/raid1/www/Hosts/bankrupt/TCR_Public/020725.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, July 25, 2002, Vol. 6, No. 146
Headlines
360NETWORKS: Proposes Uniform Plan Solicitation Procedures
ANC RENTAL: Court Approves Purchase Agreement with ElDorado
ADELPHIA COMMS: Gets OK to Retain Ordinary Course Professionals
AMAZON.COM INC: Second Quarter Net Loss Narrows to $94 Million
AMERICAN GOLF: Enters Fin'l Restructuring Agreement with Lenders
CKE RESTAURANTS: May Have to Sell More Outlets to Retire Debt
CASTLE DENTAL: Completes Financial Restructuring Transactions
CHIVOR SA: Disclosure & Confirmation Hearings Set for August 13
COHO ENERGY: Court Resets Property Sale Hearing for August 6
COMMSCOPE INC: Resets Q2 Earnings Release Date for July 29, 2002
COVANTA ENERGY: Keeps Plan Filing Exclusivity to Nov. 27, 2002
DAIRY MART: Court Extends Plan Filing Exclusivity to August 19
ELECTROVOICE: Case Summary & 14 Largest Unsecured Creditors
ENRON CORP: Court Sets CommodityLogic Sale Hearing for August 8
ENRON CORP: LNG Unit Wins Nod to Sell Hoegh Charter Contracts
ETOYS: Committee Retains Jaspan Schlesinger as New Local Counsel
FEDERAL-MOGUL: Equity Committee Hires Bifferato as Counsel
FLAG TELECOM: Court Okays Innisfree as Special Noticing Agents
FORMICA CORPORATION: Obtains Plan Filing Exclusivity Extension
GENERAL CREDIT: Seeks Chapter 11 Protection in Manhattan Court
GENERAL CREDIT: Case Summary & 20 Largest Unsecured Creditors
GOLDMAN INDUSTRIAL: Has Until August 14 to File Chapter 11 Plan
HISPANIC TELEVISION: Files for Chapter 11 Protection in Texas
HISPANIC TELEVISION NETWORK: Voluntary Chapter 11 Case Summary
HORNBECK OFFSHORE: S&P Places B+ Ratings on CreditWatch Positive
HOULIHAN'S RESTAURANT: Wants to Continue Using Cash Collateral
IT GROUP: Seeks Second Removal Period Extension Until October 14
INT'L TOTAL SERVICES: Auditors Express Going Concern Doubt
INTERPLAY ENTERTAINMENT: Prepares Prospectus for 12M Shares Sale
KINETICS SYSTEMS: S&P Withdraws BB Credit & Senior Debt Ratings
KMART CORP: Ridgewood Seeks Stay Relief to Effect $2.2MM Setoff
KMART: Court Okays Pact Establishing Lenders' Claim Filing Terms
KMART CORP: Exclusivity Period Extended through Feb. 28, 2003
LAIDLAW: Wins Transportation Board Approval for Rockton Purchase
LAIDLAW INC: August 31, 2001 Equity Deficit Reaches $980 Million
LEAR CORP: S&P Revises Outlook on BB+ Credit Rating to Positive
LENNOX INT'L: Further Pares-Down Debt to $511MM at June 30, 2002
LODGIAN: Asks Court to Authorize Merrill Lynch Exit Financing
LOGIC DEVICES: Falls Short of Nasdaq Continued Listing Standards
MANITOWOC: S&P Assigns B+ Rating to Proposed $175MM Senior Notes
NATIONAL STEEL: Court Okays Ernst & Young LLP as Consultants
NEOTHERAPEUTICS: Preparing for Shareholder Vote on Reverse Split
OTIS SPUNKMEYER: S&P Rates Corp. Credit & Bank Facility at B+
PPL CORP: Working Capital Deficit Tops $79MM at June 30, 2002
PPL CORP: Selling Brazilian Electric Company to Franklin Park
PACIFIC GAS: Wins Nod to Acquire IT Equipment for New Entities
PANACO INC: Wants to Bring-In Kaye Scholer as Corporate Counsel
POLAROID CORP: Wants Time to Remove Actions Extended to Sept. 11
PORTOLA PACKAGING: Says Liquidity Sufficient to Fund Operations
PSINET INC: Goldin Terminating BSI's Engagement with Holdings
RAILWORKS CORP: Appoints Ab Rees as New CEO and Board Chairman
RAZORFISH INC: Reaffirms Earnings Guidance for 2nd Quarter 2002
RED OAK HEREFORD: Inks Licensing Agreement with Premium Quality
RELIANCE GROUP: Court Okays Schnader as Committee's Counsel
RICA FOODS: Makes Timely $717K Interest Payment to Pacific Life
ROMACORP: S&P Ups Rating to CCC- After Delayed Interest Payment
SOLID RESOURCES: Court OKs Well Testing Division Sale to Lonkar
STARBAND COMM: Court Approves Settlement Agreement with EchoStar
STYLECLICK INC: Second Quarter Net Loss Tops $6.2 Million
TSET INC: Independent Auditors Issue Going Concern Opinion
TRAK AUTO PARTS: Advance Auto Gets Approval to Acquire Assets
TRINITY: S&P Gives Prelim. BB+ Sub. Debt Rating to $150MM Shelf
USURF AMERICA: Falls Below AMEX Continued Listing Requirements
UNITED STATIONERS: Net Sales for Second Quarter Drop 8.3%
VENTAS INC: Extends Exchange Offer for Outstanding 8-3/4% Notes
VENTAS INC: June 30, 2002 Equity Deficit Reaches $95 Million
W.R. GRACE: Sales Slide-Up to $473.4 Million in Second Quarter
WILLIAMS: S&P Hatchets Corp. Credit Rating Down 2 Notches to BB+
WORLDCOM: S&P Drops Four Synthetic Securities' Ratings to D
ZIFF DAVIS: Noteholders Accept Terms of Fin'l Restructuring Plan
* Top Commercial Litigation Attorneys Join Stroock & Stroock
* DebtTraders' Real-Time Bond Pricing
*********
360NETWORKS: Proposes Uniform Plan Solicitation Procedures
----------------------------------------------------------
360networks inc., and its debtor-affiliates ask the Court to:
(i) establish:
(a) August 12, 2002 as the record date for voting and
solicitation purposes;
(b) a voting deadline; and
(c) procedures for requests for temporary allowance of
certain claims for voting purposes;
(ii) establish procedures for filing objections to the Plan;
(iii) approve the procedures and materials to be employed in
the solicitation of votes; and
(iv) establish a hearing date to consider the confirmation of
the Plan.
Shelley C. Chapman, Esq., at Willkie Farr & Gallagher, in New
York, explains that the establishment of these procedures and
dates is necessary to provide a smooth process for plan
confirmation.
Voting Requirements
Each impaired class of Claims must accept the Plan or be subject
to a "cramdown."
Classes 1, 2, 3 and 6, except for Impaired Class 6 Claims, are
unimpaired. This means they don't have to vote.
Class 8 will be deemed to have accepted the Plan, and Class 9
will be deemed to have rejected the Plan.
Votes on the Plan, therefore, are being solicited from impaired
classes that would receive or retain distributions or property
under the Plan. Classes 4, 5, and 7, as well as any Impaired
Class 6 Claims subclasses, are the only impaired Classes.
Ms. Chapman states that the Debtors propose these rules for
allowance of Claims for purposes of voting on the Plan as:
(i) with respect to a liquidated, noncontingent Claim as to
which a proof of claim has been timely filed and as to
which an objection has not been filed at least 20 days
prior to the end of the period fixed by the Court for
voting on the Plan, the amount and classification of the
Claim shall be specified in the proof of claim;
(ii) with respect to a Claim that is the subject of an
objection filed at least ten days prior to the end of
the Voting Period, the Claim will be disallowed
provisionally for voting purposes, except to the extent
and in the manner that:
(a) the Debtors agree the Claim should be allowed in the
Debtors' objection to the Claim; or
(b) the Claim is allowed temporarily for voting purposes
in accordance with Bankruptcy Rule 3018;
(iii) with respect to a Claim that has been estimated or
allowed for voting purposes by order of the Court, the
amount and classification of the Claim will be that set
by the Court;
(iv) a Claim recorded in the Schedules or in the Clerk's
records as wholly unliquidated, contingent and
undetermined will be accorded one vote valued at one
dollar;
(v) with respect to a Claim that is unliquidated, contingent
and undetermined in part, the holder of the Claim will
be entitled to vote that portion of the Claim that is
liquidated, non-contingent and undisputed in the
liquidated, noncontingent and undisputed amount;
(vi) with respect to a Claim as to which a proof of claim has
not been timely filed, the voting amount of the Claim
will be equal to:
(a) the amount listed, in respect of the Claim in the
Debtors' Schedules of Assets and Liabilities filed
with the Court to the extent the Claim is not listed
as contingent, unliquidated, undetermined or
disputed; or
(b) if not listed, then the Claim respecting the proof
of claim will be disallowed provisionally for voting
purposes;
(vii) with respect to a Claim as to which the holder has
agreed that the Claim may be asserted solely for
purposes of setoff against claims the Debtors may have
against the holder and not as an affirmative Claim
against the Debtors' estates, the Claim will be
disallowed provisionally for voting purposes;
(viii) a creditor will not be entitled to vote its Claim to the
extent the Claim duplicates or has been superseded by
another Claim of the creditor; and
(ix) respecting a Claim that appears on the Debtors'
Schedules as undisputed, noncontingent, and liquidated,
and as to which no objection has been filed at least 20
days prior to the end of the Voting Period, the amount
and classification of the Claim shall be that specified
in the Schedules.
Ms. Chapman also provides these rules and standards for the
tabulation of ballots of creditors:
(i) for the purpose of voting on the Plan, BSI, as balloting
agent, will be deemed to be in constructive receipt of any
ballot timely delivered to any address that BSI designates
for the receipt of ballots cast on the Plan;
(ii) any ballot received by BSI after the end of the Voting
Period shall not be counted;
(iii) whenever a holder of a Claim submits more than one ballot
voting the same claim prior to the end of the Voting
Period, the first ballot sent and received shall count
unless the holder has sufficient cause to submit, or the
Debtors consent to the submission of, a superseding
ballot;
(iv) if a holder of a Claim casts simultaneous duplicative
ballots voted inconsistently, then the ballots shall be
counted as one vote accepting the Plan;
(v) the authority of the signatory of each ballot to complete
and execute the ballot shall be presumed;
(vi) any ballot that is not signed shall not be counted;
(vii) any ballot received by BSI by telecopier, facsimile or
other electronic communication shall not be counted;
(viii) a holder of a Claim must vote all of its Claims within a
particular class under the Plan either to accept or reject
the Plan and may not split its vote. Accordingly, a
ballot that partially rejects and partially accepts the
Plan, or that indicates both a vote for and against the
Plan, will not be counted; and
(ix) any ballot that is timely received and executed but does
not indicate whether the holder of the relevant Claim is
voting for or against the Plan shall be counted as a vote
for the Plan.
Voting Deadline
To be counted, ballots must be marked, signed, and returned so
it is received no later than 5:00 p.m. (Eastern Daylight Savings
Time), on ________, 2002. After reviewing the Plan and the
Disclosure Statement, creditors should indicate their vote on
each enclosed Ballot and return the Ballot in the enclosed self-
addressed envelope to the Balloting Agent:
If sent by regular mail, to:
360networks Balloting
Bankruptcy Services LLC
P.O. Box ____
F.D.R. Station
New York, New York
If sent by overnight mail or by hand to:
360networks Balloting
c/o Bankruptcy Services LLC
70 East 55th Street, 6th Floor
New York, New York
Attn: Kathy Gerber
(360 Bankruptcy News, Issue No. 28; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
ANC RENTAL: Court Approves Purchase Agreement with ElDorado
-----------------------------------------------------------
ANC Rental Corporation and its debtor-affiliates obtained
authority from the U.S. Bankruptcy Court for the District of
Delaware to:
A. enter into an Agreement and Security Agreement with the
ElDorado National Inc., a Kansas-based shuttle bus
manufacturer, for the purchase of 157 buses;
B. grant a first priority security interest in the new buses to
be purchased from ElDorado; and,
C. deliver title to 253 trade-in buses in accordance with the
agreement free and clear of liens and encumbrances.
The pertinent points of the ElDorado Asset Purchase Agreement
are:
A. Sale and Purchase of New Buses: ANC will purchase 157 new
buses from ElDorado. All of the new buses will be
manufactured by ElDorado at its facilities. ANC must issue
three purchase orders (PO) to ElDorado for the new buses:
1st PO -- 41 Aerotech Model 240 Para-transit buses
2nd PO -- 41 Aerotech Model 220 buses
3rd PO -- 75 Aerotech Model 220 buses
B. Price:
Aerotech Model 220 bus -- $50,000 each
Aerotech Model 240 Paratransit bus -- $65,000 each
The purchase price of the 157 new buses will be reduced by
$6,600 per vehicle, which is the total unit consideration for
the trade-in buses. There will be no other credit or
consideration for the trade-in buses.
C. Payment:
a. ANC will pay to ElDorado as nonrefundable down payment:
1st PO down payment -- $528,900;
2nd PO down payment -- $344,400;
3rd PO down payment -- $630,000.
ElDorado agrees to return to ANC, within 15 days after an
Event of Default by ElDorado a portion of the down payment
equal to the down payment allocable to the New Buses not
delivered by ElDorado to ANC prior to the event of
default. Default will occur if ElDorado:
1. fails to deliver all of the New Buses to ANC prior to
the Final Delivery Date, which will be 120 days after
the date ElDorado receives the last chassis;
2. admits in writing its inability to pay its debts as
they become due or makes an assignment for the benefit
of creditors, files a petition in bankruptcy or
commences any proceeding under any bankruptcy,
reorganization, arrangement, liquidation or similar law
of any jurisdiction, or any petition or application, or
any proceeding is commenced against ElDorado, which
remains undismissed for a period of 60 days or more, or
if ElDorado by any act or omission indicates its
consent to that petition, application, proceeding; or,
3. suffers any material adverse change occurs in its
financial condition.
b. The remaining balance of the Net Purchase Price for each
New Bus must be paid to ElDorado by ANC on these
schedules:
1st PO -- 36 monthly payments at $1,490/month plus interest
2nd PO -- 36 monthly payments at $1,146/month plus interest
3rd PO -- 36 monthly payments at $1,146/month plus interest
Monthly payments will commence with a payment due on the
first day of the calendar month following delivery of the
New Bus to ANC, and a like payment on the first day of
each of the next 35 succeeding calendar months thereafter.
D. Trade-In Buses:
a. The $6,600 credit for buses currently owned by
ANC which will be traded-in to ElDorado is applicable to
only 157 New Buses pursuant to the three purchase orders.
The buses being traded include 39 mid-size, rear engine
buses and 214 Cutaway buses;
b. After ANC submits its first purchase order, ANC will also
deliver up to a maximum of 90 buses for trade-in. These
buses are made available as a result of ANC's
consolidation of certain of its airport locations. Then,
ANC must deliver another 157 buses for trade-in, on a one-
for-one basis for the 157 New Buses; and,
c. ElDorado will cause a dealer, Creative Bus Sales, Inc., to
pick up and relocate the Trade-In Buses used at the ANC
locations within 20 business days following the receipt by
ElDorado of the Trade-In Buses certificates of titles.
ElDorado will be responsible to arranging and paying for
all freight and transportation in connection with the pick
up and relocation of the Trade-In Buses.
E. Grant of First Priority Security Interest: ANC will grant
ElDorado a continuing first priority security interest in
each New Bus to secure the unpaid balance of the aggregate
Net Purchase Price under this Agreement and the performance
by ANC of all liabilities and obligations due. ANC further
agrees to take other actions upon request by ElDorado,
including executing and delivering other documents that may
be necessary for ElDorado to perfect its security interest in
each New Bus. (ANC Rental Bankruptcy News, Issue No. 16;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
ADELPHIA COMMS: Gets OK to Retain Ordinary Course Professionals
---------------------------------------------------------------
Adelphia Communications, and affiliated debtors sought and
obtained entry of an order from the Court authorizing them to
employ professionals utilized in the ordinary course of
business.
According to Shelley C. Chapman, Esq., at Willkie Farr &
Gallagher in New York, the Debtors desire to continue to employ
the Ordinary Course Professionals to render services to the
Debtors' estates similar to those services the firms rendered
prepetition. The services include legal services regarding
specialized areas of law, accounting, and other matters
requiring professional expertise and impacting the Debtors' day-
to-day operations. The Ordinary Course Professionals will not
be involved in the administration of these cases, but will
provide services concerning the Debtors' ongoing business
operations.
The Debtors anticipate they may need the services of additional
Ordinary Course Professionals and therefore seek the right to
retain additional Ordinary Course Professionals, as the need
arises. The Debtors will file a notice with the Court stating
the Debtors' intention to employ additional Ordinary Course
Professionals and to serve that notice upon: the Office of the
United States Trustee; counsel for the agents to the Prepetition
Lenders under the Debtors' Credit Facilities; counsel for the
agents to the DIP Lenders; counsel to the official committee of
unsecured creditors, or if one has not yet been appointed, to
the Debtors' 50 largest unsecured creditors on a consolidated
basis and counsel to the Informal Committee; and all other
parties that have filed a notice of appearance in these cases.
The Debtors further propose that if no objection to a proposed
additional Ordinary Course Professional is filed within 15 days
after service, then retention of the additional Ordinary Course
Professional(s) would be deemed approved by the Court without
the need for a hearing or further order. In addition, within 30
days of the entry of either an order granting this Motion or the
Debtors' engagement of an Ordinary Course Professional, that
professional would serve upon the Office of the United States
Trustee and the Debtors and file with the Court an affidavit
certifying that the professional does not represent or hold any
interest adverse to the Debtors or their estates with respect to
the matter on which that professional is to be employed; and a
completed retention questionnaire.
In light of the additional cost associated with preparation of
employment applications for numerous professionals who will
receive relatively small fees, Ms. Chapman believes that it
would be impractical and inefficient for the Debtors to submit
individual applications and proposed retention orders for each
Ordinary Course Professional. Continuing to employ the Ordinary
Course Professionals, rather than retaining new professionals,
will enable the Debtors to carry out their normal business
activities without the disruption from terminating their
relationships with the Ordinary Course Professionals and
locating, retaining, and familiarizing other competent
professionals. The Debtors also believe the relatively low
costs of these professionals warrant streamlined procedures.
The relief will save the estates the costs associated with
applying separately for the employment of each professional as
well as the administrative fees pertaining to interim fee
applications. Also, the Court and the U.S. Trustee will be
relieved of the burden of reviewing possibly numerous fee
applications involving relatively small amounts of fees and
expenses.
The Debtors are permitted to pay each Ordinary Course
Professional, without a prior application to the Court by the
professional, 100% of the fees and disbursements incurred, upon
the submission to, and approval by, the Debtors of an
appropriate invoice setting forth in reasonable detail the
nature of the services rendered and disbursements actually
incurred, up to the lesser of: $25,000 per month per Ordinary
Course Professional or $450,000 per month, in the aggregate, for
all Ordinary Course Professionals. If an Ordinary Course
Professional seeks more than $25,000 per month, then that
professional would be required to file a fee application for the
full amount of its fees.
Although certain of the Ordinary Course Professionals may hold
unsecured claims against the Debtors for prepetition services
rendered to the Debtors, the Debtors do not believe any of the
Ordinary Course Professionals has an interest adverse to the
Debtors, their creditors or other parties-in-interest on the
matters for which they would be employed and, therefore, all of
the Ordinary Course Professionals proposed to be retained should
meet the special counsel retention requirement under section
327(e) of the Bankruptcy Code. Ms. Chapman assures the Court
that the proposed ordinary course retention and payment
procedures set forth in this Motion will not apply to those
professionals for whom the Debtors have filed separate
applications for approval of employment. (Adelphia Bankruptcy
News, Issue No. 11; Bankruptcy Creditors' Service, Inc.,
609/392-0900)
Adelphia Communications' 9.50% bonds due 2005 (ADEL05USR1),
DebtTraders says, are trading at 31 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ADEL05USR1
for real-time bond pricing.
AMAZON.COM INC: Second Quarter Net Loss Narrows to $94 Million
--------------------------------------------------------------
Amazon.com, Inc., (Nasdaq:AMZN) announced financial results for
its second quarter ended June 30, 2002.
Free cash flow was $16 million for the trailing four quarters,
compared with negative $270 million for the four quarters ended
June 2001. Free cash flow includes interest payments and capital
expenditures and excludes proceeds from exercise of stock
options.
Common stock outstanding was 380 million shares at June 30,
2002, an increase of 5% compared to June 30, 2001 (approximately
half of the increase was in connection with a July 2001 $100
million investment in the Company).
Net sales were $806 million, compared with $668 million in the
second quarter 2001, an increase of 21%.
Operating profit was $1 million, compared with a loss of $140
million a year ago. Pro forma operating profit was $26 million,
or 3% of net sales, exceeding the Company's guidance of $5
million to $15 million. This compares with a pro forma operating
loss of $28 million in the second quarter 2001, an improvement
of $54 million.
Net loss was $94 million, compared with a second quarter 2001
net loss of $168 million. Pro forma net loss, which includes
interest expense, was $4 million, compared with a pro forma net
loss of $58 million in the second quarter 2001.
"I'm especially pleased with the outstanding job our U.S. Books
team is doing -- posting another quarter of 20% year-over-year
book unit growth, up from 15% growth this past fourth quarter,"
said Jeff Bezos, founder and CEO of Amazon.com. "Also,
Electronics, Tools and Kitchen revenues accelerated as we
lowered prices and expanded Electronics selection by 40% to over
60,000 items, including products from Sony, Toshiba, Yamaha and
Microsoft."
In June, Amazon.com announced its fourth significant price
decrease in the past year. In July 2001, the Company lowered
book prices to 30% off books over $20, and in January introduced
its Free Super Saver Shipping option on orders over $99. In
April, Amazon.com extended the 30% discount to books over $15,
and in June extended its Free Super Saver Shipping option to
qualifying orders over $49 as a long-term test. Additionally,
Amazon.com recently reduced prices on electronics, tools and
many bestselling CDs and DVDs.
Highlights of Second Quarter Results (comparisons are with the
equivalent period of 2001)
-- Third-party transactions (new, used and refurbished
items sold on Amazon.com product detail pages by businesses and
individuals) grew sequentially to 20% of North American units,
representing 35% of North American orders, compared with 10% of
units and 18% of orders.
-- International segment sales, from the Company's U.K.,
German, French and Japanese sites, grew 70% to $218 million, and
pro forma operating results improved by 66% to a loss of $10
million, or 5% of International sales.
-- Electronics, Tools and Kitchen segment sales growth
accelerated to 16% from 8% growth in the first quarter 2002, and
pro forma operating losses declined 55% to $18 million.
-- Books unit growth was 20%. Books, Music and DVD/Video
segment sales grew 6% to $412 million, and pro forma operating
profit grew 26% to $49 million, a record 12% of Books, Music and
DVD/Video sales.
-- Pro forma operating profit was $82 million for the
trailing four quarters, or 2% of net sales.
-- Inventory turns improved 35% to 19 for the trailing
four quarters, up from 14.
Amazon.com's June 30, 2002, balance sheet shows a total
shareholders' equity deficit of about $1.444 billion.
Stock Options
The Company announced that by the beginning of 2003 all stock-
based awards granted thereafter will be expensed.
Financial Guidance
The following forward-looking statements reflect Amazon.com's
expectations as of July 23, 2002. Results may be materially
affected by many factors, such as changes in general economic
conditions and consumer spending, the emerging nature and rate
of growth of the Internet and online commerce, and the various
factors detailed below.
Third Quarter 2002 Expectations
-- Net sales are expected to be between $780 million and
$830 million.
-- Pro forma operating income is expected to be between $8
million and $17 million, or between 1% and 2% of net sales.
Full Year 2002 Expectations
-- Free cash flow is expected.
-- Net sales are expected to grow by over 18%.
-- Pro forma net income is expected.
Amazon.com, a Fortune 500 company based in Seattle, opened its
virtual doors on the World Wide Web in July 1995 and today
offers Earth's Biggest Selection. Amazon.com seeks to be the
world's most customer-centric company, where customers can find
and discover anything they might want to buy online. Amazon.com
and sellers list millions of unique new and used items in
categories such as electronics, computers, kitchenware and
housewares, books, music, DVDs, videos, camera and photo items,
toys, baby items and baby registry, software, computer and video
games, cell phones and service, tools and hardware, travel
services, magazine subscriptions and outdoor living items.
Through Amazon Marketplace, zShops and Auctions, any business or
individual can sell virtually anything to Amazon.com's millions
of customers, and with Amazon.com Payments, sellers can accept
credit card transactions, avoiding the hassles of offline
payments.
Amazon.com operates five international Web sites:
http://www.amazon.ca http://www.amazon.co.uk
http://www.amazon.de http://www.amazon.frand
http://www.amazon.co.jp
It also operates the Internet Movie Database --
http://www.imdb.com-- the Web's comprehensive and authoritative
source of information on more than 300,000 movies and
entertainment titles and 1 million cast and crew members dating
from the birth of film.
Amazon.com Inc.'s 6.875% convertible bonds due 2010
(AMZN10USN1), DebtTraders says, are trading at around 50. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=AMZN10USN1
for real-time bond pricing.
AMERICAN GOLF: Enters Fin'l Restructuring Agreement with Lenders
----------------------------------------------------------------
National Golf Properties, Inc., (NYSE: TEE) announced that
American Golf Corporation, the primary tenant of National Golf,
has entered into a restructuring agreement with its lenders. As
previously announced, National Golf, American Golf and certain
affiliated entities entered into a merger and reorganization
agreement providing for a combination of the two companies.
Also, as detailed in an 8-K filing on July 1, 2002, National
Golf entered into restructuring agreements with its lenders on
June 28.
On July 23, 2002, American Golf entered into a restructuring
agreement and limited waiver with Bank of America and the
holders of its private placement notes, which is subject to the
delivery of leasehold mortgages on certain golf courses leased
by American Golf and an affiliate. The process of preparing
these leasehold mortgages is underway and is required to be
completed by August 8, 2002; however, there can be no assurance
that the leasehold mortgages will be delivered by this date.
Under the terms of the agreement, the maturities of the Bank of
America credit facility and the private placement notes were
changed to the earlier of March 31, 2003 or the consummation of
the transactions contemplated by the pending merger and
reorganization of National Golf and American Golf. Bank of
America and the American Golf noteholders have waived existing
defaults and all potential future events of default other than
specified "major defaults" during this period.
Under the terms of the restructuring agreement, American Golf
pledged certain securities and agreed to grant leasehold
mortgages to National Golf Operating Partnership, L.P., Bank of
America and the American Golf noteholders to secure its
obligations under its leases with NGOP and under the
restructuring agreement. American Golf has also committed, as of
July 1, 2002, to make principal amortization payments
aggregating approximately $24 million ratably to Bank of America
and the American Golf noteholders prior to the March 31, 2003
maturity. This $24 million includes a regularly scheduled
principal payment of approximately $2 million that was paid to
the American Golf noteholders on July 2, 2002. A payment of
approximately $6 million was placed into escrow and will be
released once the leasehold mortgages are delivered.
In connection with the restructuring agreement, NGOP agreed to
defer payment of rent and lease termination fee receivables due
from American Golf and certain of its related entities, but only
if necessary and only to the extent necessary to permit
scheduled principal and amortization payments to Bank of America
and the American Golf noteholders and specified other payments.
The maximum amount of rent deferral that may be granted is
approximately $15 million owed as of June 28, 2002 (which
remains owing as of July 23, 2002) and up to $24 million for the
twelve month period beginning April 1, 2002 and ending March 31,
2003, determined on a cumulative basis. As of July 23, 2002,
NGOP has not deferred any of the $24 million, but may still
grant up to $24 million of rent deferral through March 31, 2003
if and to the extent necessary.
As additional security for American Golf's obligations to Bank
of America and the American Golf noteholders, David Price
pledged approximately 3.6 million shares of common stock and
NGOP common units that he beneficially owns and granted a second
deed of trust with respect to real property of an affiliated
entity to these creditors. David Price is required to substitute
cash collateral for this collateral by October 15, 2002 (in the
case of the shares and units) and September 30, 2002 (in the
case of the second deed of trust).
National Golf, American Golf, David Price and certain affiliated
entities entered into a facilitation agreement in connection
with the American Golf debt restructuring agreement, under which
David Price agreed to support a transaction involving the sale
of all or a substantial portion of the common stock of National
Golf and common units of NGOP, provided the sale is approved by
the Independent Committee of the Board of Directors of National
Golf and the Independent Committee receives a fairness opinion
from Lazard or another nationally recognized investment banking
firm. There can be no assurance as to whether or when National
Golf will enter into an agreement with respect to such a sale
transaction. National Golf also agreed not to consummate the
transactions contemplated by the merger and reorganization
agreement with American Golf unless all amounts owed by American
Golf to Bank of America and the American Golf noteholders are
paid in full. In addition, National Golf waived certain
provisions of its voting agreement with David Price to permit
him to pledge his shares of NGP common stock and NGOP common
units to Bank of America and the American Golf noteholders and
to sell those shares and units under certain circumstances in
order to satisfy his cash collateral obligations to Bank of
America and the American Golf noteholders. National Golf entered
into a registration rights agreement with David Price with
respect to these shares.
In an agreement concluded on June 28, 2002, National Golf
entered into an amendment and extension of credit agreement with
certain of its lenders to extend the maturity of its credit
facility to March 31, 2003. At the same time, National Golf also
entered into an agreement with the holders of its private
placement notes to change the maturities of the notes to March
31, 2003. Under the terms of both agreements, the lenders and
noteholders waived existing defaults and all potential future
events of default other than specified "major defaults."
National Golf noted that American Golf and its affiliates have
paid year-to-date through July approximately $49 million of
their rent obligations totaling approximately $64 million. As of
July 23, 2002, American Golf owed National Golf approximately
$15 million of rent and approximately $16 million of lease
termination fees.
National Golf Properties is the largest publicly traded company
in the United States specializing in the ownership of golf
course properties with 110 golf course facilities geographically
diversified among 22 states.
CKE RESTAURANTS: May Have to Sell More Outlets to Retire Debt
-------------------------------------------------------------
Revenue from CKE company-operated Carl's Jr. restaurants
decreased $3,431, or 2.1%, to $158,554 for the 16-week period
ended May 20, 2002 when compared to the prior year quarter. The
decrease in revenue is due primarily to asset dispositions made
during the CKE Restaurants' repositioning program initially
implemented two years ago to rebalance the system and repay bank
debt. Same-store sales for company-operated Carl's Jr.
restaurants increased 4.2% in the current quarter and Carl's Jr.
company-operated restaurant average unit volumes were $1,155 for
the trailing thirteen periods ended May 20, 2002, and the
average check for the first quarter was $5.23 as compared to
$4.87 in the comparable period of the prior fiscal year,
reflecting the Company's focus on premium products.
Net franchising income increased approximately 8.0%, or $500, in
the first quarter of the current fiscal year. This is primarily
attributable to increased royalties resulting from the sales of
restaurants to franchisees coupled with lower administrative
expenses.
Restaurant-level margins for CKE's company-operated Carl's Jr.
restaurants increased 2.8% in the 16-week period ended May 20,
2002 from 19.9% in the prior-year quarter to 22.7% in the
current quarter, when measured as a percentage of company-
operated restaurant revenue. Food and packaging costs decreased
0.7% as a percentage of company-operated revenue, primarily due
to a reduced emphasis on the value menu, the elimination of
certain high food cost products from the menu and the
introduction of higher margin products to the menu. Payroll and
other employee benefits decreased 0.5% as a percentage of
company-operated revenue due to lower required provisions for
Company workers' compensation self-insurance program
liabilities. Occupancy and other operating expenses decreased
1.6% as a percentage of company-operated revenue due to lower
natural gas and electricity prices than in the prior year. These
improvements were offset by higher repair and maintenance costs
the Company incurred to enhance the visual appeal of restaurants
and increases in travel and training expenses for restaurant
employees.
Because the majority of CKE's Carl's Jr. restaurants are located
in California, legislation in that state can have a significant
impact on financial results. The Governor of California recently
signed into law Assembly Bill No. 749 relating to workers'
compensation claims. The bill requires that payments for certain
benefits that occur after January 1, 2003 for injuries sustained
prior to January 1, 2001 shall be made at the rate in effect at
the time the payment is made. The expected impact to CKE's
financial statements is not material.
Hardee's
During the first quarter, CKE acquired six restaurants from
franchisees, sold one restaurant to a franchisee and closed four
restaurants. Hardee's franchisees and licensees opened eight
restaurants, acquired one restaurant from the Company, sold four
restaurants to the Company and closed 54 restaurants.
Revenue from company-operated Hardee's restaurants decreased
$21,821, or 11.0%, to $176,184 for the 16-week period ended May
20, 2002, when compared to the prior year comparable periods.
The decrease in revenue is due primarily to asset dispositions
made during the Company's repositioning program initially
implemented two years ago to rebalance the system and repay bank
debt. Same-store sales for company-operated Hardee's were
relatively flat at 0.3% in the current quarter, company-operated
restaurant average unit volumes were $775 for the trailing
thirteen periods ended May 20, 2002, and the average check for
the first quarter was $3.84 as compared to $3.62 in the
comparable period of the prior fiscal year, reflecting our focus
on premium products.
Net franchising income increased $527, or 4.7%, as compared to
the prior fiscal year as the first quarter of fiscal 2003 did
not require an addition to the allowance for doubtful accounts,
offset by higher rent expense on restaurants sold to
franchisees.
Restaurant-level margins for company-operated Hardee's
restaurants increased 3.7% in the 16-week period ended May 20,
2002 from 8.6% in the prior year quarter to 12.3% in the current
quarter, when measured as a percentage of company-operated
restaurant revenue. Food and packaging costs decreased 1.4% as a
percentage of Company-operated revenue, primarily due to an
emphasis on premium products, reduced discounting during the
current fiscal year, lower commodity prices and the closure of
unprofitable restaurants. Payroll and other employee benefits
remained flat in the current year quarter as compared to the
prior year quarter, primarily also due to a conscious decision
to increase staffing to improve guest service. Occupancy and
other operating expenses decreased 2.2% as a percentage of
Company-operated revenue in the current year quarter due to a
decline in the cost of natural gas and a lower provision for
general liability claims. These improvements were offset by
higher repair and maintenance costs to enhance the visual appeal
of the restaurants.
La Salsa
Since the acquisition of SBRG on March 1, 2002, revenue from
company-operated La Salsa restaurants was $8,729. Restaurant-
level margins were 14.5% as a percentage of company-operated
restaurant revenue. Food and packaging costs were 26.9%, payroll
and other employee benefits were 32.0% and occupancy and other
operating costs were 26.6%. The La Salsa brand restaurants
contributed $292 of net income to the Company.
Since the acquisition of SBRG on March 1, 2002, revenue from
company-operated Timber Lodge Steakhouse restaurants was
$10,067. Restaurant-level margins were 9.0% as a percentage of
company-operated restaurant revenue. Food and packaging costs
were 36.1%, payroll and other employee benefits were 30.5% and
occupancy and other operating costs were 24.4%. Company-operated
Timber Lodge Steakhouse restaurants contributed $183 of net
income to the Company. Net income from Timber Lodge Steakhouse
franchise operations was $17.
Since the acquisition of SBRG on March 1, 2002, revenue from
company-operated Green Burrito restaurants (not including
restaurants dual-branded with Carl's Jr. restaurants) was $382.
Restaurant-level margins were 11.3% as a percentage of company-
operated restaurant revenue. Food and packaging costs were
27.4%, payroll and other employee benefits were 35.3% and
occupancy and other operating costs were 25.9%. Company-operated
Green Burrito restaurants (excluding those restaurants dual-
branded with Carl's Jr. restaurants) contributed $65 of net
income to the Company.
During the first quarter of fiscal 2002, the Taco Bueno brand
contributed $2,500 in operating income to the Company's results.
In June 2001, CKE completed its sale of Taco Bueno to Jacobson
Partners.
Interest expense for the first quarter of fiscal 2003 decreased
$8,627, or 38.3%, as compared with the previous year first
quarter. This decrease was due to lower levels of borrowings
outstanding under the Company's Senior Credit Facility
throughout the period, lower amortization costs associated with
debt issuance costs and that in the first quarter of fiscal
2002, CKE wrote off $3,881 in debt issuance costs as a result of
a modification in the terms of its Senior Credit Facility.
Advertising expenses decreased $2,325, or 9.4%, to $22,384 for
the 16-week period ended May 20, 2002, as compared to the
comparable period in the prior year, however, as a percentage of
total company-operated revenue, advertising expenses remained
relatively constant at 6.3%.
General and administrative expenses decreased $1,592, or 4.5%,
to $34,062 for the 16-week period ended May 20, 2002, as
compared to the prior year. As a percentage of total revenue,
general and administrative expenses were 7.8%, relatively flat
compared to last year. The ceasing of goodwill amortization
charges and the sale and closure of restaurants reduced general
and administrative expenses by $1,615 and $1,555, respectively.
Those reductions were partially offset by increases in corporate
incentive compensation, contract services and telephone costs
totaling $1,578.
Other income, net, increased $3,395 during the 16-week period
ended May 20, 2002, primarily due to a gain on the sale of
Checkers Drive-In Restaurants, Inc. common stock and the
repurchase of the
Company's convertible subordinated notes. During the first
quarter of fiscal 2003, CKE sold 216,000 shares of Checkers'
stock, realizing a net gain of $2,666. Additionally, during the
first quarter of fiscal 2003, it repurchased $11,053 (face
value) of convertible notes for $9,999, at various prices
ranging from $87.25 to $90.25. These transactions resulted in
recognition of a gain on retirement of debt of $1,054.
The Company recorded an income tax benefit of $2,685 for the
first quarter of fiscal 2003. This amount consisted primarily of
a $3,600 expected income tax refund due to recent changes in the
Internal Revenue Code regarding the carryback of net operating
losses, allowable under the recently-enacted Job Creation and
Worker Assistance Act of 2002. CKE expects to receive a total of
$6,800 in income tax refunds during the second quarter of fiscal
year 2003. The Company believes that its net operating losses
are such that it will not be required to pay federal income
taxes on this fiscal year's taxable earnings. CKE has provided
for estimated state franchise taxes.
Financial Condition and Liquidity
The quick-service restaurant business generally receives
simultaneous cash payments for sales. CKE presently uses the net
cash flow from operations to repay outstanding indebtedness and
to reinvest in long-term assets, primarily for the remodeling
and construction of restaurants. Normal operating expenses for
inventories and current liabilities generally carry longer
payment terms (usually 15 & 30 days). As a result, CKE typically
maintains current liabilities in excess of current assets.
The Company believes that cash generated from its various
restaurant concept operations, cash and cash equivalents on hand
as of May 20, 2002, and amounts available under its senior
credit facility, will provide the funds necessary to meet all of
its capital spending and working capital requirements for the
foreseeable future. CKE amended and restated its senior credit
facility on January 31, 2002, securing a $100,000 lender's
commitment under a revolving credit facility. The amended senior
credit facility includes a letter of credit sub-facility, and
has a maturity date of December 14, 2003, extendable to November
15, 2006, provided CKE is able to earlier refinance its
convertible subordinated notes due March 2004. The senior credit
facility is collateralized by all of the Company's personal
property assets and certain restaurant property deeds of trust
with an appraised value of $218,200. Borrowings under its senior
credit facility bear interest at LIBOR rate plus an applicable
margin. As of May 20, 2002, the applicable margin was 4.0% and
the interest rate was 5.9%.
Under the amended credit facility, CKE had $53,711 of
outstanding letters of credit at May 20, 2002. As it had
borrowed $10,000 on the facility at that date, it had $36,289 of
borrowings available for use. As of June 24, 2002, CKE had $0
outstanding on the credit facility and approximately $11,500
invested in overnight deposits.
The repurchase of convertible debt during the quarter was the
first step in addressing the maturing of CKE's $148,105 of
convertible notes, due March 2004. Strategies it says it may
consider in the future include additional bank debt, the sale of
assets (including restaurants), a debt or equity offering, a
debt swap or some combination of those items. In the event that
it is unable to successfully implement one or more of those
options, or turnaround Hardee's, it may be required to sell
additional restaurants at a loss to raise sufficient funds to
retire the debt. Those losses may be material and have a
significant negative impact on CKE's operating results.
CASTLE DENTAL: Completes Financial Restructuring Transactions
-------------------------------------------------------------
Castle Dental Centers, Inc. (OTCBB:CASL), a full service dental
care provider, announced that it has completed the restructuring
of its senior secured and senior subordinated debt, totaling
approximately $70 million. The debt restructuring included the
conversion of approximately $21.7 million of subordinated debt
to equity in the form of newly-issued convertible preferred
stock. New financing of $1.7 million, in the form of
subordinated convertible notes, was received from the present
holders of the Company's senior subordinated notes, Heller
Financial (a GE Capital Healthcare Financial Services company)
and Midwest Mezzanine Funds, as well as from the Company's
president and chief executive officer, James M. Usdan. As a
result of the conversion of debt and the new financing, GE
Capital Healthcare Financial Services and Midwest Mezzanine
Funds now own the majority voting rights in Castle Dental. With
the signing of these agreements, the Company is no longer in
default of its senior credit facility nor any other debt
agreements.
"The completion of our debt restructuring is a major milestone
in the turnaround that has been ongoing for over a year at
Castle Dental," said James M. Usdan, president and chief
executive officer. "It is a significant achievement and the
first step to returning the Company to profitability. The
signing of these agreements allows our team to build upon
successes implementing operational policies and communication
programs that positively impact our employees, patients and the
communities that have supported Castle for 54 years."
The new loan agreement with the senior bank group provides for a
three-year term in the principal amount of approximately $47.4
million, with principal payments totaling $2 million in 2003, $4
million in 2004 and with the balance due in July 2005. Interest
will accrue and be payable monthly at prime plus two percent.
The Company issued warrants to the senior bank group to acquire
convertible preferred stock equal to 12% of its fully-diluted
equity. The Company also agreed to pay fees and costs incurred
by the senior bank group in connection with the restructuring.
"We appreciate the support of GE Capital Healthcare Financial
Services and Midwest Mezzanine Funds, our new majority owners,
in reaching these agreements and look forward to working with
them as we continue to focus on improving our service levels and
operating results," added Usdan.
Castle Dental has provided quality dental care for over 54
years. With over 80 centers nationwide, Castle Dental provides a
full spectrum of dental services including general and cosmetic
dentistry, orthodontics, pedodontics and oral surgery. The
Castle Dental family, including over 200 dentists and
specialists, is committed to the dental health of its neighbors,
neighborhoods and communities.
CHIVOR SA: Disclosure & Confirmation Hearings Set for August 13
---------------------------------------------------------------
The United States Bankruptcy Court for the Southern District of
New York has scheduled a hearing to approve the adequacy of
Chivor S.A.'s Disclosure Statement on August 13, 2002, 10:00
a.m., before the Honorable Burton R. Lifland in:
Room 623
United States Bankruptcy Court
Southern District of New York
Alexander Hamilton Custom House
One Bowling Green
New York, New York 10004
The Hearing to confirm the Plan will commence immediately after
the Disclosure Statement Hearing or as soon as the Court's
schedule permits.
The Plan provides, among others:
i) the Existing Credit Agreement will be amended and
holders of claims of indebtedness under the Existing
Credit Agreement will be given all the rights and
benefits of a "Lender" under the Amended Credit
Agreement;
ii) that, in respect of all other claims against he Debtor,
they will be reinstated; and
iii) that holders of authorized common stock of the Debtor
(Equity Interests) will retain their interests.
Prior to the Petition Date, votes on the Plan were solicited
from holders of the Class 2 Senior Secured Claims, as the only
impaired class of creditors entitled to vote under the Plan. The
holders of the Class 2 Senior Secured Claims voted to accept the
Plan. The Debtor clarifies that it will not anymore solicit
further votes on the Plan.
The Debtor is a corporation (sociedad anonima) and public
services enterprise organized and existing under the laws of the
Republic of Colombia and is the fourth largest electric power
generator in Colombia. The Company, which owns the third largest
hydroelectric power generator station, located in east central
Colombia filed for chapter 11 protection on July 6, 2002. Howard
Seife, Esq. and N. Theodore Zink, Jr., Esq. at Chadbourne &
Parke LLP represent the Debtor in its restructuring efforts. As
of May 30, 2002, the Debtor listed $588,624,000 in assets and
$349,376,000 in debts.
COHO ENERGY: Court Resets Property Sale Hearing for August 6
------------------------------------------------------------
Coho Energy, Inc., (OTCBB:CHOH) announced that the hearing
scheduled on July 22, 2002 in the U.S. Bankruptcy Court in
Dallas, Texas for final approval of its pending property sales
or approval of a competing plan of reorganization was
rescheduled to August 6, 2002.
As previously reported, an auction was held in the U.S.
Bankruptcy Court in Dallas, Texas on June 27, 2002 for the sale
of all of Coho Energy's oil and gas properties. Citation Oil &
Gas Corp., made the winning bid of $165.5 million for Coho
Energy's oil and gas properties located in Oklahoma and Red
River County, Texas. Denbury Resources, Inc., was the winning
bidder for Coho Energy's oil and gas properties located in
Mississippi and Navarro County, Texas with a bid price of $50.3
million. The property sales are scheduled to be completed in
late August 2002, subject to completion of title and
environmental reviews and final approval by the court.
Since the estimated claims of Coho Energy's creditors in its
bankruptcy proceedings aggregate in excess of $335 million, it
is unlikely that Coho Energy's shareholders will receive any
distribution upon liquidation of the company. Coho Energy's
creditors will be paid pursuant to U.S. Bankruptcy Court
approval.
COMMSCOPE INC: Resets Q2 Earnings Release Date for July 29, 2002
----------------------------------------------------------------
CommScope, Inc., (NYSE: CTV) has rescheduled its conference call
to discuss its second quarter 2002 results ending June 30, 2002.
The Company intends to release the financial results at 7:00 a.m
Eastern Time on Monday, July 29 prior to its 8:30 a.m.,
conference call. You are invited to listen to the conference
call or live webcast with Frank Drendel, Chairman and CEO, Brian
Garrett, President and COO and Jearld Leonhardt, Executive Vice
President and CFO.
To participate in the conference call, domestic and
international callers should dial 212-896-6102. Please plan to
dial in 10-15 minutes before the start of the call to facilitate
a timely connection. The live, listen-only audio of the
conference call will also be available via the Internet at:
http://www.firstcallevents.com/service/ajwz361530761gf12.html
If you are unable to participate on the call and would like to
hear a replay, you may dial 800-633-8284. International callers
should dial 402-977- 9140 for the replay. The replay ID is
20732997. The replay will be available through Thursday,
August 1. A webcast replay will also be archived for a limited
period of time following the conference call via the Internet on
CommScope's Web site at http://www.commscope.com
CommScope is the world's largest manufacturer of broadband
coaxial cable for Hybrid Fiber Coax (HFC) applications and a
leading supplier of high- performance fiber optic and twisted
pair cables for LAN, wireless and other communications
applications.
As previously reported, Standard & Poor's raised the CommScope's
rating to BB+ owing to the company's solid performance.
COVANTA ENERGY: Keeps Plan Filing Exclusivity to Nov. 27, 2002
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
extends Covanta Energy Corporation and its debtor-affiliates'
exclusive period to file a plan of reorganization through and
including November 27, 2002. Furthermore, the Court extends the
Debtors' exclusive period to solicit acceptances of that plan
through and including January 26, 2003.
DAIRY MART: Court Extends Plan Filing Exclusivity to August 19
--------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the Southern District
of New York, Dairy Mart Convenience Stores, Inc., and its
debtor-affiliates obtained an extension of their exclusive
periods. The Court gives the Debtors, until August 19, 2002,
the exclusive right to file their plan of reorganization and
until October 21, 2002 to solicit acceptances of that Plan from
their creditors.
Dairy Mart Convenience Stores, Inc., filed for chapter 11
protection on September 24, 2001. Dennis F. Dunne, Esq., at
Milbank, Tweed, Hadley & McCloy LLP represents the Debtors in
their restructuring efforts. When the Company filed for
protection from its creditors, it listed debts and assets of
over $100 million.
ELECTROVOICE: Case Summary & 14 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Electrovoice International, Inc.
150 West 28th Street
New York, New York 10001
Bankruptcy Case No.: 02-13570
Chapter 11 Petition Date: July 23, 2002
Court: Southern District of New York (Manhattan)
Judge: Robert E. Gerber
Debtor's Counsel: Michael S. Fox, Esq.
Traub, Bonacquist & Fox LLP
655 Third Avenue
21st Floor
New York, NY 10017
(212) 476-4770
Fax : (212) 476-4787
Total Assets: $3,571,000
Total Debts: $5,409,900
Debtor's 14 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Brother International Corp. $100,000
C.H. Robinson Worldwide Inc. $28,800
Daewoo Electronics $1,500,000
120 Chubb Avenue
Lyndhurst NJ 07071
Dezer Properties 150 LLC $48,900
Kenwood U.S.A. Corporation $13,600
Koss Audio & Video Electronics $25,800
L.G. Electronics U.S.A. $130,000
Norelco Consumer Products $114,900
Olympus America Inc. $28,800
Philips Consumer Electronics $221,700
Sampo Corporation $85,500
Samsung Electronics USA, Inc. $21,300
Sharp Electronics Corporation $55,400
Thomson Multi Media $54,900
ENRON CORP: Court Sets CommodityLogic Sale Hearing for August 8
---------------------------------------------------------------
Enron Corporation and its debtor-affiliates obtained Court
approval of its proposed uniform bidding procedures for the sale
of Enron Net Works' CommodityLogic software.
The Court will convene a sale hearing on August 8, 2002 at 10:00
a.m. (New York City Time).
As previously reported, the Debtors proposed that competing bids
be governed by these terms and conditions:
A. Any entity that wishes to make a bid for the Property must
provide Enron Net Works with sufficient and adequate
information to demonstrate it has the financial ability to
consummate the sale, including evidence of adequate
financing, and including a financial guaranty, if
appropriate;
B. Enron Net Works, upon consultation with the Creditors'
Committee, shall entertain Competing Bids that are on
substantially the same terms and conditions as those of
IntercontinentalExchange's Asset Purchase Agreement;
C. Competing Bids must:
(a) be in writing, and
(b) be received by:
(i) Enron Corp.
1400 Smith Street
Houston, Texas 77002
Attention: John Cummings,
(ii) Weil, Gotshal & Manges LLP
100 Crescent Court, Suite 1300
Dallas, Texas 75201
Attention: Martin A. Sosland, Esq.
Facsimile: 214-746-7700
Attorneys for Enron Net Works,
(iii) Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: David J. Gilberg, Esq.
Facsimile: 212-558-3588
Attorneys for Intercontinental,
(iv) Davis, Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: Donald S. Bernstein, Esq.
Facsimile: 212-450-3800
Attorneys for JP Morgan Chase Bank, as Agent,
(v) Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Attention: Fredric Sosnick, Esq.
Facsimile: 212-848-7179
Attorneys for Citicorp, as Agent,
and
(vi) Milbank, Tweed, Hadley & McCloy LLP
One Chase Manhattan Plaza
New York, New York 10005
Attention: Luc A. Despins, Esq.
Facsimile: 212-530-5219
Attorneys for the Creditors' Committee
The bid must received by these parties no later than July 31,
2002, at 4:00 p.m. (EDT).
D. Competing Bids must be in an amount that is at least $135,000
greater than the amount of the Purchase Price.
E. All Competing Bids conforming with these terms shall be
considered at the Auction to be held at the offices of Weil,
Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York
10153, or in a manner and at an alternative location as the
Court may direct, on August 6, 2002 commencing at 10:00 a.m.
(EDT).
F. Any Competing Offer must be presented under a contract
substantially similar to the Agreement, marked to show any
modifications made to the Agreement, and the bid must not be
subject to due diligence review or obtaining financing.
G. Enron Net Works, upon consultation with the Creditors'
Committee, shall, after the Bid Deadline and prior to the
Auction, evaluate all bids received, and determine, upon
consultation with the Creditors' Committee, which bid
reflects the highest or best offer for the Property. Enron
Net Works shall announce the determination at the
commencement of the Auction.
H. Subsequent bids at the Auction must be in an amount that is
at least $25,000 more than the prior bid.
I. In the event a competing bidder is the winning bidder (as
determined by Enron Net Works, the Creditors' Committee, and
accepted by the Court), and the winning bidder fails to
consummate the proposed transaction by the Closing Date,
Enron Net Works, upon prior written consent of the Creditors'
Committee, shall be free to consummate the proposed
transaction with the next highest bidder at the final price
bid by the bidder at the Auction (or, if that bidder is
unable to consummate the transaction at that price, Enron Net
Works, upon prior written consent of the Creditors'
Committee, may consummate the transaction with the next
higher bidder, and so forth) without the need for an
additional hearing or order of the Court.
J. All bids for the purchase of the Property shall be subject to
approval of the Bankruptcy Court.
K. No bids shall be considered by Enron Net Works or the
Bankruptcy Court unless a party submitted a Competing Offer
in accordance with the Auction Terms and participated in the
Auction. Enron Net Works, upon consultation with the
Creditors' Committee, may reject any Competing Bids not in
conformity with the requirements of the Bankruptcy Code, the
Bankruptcy Rules or the Local Bankruptcy Rules of the Court,
or contrary to the best interests of Enron Net Works and
parties in interest.
L. All bids are irrevocable until the earlier to occur of:
(i) the closing of the sale on the Closing Date, or
(ii) 30 days following the last date of the Auction (as
may be adjourned).
M. All bids are subject to other terms and conditions as are
announced by Enron Net Works, in consultation with the
Creditors' Committee, at the outset of the Auction.
N. Nothing here shall compel or preclude Enron Net Works, in
consultation with the Creditors' Committee, from determining
that a bid for less than all of the Property is a Competing
Offer in compliance with these terms or the best offer.
O. Enron Net Works, in consultation with the Creditors'
Committee, shall have the right to entertain non-conforming
offers at its discretion. (Enron Bankruptcy News, Issue No.
37; Bankruptcy Creditors' Service, Inc., 609/392-0900)
Enron Corp.'s 9.125% bonds due 2003 (ENRN03USR1) are trading at
about 11.5 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ENRN03USR1
for real-time bond pricing.
ENRON CORP: LNG Unit Wins Nod to Sell Hoegh Charter Contracts
-------------------------------------------------------------
Enron LNG Shipping Company obtained Court approval of:
(a) the terms and conditions of the Purchase and Sale
Agreement, and
(b) authorize the consummation of the sale, free and clear
of liens, claims and encumbrances, and the assumption
and sale of the Charter Contracts to Tractebel.
Enron LNG entered into a Purchase and Sale Agreement with
Tractebel LNG Trading S.A., which is an affiliate of Tractebel
S.A., the sixth largest independent power producer in the world.
Tractebel S.A., is also associated with Suez, a major European
conglomerate.
Under the Purchase and Sale Agreement, Enron LNG will sell and
assume and assign these contracts to Tractebel:
(a) the LNG Vessel Time Charter for the vessel known as the
Hoegh Galleon, as amended;
(b) the Deed of Guarantee of Owner Guarantor;
(c) the voyage expense payment agreement; and
(d) all of the remaining bunker fuel, remaining on board the
Vessel, and all LNG Heel, remaining in the tanks on
board the Vessel, as of the Closing.
The Purchase and Sale Agreement
The principal terms and conditions of the Purchase and Sale
Agreement are:
Purchase Price: $21,500,000
Tractebel also agrees to pay Enron LNG, at
Closing, an amount equal to the Bunker Fuel and
LNG Heel Value.
Escrow
Arrangements: Tractebel will deposit by wire transfer in
immediately available funds an amount equal to
$2,150,000 to be held in escrow with JPMorgan
Chase Bank, Houston Office, as escrow agent,
pursuant to an escrow agreement among Tractebel,
Enron LNG and the Escrow Agent.
Closing
Date Payment: At the Closing, Tractebel will pay Enron LNG
by wire transfer an amount equal to:
(i) the Purchase Price less the Deposit
(together with any interest earned in
respect of the Deposit) deposited in
Escrow, plus
(ii) that amount which is equal to the Bunker
Fuel and LNG Heel Value, all in
immediately available funds to the
account or accounts specified by Enron
LNG to Tractebel on or prior to the
Business Day immediately preceding the
Closing.
Tractebel's
Parent Guaranty: Contemporaneously with the execution of the
Purchase and Sale Agreement, Tractebel will
deliver to Enron LNG its Parent Guaranty to
guarantee the deposit by Tractebel of the Escrow
with the Escrow Agent in accordance with Section
3.2 and all payment obligations of Tractebel
arising under the Purchase and Sale Agreement.
Tractebel will cause its Parent Guaranty to be
maintained in full force and effect until Enron
LNG has received full and final payment of the
Purchase Price and the Bunker Fuel and LNG Heel
Value.
Closing
Statement: Not later than three Business Days prior to the
Closing Date, Enron LNG must prepare and deliver
to Tractebel a statement of the estimated
Closing Date Payment. This statement will set
forth, in reasonable detail, the calculation of
the Closing Date Payment.
Assumption of
Liabilities: Effective upon the Closing Date, Tractebel
agrees to assume and to pay, perform and fully
satisfy when due only those liabilities, duties
and obligations of Enron LNG under or pursuant
to the Assumed Contracts that are attributable
to the period from and after the Closing Date.
Non-Recourse Sale,
Disclaimer of
Representations
and Warranties: Except as otherwise expressly set forth in the
Purchase and Sale Agreement:
(i) the assignment, sale, transfer, setting
over and delivery of the Assets will be
"as is, where is" and "with all faults";
and
(ii) Tractebel will have no recourse to Enron
LNG or any Affiliate, from and after the
Closing in connection with the Assets,
the Assumed Contracts, the Assumed
Liabilities or the Purchase and Sale
Agreement.
Seller's
Closing
Conditions: The obligation of Enron LNG to proceed with the
closing is subject, at its option, to the
satisfaction on or prior to the closing date of
all of these conditions:
(a) Representations, Warranties, and Covenants
The representations and warranties of
Tractebel will be taken as a whole, true
and correct in all material respects, in
each case as of the date of the Purchase and
Sale Agreement and on and as of the Closing
Date, and the covenants and agreements of
Tractebel to be performed on or before the
Closing Date must have been duly performed
in all material respects in accordance with
the Purchase and Sale Agreement.
(b) No Action
On the Closing Date, no Action (excluding
any matter initiated by Enron LNG or any of
its Affiliates) will be pending or
threatened before any Governmental Authority
of competent jurisdiction, including:
(i) the United States of America and the
Cayman Islands,
(ii) any state, province, country,
municipality, or other governmental
subdivision within the United States
of America or the Cayman Islands, and
(iii) any court or any governmental
department, commission, board,
bureau, agency or other
instrumentality of the United States
of America or the Cayman Islands or
of any state, province, country,
municipality, or other governmental
subdivision,
seeking to enjoin or restrain the
consummation of the Closing or recover
damages from Enron LNG or any Affiliate of
Enron LNG resulting therefrom.
(c) U.S. Bankruptcy Court Order
The Bankruptcy Court must have entered an
order authorizing and approving the terms
and conditions of the Purchase and Sale
Agreement, and the order cannot have
been reversed, stayed, enjoined, set aside,
annulled or suspended;
(d) Cayman Islands Court Order
The Grand Court of the Cayman Islands must
have entered an order authorizing and
approving the terms and conditions of the
Purchase and Sale Agreement, and the order
Cannot have been reversed, stayed,
enjoined, set aside, annulled or suspended.
(e) Existing Guarantee
Effective as of the Closing Date:
(i) the Deed of Guarantee, dated April
11, 2000, executed by Enron for the
benefit of Hoegh pursuant to the Time
Charter and any related liabilities
must have been unconditionally
released as to Enron, the release in
form and substance satisfactory to
Enron LNG, and
(ii) substitute arrangements, if required,
in relation to Tractebel, must be in
effect;
Buyer's Closing
Conditions: The obligation of Tractebel to proceed with the
Closing contemplated is subject, at the option
of Tractebel, to the satisfaction on or prior to
the Closing Date of all of these conditions:
(a) Representations, Warranties, and Covenants
The representations and warranties of Enron
LNG must be, true and correct in all
material respects, in each case as of the
date of the Purchase and Sale Agreement and
on and as of the Closing Date, and the
covenants and agreements of Enron LNG to be
performed on or before the Closing Date
must have been duly performed in all
material respects in accordance with
Purchase and Sale Agreement.
(b) No action
On the Closing Date, no Action (excluding
any matter initiated by Tractebel or
any of its Affiliates) can be pending or
threatened before any Governmental Authority
seeking to enjoin or restrain the
consummation of the Closing or recover
damages from the Buyer or any Affiliate of
Tractebel resulting therefrom.
(c) U.S. Bankruptcy Court Order
The Bankruptcy Court must have entered the
U.S. Bankruptcy Court Order, and the order
cannot have not been reversed, stayed,
enjoined, set aside, annulled or suspended.
(d) Cayman Islands Court Order
The Grand Court of the Cayman Islands must
have entered the Cayman Islands Court Order
and the order cannot have not been reversed,
stayed, enjoined, set aside, annulled or
suspended.
(e) No Material Adverse Effect
No material adverse effect on the physical
condition of the Vessel which deprives
Tractebel of the use thereof in the manner
intended under the Time Charter for a
continuous period of 120 days as determined
by a recognized industry expert qualified to
make the determination and mutually
acceptable to the Parties, can have
occurred or be continuing; it being
expressly acknowledged that, any effect
resulting from:
(1) any change in economic, industry, or
market conditions,
(2) any change in Law or regulatory policy,
or
(3) the U.S. Bankruptcy Case or the Cayman
Islands Proceeding will not constitute
a Material Adverse Effect; and
(f) the Vessel must have been delivered to
Tractebel on Dropping Outbound Pilot from an
LNG terminal located at U.S.
Atlantic/Caribbean/U.S. Gulf of Mexico range
no later than July 31, 2002;
Closing: Provided that the conditions set forth in
Article 6 of the Purchase and Sale Agreement are
fulfilled or waived at or prior to Closing,
each Party agrees to close and consummate the
transactions contemplated in the Purchase and
Sale Agreement on the Closing Date at 10:00
a.m., Houston, Texas time, at the offices of
Andrews & Kurth L.L.P. at 600 Travis Street,
Houston, Texas, 77002 or at another time or
place as Enron LNG and Tractebel may otherwise
agree in writing.
Seller's Closing
Obligations: At the Closing, Enron LNG must execute and
deliver, or cause to be executed and delivered,
to Tractebel:
(a) a certificate, dated the Closing Date and
executed by an authorized officer of Enron
LNG on its behalf, as to the matters set
forth in Section 6.2(a) of the Purchase and
Sale Agreement;
(b) the Assignment and Assumption Agreement duly
executed by Enron LNG;
(c) the Closing Statement duly executed by Enron
LNG;
(d) the Assumed Contracts, together with a
certificate, dated the Closing Date and
executed by an authorized officer of Enron
LNG on its behalf, listing each Assumed
Contract and certifying that each Assumed
Contract is a true, correct and complete
original counterpart thereof; and
(e) the Notice to the Escrow Agent duly executed
by Enron LNG;
Buyer's Closing
Obligations: At Closing, Tractebel must deliver, or cause to
be delivered, to Enron LNG:
(a) the Closing Date Payment in immediately
available funds to the bank account as
provided in Section 3.2 of the Purchase and
Sale Agreement, and Enron LNG will be
allowed to keep and retain the Deposit;
(b) a certificate, dated the Closing Date and
executed by an authorized officer of
Tractebel on its behalf, as to the matters
set forth in Section 6.1(a) of the Purchase
and Sale Agreement;
(c) the Closing Statement duly executed by
Tractebel;
(d) a duly executed copy of the Assignment and
Assumption Agreement;
(e) certificates of resolutions or other action,
incumbency certificates and other
certificates of officers of Tractebel as
Enron LNG may require to establish the
identities of and verify the authority and
capacity of the officers of Tractebel who
are taking (or have taken) any action in
connection with the Purchase and Sale
Agreement, including the execution and
delivery hereof; and
(f) the Notice to the Escrow Agent duly executed
by Tractebel. (Enron Bankruptcy News, Issue
No. 37; Bankruptcy Creditors' Service, Inc.,
609/392-0900)
ETOYS: Committee Retains Jaspan Schlesinger as New Local Counsel
----------------------------------------------------------------
The Official Committee of Unsecured Creditors in the chapter 11
cases involving eToys, Inc., seeks authority from the U.S.
Bankruptcy Court for the District of Delaware to retain and
employ Jaspan Schlesinger Hoffman LLP as successor local
counsel.
Frederick B. Rosner, Esq., was the principal attorney working on
this matter. In May, 2002 Mr. Rosner accepted a position with
Jaspan Schlesinger and left the employ of Cozen & O'Connor.
Jaspan Schlesinger's standard hourly rates range from:
partners and of counsel $315 to $410 per hour
associates $170 to $315 per hour
legal assistants $140 per hour
eToys, Inc., now known as EBC I Inc, operated a web-based toy
retailer based in Los Angeles, California. The Company filed a
Chapter 11 Petition on March 7, 2001. When the company filed
for protection from its creditors, it listed $416,932,000 in
assets and $285,018,000 in debt. eToys sold its assets and name
to toy retailer KB Toys. The Company's SEC report on February
28, 2002, the Debtors listed 32,091,918 in total assets and
192,396,702 in total liabilities. Robert J. Dehney, Esq., at
Morris, Nichols, Arsht & Tunnell and Howard Steinberg, Esq., at
Irell & Manella represent the Debtors as they wind-up their
financial affairs.
FEDERAL-MOGUL: Equity Committee Hires Bifferato as Counsel
----------------------------------------------------------
The Official Committee of Equity Security Holders of Federal-
Mogul requests permission to retain and employ Bifferato,
Bifferato & Gentilotti as its counsel, nunc pro tunc to June 17,
2002.
Equity Committee Chairperson Lawrence R. Spieth explains that
the Committee selected Bifferato based on the firm's expertise
in complex bankruptcy matters. Bifferato's bankruptcy and
restructuring group has extensive experience and knowledge in
the field of debtors' and creditors' rights and business
reorganizations under the Bankruptcy Code.
The Equity Committee anticipates Bifferato will be:
A. giving legal advice with respect to the Equity Committee's
powers and duties in the context of the Debtors' bankruptcy
cases;
B. assisting, advising and representing the Equity Committee in
its consultations with the Debtors and other statutory
committees regarding the administration of the cases;
C. assisting, advising and representing the Equity Committee in
any investigation of the acts, conduct, assets, liabilities
and financial conditions of the Debtors and their affiliates
(including investigation of transactions entered into or
completed before the Petition Date), the operation of the
Debtors' businesses, and any other matter relevant to the
case or to the formulation of a plan of reorganization;
D. preparing on behalf of the Equity Committee necessary
applications, motions, answers, orders, reports and other
legal papers in connection with the administration of the
estates in these cases;
E. reviewing and responding on behalf of the Equity Committee to
motions, applications, complaints and other documents service
by the Debtors or other parties in interest on the Equity
Committee in this cases;
F. participating with the Equity Committee in the formulation of
a plan of reorganization; and
G. performing any other legal services for the Equity Committee
in connection with these Chapter 11 cases.
Bifferato will bill the estates for legal services on an hourly
basis at its customary hourly rates:
Professionals Hourly Rate
------------------ -----------
Directors $275
Associates 195
Paraprofessionals 95
Ian Connor Bifferato, Esq., the firm's director, assures the
Court that his firm does not have or represent any interest
adverse to the Equity Committee, in matters upon which Bifferato
will be engaged. The firm, however, has formally acted as
Delaware Counsel for Cooper Industries Inc., with regard to
Cooper's interest in the Debtors' cases. Eventually, Cooper
retained substitute Delaware Counsel in the Debtors' Chapter 11
proceedings.
Mr. Bifferato elaborates that Cooper and the firm have
consensually terminated any further attorney client
relationship. Cooper has represented that it has no objection to
the firm's retention to represent the Equity Committee.
(Federal-Mogul Bankruptcy News, Issue No. 20; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
Federal-Mogul Corporation's 8.8% bonds due 2007 (FMO07USR1),
DebtTRaders reports, are trading at about 19. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=FMO07USR1for
real-time bond pricing.
FLAG TELECOM: Court Okays Innisfree as Special Noticing Agents
--------------------------------------------------------------
Judge Gropper authorizes FLAG Telecom Holdings Limited, and its
debtor-affiliates to retain Innisfree M&A Inc., as special
noticing, balloting and tabulating agent effective June 24,
2002.
Kees van Ophem, General Counsel and Secretary of FLAG Telecom
Holdings Ltd., says Innisfree will not duplicate the services of
Poorman-Douglas Corp. whose responsibilities, as claims agent of
the Bankruptcy Court, pertain to general noticing and claims
administration. Innisfree will perform bankruptcy solicitations
and notice mailings for the Debtors' security holders.
The Debtors' securities consist of bonds issued by FTHL and FLAG
Limited and FTHL common stock, which is traded on the Nasdaq
stock exchange and on the London Stock Exchange.
The person at Innisfree with primary responsibility for
fulfilling the Debtors' requirements will be Jane Sullivan,
Practice Director of the Firm's Bankruptcy Specialty Practice.
Ms. Sullivan has more than 15 years of experience in public
securities solicitations and has worked on more than 55
prepackaged and traditional bankruptcy solicitations, including
America West Airlines, Barney's, Chiquita Brands, Eagle-Picher
Industries, Federated Department Stores, First Republic Bank,
Fruit of the Loom, I.C.H. Corp., MCorp, McLeod USA, Resorts
International, Sun Healthcare, and Zale Corp.
Scope of Services
Specifically, Innisfree will perform these services:
(a) Provide advice to the Debtors and its counsel regarding
all aspects of the plan vote, including timing issues,
voting and tabulation procedures, and documents needed for
the vote;
(b) Review the voting portions of the disclosure statement and
ballots, particularly as they may relate to beneficial
owners of the Bonds held in Street name;
(c) Work with the Debtors to request appropriate information
from the trustee(s) of the Bonds and The Depository Trust
Company and other appropriate transfer agents;
(d) Mail voting documents and such notice documents as
requested to the registered record Security Holders;
(e) Coordinate the distribution of voting documents and other
notice documents to Street name Security Holders by
forwarding the appropriate documents to the banks and
brokerage firms holding the securities (or their agent),
who in turn will forward it to beneficial owners for
voting;
(f) Distribute copies of the master ballots to the appropriate
nominees so that firms may cast votes on behalf of
beneficial owners;
(g) Prepare certificates of service for filing with the court,
as appropriate;
(h) Handle requests for documents from parties in interest,
including brokerage firm and bank back-offices and
institutional Security Holders;
(i) Respond to telephone inquiries from Security Holders
regarding the disclosure statement and the voting
procedures. Innisfree will restrict its answers to the
information contained in the plan and notice documents.
Innisfree will seek assistance from the Debtors or their
counsel on any questions that fall outside of the voting
documents;
(j) If requested to do so, Innisfree will make telephone calls
to confirm receipt of plan and notice documents and
respond to questions about the voting procedures;
(k) If requested to do so, Innisfree will assist with an
effort to identify beneficial owners of the Bonds;
(l) Receive and examine all ballots and master ballots cast by
Security Holders. Innisfree will date- and time-stamp the
originals of all such ballots and master ballots upon
receipt; and
(m) Tabulate all ballots and master ballots of Security
Holders received prior to the voting deadline in
accordance with established procedures, and prepare a vote
certification for filing with the court.
Compensation
Ms. Sullivan says Innisfree proposes to be compensated under
these terms:
(a) A project fee of $10,000, plus $2,000 for each public
security (i.e., each cusip number or ISIN number) entitled
to vote on the Plan, and $1,500 for each public security
not entitled to vote on the Plan but entitled to receive
notice.
(b) For the mailing to Security Holders, we would estimate
labor charges at $1.75-$2.25 per package, depending on the
complexity of the mailing. The charge indicated assumes
the package would include the disclosure statement, a
ballot, a return envelope, and one other document. It also
assumes that a window envelope will be used for the
mailing, and will therefore not require a matched mailing;
(c) A minimum charge of $2,000 to take up to 250 telephone
calls from Security Holders within a 30-day solicitation
period. If more than 250 calls are received within the
period, those additional calls will be charged at $8.00
per call. Any calls to Security Holders will be charged at
$8.00 per call;
(d) A charge of $100 per hour for the tabulation of ballots
and master ballots, plus set-up charges of $1,000 for each
tabulation element (e.g., each Bond Cusip Number or ISIN
Number). Standard hourly rates (as enumerated below) will
apply for any time spent by senior executives reviewing
and certifying the tabulation and dealing with special
issues that may develop;
(e) Innisfree will bill for consulting hours at our standard
hourly rates, as listed below, or at the standard hourly
rates for other professionals that may work on the case.
Consulting services by Innisfree would include the review
and development of materials, including the disclosure
statement, plan, ballots, and master ballots;
participation in telephone conferences, strategy meetings
or the development of strategy relative to the project;
efforts related to special balloting procedures, including
issues that may arise during the balloting or tabulation
process; computer programming or other project-related
data processing services; visits to cities outside of New
York for client meetings or legal or other matters;
efforts related to the preparation of testimony and
attendance at court hearings; and the preparation of
affidavits, certifications, fee applications (if required
by the court), invoices, and reports;
(f) Out-of-Pocket Expenses: All out-of-pocket expenses
relating to any work undertaken by Innisfree will be
charged separately, and will include such items as travel
costs, postage, messengers and couriers, etc., expenses
incurred by Innisfree in obtaining or converting
depository participant, creditor, shareholder and/or lists
of Non-Objecting Beneficial Owners; and appropriate
charges for supplies, in-house photocopying, telephone
usage, etc.
Innisfree's current standard hourly rates are:
Professional Compensation
------------ ------------
Co-Chairman $375 per hour
Managing Director $350 per hour
Practice Director $275 per hour
Director $250 per hour
Account Executive $225 per hour
Staff Assistant $150 per hour
Disinterestedness
Ms. Sullivan makes this disclosure to the Court:
(a) National City (a Bank Lender) is a client with
Innisfree.
(b) Innisfree has a bank account with HSBC Bank (a
Bondholder).
(c) Verizon (a Major Shareholder of FTHL) provides phone
service to Innisfree.
(d) Alcatel (a Critical Vendor/Supplier to FLAG) is a
client of Innisfree.
(e) Qwest, Sprint and Verizon Communications (Major
Customers) provide phone services to Innisfree.
Ms. Sullivan says Innisfree does not have or represent any
interest adverse to the interests of the Debtors or their
estate. (Flag Telecom Bankruptcy News, Issue No. 12; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
FORMICA CORPORATION: Obtains Plan Filing Exclusivity Extension
--------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the Southern District
of New York, Formica Corporation and its debtor-affiliates
obtained an extension of their exclusive periods. The Court
gives the Debtors, until November 1, 2002, the exclusive right
to file their plan of reorganization, and until January 2, 2003,
to solicit acceptances of that Plan.
Formica, together with its debtor and non-debtor-affiliates is a
preeminent worldwide manufacturer and marketer of decorative
surfacing materials. The company filed for chapter 11 protection
on March 5, 2002. Alan B. Miller, Esq., and Stephen Karotkin,
Esq., at Weil, Gotshal & Manges LLP represent the Debtors in
their restructuring efforts. As of September 30, 2001, the
Company reported a consolidated assets of $858.8 million and
liabilities of $816.5 million.
GENERAL CREDIT: Seeks Chapter 11 Protection in Manhattan Court
--------------------------------------------------------------
General Credit Corp., (OTC BB:GNIZ) announced that, on July 19,
2002, General Credit Corp., and its wholly owned subsidiaries
filed voluntary petitions for relief under Chapter 11 of the
United States Bankruptcy Code in the United States Bankruptcy
Court for the Southern District of New York (Case No. 02-13506).
The Debtors will continue to manage their properties and operate
their businesses as "debtors-in-possession" under the
jurisdiction of the Bankruptcy code. Filings may be accessed on
the Court's Electronic Case Filing System at
http://ecf.nysb.uscourts.gov/index.htmlor at the Clerk's Office
in Manhattan, White Plains or Poughkeepsie, N.Y.
GENERAL CREDIT: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: General Credit Corporation
370 Lexington Avenue, Suite 2000
New York, NY 10017
Bankruptcy Case No.: 02-13506
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Carly Holding, Inc. 02-13508
General Armored Corporation 02-13510
G.S. Capital Corporation 02-13511
Type of Business: The Debtors are engaged in the business of
providing working capital financing to their
customers through check factoring, which is
the discounted purchase of corporate checks
made payable to the Debtors' corporate
customers.
Chapter 11 Petition Date: July 19, 2002
Court: Southern District of New York (Manhattan)
Judge: Cornelius Blackshear
Debtor's Counsel: Joshua Joseph Angel, Esq.
Angel & Frankel, P.C.
460 Park Avenue
New York, NY 10022-1906
(212) 752-8000
Fax : (212) 752-8393
Total Assets: $6,010,455
Total Debts: $9,988,032
Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Donald M. Landis Loan $2,150,000
14 Colonial Road
White Plains, NY 10605
Santa Catarelli Loan $850,000
143 Bay 20th Street
Brooklyn, NY 11214
Ira S. Theodore & Nan J. Loan $800,000
Theodore
86 Bounty Lane
Jericho, NY 11753
Burton Koffman Loan $600,000
300 Plaza Drive
Vestal, NY 13850
Dana Schwartz Loan $500,000
47 Alpine Road
Greenwich, CT 06830
Gerald Klafter Loan $500,000
7688 Glendevon Lane
Del Ray Beach, FL 33446
K-6 Inc. Loan $300,000
300 Plaza Drive
Vestal, NY 13850
The Nan & Ira Family Loan $300,000
Foundation
1 N.Y. Plaza, 41st Floor
New York, NY 10004
New Value, Inc. Loan $250,000
300 Plaza Drive
Vestal, NY 13850
Robert Gallo Loan $250,000
1175 York Avenue
New York, NY 10021
Seftor, Inc. Loan $222,000
Dennis Ringer Loan $200,000
Marvin Hyman Loan $150,000
Sanford Redmond Loan $150,000
Sanford Redmond Inc. Loan $150,000
Mike Genuth Loan $100,000
Cornick, Garber & Sandler Trade $55,800
LLP
GOLDMAN INDUSTRIAL: Has Until August 14 to File Chapter 11 Plan
---------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the District of
Delaware, Goldman Industries and its debtor-affiliates obtained
an extension of their exclusive periods. The Court gives the
Debtors, until August 14, 2002, the exclusive right to file
their plan of reorganization and until October 14, 2002 to
solicit acceptances of that Plan.
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.
HISPANIC TELEVISION: Files for Chapter 11 Protection in Texas
-------------------------------------------------------------
On July 24, 2002, Hispanic Television Network, Inc., (OTC
Bulletin Board: HTVN) filed a voluntary petition for relief
under Chapter 11 of the U.S. Bankruptcy Code in the United
States Bankruptcy Court for the Northern District of Texas, Ft.
Worth Division. The filing is intended to allow the Company to
continue to operate its business as a debtor-in-possession while
a plan of reorganization is prepared and filed with the
Bankruptcy Court.
The Company and its principal secured creditors have entered
into an agreement with BroadcastLinks, Inc., a Delaware
corporation, whose principal executive offices are located in
New York, New York providing for a proposed business combination
under which the Company would be reorganized under a Chapter 11
plan as a newly-formed, combined entity and BroadcastLinks would
become the principal shareholder of the combined entity. Under
the agreement, BroadcastLinks will also provide debtor-in-
possession financing to the Company until the plan of
reorganization is confirmed. The anticipated plan of
reorganization will result in the cancellation of all currently
outstanding equity interests in the Company, including the
cancellation of all common stock, preferred stock, and options
and warrants.
HISPANIC TELEVISION NETWORK: Voluntary Chapter 11 Case Summary
--------------------------------------------------------------
Debtor: Hispanic Television Network Inc.
aka Televideo, Inc.
aka Beaumont Broadcasting Corp.
fka MGB Entertainment
fka Hispanic Television Ventures Inc.
fka American Independent Network Inc.
6125 Airport Freeway #200
Haltom City, TX 76117
Bankruptcy Case No.: 02-45365
Chapter 11 Petition Date: July 24, 2002
Court: Northern District of Texas (Fort Worth)
Judge: D. Michael Lynn
Debtors' Counsel: Jeffrey Philipp Prostok, Esq.
Forshey & Prostok
777 Main St., Suite 1285
Ft. Worth, TX 76102
817-877-8855
HORNBECK OFFSHORE: S&P Places B+ Ratings on CreditWatch Positive
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its single-'B'-plus
corporate credit and senior unsecured debt ratings assigned to
oil field services company Hornbeck Offshore Services, Inc. on
CreditWatch with positive implications. Hornbeck currently has
approximately $175 million debt outstanding.
The rating action follows Mandeville, Louisiana-based Hornbeck's
announcement that it plans to issue $126.5 in million common
stock through an IPO. Proceeds are to be used for its current
new vessel program, upgrade of the existing fleet, potential
acquisitions and new construction.
Projected proceeds from the IPO should provide adequate funding
for the first four vessels of its announced new vessel program
should projected earnings fall short and help fund the remaining
four vessels planned. In addition, the IPO will improve
Hornbeck's high debt leverage and open up the equity markets for
a more balanced funding of future growth.
Standard & Poor's views the marine services industry, including
Hornbeck's barge and tug operations, as very cyclical and prone
to fluctuations in dayrates and utilization. Solid contracted
earnings and moderate debt leverage will be important to
maintaining ratings in a downturn. A recent flurry of new
deepwater capable vessel construction programs raises the
potential for overcapacity in the industry. Potential ratings
improvement will depend on the success of its IPO in a difficult
market, and the ability of Hornbeck to put its un-contracted
vessels under long-term agreements.
Standard & Poor's will resolve the CreditWatch listing after
further consultation with Hornbeck's management and the
successful completion of the IPO.
HOULIHAN'S RESTAURANT: Wants to Continue Using Cash Collateral
--------------------------------------------------------------
Houlihan's Restaurants, Inc., and its debtor-affiliates ask the
U.S. Bankruptcy Court for the Western District of Missouri for a
further extension of their ability to use their secured lenders'
cash collateral through September 30, 2002. The Debtors agree
to keep their use of the lenders' cash collateral within these
cash flow forecasts:
Week End Beginning Balance Ending Balance
-------- ----------------- --------------
8/2/2002 $986,378 $1,060,469
8/9/2002 $1,060,469 $1,089,752
8/16/2002 $1,089,752 $1,183,700
8/23/2002 $1,183,700 $123,352
8/30/2002 $123,352 $420,589
9/6/2002 $420,589 $555,722
9/13/2002 $555,722 $760,589
9/20/2002 $760,589 $491,470
9/27/2002 $491,470 $(296,606)
As reported in Troubled Company Reporter's June 27, 2002
edition, the Debtors filed their Disclosure Statement and Plan
of Reorganization in the Court. Since then, the Debtors have
been negotiating with the Committee, the Lenders, and various
constituencies to try to reach consensual agreement with respect
to the Plan. The Debtors assure the Court that they have made
significant progress but the Plan will not be approved prior to
the expiration of the DIP Order at the end of July, 2002.
Houlihan's Restaurants, Inc., filed for chapter 11 protection
together with affiliates on January 23, 2002. Cynthia Dillard
Parres, Esq., and Laurence M. Frazen, Esq., at Bryan, Cave LLP
represent the Debtors in their restructuring efforts. When the
Company filed for protection from its creditors, it listed
estimated debts and assets of more than $100 million.
IT GROUP: Seeks Second Removal Period Extension Until October 14
----------------------------------------------------------------
The IT Group, Inc., and its debtor-affiliates ask the Court to
extend the deadline within which they may remove pending
prepetition State Court Actions to the Bankruptcy Court. The
Debtors suggest the new deadline be the earlier of:
-- October 14, 2002, or
-- 30 days after the entry of an order terminating the
automatic stay with respect to any particular action
sought to be removed.
Christopher S. Chow, Esq., at Skadden, Arps, Slate, Meagher &
Flom LLP, in Wilmington, Delaware, explains that the Debtors
need more time to determine which of the state court actions
they will remove. These actions involve a wide variety of
claims, some of which are extremely complex. The actions, in
particular, consist of all forms of environmental, commercial,
tort, employment-related, trademark and patent litigation.
Mr. Chow notes that in the light of the Asset Sale to Shaw, the
Debtors are now in a better position to evaluate which actions
should be removed. The Debtors are continuing to work
diligently toward addressing each claim appropriately. The
proposed extension of the removal period will afford the Debtors
sufficient opportunity to make fully informed decisions
concerning the possible removal of the actions. It will also
protect the Debtors' valuable right economically to adjudicate
lawsuits if the circumstances warrant removal.
Mr. Chow assures the Court that the Debtors' adversaries will
not be prejudiced by the requested extension because the
adversaries are not allowed to prosecute the actions absent
relief from automatic stay.
The Debtors' current deadline to remove actions is preserved
until the conclusion of the July 31, 2002 hearing on the motion.
(IT Group Bankruptcy News, Issue No. 14; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
INT'L TOTAL SERVICES: Auditors Express Going Concern Doubt
----------------------------------------------------------
During fiscal 2002, International Total Services, Inc.'s
services were provided under contracts that generally had terms
of one to three years, but were cancelable by either party on 30
to 90 days notice. Although contract terms varied significantly,
clients generally paid an hourly rate for services provided.
Certain services, such as aircraft cleaning, were billed on a
flat fee-for-service basis, and certain others were billed at a
fixed monthly rate. The Company recognizes revenues as the
related services are performed.
On September 13, 2001, International Total Services, Inc., and
six of its wholly-owned subsidiaries filed voluntary petitions
for reorganization under Chapter 11 of the Federal Bankruptcy
Code in the United States Bankruptcy Court in the Eastern
District of New York. The Company's subsidiaries in the United
Kingdom were not included in the Chapter 11 Filing. The Company
is managing its business as debtor-in-possession subject to
Bankruptcy Court approval.
The terrorist attack on September 11, 2001 has led to a complete
reevaluation of the respective roles of the federal government
and the private sector in providing security services at
airports. The President of the United States has signed
legislation to make all airport pre-board screeners federal
employees by the end of 2002. The federal take over of pre-board
screening services will result in a significant loss of revenues
and margin of the Company. The Company believes that the impact
of the loss of such a significant portion of business on the
Chapter 11 process and future cash flow from operations, among
other things, may preclude the Company from continuing to
operate as a going concern. It is not known at this time if the
federal government will provide any compensation to the Company
for the loss of the pre-board screening revenues.
The Company's financial statements have been prepared assuming
that the Company will continue as a going concern, which
contemplates the realization of assets and the settlement of
liabilities, including any commitments and/or contingent
liabilities, in the normal course of business. The Company has
incurred a loss from operations for fiscal 2002, fiscal 2001,
and fiscal 2000, and has negative net worth. In addition,
operations generated negative cash flow for fiscal 2002 and
2001. These factors, combined with the loss of pre-board
screening revenues, the Chapter 11 Filing and the Chapter 11
Dispositions, raise substantial doubt about the Company's
ability to continue as a going concern.
INTERPLAY ENTERTAINMENT: Prepares Prospectus for 12M Shares Sale
----------------------------------------------------------------
Interplay Entertainment Corporation has prepared a prospectus
relating to the offer and sale, from time to time, of up to
12,283,020 shares of its common stock that are held by the
stockholders named in the "Selling Stockholders" section of the
prospectus. The shares of common stock offered pursuant to the
prospectus were originally issued to the selling stockholders in
connection with private placements of the Company's shares and
pursuant to the exercise of common stock purchase warrants
issued to the selling stockholders in connection with such
private placements.
The prices at which the stockholders may sell the shares in the
offering will be determined by the prevailing market price for
the shares or in negotiated transactions. Interplay will not
receive any of the proceeds from the sale of the shares, but
will bear all expenses of registration incurred in connection
with the offering. The stockholders whose shares are being
registered will bear all selling and other expenses.
Interplay has also registered with the SEC, and filed Amendment
No. 5 to that registration statement relating to the offer and
sale of up to 28,715,970 shares of its common stock. It
currently has an effective registration statement relating to
the offer and sale of up to 11,256,511 shares of its common
stock. The aggregate number of shares being offered, assuming
the effectiveness of each of the registration statements, is
52,255,501. The completion of this offering and the concurrent
offerings do not depend on each other.
Interplay's common stock is traded on the Nasdaq SmallCap Market
under the symbol "IPLY." On June 26, 2002, the last reported
sale price of the common stock was $0.41 per share.
Interplay Entertainment makes PC and console video games with
such serene titles as Dungeon Master II, Redneck Rampage, and
Torment. Among the subsidiaries and divisions under the
Interplay umbrella are 14 Degrees East (strategy and puzzle
games), Black Isle (role playing games), Shiny Entertainment
(cartoon animation), Tantrum (action games), and Digital Mayhem.
Struggling to rebound from financial problems, Interplay is
putting more focus on its console games.
As of March 31, 2002, Interplay Entertainment has a working
capital deficit of about $34 million, and a total shareholders'
equity deficit of about $28 million.
KINETICS SYSTEMS: S&P Withdraws BB Credit & Senior Debt Ratings
---------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its double-'B'
corporate credit and senior secured bank loan ratings on Santa
Clara, California-based Kinetics Systems Inc., because the
company has postponed its bank loan syndication.
KMART CORP: Ridgewood Seeks Stay Relief to Effect $2.2MM Setoff
---------------------------------------------------------------
Dorel Industries Inc., also known as Ridgewood Industries,
supplied Kmart Corporation with ready to assemble furniture
worth $11,609,508 prior to Petition Date. As of the Petition
Date, this balance remains outstanding.
Under some arrangements with Ridgewood, Kmart was entitled,
prepetition, to certain advertising allowances pertaining to
products Kmart bought from Ridgewood. Ridgewood owe Kmart
$862,595 in outstanding prepetition advertising allowance.
In addition, Kmart was entitled to vendor/volume rebates for
product it purchased from Ridgewood prepetition. The volume
rebate was 2.5% of the total product Kmart purchased from
Ridgewood. In 2001, Kmart is entitled to a prepetition volume
rebate of $1,335,393.
Moreover, Kmart was also entitled to certain servicing credits
for prepetition purchases from Ridgewood. The outstanding
prepetition servicing credits due Kmart is $42,654.
Thus, Ridgewood asks the Court to lift the automatic stay to
setoff Kmart's $2,240,642 prepetition claims for advertising
allowances, volume rebates and service credits against its
$11,609,508 prepetition claim.
Alan K. Mills, Esq., at Barnes & Thornburg, in Indianapolis,
Indiana, asserts that the debts are mutual because they are due
to and from the same entities in the same capacity. Thus, Mr.
Mills contends, cause exists for termination of the automatic
stay to allow Ridgewood to effect a setoff. (Kmart Bankruptcy
News, Issue No. 28; Bankruptcy Creditors' Service, Inc.,
609/392-0900)
KMART: Court Okays Pact Establishing Lenders' Claim Filing Terms
----------------------------------------------------------------
JPMorgan Chase Bank is the administrative agent on behalf of
several banks, financial institutions and other entities to
Kmart Corporation's:
(i) Three-Year Credit Agreement dated December 6, 1999; and
(ii) 364-Day Credit Agreement dated November 30, 2001.
In a Court-approved stipulation, the Debtors, JPMorgan Chase and
the Lenders have agreed to these terms regarding filing Proofs
of Claim by the Administrative Agent and Lenders:
(a) The Administrative Agent may (but is not obligated to)
file a master Proof of Claim in the case of Kmart
asserting on its own behalf and on behalf of the Lenders,
any and all Claims arising under the Credit Agreements;
(b) The filing of a master Proof of Claim in the case of Kmart
by the Administrative Agent shall constitute a filing of a
master Proof of Claim in the case of each Debtor that is a
Loan Party;
(c) Neither the Administrative Agent nor the Official
Financial Institutions' Committee, nor their respective
professionals shall be responsible for distributing the
Bar Date Notice and related materials, including the Order
and form of Proof of Claim to each Lender;
(d) The Administrative Agent shall not be required to attach
any of the Loan Documents to a master Proof of Claim filed
on its own behalf of the Lenders, and instead shall make
copies of the Loan Documents available to any party in
interest upon request. The Administrative Agent shall
provide the Debtors, upon their request, with a schedule
of the Revolving Credit Loans and Revolving Credit
Commitments held by each Lender under the Credit
Agreements, as the information is recorded in the
Administrative Agent's books and records;
(e) Nothing in the Stipulation shall prejudice the rights of
the Administrative Agent or any Lender to:
(1) file, on its own behalf, an individual Proof of Claim
asserting Claims against any Debtor, or
(2) vote separately on any plan of reorganization proposed
in these cases. (Kmart Bankruptcy News, Issue No. 27;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
Kmart Corp.'s 9.0% bonds due 2003 (KM03USR6) are trading at 30,
DebtTraders reports. For real-time bond pricing, see
http://www.debttraders.com/price.cfm?dt_sec_ticker=KM03USR6
KMART CORP: Exclusivity Period Extended through Feb. 28, 2003
-------------------------------------------------------------
Kmart Corporation (NYSE: KM) announced that, at a hearing
Wednesday in Chicago, the United States Bankruptcy Court for the
Northern District of Illinois approved Kmart's request to extend
the period during which the Company has the exclusive right to
file a plan of reorganization. The Court also granted a number
of other orders sought by Kmart, including the assumption of an
additional key brand license agreement, the sale of a corporate
aircraft, and the retention of a mediator to assist in the
disposition of personal injury claims against Kmart.
The period in which Kmart has the exclusive right to file a plan
of reorganization has been extended through February 28, 2003.
It had been scheduled to expire on August 7, 2002. None of
Kmart's statutory committees objected to the proposed extension.
James B. Adamson, Kmart Chairman and Chief Executive Officer,
said, "We are very pleased to have received the support of the
Court and our creditor groups to extend our exclusivity rights.
With this extension, we can focus on our top priorities of
driving sales and reducing costs in the second half of 2002. We
believe the information we gain from this year's back-to-school
and holiday seasons will be invaluable as we develop a long-term
strategic business plan and plan of reorganization for Kmart."
The Court today also approved a motion allowing Kmart to assume
the license agreement for its proprietary Route 66(R) apparel
line. The Court previously approved the assumption of license
agreements for Kmart's Martha Stewart Everyday(R), Jaclyn
Smith(R), Kathy Ireland(R), Disney(R), JOE BOXER(R), Curtis
Mathes(R) and Sesame Street(R) brands.
Other motions approved by the Court include the sale of a
corporate jet to Shamrock Equipment Company, Inc.; the retention
of Erwin I. Katz, a retired bankruptcy judge, as a mediator in
connection with the Company's procedures for resolving certain
judgment claims; and the retention of legal and financial
advisors for the recently appointed Equity Committee.
Kmart Corporation is a $36 billion company that serves America
with more than 1,800 Kmart and Kmart SuperCenter retail outlets
and through its e-commerce shopping site, http://www.kmart.com
LAIDLAW: Wins Transportation Board Approval for Rockton Purchase
----------------------------------------------------------------
Surface Transportation Board decided on July 2, 2002 to approve
Laidlaw Inc.'s application to acquire control of Rockton Bus
Company Inc.
Rockton is a motor passenger carrier that is authorized to
provide special and charter operations, pursuant to a federally
issued authority.
Under a voting trust agreement dated November 1, 1999, Laidlaw
Inc.'s indirectly controlled subsidiary -- Laidlaw Transit Inc.
-- acquired all of Rockton's outstanding shares of stock. As a
result, Rockton is able to offer its Illinois and Iowa
passengers with tour and sightseeing services over an expanded
area. Moreover, the Rockton's addition to the Laidlaw family
will promote efficient use of buses and ensure that Rockton and
other Laidlaw affiliates will have an adequate number of buses
to serve the public.
Accordingly, the Board decides that:
(a) the proposed acquisition of control is approved and
authorized, subject to the filing of opposing comments;
(b) if timely opposing comments are filed, the findings made
in this decision will be deemed as having been vacated;
(c) this decision will be effective on August 26, 2002,
unless timely opposing comments are filed; and
(d) a copy of this notice will be served on:
-- the U.S. Department of Transportation, Federal Motor
Carrier Safety Administration, 400 7th Street, S.W.
Room 8214, Washington, DC 20590;
-- the U.S. Department of Justice, Antitrust Division,
10th Street & Pennsylvania Avenue, N.W. Washington,
DC 20530; and
-- the U.S. Department of Transportation, Office of the
General Counsel, 400 7th Street, S.W. Washington, DC
20590. (Laidlaw Bankruptcy News, Issue No. 20;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
LAIDLAW INC: August 31, 2001 Equity Deficit Reaches $980 Million
----------------------------------------------------------------
Laidlaw Inc., announced financial results for its fiscal year
ended August 31, 2001. Since the end of fiscal 2001, the
Company has resolved several major obstacles that have been
identified as important to the successful consummation of its
plan of reorganization. These include, among others, the
agreement in principle to settle the securities fraud
litigation, In re Laidlaw Bondholders litigation, previously
announced in January 9, 2002, as well as the settlement of all
matters involving Safety-Kleen Corp., previously announced on
July 18, 2002.
Consolidated Revenue
For the fiscal year ended August 31, 2001, consolidated revenues
from the Company's Contract Bus services, Greyhound and
Healthcare services segments increased 3% to $4.42 billion from
the $4.27 billion reported for fiscal 2000.
At August 31, 2001, Laidlaw Inc., has a total shareholders'
equity deficiency of about $980 million.
Recontinuance of Healthcare Businesses
During the fourth quarter of fiscal 2001, it was determined that
the Healthcare services businesses no longer qualified for
classification as discontinued operations. As a result, the
Healthcare services businesses have been reclassified as
continuing operations. Certain items in the presentation of the
fiscal 1999 and 2000 results have been reclassified to present
all operations as "continuing" in all comparative fiscal years.
Goodwill Impairment
The Company has changed its method of measuring goodwill
impairment to more closely approximate the recently established
standards under Canadian GAAP and U.S. GAAP. These new standards
are applicable to the Company effective September 1, 2002. The
Company determined that a permanent impairment in the carried
value of goodwill existed in all its operating segments because
of the Company's voluntary petition for reorganization filing on
June 28, 2001, and because of continued depressed operating
results reported during the last few years. Consolidated
earnings before interest, taxes, depreciation and amortization
(EBITDA), before goodwill impairment charges, was $383 million
compared with $386 million for fiscal 2000.
This change in methodology resulted in the Company's recognition
of a $1.1 billion reduction in the carried value of goodwill in
fiscal 2001, which reduced consolidated EBITDA to a loss of $722
million. The goodwill impairment charge for fiscal 1999 was
increased by $974 million as a result of this change. There was
no goodwill impairment charge in fiscal 2000.
Safety-Kleen Settlement
On July 18, 2002, the Company and Safety-Kleen Corp., announced
that, through a court-approved mediation process, they had
reached an amicable resolution (and there was no admission of
liability by any party to this agreement) of all claims the
companies had asserted against one another. The central
component of the settlement is the agreement by Laidlaw and its
major creditor groups, to provide in the Company's plan of
reorganization, for an allowed, general unsecured claim of $225
million in favor of Safety-Kleen Corp. The claim will be
classified as a Class 6 claim along with other general unsecured
claims under the Laidlaw plan.
The earnings relating to Laidlaw's 44% ownership interest in
Safety-Kleen was a loss of $255 million in fiscal 2001, a loss
of $660 million in fiscal 2000, and income of $32 million in
fiscal 1999. The fiscal 2001 loss related to the Safety-Kleen
settlement consists of approximately (1) the $225 million
general unsecured claim described above, (2) $15 million related
to certain industrial revenue bonds, (3) $8 million relating to
insurance matters, (4) $6 million related to performance bonds
and (5) $1 million related to certain other litigation matters.
Net Loss
Including the loss as a result of the Safety-Kleen settlement,
the Company had a loss from continuing operations of $1.58
billion for fiscal 2001 compared with a loss of $1.25 billion
for fiscal 2000.
Because the Healthcare services segment is now classified as a
continuing operation, the Company was, for fiscal 2001, required
to reverse the remaining provision for loss on sale of
discontinued operations. This reversal resulted in income from
discontinued operations of $986 million and reduced the
consolidated net loss, for the current fiscal year, to $599
million compared with a net loss of $2.24 billion for fiscal
2000.
Segment Results
In addition to now reporting the Healthcare businesses as a
segment, the Company has changed for all prior periods described
in this report the reportable segments as compared to the prior
year. The former Education services segment, which consisted of
the school bus transportation operations, has been combined with
the municipal and paratransit operations to form the Contract
Bus services segment. The former Inter-city, Transit & Tour
services segment, which consisted of the Greyhound operations
and the municipal and paratransit operations, now consists only
of the Greyhound operations and the segment has been renamed
Greyhound.
The Company's Contract Bus service segment now comprises its
school bus and municipal transit operations. Revenue for fiscal
2001 increased 3% to $1.77 billion from $1.73 billion last year.
EBITDA for the current fiscal year was $141 million compared
with $304 million for fiscal 2000. Before the goodwill
impairment charge, EBITDA for fiscal 2001 was $270 million.
Revenue from Greyhound, the Company's North America-wide
intercity and tourism services unit, increased 5% to $1.25
billion compared with $1.20 billion in fiscal 2000. Fiscal 2001
EBITDA for the Greyhound segment was a loss of $287 million
compared to EBITDA of $93 million reported for fiscal 2000.
EBITDA for fiscal 2001 was $85 million before the goodwill
impairment charge.
The Company's recontinued Healthcare services segment is
composed of its ambulance services and emergency department
management businesses. Revenue for fiscal 2001 increased 3% to
$1.39 billion from $1.35 billion last year. EBITDA for fiscal
2001 was a loss of $577 million compared with a loss of $11
million last year. Before the goodwill impairment charge of $605
million, EBITDA for fiscal 2001 was $28 million.
Revenue growth in all segments is due primarily to price and
volume increases. Increases in accident claim-related costs and
energy expenses along with increased labor and benefits costs
negatively influenced EBITDA in the Contract Bus services and
Greyhound segments. These factors were partially offset, at the
Greyhound segment, by a favorable settlement of a long-
standing, rent-related dispute with the Port Authority Terminal
of New York City. The improvement in Healthcare services EBITDA,
before goodwill impairment, was derived principally from
increased cash collections, partially offset by provisions for
settlements of Medicare and Medicaid reimbursement claims and by
a provision for exposure to professional liability claims
resulting from the liquidation of one of the Company's insurers.
Laidlaw Inc., is a holding company for North America's largest
providers of school and intercity bus transportation, public
transit, patient transportation and emergency department
management services.
Laidlaw Inc.'s 7.050% bonds due 2003 (LDM03USR1) are trading at
60.5 cents-on-the-dollar, DebtTraders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=LDM03USR1for
real-time bond pricing.
LEAR CORP: S&P Revises Outlook on BB+ Credit Rating to Positive
---------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
Southfield, Michigan-based Lear Corp., to positive from stable,
reflecting the potential for an upgrade within the next one to
two years if the company continues to generate solid free cash
flow and reduce debt levels.
In addition, Standard & Poor's affirmed its double-'B'-plus
corporate credit rating on Lear, a manufacturer of automotive
interior systems. Lear's total debt (including operating leases
and sold accounts receivable) is about $2.9 billion.
Lear has reduced debt by about $1.3 billion since its $2.3
billion acquisition of UT Automotive in 1999. The company made
14 acquisitions for $4.6 billion from 1994 to 1999, but has not
made any significant purchases since 1999. "Lear is expected to
refrain from making significant debt financed acquisitions for
the next few years in order to improve its credit profile to a
level consistent with an investment-grade rating," said Standard
& Poor's credit analyst Martin King. "Potential impediments to a
higher rating would be a deterioration in the operating
environment, difficulties executing the company's current
restructuring program, or large acquisitions."
Lear's cash flow generation has been solid, with free cash flow
totaling more than $300 million during 2001 and $200 million
during the first half of 2002. Lear expects free cash flow to
total $300 million - $350 million during 2002, which will be
used primarily for debt reduction. Fair financial flexibility is
provided by access to capital markets, ample borrowing
availability under bank credit lines, and the ability to sell
assets.
Lear Corp.'s 7.96% bonds due 2005 (LEA05USR1), DebtTraders says,
are trading above par at about 102.88. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=LEA05USR1for
real-time bond pricing.
LENNOX INT'L: Further Pares-Down Debt to $511MM at June 30, 2002
----------------------------------------------------------------
Lennox International Inc., (NYSE: LII) reported second quarter
2002 earnings, before restructuring charges for programs
announced in 2001, increased 42% to $27 million from $19 million
in the year ago period. Total company sales were $831 million,
down 2% versus last year.
Quarterly operating income for this year was up 21% to $53
million from $43 million last year. Operating margins rose to
6.3% from 5.1% last year. EBITDA increased 7% to $69 million.
Foreign exchange benefited revenues by four-tenths of one
percent and had a positive impact of less than $0.01 on earnings
per share in the quarter.
During the second quarter of this year, the company incurred
pretax charges of $1.2 million for previously announced
restructuring programs to consolidate some operations and phase
out certain non-core assets and underperforming product lines.
Last year in the second quarter, the company incurred $38
million in restructuring charges to consolidate underperforming
service centers in its Service Experts operation.
Had the FAS 142 accounting rule eliminating the amortization of
goodwill been effective in 2001, operating income in the second
quarter of 2001 would have been $4.6 million higher and earnings
per share before restructuring charges would have been $0.40. On
a GAAP basis, after accounting for restructuring charges, the
company reported net earnings per share of $0.43 in the second
quarter 2002, compared with a reported loss per share of $0.12
in the same quarter last year.
"We're very pleased the first-quarter 2002 improvement in LII's
operating performance continued in the second quarter, despite
mixed market demand in the sectors we serve and an especially
challenging commercial air conditioning sector," said Bob
Schjerven, chief executive officer. "We are particularly pleased
to see the pace of improvement at Service Experts, our retail
segment, accelerate in the second quarter."
LII continues a successful focus on free cash flow, with
emphasis on working capital management and capital spending.
Inventories are down 16%, or $55 million, year-over-year, while
working capital - expressed as a percent of sales on a trailing
12 months basis - declined significantly to 21.1% from 24.0%. In
the second quarter the company generated $2 million in free cash
flow, bringing year-to-date free cash flow to $10 million. "Due
to the seasonal nature of our business, we have typically used
cash in the first half of the year and generated cash in the
second half, so we are encouraged by this performance,"
Schjerven said.
The company also continues to make significant progress in
paying down long-term debt, reducing its total debt as of June
30, 2002 to $511 million, down $103 million from the same time a
year earlier. At the end of the second quarter, Debt to Total
Capitalization was 53.2%, comparing favorably with 57.3% at the
same time last year, adjusted for FAS 142 goodwill impairment
charges taken in the first quarter of 2002.
Business Segment Highlights
All business segment highlights exclude restructuring charges.
North American residential: Revenues grew by 5% from the
previous year to $351 million. Segment operating income for the
quarter increased 11% to $36.1 million from $32.4 million last
year, with FAS 142 contributing $1 million to the overall
improvement. Segment operating margins expanded 60 basis points
to 10.3%.
The company reported strong market acceptance for the new Dave
Lennox Signature Series -- an innovative product line recently
introduced by its Lennox Industries unit that features the
industry's quietest air conditioners and furnaces, as well as
the most effective home air purification system on the market
today.
Service Experts: Despite a 7% decrease in revenues to $251
million, the Service Experts segment showed a substantial
improvement in operating profitability for the second straight
quarter. On a same store basis, adjusting for dealer service
centers that were sold or closed in 2001, second quarter sales
were down 4% -- a significant improvement over the 9% decline in
the first quarter of this year. Segment operating income
increased to $15.9 million from $4.2 million last year, with FAS
142 contributing $2.4 million to the year-over-year improvement.
Operating margins for the second quarter were 6.3%, compared
with 1.6% last year.
"Dennis Smith, who joined us as president of Service Experts in
the fourth quarter of last year, is effectively instilling a
performance-oriented culture throughout the organization," said
Schjerven. "His management's attention to labor productivity --
critical to operating profitability in this type of service
business -- and containing S,G & A costs are driving the
improvement."
"While we certainly have a way to go to realize the full
potential from Service Experts, we are pleased with the trend we
are seeing."
Worldwide commercial air conditioning: LII faced lower demand
levels for commercial air conditioning equipment, with North
American industry shipments of unitary commercial HVAC equipment
down approximately 12% in the first five months of 2002 and
reports of lower demand levels in Europe. Segment revenues
declined 11% in the second quarter to $115 million. Operating
profits decreased 34% to $5.7 million due to lower volumes,
which could only partially be offset by lower period expenses.
As a result, segment operating margins for the quarter were 5%,
down from 6.7% last year. Had FAS 142 been effective, 2001
quarterly operating income would have been $400,000 higher.
Worldwide commercial refrigeration: Revenues increased by 6% to
$90 million, as the strengthening in the order rate reported at
the end of the first quarter was sustained. Segment operating
income increased 19% to $9.0 million, with FAS 142 contributing
$400,000 to the year-over-year improvement. Benefiting from
higher volumes and cost control initiatives, operating margins
expanded 110 basis points to 10.0%.
Worldwide heat transfer: Demand for heat transfer components
remains soft, with segment sales decreasing 9% to $52 million in
the second quarter. This volume erosion resulted in a quarterly
segment operating loss of $300,000, compared with operating
income of $2.0 million the previous year. 2001 quarterly
operating income would have been $300,000 higher if FAS 142
accounting had been effective. Segment operating margins were
(0.6%) compared with 3.5% last year.
A planned joint venture with Outokumpu of Finland announced in
April will result in Outokumpu purchasing a 55% interest in
LII's heat transfer business segment for $55 million, with LII
retaining 45% ownership. The joint venture agreement is on track
to be completed in the third quarter of this year. "Assuming
this transaction is completed as expected, our reported revenues
will decline by approximately $60 million in the second half of
this year, although it will not have a material impact on our
EPS or free cash flow for 2002," said Rick Smith, chief
financial officer.
Business Outlook: Earnings Guidance Raised
"We previously reported the first quarter of this year was a
turning point for LII's operating performance, and we are very
pleased to report that momentum carried into the second
quarter," Schjerven said. "We are confident this broad-based
improvement will continue and we are raising our earnings
guidance for 2002." The company expects full year diluted
earnings per share, excluding restructuring and goodwill
impairment charges, will be in the range of $0.90 to $1.00. The
outlook for free cash flow has also been raised to approximately
$75 million for full year 2002.
The LII management team continues to focus on reducing product
costs, eliminating waste in manufacturing processes, and
streamlining overhead structures. Despite their progress, the
company is feeling the pressure from increasing material costs,
most notably on steel. "Our operating companies are considering
the appropriate pricing actions to protect our margins,"
Schjerven said.
A Fortune 500 company operating in over 70 countries, Lennox
International Inc., is a global leader in the heating,
ventilation, air conditioning, and refrigeration markets. Lennox
International stock is traded on the New York Stock Exchange
under the symbol "LII". Additional information is available at:
http://www.lennoxinternational.comor by contacting Bill
Moltner, vice president, investor relations, at 972-497-6670.
* * *
As reported in Troubled Company Reporter's July 16, 2002,
edition, Standard & Poor's assigned its double-'B'-minus
corporate credit rating to air conditioning and heating
equipment manufacturer Lennox International Inc. The outlook is
stable.
At the same time, Standard & Poor's said that it assigned its
single-'B' rating to the company's $143.8 million convertible
subordinated notes. Proceeds from the notes were used to
partially repay amounts on the company's revolving credit
facility. Total debt is about $820 million.
"The ratings reflect the company's leading positions in air
conditioning and heating equipment markets for residential and
light commercial applications, offset by a challenging
residential retail business and an aggressive financial
profile", said Standard & Poor's credit analyst Pamela Rice.
She added, "The company's leading market positions and the fact
that a substantial portion of its sales are derived from less
volatile repair and replacement markets support rating
stability. However, weak retail business performance limits
upside ratings potential".
LODGIAN: Asks Court to Authorize Merrill Lynch Exit Financing
-------------------------------------------------------------
Lodgian, Inc., its debtor-affiliates, and the Official Committee
of Unsecured Creditors jointly ask the Court for an order
authorizing the Debtors to perform their obligations under the
commitment letter with Merrill Lynch Mortgage Capital Inc.,
regarding a $286,200,000 financing to be provided by Merrill and
its affiliates to one or more special purpose entities owned and
controlled by Lodgian.
Adam C. Rogoff, Esq., at Cadwalader Wickersham & Taft in New
York, tells the Court that exit financing is essential to any
plan of reorganization. The Debtors will require significant
funding at plan consummation to:
* refinance certain existing secured debt, including amounts
outstanding under the DIP Facility,
* make required cure payments under executory contracts,
including vital franchise agreements,
* pay administrative expenses, including transaction expenses,
and
* provide for the funding of on-going capital expenditures
required under franchise agreements.
Mr. Rogoff believes that any financing arrangements will
necessarily require extensive and time-consuming due diligence
with respect to the individual hotel properties that would serve
as collateral, including with respect to appraised values,
environmental and engineering matters, as well as legal due
diligence. In order to maximize recoveries to creditors, the
Debtors and the Committee believe that it is best to secure --
as soon as possible -- an exit financing commitment on
commercially competitive terms that provides sufficient
borrowing availability and contains as few material conditions
to closing as practicable, including Due Diligence-related
contingencies.
Beginning in January 2002, Mr. Rogoff relates that the Debtors
and their financial adviser had discussions with 18 potential
exit-financing lenders, including Merrill. Of these, 11 parties
did not indicate further interest while two were contemplating
less favorable lending structures and were not actively pursued.
Five lenders, including Merrill, proceeded to conduct initial
Due Diligence with the Debtors' assistance. One of the five was
unwilling to proceed with Due Diligence and discussions, except
on an exclusive basis. The Debtors did not believe it was
appropriate at that stage, particularly given that its proposal
would not have been as favorable as those of others engaged in
initial Due Diligence. The Debtors received formal proposals
from two of the five parties who conducted initial Due
Diligence, including Merrill. The Debtors and their financial
adviser kept the Committee and its financial adviser informed of
these discussions and proposals.
The Debtors and the Committee, with the advice of their
advisers, determined that Merrill's proposal was no less
favorable than the proposal received from the other potential
lender, Merrill was much further advanced in its Due Diligence
than the other potential lender. In order to reach the level of
Due Diligence Merrill had already completed, the other potential
lender would need more time and a significant advance payment
from the Debtors to cover related out-of-pocket costs to be
incurred by the other potential lender. Therefore, the Debtors
and the Committee determined that the Debtors should pursue
negotiations with Merrill to a definitive commitment.
The Debtors, the Committee and their advisers engaged in joint
negotiations with Merrill on the Loan's terms and conditions,
which reflect significant improvements over the terms of
Merrill's initial proposal. Mr. Rogoff informs the Court that
the Commitment Letter provides for a $286,200,000 Loan secured
by the Morgan Stanley Senior Funding Hotels and the Nationwide
Hotels. Of the Loan, $256,200,000 will be used to refinance the
Morgan Stanley Senior Funding Credit Facility and the Nationwide
Loans. The $30,000,000 balance will be available to fund other
required payments at plan consummation and for general corporate
purposes, including on-going capital expenditures.
Mr. Rogoff states that the Loan amount is not subject to any
further valuation work by Merrill with respect to the Portfolio
Hotels. Merrill has until October 4, 2002 to complete its
review of all required third party reports with respect to the
Portfolio Hotels, including all appraisals, structural and
environmental reports and title reports, and legal Due Diligence
items with respect to the Portfolio Hotels, the Borrower and
Lodgian, including management agreements, franchise agreements,
ground leases, space leases and filings in pending litigation.
Lodgian may terminate the Commitment Letter if Merrill does not
give Lodgian written notice by October 4, 2002 that all
conditions to the closing of the Loan relating to Merrill's
receipt and approval of Third Party Reports and Legal Due
Diligence Items have been satisfied.
Mr. Rogoff relates that the Debtors agreed to pay Merrill a
$1,000,000 maximum commitment fee, with $500,000 payable within
two business days after the Approval Order becomes final, and
the remaining $500,000 within two business days after Lodgian's
receipt of the Diligence Completion Notice -- provided that the
Diligence Completion Notice is received not later than
October 4, 2002. The Commitment Fee and any extension fee paid
by Lodgian are non-refundable, but, if the Loan closes, will be
credited against the "Up-Front Fee" payable at the Closing, as
provided in the Agreement. Lodgian has also agreed to pay all
of Merrill's out-of-pocket costs in connection with Due
Diligence and the negotiation and preparation of the Commitment
Letter and definitive loan documents.
Mr. Rogoff explains that the Commitment Letter will terminate
if:
-- the Approval Order has not been entered and become final
by August 30, 2002;
-- Lodgian does not pay either installment of the Commitment
Fee when due;
-- the Court does not enter an order confirming Lodgian's
final plan of reorganization by November 15, 2002; or
-- the Loan has not closed by November 30, 2002.
At any time, on or after September 1, 2002, Lodgian may make a
written request to extend the plan of reorganization and loan
closing deadlines up to 60 days. If Merrill agrees to the
extension, Lodgian will pay Merrill a $350,000 extension fee.
If Merrill does not agree to the extension within 10 days after
Lodgian's request, Lodgian may terminate the Commitment Letter
by written notice, provided that the termination notice is given
not later than 20 days after the date of the extension request.
According to Mr. Rogoff, Lodgian has agreed not to engage or
solicit any other prospective lender to provide financing with
respect to the Portfolio Hotels until the earlier of September
20, 2002, and the termination of the Commitment Letter. Lodgian
and the Committee believe that some period of exclusivity is
required to induce Merrill to devote the substantial time and
resources required by the transaction and that the agreed period
is reasonable in light of:
(1) the amount of work required to complete Due Diligence on
the 56 Portfolio Hotels,
(2) Lodgian's right to terminate the Commitment Letter if
Merrill does not agree to a requested extension or fails
to deliver a timely Diligence Completion Notice, and
(3) the availability to Lodgian for use with any other
lender of all Third Party Reports generated for
Merrill's Due Diligence.
The Lender's obligation to make the Loan is subject to:
A. the preparation, execution and delivery of a definitive loan
agreement reasonably acceptable to the Lender and
incorporating substantially the terms and conditions set
forth in the Commitment Letter and the Agreement;
B. EBITDA for the Portfolio Hotels measured cumulatively for
the period from July 1, 2002 through the closing of the Loan
should be no less than 90% of:
Minimum
Month EBITDA
-------------- -----------
July 2002 $ 6,116,970
August 2002 5,502,885
September 2002 4,257,937
October 2002 6,098,003
November 2002 3,248,000
December 2002 1,194,934
C. the Lender's reasonable determination that there has been no
material adverse change in the United States hospitality
sector due to acts of terrorism, declaration by the United
States of war or national emergency or the outbreak or
escalation of other hostilities involving the United States
in the United States or abroad; and
D. at Closing, minimum percentages of the Portfolio Hotels
specified in the Commitment Letter are operated under
franchise agreements with Six Continents, Marriott and other
nationally-recognized hotel franchises, have not received
failing quality control scores under their franchise
agreements and are not unavailable due to suffered casualty
loss.
The material terms of the Loan are:
A. Borrower: One or more single-purpose entities, wholly owned
and controlled by the Debtors, whose only assets are the
Portfolio Hotels and related assets.
B. Lender: Merrill Lynch Mortgage Capital Inc. and affiliates.
C. Loan Amount: $286,200,000.
D. Purpose: The proceeds of the Loan will be used as follows:
a) $195,600,000 to refinance the Morgan Stanley Senior
Funding Credit Agreement secured by mortgage liens on the
50 Morgan Stanley Senior Funding Hotels;
b) $60,600,000 to refinance the Nationwide Loans secured by
mortgage liens on the six Nationwide Hotels; and
c) $30,000,000 for general corporate purposes, other than
acquiring any new hotel property.
D. Loan Term: The loan will mature two years from Closing.
Lodgian has the option to extend the term of the Loan for
three additional periods of one year each, subject to meeting
certain financial tests, maintaining material licenses and
permits, entering into an Eligible Cap Agreement, absence of
a default, payment of the Extension Fee referred to below and
timely notice.
E. Interest Rate: LIBOR plus 350 basis points or, following an
Event of Default, 850 basis points. During the term of the
Loan and any extension, the Borrower will maintain an
interest rate cap agreement with a counterparty having a
credit rating at the time the cap agreement is entered into
of not less than "AA" or its equivalent and, at all times
thereafter, of not less than "AA-" or its equivalent, which
agreement will have a notional amount equal to the principal
amount of the Loan from time to time, and a "strike" rate of
not greater than 6.50% per annum.
F. Commitment Fee: Up to $1,000,000 payable $500,000 within two
business days after the date on which the Approval Order has
become non-appealable; and $500,000 within two business days
after receipt by the Debtors of the Diligence Completion
Notice, provided that the Diligence Completion Notice is
received on or before October 4, 2002. The Commitment Fee is
non-refundable; provided that the Commitment Fee and any
Extension Fee paid by Lodgian will be credited against the
Up-Front Fee at Closing.
G. Up-Front Fee: 1.375% of the Loan Amount payable at Closing.
H. Extension Fee: 0.25% of the then outstanding loan amount for
each extension, payable at the first day of the extension
period.
I. Amortization: During the first year of the Loan, monthly
principal payments equal to the lesser of $250,000 and the
sum of Excess Cash Flow for that month plus Excess Cash Flow
for any prior month not previously applied to pay principal.
During the second year of the Loan, monthly principal
payments of $375,000. During each one year extension of the
Loan, monthly principal payments of $500,000. Beginning at
the time the outstanding principal amount of the Loan is 30%
or less of the original principal amount of Loan, monthly
principal payments equal to Excess Cash Flow.
J. Prepayment: The Loan will be prepayable in whole but not in
part at any time during the loan term, subject to payment of
a fee of 3% of the amount prepaid during the first year of
the loan, 2% of the amount prepaid during months 13 through
18 of the loan term, or 1% of the amount prepaid during
months 19 to 24 of the loan.
K. Security: The Loan will be secured by:
a) a first mortgage lien on, and first priority assignment of
leases, rents, receivables and other income of, each
Portfolio Hotel,
b) a first priority security interest in all other assets of
the Borrower related to the renovation, use or operation
of each Portfolio Hotel, including all personal property,
fixtures and equipment, licenses, permits and approvals,
contracts and agreements, including management, franchise
and operating agreements, and cash management accounts,
escrows and reserves,
c) a perfected first priority security interest in the
membership or other equity ownership interests in the
Borrower held by the Debtors, and
d) other customary items of security for a loan of this size
and type.
K. Pledged Accounts, Escrows And Reserves:
a) Lockbox Account: All rents, receivables and other revenue
generated in connection with the Portfolio Hotels will be
deposited into a Lockbox Account maintained for the
benefit of the Account maintained for the benefit of the
Lender. Absent a continuing default, amounts on deposit
will be applied first, to taxes, insurance and similar
items, second, to other property expenses or reserves
established third, to debt service payable on the Loan,
and fourth, to the Debtors.
b) FFE Account: The Borrower will make monthly deposits into
an account pledged to the Lender necessary to maintain an
account balance equal to 4% of total gross revenue of the
Portfolio Hotels as an FF&E reserve. Absent a continuing
default, amounts on deposit may be applied to normal
repair, replacement and maintenance expenses in accordance
with the Borrower's annual budget.
c) Escrow Account: The Borrower will make monthly deposits
into an escrow account maintained by the Lender sufficient
to pay all real estate taxes and the insurance premiums on
the insurance coverage specified in the Agreement for each
Portfolio Hotel.
d) Environmental Reserve: If required by the Lender, the
Borrower will maintain a reasonable reserve to fund
remediation of any environmental condition identified at
any Portfolio Hotel.
e) Cash Flow Reserve: During a Cash Trap Period, all Excess
Cash Flow will be deposited into an account controlled by
the Lender. A Cash Trap Period will commence if the
Borrower fails to meet certain financial tests specified
in the Agreement on a quarterly basis, and will continue
so long as the Borrower fails to meet these tests on a
monthly basis. Absent a continuing default, deposited
amounts may be held in the account or applied to
prepayment of the Loan, capital expenditures approved by
the Lender or up to $3,000,000 of scheduled debt service
payments. Remaining amounts will be released to the
Borrower 90 days after the Cash Trap Period terminates, so
long as no new Cash Trap Period has commenced and no
default then exists.
L. Closing Date: Closing shall take place on the first business
day that is at least 11 days after entry of the Confirmation
Order. The Closing will be subject to:
* The Confirmation Order has been entered and consummation of
the Final Plan is not stayed pending appeal.
* The Final Plan and the Confirmation Order, insofar as they
relate to the Borrower, the Loan and the Portfolio Hotels,
is reasonably acceptable to the Lender.
* The Final Plan provides for minimum equity ownership and
Board representation specified in the Agreement for the
Debtors' unsecured creditors.
* For each Portfolio Hotel, the Lender's reasonable approval
of the Third Party Reports specified in the Agreement, a
capital improvement budget and any renovation plans and
specifications, and any management agreement.
* In case of any Third Party Report dated no earlier than
August 15, 2002 that is more than 150 days old at Closing,
receipt by the Lender of an update showing no material
adverse change since the date of the original report.
* Receipt by the Lender of title insurance policies meeting
the requirements specified in the Agreement.
* Meeting the minimum "Debt Service Coverage Ratio" specified
in the Agreement.
* Receipt by the Lender of all fees and expense
reimbursements then due.
* Satisfaction of other customary conditions, including
receipt of customary legal opinions.
Mr. Rogoff asserts that clear business reasons exist under
Section 363(b) of the Bankruptcy Code to merit the Court's
authorization of this Motion as the Commitment Letter satisfies
every prong of the business judgment test. The Debtors and the
Committee believe that the terms of the Commitment Letter and
the Agreement are favorable and in the best interests of the
Debtors, their estates and creditors, and are consistent with
the Proposed Plan. The Debtors and the Committee further
contend that the fees under the Commitment Letter are
competitive with industry standards and represent a fair and
reasonable expense. Although the Debtors have discussed exit
financing arrangements with multiple parties, none of them came
close to offering the terms and fees proposed by Merrill.
Further negotiations with other possible lenders could generate
significant costs to the Debtors through the necessary delay
they would entail without certainty of completion. (Lodgian
Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service,
Inc., 609/392-0900)
LOGIC DEVICES: Falls Short of Nasdaq Continued Listing Standards
----------------------------------------------------------------
LOGIC Devices Incorporated (Nasdaq:LOGC), announced that, on
July 17, 2002, it received a warning from Nasdaq that the
Company may be delisted. The letter from Nasdaq states, "For the
last 30 consecutive trading days, the Company's common stock has
not maintained a minimum market value of publicly held shares of
$5,000,000 and a minimum bid price per share of $1.00, as
required for continued inclusion under Marketplace Rules
4450(a)(2) and 4450(a)(5), respectively." Under the Nasdaq
rules, the Company has 90 days, or until October 15, 2002, to
regain compliance. Otherwise, Nasdaq will provide notification
that the Company will be delisted. At that time, the Company can
appeal the determination to a Listing Qualifications Panel, in
accordance with Nasdaq's rules. The Company is currently
reviewing its options.
Established in 1983, LOGIC Devices is a fabless semiconductor
manufacturer providing high-performance, function-specific
integrated circuits that are utilized in smart weapons systems
and in broadcast studio, medical imaging, and digital
telecommunications equipment.
MANITOWOC: S&P Assigns B+ Rating to Proposed $175MM Senior Notes
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its single-'B'-plus
rating to The Manitowoc Company Inc.'s proposed offering of $175
million senior subordinated notes due 2012.
At the same time, the double-'B' corporate credit rating was
affirmed on the Manitowoc, Wisconsin-based company. In addition,
the rating was removed from CreditWatch where it was originally
placed on March 19, 2002, following the company's announcement
of the acquisition of Grove Investors Inc. The outlook is
negative. Manitowoc is a provider of cranes, food service
equipment, and marine services. The company has total debt of
about $700 million (pro forma the Grove acquisition).
"The rating reflects Manitowoc's leading positions in niche
markets, well-known brands and product diversity, and low-cost
and efficient global manufacturing operations, offset by
competitive pressures in the highly cyclical construction and
industrial end markets, and aggressive financial profile," said
Standard & Poor's credit analyst John Sico.
The acquisition will be funded with $200 million in cash and 2
million shares of Manitowoc's common stock currently valued at
about $70 million. Pro forma for the acquisition, which is
expected to close by August 31, 2002, Manitowoc's total debt to
EBITDA would be 3.6 times and total debt to capital would be
about 69%. Following integration and cost savings, Standard &
Poor's expects total debt to EBITDA to fluctuate around 3.0x and
EBITDA interest coverage should range between 4.0x-4.5x. In
addition, funds from operations to total debt is expected to
average around 20%.
If credit protection measures remain below appropriate levels
for the current ratings over the intermediate term, the ratings
could be lowered.
NATIONAL STEEL: Court Okays Ernst & Young LLP as Consultants
------------------------------------------------------------
National Steel Corporation and its debtor-affiliates obtained
Court's authority to employ and retain Ernst & Young LLP as
their Audit, Tax and Human Resources Advisors, nunc pro tunc to
the Petition Date.
E&Y LLP is a firm of independent public accountants and is one
of the five largest accounting, auditing, and tax consulting
firms in the United States. E&Y LLP also has significant
experience providing human resource advisory services to debtors
and creditors during the course of Chapter 11 cases.
The professionals at E&Y LLP with primary responsibility for
rendering services to the Debtors include:
For Audit:
James A. Pease Partner
Timothy R. Cash Partner
Kevin K. Kilmara Senior Manager
Jon J. McCoy Manager
For Tax:
Mitch Stauffer Partner
Dan Carsaro Partner
Rich Liebman Partner
Marie Powell Tax Consulting Manager
For Human Resources:
Donald Kalfen Partner
E&Y LLP has agreed to perform these services:
(1) Audit Services
-- audit and report on the financial statements of the
Company for the year ending December 31, 2002;
-- review of each of the Company's unaudited quarterly
financial statements before the Company files its Form
10-Q; and
-- audit and report on the financial statements and
supplemental schedules of the Company's 20 benefit plans
for the year ended December 31, 2001, which are to be
included in the Plans' Form 5500 filings with the
Department of Labor's Pension and Welfare Benefits
Administration.
(2) Tax Services
-- assist and advise the Company in its bankruptcy
restructuring objective and post-bankruptcy operations by
determining the tax effects of alternative restructuring
and operating plans, including, as needed, research and
analysis of Internal Revenue Code sections, treasury
regulations, case law and other relevant tax authority
which could be applied to business valuation and
restructuring models;
-- analyze the availability, limitations, preservation and
maximization of tax attributes, like net operating losses
and alternative minimum tax credits, minimize tax costs
in connection with stock or asset sales, if any, assist
with tax issues arising in the ordinary course of
business while in bankruptcy, like the ongoing assistance
with a federal IRS examination and related issues raised
by the IRS agent and the mitigation of officer liability
issues, and, as needed, research and analyze federal and
state income and franchise tax issues arising during the
bankruptcy period;
-- assist with settling tax claims against the Company and
obtaining refunds of reduced claims previously paid by
the Company for various taxes, including, but not limited
to, federal and state income, franchise, payroll, sales
and use, property, excise an business license;
-- assist in assessing the validity of tax claims, including
working with bankruptcy counsel to reclassify tax claims
as non-priority;
-- analyze legal and other professional fees incurred during
the bankruptcy period for purposes of determining future
deductibility of the costs;
-- documenting, as appropriate or necessary, of tax
analysis, opinions, recommendations, conclusions and
correspondence for any proposed restructuring
alternative, bankruptcy tax issue or other tax matter;
and
-- additional tax consulting services requested by the
Company.
(3) Human Resources Services
-- assist in developing a business case for enhancements to
the Company's compensation and benefits programs;
-- assist in the design and development of cash retention
compensation programs;
-- assist in analyzing the financial affect of proposed
retention compensation programs and revisions, if any, to
existing compensation and benefit programs;
-- assist in evaluating the adequacy of existing executive
employment contracts and provide suggested revisions;
-- assist in evaluating adequacy of existing
change-in-control arrangements and provide suggested
revisions;
-- assist in benchmarking existing and proposed compensation
and benefit programs;
-- advise the Company with respect to tax and accounting
issues relative to newly designed or modified
compensation, benefit and HR programs;
-- prepare summary and other materials regarding the
programs, contracts and arrangements for presentation to
the Company's board of directors and any committee and,
if requested by the Company, present the materials at a
meeting or meetings of the board of directors and any
committee; and
-- perform other services as may be requested in writing
from time to time by the Company or its counsel and
agreed to by E&Y LLP.
Under the terms of an Engagement Letter, National Steel will pay
E&Y LLP:
(A) Audit Service
-- E&Y LLP will receive $900,000 (including expenses) for
the completion of the Company's consolidated audit for
the year ending December 31, 2002, payable in six
installments of $150,000 beginning in June 2002 and
ending in February 2003;
-- E&Y LLP will receive $55,000 (including expenses) for
each quarterly review (March 31, 2002, June 30, 2002 and
September 30, 2002); and
-- E&Y LLP will receive $194,000 (including expenses) for
the audits of the Company's 20 benefit plans for the year
ended December 31, 2002 payable in two installments of
$97,000 in June 2002 and August 2002.
(B) Tax Services
-- E&Y LLP's fees for tax-related services will be based on
actual time incurred at these hourly rates:
Partners and Principals $475-700
Senior Manager 330-545
Manager 300-440
Senior 180-320
Staff 165-225
-- E&Y LLP will be reimbursed for actual expenses related to
tax services; and
-- E&Y LLP will be reimbursed for fees (including any time
or reasonable expenses of legal counsel) for time spend
considering or responding to discovery requests or
participating as a witness or otherwise in any legal,
regulatory, or other proceeding as a result of our
performance of the tax services.
(C) Human Resources Services
-- E&Y LLP's fees for human resources-related services will
be based on actual time incurred at these hourly rates:
Partners and Principals $475-650
Senior Manager 390-460
Manager 325-400
Senior 200-320
Staff 165-195
-- E&Y LLP will be reimbursed for reasonable documented
out-of-pocket expenses incurred in connection with
providing the human resources services including, but not
limited to, travel costs, lodging, meals, research, and
overnight mail and courier service; and
-- In the event E&Y LLP is requested or authorized by the
Company or is required by government regulation, subpoena
or other legal process to produce our documents or its
personnel as witnesses with respect to the human
resources services provided to the Company, the Company
will, so long as E&Y LLP is not a party to the proceeding
in which information is sought, reimburse E&Y LLP for its
professional time and expenses, as well as the reasonable
documented fees and expenses of its counsel, incurred in
responding to the requests. (National Steel Bankruptcy
News, Issue No. 11; Bankruptcy Creditors' Service, Inc.,
609/392-0900)
National Steel Corp.'s 9.875% bonds due 2009 (NSTL09USR1),
DebtTraders reports, are trading at 38 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=NSTL09USR1
for real-time bond pricing
NEOTHERAPEUTICS: Preparing for Shareholder Vote on Reverse Split
----------------------------------------------------------------
NeoTherapeutics Inc., (Nasdaq: NEOT) announced that its Board of
Directors voted to authorize a 25-for-1 share reverse split of
its outstanding common stock, subject to stockholder approval.
The Board also voted to obtain stockholder approval in advance
for certain market financings, subject to specified limitations.
A special meeting of NeoTherapeutics' stockholders will be held
on September 5, 2002 to consider these proposals. Stockholders
of record on July 24, 2002 will be entitled to vote in this
special meeting. More information on these proposals and the
meeting will be available in a forthcoming proxy statement.
NeoTherapeutics' Board of Directors also approved the cessation
of the research operations of the Company's subsidiary, NeoGene
Technologies Inc.
"We took these actions as part of our restructuring of the
Company," said Samuel Gulko, Senior Vice President, Finance and
CFO of NeoTherapeutics. "Nasdaq requires the Company to
maintain, among other things, a minimum share price and the
reverse stock split should allow us to meet this requirement. It
will also increase the number of shares available for purposes
of potential future financings as well as, we believe, make our
stock more attractive to institutional investors. We anticipate
that our decision to terminate research operations at NeoGene
will reduce our annual expenses by approximately $2.4 million,
based on NeoGene's operating costs for 2001."
"This action to terminate most of NeoGene's operations was based
on our need to reduce expenses and return to our core product-
oriented businesses. In our current circumstances, it is not
feasible for us to fund NeoGene for the period of time necessary
to allow its discoveries to become commercial products. This
restructuring allows us to focus on our core business, the
discovery and development of pharmaceutical products in
neurology and oncology," said Alvin Glasky, Ph.D., Chairman, CEO
and Chief Scientific Officer of NeoTherapeutics and President of
NeoGene.
NeoTherapeutics seeks to create value for stockholders through
the discovery and out-licensing of drugs for central nervous
system disorders and the in-licensing and commercialization of
anti-cancer drugs. Neotrofin(TM) is in clinical development in
Parkinson's disease, spinal cord injury and chemotherapy-induced
neuropathy. The Company's lead oncology drug, satraplatin, is
being prepared for a phase 3 study in prostate cancer.
Additional anti-cancer drugs are in phase 1 and 2 human clinical
trials, and the Company has a rich pipeline of pre-clinical
neurological drug candidates. For additional information visit
the Company's Web site at http://www.neot.com
NeoTherapeutics will file a proxy statement with the Securities
and Exchange Commission in connection with the stockholders'
meeting described above, which will be sent to the stockholders
seeking their approval of the proposals. Investors and security
holders are urged to read the proxy statement when it becomes
available because it will contain important information. When
filed, this document, and any other relevant documents filed,
may be obtained free of charge at the Web site maintained by the
SEC at http://www.sec.gov or by requesting it in writing from
NeoTherapeutics Inc., Attn: Investor Relations, 157 Technology
Drive, Irvine, California, 92618. NeoTherapeutics and its
officers and directors may be deemed to be participants in the
solicitation of proxies from NeoTherapeutics stockholders in
favor of the proposals. A description of the direct and indirect
interests of NeoTherapeutics' executive officers and directors
in NeoTherapeutics will be included in the proxy statement.
OTIS SPUNKMEYER: S&P Rates Corp. Credit & Bank Facility at B+
-------------------------------------------------------------
Standard & Poor's assigned its single-'B'-plus corporate credit
rating to baked goods company Otis Spunkmeyer Inc. At the same
time, Standard & Poor's assigned its single-'B'-plus senior
secured debt rating to the company's proposed $140 million
credit facility due 2008. The outlook is stable.
The ratings on the San Leandro, California-based company reflect
a narrow business focus and high debt leverage following Otis
Spunkmeyer's impending $288 million acquisition by Code
Hennessey & Simmons from First Atlantic Capital (a transaction
expected to close in August 2002). The ratings also reflect a
competitive operating environment for baked goods. Mitigating
these rating concerns are the firm's leading market share in the
frozen cookie dough market, its strong brand recognition, and
its niche distribution infrastructure.
"Otis Spunkmeyer's strong brand and niche position in the frozen
cookie dough and frozen muffin market provide it with a platform
to leverage its distribution infrastructure potentially into
other bakery categories such as bagels, etc.," said Standard &
Poor's analyst Ronald Neysmith.
However, Standard & Poor's believes that the firm will be
challenged by larger and financially stronger players dominating
the sweet baked goods market, including General Mills Inc.
(BBB+/Stable), George Weston Ltd. (A-/Stable), and Sara Lee
Corp. (A+/Stable/A-1). This competition could limit Otis
Spunkmeyer's growth opportunities. Still, a key strength
supporting the rating is the company's solid brand franchise and
its frozen distribution network, which is costly for a
competitor to create.
The bank facility consists of a $120 million term loan maturing
in 6.5 years and a $20 million revolving credit facility
maturing in six years. The facility is secured by substantially
all the domestic assets, 100% of the stock of domestic
subsidiaries, and 65% of the stock of foreign subsidiaries.
Otis Spunkmeyer manufactures frozen and pre-baked products for
the foods service and retail distribution channels. The
company's broad portfolio of premium-baked goods includes
cookies, muffins, danishes, bagels, and brownies. The company
holds a leading share with a No. 1 position in the frozen cookie
dough market and a No. 2 position in the branded pre-baked
muffin category.
PPL CORP: Working Capital Deficit Tops $79MM at June 30, 2002
-------------------------------------------------------------
Due to two unusual charges, PPL Corporation (NYSE: PPL) reported
a loss per share of $0.18 for the second quarter of 2002. The
charges, primarily non-cash in nature, relate to CEMAR, PPL's
Brazilian distribution company ($94 million or $0.64 per share),
and to expenses incurred with regard to the seven percent
reduction in the company's workforce announced last month ($74
million or $0.29 per share).
PPL reported second-quarter earnings from its core business
operations of $0.75 per share, exceeding Thomson Financial's
First Call consensus earnings estimate of $0.60 per share from
core operations. PPL reported record second- quarter earnings of
$0.80 per share from core operations a year ago.
This performance keeps PPL on track to achieve its 2002 earnings
forecast of between $3.30 and $3.50 per share from core
operations. In addition, PPL reaffirmed its projection,
announced earlier this year, for mid-single-digit growth in
earnings per share from core operations for 2003.
Second-quarter earnings per share from core operations were
$0.05 lower than last year, primarily due to lower margins on
energy sales in the western United States. The positive drivers
for second-quarter core earnings were increased margins on
energy transactions in the eastern United States and success in
continuing to reduce operating costs.
PPL's June 30, 2002 balance sheet shows that its total current
liabilities exceeded its total current assets by about $79
million.
"The continued relatively strong performance of PPL's earnings
from core operations has demonstrated the value of our hedging
strategy," said William F. Hecht, PPL's chairman, president and
chief executive officer. "There continue to be many unanswered
questions regarding the structure of our industry, and this has
reinforced our belief in the value of multi-year sales contracts
to reduce unpredictability in earnings, to reduce risk and to
improve returns."
PPL's integrated corporate strategy encompasses generating and
selling energy in key U.S. markets through an optimum balance of
energy supply and customer load under multi-year contracts and
operating high-quality energy delivery businesses in select
regions. "Our solid performance in core operations in the second
quarter and our reaffirmation of PPL's growth rate validate our
strategy," Hecht said. "Our plans also call for maintaining a
strong liquidity and credit-quality position to give us the
flexibility to respond to changing business conditions, while
serving as a platform to pursue disciplined growth
opportunities," said Hecht.
About 82 percent of PPL's earnings from core operations in 2002
are expected to come from electricity generation that is
dedicated to supplying energy under long-term contracts, from
its regulated energy delivery business in Pennsylvania and from
short-term energy sales in the first half of 2002.
By the end of this month, the company expects to place more than
1,000 megawatts of electricity generating capacity into
commercial operation in new generating facilities in Illinois,
Arizona and New York. Hecht said, "The new plants are uniquely
positioned to serve the growing demands of the Chicago, Phoenix
and Long Island metropolitan areas, where power imports are
restricted because of transmission congestion."
PPL reported a loss of $0.20 per share for the first half of
2002, due primarily to several unusual charges. The company
recorded a first-quarter charge of $1.02 per share related to
changes in accounting rules for goodwill that affect its Latin
American investments. Also affecting PPL's earnings for the
first half of 2002 were the second-quarter charges associated
with its Brazilian investment and its workforce reduction
program.
Earnings from PPL's core operations in the first half of 2002
were $1.77 per share compared to $2.31 per share for the first
half of 2001. While reflecting the lower margins on energy sales
in the western United States from a year ago, this year-to-date
performance keeps PPL on track to achieve its forecast for core
earnings per share for 2002. The positive drivers of PPL's core
earnings for the first half of 2002 were: increased margins on
energy transactions in the eastern United States, improved
earnings contributions from energy-related businesses such as
PPL's synthetic fuel operations, and success in continuing to
reduce operating costs.
For the 12 months ended June 30, 2002, PPL reported a loss of
$1.29 per share due to impairment charges on PPL's Latin
American and United Kingdom electricity delivery businesses,
changes in accounting rules for goodwill that affect its Latin
American investments, the decision to cancel several domestic
power plant projects, staffing cuts associated with its
workforce reduction program, and charges associated with the
bankruptcy of Enron. These charges were partially offset by a
credit to earnings relating to a change in pension accounting.
PPL's 12-month earnings from core operations were $3.68 per
share compared to $4.00 per share for the same period of 2001.
In late January 2002, PPL announced that it had taken an
impairment charge of $217 million, for December 2001, with
respect to CEMAR and also said it would provide no additional
funding for CEMAR. That impairment charge represented the net
asset value of CEMAR at the end of 2001.
In the first quarter of 2002, PPL recorded a $6 million pre-tax
charge for an early-January investment made prior to its
decision to invest no additional funds in CEMAR. In the second
quarter of 2002, PPL recorded a charge for the balance of its
exposure to CEMAR of about $94 million, an amount that was
previously reported and that is primarily related to the
cumulative translation adjustment. The CTA is the amount of
currency devaluation of PPL's original investment in CEMAR since
the date of purchase. That balance could not be written off
previously because of applicable accounting rules.
On Monday, July 22, PPL announced a proposal to sell CEMAR to
Franklin Park Energy LLC of McLean, Va. To expedite the
transaction, CEMAR has requested that the Brazilian regulator
act by mid-August on the sale proposal. If the transaction is
approved, Franklin Park would purchase CEMAR for a nominal price
and would assume the responsibility to operate CEMAR.
The proposed sale of CEMAR to Franklin Park does not affect
PPL's earnings forecast. PPL has reiterated that any operating
losses for CEMAR in 2002 would be offset accordingly upon
exiting the investment in CEMAR.
PPL Corporation, headquartered in Allentown, Pa., controls or
owns more than 10,000 megawatts of generating capacity in the
United States, sells energy in key U.S. markets, and delivers
electricity to nearly 6 million customers in Pennsylvania, the
United Kingdom and Latin America.
PPL CORP: Selling Brazilian Electric Company to Franklin Park
-------------------------------------------------------------
PPL Corporation (NYSE: PPL) announced a proposal for the sale of
its 90 percent interest in Companhia Energetica do Maranhao
(CEMAR) to Franklin Park Energy, LLC of McLean, Va. CEMAR is
PPL's Brazilian electric distribution company.
In a filing submitted Monday, CEMAR has asked Brazil's National
Electrical Energy Agency to approve the sale. To expedite the
transaction, CEMAR has requested that ANEEL act by August 15 on
the sale proposal. If the transaction is approved by ANEEL and
completed, Franklin Park would purchase CEMAR for a nominal
price and would assume the responsibility to operate CEMAR.
The eventual transfer of CEMAR to Franklin Park also is subject
to the negotiation and execution of a definitive purchase and
sale agreement between Franklin Park and PPL Global, a
subsidiary of PPL Corporation. The transfer of PPL's ownership
to Franklin Park is not expected to change CEMAR's day-to-day
operations, and CEMAR will be held to the same standards of
high-quality customer service that has characterized PPL's
ownership of CEMAR.
"We are pleased to enter into this proposal with Franklin Park,
and we are hopeful that ANEEL will approve the sale and change
of ownership as soon as possible to remove any uncertainty for
the customers, creditors and employees of CEMAR," said William
F. Hecht, chairman, president and chief executive officer of
PPL.
"Franklin Park brings the potential of a future additional
equity investment in CEMAR, and Franklin Park is in a good
position to do the financial restructuring of CEMAR that is
necessary for the restoration of CEMAR to financial health,"
Hecht said.
Hecht noted that the proposed transaction would not have any
impact on PPL's financial results.
Hecht said that the possible sale of CEMAR has been under
discussion with interested parties since before ANEEL refused
the company's request for an extraordinary tariff review in
early June of 2002.
"Our CEMAR team worked closely with government officials,
creditors and bondholders for nearly a year to return CEMAR to
financial health following the impact of the prolonged drought,
government-mandated electricity rationing and a non-functioning
wholesale energy market in Brazil. Unfortunately, the denial of
the tariff review by ANEEL left us with no choice, short of
filing for bankruptcy, but to seek a buyer for the company.
CEMAR's advisor has contacted more than 40 potential purchasers,
and Franklin Park has emerged from that process," said Hecht.
Franklin Park is a private investment group focused on owning
and operating utilities in the United States and Latin America.
Franklin Park is led by Thomas A. Tribone.
CEMAR provides electricity delivery service to more than 1
million customers in the northeastern Brazilian state of
Maranhao. PPL's other Latin American electricity distribution
companies, located in Chile, Bolivia and El Salvador, are
unaffected by the situation in Brazil.
PPL Corporation, headquartered in Allentown, Pa., controls or
owns more than 10,000 megawatts of generating capacity in the
United States, sells energy in key U.S. markets, and delivers
electricity to customers in Pennsylvania, the United Kingdom and
Latin America.
PACIFIC GAS: Wins Nod to Acquire IT Equipment for New Entities
--------------------------------------------------------------
Pacific Gas and Electric Company obtained Court approval for the
acquisition costs for the IT Equipment, for its three new
entities contemplated under the Plan, as a use of estate
property that is outside of the ordinary course of business
under Bankruptcy Code Section 363(b)(l).
The Court emphasizes that:
(a) PG&E is authorized to incur no more than $6,400,000 in
connection with the lease and purchase costs, and
(b) to the extent that PG&E seeks any rate recovery for the
costs approved, the Order granting this motion shall not be
construed to have any effect on applicable regulatory
requirements for such recovery.
As previously reported, Pacific Gas and Electric Company
anticipated that the three New Entities -- ETrans LLC, GTrans
LLC and Gen -- contemplated under the Plan will require various
information technology computer and network hardware, software
and miscellaneous components (collectively, the IT Equipment) in
order to support their business operations. The lines of
business currently use over 400 applications that must be
separated from PG&E in order for the New Entities to operate
independently. (Pacific Gas Bankruptcy News, Issue No. 40;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
PANACO INC: Wants to Bring-In Kaye Scholer as Corporate Counsel
---------------------------------------------------------------
Panaco, Inc., asks the U.S. Bankruptcy Court for the Southern
District of Texas to approve its retention of Kaye Scholer LLP
as corporate counsel.
Kaye Scholer is expected to represent the Debtor in:
a) the areas of tax, securities law, transactional, labor
and employment in connection with this chapter 11 case;
b) general corporate, finance and corporate governance
matters, including but not limited to SEC filings, M&A
transactions, if any, as well as providing general
advice to the Debtor in connection with these matters;
and
c) any matter with respect to which the Debtor requires
advice, assistance and counsel in connection with this
case.
Kaye Scholer is willing to render professional services to the
Debtor at these hourly rates:
Arthur Steinberg Partner $605 per hour
Emanuel Cherney Partner $565 per hour
Jonathan M. Gottsegen Associate $375 per hour
Louis Lombardo Associate $375 per hour
Scott I. Davidson Associate $395 per hour
Panaco, Inc., is in the business of selling oil and natural gas
produced on properties it leases to third party purchasers. The
Company filed for chapter 11 protection on July 16, 2002. Monica
Susan Blacker, Esq., at Neligan Stricklin LLP represents the
Debtor in its restructuring efforts. When the Debtor filed for
protection from its creditors, it listed $130,189,000 in assets
and $170,245,000 in debts.
POLAROID CORP: Wants Time to Remove Actions Extended to Sept. 11
----------------------------------------------------------------
For the second time, Polaroid Corporation, and its debtor-
affiliates ask the Court to extend the period to remove actions
to the later of September 11, 2002 or 30 days after an entry of
an order terminating the automatic stay with respect to any
particular action sought to be removed.
According to Mark L. Desgrosseilliers, Esq., at Skadden, Arps,
Slate, Meagher & Flom, in Wilmington, Delaware, the Debtors need
the additional time to determine which of 50 pending prepetition
State Court Actions they may remove to the District of Delaware
for continued litigation and resolution. "The Actions involve a
wide variety of claims, some of which are extremely complex,"
Mr. Desgrosseilliers says.
In any case, Mr. Desgrosseilliers assures the Court that the
Debtors' adversaries will not be prejudiced by the extension
because they cannot prosecute their Action without relief from
the automatic stay. Any party may also seek the Court's
authority at any time to proceed with the Action pursuant to
Section 1452(b) of the Bankruptcy Code.
By application of Del.Bankr.LR 9006-2, the current deadline is
automatically extended through the conclusion of the August 29,
2002 hearing. (Polaroid Bankruptcy News, Issue No. 20;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
Polaroid Corporation's 11.5% bonds due 2006 (PRD3), DebtTraders
says, are trading at 3.5 cents-on-the-dollar. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=PRD3for
real-time bond pricing.
PORTOLA PACKAGING: Says Liquidity Sufficient to Fund Operations
---------------------------------------------------------------
Portola Packaging, Inc.'s sales decreased $4.6 million, or 8.0%,
from $57.6 million for the three months ended May 31, 2001 to
$53.0 million for the three months ended May 31, 2002. This
decrease was primarily due to decreased sales of $3.7 million
from the U.S. closure division primarily due to price reductions
to customers to reflect lower resin costs and product mix. Sales
also decreased by $0.9 million in Mexico due to sales volume,
$0.4 million in equipment sales due to timing of customer orders
and $0.4 million in bottling sales due to discontinuation of the
Company's consolidated joint venture. Offsetting these decreases
were increased sales of $0.4 million in the United Kingdom due
to sales volume and $0.4 million in tooling due to timing of
customer orders and favorable market conditions.
Gross profit increased $0.6 million to $14.4 million, or 4.0%,
for the third quarter of fiscal 2002 as compared to $13.8
million for the third quarter of fiscal 2001. As a percentage of
sales, gross profit increased from 24.0% for the three months
ended May 31, 2001 to 27.1% for the same period in fiscal year
2002. The margin increase was mainly due to overall lower raw
material costs, primarily due to the lower resin prices.
For the first nine months of fiscal year 2002, sales decreased
$4.3 million, or 2.7%, from $159.5 million for the first nine
months of fiscal year 2001 to $155.2 million for the first nine
months of fiscal 2002. The decrease in sales for the first nine
months of fiscal 2002 compared to the same period in fiscal 2001
was mainly attributable to decreased sales of $5.5 million from
the U.S. closure division primarily due to price reductions to
customers to reflect lower resin costs and product mix.
Equipment sales decreased $2.7 million mainly due to the timing
of customer orders. Bottling sales decreased $0.8 million due to
the discontinuation of the Company's consolidated joint venture.
Foreign sales increased $2.3 million due to increased market
demand, offset by price reductions to customers due to lower
resin prices. Sales increased $0.6 million from tooling due to
timing of customer orders and favorable market conditions. The
Company also increased sales by $1.8 million in the first half
of fiscal 2002 due to the Company's acquisition of Consumer Cap
Corporation in January 2001.
Gross profit increased $4.2 million, or 12.3%, to $38.3 million
for the nine months ended May 31, 2002, from $34.1 million for
the same period in fiscal year 2001. Gross profit as a
percentage of sales increased from 21.4% for the nine months
ended May 31, 2001 to 24.7% for the first nine months of fiscal
year 2002. Gross profit increased in dollars primarily from
decreasing domestic raw material costs, employee cost savings
and synergies from the Consumer acquisition, as well as
increased margins from the foreign operations.
Liquidity and Capital Resources
The Company has relied primarily upon cash from operations,
borrowings from financial institutions and, to a lesser extent,
sales of common stock to finance its operations, repay long-term
indebtedness and fund capital expenditures and acquisitions. At
May 31, 2002, the Company had cash and cash equivalents of $4.4
million, an increase of $1.1 million from August 31, 2001.
Cash provided by operations totaled $13.8 million for the nine
months ended May 31, 2002, a $7.6 million increase from the $6.2
million provided by operations for the nine months ended May 31,
2001. Net cash provided by operations for the nine month period
ended May 31, 2002 was the result of net income plus non-cash
charges for depreciation and amortization. Due to the adoption
of SFAS No. 142, amortization expense for fiscal year 2002 did
not include goodwill amortization. In addition, cash was
provided by a decrease in accounts receivable and inventory,
offset by a decrease in accounts payable and accrued
liabilities. Working capital (current assets less current
liabilities) increased $2.5 million as of May 31, 2002 to $21.5
million as compared to $19.0 million as of August 31, 2001.
Cash used in investing activities was $7.9 million for the nine
months ended May 31, 2002 as compared to $1.2 million for the
same period in fiscal year 2001. In both periods, the use of
cash consisted primarily of additions to property, plant and
equipment. Proceeds from the sale of property, plant and
equipment in the first nine months of fiscal year 2002 and 2001
were $0.4 million and $10.0 million, respectively.
Cash used by financing activities was $4.8 million for the nine
month period ended May 31, 2002, as compared to $6.1 million for
the first nine months of fiscal year 2001. The cash used in
fiscal year 2002 was due to a $4.0 million paydown of the senior
revolving credit facility, a $0.3 million paydown of long-term
debt and $0.3 million in payments under covenants not-to-compete
agreements. The cash used in fiscal 2001 was primarily due to
$1.4 million of cash used to satisfy a book overdraft, a $4.5
million paydown of long-term debt primarily due to the Consumer
acquisition, a $1.0 million payment of debt issuance costs and
$0.3 million in payments under covenants not-to-compete
agreements, offset by $1.2 million borrowed under the senior
revolving credit facility.
At May 31, 2002, the Company had $4.4 million in cash and cash
equivalents as well as borrowing capacity under the senior
revolving credit facility (of which $22.5 million was available
for draw after considering the $3.0 million minimal availability
requirements as of May 31, 2002). While there can be no
assurances, management believes that these resources, together
with anticipated cash flow from operations and financing
available from other sources, will be adequate to fund the
Company's operations, debt service requirements and capital
expenditures in fiscal year 2002.
PSINET INC: Goldin Terminating BSI's Engagement with Holdings
-------------------------------------------------------------
Harrison J. Goldin, Chapter 11 Trustee for PSINet Consulting
Solutions Holdings, Inc., and for PSINet Consulting Solutions
Knowledge Services, Inc., sought and obtained an order
terminating the retention of Bankruptcy Services, L.L.C. as
notice and claims agent in the Holdings' case.
The Trustee sought and obtained the approval because (1) BSI had
been retained in the case prior to the Trustee's appointment and
not by the Trustee, and (2) the Court had authorized the
retention of Garden City Group, Inc. (GCG) as the notice and
claims agent in the Holdings' case.
The Trustee tells the Court that, at the time of his
appointment, he was not aware of BSI's retention. He did not
intend to retain BSI in the Holdings' case. Therefore, the
Trustee retained GCG and the retention was approved by the
Court. Since its retention, GCG has been actively assisting the
Trustee in preparing the Schedules of Assets, Liabilities and
Statements of Financial Affairs for the Debtors. Therefore, GCG
is familiar with Debtors' books and records. In addition,
because of the confidentiality concerns that may arise in
connection with inter-company claims litigation between Holdings
and PSINet, the Trustee believes it is in the best interests of
the estate of Holdings to have a separate claims agent.
The Trustee advises that he has not authorized BSI to perform
any services on behalf of either Holdings or Knowledge.
With the Trustee's request, the Court directed BSI to turn over
to the Trustee any files, documents or proof of claim forms that
are the property of the Holdings or Knowledge estates. (PSINet
Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service,
Inc., 609/392-0900)
PSINET Inc.'s 11% bonds due 2009 (PSINET2) are trading at 9.125,
DebtTraders reports. For real-time bond pricing, see
http://www.debttraders.com/price.cfm?dt_sec_ticker=PSINET2
RAILWORKS CORP: Appoints Ab Rees as New CEO and Board Chairman
--------------------------------------------------------------
RailWorks Corporation (OTC Bulletin Board: RWKSQ) announced the
appointment of Ab Rees as its new Chief Executive Officer and
Chairman of the Board, and Jim Kimsey as its new President and
Chief Operating Officer. Both appointments are contingent upon
approval by the U.S. Bankruptcy Court for the District of
Maryland in Baltimore. Messrs. Rees and Kimsey are joining
RailWorks as consultants pending the bankruptcy court approval
of their respective appointments.
Ab Rees has over 38 years experience in the rail industry. He
most recently served as Senior Vice President, Operations of
Kansas City Southern Railway, a transportation company that
through its subsidiaries owns and operates over 3,000 miles of
railroad in the Midwestern and Southern United States. He joined
Kansas City Southern Railway in 1995. In addition, he served as
its Senior Vice President, International Operations and as a
member of its Board of Directors. Before joining Kansas City
Southern Railway, Ab Rees spent the previous 31 years of his
career serving in various executive positions at the Atchison,
Topeka & Santa Fe Railway, the Union Pacific Railroad and the
Missouri Pacific Railroad.
Jim Kimsey most recently served as President, Western Utilities
Services of Exelon Infrastructure Services, Inc., a utility
holding company that provides outsourcing of deregulated
utilities. Exelon Infrastructure Services acquired Fishbach &
Moore Electric, Inc., his previous employer. At Fishbach &
Moore, which was one of the country's largest construction
contracting firms, Mr. Kimsey served as Chief Executive Officer
and President.
"I'm very pleased that we have been able to attract individuals
of Ab Rees' and Jim Kimsey's caliber," said RailWorks present
Chairman of the Board, Norman Carlson. "They have the extensive
industry experience and proven records of success that will be
invaluable to RailWorks as it emerges from its reorganization.
We're honored to welcome them to the company," added Mr.
Carlson. "Each offers tremendous strategic vision and a range of
experience that will help us emerge from bankruptcy as one of
the leading providers of integrated rail system services and
products."
"I am extremely pleased to accept this opportunity to take the
positions of CEO and Chairman of this company," said Ab Rees. "I
believe we have some significant challenges ahead of us but with
the experience of our senior management, we anticipate
integrating the services RailWorks provides and leading the
company to higher levels of performance and creating the 'new
RailWorks.'"
"Having been involved with the construction industry my whole
career, I believe RailWorks has vast resources which give us a
great opportunity to establish it as one of the industry
leaders," added Kimsey.
RailWorks has filed a plan of reorganization and disclosure
statement with the Bankruptcy Court, pursuant to which RailWorks
will be substantially deleveraged and will receive significant
new financing from Matlin Patterson Global Opportunities
Partners, L.P.
Norm Carlson and John Kennedy, RailWorks' Chairman and Chief
Executive Officer, respectively, will retain their positions
until Rees and Kimsey are approved by the Court.
"We are very pleased that RailWorks has attracted senior
executives with the experience of Ab Rees and Jim Kimsey, as the
company prepares to exit from bankruptcy and move forward on a
deleveraged basis," said David Matlin, CEO of Matlin Patterson
Asset Management LLC, the investment adviser to RailWorks'
largest unsecured creditor and plan sponsor, Matlin Patterson
Global Opportunities Partners L.P.
RailWorks Corporation is one of the leading providers of
integrated rail system services and products to a diverse base
of customers throughout North America.
Matlin Patterson Global Opportunities Partners L.P., a private
investment fund, is RailWorks' largest unsecured creditor and
plan sponsor. Effective July 16, 2002, the Fund changed its name
from CSFB Global Opportunities Partners, L.P. and Credit Suisse
First Boston no longer has any affiliation with the Fund other
than as a limited partner.
RAZORFISH INC: Reaffirms Earnings Guidance for 2nd Quarter 2002
---------------------------------------------------------------
Razorfish, Inc. (Nasdaq:RAZFD), the digital solutions provider,
reaffirms its guidance for the second quarter 2002. That
guidance, which was provided on April 17, 2002 in the first
quarter 2002 earnings press release, was that the Company
anticipated revenues before reimbursements for direct costs of
$10.3 million to $11.3 million and pro forma net income of $0.5
million to $1.0 million for the second quarter 2002.
The Company expects to announce its full quarterly operating
results and host an investor conference call in conjunction with
that announcement within the next couple of weeks once it has
finalized the selection of its new independent auditors. As
previously disclosed, Razorfish dismissed Arthur Andersen as the
Company's auditors effective July 1, 2002 (see current report on
8-K filed July 9, 2002).
Razorfish's services employ digital technologies to address a
wide range of its clients' needs, from business and brand
strategy to systems integration. From its founding in 1995 to
the present, Razorfish has provided its clients with services
designed to enhance communications and commerce with their
customers, suppliers, employees and other partners through the
use of digital technologies. Razorfish is headquartered in New
York and has offices in Boston, Los Angeles, San Francisco,
Silicon Valley, and Tokyo. Recent Razorfish clients include
Cisco Systems, Western Union, VERITAS, Microsoft, Manulife
Financial, Ford Motor Company, and GlaxoSmithKline. For more
information visit: http://www.razorfish.com
At March 31, 2002, Razorfish's balance sheet shows a total
shareholders' equity deficit of about $3.3 million.
RED OAK HEREFORD: Inks Licensing Agreement with Premium Quality
---------------------------------------------------------------
Effective April 27, 2001, the Common Stock of Red Oak Hereford
Farms, Inc. (Pink Sheets: HERF) was delisted from the OTC:BB
resulting from the Companies inability to complete the 2000
audit, resulting from the lack of funds. As disclosed in
previous SEC reporting, the Company has been at risk in
obtaining necessary resources -- including sufficient funding to
move the business strategy forward.
To preserve the trademark and the related customer base
developed up to the first of October 2001, Red Oak Farms, Inc.
and HERF management negotiated and entered into a consulting
agreement and a licensing agreement, with Premium Quality Foods,
Inc., on October 4, 2001. The licensing agreement is for rights
to utilize the Red Oak Farms Trademark. PQF is controlled by a
prior officer of HERF and a Red Oak Farms, Inc., employee.
These agreements are designed to provide a revenue stream to
HERF and Red Oak Farms, Inc. HERF and ROF are currently in
dispute with PQF on the terms of these contracts and are in
negotiations to settle the matter. The Company is not currently
conducting ongoing revenue producing operations.
Founded in 1997, Red Oak Hereford Farms, Inc., through
subsidiaries produced and sold Certified Hereford Beef, Premium
branded Hereford fresh Beef, and premium precooked products to
retail, food service, mail order and e-commerce markets. The
company also sold and distributed the award-winning beef jerky
-- My Favorite Jerky(TM).
RELIANCE GROUP: Court Okays Schnader as Committee's Counsel
-----------------------------------------------------------
The Official Committee of Unsecured Creditors seeks the Court's
authority to retain Schnader, Harrison, Segal & Lewis as special
litigation counsel, in the chapter 11 cases involving Reliance
Group Holdings, Inc., and its debtor-affiliates.
Arnold Gulkowitz, Esq., at Orrick, Herrington & Sutcliffe, in
New York, tells Judge Gonzalez that Schnader Harrison has
considerable experience and knowledge in the pending matters
with Pennsylvania's Department of Insurance.
The Committee wants Schnader Harrison to represent it in the
adversary proceedings with the Pennsylvania State Insurance
Commissioner.
Mr. Gulkowitz assures the Bankruptcy Court that Schnader
Harrison intends to work closely with other professionals
appointed in these cases to avoid duplication of services.
The Committee intends to employ Schnader Harrison attorneys
under a general retainer. The firm will charge its normal
hourly rates and will seek reimbursement of actual and necessary
expenses.
Schnader Harrison advises the Committee that its lawyers and
paraprofessionals bill their time in one-tenth hour increments.
The current hourly rates of Schnader Harrison's top guns, who
will represent the Committee in these cases, are:
Professional Hourly Rate
------------ -----------
David Smith $410
Christina Rainville $305
Jonathan Liss $190
Jennifer Nimmons $145
Other Schnader Harrison attorneys and paraprofessionals may,
from time to time, provide assistance. The hourly rates are
subject to periodic adjustments.
Schnader Harrison will also charge for other services rendered
including, but not limited to, telephone and fax, photocopying,
travel, business meals, computerized research, messengers,
couriers, postage and other fees and expenses. "These amounts
will be billed at actual cost or, in certain situations, amounts
that approximate Schnader Harrison's costs, including reasonable
allocation of associated rent, amortization or depreciation, and
administrative costs," Mr. Gulkowitz says.
David Smith, Esq., a partner at the Schnader Harrison, informs
Judge Gonzalez that the firm may have in the past represented
and may presently or in the future represent Debtors' creditors
and other parties-in-interest in matters unrelated to these
cases. Mr. Smith does not believe these representations will
affect Schnader Harrison's representation of the Committee in
adversary proceedings with the Pennsylvania State Insurance
Commissioner or otherwise result in Schnader Harrison not being
a "disinterested party" as defined by Section 101(14) of the
Bankruptcy Code.
* * *
Finding merit in the Committee's request, Judge Gonzalez
approves the application to employ Schnader Harrison as Special
Counsel. (Reliance Bankruptcy News, Issue No. 26; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
RICA FOODS: Makes Timely $717K Interest Payment to Pacific Life
---------------------------------------------------------------
Rica Foods, Inc., (Amex: RCF) has made its scheduled interest
payment of US$717,600 due on July 15th, 2002, as agreed in the
Note Purchase Agreement signed by and between Corporacion As de
Oros, S.A., and Corporacion Pipasa, S.A., and Pacific Life
Insurance, Company and Subsidiaries in 1998 and restated in the
year 2000.
"We are proud to announce that we are on time and right on track
with our payment obligations with Pacific Life. We continue to
move forward poising the company in its growth path. We have
build a solid relationship with our creditors and suppliers
locally and abroad. We are encouraged by the confidence rendered
by our bond holders and the discipline and fiscal prudence of
our Management team," Mr. Nestor Solis, Chief Financial Officer
of the Company said today.
The Company reported that the credit was initially for $20
million and today the balance is $12 million. The facility was
used to partially restructure Pipasa's debt and to substantially
restructure As de Oros' debt, contemporaneously with the
acquisition of the second largest poultry producer of Costa
Rica. "We have proven our strategy worked, whereby we gained a
dominant market presence, backed up by well planed synergies and
economies of scale," Mr. Solis added.
This payment reassures our credit worthiness and confirms the BB
rating granted by Fitch Ibca on April 2002. "Fitch's rating
encourages us to continue our corporate efforts to obtain
quality and growth," Mr. Solis concluded.
As reported in Troubled Company Reporter's June 5, 2002,
edition, Rica Foods' working capital deficiency reached $11
million, as of March 3, 2002.
ROMACORP: S&P Ups Rating to CCC- After Delayed Interest Payment
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on casual dining restaurant operator Romacorp Inc., and
parent Roma Restaurant Holdings Inc., to triple-'C'-minus from
'D' following the company's delayed payment of interest to
holders of its $57 million 12% senior unsecured notes due in
2006.
The outlook is negative. Dallas, Texas-based Romacorp had $72.4
million of debt outstanding as of March 24, 2002. The company
operates and franchises Tony Roma's restaurants, specializing in
baby-back ribs.
"The rating on Romacorp is based on the company's very limited
liquidity, highly leveraged capital structure, weak operating
performance, and participation in the highly competitive
restaurant industry," Standard & Poor's credit analyst Robert
Lichtenstein said.
"Although management has attempted to improve operating
performance, there is no assurance that it can succeed in
reviving its restaurant operations," Mr. Lichtenstein added.
"Moreover, Romacorp may need to refinance its credit facility or
obtain cash from other sources as the facility reduces over the
coming year."
Standard & Poor's said that Romacorp's liquidity is constrained
as the company had only $2.6 million available under its $18
million revolving credit facility and about $1 million of cash
and cash equivalents on the balance sheet as of March 24, 2002.
Moreover, the availability on Romacorp's revolving credit
facility will reduce by $0.25 million per month from September
2002 until June 2003, when the credit facility reduces to $5.5
million. The rating agency said that management would also be
challenged to comply with the amended covenants for EBITDA
performance.
SOLID RESOURCES: Court OKs Well Testing Division Sale to Lonkar
---------------------------------------------------------------
Alvin Harter, President and CEO of Solid Resources Ltd.,
(TSXV: SRW) announced that the Company has successfully applied
for, and received an Order approving the sale of the well
testing division to Lonkar Well Testing Services Ltd. The
approval was granted in the Court of Queen's Bench of Alberta on
Friday July 19, 2002.
The signing of the Purchase and Sale agreement was previously
announced on July 15, 2002. The sale is still expected to close
on July 31, 2002.
As reported in Troubled Company Reporter's July 8, 2002,
edition, the Court of Queen's Bench of Alberta extended the
Solid Resources' creditors protection under CCAA through
September 30, 2002.
STARBAND COMM: Court Approves Settlement Agreement with EchoStar
----------------------------------------------------------------
StarBand, America's leading consumer high-speed, two-way
satellite Internet provider, has received court approval of its
agreement with EchoStar Communications.
The settlement between the two companies, resolving customer
base transition, billing and payment issues, was filed on June
20 but required Bankruptcy Court approval.
"We applaud EchoStar for working with StarBand to reach an
amicable agreement," said StarBand Chairman and Chief Executive
Officer Zur Feldman. "Because of EchoStar's flexibility in
working through the issues, StarBand can now focus on delivering
high-speed, two-way satellite Internet service virtually
everywhere."
Effective immediately, EchoStar will begin to transition billing
and customer service responsibilities of StarBand's retail
customer base to StarBand. EchoStar will continue billing and
supporting its StarBand wholesale subscribers.
StarBand delivers its two-way satellite Internet service through
professionally installed small antennas on roofs, walls or poles
of consumer homes for residential service or commercial
buildings for small office customers. The StarBand Model 360
high-speed satellite modem is connected to a customer's
computer. When a customer accesses StarBand Internet service,
the signal travels over inside wiring to the rooftop antenna.
The antenna then relays the data signals to a satellite. The
satellite sends the signal to the StarBand Network Operations
Center where it gathers, aggregates and routes the signals to
deliver data from the Internet to the customer. The StarBand
antenna accommodates both StarBand high-speed Internet service
and satellite TV programming.
StarBand Communications Inc., headquartered in McLean, Virginia,
is America's first nationwide provider of two-way, always-on,
high-speed Internet access via satellite to residential
customers. In February, 2002, StarBand introduced StarBand Small
Office service, a business-grade product for small business
owners wanting the affordable, always-on features of high-speed
satellite Internet access - virtually anywhere they run their
business. StarBand was recognized with the 'Most Innovative
Internet Service Provider' award sponsored by Interactive Week
and the Net Economy in September 2001 and awarded one of 21
finOvation Awards for product excellence by readers and editors
of Farm Industry News in January 2002. StarBand has exclusive
rights to offer Gilat's two-way, high-speed consumer Internet
technology in the United States, Mexico and Canada. Visit
StarBand at http://www.StarBand.com
STYLECLICK INC: Second Quarter Net Loss Tops $6.2 Million
---------------------------------------------------------
Styleclick, Inc. (OTC BB:IBUYA.OB), a provider of e-commerce
services and technologies, reported results for the second
quarter ended June 30, 2002.
Service Revenues were $1,226,000 a slight decrease of 3.3% from
Service Revenues in the first quarter of 2002 of $1,268,000.
Product Sales for the second quarter were $132,000, a decrease
of $165,000 from the first quarter of 2002. As of the end of the
second quarter, Styleclick has substantially completed the
liquidation of product inventory from discontinued operations.
Gross profit in the second quarter increased to $716,000
compared to $474,000 in the first quarter of 2002 due to lower
cost of goods for liquidated products and lower costs of
services due to decreases in personnel costs.
Operating expenses in the second quarter of $6,824,000 include a
write-off of deferred advertising and promotion of $5,000,000
based on the determination by the Company that it is unlikely to
realize the value of the asset. Excluding this write-off,
operating expenses for the second quarter increased to
$1,824,000 from $1,692,000 in the first quarter.
Net loss excluding the write-off of deferred advertising and
promotion expense was $1,194,000 compared to $1,268,000 or $.04
per share in the prior quarter. Including the write-off of
deferred advertising and promotion expense, net loss for the
quarter was $6,194,000.
Styleclick, Inc., (OTC BB:IBUYA.OB) provides e-commerce services
and technology that enable companies to sell online. Styleclick
integrates its online storefront application and merchandising
and inventory management technology with reporting systems and
back-end fulfillment and customer care to create commerce-driven
offerings to help clients expand sales to customers across the
Web. Styleclick's technology platform leverages a central CRM-
driven database for consumer profiling and direct marketing
capabilities. A majority-owned subsidiary of USA Interactive
(Nasdaq: USAI), the Company operates as part of USA's
Information and Services Group.
Styleclick receives substantially all of its business from USA
Electronic Commerce Solutions LLC (ECS), another USA Interactive
company, to which Styleclick provides e-commerce-enabling
technology for certain third-party clients of ECS. Accordingly,
the Company is dependent upon ECS' ability to sell and continue
to maintain such services provided by the Company, and there can
be no assurances thereto. Moreover, ECS has advised the Company
that is reviewing its relationships with its partners and that
it is likely that certain of its smaller relationships will be
materially altered or discontinued. Specifically, with respect
to Sportsline.com, Inc., an agreement has been reached between
ECS and Sportsline.com, Inc., to mutually terminate their
relationship. The Company continues to explore opportunities for
new business.
At March 31, 2002, Styleclick's balance sheet shows a working
capital deficit of about $12 million, and a total shareholders'
equity deficit of about $3.3 million.
TSET INC: Independent Auditors Issue Going Concern Opinion
----------------------------------------------------------
TSET Inc., operates principally in one segment of business:
The Kronos segment licenses, manufactures and distributes air
movement and purification devices utilizing the Kronos(TM)
technology. Based on the Comapny's decision to focus its
resources on Kronos Air Technologies, several actions were
taken, most of which impacted the results of operations. On
April 11, 2001, TSET sold Atomic Soccer. The sale resulted in a
loss of $2,297,000. During the fourth quarter of 2001, TSET
determined that the assets of Aperion Audio were impaired and it
recognized an impairment loss of $2,294,000. On September 14,
2001, the board authorized management to pursue a formal plan
for disposal of Aperion Audio. The anticipated loss from
operations during the phase-out period is $150,000, but there is
no anticipation of a loss on the sale of Aperion Audio. Based
upon its decision to discontinue development of Cancer Detection
International, TSET has recognized an impairment loss of the
remaining goodwill of $273,000 associated with that investment.
On January 18, 2002, TSET began trading shares of its common
stock under a new ticker symbol (KNOS). At the same time, it
announced that the Company will be doing business under the name
of Kronos Advanced Technologies. TSET anticipates asking its
shareholders to vote for the approval of an amendment to its
Articles of Incorporation for a name change of the Company to
Kronos Advanced Technologies, Inc., at its annual meeting in
2002.
Kronos Air Technologies is focused on the development and
commercialization of an air movement and purification
technology known as Kronos(TM). The Kronos(TM) technology
operates through the application of high-voltage management
across paired electrical grids that creates an ion exchange
which moves air and gases at high velocities while removing
odors, smoke, and particulates, as well as killing pathogens,
including bacteria. TSET believes the technology is cost-
effective and is more energy-efficient than current alternative
fan and filter technologies. Kronos(TM) has U.S. and
international patents pending.
The Kronos(TM) device is comprised of state-of-the-art high-
voltage electronics and electrodes attached to one or more sets
of corona and target electrodes housed in a self-contained
casing. The device can be flexible in size, shape and capacity
and can be used in embedded electronic devices, standalone room
devices, and integrated HVAC and industrial applications. The
Kronos(TM) device has no moving parts or degrading elements and
is composed of cost-effective, commercially available
components.
The Kronos(TM) technology combines the benefits of silent air
movement, air cleaning, and odor removal. Because the
Kronos(TM) air movement system is a silent, non-turbulent, and
energy-efficient air movement and cleaning system, TSET believes
that it is ideal for air circulation, cleaning and odor removal
in all types of buildings as well as compact, sealed
environments such as airplanes, submarines and cleanrooms.
Additionally, because it has no moving parts or fans, a
Kronos(TM) device can instantly block or reverse the flow of air
between adjacent areas for safety in hazardous or extreme
circumstances.
The U.S. Department of Defense and Department of Energy have
provided Kronos Air Technologies with various grants and
contracts to develop, test and evaluate the Kronos(TM)
technology. Since May 2001, the total potential value of Small
Business Innovation Research (SBIR) contracts awarded to Kronos
Air Technologies has been $1.7 million. In December 2001,
Kronos Air Technologies was awarded an SBIR contract sponsored
by the U.S. Army. This contract is potentially worth up to
$850,000 in product development and testing support for Kronos
Air Technologies. Phase One of the contract is worth up to
$120,000 in funding to investigate and analyze the feasibility
of the Kronos(TM) technology to reduce humidity in heating,
ventilation and air conditioning (HVAC) systems.
Dehumidification is essential to making HVAC systems more energy
efficient. Phase Two of the contract is worth up to $730,000
in additional funding for product development and testing. In
May 2002, the U.S. Army requested the company to submit a
detailed Phase Two proposal by June 10, 2002 for review in the
current year.
In May 2001, Kronos Air Technologies was awarded its first SBIR
contract sponsored by the U.S. Navy. That contract is
potentially worth $837,000 in product development and testing
support. The first phase of the contract is worth up to $87,000
in funding for manufacturing and testing prototype devices for
air movement and ventilation onboard naval vessels. The second
phase of the contract is worth up to $750,000 in additional
funding. In January 2002, Kronos Air Technologies received a
Phase II invitation letter for this grant with a potential
$750,000 commitment. The Kronos(TM) devices manufactured under
this contract will be embedded in an existing HVAC systems to
move air more efficiently than the traditional, fan based
technology.
In April 2002, the U.S. Navy and Kronos mutually agreed to
exercise the option on the first phase of the U.S. Navy SBIR
contract. The option is to provide incremental funding to
Kronos to further test and evaluate the Kronos(TM) devices built
during the initial SBIR funding. Testing will include
demonstrating the ability of these U.S. Navy Kronos(TM) devices
to capture and destroy biological hazards and to effectively
manage electrical magnetic interference.
RESULTS OF OPERATIONS
The Company's net loss from continuing operations for the
current year third quarter and nine months was $0.7 million and
$2.9 million, respectively, compared with a net loss of $0.7
million and $2.1 million for the corresponding periods of the
prior year. The increase in the net loss was the result of
increased professional fees and consulting services offset by a
decrease in salaries and other general and administrative
expenses.
Revenues are generated through sales of Kronos(TM)devices at
Kronos Air Technologies, Inc. Revenue for the current year third
quarter was $0 and for the current year nine months was $65,000.
Revenue of $5,000 was recorded during the corresponding periods
of the prior year. These revenues were primarily from our U.S.
Navy Small Business Innovative Research contract.
TSET's total assets at March 31, 2002 were $3.1 million compared
with $3.1 million at June 30, 2001. Total assets at March 31,
2002 were comprised primarily of $2.3 million of
patents/intellectual property and $556,000 of deferred financing
fees. Total assets at June 30, 2001 were comprised primarily of
$2.4 million of patents/intellectual property and $520,800 of
deferred financing fees. Total current assets at March 31, 2002
and June 30, 2001 were $189,000 and $70,000, respectively,
while total current liabilities for those same periods were $2.5
million and $1.9 million, respectively, creating a working
capital deficit of $2.3 million and $1.9 million at each
respective period end. This working capital deficit is
primarily due to accrued expenses for compensation, management
consulting and other professional services. Shareholders'
equity as of March 31, 2002 and June 30, 2001 was a deficit of
$1.1 million and a positive $479,000, respectively,
representing a decrease of $1.6 million. The decrease in
shareholders' equity is primarily the result of incurring a $2.9
million loss from continuing operations for the nine months
ended March 31, 2002, partially offset through the sale and
issuance of $1.3 million of common stock.
LIQUIDITY AND CAPITAL RESOURCES
Historically TSET has relied principally on the sale of common
stock to finance operations. It has recently completed a
successful private placement of its common stock through which
it was able to obtain commitments for 2,738,824 shares of its
common stock, valued at $0.17 per share, in consideration of
$465,600 in cash and 41,459 shares of its common stock, valued
at $0.17 per share, in consideration of commitments to convert
$143,048 of debt into equity with respect to certain members of
the management team. Going forward, in addition to continued
sales of common stock, the Company plans to rely on the proceeds
from Small Business Innovation Research (SBIR) contracts with
the U.S. Navy and Army as well as other government contracts and
grants, and cash flow generated from the sale of Kronos(TM)
devices. It has also entered into a common stock purchase
agreement with Fusion Capital under which it has the right,
subject to certain conditions, to draw down approximately
$12,500 per day from the sale of common stock to Fusion Capital.
The SBIR contracts are potentially worth up to $1.7 million in
product development and testing support for Kronos Air
Technologies. The first phase of the contracts is worth up to
$207,000 in funding. If awarded to Kronos Air Technologies,
the second phase of the contracts would be worth up to $1.5
million in additional funding. In January 2002 and May 2002
Kronos Air Technologies received Phase II invitation letters for
U.S. Navy and U.S. Army contracts, respectively, with
potentially $1.5 million in commitments.
Net cash flow used on operating activities was $1.2 million for
the current year nine months. TSET was able to satisfy some of
its cash requirements for this period through the issuance and
sale of common stock.
GOING CONCERN OPINION
TSET's independent auditors have added an explanatory paragraph
to their audit opinion issued in connection with the 2001 and
2000 financial statements that states that TSET does not have
significant cash or other material assets to cover its operating
costs. The Company's ability to obtain additional funding
willlargely determine its ability to continue in business.
Accordingly, there is substantial doubt about the Company's
ability to continue as a going concern.
TSET admits that it can make no assurance that it will be able
to successfully transition from research and development to
manufacturing and selling commercial products on a broad basis.
While attempting to make this transition, the Company will be
subject to all the risks inherent in a growing venture,
including, but not limited to, the need to develop and
manufacture reliable and effective products, develop marketing
expertise and expand its sales force.
TSET incurred a net operating loss of $2.9 million for the
current year nine months. It has incurred net losses from
continuing operations of $3.6 million and $1.4 million for the
fiscal years ended June 30, 2001 and 2000. It has incurred net
losses from continuing operations of $0.7 million for the three
months ended March 31, 2002 and has incurred annual operating
losses of $9.9 million, $2.0 million and $52,000 respectively,
during the past three fiscal years of operation. As a result,
at March 31, 2002 and June 30, 2001 the Company had an
accumulated deficit of $14.9 million and $12.0 million,
respectively. Its revenues have not been sufficient to sustain
operations. Management expects that revenues will not be
sufficient to sustain operations for the foreseeable future.
Profitability will require the successful commercialization of
its Kronos(TM) technology. No assurances can be given when
this will occur or that TSET will ever be profitable.
TRAK AUTO PARTS: Advance Auto Gets Approval to Acquire Assets
-------------------------------------------------------------
Advance Auto Parts, Inc., (NYSE: AAP) has received bankruptcy
court approval to acquire certain assets of Trak Auto
Corporation, including the leases on up to 55 stores operated by
Trak in northern Virginia, Washington D.C., and eastern
Maryland. The closing is scheduled to occur by July 29, 2002,
although the transfer and conversion of these stores will take
place over the next three to four months.
"We are excited about the opportunity to expand our presence and
serve more customers in the metropolitan Washington D.C. area,
as well as the surrounding communities." said Larry Castellani,
Chief Executive Officer of Advance. "We are looking forward to
more effectively serving the Do-it-Yourself customer, as well as
the professional installer, from approximately 75 locations in
these markets. We are also pleased to welcome the Trak store
team members who will be joining Advance Auto Parts."
The terms of the agreement provide that Advance Auto Parts will
assume the existing leases on the acquired stores and will pay
up to $16 million for inventory and fixtures.
The acquisition of these approximately 50 stores will take the
place of new store openings, and consequently, Advance Auto
Parts maintains its 2002 total new store opening plan of 100 to
125 stores. The funds for this transaction, including any
conversion costs, are included in the Company's existing capital
expenditures budget. The conversion and re-branding of the
stores is expected to begin by early September and be completed
before the end of 2002.
The integration of the Discount Auto Parts stores, acquired in
November 2001, continues on plan and the conversion of the Trak
Stores will not impact that integration. 108 of the 189 Discount
Auto Parts stores in Georgia, Mississippi, Alabama, the Florida
Panhandle, Louisiana and South Carolina have been converted to
Advance Auto Parts stores to date and the remainder will be
completed by the end of the year. Merchandise conversions in the
Florida markets will be completed before the end of the third
quarter. The Discount Auto Parts stores have continued to
perform well during the integration process.
Advance Auto Parts, Inc. is based in Roanoke, Va., and is the
second largest auto parts chain in the nation. With
approximately 2,400 stores in 38 states, Puerto Rico and the
Virgin Islands, the Company serves both the do-it-yourself and
professional installer markets. Additional information about the
Company, employment opportunities, services, as well as on-line
purchase of parts and accessories can be found on the Company's
Web site at http://www.advanceautoparts.com
TRINITY: S&P Gives Prelim. BB+ Sub. Debt Rating to $150MM Shelf
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
triple-'B'-minus senior unsecured debt rating and its
preliminary double-'B'-plus subordinated debt rating to Trinity
Industries Inc.'s $150 million shelf registration.
At the same time, Standard & Poor's affirmed its triple-'B'-
minus corporate credit rating on the general industrial
manufacturer. At March 31, 2002, Dallas, Texas-based Trinity had
about $447 million in non-recourse debt securities outstanding.
The outlook remains negative.
"The ratings on Trinity reflect the company's leading market
positions in mature and highly cyclical markets, a moderately
aggressive financial policy, and satisfactory financial
flexibility", said Standard & Poor's credit analyst Joel
Levington.
Trinity manufactures a wide range of high-volume, metal bending
goods for the railcar, highway construction, barges, and general
industrial markets. Standard & Poor's does not expect any
meaningful improvement in the railcar manufacturing market for
the next several quarters. Cash flow protection measures are
likely to be subpar in the intermediate term. Financial
flexibility benefits from discrete business units, which could
be sold, if necessary, and modest leverage at the leasing unit.
Should railcar industry fundamentals remain depressed for an
extended period of time, or liquidity become further
constrained, Standard & Poor's may lower its rating.
USURF AMERICA: Falls Below AMEX Continued Listing Requirements
--------------------------------------------------------------
USURF America, Inc., (Amex: UAX) the developer of
Quick-Cell(TM), a family of Wi-Fi-standard broadband fixed-
wireless high-speed Internet access products, has been notified
by the American Stock Exchange that it has fallen below the
continued listing standards of the Exchange. The company has 18
months in which to bring itself back into compliance with the
Exchange's continued listing standards.
On May 1, 2002, the company received notice from the AMEX Staff
indicating that the company is below certain of the Exchange's
continued listing standards: Section 1003(a)(i) of the AMEX
Company Guide, losses from operations in its two most recent
fiscal years with shareholders' equity below $2 million; and
Section 1003(a)(iv) of the AMEX Company Guide, sustained losses
so substantial in relation to the company's overall operations
or its existing financial resources, or its financial condition
in relation to its overall operations or its existing financial
resources, or its financial condition has become so impaired
that it appears questionable, in the opinion of the Exchange, as
to whether the company will be able to continue operations
and/or meet its obligations as they mature. The company was
afforded the opportunity to submit a plan of compliance to the
Exchange and, on May 31, 2002, presented its plan to the
Exchange. On July 19, 2002, the Exchange notified the company
that it accepted the company's plan of compliance and granted
the company an extension of time to regain compliance with the
continued listing standards. The company will be subject to
periodic review by the Exchange Staff during the extension
period. Failure to make progress consistent with the plan or to
regain compliance with the continued listing standards by the
end of the extension period could result in the company's being
delisted from the American Stock Exchange.
"We received this acknowledgment from the Exchange after review
of our new business plan, which pleases us immensely," said Doug
McKinnon, president and CEO of USURF. "This notification also
allows us to refute market rumors about our imminent delisting.
We are confident that USURF will meet the Exchange's continued
listing requirements."
USURF's new, expanded business plan moves beyond its initial
market focus on underserved and rural markets toward specific
applications and vertical markets. USURF intends to reach
emerging vertical markets through strategic partners and new
marketing channels.
"Our value proposition to these new verticals will be, 'Let
USURF design, deploy and own the network so you can concentrate
on what you do best -- run your business,'" McKinnon said. USURF
is developing partnerships with companies creating or extending
broadband connectivity for their customers, employees and
partners. This strategy is expected to deliver a stronger and
more compelling future financial performance.
Examples of new markets include the hospitality, education,
aviation, Multiple Dwelling Unit (MDU)/Planned Community
Development (PCD), ILEC (Independent Local (telephone) Exchange
Carrier), utility, municipality, enterprise and special
situation markets.
The Company's proprietary Quick-Cell(T) technology is one of the
most flexible fixed-wireless Internet access solutions on the
market, and features "always-on" access to the Internet. Its
Quick-Cell equipment meets all 802.11(x) standards and utilizes
unlicensed 2.4GHz 802.11b spectrum and can be deployed far less
expensively than other wireline and cable technologies. For more
information about USURF America, please visit its Web site at
http://www.usurf.com
UNITED STATIONERS: Net Sales for Second Quarter Drop 8.3%
---------------------------------------------------------
United Stationers Inc., (Nasdaq: USTR) reported net sales for
the second quarter ended June 30, 2002, of $898 million, down
8.3% compared with sales of $979 million for the same three
months of 2001. Net income for the second quarter was $15.7
million, a 28.0% decrease from $21.8 million in the comparable
period last year.
Net sales for the first half of 2002 were $1.8 billion, compared
with sales of $2.0 billion in the same period last year. After
adjusting for one fewer selling day in the first half of 2002,
sales were down 8.8%. Net income for the year-to-date period was
$39.9 million, down 8.3% compared with $43.5 million a year ago.
For the first six months of 2002, earnings per share were $1.16,
down 9.4% compared with $1.28 in 2001.
For the trailing 12 months, reductions in working capital
(including sold receivables and excluding the restructuring
accrual) generated approximately $113 million of cash. Cash from
operations and working capital exceeded $230 million during the
same period.
Net capital spending, including capitalized software costs, for
the first half of 2002 was $9.6 million versus $22.8 million at
this time last year. The company expects that its 2002 net
capital spending will be in the range of $30 million to $35
million.
Second Quarter Reflects Continuing Trends
Second quarter 2002 results reflected soft sales in all major
product categories. The three primary factors that affected the
first quarter of 2002 continued to have an impact on sales
comparisons in the second quarter: the integration of U.S.
Office Products into the Corporate Express business model (in
which a greater percentage of products are bought directly from
manufacturers); the divestitures of the Positive ID division and
the CallCenter Services business; and lower sales to national
accounts, which appear to be the result of workforce reductions
by large companies.
Gross margins remain under pressure. United continues to
experience a shift within each of its product categories toward
consumable items and away from higher-margin, discretionary
purchases, which reflects the weak economic environment. In
addition, volume allowances from manufacturers have declined as
a result of lower inventory purchases associated with both the
decline in sales and the company's focus on working capital
management. Despite these factors, the company expects to
continue generating strong free cash flow.
Operating expenses for the 2002 second quarter were $101.4
million, or 11.3% of sales, compared with $112.8 million, or
11.5% of sales, in the 2001 quarter. The 2002 numbers included
approximately $2.5 million of incremental operating costs
related to the restructuring plan. The rate decline was related
primarily to cost reductions achieved from the restructuring
plan.
"While it was a challenging quarter from a financial
perspective, United made important progress on its restructuring
during the quarter," said Randall W. Larrimore, president and
chief executive officer. "We also completed several operational
initiatives that improved our ability to serve customers while
controlling costs. Our actions included closing one of our
oldest Supply Division distribution centers, located in Detroit,
Michigan. In addition, we moved Azerty's computer consumables
business into the Supply Division infrastructure and closed four
Azerty distribution centers. This enhanced our ability to
package computer consumables and traditional office products in
a single box. Also, we opened a new state-of-the-art
distribution facility in Grand Rapids, Michigan, and last week
announced that we will be consolidating four Supply Division
call centers into two national call centers. These call centers
will have the latest in telephony and customer service systems
technology. As a result of these and other actions, we are on
target to save $25 million in 2002 as a result of our
restructuring efforts."
Continuing Improvements in Working Capital
and Free Cash Flow
The company generated nearly $170 million in free cash flow
(excluding the effects of the restructuring accrual and before
share repurchases) for the trailing 12 months. Sources of cash
were $232 million from operations, which includes $38 million in
depreciation and amortization, and $113 million in working
capital reductions. The working capital amount included
receivables sold under the company's securitization program.
Cash consumed for the trailing 12 months included $22 million in
net capital spending and $44 million in scheduled debt
repayments. On the same basis, free cash flow for the first half
of 2002 was approximately $87 million.
"Our strong cash flow resulted in a $207 million reduction in
debt and securitization financing during the last 12 months. As
a result, we had $45 million of receivables outstanding under
our securitization program at the end of the second quarter,
versus $152 million a year ago. This gave us a debt-to-total
capitalization, including the securitization financing, of 34%
at June 30, 2002, compared with 49% a year ago," Larrimore
explained.
"We are very proud of our improved working capital efficiency
and strong cash flow. Our solid balance sheet will enable us to
continue repurchasing our stock," he added.
Improved Outlook for 2003
"We expect the rest of 2002 to be challenging, as the factors
that affected our second quarter will most likely persist
through the year. To date, sales for July are down 5% to 6%
compared with the prior-year period. This is in line with our
expectations, as the comparative prior-year period included a
diminishing sales impact related to the U.S. Office Products
business. In 2003, we believe that a stronger economic
environment, combined with our marketing initiatives, will lead
to higher sales, a more favorable product mix and improved
operating margins. We also expect stronger sales and
correspondingly higher inventory purchases to drive up
manufacturers' volume allowances from 2002 levels. Furthermore,
we are on track to achieve approximately $40 million in savings
during 2003 as a result of our restructuring plan," said
Larrimore.
"Moving forward, Dick Gochnauer, our new chief operating
officer, will be focusing on continuing to improve our
operations. This will lead us to evaluate every activity that
does not add value for our customers. So while our top-line
growth is slower than we would like, we will continue to
effectively hold the line on costs," Larrimore concluded.
Share Repurchase Update
As previously announced, the company's board of directors
approved an expanded stock repurchase program authorizing United
to buy an additional $50 million of its common stock. The
company has purchased $4 million under the new authorization, in
addition to having used the $15 million remaining under the
October 2000 authorization. Under this expanded program,
purchases may be made from time to time in the open market or in
privately negotiated transactions. Depending on market and
business conditions and other factors, these purchases may
continue or be suspended at any time without notice. The company
has approximately 33.2 million shares outstanding.
Company Overview
United Stationers Inc., with trailing 12 months sales of
approximately $3.7 billion, is North America's largest wholesale
distributor of business products and a provider of marketing and
logistics services to resellers. Its integrated computer-based
distribution system makes more than 40,000 items available to
approximately 20,000 resellers. United is able to ship products
within 24 hours of order placement because of its 36 United
Stationers Supply Co. distribution centers, 24 Lagasse
distribution centers that serve the janitorial and sanitation
industry, two Azerty distribution centers in Mexico that serve
computer supply resellers, two distribution centers that serve
the Canadian marketplace, and a mega-distribution center shared
by several business units. Its focus on fulfillment excellence
has given the company an average order fill rate of 98%, a 99.5%
order accuracy rate, and a 99% on-time delivery rate. For more
information, visit http://www.unitedstationers.com
The company's common stock trades on the Nasdaq National Market
System under the symbol USTR and is included in the S&P SmallCap
600 Index.
As reported in Troubled Company Reporter's June 21, 2002,
edition, Standard & Poor's affirmed United Stationer's BB
Corporate Credit Rating.
VENTAS INC: Extends Exchange Offer for Outstanding 8-3/4% Notes
---------------------------------------------------------------
Ventas, Inc. (NYSE:VTR) said that it, together with certain of
its subsidiaries, have extended their offer to exchange all of
the currently outstanding 8-3/4% Senior Notes due 2009 and 9%
Senior Notes due 2012, of Ventas Realty, Limited Partnership and
Ventas Capital Corporation, to July 25, 2002 at 5:00 p.m. New
York City time, unless further extended.
The extension has been made to allow holders of outstanding
Senior Notes who have not yet tendered their Senior Notes to do
so. As of the close of business on July 23, 2002, approximately
$173.0 million in aggregate principal amount of 8-3/4% Senior
Notes and approximately $224.9 million in aggregate principal
amount of 9% Senior Notes had been validly tendered for exchange
(without guarantees) and not withdrawn.
Ventas, Inc., is a healthcare real estate investment trust whose
properties include 43 hospitals, 215 nursing facilities and
eight personal care facilities in 36 states. More information
about Ventas can be found at its Web site at
http://www.ventasreit.com
In its Form 10-Q filed with the Securities and Exchange
Commission on May 14, 2002, Ventas' March 31, 2002, balance
sheet shows a total shareholders' equity deficit of about $94
million.
VENTAS INC: June 30, 2002 Equity Deficit Reaches $95 Million
------------------------------------------------------------
Ventas, Inc., (NYSE:VTR) announced that normalized Funds From
Operations for the second quarter of 2002 totaled $23.0 million.
FFO for the comparable period in 2001 totaled $18.6 million.
First quarter 2002 FFO was $22.1 million.
Net income for the second quarter ended June 30, 2002 was $26.5
million after an extraordinary loss of $6.9 million, related to
the extinguishment of debt. Net income for the three months
ended June 30, 2001 was $8.1 million. First quarter 2002 net
income was $12.7 million.
Normalized FFO for the first six months of 2002 was $45.0
million, compared with $39.6 million in the comparable 2001
period. Net income for the six months ended June 30, 2002 was
$39.2 million after an extraordinary loss of $6.9 million
related to the extinguishment of debt, versus $18.7 million for
the same period in the prior year.
At June 30, 2002, Ventas' total shareholders' equity deficit
slides-up to about $95 million.
"We made great progress in the first half of 2002," President
and CEO Debra A. Cafaro said. "Our FFO this quarter is up by
more than 20 percent over the comparable 2001 period and our
cash flow growth is dramatic as the result of our successful
refinancing, our rent escalators and our declining debt
balances."
Second Quarter Highlights
and Other Recent Developments
Recent highlights include:
-- On June 20, 2002, Ventas completed the sale of its 164-
bed hospital in Arlington, Virginia to HCA Corporation for $27.5
million, yielding a $22.4 million gain.
-- Through July 1, 2002, Ventas sold 140,000 shares of
common stock in its principal tenant, Kindred Healthcare, Inc.
(NASDAQ:KIND), generating proceeds of approximately $6.2
million. The average per share sale price was over $44.
-- The 253 skilled nursing facilities and hospitals leased
to Kindred produced EBITDAR to rent coverage of 1.9x for the
twelve month period ended March 31, 2002 (excluding the
Arlington Hospital).
-- On May 1, 2002, the rent escalator on the Kindred
Master Leases took effect, increasing annual rent by $6 million
to $186 million (excluding the Arlington Hospital).
-- During the second quarter, Ventas completed the
refinancing of its balance sheet with the private placement of
$400 million of Senior Notes. Additionally, the Company closed
its new $350 million secured credit facility.
-- The Company reduced its outstanding debt balances to
$807 million at June 30, 2002.
-- Ventas's $750 million Universal Shelf Registration
became effective in July 2002. This will give the Company
efficient access to the capital markets as it implements its
diversification strategy.
-- Morgan Stanley added Ventas to its benchmark REIT index
(RMS), effective July 19, 2002.
Second Quarter Results
Rental income for the quarter ended June 30, 2002 was $47.1
million, of which $46.6 million resulted from leases with
Kindred. Expenses for the quarter ended June 30, 2002 totaled
$40.7 million and included $10.4 million of depreciation
expenses; $19.1 million of interest expense on debt financing;
and $1.4 million of interest expense on the Company's settlement
with the Department of Justice. In addition, the Company
reported a one-time $5.4 million net loss on the $350 million
swap breakage incurred in connection with the Company's debt
refinancing. Professional fees for the quarter ended June 30,
2002 totaled $0.9 million.
During the quarter, the Company reclassified to discontinued
operations the results of operations specifically related to
assets sold or held for sale on or after January 1, 2002,
including the Arlington Hospital. This reclassification, which
is required under the newly effective FAS 144, affects the
presentation of results for the current and prior periods but
does not impact the Company's net income or FFO.
Six Month Results
Rental income for the six months ended June 30, 2002 was $93.2
million, of which $92.1 million resulted from leases with
Kindred.
Expenses for the six months ended June 30, 2002 totaled $75.7
million, and included $20.8 million of depreciation on real
estate assets, $38.9 million of interest expense and $2.9
million of interest on the United States settlement. In
addition, the Company reported a one-time $5.4 million net loss
on the $350 million swap breakage incurred in connection with
the Company's debt refinancing. Professional fees totaled $1.5
million.
FFO and Dividend Guidance
The Company reaffirms its 2002 normalized FFO guidance of $1.28
to $1.30 per diluted share as previously announced. The Company
expects to report normalized FFO of $1.43 to $1.45 per diluted
share in 2003, excluding gains and losses and the impact of
capital transactions. The Company expects to maintain an FFO
payout ratio of 73% to 75%, which should result in a 2003
dividend of $1.05 to $1.07 per share. The Company's dividend
policy and payment remain subject to approval by the Company's
Board of Directors. The Company may from time to time update its
publicly announced FFO and dividend guidance, but it is not
obligated to do so.
Ventas, Inc., is a healthcare real estate investment trust whose
properties include 43 hospitals, 215 nursing facilities and
eight personal care facilities in 36 states. More information
about Ventas can be found on its Web site at
http://www.ventasreit.com
W.R. GRACE: Sales Slide-Up to $473.4 Million in Second Quarter
--------------------------------------------------------------
W. R. Grace & Co., (NYSE: GRA) reported that 2002 second quarter
sales totaled $473.4 million compared with $450.3 million in the
prior year quarter, a 5.1% increase. Excluding currency
translation impacts, sales were up 5.4%. The second quarter was
favorably impacted by continued strong demand for refining
catalysts, and by revenue from bolt-on acquisitions in catalyst
products and construction chemicals. Pre-tax income from core
operations in the second quarter of 2002 was $56.6 million, down
1.6% from $57.5 million in the second quarter of 2001. The
current quarter reflects aggregate added costs of $7.4 million
for facility rationalizations in the Performance Chemicals
business segment and higher pension expense due to poor equity
market performance. Second quarter net income was $21.2 million,
or $0.32 per share, compared with $23.0 million, or $0.35 per
share, in the second quarter of 2001. In addition to the costs
for facility rationalizations and pensions reflected in core
operations, net income for the 2002 second quarter reflects a
$2.0 million pre-tax charge for defense of non-core
environmental litigation and an $8.4 million pre-tax charge for
Chapter 11-related expenses, partially offset by lower interest
expense.
Grace's June 30, 2002, balance sheet shows a total shareholders'
equity deficit of $75.6 million, down from $141.7 million
recorded at December 31, 2001.
"I'm pleased with our core business performance," said Grace
Chairman, President and Chief Executive Officer Paul J. Norris.
"We achieved good sales growth despite softness in certain
business segments. Our operating fundamentals remain sound and
we are well positioned for economic recovery. However, our net
profit performance was adversely affected by costs that are
ancillary to our business fundamentals and by continuing
expenses for Chapter 11-related matters. We expect that the
Chapter 11 proceedings will continue to be a source of
volatility in our reported earnings over the next several
quarters."
Year-to-date 2002, Grace reported sales of $886.9 million, a
4.8% increase versus 2001. Excluding currency translation
impacts, sales were up 6.4%. Pre-tax income from core operations
was $90.4 million, 4.5% higher than 2001. Year-to-date pre-tax
operating margin was 10.2%, equal with the prior year, and
reflecting the negative effects of facility rationalizations
during the second quarter and overall higher pension costs. Net
income and diluted EPS were $33.6 million and $0.51 per share in
2002 compared with $37.6 million and $0.57, respectively, for
year-to-date 2001.
CHAPTER 11 PROCEEDINGS
On April 2, 2001 Grace and 61 of its United States subsidiaries
and affiliates, including its primary U.S. operating subsidiary
W. R. Grace & Co.-Conn., filed voluntary petitions for
reorganization under Chapter 11 of the United States Bankruptcy
Code in the United States Bankruptcy Court for the District of
Delaware (the "Filing"). Grace's non-U.S. subsidiaries and
certain of its U.S. subsidiaries were not a part of the Filing.
Since the Filing, all motions necessary to conduct normal
business activities have been approved by the Bankruptcy Court.
The Bankruptcy Court has entered an order establishing a bar
date of March 31, 2003 for claims of general unsecured
creditors, asbestos property damage claims and medical
monitoring claims related to asbestos. The bar date does not
apply to asbestos-related bodily injury claims or claims related
to Zonoliter Attic Insulation, which will be dealt with
separately. Please refer to www.graceclaims.com for information
and claim forms. A trial concerning allegations of a fraudulent
conveyance related to the 1998 transactions involving Cryovac
and Sealed Air is scheduled to take place during the fourth
quarter of 2002. These litigation and claims solicitation
activities are resulting in higher Chapter 11 related costs,
which will likely continue over the next several quarters.
ACCOUNTING MATTERS AND CONTINGENCIES
Grace's second quarter results reflect: (a) $4.1 million for
costs associated with relocating certain plant and
administrative activities of the Performance Chemicals business
segment to improve customer service and lower operating costs,
(b) $3.3 million in added pension costs (non-cash) due to lower
market values of plan assets resulting from the decline in
equity markets, and (c) $2.0 million for defense of
environmental litigation related to Grace's former mining
operation in Libby, Montana. Also, in the second quarter, Grace
completed its assessment of impairment under Statement of
Financial Accounting Standards No. 142, "Goodwill and Other
Intangible Assets," with no adjustment to recorded amounts of
goodwill or intangibles.
Most of Grace's noncore liabilities and contingencies (including
asbestos-related litigation, environmental claims, tax matters
and other obligations), are subject to compromise under the
Chapter 11 process. The Chapter 11 proceedings, including
litigation and the claims resolution process, could result in
allowable claims that differ materially from recorded amounts.
Grace will adjust its estimates of allowable claims as facts
come to light during the Chapter 11 process that justify a
change, and as Chapter 11 proceedings establish court-accepted
measures of Grace's noncore liabilities. See Grace's recent
Securities and Exchange Commission filings for discussion of
noncore liabilities and contingencies.
Grace is a leading global supplier of catalysts and silica
products, specialty construction chemicals, building materials,
and sealants and coatings. With annual sales of approximately
$1.7 billion, Grace has over 6,000 employees and operations in
nearly 40 countries. For more information, visit Grace's Web
site at http://www.grace.com
WILLIAMS: S&P Hatchets Corp. Credit Rating Down 2 Notches to BB+
----------------------------------------------------------------
Standard & Poor's Rating Services lowered the corporate credit
rating on The Williams Cos. Inc., two notches to double-'B'-plus
from triple-'B', reflecting the deteriorating liquidity position
of the company, especially in the near term. The company's other
ratings and those of its subsidiaries were also lowered. The
senior unsecured debt rating was lowered to double-'B' from
triple-'B'-minus and the company's short-term rating was
withdrawn. The ratings have been placed on Creditwatch with
negative implications.
"The deterioration of the company's liquidity position, combined
with the fall in the company's stock price after announcing a
severe dividend cut, makes the possibility of issuing equity in
the near term unlikely," said credit analyst Jeffrey Wolinsky.
"Additionally, Williams' inability to renew the $2.2 billion
364-day revolver, which expires today, on an unsecured basis, is
not commensurate with an investment grade rating," continued
Wolinsky.
Standard & Poor's had expected the line to be renewed on an
unsecured basis within the $1.5 billion to $1.0 billion range,
which would have mitigated the current liquidity crunch. In
addition, current market conditions have added substantial
execution risk to Williams planned $3 billion debt reduction
over the next year. The inability to issue equity means that the
debt reduction must be accomplished through assets sales alone,
which increases execution risk.
The Creditwatch placement is focused on the events of the next
two months, where liquidity is tight. About $800 million of debt
at Williams and Transco mature in late July and early August
2002, and about $180 million could come due from existing
ratings triggers. Additionally, margin calls ranging from $175
million to $600 million may come due because of the sub-
investment grade rating of the company. To meet these cash
requirements, Williams plans to fully draw on the existing $700
million revolver and execute asset sales of about $120 million.
If the margin calls come in at the higher level, Williams has a
number of options to meet the liquidity needs, including closing
and drawing on the secured revolver, a potential bridge
financing on asset sales or other options.
Assuming that Williams is able to weather the financial stress
over the next two months, the rating could be removed from
CreditWatch.
WORLDCOM: S&P Drops Four Synthetic Securities' Ratings to D
-----------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on four
synthetic securities related to WorldCom Inc., to 'D' from
single-'C' and removed them from CreditWatch with negative
implications, where they were placed on April 17, 2002.
The rating actions follow the lowering of WorldCom Inc.'s senior
unsecured debt ratings on July 22, 2002.
These synthetic securities are weak-linked to the underlying
collateral, WorldCom Inc.'s debt. The lowered ratings reflect
the credit quality of the underlying securities issued by
WorldCom Inc.
RATINGS LOWERED AND REMOVED FROM CREDITWATCH
Corporate Backed Trust Certificates Series 2001-17 Trust
$28 million corporate-backed trust certs
Rating
Class To From
A-1 D C/Watch Neg
PreferredPLUS Trust Series WCM-1
$80.703 million corporate bond-backed trust certs
Rating
To From
Certificates D C/Watch Neg
CorTS Trust For WorldCom Notes
$57.156 million corporate-backed trust securities
Rating
To From
Certificates D C/Watch Neg
SATURNS Trust No. 2001-5
$26.023 million WorldCom debenture-backed securities
Rating
To From
Units D C/Watch Neg
Worldcom Inc.'s 11.25% bonds due 2007 (WCOM07USA1) are trading
at 24 cents-on-the-dollar, DebtTRaders reports. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=WCOM07USA1
for real-time bond pricing.
ZIFF DAVIS: Noteholders Accept Terms of Fin'l Restructuring Plan
----------------------------------------------------------------
Ziff Davis Media announced further progress towards completing
its financial restructuring plan. As of July 23, 2002
preliminary tabulations now reflect that holders of over 88% of
the aggregate face amount of its $250.0 million of 12.0% Senior
Subordinated Notes due 2010 have formally accepted the terms of
its financial restructuring plan under which the Company would
reduce its Senior Notes by approximately $155.0 million and its
cash debt service requirements over the next several years by
over $30.0 million annually by exchanging cash and new
securities for the Senior Notes.
In addition, approximately 98% of these same note holders and
approximately 96% of its senior bank lenders who voted have also
consented to implementing the same financial restructuring plan
through a prepackaged plan of reorganization.
As a result, the Company announced that it has extended its
Exchange Offer and solicitation of consents for the Prepackaged
Plan through 9:00 a.m. on July 30, 2002.
"We're nearing the end of our journey to restructure the
Company's balance sheet, and look forward to focusing 100% on
our core mission -- growing our pre-eminent technology and games
properties and providing new, creative marketing solutions for
our loyal customer base," said Robert F. Callahan, President and
CEO of Ziff Davis Media Inc.
Ziff Davis Media Inc. -- http://www.ziffdavis.com-- is the
information authority for buying and using technology. In the
United States, the company publishes 9 industry leading business
and consumer publications: PC Magazine, eWEEK, Baseline, CIO
Insight, Electronic Gaming Monthly, Official U.S. PlayStation
Magazine, Computer Gaming World, GameNow, and Xbox Nation. There
are 48 foreign editions of Ziff Davis Media's publications
distributed in 78 countries worldwide. In addition to producing
companion web sites for its magazines, the Company develops tech
enthusiast sites such as ExtremeTech.com. It provides custom
publishing and integrated marketing solutions through Ziff Davis
Custom Media and industry analyses through Ziff Davis Market
Experts. The company also produces seminars and webcasts.
* Top Commercial Litigation Attorneys Join Stroock & Stroock
------------------------------------------------------------
A top financial services and commercial litigation team led by
attorney Richard M. Sharfman has joined the law firm of Stroock
& Stroock & Lavan LLP as partner, effective Monday, July 22nd.
Mr. Sharfman, 61, joins Stroock from the law firm of Dechert,
where he was a partner in its financial services litigation
group. He will serve as Co-Chair of Stroock's Litigation
practice and become a member of the firm's Senior Executive
Committee. As a counselor and a trial lawyer, Mr. Sharfman has
represented and advised fund managers, funds, business
executives, bankers and corporations. Joining Mr. Sharfman as a
partner at Stroock is Daniel A. Ross, 52, also a Dechert partner
in the financial services and commercial litigation group with
extensive experience in commercial and private equity
litigation, as well as defamation, copyright and media law.
The move comes on the heels of Stroock's July 1 announcement of
nine new attorneys, including three top corporate reorganization
partners, joining the firm's Insolvency & Restructuring
practice. According to Stroock Managing Partner, Thomas E.
Heftler, the recent additions are part of a long-term growth
strategy. "We have known and worked with these lawyers for
years. Their practices are well-suited to our strengths and will
help fuel future growth."
Stroock's expertise in commercial and financial services
litigation is considered among the best in the country. In a
recent survey(1) by the National Law Journal of the 100 largest
commercial banks, 50 largest savings institutions and 50 largest
diversified financial companies, Stroock placed third overall
among all law firms most frequently mentioned by in-house
counsel, and second among savings institutions.
Stroock & Stroock & Lavan LLP is a law firm with market
leadership in financial services, providing transactional and
litigation expertise to leading investment banks, venture
capital firms, multinational corporations and entrepreneurial
businesses in the U.S. and abroad. Stroock's practice areas
concentrate in corporate finance, legal service to financial
institutions, energy, insolvency & restructuring, intellectual
property and real estate.
* DebtTraders' Real-Time Bond Pricing
-------------------------------------
Issuer Coupon Maturity Bid - Ask Weekly change
------ ------ -------- --------- -------------
Crown Cork & Seal 7.125% due 2002 96 - 98 +1.5
Freeport-McMoran 7.5% due 2006 90.5 - 91.5 +.5
Global Crossing Hldgs 9.5% due 2009 1.13 - 1.63 -.37
K-Mart 9.375% due 2006 39.50 - 40.50 n/a
Levi Strauss 6.8% due 2003 89 - 91 n/a
Lucent Technologies 6.45% due 2029 47 - 49 -11
MCI Worldcom 6.5% due 2010 45.5 - 47 n/a
Terra Industries 10.5% due 2005 86 - 89 +1
Westpoint Stevens 7.875% due 2008 59 - 62 -3
Worldcom 7.5% due 2011 17.5-18.5 n/a
Xerox Corporation 8.0% due 2027 43 - 45 -6
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
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices
are obtained by TCR editors from a variety of outside sources
during the prior week we think are reliable. Those sources may
not, however, be complete or accurate. The Monday Bond Pricing
table is compiled on the Friday prior to publication. Prices
reported are not intended to reflect actual trades. Prices for
actual trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy
or sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.
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 ***