500, Los Angeles, CA 90067" but was
actually mailed to "Steven J. Stanwyck, Esq., The Stanwyck
Firm APC, 10354 Wilshire Blvd., Suite 4, Los Angeles,
California 90024", as evidenced by envelopes. As a result,
the notice was returned to sender and later mailed again to
Claimant/Appellant's correct address and Claimant/Appellant
did not actually receive the notice until more than 10 days
of the purported mailing of the notice, which gave
Claimant/Appellant no days to prepare its Notice of Appeal.
(5) As soon as Appellant finally received notice of the Court's
order, it filed its Notice of Appeal at its earliest
opportunity.
Mr. Stanwyck and Mr. Fischer each submits a Declaration
accordingly and attach medicals relating to Mr. Stanwyck by Dr.
Richard H. Tuch, M.D. Dr. Tuch's information is addressed to
Judge John Ouderkirk of the Los Angeles Superior Court.
Dr. Tuch had been Mr. Stanwyck's treating psychiatrist since
June 7, 2001. Mr. Stanwyck was referred to him by his
endocrinologist, Dr. Michael Bush, who had been treating him for
bouts of intermittent dizziness that had previously defied
attempts to determine underlying medical cause. Dr. Bush noted
that Mr. Stanwvck was under a great deal of stress, so he
presumed that this stress might play some role in the either the
initiation or intensification of the patient's dizziness. Dr.
Tuch noted that Mr. Stanwyck was distraught over the pending
dissolution of his family and his emotional state had
necessitated rather intensive treatment, amounting to four
sessions weekly over the course of 9 months.
In his letter to Judge Ouderkirk, Dr. Tuch writes, "Mr. Stanwyck
had exhibited mood swings characterized by irritability,
anxiety, bouts of anger, and depression. At times his anger had
led him to exhibit some loss of control over the expression of
these feelings. ... He has troubles with concentration, memory
and attentiveness that have caused him ongoing problems in the
pursuit of his professional and personal affairs. ... To
complicate matters, on January 27, 2002 Mr. Stanwyck was
involved in a serious automobile accident in which his car was
"totaled." He seems to be currently suffering from a post-
concussive syndrome, and is undergoing a neurological evaluation
at U.C.L.A. We are awaiting the results of that testing, but
preliminary indications suggest that Mr. Stanwyck is suffering
from some neurological sequela. In summary, Mr. Stanwyck's
psychiatric-neurological condition is substantially interfering
with his ability to adequately attend to professional and
personal matters at this time . . . ." (Pacific Gas Bankruptcy
News, Issue No. 34; Bankruptcy Creditors' Service, Inc.,
609/392-0900)
PAPER WAREHOUSE: Grant Thornton Expresses Going Concern Doubts
--------------------------------------------------------------
Paper Warehouse is a chain of retail stores specializing in
party supplies and paper goods. Its fiscal year ends on the
Friday closest to January 31st and is generally 52 weeks;
however it periodically consists of 53 weeks. Its fiscal year
ended February 1, 2002 (fiscal 2001) consisted of 52 weeks, its
fiscal year ended February 2, 2001 (fiscal 2000) consisted of 53
weeks, and its fiscal year ended January 28, 2000 (fiscal 1999)
consisted of 52 weeks.
As of February 1, 2002, Paper Warehouse had 152 stores,
including 100 Company-owned stores and 52 franchise stores.
These stores are conveniently located in major retail trade
areas to provide customers with easy access. The Company
operates these stores under the names Paper Warehouse and Party
Universe. It also operates a website, which can be accessed at
www.PartySmart.com.
On April 12, 2002, Paper Warehouse signed a purchase agreement
to sell 13 stores located in Seattle, Washington, and on April
23, 2002, the Company closed on this transaction and exited the
Seattle market.
Paper Warehouse incurred a net loss of $9.8 million for fiscal
2001. This net loss reflects the Company decision to record a
full valuation allowance against its deferred tax asset, equal
to approximately $6.1 million. The Company incurred net losses
of $434,000 and $4.4 million for fiscal 2000 and fiscal 1999,
respectively, and indicates that it cannot assure that it will
generate sufficient revenues, or control operating expenses, to
achieve or sustain profitability in future years, or to reverse
the valuation allowance established in fiscal 2001 against its
deferred tax asset.
Paper Warehouse is currently in breach of a covenant under the
indenture governing its outstanding subordinated debentures,
which could result in an "Event of Default" under such indenture
and a cross-default under its revolving credit agreement if not
waived by the debenture holders prior to June 16, 2002. Such
events of default could possibly cause the payment amounts
outstanding under the subordinated debentures and revolving line
of credit to be accelerated, in which case the Company may not
have sufficient cash readily available to satisfy such
obligations.
If unable to generate sufficient cash from operations, Paper
Warehouse will be required to adopt one or more alternatives to
raise cash such as refinancing or restructuring outstanding
indebtedness, selling assets or seeking to raise additional debt
or equity capital. The Company's losses, coupled with the
financial difficulties of other party good competitors, could
affect Paper Warehouse's ability to obtain such additional
financing. In addition, such financing may be unavailable or
may be unavailable on favorable terms. If adequate funds are
unavailable or are unavailable on acceptable terms, the Company
may be unable to develop or enhance its operations, products and
services, take advantage of future opportunities or respond to
competitive pressures.
As of February 1, 2002, the Company had approximately $14.9
million of borrowings outstanding, which include amounts
outstanding under its revolving line of credit, its subordinated
debt, its mortgage, its note payable to an unrelated business
partner, capital leases and other debt. Paper Warehouse is
considerably more leveraged than some of its competitors, which
may place it at a competitive disadvantage.
Retail sales of $85.3 million for fiscal 2001 decreased $3.5
million, or 3.9%, from retail sales of $88.8 million for fiscal
2000. Fiscal 2001 contained 52 weeks compared to 53 weeks for
fiscal 2000. Excluding the 53rd week for fiscal 2000, equal to
approximately $1.2 million of sales, retail sales declined 2.6%
year-over-year. Fiscal 2001 sales were negatively impacted by
the weakened economy, which was compounded by the September 11,
2001 tragedy, and resulting effect on consumer confidence.
Although seasonal category sales consistently performed well
during fiscal 2001, everyday product categories performed at
below prior year levels. Sales from the Internet Web site were
not significant during fiscal 2001, although the Web site's
results reflected substantial improvement since its relaunch in
the third quarter of fiscal 2000. During fiscal 2001, Paper
Warehouse opened two Company-owned stores, bringing the total to
100 as of February 1, 2002, compared to 98 at the end of fiscal
2000. Comparable store sales for fiscal 2001 decreased 2.6% from
the prior year comparable period, and were calculated assuming
fiscal 2000 was a 52-week year. This growth rate compares to a
comparable store sales increase of 5.8% for fiscal 2000.
Looking forward, the Company anticipates comparable-store
increases to result from increased advertising, selected price
increases and additional in-store promotional activity.
Fiscal 2001 franchise related fees of $1.5 million increased
$56,000, or 3.9%, over fees for fiscal 2000. The year-over-year
increase reflects increased royalties from increased franchise
store sales and higher initial franchise fees. For both fiscal
2001 and 2000, royalty payments averaged 4% of franchise store
sales. During fiscal 2001, seven franchise stores opened and
four franchise stores closed, bringing the total franchise
stores to 52 as of February 1, 2002, compared to 49 at the end
of fiscal 2000.
Paper Warehouse realized a net loss of $9.8 million, or $5.20
per diluted share, in fiscal 2001. For fiscal 2000, the net loss
was $434,000, or $0.27 per diluted share.
Independent auditors Grant Thornton LLP of Minneapolis,
Minnesota, in its March 12, 2002 Auditors Report on the
Company's financial condition said: "The Company was in breach
of a financial covenant under its subordinated convertible debt
agreement on February 1, 2002 and a waiver of the breach has not
yet been obtained. If a waiver of the breach is not obtained,
payments on the subordinated convertible debentures and the
revolving line of credit could be accelerated. This factor
raises substantial doubt about the Company's ability to continue
as a going concern and satisfy all current obligations as they
become due."
POLYMER GROUP: Files Prepackaged Chapter 11 in South Carolina
-------------------------------------------------------------
Polymer Group, Inc. (NYSE: PGI) said that in order to reduce its
debt and strengthen its competitive position, the Company and 20
domestic subsidiaries have filed voluntary petitions for a "pre-
negotiated" reorganization under Chapter 11 of the U.S.
Bankruptcy Code, and that the major elements of such
reorganization have the backing of its existing bank group and
the holder of more than two-thirds of its outstanding bonds. In
its filings in the U.S. Bankruptcy Court in Columbia, South
Carolina, the Company indicated that it will reorganize on an
expedited basis and has targeted emergence from Chapter 11
during the third quarter of 2002.
Polymer Group has received commitments for up to $125 million in
debtor-in-possession financing from a group of lenders led by
JPMorgan Chase that will be used to fund post-petition operating
expenses and to meet supplier and employee obligations.
Polymer Group's international operations and joint ventures are
excluded from the filing. There should be no impact on the
ability of non-U.S. entities to continue to meet the needs of
their customers, employees and vendors.
The Company has received support for the major elements of the
reorganization from its existing bank group and the holder of
more than two- thirds of its outstanding bonds to implement the
reorganization. PGI expects to eliminate more than $550 million
in debt through this reorganization. In addition, the Company
has a commitment for up to $75 million in the form of a new
money investment from CSFB Global Opportunities Partners, L.P.,
a New York-based investment fund.
Polymer Group Chairman, President and CEO, Jerry Zucker, stated,
"We are committed to completing our reorganization as quickly as
possible and we are targeting emergence in the third quarter of
2002. We expect that the restructuring process will generally
have no impact on the Company's ability to fulfill its
obligations to its customers and employees. During the
restructuring period and beyond, we will continue to operate as
one of the world's leading nonwovens companies and a major
supplier of engineered fabrics. We fully expect that our vendors
and customers will support the steps taken today as part of our
program to adjust our capital structure and strengthen the
Company's position for the future. Vendors will be paid for all
products supplied and services rendered after the filing date."
Mr. Zucker also stated, "We made our best efforts to negotiate a
reasonable debt exchange, but unfortunately a number of note
holders were unwilling to make the proposed concessions. I
regret the impact that our filing will have on PGI shareholders,
but after considering a wide range of alternatives, it became
clear that this course of action was the preferable way to
resolve PGI's restructuring challenges in a timely manner. This
step provides us with an expeditious alternative to reduce our
debt and effectively restructure our balance sheet. I am
confident that with the support of our dedicated employees,
suppliers and customers, PGI will emerge as a stronger and more
competitive company."
Through "first day" motions, Polymer Group has requested that
the Court authorize certain actions, including entering into DIP
financing arrangements, continuing wages and benefits to
employees without interruption and permitting the Company to pay
certain pre-petition obligations to various businesses that are
integral to its operations. It is the Company's intention to
submit a reorganization plan within 10 business days which will
include payment in full to all of its vendors, subject to court
approval.
The Company's pension plans and 401K plans are maintained
independently of the Company and are protected under federal
law. The Company will continue to administer the plans as usual.
There are no shares of Polymer Group, Inc. stock held in any of
the plans.
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.
Polymer Group Inc.'s 9.0% bonds due 2007 (PGI1) are quoted at a
price of 33, says DebtTraders. For real-time bond pricing, see
http://www.debttraders.com/price.cfm?dt_sec_ticker=PGI1
PRANDIUM: Look for Debtors' Schedules & Statements on May 22
------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
grants Prandium, Inc. and FRI-MRD Corporation an extension of
time to file their schedules of assets and liabilities and
statements of financial affairs. The Debtors have until
May 22, 2002 to prepare and deliver those documents and comply
with the requirements of Section 521(1) of the Bankruptcy Code.
Prandium, Inc., filed for chapter 11 bankruptcy protection on
May 6, 2002. Richard Levin, Esq., Peter W. Clapp, Esq., and
Stephen J. Lubben, Esq., at Skadden, Arps, Slate, Meagher &
Flom, LLP represent the Debtors in their restructuring efforts.
When the company filed for protection from its creditors, it
listed $173,882,000 in total assets and $336,536,000 in total
debts.
PRINTING ARTS: Wants Exclusive Period Extended to July 31
---------------------------------------------------------
Printing Arts America, Inc., along with its debtor-affiliates
submit their second motion to extend their exclusivity periods.
The Debtors want to extend their exclusive right to file a
reorganization plan through July 31, 2002 and they want until
September 30, 2002 to solicit acceptances of that plan.
The Debtors assert that they are proceeding diligently to
evaluate their options to exit in these cases while maintaining
the stability of their operations and increase profitability.
To maintain operations and address liquidity issues, the Debtors
relate that they have negotiated and obtained Court approval of
a post-petition financing agreement with a subset of their
prepetition secured lenders. The Debtors have negotiated, and
continue to negotiate, agreements with numerous suppliers and
trade creditors to resolve disputes and prevent supply
interruptions. The Debtors have also worked to maintain their
customer base and retain their sales force. Currently, the
Debtors are continuing to evaluate the feasibility of a sale of
certain of the estates' assets as an exit strategy.
The Debtors believe that the extension is necessary to preserve
the prospect of a consensual reorganization and ensure that the
Debtors have the opportunity to realize the best possible return
for their creditors and equity holders.
Printing Arts America, Inc. filed for chapter 11 protection on
November 1, 2001 in the U.S. Bankruptcy Court for the District
of Delaware. Teresa K.D. Currier, Esq., and William H.
Schorling, Esq., at Klett Rooney Lieber & Schorling represent
the Debtors in their restructuring efforts. When the Company
filed for protection from its creditors, it listed estimated
assets and debts of over $100 million.
RESPONSE ONCOLOGY: Tennessee Court Approves Disclosure Statement
----------------------------------------------------------------
Response Oncology, Inc., (OTC Bulletin Board: ROIXE) and its
affiliated entities said that the United States Bankruptcy Court
for the Western District of Tennessee, Western Division approved
a disclosure statement filed in connection with the Joint Plan
filed by ROI and AmSouth Bank, as agent for itself, Bank of
America, N.A. and Union Planters Bank, N.A. on Friday, May 3,
2002.
Under the Plan, originally filed April 12, 2002, and amended
April 19, 2002, ROI's outstanding common stock, preferred stock,
options and warrants will be cancelled and current shareholders
and warrantholders will not receive any consideration.
The Company has liquidated substantially all of its assets and
will complete the process of liquidating all of its assets this
summer. Under the Plan, the Lenders, whose outstanding secured
claim was allowed in the amount of $29,545,087.31 by Court order
dated October 26, 2001, will be paid all proceeds from the
liquidation, except for amounts to be paid on account of
allowed administrative and priority claims (estimated to be
approximately $3,500,000), and $250,000, which will be
distributed to general unsecured creditors. The liquidation of
ROI's assets will not return to the Lenders or general unsecured
creditors the full amount of their claims.
The Court has set a hearing on the confirmation of the Plan for
June 14, 2002 at 11:00 a.m. CDT. If the Plan is confirmed, upon
completion of the liquidation of all ROI's assets and
distribution of those proceeds, the Company will be dissolved.
Creditors and other parties in interest wishing to obtain a copy
of the Plan and Disclosure Statement may go to
http://www.wallerlaw.com In addition, the Plan, as well as the
Disclosure Statement, are on file with the Court
and are available for review and copying during the Court's
normal business hours.
On April 24, 2002, pursuant to the Court's order extending
permission for ROI to use cash collateral and to make certain
bonus and severance payments, Anthony LaMacchia, ROI's chief
executive officer and a member of ROI's board of directors
resigned, along with all other then-existing members of the
Board. Charles E. Sweet replaced Mr. LaMacchia as CEO and also
serves as chairman of the Board. Peter A. Stark, ROI's chief
financial officer, and James A. Skinner filled the other Board
positions, pursuant to the Court's Cash Collateral Order.
The Board has directed ROI to complete the audit of its 2001
consolidated financial statements. Subject to the timing of the
completion of the audit, ROI will file its Form 10-K as of and
for the year ended December 31, 2001, and its first quarter Form
10-Q for the quarter ended March 31, 2002, with the Securities
and Exchange Commission. The Company anticipates that these
filings will be submitted within the next 45-60 days. Next
week, the Company will also be filing a Form 8-K with the SEC
that contains this press release and its February 2002 unaudited
monthly operating report.
ROUNDY'S INC: S&P Rates $200MM Senior Subordinated Notes at B
-------------------------------------------------------------
A 'B' rating was assigned on May 9, 2002, to Roundy's Inc.'s
planned $200 million senior subordinated note offering due in
2012. These notes will be issued pursuant to Rule 144A with
registration rights. Standard & Poor's also assigned its 'BB-'
senior secured bank loan rating to Roundy's planned $340 million
facility and a 'BB-' corporate credit rating to the company at
that time. Outlook is positive.
The planned debt securities will be issued to help fund the
purchase of Roundy's Inc., a leading food wholesaler and
retailer in the upper-Midwest, by Willis Stein & Partners. As
part of this transaction, Willis Stein & Partners will
contribute a significant amount of PIK preferred and common
stock. The PIK preferred stock is expected to mature after the
subordinated notes.
The ratings reflect Roundy's participation in the highly
competitive food wholesale and retail industry, in which it
competes with much larger companies, and a limited history in
operating a significant retail store base. These risks are
mitigated, somewhat, by the company's leading retail market
position in the greater Milwaukee, Wis., market, and stable
operating performance in its food wholesale segment.
The food wholesale and retail sectors are highly competitive, as
consolidation trends in recent years have led to both segments
being led by large, regionally diverse players. Roundy's total
sales of about $3.5 billion in 2001 were much smaller than food
wholesalers such as Fleming Cos. Inc. and SuperValu Inc., which
each have sales of more then $13 billion, and retailers such as
Kroger Co. and Albertson's Inc., which each have more than $30
billion in sales. Standard & Poor's believes these factors will
challenge Roundy's ability to compete on price, maintain a
competitive cost structure, and expand its customer base.
However, Roundy's has a stable operating history in its food
wholesale segment, in which it has longstanding contractual
relationships with food retailers. These contracts help ensure
significant purchasing requirements from existing customers and
help mitigate some of the risk of lost customers resulting from
the change in ownership.
Roundy's retail operations have increased significantly over the
past two years through the acquisition of 24 Pick 'n' Save
stores in 2000 and 21 Copps stores in 2001. Through these
acquisitions, Roundy's established the leading retail market
position in the Milwaukee, Wis., market, with a 40% share
(including licensed Pick 'n' Save stores) according to the 2002
Market Scope. Same-store sales have trended in the mid-single-
digits area over the past three years, which compares favorably
with industry averages. Retail margins are expected to improve
over the next three years through more efficient labor
management, greater emphasis on higher-margin perishable product
sales, and cost leveraging through new store openings. Standard
& Poor's expects Roundy's will increase its store base, adding
five to seven stores annually over the next three years through
either new stores or fill-in acquisitions.
The proposed transaction would add about $250 million to
Roundy's capital structure (assuming preferred stock is treated
as equity). Pro forma lease-adjusted EBITDA coverage of interest
is 2.7 times. Operating margins of 4.3% in 2001 could increase
to about 5.0% over the next three years as the company focuses
on improving and expanding its higher-margin retail operations.
The company has historically generated positive free cash flow,
and this is expected to continue despite increased capital
expenditures to fund new store growth. Free cash flow is
expected to be used to pay down debt and help fund future fill-
in acquisitions. Financial flexibility is provided by a $90
million revolving credit facility.
The bank facility, which is comprised of a $250 million term
loan maturing in 2009 and a $90 million revolving credit
facility maturing in 2007, is rated the same as the corporate
credit rating. The facility is secured by substantially all of
the company's assets. Under a distressed enterprise value
scenario, Standard & Poor's believes there is a material
advantage to being secured even though the prospects for full
recovery of principal are uncertain.
Outlook
Roundy's leading retail market position in Milwaukee and stable
food wholesale operations provide support for the ratings. An
upgrade could be considered over the next two years if the
company is able to improve operating efficiencies in its retail
stores and maintain stability in its wholesale operations.
Ratings List
Roundy's Inc.
* Corporate credit rating BB-/Positive/--
* Senior subordinated debt B
* Senior secured bank loan BB-
SAFETY-KLEEN CORP: Dai-Ichi Presses for Payment of $1.8MM Claim
---------------------------------------------------------------
The Dai-Ichi Kangyo Bank, Ltd., now known as Mizuho Corporate
Bank, Ltd. as of April 1, 2002, renews its request for relief,
reminding Judge Walsh that this Motion concerns Safety-Kleen
Corp.'s and its debtor-affiliates' refusal to pay certain
insurance-related administrative claims that Dai-Ichi says they
(i) are legally obligated to pay, (ii) have been authorized by
Judge Walsh to pay, and (iii) promised in writing post-petition
to pay. In fact, these claims are identical to other claims that
the Debtors paid post-petition. Furthermore, these claims relate
to an insurance program that the Debtors, in a sworn affidavit,
have represented to Judge Walsh provides benefits to the
Debtors' estates. In short, this Motion involves as clear an
instance of valid administrative claims as one is likely to
find", says Mr. Frederick B. Rosner of Cozen O'Connor. Given
that the Debtors have no plausible defense to paying these
claims, Dai-Ichi submits that Judge Walsh should enter an order
directing the Debtors to pay the claims.
The parties enter a Scheduling Stipulation which requires that
the parties complete discovery and file renewed motion papers
and objections by May 13, 2002. It also sets May 17, 2002 as
the date for oral argument and an evidentiary hearing on
Movant's renewed motion. (Safety-Kleen Bankruptcy News, Issue
No. 35; Bankruptcy Creditors' Service, Inc., 609/392-0900)
SEEHAFEN ROSTOCK: Fitch May Withdraw BB Senior Rating
-----------------------------------------------------
Fitch Ratings, the international rating, agency has announced
that it may withdraw the Senior Unsecured rating of Seehafen
Rostock GmbH due to the lack of information being provided to
the agency by this borrower. Seehafen Rostock's current Senior
Unsecured rating is 'BB'.
In the last week in particular Fitch has sought to make contact
with Seehafen Rostock in order to obtain information about the
credit profile of the company. Other public comments suggest
that this is deteriorating, but Fitch has not been provided with
any details on this subject. Earlier in 2002 the agency also
sought to obtain clarification from the company about the status
of the rating, without success. If this situation continues for
one week from today, Fitch will have no option but to withdraw
the Senior Unsecured rating.
SPECIAL METALS: Wins Final Court Nod For $60 Mil DIP Financing
--------------------------------------------------------------
Special Metals Corporation (OTC: SMCXQ) received final court
approval for an incremental $60 million debtor-in-possession
revolving credit facility.
Following a hearing earlier Friday, the Honorable William S.
Howard, U.S. Bankruptcy Judge for the Eastern District of
Kentucky, entered the order approving the new credit facility.
The facility is with Credit Lyonnais, as a lender and agent for
a bank group. The facility provides for immediate availability
of $24.9 million plus a $10 million for letters of credit.
Availability will thereafter increase monthly until August 1,
2002, at which time the total availability will be $60 million
with a letter of credit sublimit of up to $20 million.
"While we are pleased to obtain final approval, we are equally
pleased that the Company has been generating sufficient
liquidity so that we have not yet needed to draw upon the
facility," said Special Metals President T. Grant John.
Special Metals is the world's largest and most-diversified
producer of high-performance nickel-based alloys. Its specialty
metals are used in some of the world's most technically
demanding industries and applications, including: aerospace,
power generation, chemical processing, and oil exploration.
Through its 10 U.S. and European production facilities and a
global distribution network, Special Metals supplies over 5,000
customers and every major world market for high-performance
nickel-based alloys.
SUNRISE TECH.: Creditors Okay Proposed Debt-for-Equity Swap
-----------------------------------------------------------
Sunrise Technologies International, Inc. (OTC Bulletin Board:
SNRS) has received signed agreements from more than 50% of its
unsecured creditors to convert into equity, assuming the
proposed Restructuring announced on March 18, 2002 occurs.
Sunrise has received written agreements from convertible
debenture holders holding a majority of the $8.9 million
outstanding convertible debt. It has also made agreements with
holders of more than 67% of its secured debt to extend their
maturity dates through the end of the year. In addition,
Sunrise is in discussion with various sources with respect to
obtaining additional loans and/or equity financing.
David Brewer, Manager of Anesti Management LLC, which manages
the operations of Sunrise, said, "I am pleased at the response
so far from our creditors and constituents. I am one of
Sunrise's largest creditors and, when I explain to them that for
the Company to survive it will need to be reorganized either in
a bankruptcy court or in an out-of-court restructuring, most of
the creditors understand why the latter choice is preferable.
People really want this Company to succeed. Doctors want this
technology to survive, and the Sunrise community wants to help
these ophthalmologists and their patients. With enough time and
continued cooperation from our creditors, I think it's possible
to keep Sunrise's assets from being liquidated."
The Company has extended until May 30, 2002 the deadline for its
remaining creditors to accept the Restructuring proposal, based
on an agreement in principle reached with Silicon Valley Bank to
extend the period allowed for this voluntary creditor workout.
Anesti Management LLC has also extended its agreement to manage
the affairs of the Company and the Restructuring. There can be
no assurance, however, that the Restructuring will be
successfully completed.
Mr. Brewer also said, "While I must emphasize that an investment
in Sunrise stock is highly speculative, I am more convinced than
ever that the Sunrise LTK technology has a substantial place in
the marketplace for vision correction. Assuming we are able to
complete the Restructuring, our plan is to refine the LTK
technology, which we believe will improve predictability, and
later to incorporate advanced Wavefront technology, which will
further distinguish Sunrise's procedure as technologically
unique."
The Company has restaffed its customer service functions and
relocated to 1600 Adams Drive, Menlo Park, CA 94025 as its
temporary headquarters. The customer service hotline telephone
number is now 650-464-5498. The Company's main telephone number
510-623-9001 is unchanged. The primary functions of the Company
are being staffed with independent contractors, many of whom are
former employees of Sunrise. In other developments, Alan
Magazine has resigned from the board of directors.
The Company is delinquent in its 10-K filing for 2001 due to
lack of staff and funds to complete it. As a result, the
Company anticipates that its stock will become ineligible for
quotation on the OTC bulletin board on or around May 18, 2002.
Thereafter, the Company's stock will be eligible to trade on OTC
or the "pink sheets."
Sunrise Technologies International, Inc. is a refractive surgery
company based in Menlo Park, California, that has developed
holmium YAG laser-based systems that utilize a patented process
for shrinking collagen developed by Dr. Bruce Sand (the "Sand
Process") for correcting ophthalmic refractive conditions.
SUNTERRA: Makes Adjustments to Previous Financial Statements
------------------------------------------------------------
Sunterra Corporation announced that its revenues for the years
ended December 31, 2001 and 2000 were $272 million and $288
million, respectively, and that its loss from operations (after
reorganization expenses) and net loss were $52 million and $72
million, respectively, for 2001 and $304 million and $376
million, respectively, for 2000.
Reorganization expenses were $50 million for 2001 and $78
million for 2000. The net loss for 2000 also reflects, among
other writedowns, reductions for asset impairments and
abandonment of $68 million. The company's results for the two
years, which are unaudited, are included in a revised proposed
Plan of Reorganization and Disclosure Statement which is being
filed with the United States Bankruptcy Court for the District
of Maryland (Baltimore Division) and in a filing on Form 8-K
being made with the Securities and Exchange Commission.
Sunterra and certain of its subsidiaries continue to operate
their businesses as debtors-in-possession under Chapter 11 of
the Bankruptcy Code.
Sunterra also announced that, in connection with the preparation
of its financial statements for the year ended December 31,
2000, Sunterra had identified certain items contained in its
prior period audited consolidated financial statements which
require a reduction to the previously reported 1999 retained
earnings balance. The principal items so identified relate to
corrections of errors and corrections of the application of
generally accepted accounting principles to certain
transactions. Sunterra will complete the review process prior
to the issuance of its audited financial statements for its 2000
fiscal year. Sunterra reported that the adjustments to all of
the items so identified to date will total approximately $113
million. The impact of the $113 million adjustment is presented
in Sunterra's unaudited 2000 financial statements described
above as a reduction in the previously reported December 31,
1999 retained earnings balance.
Sunterra has also made certain changes to its accounting
policies that have a cumulative effect on the financial
statements for the period ended December 31, 2000 that total
approximately $19 million and has recognized certain asset
impairment charges and other adjustments to the fiscal year 2000
financial statements, as previously included in monthly
operating reports filed with the Bankruptcy Court, that total
approximately $189 million. The total adjustments, inclusive of
the prior period adjustments to the 1999 retained earnings
balance, resulted in a decrease of approximately $321 million in
retained earnings from that previously reported as of December
31, 2000.
Arthur Andersen LLP audited Sunterra's financial statements for
the 1993 through 1999 fiscal years. In March 2001, Sunterra
terminated Arthur Andersen as Sunterra's auditor and retained
Deloitte & Touche LLP as its auditor. On April 25, 2002, Arthur
Andersen delivered a letter to the Audit Committee of Sunterra's
Board of Directors indicating that Arthur Andersen saw no need
for a reduction of Sunterra's 1999 retained earnings balance as
referred to above and that Arthur Andersen believed that any
such reduction would be inappropriate and contrary to generally
accepted accounting principles. Sunterra expects that the Audit
Committee will meet with Arthur Andersen regarding the matters
set forth in Arthur Andersen's letter.
As previously announced, as a result of these matters Sunterra's
audited financial statements for 1999 and prior periods, as well
as its unaudited financial statements for periods in 2001 and
2000 that were included in monthly operating reports previously
filed with the Bankruptcy Court, should not be used or relied
upon. Sunterra will not reissue any of its financial statements
for 1999 or prior periods. Sunterra's management believes that
the accounting treatment relating to the adjustments described
above is correct and anticipates that Sunterra will issue
audited financial statements for the 2000 and 2001 fiscal years
in the near future.
Sunterra Corporation is one of the world's largest vacation
ownership companies, with owner families and resorts in North
America, Europe, the Pacific and the Caribbean.
SWAN TRANSPORTATION: Wants to Continue Jackson Walker Retention
---------------------------------------------------------------
Swan Transportation Company wants to continue employing Jackson
Walker, LLP as special counsel with respect to Tort Claims
asserted against the Debtor in prepetition lawsuits.
The Debtor requires the assistance of Jackson Walker as special
counsel to:
-- provide historical information concerning the validity,
number, nature and amount of the Tort Claims;
-- monitoring state court litigation for the limited
purpose of filing suggestions of bankruptcy in the state
court proceedings as appropriate;
-- providing information to the Debtor concerning the
status of the litigation; and
-- providing notice of claims to insurance carriers.
Jackson Walker has represented the Debtor prepetition and has
developed knowledge and expertise that will be beneficial to the
Debtor and will reduce cost to its estate in liquidating the
Tort Claims.
Jackson Walker professionals and their current billing rates
are:
Richard E. Griffin Partner $350 per hour
John Kopke Partner $300 per hour
Lisa A. Powell Partner $265 per hour
Mary Lou Flynn Dupart Of Counsel $265 per hour
Nelita Hatch Associate $165 per hour
Earl H. Walker Associate $150 per hour
Kathy Adair Legal Assistant $130 per hour
Heather Currie Legal Assistant $120 per hour
Terrie Huff Legal Assistant $115 per hour
Rosemary St. John Legal Assistant $95 per hour
Jamie Vargo Legal Assistant $90 per hour
Swan Transportation Company filed for chapter 11 protection on
December 20, 2001. Tobey Marie Daluz, Esq., Kurt F. Gwynne, Esq.
at Reed Smith LLP and Samuel M. Stricklin, Esq. at Neligan,
Tarpley, Stricklin, Andrews & Folley, LLP represent the Debtor
in its restructuring efforts. When the Company filed for
protection from its creditors, it listed assets and debts of
over $100 million.
SWAN TRANSPORTATION: Seeks To Hire National Economic Research
-------------------------------------------------------------
Swan Transportation Company requests permission from the U.S.
Bankruptcy Court for the District of Delaware to hire National
Economic Research Associates, Inc.
The Debtor relates that before filing it filed for chapter 11
protection, it was engaged in extensive negotiations with an
unofficial committee. During this pre-petition period, Swan also
employed NERA to perform research and analysis of the number and
types of asbestos-related and silica-related claims that would
likely be brought against Swan in the future. NERA's preliminary
reports served as the starting point for negotiations as to the
terms of any proposed plan of reorganization to be filed by Swan
in its bankruptcy case.
The Debtor wishes to continue hiring NERA to provide the estate
with further research and analysis regarding the likely number,
type and value of asbestos-related and silica-related claims
that exist against this estate and to provide confirmation
testimony.
Subject to Court approval, compensation will be payable to NERA
on an hourly basis, plus reimbursement of actual, necessary
expenses incurred by the firm. The professionals proposed to
perform the work for the Debtor and their current hourly rates
are:
Fred Dunbar Sr. Vice President $475 per hour
David Tabak Vice President $375 per hour
Walter Surratt Senior Consultant $340 per hour
Faten Sabry Senior Consultant $335 per hour
Tom Bomholdt Consultant $330 per hour
Phoebus Dhrymes Outside Consultant $450 per hour
Junior Staff rates $125 to $250 per hour
The professional services that NERA will render to the Debtor
include:
a. Providing thorough and detailed analysis of the number,
type and value of potential asbestos-related and silica-
related personal injury claims against the estate;
b. Making representatives with knowledge of the research
available for discovery relating to any aspect of this
case; and
c. Appearing in Court to provide testimony regarding the
results of its research and analysis thereof.
Swan Transportation Company filed for chapter 11 protection on
December 20, 2001. Tobey Marie Daluz, Esq., Kurt F. Gwynne, Esq.
at Reed Smith LLP and Samuel M. Stricklin, Esq. at Neligan,
Tarpley, Stricklin, Andrews & Folley, LLP represent the Debtor
in its restructuring efforts. When the Company filed for
protection from its creditors, it listed assets and debts of
over $100 million.
TRUMP CASINO: S&P Gives CCC Rating to $130M 2nd Mortgage Notes
--------------------------------------------------------------
On May 10, 2002, Standard & Poor's assigned its 'CCC' rating to
Trump Casino Holdings LLC's (TCH) proposed $130 million second
priority mortgage notes due 2010. Concurrently, it affirmed its
'B-' rating for TCH's proposed first priority mortgage notes due
2010. The first and second mortgage notes will be jointly issued
by TCH and its subsidiary, Trump Casino Funding Inc. The outlook
is stable.
The ratings for Trump Atlantic City Associates (TAC), an
affiliate of Atlantic City, New Jersey-based TCH, remain on
CreditWatch with positive implications where they were placed on
April 30, 2002.
Standard & Poor's expects to withdraw its corporate credit and
senior secured debt ratings for TCH and TAC parent company, TCH
Trump Hotels & Casino Resorts Holdings L.P. (THCR) upon
consummation of the TCH note offering. It is anticipated that
the new notes offered by TCH will refinance the outstanding
balance of THCR's 15.5% senior notes due 2005.
The newly assigned rating to the proposed second mortgage notes
reflects a change to TCH's anticipated note offering. The first
mortgage note offering will be reduced to $340 Million from its
originally proposed $470 million. The balance of $130 million
will be funded with the proposed second mortgage notes.
Ratings for TCH reflect the good operating momentum at its two
casino properties, Trump Marina and Trump Indiana. Ratings
further reflect improved financial flexibility stemming from the
expected refinancing of debt that was scheduled to mature in
2003. These factors are offset by high debt leverage, somewhat
limited anticipated levels of free cash flow to reinvest in the
properties, and the relationship to more highly leveraged TAC.
Standard & Poor's expects that the Chicago gaming market will
remain healthy over the intermediate term, providing a favorable
operating environment for Trump Indiana. Recent cost-reduction
efforts improved the bottom line performance of this property in
2001, and those savings should continue to benefit the company
in 2002 and beyond.
Standard & Poor's expects that Trump Marina will benefit over
the long term from its location in the Marina district of
Atlantic City. The Marina district is expected to receive more
visitors in 2002, driven by improved access since the July 2001
opening of a tunnel that connects the area to the Atlantic City
Expressway. Moreover, substantial renovations at nearby
Harrah's, including a new 452-room hotel tower, are expected to
help attract visitors to the Marina. The anticipated summer 2003
opening of Borgata, a 2,000-room property being built in the
Marina district by joint venture partner MGM Mirage (and Boyd
Gaming Corp., will further add excitement to this section of the
city when it is complete. In the intermediate term, Standard &
Poor's expects that Trump Marina will indirectly benefit from
these investments and, longer term, has the potential to expend
and benefit to an even greater degree.
The ratings for TCH and TAC are linked, given their common
parent company. Standard & Poor's will continue to monitor the
consolidated performance of THCR, as well as the individual
performance of TCH and TAC. Although covenants under the bond
indenture for the proposed notes limit transactions with
affiliates, management decisions in the interest of parent
company shareholders may not always be fully aligned with the
interests of TCH bondholders.
Aside from the limitation on transactions with affiliates,
bondholders are expected to benefit from the excess cash flow
offer requirement and the existence of a maintenance capital
reserve account. Both covenants are designed to require that
certain excess free cash flow generated by TCH is applied toward
debt reduction and toward re-investing in the properties.
Outlook
The outlook reflects Standard & Poor's expectation that the
operating environment in Atlantic City and the Chicago market
will be favorable in the near term, helping to drive a modest
improvement in TCH's cash flow and credit measures.
RATINGS ASSIGNED
Trump Casino Holdings LLC
* Corporate credit rating B-
* Senior secured first mortgage note B-
* Senior secured second mortgage note CCC
TOUCHSTONE RESOURCES: Davidson & Co. Airs Going Concern Doubts
--------------------------------------------------------------
Touchstone Resources Ltd. is engaged in the business of
acquiring interests in petroleum and natural gas rights, and the
exploration for and development, production and sale of,
petroleum and natural gas in the United States. It currently
holds interests in five project areas and have recently sold its
interest in a sixth project area. It presently owns no proven or
probable oil and gas reserves. Four wells were recently brought
on production, however, there has been insufficient production
time to assign any proven or probable oil and gas reserves. The
Company is currently involved in drilling or completing 5 wells
in 4 different project areas. If any of these wells produce oil
or gas in paying quantities as expected, it will then have
reserves in proved and probable categories. Its current drilling
activities encompass development and production.
The Company was incorporated under the name of Murjoh Resources
Inc. on October 5, 1982 under the laws of the Province of
British Columbia. Effective August 25, 1987, the name was its
common stock is traded on the Canadian Venture Exchange
("CDNX"). Its principal business activities, which are conducted
through its wholly owned subsidiaries, Fortis Energy, LLC, and
Touchstone Resources USA, Inc., are oil and gas exploration,
development, operations, and acquisitions of oil and gas leases.
The interests that it seeks to acquire will be working interests
ownership positions in oil and gas leases and/or in specific
wells. Fortis Energy, LLC is a Texas limited liability company
formed on April 17, 1998. Touchstone Resources USA, Inc., is a
Texas corporation formed on May 12, 2000.
Touchstone has had operating losses and limited revenues to
date, is experiencing negative cash flow and does not expect to
be profitable in the foreseeable future.
It has been operating at a loss each year since inception, and
expects to continue to incur substantial losses for at least the
foreseeable future. Net loss applicable to common stockholders
for the years ended September 30, 1999, 2000 and 2001 were
approximately $180,080, $2,111,241 and $3,552,123 respectively.
Through September 30, 2001, the Company had an accumulated
deficit of approximately $5,843,444. It also had limited
revenues to date. Revenues for the year ended September 30,
1999, 2000 and 2001 were $0, $31,908 and $123,411 respectively.
Further, it may not be able to generate significant revenues in
the future. In addition, it expects to incur substantial
operating expenses in connection with oil exploration
activities. As a result, it expects to continue to experience
negative cash flow for at least the foreseeable future and
cannot predict when, or even if, it might become profitable.
If unable to produce oil and/or gas from its properties
operations will be severely affected. Its business of exploring
for and producing oil and gas involves a substantial risk of
investment loss which even a combination of experience,
knowledge and careful evaluation may not be able to overcome.
Drilling oil and gas wells involves the risk that the wells may
be unproductive or that, although productive, the wells do not
produce oil and/or gas in economic quantities. Other hazards,
such as unusual or unexpected geological formations, pressures,
fires, blowouts, loss of circulation of drilling fluids or other
conditions may substantially delay or prevent completion of any
well. Adverse weather conditions can also hinder drilling
operations. A productive well may become uneconomic in the event
water or other deleterious substances are encountered, which
impair or prevent the production of oil and/or gas from the
well. In addition, production from any well may be unmarketable
if it is impregnated with water or other deleterious substances.
As with any petroleum property, there can be no assurance that
oil and gas will be produced from the properties in which
Touchstone has interests.
"[U]nless the Company attains future profitable operations
and/or obtains additional financing, there is substantial doubt
about the Company's ability to continue as a going concern,"
Davidson & Company, Chartered Accountants of Vancouver, Canada
says in its Auditors Report dated January 16, 2002.
UNITED COMPANIES: Fitch Downgrades Manufactured Housing Bonds
-------------------------------------------------------------
Fitch Ratings has downgraded the ratings of 13 classes of United
Companies Financial Corporation's manufactured housing
transactions.
In October 1998, UCFC first announced it would sell or close its
manufactured housing operation. Subsequently, in March 1999, the
company filed for Chapter 11 bankruptcy protection. Since these
events, Fitch has taken numerous rating actions on the company's
manufactured housing bonds (see press releases dated Oct. 30,
1998, Feb. 4, 1999, June 24, 1999, Sept. 8, 2000 and June 14,
2001). The rating actions reflected the poor performance of the
pools as well as the uncertainty surrounding the status of the
servicing operation due to the bankruptcy.
Poor performance of the loans has caused considerable interest
shortfalls on a number of transactions. The most recent rating
actions took place in June 2001. At that time Fitch downgraded
and/or placed on Rating Watch Negative a number of bonds.
In December 2000, EMC Mortgage Corp (EMC), acquired the
servicing rights for UCFC's manufactured housing portfolio.
Since the transfer of servicing, there has been no significant
improvement in performance. Due to the unique nature of the
manufactured housing asset with regard to liquidation, Fitch
does not expect recovery rates (which are currently running at
approximately 15%) to improve.
At this time, Fitch expects the subordinate bonds to experience
prolonged disruptions in interest payments. Additionally, a
number of 'AA-'-rated bonds have experienced interest shortfalls
as well. The rating on these securities address the likelihood
of receipt of distributions according to their terms. Since the
financial structures provide for repayment of interest
shortfalls which Fitch believes may be recoverable, these bonds
were placed on Rating Watch Negative to inform investors of the
cash flow status. At that time it was unclear whether those
shortfalls would be short term or would occur over a prolonged
period of time. Given the current collateral and servicing
performance, coupled with the significant amount of outstanding
unpaid interest shortfalls, these bonds can no longer maintain
their 'AA-' ratings.
The affected securities are:
United Companies Financial Corp.'s manufactured housing
contracts pass-through certificates:
--Series 1996-1 class M, downgraded to 'BBB-' from 'AA-' and
will remain on Rating Watch Negative;
--Series 1996-1 class B-2, downgraded to 'D' from 'CCC';
--Series 1997-1 class M, downgraded to 'BB-' from 'BBB-' and
will remain on Rating Watch Negative;
--Series 1997-1 class B-1 downgraded to 'CCC' from 'B';
--Series 1997-2 class M, downgraded to 'BB-' from 'BBB-' and
will remain on Rating Watch Negative;
--Series 1997-2 class B-1, downgraded to 'CCC' from 'B';
--Series 1997-3, class M, downgraded to 'BBB-' from 'AA-' and
will remain on Rating Watch Negative;
--Series 1997-3 class B-1, downgraded to 'CCC' from 'B';
--Series 1997-4 class M, downgraded to 'A-' from 'AA-' and
will remain on Rating Watch Negative;
--Series 1997-4 class B-1, downgraded to 'CCC' from 'B';
--Series 1998-1 class M, downgraded to 'BB-' from 'BBB-' and
will remain on Rating Watch Negative;
--Series 1998-1 class B-1, downgraded to 'CCC' from 'B';
--Series 1998-2 class B-2, downgraded to 'D' from 'CCC'.
The following security will remain on Rating Watch Negative:
--Series 1998-2 class B-1, 'BBB'.
Also, the following bond has been removed from Rating Watch
Negative:
--Series 1998-3 class B-1, 'BBB'.
Fitch will continue to monitor the performance of the collateral
pools backing the securities as well as the status of the
servicing platform.
UNITED INDUSTRIES: S&P Revises Outlook on B Rating to Positive
--------------------------------------------------------------
Standard & Poor's on May 10, 2002 revised its outlook on lawn
and garden pesticide and fertilizer-maker United Industries
Corp. to positive from stable. The revision is based on Standard
& Poor's expectation that the company's improved financial
profile will be sustainable. In addition, Standard & Poor's
affirmed the single-'B' corporate credit rating for the company.
The affirmation incorporates the recent amendment to the
company's bank credit facility, which increased the term loan B
by an incremental $35 million and the revolving credit facility
by an incremental $10 million.
The company's total debt outstanding as of March 31, 2002 was
about $400 million.
St. Louis, Missouri-based United Industries ratings reflect it's
high debt leverage, seasonal business characteristics, and
competitive industry dynamics. These factors are somewhat offset
by the company's solid market positions in consumer lawn and
garden pesticides and fertilizers, and household insecticides, a
more diversified product portfolio and customer mix. The
negative factors are also offset by favorable industry growth
prospects.
United Industries' operating performance showed some improvement
in 2001, which continued into the first quarter of 2002, the
result of better business fundamentals. Improved results
followed operating performance that over the past few years was
hurt by retail inventory balancing issues, weather, and the
withdrawal of the company's Durasban product.
United Industries manufactures and markets consumer lawn and
garden pesticides, household insecticides, and lawn and garden
fertilizers. Within the growing $2.8 billion U.S. consumer lawn
and garden, and household insecticides retail markets, the
company participates in the value and opening price point
categories. The company is well positioned within its product
categories with the No. 1 position in home centers and No. 2
position within the mass merchandiser channel. Still, industry
dynamics remain competitive with branded and nonbranded
participants, including segment leader, The Scotts Co.
(BB/Stable/--). However, United Industries' low cost structure
and strong distribution network enable it to provide a higher
return to retailers, as well as generate consistently high
lease-adjusted EBITDA margins of about 20%.
Still, United Industries' business is highly seasonal, with
about 75% of sales and profitability occurring in the first half
of the calendar year. In addition, sales can also be hurt by
unfavorable weather conditions.
As expected, the company's growth has come primarily from
acquisitions but should also benefit from favorable demographics
and new product introductions. Indeed, United Industries'
revenues before promotion expense increased about 70% for the
three months ended March 31, 2002 compared with the same period
last year, reflecting the December 2001 acquisition of the
fertilizer brands from Pursell Industries Inc. Moreover, for the
trailing 12 months ended March 31, 2002, EBITDA coverage of
interest improved to about 2 times, with debt to EBITDA now
about 6x. Additionally, the company's credit profile should
benefit from the recently completed and partially equity funded
acquisition of the Schultz Co. The Schultz acquisition will not
only diversify United Industries' product portfolio but will
provide cross-selling opportunities that could lead to a
customer mix similar to the industry.
The upsized bank facility provides the company with adequate
financial resources to support its business initiatives.
Outlook
Despite the seasonal business characteristics and challenging
industry conditions, United Industries' ratings could be raised
if the company can demonstrate sustainable improvement in credit
protection measures over time.
Ratings Affirmed:
* Corporate Credit Rating B
* Senior Secured Debt B
* Subordinated Debt CCC+
VERADO HOLDINGS: Delaware Court Sets June 3 as Claims Bar Date
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware fixes
June 3, 2002 as the Claims Bar Date -- the deadline by which
creditors of Breakaway Solutions, Inc. must file their proofs of
claim or be forever barred from asserting that claim.
The Court rules that each person or entity that wishes to assert
a claim against the Debtors that arose before the Petition Date,
shall file a written proof of that claim and must be received on
or before 4:00 p.m. of the Claims Bar date by:
Verado Claims Processing Center
c/o Bankruptcy Services, LLC, PO Box 5285
F.D.R. Station, New York, New York 10150-5285
or
Verado Claims Processing Center
c/o Bankruptcy Services, LLC
70 East 55th Street, 6th Floor
New York, New York 10022-3222
The Court adds that the Governmant Bar Date, by which all
governmental units' proof of claim must be received on or before
August 16, 2002 at 4:00 p.m.
Proofs of claim are not required to be filed anymore if they
are:
a) claims that has already properly filed with the Court;
b) claims not listed as "disputed," "contingent" or
"unliquidated" in the Schedules; and who agrees with the
nature, classification and amount of such claim set
forth in the Schedules;
c) claim or interest previously has been allowed by, or
paid pursuant to, an order of this Court;
d) any person having a claim as an administrative expense
of the Debtor's chapter 11 case; and
Verado Holdings, Inc., through its subsidiaries, provides
outsourced services as well as professional services, data
center, and application hosting solutions for various
businesses. The Company filed for chapter 11 protection on
February 15, 2002. When the Debtors filed for protection from
its creditors, it listed $61,800,000 in assets and $355,400,000
in liabilities.
VERADO HOLDINGS: Gets Permission to Hire Klett Rooney as Counsel
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approves
the retention of Klett Rooney Lieber & Schorling, as co-counsel
to the Official Committee of Unsecured Creditors, nunc pro tunc
to March 7, 2002.
Klett Rooney will provide various legal services to the
Committee in its role as co-counsel:
a) rendering legal advice with respect to the powers and
duties of the committee and the other participants in
the Debtors' cases;
b) assisting the Committee in its investigation of the
acts, conduct, assets, liabilities and financial
condition of the Debtors, the operation of the Debtors'
businesses and any other matter relevant to the Debtors'
cases, as and to the extent such matters may affect the
Debtors' creditors;
c) participating in negotiations with parties-in-interest
with respect to any disposition of the Debtors' assets,
plan of reorganization and disclosure statement in
connection with such plan, and otherwise protecting and
promoting the interests of the Debtors' creditors;
d) preparing all necessary applications, motions, answers
orders, reports and papers on behalf of the Committee,
and appearing on behalf of the Committee at Court
hearings as necessary and appropriate in connection with
the Debtors' cases;
e) rendering legal advice and performing general legal
services; and
f) performing all other necessary legal services in
connection with these chapter 11 case.
The attorneys who will primarily represent the Committee and
their standard hourly rates are:
a) Teresa K.D. Currier, Shareholder $395 per hour
b) Kerri K. Mumford, Associate $140 per hour
Other attorneys and support staff may provide services to the
Committee within these ranges:
Shareholders $225 to $470 per hour
Associates $125 to $270 per hour
Paralegals $65 to $120 per hour
Verado Holdings, Inc., through its subsidiaries, provides
outsourced services as well as professional services, data
center, and application hosting solutions for various
businesses. The Company filed for chapter 11 protection on
February 15, 2002. When the Debtors filed for protection from
its creditors, it listed $61,800,000 in assets and $355,400,000
in liabilities.
WARNACO GROUP: Valentino Asks to Allow Late Filing of Claims
------------------------------------------------------------
In separate motions, three Valentino companies seek the Court's
authority to allow them to file late proofs of claim in the
bankruptcy cases of Warnaco Group, Inc. and its debtor-
affiliates:
(a) Valentino USA as successor-in-interest of Valentino
Couture, Inc.;
(b) Valentino S.p.A.
(c) Valentino Globe B.V. formerly known as Globelegance B.V.
Phillip R. Forlenza, Esq., at Patterson, Belknap, Webb & Tyler,
LLP, in New York, relates that the three companies have License
Agreements with the Debtors where the Debtors are granted the
license to use the mark "Valentino" and the "V" design mark in
the manufacture, distribution and sale of intimate apparel in:
Valentino Entity Agreement Date Location Covered
---------------- -------------- ----------------
Valentino USA July 4, 1987 USA, its territories,
Puerto Rico & Canada
Valentino S.p.A. December 4, 1995 Italy
Valentino Globe December 4, 1995 around the world
except USA, Canada,
Italy and Japan
Pursuant to the Agreements, Mr. Forlenza says, the Debtors are
required to make payment to Valentino using a formula based upon
the Debtors' sales, subject to certain minimum payments.
The Agreements are due to expire on December 31, 2002. However,
Mr. Forlenza reports, the Debtors ceased performing under the
Agreements in early 1999 although it had made its minimum
payments until April 2001.
Mr. Forlenza notes that Valentino is not listed as a creditor on
the Schedules and thus did not receive notice of the Debtors'
bankruptcy. Moreover, Valentino was also not served with the Bar
Date Order. Thus, Valentino only learned about the Bar Date on
January 15, 2002 -- days after the deadline of filing of proofs
of claim.
Upon knowledge, Valentino filed a proof of claim on January 18,
2002 in the amount of:
Valentino Entity Claim Amount
---------------- ------------
Velentino USA $1,356,731
Valentino S.p.A. 214,287
Valentino Globe 637,499
Since Valentino was unaware of the Bar Date, Mr. Forlenza
contends that, pursuant to Rule 9006(b) of the Federal Rules of
Bankruptcy Procedures, Valentino should be allowed to file the
late proof of claim because the failure to file was the result
of an excusable neglect without prejudicing the Debtors'
interests. (Warnaco Bankruptcy News, Issue No. 24; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
WHEELING-PITTSBURGH: Asks Court To Continue Tatum's Employment
--------------------------------------------------------------
Wheeling-Pittsburgh Steel Corp. and its debtor-affiliates ask
Judge Bodoh for authority to further employ Tatum CFO Partners,
LLP, a second time to provide short-term financial consulting
services to WPC and WPSC relating to WPC's equity investment in
Ohio Coatings Company and WPSC's supply agreement with OCC.
The Debtors sought and obtained Judge Bodoh's approval for the
retention of Tatum to provide short-term financial consulting
services to WPC and WPSC with respect to WPC's 50% equity
investment in OCC and WPSC's supply agreement with OCC.
OCC is a company that produces tin plate. OCC's current senior
financing is maturing and OCC is actively looking for
alternative sources of financing. The interests of OCC are
intertwined with those of WPC and WPSC to the extent that, if
OCC were to be unable to sustain operations, it would have a
negative impact on the financial condition and operations of the
Debtors.
In the original Application, the Debtors said they anticipated
that the services to be provided by Tatum to WPC and WPSC would
be completed no later than the end of April 2002 and probably
sooner. Although Tatum has made substantial progress in its
attempt to obtain alternative sources of financing for OCC and
in its negotiations with Dong Yang Tin Plate of Korea, the
remaining 50% shareholders of OCC, to restructure WPC's
ownership interest in OCC, additional time is needed for Tatum
to complete its services to WPC and WPSC. The Debtors now
anticipate that the services to be provided by Tatum to WPC and
WPSC should be completed no later than the end of June 2002.
The Tatum Order stated that, if the Debtors wish to have Tatum
perform additional services not otherwise described in the Tatum
Agreement, the Debtors will first apply to Judge Bodoh for
permission to further employ Tatum and for approval of any fees
to be paid to Tatum for additional services.
If Judge Bodoh grants this Application, Tatum, by and through
Mr. James R. Duncan, Jr., will continue to provide specific
services for WPC, WPSC and the Debtors as the Debtors deem
appropriate and feasible in order to advise the Debtors with
respect to their interests in OCC, including:
(1) continuing to assist WPC in the development of a
recapitalization strategy for WPC's substantial equity interest
in OCC;
(2) continuing to assist WPC with respect to enhancing the
value of WPC's equity interest in OCC;
(3) continuing to assist WPC in the development of a
strategy for the disposition of some or a part of WPC's equity
interest in OCC;
(4) continuing to assist WPC and the Debtors with any
negotiations involving Dong ^Yang Tin Plate of Korea relating to
these services;
(5) continuing to assist the Debtors in considering the
OCC banking relationships and acting as a liaison for the
Debtors with OCC's current lenders in responding to any
information requests received by the Debtors from OCC's lenders;
(6) continuing to assist WPSC in maintaining its favorable
supply agreement with OCC relating to the sale of tin plate; and
(7) continuing to provide such other necessary services as
are requested by the Debtors in these connections.
The Debtors propose that Tatum be compensated for these services
at its ordinary billing rate of $150 per hour, but not to exceed
$1,350.00 in any one day, in accordance with its customary
billing practices regarding charges and expenses.
As disclosed in the original Application, Tatum received a
retainer from the Debtors in the amount of $20,000. In Tatum's
first application for allowance of interim compensation and
expense reimbursement, Tatum agreed to apply the retainer, in
part, against the $6,981 professional fee holdback. The
original Application provided that the retainer would be applied
to time charges and expenses specific to Tatum's last
application for payment for its engagement. In this second
Application, Tatum and the Debtors have agreed that Tatum will
apply the retainer against the 20% professional fee holdback
in connection with its First Fee Application and future fee
applications. Tatum's agreement to apply the retainer against
the 20% professional fee holdback as of the ate that Judge Bodoh
approves its First Fee Application represents a more favorable
result to the Debtors and their estates.
The engagement agreement for Tatum and disclosures of
disinterestedness are the same as for the first Application.
(Wheeling-Pittsburgh Bankruptcy News, Issue No. 21; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
WINSTAR COMMS: Chapter 7 Trustee Engages Fox as Counsel
-------------------------------------------------------
Christine C. Shubert, the Chapter 7 Trustee appointed to
liquidate Winstar Communications, Inc.'s and its debtor-
affiliates estate, gets Court permission to employ and retain
Fox Rothschild O'Brien & Frankel, LLP as her counsel, nunc pro
tunc to January 26, 2002, the first date services were provided
to the Trustee.
Subject to Court approval in accordance with section 330 of the
Code, Ms. Shubert submits that compensation will be payable to
Fox Rothschild on an hourly basis at the firm's normal and
customary hourly rates, plus reimbursement of actual, necessary
expenses and other charges incurred. The principal attorneys and
paralegals presently designated to represent the Trustee and
their current standard hourly rates are:
Francis G.X. Pileggi $285 per hour
Michael J. Viscount, Jr. $300 per hour
Michael G. Menkowitz $285 per hour
Magdalena Schardt $245 per hour
Prince Altee Thomas $210 per hour
Sheldon K. Rennie $205 per hour
Edith Eichert (Paralegal) $125 per hour
Kyra W. Coleman (Paralegal) $125 per hour
Specifically, the Trustee will look to Fox Rothschild:
A. to provide legal advice with respect to the powers and duties
as a Trustee;
B. to prepare on behalf of the Trustee necessary applications,
motions, answers, orders, reports and other legal papers;
C. to analyze the Debtor's financial condition to determine the
best course of action to follow in order to achieve the
best possible outcome for the Debtor and its creditors;
D. to appear in Court and to protect the interests of the
Trustee, the Debtor and the Debtor's creditors; and
E. to perform all other legal services for the Trustee that may
be necessary and proper in these proceedings.
Michael G. Menkowitz, Esq., a Fox Rothschild partner, assures
that the firm does not hold or represent any interest materially
adverse to the Debtor's estate or any class of creditors, nor
has any relationship to any party in this proceeding except that
the firm may have represented general unsecured creditors of the
Debtor in other, unrelated matters, and is a disinterested
person within the meaning of 11 U.S.C. Secs. 101(14) and 327(1)
and (c). (Winstar Bankruptcy News, Issue No. 27; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
WORLDCOM INC: S&P Drops Corporate Credit Ratings to Low-B Level
---------------------------------------------------------------
The long-term corporate credit rating on WorldCom Inc. was
lowered to 'BB' from 'BBB' and the short-term corporate credit
rating was lowered to 'B' from 'A-3' on May 10, 2002. All
ratings remained on CreditWatch with negative implications.
The downgrade was based on significant deterioration in the
company's financial condition due to a continued weakening of
WorldCom's business position, which in turn will limit the
company's ability to reduce debt leverage. The downgrade and
CreditWatch listing also reflect concerns regarding liquidity
beyond the near term.
Over the past few months, Standard & Poor's has closely
monitored the evolution of WorldCom's business and financial
profile. Concerns about the economy's effect on the company's
business and its ability to delever its balance sheet prompted
an outlook revision to negative in early February. As concerns
increased regarding these issues, WorldCom's ratings were
lowered in April and put on CreditWatch for a possible further
downgrade. At that time Standard & Poor's indicated that a
further downgrade might be modest if business conditions showed
potential for improvement, and if recent management changes
meaningfully bolstered investor confidence. However, Standard &
Poor's also indicated that a more significant downgrade was
likely if there was a permanent impairment of the company's
financial condition. Moreover, in addition to these issues, and
despite adequate near-term liquidity, Standard & Poor's was also
concerned about the status of WorldCom's accounts receivable
securitization program, which, because of ratings triggers,
could put more pressure on the company.
Recently granted waivers on the accounts receivable
securitization program, combined with prospects for a
renegotiated credit facility, are viewed as favorable for near-
term liquidity. While revision of the terms of the asset
securitization program avoids what would have been a material
negative impact on working capital, the program has nevertheless
been downsized, which will require a cash outlay of about $400
million when the new terms take effect on May 23. WorldCom has
indicated that it anticipates it will be able to put in place a
longer-term, secured bank facility within the next month. This
suggests more surety regarding liquidity because $2.65 billion
of bank facilities are scheduled to term out in June 2003.
However, the ultimate value of a longer-term secured facility
will depend on the terms of the facility. In particular, if
financial covenants of a facility materially effectively limit
drawdowns, then the additional liquidity realized from obtaining
such a new facility may be limited.
Despite resolution of the securitization issue and even assuming
that a new bank facility is put into place on favorable terms,
material degradation in operating cash flow would jeopardize
WorldCom's financial condition. New management may be able to
craft a strategic approach that more effectively positions
WorldCom to leverage its formidable network assets and
capabilities. Nevertheless, the challenges are formidable: a
still weak economic environment; continuing margin pressure in
residential long distance; and the likely emergence of the Bell
companies as competitors for enterprise customers as they gain
interLATA entry suggest a far more competitive environment for
WorldCom.
In resolving the CreditWatch, Standard & Poor's will examine a
number of issues, including bank agreements, potential asset
sales, and a strategy to address a much more competitive
environment. Standard & Poor's is also particularly concerned
that WorldCom's much publicized recent financial travails may
negatively impact its ability to attract and retain customers.
While the company noted that its discussions with key accounts
indicate only some nervousness on the part of those customers,
if empirical evidence in the coming weeks and months indicate a
trend of customer defections that materially impact cash flow,
an additional downgrade would be likely.
Ultimately, resolution of the CreditWatch hinges on assessing
the prospects that WorldCom can maintain a credit profile
consistent with a corporate credit rating in the 'BB' rating
category. Standard & Poor's also notes that if WorldCom obtains
a credit facility that is secured by a substantial portion of
its assets, unsecured issues could be notched below the
corporate credit rating.
Ratings List TO FROM
WorldCom Inc.
* Corporate credit rating BB/B BBB/A-3
* Senior unsecured debt BB BBB
* Preferred stock B BB+
* Commercial paper B A-3
DebtTraders reports that Worldcom Inc.'s 8.250% bonds due 2031
(WCOM31USN1) are quoted between 41 and 42.5. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=WCOM31USN1
for real-time bond pricing.
ZENITH INDUSTRIAL: Court Approves Sidley Austin Employment
----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gives its
permission to Zenith Industrial Corporation to engage the law
firm of Sidley Austin Brown & Wood as its general reorganization
and bankruptcy counsel.
Sidley Austin will:
a) provide legal advice with respect to the Debtor's powers
and duties as debtor-in-possession in the continued
management and operation and of its business and
properties;
b) take all necessary action to protect and preserve the
Debtor's estate including prosecuting actions on behalf
of the Debtor, defending any actions commenced against
the Debtor, negotiating any and all litigation in which
the Debtor is involved and objecting to claims filed
against the Debtor's estate;
c) prepare on behalf of the Debtor all necessary motions,
answers, orders, reports and other legal papers in
connection with the administration of the Debtor's
estate;
d) perform any and all other legal services for the Debtor
in connection with both this chapter 11 case, and with
the formulation and implementation of the Debtor's plan
of reorganization;
e) advise and assist the Debtor regarding all aspects of
the plan confirmation process, including securing the
approval of a disclosure statement by the Bankruptcy
Court and the confirmation of a plan at the earliest
possible date;
f) give legal advice and perform legal services with
respect to general corporate matters, and advice and
representation with respect to obligations of the
Debtor, its Board of Directors and its officers;
g) give legal advice and perform legal services with
respect to matter involving the negotiation of the terms
of and the issuance of corporate securities, matters
related to corporate governance and the interpretation,
application or amendment of the Debtor's corporate
documents, including its Certificates of Incorporation,
by-laws and material contracts, and matters involving
stockholders and the Debtor's legal duties toward them;
h) give elgal advice and perform legal services with
respect to related real estate and tax issues; and
i) render such other services as my be in the best interest
of the Debtor as agreed upon Sidley Austin and the
Debtor.
The Debtor agrees to pay Sidley Austin at its customary billing
rates:
Partners $340 to $650 per hour
Associates $160 to $375 per hour
Para-professionals $$80 to $160 per hour
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.
ZENITH INDUSTRIAL: Signs-Up Plante & Moran as Auditor
-----------------------------------------------------
Zenith Industrial Corporation submits to the U.S. Bankruptcy
Curt for the District of Delaware, its application to retain
Plante & Moran, LLP as independent auditor.
The Debtor believes that the services of PlanteMoran are
necessary for its business to continue operating as a going
concern and to preserve the value of its business. The Debtor
believes that PlanteMoran is well qualified and able to provide
services to the Debtor in a cost-effective, efficient and timely
manner.
The Debtor anticipates that PlanteMoran will render independent
auditing services to the Debtor as both parties deem
appropriate, necessary and feasible. In particular, the Debtor
anticipates that PlanteMoran will issue an audit opinion of the
Debtor's financial statements as of December 31, 2001
Subject to the Court's approval, PlanteMoran will charge for its
professional services on an hourly basis and seek reimbursement
of actual and necessary out-of-pocket expenses.
Based on past year-end audits performed by PlanteMoran of
similarly sized corporations, PlanteMoran estimates the total
fee for performance of Auditing Services to be $65,000 to
$85,000 and will not exceed $85,000.
PlanteMoran has informed the Debtor that its billing rates are:
partners $240 to S450 per hour
managers $150 to $230 per hour
audits-in-charge $110 to $140 per hour
audit staff $70 to $110 per hour
paraprofessionals $75 per hour
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, 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.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
prior written permission of the publishers. Information
contained herein is obtained from sources believed to be
reliable, but is not guaranteed.
The TCR subscription rate is $625 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Christopher
Beard at 240/629-3300.
*** End of Transmission ***