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/raid1/www/Hosts/bankrupt/TCR_Public/020909.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, September 9, 2002, Vol. 6, No. 178 Headlines 360NETWORKS: Obtains Nod to Participate in Ledcor Settlement ADELPHIA COMMS: Intends to Wind-Down Operations of 14 CLECS ADMIRAL CBO: S&P Hatchets Ratings on Four Classes of Notes AIMGLOBAL: Giga-Tron Wants Receiving Order against Aimtronics AJAX MAGNATHERMIC: Rosen & Co. to Auction-Off Assets Tomorrow AMES DEPARTMENT: Wants to Terminate 5 Closing Store Leases ANC RENTAL: Seeks OK to Continue Use of Lenders' Cash Collateral APPLE CAPITOL: Court Moves Final Sale Hearing Date to October 8 BRITISH ENERGY: Wooing UK Government's Aid for Restructuring BEA CBO 1998-2: S&P Junks Rating on Class A-3 Notes at CCC- BETHLEHEM STEEL: Nat'l Union Seeks Stay Relief to Pursue Action BUDGET GROUP: Taps Weber as Corporate Communications Consultant CAMPBELL SOUP: 4th Quarter 2002 Net Sales Slide-Up 5% to $1.2BB COLD METAL: U.S. Trustee Appoints Unsecured Creditors Committee CONSECO, INC.: 30-Day Grace Period Expires & Deathwatch Begins THE CREDIT STORE: Court Approves Stuart Gerry as Local Counsel CRESCENT OPERATING: Amends Settlement Agreement with CEI DELANEY VINEYARDS: Voluntary Chapter 11 Case Summary DOE RUN RESOURCES: Extends Offers for Old Notes Until Sept. 20 ENRON CORP: Brings-In Dovebid to Auction De Minimis Assets EXIDE TECHNOLOGIES: Appoints Stuart Kupinsky as New Senior VP FLOWERS FOODS: Names Jimmy Woodward as Senior Vice-Pres. & CFO FRUIT OF THE LOOM: Court Okays Keen's Retention as Auctioneer GEMSTAR-TV GUIDE: S&P Cuts Corp Rating to BB over Legal Concerns GLOBAL CROSSING: Wants to Reject Unexpired Contract with Unisys GENCORP INC: Board Declares Quarterly Cash Dividends on Shares GRAY TELEVISION: S&P Rates Planned Bank Loan & Sub Notes at B+ HOMEGOLD FIN'L: Lending Partner Extends $200M Forward Commitment HORSEHEAD: UST Says JP Morgan Has to Cover any Burial Expenses INSPIRE INSURANCE: Files Chapter 11 Plan & Disclosure Statement INTELLICORP INC: Files for Chapter 11 Reorganization in Delaware INTELLICORP INC: Case Summary & 25 Largest Unsecured Creditors KAISER ALUMINUM: Retirees' Committee Signs-Up Jaspan as Counsel KMART CORP: Proposes to Modify Personal Injury Claims Protocol LANTRONIX: Will Publish Q4 & FY 2002 Final Results on Thursday LA QUINTA: S&P Changes Ratings Outlook to Stable from Negative LODGIAN: Asks Court to Fix October 22 as Admin. Claims Bar Date LTV CORP: Seeks Approval to Retain Nationwide as Appraisers MIDLAND COGENERATION: Fitch Ratchets Rating of $567M Bonds to BB NATIONAL STEEL: Court Extends EPA's Bar Date to November 6, 2002 ORBITAL SCIENCES: Fitch Affirms B+ Sr. Secured Facility Rating OWENS CORNING: Seeks 4th Exclusivity Extension to Jan. 31, 2003 PHOENIX GROUP: Bringing-In Kirkpatrick & Lockhart as Co-Counsel POLYMER GROUP: Court to Consider Reorg. Plan on Sept. 30, 2002 PROVANT INC: Seeks Listing Transfer to Nasdaq SmallCap Market QUANTUM CORP: Inks Pact to Acquire Benchmark Storage Innovations QWEST COMMS: S&P Affirms B- Rating After Seeing Loan Amendments SAFETY-KLEEN: Retaining Rosenthal as Special Litigation Counsel SAIRGROUP FINANCE: Look for Schedules & Statements on October 3 SCIENT INC: Auction Sale Scheduled for September 13, 2002 SEITEL INC: Second Quarter Net Loss Balloons to $79 Million SOLECTRON CORP: Will Provide Manufacturing Services for Asyst SOLECTRON: Will Release Fiscal Year 2002 Results on Sept. 26 SOLID RESOURCES: Closes $4M Sale of Well Testing Div. to Lonkar SOLID RESOURCES: Creditors Approve Proposed Plan of Arrangement TERION INC: Successfully Emerges from Chapter 11 Proceeding TTR TECHNOLOGIES: Fails to Satisfy Nasdaq Listing Requirements UNIROYAL TECHNOLOGY: Hires Bayard Firm as Bankruptcy Counsel UNIROYAL TECH.: Commences Trading on National Quotation Bureau UNITED AIRLINES: Flight Attendants Welcome New CEO Glenn Tilton US AIRWAYS: Brings-In O'Melveny & Myers as Special Labor Counsel U.S. STEEL CORP: Seeking Reversal of Indiana Tax Board Ruling WILLIAMS COMMS: Unsecured Panel Taps Anderson Kill as Counsel WORLDCOM: Hires Squire Sanders & Dempsey as Conflict Counsel * Leonard Hyman Affiliates With R.J. Rudden Associates, Inc. * BOND PRICING: For the week of September 9 - 13, 2002 ********* 360NETWORKS: Obtains Nod to Participate in Ledcor Settlement ------------------------------------------------------------ 360networks inc., and its debtor-affiliates sought and obtained the Court's authority to participate in a Settlement between the Debtors' affiliates -- the 360 Group -- and the LIL Limited and its affiliates -- Ledcor. Alan J. Lipkin, Esq., at Willkie Farr & Gallagher, in New York, relates that Ledcor is the controlling shareholder of the Debtors' ultimate Canadian parent. Thus, the Debtors have been particularly vigilant in the negotiation of the settlement with Ledcor. Prior to Petition Date, certain members of Ledcor and members of the 360 Group entered into numerous agreements, including, but not limited to, fiber sale and IRU agreements, asset sale agreements, project management and construction services agreements, and intellectual property rights agreements. Most of the contractual relationships and dealings between the 360 Group and Ledcor involved the Canadian companies but in some instances the Debtors were also parties to, like: (1) two assignment and assumption agreements, dated September 27, 1999 under which Ledcor Industries Limited and Ledcor Industries Inc. assigned to Worldwide Fiber No. 3 Ltd. all of their respective rights and obligations pursuant to certain agreements, including, in the aggregate, the Build Agreement No. 2, Build Agreement No. 3, Build Agreement No. 4 and Build Agreement No. 65 as described in and amended by the May 2, 1998 Amendment Agreement between Ledcor Industries Limited, Ledcor Industries Inc., fONOROLA Telecommunications, Limited Partnership and fONOROLA Fiber Development Inc.; and (2) a non-competition agreement originally entered into between Ledcor Inc. and Starfiber Inc. dated May 31, 1998. Under these contracts, Mr. Lipkin says, the Debtors paid $48,000,000 to certain members of Ledcor, of which $6,500,000 was transferred during the 90 days before the Petition Date. Ledcor has asserted that the Alleged Preference Period Payments are not recoverable by the Debtors because: (a) certain of the payments were made in the ordinary course of business; (b) certain of the payments were pass-through payments from or to other vendors; (c) certain of the payments were payments made on secured liabilities to Ledcor; (d) certain of the payments were followed by new value given by Ledcor; and (e) in certain instances, the payments were made in a contemporaneous exchange for new value. Globally, Mr. Lipkin reports, Ledcor has claimed that the 360 Group and certain of its affiliates owe Ledcor $29,000,000 of which $17,900,000 is alleged to be owned by the Debtors. In Ledcor's proof of claim, Ledcor has asserted $15,900,000 of secured claims and $2,800,000 of unsecured claims against the Debtors and their Canadian affiliates. In the CCAA cases, Ledcor has not filed proofs of claim, as the deadline has not yet expired. To settle the claims, the parties entered into a global settlement dated July 24, 2002 to restructure the 360 Group's contractual and business relationships with Ledcor. Judge Gropper approves these Terms of Settlement: Rights Transfers and Claims Releases A. Setoff and Claims Release: The 360 Group and Ledcor will setoff, net out, and mutually discharge all prepetition and postpetition claims between them except for claims related to ongoing contracts. Among other things, this would result in Ledcor waiving $15,400,000 of claims Ledcor asserts are owed by the 360 Group after a setoff and netting out of the 360 Group's claims against Ledcor; B. Call-Net Settlement: The 360 Group will obtain a release from Call-Net Enterprises Inc., Sprint Canada Inc., Call-Net Technology Services Inc and CNCS Inc. -- Call-Net Group -- in favor of Ledcor related to certain agreements to which certain members of Ledcor and the Call-Net Group are parties. In connection with the 360 Group's delivery of Call-net Release: -- $2,000,000 will be released to the 360 Group from an escrow account to be funded by Ledcor; and -- Ledcor will release the 360 Group from any obligation to provide the Call-Net Group with the IRU related to the West Coast Build Agreement; C. Delivery of IRU Option: Upon the discharge of all liens on the various builds constructed pursuant to the West Coast Build Agreement, the 360 Group will grant to Ledcor an irrevocable option to acquire for CDN$1 an IRU for 12 fiber strands on the various builds constructed pursuant to the West Coast Build Agreement, with Ledcor to be obligated to pay certain maintenance fees related to those strands to the applicable members of the 360 Group; D. Non-competition Agreement: The Non-competition Agreement will be terminated. Going forward, Ledcor will provide the 360 Group with the right to bid on fiber maintenance opportunities on all future route builds as well as the opportunity to participate in any future route builds on certain terms and conditions; E. Liens: Ledcor will obtain from the 360 Group releases of all mechanics' liens, whether filed by Ledcor or its subcontractors, which arose from debts owed by the 360 Group to Ledcor or its sub-contractors. Ledcor also will indemnify the 360 Group for any losses or damages suffered by the 360 Group if Ledcor does not obtain the discharge of these liens; and F. Release from Preference Claims: The Debtors will release Ledcor from all preference claims, which theoretically could result in the Debtors waiving claims for up to $48,000,000, but based on Ledcor's asserted defenses could be as low as zero. Asset Sales and Transfers 1. Assets to be Delivered: Ledcor will transfer to the 360 Group all of Ledcor's telecommunications shelters presently located at a site in each of Lanley and Surry, British Columbia, free and clear of all liens. At the 360 Group's option, Ledcor will transfer to the 360 Group, free and clear of all liens, six fiber strands along the Calgary to Edmonton route at no cost to the 360 Group; 2. Purchase of Toronto and Calgary Carrier Centers: Ledcor will purchase from the applicable members of the 360 Group certain Toronto and Calgary properties for CDN$18,000,000 and remove all of the liens asserted against the properties. Also in connection with any liability arising from environmental contamination of the Calgary property, Ledcor will, among other things: -- indemnify the 360 Group against any damage or liability the 360 Group may suffer in connection with the environmental cleanup of the Calgary property; and -- fund up to CDN$700,000 for remediation and cleanup of the properties adjacent to or neighboring the Calgary property; and 3. Intellectual Property Rights: The 360 Group will transfer to Ledcor all of the 360 Group's interest in certain construction related intellectual property and upon Ledcor's request, certain construction equipment utilizing the intellectual property. Ledcor will transfer to the 360 Group a perpetual, non-exclusive license to use the intellectual property at no cost. Mr. Lipkin tells the Court that the Settlement Agreement is conditioned upon the occurrence of, inter alia, all of these conditions: (1) the parties will have negotiated in good faith and entered into a definitive formal settlement agreement containing the terms set forth in the Term of Settlement; (2) consent to the settlement by the Canadian Monitor; (3) consent to the settlement by the Debtors' prepetition lenders and their release of any liens on assets to be transferred by the 360 Group to Ledcor pursuant to the settlement; (4) approval of the settlement by final order of the Canadian Court in the CCAA Cases; (5) approval of the settlement by final order of this Court; and (6) approval by the Canadian Court of a plan of arrangement in the CCAA cases and the confirmation by this Court of a plan of reorganization Mr. Lipkin convinced the Court that the settlement is fair, equitable and in the best interest of the Debtors' estates because the Debtors' reorganization would be facilitated by resolving the payments and other disputes with Ledcor like, lien claims, mechanics' liens and preference claims. The settlement will also resolve the issues without costly and time-consuming litigation. In pure economic terms, the settlement would: (a) release the 360 Group from at least $29,300,000 of claims, many of which are secured; (b) permit the Debtors to receive $2,000,000 from an escrow account that has been funded by Ledcor; (c) release the Debtors from any obligations to Ledcor that the Debtors provide the Call-Net Group with certain IRUs; (d) discharge mechanics' lines that arose from debts alleged to be owed by the 360 Group to Ledcor or its sub- contractors; (e) provide the 360 Group with all of the Ledcor telecommunications shelters presently located at sites in Langley and Surrey, British Columbia, free and clear of all liens; (f) provide the 360 Group with the right to acquire six fiber strands Ledcor's Calgary to Edmonton route for CDN$1 and free and clear of all liens; (g) provide the 360 Group with a favorable purchase price of CDN$18,000,000 for the Toronto and Calgary Carrier Centers and avoid the need to pay a brokerage commission for a sale to a third party; and (h) resolve all claims between the parties except for claims related to ongoing contracts. (360 Bankruptcy News, Issue No. 31; Bankruptcy Creditors' Service, Inc., 609/392- 0900) ADELPHIA COMMS: Intends to Wind-Down Operations of 14 CLECS ----------------------------------------------------------- Marc Abrams, Esq., at Willkie Farr & Gallagher, in New York, recounts that in two separate transactions that took place in December 2000 and October 2001, the Adelphia Communications Debtors acquired 17 Competitive Local Exchange Carrier markets from ABIZ including markets in: -- Charlottesville, -- Richmond, -- Roanoke, -- Shenandoah Valley, -- Albany, -- Buffalo, -- Cleveland, -- Connecticut, -- New Hampshire, -- Portland, -- Providence, -- Rochester, -- Youngstown, -- Denver, -- Los Angeles, -- Orange County, and -- San Diego. Pursuant to the terms of the Acquisition, ACOM purchased substantially all of the assets associated with the Acquired CLECs and was assigned substantially all of the executory contracts and unexpired leases relating to these markets for $198,300,000. The Acquired CLECs provide business-to-business services including: -- local and long distance telephone service with advanced features including voicemail; -- data transmission services including dedicated services including inter-city private lines and virtual private network services; and -- internet services, including high speed connections and dial- up services, commercial web-hosting services and co-location services (e.g. servers) to commercial business customers. In general, the CLEC industry has performed poorly. In fact, Mr. Abrams points out that many of the top industry comparable companies including ICG Communications, McLeodUSA and XO Communications have filed for Chapter 11 protection. Like its competitors, ACOM's CLEC business is cash flow negative and capital intensive. While certain of the Acquired CLECs including Buffalo have a substantial customer base, others including Rochester, Providence and San Diego, currently have no customers. On a consolidated basis, the 14 CLECs had negative free cash flow of over $81,500,000 for the last 12 months ended March 31, 2002. Based on the recent experience of ABIZ and other CLEC operators, the Debtors do not believe that each of the 14 CLECs can profitably be sold as a going concern. The Debtors estimate that these sales could take between 3 to 6 months. Based on a preliminary analysis of recent sales of distressed CLECs, the Debtors' financial advisors have concluded that the Debtors would be unlikely to receive consideration for the CLECs that exceeds the businesses' "burn rate" during the sale process. Specifically, recent sales suggest that in a going concern sale of the 14 CLECs, the Debtors would be unlikely to fetch more than 0.5 times the revenues of the 14 CLECs or $8,000,000. In contrast, based on the $2,000,000 to $3,000,000 monthly burn rate of the 14 CLECs, the Debtors would lose $6,000,000 to $18,000,000 during the three to six months they would undertake to sell the 14 CLECs. Mr. Abrams informs the Court that ABIZ underwent an operational restructuring, rationalizing the business plan for a more sustainable and profitable enterprise. The restructuring effort included closing early stage and underperforming markets and an ongoing assessment of its corporate cost structure. After trying for several months unsuccessfully to sell certain of their markets as a going concern, ABIZ decided to close 14 of its 50 markets, which were all cash flow negative. The markets scheduled for sale or shutdown are comparable to the 14 CLECs that are the subject of this Motion: -- Austin, -- Baltimore, -- Boston, -- Chicago, -- Cincinnati, -- Dallas, -- Detroit, -- Indianapolis, -- New York, -- Phoenix, -- San Antonio, -- Seattle, -- Tri Cities (TN), and -- Washington D.C. Based on ABIZ's and other operators' experience, the Debtors believe the chances of their selling the majority of the 14 CLECs as a going concern are remote at best. Accordingly, the Debtors intend to commence an orderly liquidation process of the 14 CLECs to avoid unnecessary cash drain and undue delay. By this motion, the Debtors ask the Court to approve the wind- down of its 14 CLECs. The 14 CLECs are not only unprofitable but result in a $2,000,000 to $3,000,000 cash flow loss each month. The Debtors propose to immediately notify their customers and local, state and federal agencies that they intend to discontinue service and wind-down the operations associated with the 14 CLECs. The Debtors estimate that the cost of winding down the 14 CLECs could exceed $11,000,000 and include costs of: -- $9,000,000 to operate the 14 CLECs during the 90 days the Debtors anticipate the wind-down process may take; -- $1,000 to $20,000 per LSO that is uninstalled; -- $75,000 to $125,000 per city where a central office will be uninstalled; -- up to $250,000 in costs under the Severance Plan; -- up to $500 per circuit that must be disconnected for Type 2 lines; and -- any fees payable to ABIZ in connection with their assistance in winding down the 14 CLECs. In addition, once the Debtors notify customers that service will be discontinued, the Debtors anticipate that collections will be negatively impacted. Inasmuch as the costs associated with winding-down the 14 CLECs are unavoidable and necessary to curb continued operating losses, the Debtors believe that using assets of the estates to shut down the 14 CLECs are warranted, appropriate and a sound exercise of their business judgment. (Adelphia Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., 609/392-0900) DebtTraders reports that Adelphia Communications' 10.500% bonds due 2004 (ADEL04USR1) are trading between 44 and 46. See http://www.debttraders.com/price.cfm?dt_sec_ticker=ADEL04USR1 for more real-time bond pricing. ADMIRAL CBO: S&P Hatchets Ratings on Four Classes of Notes ---------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on the class A-2, B-1, B-2, and C notes issued by Admiral CBO (Cayman) Ltd., an arbitrage CBO transaction originated in August of 1999, and removed them from CreditWatch with negative implications, where they were placed on Aug. 19, 2002. In addition, the rating on the class A-1 notes is affirmed. The ratings assigned to the class B-1 and B-2 notes were previously lowered in April 2002, while the rating assigned to the class C notes was previously lowered in August 2001 and again in April 2002. The lowered ratings reflect factors that have negatively affected the credit enhancement available to support the notes since the previous rating action in April 2002. These factors include continuing par erosion of the collateral pool securing the rated notes and a negative migration in the overall credit quality of the assets within the collateral pool. As a result of asset defaults, the overcollateralization ratios have deteriorated since the April 2002 rating action. According to the Aug. 1, 2002 monthly report, the class A notes overcollateralization ratio was at 115.66%, versus the minimum required ratio of 127% (compared to a ratio of 122.01% at the April 2002 rating action); the class B overcollateralization ratio was at 97.32%, versus its required minimum ratio of 112.0% (compared to a ratio of 102.66% at the April 2002 rating action); and the class C overcollateralization ratio was at 91.37%, versus its required minimum ratio of 100.0% (compared to a ratio of 96.39% at the April 2002 rating action). In addition, the credit quality of the collateral pool has deteriorated since the April 2002 rating action. Including defaulted assets, 24.17% of the assets in the portfolio currently come from obligors rated triple-'C'-plus or below, and 13.48% of the performing assets come from obligors with ratings on CreditWatch negative. Standard & Poor's has reviewed the results of the current cash flow runs generated for Admiral CBO Ltd., to determine the level of future defaults the rated tranches can withstand under various stressed default timing and interest rate scenarios, while still paying all of the rated interest and principal due on the notes. After the results of these cash flow runs were compared with the projected default performance of the performing assets in the collateral pool, it was determined that the ratings currently assigned to the class A-2, B-1, B-2, and C notes were no longer consistent with the amount of credit enhancement available, resulting in the lowered ratings. Standard & Poor's will continue to monitor the performance of the transaction to ensure that the ratings reflect the amount of credit enhancement available. Ratings Lowered And Removed From Creditwatch Negative Admiral CBO (Cayman) Ltd. Rating Class To From Balance (Mil. $) A-2 BBB+ AA/Watch Neg 47.5 B-1 CCC- B-/Watch Neg 14.0 B-2 CCC- B-/Watch Neg 25.0 C CC CCC-/Watch Neg 16.0 Rating Affirmed Admiral CBO (Cayman) Ltd. Class Rating Balance (Mil. $) A-1 AAA 153.407 AIMGLOBAL: Giga-Tron Wants Receiving Order against Aimtronics ------------------------------------------------------------- AimGlobal Technologies Company, Inc., (TSE/Amex: AGT) announced that Giga-Tron Associates Limited has filed a Petition for Receiving Order in the Ontario Superior Court against its subsidiary, Aimtronics Corporation. Giga-Tron is a trade creditor of Aimtronics that has not joined in the recently announced creditor compromise agreement. Giga-Tron's claim seeks C$413,330 from Aimtronics. As previously reported, AGT has reached agreements with creditors representing over C$11 million in liabilities to compromise their claims against the company and its subsidiaries. AGT reports that it is nearing completion of the initial cash distribution to those creditors that have submitted the required documentation. AGT management expects to begin distribution to creditors of promissory notes under the compromise agreement within the next week and complete that phase of the creditor compromise within the next few weeks. AGT reported that it, its Aimtronics subsidiary and Valtec Capital Corporation, the holder of AGT's senior secured indebtedness, intend to fully dispute the Giga-Tron action. Aimtronics has filed a Notice of Dispute with the Ontario Superior Court and intends to vigorously oppose the Petition. AGT believes Giga-Tron's action is an attempt to extract a higher amount than the other creditors have agreed to accept which would have the effect of unreasonably circumventing Valtec's priority rights as a senior secured creditor and prejudice the position of the Company's other creditors and stakeholders. The chairman of AGT's board of directors, Warren H. Feder, said, "Given the significant progress that the company has made in implementing its restructuring and with the support of Valtec, we believe that the Giga-Tron Petition can be rebutted." AimGlobal Technologies Company, Inc., a company incorporated under the laws of British Columbia, operates in the electronics manufacturing services business providing contract manufacturing for original equipment manufacturers in the medical, aerospace, wireless, communications, industrial, military and emergency response markets in Canada and the United States. The Company offers a full range of services including product development and design, material procurement and management, prototyping, manufacturing and assembly, functional and in-circuit testing, final system box build and distribution. AJAX MAGNATHERMIC: Rosen & Co. to Auction-Off Assets Tomorrow ------------------------------------------------------------- SECURED PARTY SALE Rosen & Company, Inc., (Cleveland, Ohio) has been authorized by the Secured Party to sell at PUBLIC AUCTION SALE, the right, title and interest, if any, in and to the tangible and intangible personal property assets of the following two corporations: * AJAX MAGNETHERMIC CORPORATION, a Delaware corporation, Warren, Ohio (including its divisions INDUSTRIAL ELECTRIC HEATING, Warren, Ohio; MULTIPLE INDUCTION SERVICES, Warren, Ohio; CONTROL TRANSFORMER, Cortland, Ohio; PARK PRECISION, Madison, Michigan; AJAX INDUCTION SERVICE, Alabaster, Alabama & AJAX INDUCTION SERVICES, LONGVIEW, Texas) and * AMERICAN INDUCTION HEATING CORPORATION, a Michigan Corporation, Warren, Ohio. SALE DATE: September 10, 2002 10 a.m. (Ohio Time) LOCATION: AJAX MAGNETHERMIC CORPORATION 1745 OVERLAND RD., WARREN, OHIO OFFERED: BULK BID ONLY Assets to be Auctioned: All of the above two corporations' right, title and interest, if any, in and to the following assets that are encumbered by the security interests of the SECURED PARTY: All machinery and other equipment (other than titled motor vehicles); inventories; accounts receivables and related rights and interests; instruments; certificates and other documents; chattel paper; patents; trademarks; copyrights and other intellectual property; contract rights; investment property; general intangibles. The auctioned assets will include all of their right, title and interest, if any, in and to JAPAN AJAX MAGNETHERMIC CO. LTD., a joint venture, AJAX MAGNETHERMIC CANADA LIMITED, an Ontario, Canada corporation and AJAX MAGNETHERMIC EUROPE LIMITED, a limited liability company of England and Wales; and information relating to those entities is available from Rosen & Company, Inc., 30405 Solon Road, Unit 6, Solon, Ohio 44139. ASSETS AUCTIONED SHALL BE SOLD AND REMAIN SUBJECT TO SECURITY INTERESTS, IF ANY, SENIOR IN PRIORITY TO THOSE OF THE SECURED PARTY. TERMS: CERTIFIED CHECK TO ROSEN & COMPANY INC., TRUST ACCOUNT IN THE AMOUNT OF 25% of the bid, balance in full upon Acceptance of the Secured Party. Visit the company's Web site at http://www.rosenandcompany.com or for a free brochure and additional information contact: Stanley Rosen or Ken Miller, Auctioneers with Rosen & Company, Inc. AMES DEPARTMENT: Wants to Terminate 5 Closing Store Leases ---------------------------------------------------------- Ames Department Stores, Inc., and its debtor-subsidiaries seek the U.S. Bankruptcy Court for the Southern District of New York's authority to reject five unexpired nonresidential real property leases effective as of August 23, 2002. Having closed the locations and vacated the premises, Deryck A. Palmer, Esq., at Weil, Gotshal & Manges LLP, in New York, explains that the Leases no longer offer any value to the Debtors. Each day a Lease remains in effect, the Debtors are required to perform all postpetition obligations, resulting in an unnecessary depletion of the Debtors' estates. The unexpired Leases represent retail locations where the Debtors have ceased operations: Store No. Location Landlord --------- -------- -------- 65 Syracuse, NY Shop City Real Estate LLC 239 Essex, MD County Ridge Shopping Center 747 East Neptune, NJ Coolidge-Neptune Equities, LLC 773 North Brunswick, NJ Federal Realty Investment Trust 1158 Cambridge, OH Glimcher Realty Trust The Debtors have reviewed and analyzed the Leases to determine their respective economic values in the perspective of their operations. Based on the results, the Debtors have determined that there is no further benefit in retaining the Leases. According to Mr. Palmer, the Debtors have been unsuccessful in securing subtenants or assignees willing and able to satisfy the full value of the Lease obligations. It is, therefore, unlikely that the sale of the Leases would generate value for the benefit of the Debtors' estates. By eliminating the ongoing administrative payment obligations, Mr. Palmer contends that the immediate rejection of the Leases will contribute to the Debtors' prospects for providing recovery to all creditors. "There is simply no business justification for the Debtors to continue performing their obligations under the Leases in light of the fact that the Debtors have vacated the locations governed by the Leases," Mr. Palmer says. The Debtors also will abandon certain properties remaining in the leased premises. The Debtors have determined that that abandonment is warranted since the value of those properties is inconsequential. According to Mr. Palmer, the removal and storage of the Property will only burden the Debtors. Although the abandonment of the Property to the affected Lessors may give rise to a general unsecured claim under the respective Leases, the potential value of any distributions made on account of those Claims will be far less than the cost to remove, transport, and store those properties. (AMES Bankruptcy News, Issue No. 24; Bankruptcy Creditors' Service, Inc., 609/392-0900) ANC RENTAL: Seeks OK to Continue Use of Lenders' Cash Collateral ---------------------------------------------------------------- ANC Rental Corporation and its debtor-affiliates seek approval from the U.S. Bankruptcy Court for the District of Delaware to continue using the Cash Collateral until December 15, 2002 or any other time that the Court deems appropriate. The Debtors need to dip into their lenders' cash collateral to pay expenses critical to the operation of their business and to continue their reorganization efforts. According to Mark J. Packel, Esq., at Blank Rome Comisky & McCauley LLP, in Wilmington, Delaware, the Debtors have been engaged in discussions with their Secured Creditors and the Creditors Committee and will work to obtain these parties' consent on the requested extension. The Debtors propose to use the cash collateral on the same terms and conditions as set forth in the current Cash Collateral Order including, without limitation, with respect to the grant of replacement liens and adequate protection. Should the Court disapprove the continued use of the Cash Collateral, Mr. Packel fears that the Debtors' reorganization efforts would be seriously undermined. It would spell disaster to the Debtors' creditors, equity holders and employees. The Debtors fund their working capital needs through cash generated from their business operations. Except for certain contingent letters of credit, the Debtors do not rely on any credit facility to meet their regular working capital needs. The Cash Collateral will be used to: -- fund the payment of all operating expenses of the Debtors, including postpetition costs relating to, among others, the maintenance of the various vehicles used by the Debtors and the payment of rent, taxes, utilities, salaries and wages, employee benefits and necessary capital expenditures; -- pay certain obligations set forth in the various motions filed with this Court during the pendency of these Chapter 11 cases; -- finance and purchase the automobiles that are rented by the Debtors; -- provide, in the ordinary course of business, liquidity to certain of the Debtors' non-debtor foreign subsidiaries on an "as-needed" basis to cover working capital shortfalls at certain times of the year; and -- fund other administrative expenses incurred by the Debtors during the pendency of their Chapter 11 cases, including, without limitation: (a) professional fees and expenses allowed by the Court, (b) reimbursement of allowed expenses incurred by the members of any official committee appointed by the Office of the United States Trustee in the Debtors' cases, (c) fees payable under Section 1930 of the Judiciary Procedures Code and related costs, and (d) other charges incurred in administering the Debtors' Chapter 11 cases. Mr. Packel points out that the Debtors' use of Cash Collateral has been instrumental to the implementation of the Debtors' business plan that will result in the Debtors' streamlining of their businesses and successful emergence from Chapter 11 as a viable company, to the benefit of the Debtors, their estates and their creditors. (ANC Rental Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service, Inc., 609/392-0900) APPLE CAPITOL: Court Moves Final Sale Hearing Date to October 8 --------------------------------------------------------------- Applebee's International, Inc., (Nasdaq:APPB) announced that on September 4, 2002, the United States Bankruptcy Court for the Southern District of Florida, which is handling the Apple Capitol Group, LLC voluntary Chapter 11 proceeding, extended the date for the final sale approval hearing from September 13th to October 8th. Applebee's International has previously announced the potential acquisition of these 21 franchise restaurants located in the Washington, D.C. area from Apple Capitol, an existing franchisee. The company continues to expect to close under its negotiated purchase agreement to acquire the 21 restaurants in the fourth quarter of 2002, subject to normal bankruptcy court bidding procedures, obtaining operating licenses and other third-party consents. Applebee's International, Inc., headquartered in Overland Park, Kan., develops, franchises and operates restaurants under the Applebee's Neighborhood Grill and Bar brand, the largest casual dining concept in the world. There are currently 1,450 Applebee's restaurants operating system-wide in 49 states and seven international countries. Additional information on Applebee's International can be found at the company's Web site http://www.applebees.com BRITISH ENERGY: Wooing UK Government's Aid for Restructuring ------------------------------------------------------------ British Energy announces that it has initiated discussions with the UK Government with a view to seeking immediate financial support and to enable a longer term restructuring to take place. The Government has informed BE that it is willing to enter into such discussions in which considerations of safety and security of supply will be paramount. The Board has reasonable grounds for believing that these discussions will be successful but there can be no certainty that this will preserve value for investors. The Board anticipates that if these discussions are not successful, the company may be unable to meet its financial obligations as they fall due and therefore the company may have to take appropriate insolvency proceedings. These discussions follow commercial negotiations with BNFL. BNFL yesterday delivered its formal proposals to BE and the terms offered by BNFL fell short of those which BE requires. The Board is progressing the discussions for immediate financial support. However, the discussions over a longer term restructuring will be complex and are unlikely to be concluded in the near future. Any support from the Government will need to take into account both UK and EU regulations. BE continues to operate its power stations in the UK and in North America to supply electricity and comply with all safety and other regulatory requirements. Robin Jeffrey, Executive Chairman commented "Over the past several months we have worked hard to negotiate improved arrangements for waste management services and to lobby Government for a level playing field. It is now clear that there will be no prompt resolution to these issues. Having reviewed the longer term prospects for the business, the Board has concluded that we had no alternative other than to seek Government support. I will be working with my colleagues to secure the best outcome for everyone involved." In addition, BE confirms that it is in the preliminary stages of exploring the possibility of a sale of its interest in Amergen Energy Company LLC. BEA CBO 1998-2: S&P Junks Rating on Class A-3 Notes at CCC- ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on the class A-3 notes issued by BEA CBO 1998-2 Ltd. and co-issued by BEA CBO 1998-2 (Delaware) Corp., to triple-'C'-minus from single-'B'-plus and removed it from CreditWatch with negative implications, where it was placed on May 2, 2002. In addition, the triple-'A' ratings on the class A-1L, A-1, and A-2 notes are affirmed based on a financial guarantee insurance policy issued by Financial Security Assurance Inc. The lowered rating on the class A-3 notes reflects factors that have negatively affected the credit enhancement available to support the notes since the ratings were last lowered in December 2001. These factors include continuing par erosion of the collateral pool securing the rated notes and a negative migration in the credit quality of the performing assets within the pool. According to the August 2, 2002 trustee report, the class A overcollateralization ratio is 98.05% versus the required minimum of 115%, and versus a ratio of 105.95% at the time of the December rating action. The ratio has been out of compliance since December 2000. The current performing pool has an aggregate par value of $191.5 million, compared to the effective date required portfolio collateral amount of $300 million. In contrast, only $34.02 million of the principal amount of the liability has been paid down due to the special redemption since the transaction's inception. Moreover, a total of $59.55 million, or approximately 23.71% of the total collateral pool, is in default. In addition, the credit quality of the collateral pool has deteriorated since the previous rating action. The transaction is currently failing three out of four categories in Standard & Poor's issuer rating distribution test. According to the Aug. 2, 2002 trustee report, 30.58% of the assets in the collateral pool come from obligors rated single-'B'-plus and higher (versus the minimum required 35%), 43.23% of the assets in the collateral pool come from obligors rated single-'B' and higher (versus the minimum required 75%), and 56.44% of the assets in the collateral pool come from obligors rated single-'B'-minus and higher (versus the minimum required 95%). Furthermore, approximately 5.25% of the obligors in the performing collateral pool currently have ratings on CreditWatch with negative implications. As a part of its analysis, Standard & Poor's reviewed the results of recent cash flow model runs. These runs stressed various parameters that are instrumental in the performance of this transaction, and are used to determine its ability to withstand various levels of default. When the stressed performance of the transaction was then compared to the projected default performance of the current collateral pool, Standard & Poor's found that the projected performance of the class A-3 notes, given the current quality of the collateral pool, was not consistent with its prior rating. Consequently, Standard & Poor's has lowered its rating on these notes to the new level. Standard & Poor's will continue to monitor its ratings on the class A-1L, A-1, A-2, and A-3 notes. RATING LOWERED AND REMOVED FROM CREDITWATCH NEGATIVE BEA CBO 1998-2 Ltd./BEA CBO 1998-2 Corp. Rating Class To From Current Balance(Mil. $) A-3 CCC- B+/Watch Neg 20 RATINGS AFFIRMED BEA CBO 1998-2 Ltd./BEA CBO 1998-2 Corp. Class Rating Current Balance (Mil. $) A-1L AAA 20.97 A-1 AAA 71 A-2 AAA 100 BETHLEHEM STEEL: Nat'l Union Seeks Stay Relief to Pursue Action --------------------------------------------------------------- On February 20, 2001, a fire occurred at a steel warehouse in Davenport, Iowa. The steel warehouse was owned and operated by Alternative Distribution Systems Inc. and its wholly owned subsidiary. The warehouse is covered by a $1,000,000 property insurance policy through The National Union Fire Insurance Company of Pittsburgh, Pennsylvania. At the time of the fire, the warehouse stored property belonging to several major steel companies, including Bethlehem Steel Corporation. In order to determine National Union's liability on the policy, Alan Effron, Esq., at Pelosi Wolf Effron & Spates LLP, in New York, relates that Alternative Distribution Systems and National Union filed separate declaratory judgment actions before the Chancery Division of the Circuit Court of Cook County in Illinois. The Court Actions were later consolidated. Pursuant to the Consolidated Action, the Illinois Court ruled that the National Union policy covered the property losses of Alternative Distribution Systems as well as the property losses of Bethlehem Steel and other companies. Against this backdrop, National Union asks the Court to lift the automatic stay to permit the Consolidated Action to proceed in Illinois State Court. National Union wants the Illinois Court to identify the specific customers that are entitled to recover under the National Union policy, and how the $1,000,000 policy limit should be divided. Mr. Effron contends that it is advantageous for Bethlehem Steel to allow the action to proceed, so that it may be considered among the parties entitled to coverage under the policy. Moreover, the sooner this determination is made by the Illinois Court, the sooner payment can be made to Bethlehem and the other insured parties. To date, Mr. Effron reports, Bethlehem Steel's interests in this matter have been adequately represented by Alternative Distribution Systems, and there is no reason to believe that this would not continue. If, on the other hand, the automatic stay is not modified, Mr. Effron says, Bethlehem Steel and the other insured parties will likely suffer significant delays in receiving compensation for their property losses. Besides that, National Union may ultimately find itself subject to multiple and inconsistent judgments as to its liability on the policy. (Bethlehem Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service, Inc., 609/392-0900) BUDGET GROUP: Taps Weber as Corporate Communications Consultant --------------------------------------------------------------- Budget Group Inc., and its debtor-affiliates seek the Court's authority to employ and retain Weber Shandwick Worldwide as their corporate communications consultant pursuant to Section 327(a) of the Bankruptcy Code. According to Robert L. Aprati, the Debtors' Executive Vice President, General Counsel and Secretary, Weber Shandwick is particularly well suited to serve as the Debtors' corporate communications consultant in these Chapter 11 cases. Formed in 2001 through the merger of BSMG Worldwide and Weber Shandwick Worldwide, Weber Shandwick specializes in addressing crisis and corporate communications. Weber Shandwick's professionals have extensive experience in providing corporate communications consulting services in reorganization and restructuring proceedings. Weber Shandwick enjoys an excellent reputation for the services it has rendered on behalf of debtors, creditors and equity holders in large and complex Chapter 11 cases, including, Chiquita Brands International, Doskocil Manufacturing, Pillowtex Corporation, and Winstar Communications. Mr. Aprati relates that Weber Shandwick has provided prepetition services to the Debtors in preparation for their Chapter 11 bankruptcy filings, including development of a comprehensive communications strategy that was implemented on the Petition Date, by which the Debtors made public announcements of the commencement of these Chapter 11 cases and other communications to all relevant audiences. Moreover, since entering into an agreement with the Debtors in January 2002, Weber Shandwick has performed communications relating to the Debtors' initial announcement to undertake a financial recapitalization initiative in April 2002, provided continued support to the Debtors' ongoing worldwide business operations and has prepared constituent communications materials relating to the Debtors' reorganization under Chapter 11. Through these prepetition activities, Weber Shandwick's professionals have worked closely with the Debtors' management, internal communications and other professionals and have become well acquainted with the Debtors' corporate communications needs. Accordingly, Weber Shandwick has developed significant experience and expertise that will assist it in providing effective and efficient services in these Chapter 11 cases. Mr. Aprati contends that Weber Shandwick's services are necessary to enable the Debtors to successfully effectuate a Chapter 11 process and maximize the value of their estates for the Debtors' creditors and other parties-in-interest. Many persons and entities, including employees, unions, vendors, suppliers, trade and other creditors, counter-parties to executory contracts and leases, lenders, public debt holders, equity holders, financial markets, potential investors, governmental entities, the media and the general public will be interested in the Debtors' bankruptcy. The cooperative participation of many of these persons and entities will be necessary for the Debtors to successfully operate in Chapter 11 and manage their bankruptcy estates. Mr. Aprati explains that Weber Shandwick will be able to assist the Debtors in protecting, retaining and developing the goodwill and confidence of these constituencies. In particular, the Debtors anticipate that Weber Shandwick will provide the corporate communications support required by the Debtors in connection with these Chapter 11 cases, including, without limitation: -- providing communications services; -- providing ongoing strategic counsel to the Debtors; -- providing the continued development of a communications plan in connection with these Chapter 11 cases; -- preparing employee, customer, supplier and collateral materials; -- assisting in the production of management presentation materials; -- conducting management training; and -- providing logistics and media coverage in North America and Europe. The Debtors believe that by having a corporate communications consultant provide these services in these bankruptcy cases, other professionals in these cases and the officers who might otherwise handle corporate communications matters will be able to focus better on their work to facilitate a successful Chapter 11 process. Weber Shandwick Executive Vice President Peter Duda assures the Court that the firm's principals and professionals: (a) do not have any adverse connection with the Debtors, their creditors, or any other party-in-interest or their respective attorneys and accountants or the United States Trustee; (b) do not hold or represent an interest adverse to the Debtors' estates; and (c) are "disinterested persons" as that term is defined in Section 101(14) of the Bankruptcy Code. However, Weber Shandwick currently has or in the past has had client relationship with these companies: Credit Suisse First Boston, Bank of America, N.A., Chase Manhattan Bank, Computer Science Corporation, Liberty Mutual, Wells Fargo Bank National Association, Ernst & Young, King & Spalding, Perot Systems Ciro, Sabre Travek Information Network, Galileo International, Inc. and ICPMG. In each of these cases, Weber Shandwick provides its clients with marketing communications and is not engaged in any restructuring projects. Weber Shandwick intends to charge for its professional services on an hourly basis in accordance with its ordinary and customary hourly rates in effect on the date services are rendered. Weber Shandwick's hourly billing rates currently range from: Chairman/CEO $400 Vice Chairman/Partner 375 President 350 Principal 325 Senior Managing Director/EVP 300 Managing Director/SVP 275 Director/VP 225 Group Managers 175 Account Supervisors 150 Senior Associates 135 Associates 115 Junior Associates 90 Account Coordinators 75 Interns 50 Mr. Duda informs the Court that Weber Shandwick has received a $25,000 retainer in connection with preparing for the filing of these Chapter 11 cases and for its proposed postpetition representation of the Debtors. According to Mr. Duda, all prepetition fees and expenses of Weber Shandwick have been paid. In addition to the Retainer, within one year prior to the Petition Date, Weber Shandwick has received $228,825.50 on account of services rendered in contemplation of, or in connection with, these bankruptcy cases. (Budget Group Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., 609/392-0900) DebtTraders reports that Budget Group Inc.'s 9.125% bonds due 2006 (BD06USR1) are trading between 18.5 and 20.5 . See http://www.debttraders.com/price.cfm?dt_sec_ticker=BD06USR1for more real-time bond pricing. CAMPBELL SOUP: 4th Quarter 2002 Net Sales Slide-Up 5% to $1.2BB --------------------------------------------------------------- Campbell Soup Company (NYSE:CPB) reported diluted earnings per share for the fourth quarter ended July 28, 2002 of $.13, even with last year. Before the costs of the previously announced Australian manufacturing reconfiguration, diluted earnings per share were $.14, versus $.15 a year ago. Last year's fourth quarter results included approximately $.03 dilutive impact from the acquisition of several European dry soup and sauce businesses. For the quarter, net sales increased 5 percent to $1,223 million. The following factors drove the increase: base volume and mix was up 4 percent, price added 1 percent, promotions reduced sales 2 percent, currency added 2 percent. For the quarter, wet soup shipments compared to a year ago were up 3 percent in the U.S. and 1 percent outside the U.S., resulting in a 2 percent increase worldwide. As reported, net earnings were $55 million, an increase of 6 percent versus $52 million a year earlier. Excluding the impact of the Australian reconfiguration, net earnings for the quarter were $59 million versus $62 million a year ago. The net earnings decline resulted from planned increases in marketing and infrastructure investments across major businesses. Total marketing investment for the quarter was up 17 percent before the impact of currency. For fiscal 2002, the company reported diluted earnings per share of $1.28. Net earnings were $525 million. Excluding costs associated with the Australian manufacturing reconfiguration, diluted earnings per share were $1.31, compared to $1.58 for the prior year. The earnings decrease was directly related to planned increases in marketing and infrastructure investment in support of the company's multi-year Transformation Plan. Net sales for the year increased 6 percent to $6,133 million. The following factors drove the increase: -- The European acquisition contributed 4 percentage points to this growth. -- Volume and mix was up 2 percent -- Price added 1 percent -- Promotions reduced sales 1 percent -- Currency had no impact Worldwide wet soup shipments increased 1 percent, with soup outside the U.S. up 2 percent and U.S. wet soup shipments up 1 percent. For the year, ready-to-serve soup shipments rose 9 percent, while condensed soup shipments declined 5 percent. In line with previously announced plans, total marketing spending was up 15 percent before the impact of currency and the European acquisition, and up 20 percent including the European acquisition. In addition, the company reported another year of strong free cash flow of $748 million. Douglas R. Conant, Campbell's President and Chief Executive Officer, said, "We have made substantial progress in the first year of our Transformation Plan. We significantly increased our investment in marketing and infrastructure to put Campbell back on track. These marketing investments produced solid growth in many of our businesses, including ready-to-serve soups, 'V8' vegetable juices, 'Prego' pasta sauces, 'Pace' Mexican sauces, 'Arnott's' biscuits and 'Pepperidge Farm' cookies and breads. We recognize that the increased marketing efforts against our condensed soup business had limited impact. However, it's important to note that we are only now realizing the first of many planned technology-driven product and package improvements in condensed soup. Overall, we significantly advanced our quality improvement agenda and we delivered strong productivity gains. In sum, we promised that we would take significant steps to build a platform to support profitable growth - and we have." Conant continued, "As we enter the second year of our Transformation Plan, our business is poised for growth, but not yet at the levels to which we aspire. While we expect solid sales growth in fiscal 2003, we will continue to invest for the long term in brand-building, innovation, quality and infrastructure." For fiscal year 2003, the company expects earnings per share to be approximately $1.35, excluding the impact of adopting new accounting rules related to goodwill and other intangible assets. Under these rules, amortization of these assets will cease. The company is continuing to evaluate the impact of the new accounting rules and expects that the adoption will result in an increase in earnings per share of approximately $.12 to $.13 annually. For the first quarter, given the unusual events of the first quarter last year, notably the impact of September 11, the company expects earnings to be flat compared with last year, excluding the impact of new accounting rules related to goodwill and other intangible assets. A summary of fiscal 2002 results by segment follows: North America Soup and Away From Home Sales of $2,524 million were flat compared with a year ago. Operating earnings of $624 million were down 19 percent, reflecting increased marketing and infrastructure investments. For the year, as previously noted, U.S. soup shipments were up 1 percent. Further details include: -- Ready-to-serve soup shipments increased 9 percent behind continued excellent performance by Campbell's "Chunky" and "Select" soups. New varieties, quality improvements and strong advertising drove the performance of these brands. -- "Swanson" broth shipments were up 4 percent as the new Pop N' Pour lids, new package sizes and product improvements proved to be a hit with consumers. -- Condensed soups declined 5 percent for the year. In the fourth quarter, the company began shipping ten improved condensed vegetable varieties as well as two new "Goldfish" soups. -- New "Soup At Hand" is now on shelf. This ready-to-serve soup, designed for out-of-home consumption, will receive significant marketing support in fiscal 2003. -- Away From Home sales were up slightly versus a year ago, led by strong soup sales in chain accounts and traditional foodservice outlets, which offset a decline in lower margin bakery and frozen entree sales. -- Canadian sales were ahead of a year ago led by soup shipments, in response to increased marketing investment in core businesses. The Canadian business had a strong year on the top line driven by all businesses in its portfolio. North America Sauces and Beverages Sales were up 2 percent to $1,182 million, behind strong sales of "Prego" Pasta Bake sauces, "Pace" Mexican sauces and "V8" vegetable juices, partially offset by a sales decline in "V8 Splash" juice drinks. Operating profits declined 20 percent to $236 million. The earnings decline was primarily the result of planned marketing increases behind the "Prego" franchise, "Pace" Mexican sauces and "V8" vegetable juices. -- "Prego" Pasta Bake sauces delivered growth in the "Prego" franchise. -- "Pace" Mexican sauces shipments increased behind focused marketing in the brand's core Southwest market. -- "V8" vegetable juice shipments were up, responding positively to increased advertising and more effective marketing. Biscuits and Confectionery Sales increased 4 percent to $1,507 million; before the impact of currency, sales grew 5 percent. Sales were up in all three businesses - Arnotts in Australia, Pepperidge Farm and Godiva Chocolatier. Excluding the impact of the Australian reconfiguration, earnings declined 8 percent to $195 million. These results were driven by planned marketing and infrastructure investments. -- Pepperidge Farm delivered strong sales performance across its biscuit, bakery and frozen segments. In biscuits, the introduction of "Goldfish" Sandwich Crackers, as well as strong sales of "Milano" cookies and "Goldfish" crackers, were the primary drivers of growth. Bakery sales increased primarily due to new varieties and increased distribution of "Farmhouse" bread and rolls. New varieties of Pepperidge Farm "Texas Toast" frozen bread delivered strong sales results in the frozen category. -- At Arnotts, sales were up on the strength of snack foods and biscuits. Value-added products in the snack foods category, such as "Rix" Rice Chips and "Kettle" Chips helped drive results. "Tim Tam" biscuit sales were also up significantly in both Australia and Indonesia. -- Godiva Chocolatier's worldwide sales were up slightly, as additional sales from new stores were offset by lower same store sales in a weak North American retail environment. International Soup and Sauces International Soup and Sauces sales increased 46 percent to $920 million compared to $632 million a year ago. Operating earnings increased to $92 million compared to $51 million a year ago. These results were driven by the European acquisition, which was completed May 4, 2001. Sales on the base business were down 1 percent and operating earnings declined significantly. These results were due to sales softness in the United Kingdom business and increases in marketing and infrastructure investments to support long-term growth. The recently acquired European dry soup and sauces business continues to meet sales and earnings expectations. -- Weakness in the UK in both soup and sauces offset gains in soup sales in Belgium and France. -- In Australia, Campbell's wet soup share continued to rise, as new product launches under the "Country Ladle," "Chunky" and "Velish" brands proved successful. Campbell's "Real Stock" broth sales were also up significantly. Accounting Change In the first quarter, the company adopted new accounting standards related to the recognition, measurement and income statement classification of certain consumer and trade promotional expenses, such as coupon redemption costs, cooperative advertising programs and in-store display incentives. As a result, the following reclassifications were made to the fourth quarter and fiscal 2001 financial statements: net sales were reduced by $166 million and $893 million, respectively; cost of products sold was reduced by $4 million and $14 million, respectively; and selling, general and administrative expenses were reduced by $162 million and $879 million, respectively. Campbell Soup Company is a global manufacturer and marketer of high quality soup, sauces, beverage, biscuits, confectionery and prepared food products. The company owns a portfolio of more than 20 market-leading businesses each with more than $100 million in sales. They include "Campbell's" soups worldwide, "Erasco" soups in Germany and "Liebig" soups in France, "Pepperidge Farm" cookies and crackers, "V8" vegetable juices, "V8 Splash" juice beverages, "Pace" Mexican sauces, "Prego" pasta sauces, "Franco-American" canned pastas and gravies, "Swanson" broths, "Homepride" sauces in the United Kingdom, "Arnott's" biscuits in Australia and "Godiva" chocolates around the world. The company also owns dry soup and sauce businesses in Europe under the "Batchelors," "Oxo," "Lesieur," "Royco," "Liebig," "Heisse Tasse," "Bla Band" and "McDonnells" brands. The company is ably supported by 24,000 employees worldwide. For more information on the company, visit Campbell's Web site on the Internet at http://www.campbellsoup.com * * * Campbell Soup's April 28, 2002 balance sheet shows a working capital deficit of about $1.3 billion. Campbell Soup is very highly leveraged -- with a debt-to-equity ratio topping 70:1. The Company owes $5.7 billion to creditors and reports $80 million of shareholder equity on its April 28, 2002 balance sheet. Campbell Soup has $900 million of bond debt coming due this year and next. The notes evidencing those obligations trade slightly above par. Campbell Soup common stock trades north of $20 per share. COLD METAL: U.S. Trustee Appoints Unsecured Creditors Committee --------------------------------------------------------------- Saul Eisen, the United States Trustee for Region 9 appoints nine unsecured creditors to serve on the Official Committee of Unsecured Creditors in the chapter 11 cases involving Cold Metal Products, Inc., and its debtor-affiliates: Rouge Steel Company c/o Dawn Hlavaty 3001 Miller Road, Room 2328 Dearborn, MI 48121 Tel: 313 317-0367 Fax: 313 390-4538 Ebner Furnaces, Inc. c/o Ralph G. Myers 224 Quadral Drive Wardsworth, OH 44281 Tel: 330 335-1730 Fax: 330 335-1605 WCI Steel, Inc. c/o Kathy Longo 1040 Pine Avenue SE Warren, OH 44483 Tel: 330 841-8306 Fax: 330 841-8393 ISPAT Inland Administrative Service c/o Frank L. Berzinis 30 W. Monroe Street Chicago, IL 60603-3177 Tel: 312 899-3432 Fax: 312 899-3177 National Steel Corporation c/o Jack Darby 4100 Edison Lakes Parkway Mishawaka, IN 46545 Tel: 574 273-7421 Fax: 574 273-7494 Balli Klockner, Inc. c/o Charles G. Makarov 2800 West Jefferson Gibraltar, MI 48173 Tel: 734 368-6104 Fax: 734 676-9342 Thyssen, Inc. c/o Gene Dixon 400 Renaissance Center Suite 1700 Detroit, MI 48243 Tel: 313 567-5665 Fax: 313 567-5222 United Steelworkers of America c/o David R. Jury Five Gateway Center, Room 807 Pittsburgh, PA 15222 Tel: 412 562-2546 Fax: 412 562-2429 Dofasco USA, Inc. c/o Michael Kelly Department 119701 PO Box 67000 Detroit, MI 48267-1197 Tel: 905 548-7200 x 2329 Fax: 905 548-4265 Cold Metal Products, Inc., is an intermediate steel processor of strip and sheet steel for precision parts manufacturers in the automotive, construction, cutting tools, consumer goods and industrial goods markets. The Company filed for chapter 11 protection on August 16, 2002 in the U.S. Bankruptcy Court for the Northern District of Ohio. Joseph F. Hutchinson Jr., Esq., at Brouse McDowell represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $65,430,000 in assets and $96,484,000 in debts. CONSECO, INC.: 30-Day Grace Period Expires & Deathwatch Begins -------------------------------------------------------------- After considering various financial options available to it, Conseco, Inc.'s Board of Directors concluded that it should abandon it's slow-paced Turnaround Plan and pursue a "radical change in the company's capital structure." To start that ball rolling, the Board elected to exercise a 30-day grace period on bond interest payments due August 9, 2002. The 30-day grace period for the interest payment on Conseco's 10-3/4% notes expired yesterday or expires today. Technically, acceleration of the debt does not occur until 25% of all noteholders covered by the April 24, 2002 Indenture give instructions to the Indenture Trustee. Neither Conseco or any bondholder representative has publicly announced whether those instructions have been delivered to State Street Bank and Trust Company. Conseco has hired: * Lazard Freres & Co. as its financial advisors and * Kirkland & Ellis as the Company's legal counsel; and an ad-hoc noteholders' committee has retained: * Fried, Frank, Harris, Shriver & Jacobson as counsel and * Houlihan Lokey Howard & Zukin as its financial advisor; to talk about how the radical change will be implemented in an out-of-court restructuring or through a pre-negotiated chapter 11 proceeding. Conseco, Inc., has stressed that the restructuring involves the capital structure of the holding company only. Conseco Inc.'s three operating units: Conseco Insurance Group, Conseco Finance Corp., and Bankers Life and Casualty Co., continue to operate as usual. Conseco EVP Mark Lubbers, asked for clarification about whether these statements mean that the restructuring does or does not include CIHC Corporation debt obligations, refuses to comment. THE CREDIT STORE: Court Approves Stuart Gerry as Local Counsel -------------------------------------------------------------- The Credit Store, Inc., sought and obtained authority from the U.S. Bankruptcy Court for the District of South Dakota to employ the law firm of Stuart, Gerry & Schlimgen, LLC as local counsel. The Debtor reminds the Court that it hired Neligan Stricklin, LLP in Dallas, Texas, as its lead bankruptcy counsel. Stuart Gerry will assist Neligan Stricklin in administering the company's chapter 11 case. The Debtor believes that Stuart Gerry's experience before the U.S. Bankruptcy Court for the District of South Dakota in Sioux Falls and familiarity with local rules and practices will be beneficial in reducing fees and expenses in the case. Stuart Gerry will provide professional services with respect to: a) Assisting and advising Neligan Stricklin in its consultations with the Debtor relative to the overall administration of the case; b) Representing the Debtor at hearings to be held before this Court and communicating with Neligan Stricklin regarding the matters heard and the issues raised as well as the decisions and considerations of this Court; c) Assisting Neligan Stricklin in preparing such applications, motions, memoranda, proposed orders and other pleadings as may be required in support of positions taken by the Debtor; d) Performing all other legal services for the Debtor as required to assist the Debtor in the proper administration of its case. Stuart Gerry received a $15,000 retainer and will charge the Debtor its customary $160 hourly rate for legal services. The Credit Store, Inc., is primarily in the business of providing credit card products to consumers who may otherwise fail to qualify for a traditional unsecured bank credit card. The Company filed for chapter 11 protection on August 15, 2002. Clair R. Gerry, Esq., at Stuart, Gerry & Schlimgen, LLP and Mark E. Andrews, Esq., at Neligan Stricklin, LLP represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $68 million in assets and $69 million in debts. CRESCENT OPERATING: Amends Settlement Agreement with CEI -------------------------------------------------------- Crescent Operating, Inc., (OTCBB:COPI) announced its agreement with Crescent Real Estate Equities Company (NYSE:CEI) regarding two proposed changes to the Settlement Agreement dated February 14, 2002, with CEI. First, CEI has agreed that Crescent Operating stockholders will receive common shares of CEI having a value of at least $0.20 per share of Crescent Operating common stock if the Company's stockholders vote in favor of the proposed prepackaged bankruptcy plan and the plan is implemented following confirmation by the bankruptcy court. The Settlement Agreement previously would have permitted the value of the CEI shares to be issued to Crescent Operating stockholders to be reduced to zero in certain circumstances even if the stockholders had voted in favor of the plan. Second, CEI and Crescent Operating have agreed that if, in the Company's prepackaged bankruptcy, Crescent agrees (at its sole option) to assume liability for unresolved claims asserted by third parties, the consideration paid to the Company's shareholders may be reduced (but not below $0.20) by such amount as may be agreed between CEI and Crescent Operating, and approved by the bankruptcy court, to compensate CEI for assuming the claims. If CEI and the Company are not able to agree to CEI's assumption of any unresolved third party claims that are an obstacle to confirmation of the Company's plan, the plan may not be confirmed, in which case the Company's shareholders are likely to receive no distribution. Crescent Operating has updated its estimate of the possible range of the value of CEI common shares to be issued to Crescent Operating stockholders following confirmation of the Company's bankruptcy plan. The new estimated range is based upon the information disclosed in this press release and other data compiled by management of Crescent Operating and CEI, and includes higher legal and accounting expenses incurred by CEI and Crescent Operating, and ongoing interest charges incurred by Crescent Operating, as a result of delays, arising from a number of causes, in the commencement of Crescent Operating's solicitation of the vote of its stockholders. The Company currently estimates that the value of the distribution to the Company's stockholders (in CEI shares) upon successful completion of its prepackaged bankruptcy transactions will be in the range of $0.20 to $0.50 per share of Crescent Operating common stock. DELANEY VINEYARDS: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Delaney Vineyards, Inc. 2000 Champagne Road Grapevine, TX 76051 Bankruptcy Case No.: 02-46635 Type of Business: A complete winery touted as "The Tradition of France . . . The Pride of Texas." Chapter 11 Petition Date: August 30, 2002 Court: Northern District of Texas (Fort Worth) Judge: Barbara J. Houser Debtor's Counsel: J. Robert Forshey, Esq. Forshey & Prostok 777 Main Street, Suite 1285 Fort Worth, Texas 76102 817-877-8855 Estimated Assets: Greater than $1 million Estimated Liabilities: Greater than $1 million DOE RUN RESOURCES: Extends Offers for Old Notes Until Sept. 20 -------------------------------------------------------------- The Doe Run Resources Corporation announced that (i) it had reached an agreement in principle with Regiment Capital Advisors, L.L.C., a holder of a substantial amount of its outstanding Old Notes, concerning the modification of the terms of its existing Exchange Offer, Cash Offer and Exchange/Loan Offer as set forth in its Exchange Offer, Cash Offer, Consent Solicitation and Senior Loan Participation dated June 6, 2002 and (ii) it had extended its outstanding offer for its Old Notes until 5:00 P.M. New York City Time on Friday, September 20, 2002. Doe Run announced that the principal terms of its revised Exchange Offer and Consent Solicitation are as follows: * The Cash Offer and Senior Loan Participation will each be eliminated; * The Exchange Offer will be amended so as to provide that each Holder shall receive, for each $1,000 aggregate principal amount of Old Notes successfully exchanged, (x) in the case of Senior Notes due 2005, Series B and Floating Interest Rate Senior Notes due 2003, Series B, $560 aggregate principal amount of Exchange Notes or (y) in the case of Senior Secured Notes due 2005, Series B and collectively with the Senior Notes and Floaters, "Old Notes), $660 aggregate principal amount of Exchange Notes; * Each Holder shall now receive, in addition to Exchange Notes, a pro rata share of Warrants exercisable for an aggregate of 40% of the outstanding common stock of Doe Run (assuming the participation by Holders of 100% of the aggregate amount of Old Notes outstanding), which Warrants shall be allocated to exchanging Holders according to the percentage that the Old Notes successfully tendered by such Holder bears to the aggregate amount of all Old Notes outstanding; * The Senior Loan will be in an aggregate amount of $15.5 million, will mature thirty months from the closing of the transaction, will bear interest at the rate of 11-1/4% per annum, will not require any amortization payment until maturity and all Warrants previously associated with the Senior Loan have been eliminated; and * The minimum tender that will be required to effectuate the revised Exchange Offer will be 95% of each of the Senior Notes, Senior Secured Notes and Floaters outstanding. The Exchange Notes will mature on November 1, 2008 and will bear interest payable semiannually as follows: Through calendar year 2005, interest may be paid, at the sole option of Doe Run, at the per annum rate of either (x) 3% in cash and 11% paid in kind or (y) 8% paid solely in cash. For all interest payment dates after calendar year 2005 and until the maturity of the Exchange Notes, interest will be payable semiannually at the rate of 11-1/4% per annum and will be payable only in cash. The collateral securing the Senior Loan and the Exchange Notes will be substantially similar to that set forth in the Offering Memorandum. Furthermore, Doe Run announced that The Renco Group, Inc., Doe Run's parent, is maintaining its commitment to invest $20 million in cash at the closing of the transaction and to provide an additional $15 million in credit support on terms similar to that set forth in the Offering Memorandum. Moreover, the revised Exchange Offer and Consent Solicitation will maintain a corporate governance structure for the benefit of the Warrant holders substantially similar to that set forth in the Offering Memorandum including the presence of an Independent Director, to be chosen by the Warrant holders, on Doe Run's Board of Directors. Doe Run anticipates that the investment by Renco, the New Senior Loan and the other changes set forth herein should result in greatly increased liquidity as compared to the transactions originally set forth in the Offering Memorandum. Holders should refer to the Amended and Restated Offering Memorandum for a more complete description of the revised Exchange Offer and Consent Solicitation. Doe Run expects to distribute an Amended and Restated Offering Memorandum to Holders within the next two weeks, at which time it will set a new expiration time for the Exchange Offer and Consent Solicitation. There can be no assurance that Doe Run will be able to consummate the revised Exchange Offer and Consent Solicitation or any of the transactions described in the Offering Memorandum. To the best of Doe Run's knowledge, holders of approximately 95% of the aggregate amount of Old Notes outstanding have tendered their Old Notes for participation in the existing Offers to date. Holders who desire to tender their Old Notes into the revised Exchange Offer and Consent Solicitation must fill out new Letters of Transmittal. Holders with questions concerning how to participate in the Exchange Offer and Consent Solicitation or wishing to obtain copies of the Offering Memorandum, additional Letters of Transmittal or any other documents relating to the transaction should direct all inquiries to the information agent, MacKenzie Partners, Inc., at (212) 929-5500 or (800) 322-2885 (toll-free). Beneficial owners may also contact their broker, dealer, commercial bank or trust company for assistance concerning the Exchange Offer and Consent Solicitation. As previously reported, Doe Run and Renco are discussing with Doe Run's US working capital lenders and bondholders a restructuring of the Offers. There can be no assurance that any such discussions will continue or that the Offers will be consummated or that the parties will reach an agreement as to any other possible restructuring of the Offers. ENRON CORP: Brings-In Dovebid to Auction De Minimis Assets ---------------------------------------------------------- Enron Corporation and its debtor-affiliates sought and obtained the U.S. Bankruptcy Court for the Southern District of New York's authority to employ and retain DoveBid Inc. as their auctioneer, sales agent and asset appraiser for the de minimis surplus assets under the terms of the DoveBid Agreement. Services to be performed by DoveBid under the Agreement: 1. Sale and Auction Procedures: (a) When and as the Debtors identify Surplus Assets they seek to dispose by utilizing the services of DoveBid, the Debtors and DoveBid will negotiate and execute a mutually acceptable plan of sale for each proposed auction of Surplus Assets. Each Plan of Sale will address, among other things: (i) the Surplus Assets to be sold; (ii) which Debtor entity owns the Surplus Assets; (iii) whether the Surplus Assets will be sold by public auction or privately negotiated sale; and (iv) if the Surplus Assets are to be sold by public auction, whether the auction will be promoted on DoveBid's website at http://www.dovebid.com/as a "Featured On-line Auction" or otherwise broadcast live over the internet as a "Webcast Auction"; (b) In the event that Surplus Assets are sold by public auction, DoveBid may offer Surplus Assets for sale by the piece or by the lot. Determination of sale lots for privately negotiated sales will be approved in writing by the Debtors prior to any offer for sale after notice to the Committee; (c) Each Plan of Sale will include an estimate of the proceeds DoveBid reasonably anticipates the respective sale will generate and calculate the estimated net recovery to the Debtors; (d) DoveBid will sell all Surplus Assets to the highest bidder. DoveBid will not guarantee the consummation of any sale and is not responsible in the event a purchaser fails to complete a purchase. DoveBid will not permit any purchaser to take possession of Surplus Assets without full payment and DoveBid assumes the risk of collection for any equipment it allows to be removed; (e) In the event that some Surplus Assets remain unsold at the conclusion of a Sale, or a purchaser fails to perform its obligation to pay the purchase price of an Asset, DoveBid will surrender the Unsold Assets to the Debtors, and will have no further obligations with respect to the Unsold Assets. The Debtors may request that DoveBid arrange for the removal and temporary storage of any Unsold Asset; provided, however, that: -- DoveBid will have no obligation to arrange for the removal or storage; and -- in the event that DoveBid consents to arrange for the removal and storage, the Debtors will reimburse DoveBid for the reasonable costs and expenses incurred by DoveBid; (f) After the Debtors and DoveBid develop a Plan of Sale for specific Surplus Assets, the Debtors will forward a copy of the Plan of Sale to the parties required by the Sale Procedures and electronically file it on the Court's Docket. If no objections are received within five business days, the Debtors may consummate the transaction with DoveBid immediately, without further order of the Court. If any objection is received within the period that cannot be resolved, the Surplus Asset subject to the Plan of Sale will not be sold except upon further order of the Court after notice and hearing; (g) For those sale of assets outside the scope of the Sale Procedures, the Debtors will seek separate Court approval of these sales in accordance with the requirements of the Bankruptcy Code, the Bankruptcy Rules and the Local Bankruptcy Rules; (h) Any sales consummated pursuant to the DoveBid Agreement will be free and clear of all liens, claims, encumbrances and interests, with any Liens attaching to the sale proceeds to the same extent and priority as immediately prior to the sale; (i) DoveBid will collect from the purchasers of the Surplus Assets the gross proceeds, including any applicable sales taxes and amounts due as Buyer's Premium and deposit the funds into a bank depository account maintained by DoveBid. All applicable sales taxes collected by DoveBid will be paid by DoveBid to the appropriate taxing authorities. Thereafter, DoveBid will be paid from the Account its reimbursable expenses pursuant to each Plan of Sale and amounts allocable to the Buyer's Premium, and the Debtors will be issued a check for the balance in the Account, including the applicable Rebate within 30 calendar days after the last date of the respective sale. The Debtors will deposit the check in accordance with the requirements set forth in the Sale Procedures Orders; (j) No later than 30 calendar days after the Auction, DoveBid will also issue to the applicable Debtor a settlement report showing, generally, a record of sales of the Surplus Assets, the total compensation and expense reimbursement paid to DoveBid and the allocation of the funds generated by the sales. Each Settlement Report will be prepared in a manner to comply with the Federal Rule of Bankruptcy Procedure 6004(f)(1). The Settlement Report will be filed with the Court and served upon the United States Trustee and Counsel for the Committee; (k) As compensation for its services, DoveBid will charge a buyer's premium equal to 13% of the sales price of each Asset sold for all sales. The Buyer's Premium will be collected by DoveBid directly from each successful bidder, in addition to the purchase price as bid; (l) A discount from the Buyer's Premium equal to 3% of the sales price will apply to purchasers who pay in cash, cashier's check, company check or wire transfer unless the purchasers bid over the internet, in which case the discount will only be 1%; (m) DoveBid may also discount the Buyer's Premium by an additional 10% of the sales price for those Surplus Assets purchased by current employees of the Debtors for their personal use or consumption. The Debtors or DoveBid will provide the Committee with notice of any sale of Surplus Assets to current employees; (n) None of the Debtors will be responsible in any way for payment or collection of the Buyer's Premium; (o) DoveBid has agreed to remit to the Debtors within 30 calendar day after each sale a sum equal to a percentage of those sums collected as a Buyer's Premium as a result of each sale based upon the Gross Proceeds resulting from the sale of the Surplus Assets sold subject to the respective Plan of Sale as: (i) for sales of Surplus Assets at an Auction generating Gross Proceeds between $2,000,001 and $4,000,000, the Rebate will be equal to 10% of the Buyer's Premium; (ii) for sales of Surplus Assets at an Auction generating Gross Proceeds between $4,000,001 and $6,000,000, the Rebate will be equal to 20% of the Buyer's Premium; and (iii) for sales of Surplus Assets at an Auction generating Gross Proceeds in excess of $6,000,000, the rebate will be equal to 30% of the Buyer's Premium; (p) DoveBid will be reimbursed for its reasonable, actual, out-of-pocket expenses incurred in connection with the sale of Surplus Assets, like expenses for advertising and direct marketing, labor, travel and lodging and webcast expenses; (q) The aggregate sum of all sale expenses will not exceed: -- 3% for sales generating Gross Proceeds of $4,000,000 or more; and -- $120,000 for sales generating Gross Proceeds of less than $4,000,000. The Debtors will not be liable for expenses that exceed the Sale Allowance Cap; (r) In the event that, in connection with a particular sale, the Debtors request change to the Surplus Assets or to DoveBid's set-up, sale date or check-out plans and the changes result in additional sale expenses, the Debtors agree that the parties will mutually agree on an amendment to the Plan of Sale; (s) DoveBid will be solely responsible for maintaining adequate insurance coverage pertaining to the Surplus Assets and their transfer to and from, and storage at, the site of any sale. If any sale is to occur at premises owned or leased by DoveBid, DoveBid will maintain adequate liability insurance for the duration of each sale. DoveBid will take all proper safeguards against loss and injury in the conduct of any auction. During the term of the DoveBid Agreement, DoveBid will maintain minimum Commercial General Liability Insurance as: -- $1,000,000 per occurrence combined single limit; or -- $2,000,000 general aggregate. DoveBid will also carry all worker's compensation insurance for DoveBid employees in compliance with all applicable state and local laws and Employer's Liability Insurance of $1,000,000; (t) the Debtors will reimburse DoveBid for all costs incurred in obtaining an auctioneer bond. DoveBid will include for the estimated amount of costs of the Auctioner's Bond for each Plan of Sale; (u) DoveBid will provide, in advance of any auction, a surety bond in favor of the United States of America for an amount equal to the Estimates minus expenses for each Plan of Sale. The bond will be in a form acceptable to the United States Trustee; (v) All payments of compensation and reimbursement of expenses to DoveBid will be set forth in the Settlement Report and will be made without further Court approval but will be subject to Sections 327(a) and 330 of the Bankruptcy Code; and (w) The Debtors, the Committee, the United States Trustee and any other party-in-interest will retain their rights to object to the compensation paid to DoveBid. 2. Appraisal Services: DoveBid will appraise those assets that will be marketed or sold by the Debtors. Procedures for appraisal under the Agreement are: (a) The Debtors may request DoveBid, through its DoveBid Valuation Services, Inc. subsidiary, to perform asset appraisals. The Debtors and DoveBid will utilize their best efforts to mutually agree upon the type of appraisal to be provided, the timing for the delivery of the completed appraisal, and the applicable fee, all of which will be mutually agreed upon and set forth in a Plan of Sale; and (b) DoveBid will not conduct the sale of any asset it has appraised. The Debtors will not request that DoveBid perform an appraisal of assets unless the Debtors have a good faith belief that the respective assets to be appraised will not otherwise be subject to sale by DoveBid. (Enron Bankruptcy News, Issue No. 42; Bankruptcy Creditors' Service, Inc., 609/392-0900) DebtTraders reports that Enron Corp.'s 9.125% bonds due 2003 (ENRN03USR1) are trading between 11.5 and 12.5 . See http://www.debttraders.com/price.cfm?dt_sec_ticker=ENRN03USR1 for more real-time bond pricing. EXIDE TECHNOLOGIES: Appoints Stuart Kupinsky as New Senior VP ------------------------------------------------------------- Exide Technologies (OTCBB:EXDTQ), the global leader in stored electrical energy solutions, announced the appointment of Stuart H. Kupinsky as Senior Vice President, General Counsel & Secretary. Mr. Kupinsky replaces John Van Zile, who has elected to leave the Company to pursue personal interests. Mr. Kupinsky brings with him a unique combination of legal, engineering and business skills. Prior to joining Exide, Mr. Kupinsky most recently served as the Senior Vice President, General Counsel & Secretary for Teligent in Vienna, Virginia, where he was responsible for the legal and various operational aspects of Teligent's international operations throughout its restructuring. Mr. Kupinsky also served in the United States Department of Justice as a trial attorney in the Antitrust Division and as an attorney with the Federal Communications Commission. Additionally, Mr. Kupinsky served as a law clerk for a judge on the United States Court of Appeals for the Federal Circuit in Washington D.C. Mr. Kupinsky received his J.D. from George Washington University School of Law, where he graduated with honors. He also received his B.S. in electrical engineering from Lehigh University. Craig H. Muhlhauser, Chairman and Chief Executive Officer, said, "Stuart's combination of skills and background are ideal for the type of leadership Exide needs as we continue our restructuring. I am very pleased to have Stuart join my senior management team, and have no doubt that he will play an integral role in the future direction of Exide." Mr. Kupinksy said, "I am very much looking forward to working with Craig and the rest of the Exide team as the Company moves through the restructuring process and beyond. This is a terrific Company with a vast array of innovative products, and I firmly believe Exide will emerge from its restructuring with a strong future." Exide Technologies is the world's largest industrial and transportation battery producer and recycler, with operations in 89 countries. Industrial applications include network-power batteries for telecommunications systems, fuel-cell load leveling, electric utilities, railroads, photovoltaic (solar- power related) and uninterruptible power supply (UPS) markets; and motive-power batteries for a broad range of equipment uses, including lift trucks, mining vehicles and commercial vehicles. Transportation uses include automotive, heavy-duty truck, agricultural, marine and other batteries, as well as new technologies being developed for hybrid vehicles and new 42-volt automotive applications. The Company supplies both aftermarket and original-equipment transportation customers. Further information about Exide Technologies, its financial results and other information can be found at http://www.exide.com FLOWERS FOODS: Names Jimmy Woodward as Senior Vice-Pres. & CFO -------------------------------------------------------------- Flowers Foods (NYSE: FLO) announced the appointments of Jimmy M. Woodward to senior vice president and chief financial officer and Michael A. Beaty to senior vice president/supply chain. The appointments are a continuation of the company's restructuring announced in late May and put into effect July 14, 2002, whereby two former business units were split into three operating groups with shared administrative services. Previously, Woodward served as vice president and chief financial officer. As senior vice president and chief financial officer, Woodward will continue to be responsible for all Flowers Foods finance, accounting, and administrative functions. Prior to his appointment to senior vice president/supply chain, Beaty served as senior vice president of bakery operations for Flowers Bakeries. In this newly created position, Beaty will be responsible for the manufacturing, logistics, purchasing, and environmental functions throughout the company. Commenting on the appointments, George E. Deese, president and chief operating officer of Flowers Foods said, "Our company is fortunate to have talented individuals throughout its organization. Jimmy and Mike are evidence of that wealth of talent. Both have demonstrated exceptional leadership ability in their respective areas. I am confident they will contribute to the company's continued success in their expanded roles." Woodward joined Flowers in 1985 as tax manager. He was promoted to assistant treasurer in 1990 and elected treasurer in 1997. In 1999, he was appointed vice president and chief administrative officer. He was named vice president and chief financial officer in 2000. Prior to joining the company, Woodward worked with the CPA firm of Coopers and Lybrand. He holds a degree in accounting from Florida State University in Tallahassee. Beaty joined Flowers in 1971 as production supervisor. He served successively as production superintendent, production manager, manufacturing manager, vice president of manufacturing, executive vice president, and president of various Flowers operations. In 1987, Beaty was appointed vice president of manufacturing for Flowers' Baked Foods Group, which later became Flowers Bakeries. He then was named senior vice president of bakery operations. Beaty holds a degree in management science from Georgia Tech in Atlanta. Headquartered in Thomasville, Ga., Flowers Foods is one of the nation's leading producers and marketers of packaged bakery foods for retail and foodservice customers. These products are sold under such brands as Mrs. Smith's, Nature's Own, Cobblestone Mill, and Mrs. Freshley's. For more information on the company, visit http://www.flowersfoods.com * * * At July 31, 2002, Flower Foods' balance sheet shows that its total current liabilities exceeded its total current assets by about $92 million. FRUIT OF THE LOOM: Court Okays Keen's Retention as Auctioneer ------------------------------------------------------------- The Fruit of the Loom Liquidation Trust sought and obtained authority from the U.S. Bankruptcy Court's authority to retain and employ Keen Realty as its auctioneer. As Auctioneer, Keen is expected to: (a) prepare the Non-Operating Real Properties to the extent necessary to induce buyers to submit bids; (b) furnish assistance that FOL Trust or its advisors may require to consummate the sale and transfer of the Non-Operating Real Properties for as high a price as possible; (c) retain the services of local brokers in each market, who will look solely to Keen for compensation; (d) supervise on-site inspections with the assistance of local brokers prior to the sale of any Real or Personal Property; (e) respond to and manage all pre-sale inquiries from prospective buyers of the Non-Operating Real Properties; and (f) additional related services as FOL Trust may request of the Auctioneer. Keen will not be required to submit fee applications, but any compensation disputes shall be submitted to this Court. The proposed terms of Keen's compensation provide for the payment of premiums based on the sale of Non-Operating Real Properties -- not hourly rates. There is therefore minimal risk of duplication of efforts and costs to the estates. Keen will also seek reimbursement of all reasonable, necessary, and documented out- of-pocket costs incurred in conducting the Auctions or sale of the Non-Operating Real Properties. FOL Trust must approve each expense item in excess of $500 prior to expenditure. For time spent meeting with the Trust or its advisors in connection with in-court and/or deposition testimony, preparation for testimony, responding to discovery requests, document review and preparation, and any and all related meetings, Trust shall pay Keen on an hourly basis and reimburse Keen for travel expenses. Hourly fees do not apply to testimony and court time on behalf of the Trust in support of Keen's retention and resulting transactions. Compensation shall be earned at these hourly rates: Professional Position Hourly Rate ------------ -------- ----------- Moe Bordwin Chairman $400 Harold Bordwin President 400 Chris Mahoney Vice President 300 Craig Fox Vice President 300 Mike Matlat Vice President 300 Matt Bordwin Vice President 300 Susan Walkey Associate 110 Robert Tramantano Associate 110 Eric Leighton Associate 110 The Auctions will be conducted during the fall of 2002. In connection with each sale of Real Property pursuant to an Auction, Keen will charge: (1) a $20,000 advisory and consulting fee for the review of documents and development and implementation of a marketing strategy; (2) a 6% commission % of the Gross Proceeds, with the fee to be paid, in full, off the top, from the proceeds of sale or simultaneously with the closing, sale, assignment or other consummation of the proposed transaction of any Real Property; (3) in connection with the sale of certain parcels of Real Property, in the event the successful purchaser shall have been represented by a buyer's broker, the total commission shall be increased to 9.0% of the Gross Proceeds; and (4) in the event that FOL Trust signs a binding sales contract for both the St. Martinville, Louisiana and Frankfort, Kentucky locations, either separately or combined, within 120 days of the Effective Date and closing for both properties takes place within the earlier of December 31, 2002 or 60 days following the execution of the second sales contract, Keen will earn a bonus equal to an additional 1% on the aggregate Gross Proceeds for all Non-Operating Real Estate Properties. (Fruit of the Loom Bankruptcy News, Issue No. 58; Bankruptcy Creditors' Service, Inc., 609/392-0900) GEMSTAR-TV GUIDE: S&P Cuts Corp Rating to BB over Legal Concerns ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit and bank loan ratings on Gemstar-TV Guide International Inc. to double-'B' from double-'B'-plus. Standard & Poor's said that all of the ratings remain on CreditWatch with negative implications, where they were placed on August 15, 2002. Gemstar is headquartered in Pasadena, California and had $302.7 million in debt outstanding on March 31, 2002. "Standard & Poor's is concerned that recent legal setbacks may diminish the fee-generating potential of Gemstar's patent portfolio and undermine its leading position in the industry", said Standard & Poor's credit analyst Andy Liu. "In addition, the company's financial risk has risen with the delayed SEC filing and officer certification and the potential delisting by NASDAQ, which could limit access to the capital market" Standard & Poor's said that it will review second quarter results when they become available, and will reassess its view of intermediate term earnings prospects. The ratings on the company could be subject to further downgrade following any change to revenue and cash flow guidance, erosion of company's cash cushion, additional accounting issues, or other unexpected legal developments. GLOBAL CROSSING: Wants to Reject Unexpired Contract with Unisys --------------------------------------------------------------- Unisys Corporation and Global Crossing Network Center Ltd. are parties to a contract dated August 6, 2001, wherein Unisys provides the Debtors with installation, management, maintenance and other services. Paul M. Basta, Esq., at Weil Gotshal & Manges LLP, in New York, informs the U.S. Bankruptcy Court for the District of New York that the Contract requires the Debtors to achieve minimum annual volume commitments. The Contract provides that if the Debtors don't meet the Minimum Volumes by the end of the first year of the Contract, which is August 6, 2002, Unisys may seek up to, but no more than, $1,500,000 in penalties from the Debtors. Out of an abundance of caution, the Debtors seek the U.S. authority to reject the Contract prior to August 6, 2002, to ensure that Unisys does not assert any postpetition claims under the Contract. Mr. Basta explains that the Debtors entered into the Contract when they were still expanding their business. However, the downturn in the market, especially in the telecommunication sector, has substantially slowed growth and changed the Debtors' business needs. As a result of this downturn, coupled with the commencement of these Chapter 11 cases, the Debtors have substantially reduced their operations. This operational reduction has caused the Debtors to reevaluate their needs in an effort to shed nonessential costs. In the course of this reevaluation, and in conjunction with the Debtors' realization that a $1,500,000 administrative cost could arise with continuation of the Contract, the Debtors have determined that the Contract is a cash drain on their estates and should be rejected effective August 5, 2002. Unysis Objects Adam L. Rosen, Esq., at Rosen & Slome LLP, in New York, notes that the Debtors asserted in vague and conclusory terms that if the order authorizing the rejection is entered before August 6, 2002, Unisys might be prevented from asserting an administrative claim for certain amounts that fall due on that date under the Contract. August 6, 2002 is the date set in the Contract for the Debtors to pay Unisys a certain amount for "programme services." The Reimbursement Claim was intended to cover the costs incurred by Unisys in setting up and maintaining the substantial infrastructure needed to meet the anticipated obligations to the Debtors under the Contract. Mr. Rosen believes that the Debtors' concern seems to be that there may be a chance, albeit slim, that rejection after August 6, 2002 will render the Reimbursement Claim an administrative expense. It does not appear to Unisys, and the Debtors have not provided any legal support for a contrary position, that the consequences of rejection will be any different based on whether the rejection occurs before or after August 6, 2002. Notwithstanding the Debtors' allegation that they no longer need the services under the Contract, Mr. Rosen informs the Court that a wholly owned non-debtor subsidiary of the Debtors has recently sent out an "Invitation to Tender" soliciting bids from several entities, including Unisys, for the same types of services Unisys is currently providing under the Contract. Unisys believes that the Debtors will need to reimburse the successful bidder for costs similar to the costs incurred by Unisys to set up the necessary infrastructure, which costs comprise the Reimbursement Claim. Mr. Rosen contends that any reimbursement under a new contract will constitute an administrative claim. If Unisys is correct, that much of the Reimbursement Claim will be entitled to administrative priority, then rejection of the Contract would appear to be detrimental to the Debtors' estates in that it may cause the Debtors to incur duplicate administrative claims. Furthermore, Unisys believes that rejection of the Contract at this time and on a rushed basis could harm the Debtors' customers, as well as the Debtors' reputation. Mr. Rosen points out that Unisys is currently providing maintenance and other services to the Debtors' customers. The Debtors, Unisys and other parties-in-interest should be given time to evaluate the full consequences of rejection, particularly where the Debtors offer no clear basis for moving so rapidly and have had nearly eight months to deal with this matter in a more orderly fashion. (Global Crossing Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service, Inc., 609/392-0900) DebtTraders reports that Global Crossing Holdings Ltd.'s 9.625% bond due 2008 (GBLX08USR1) are trading at about 1.25. See http://www.debttraders.com/price.cfm?dt_sec_ticker=GBLX08USR1 for more real-time bond pricing. GENCORP INC: Board Declares Quarterly Cash Dividends on Shares -------------------------------------------------------------- The Board of Directors of GenCorp Inc., (NYSE: GY) declared a quarterly cash dividend of three cents per share on the issued and outstanding ten cents par value common stock of the Company, payable November 29, 2002 to shareholders of record on November 1, 2002. GenCorp is a technology-based manufacturer with leading positions in the automotive, aerospace and defense, and pharmaceutical fine chemicals industries. For more information on GenCorp visit the Company's Web site at http://www.gencorp.com * * * As reported in Troubled Company Reporter's July 11, 2002 edition, Standard & Poor's assigned its preliminary double-'B' and single-'B'-plus ratings to senior unsecured and subordinated debt securities, respectively, filed under GenCorp Inc.'s $300 million SEC Rule 415 shelf registration. The company produces automotive sealing systems, rocket propulsion systems, and chemical intermediates. At the same time, Standard & Poor's affirmed its existing ratings on GenCorp, including the double-'B' corporate credit rating. The outlook is stable. "The ratings on GenCorp reflect a below average business profile, offset by manageable debt levels," said Standard & Poor's credit analyst Christopher DeNicolo. The firm has moderate internal cash-generating ability, and there is potential for debt-financed acquisitions. GRAY TELEVISION: S&P Rates Planned Bank Loan & Sub Notes at B+ -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its single-'B'-plus bank loan rating to TV broadcaster and newspaper company Gray Television Inc.'s proposed $450 million senior secured bank facility. The facility is rated the same as the corporate credit rating (BB+/Watch Neg/--). The proposed facility consists of a $75 million revolving credit facility that matures on December 31, 2009, and a $375 million term B loan maturing December 31, 2010. The facility will be secured by first priority security interests in the company's assets, including the equity of its subsidiaries. Standard & Poor's said that at the same time, it has assigned its single-'B'-minus rating to Gray's proposed $100 million add- on to its 9.25% senior subordinated notes due 2011. Standard & Poor's said that the new ratings were placed on CreditWatch with negative implications along with the existing ratings on the company. The ratings were originally placed on CreditWatch on April 4, 2002. The CreditWatch listing reflects concerns about the size of Gray's planned acquisition of Stations Holdings Co. Inc., the parent company of Benedek Broadcasting Corp., and how it may ultimately be financed. The subordinated notes will be used to reduce Gray's bank debt until the company completes its acquisition of Benedek. Gray expects to close the purchase on October 1, 2002, and fund it with $275 million in common equity and proceeds from the new bank loan, which will also be used to repay the remaining old bank debt of about $100 million. Gray is also acquiring the ABC affiliate in Reno, Nevada for $41.5 million and this transaction should close in late 2002. Atlanta, Georgia-based Gray will have about $660 million in debt after the Benedek deal closes. "The acquisitions will improve Gray's network-affiliation, geographic, and cash flow diversity," according to Standard & Poor's analyst Steve Wilkinson. He added, "The transactions will maintain the high quality of the company's TV portfolio with the leading news and overall audience ratings in 80% of its markets, which generally results in a higher share of market revenues, national spot advertising, and political spending". Key credit ratios will improve modestly if the transaction is funded as planned, although Gray's financial profile will remain aggressive and the company is expected to remain acquisitive. The CreditWatch will be resolved once the Benedek deal and related financings are completed. Standard & Poor's expects to affirm the ratings with a stable outlook if the transaction is funded as planned. HOMEGOLD FIN'L: Lending Partner Extends $200M Forward Commitment ---------------------------------------------------------------- HomeGold Financial, Inc. (OTC Bulletin Board: HGFN), has received a forward commitment of $200 Million from one of its current warehouse lenders. "We are pleased to receive this commitment from one of our long term warehouse lending partners," says Ronnie Sheppard, CEO HomeGold. "Further we see this as another vote of confidence in our ability to generate loan volume from an entity that is intimately familiar with our operations. Also, it ensures that the volume we generate in our newly expanded branch distribution system will have an immediate, secure outlet." As reported in Troubled Company Reporter's August 28, 2002 edition, Standard & Poor's junked HomeGold's counterparty credit rating at CCC-. HORSEHEAD: UST Says JP Morgan Has to Cover any Burial Expenses -------------------------------------------------------------- Carolyn S. Schwartz, the United States Trustee objects to Horsehead Industries, Inc.'s, and its debtor-affiliates' motion to use their Lenders' Cash Collateral. The U.S. Bankruptcy Court for the Southern District of New York authorized the Debtors, on an interim basis, to use the cash collateral of JP Morgan Chase Bank, secured lender of the Debtors and administrative agent for certain other banks and financial institutions. The U.S. Trustee points out to the Court that the Debtors' Application: -- fails to include a carve-out for a Chapter 7 trustee from the liens granted to the Lenders; and -- attempts to circumvent the clear and unambiguous language of Bankruptcy Code section 726 by granting the Lenders administrative expense claims with priority over the burial expenses incurred by a Chapter 7 trustee. Specifically, the UST explains that the Order grants the Lenders an administrative expense claim with priority over all administrative expenses notwithstanding the conversion of the Debtors' cases to cases under Chapter 7. The United States Trustee submits that any final order authoring the use of cash collateral should include an adequate carve-out for the payment of a Chapter 7 trustee in the event these cases are converted to Chapter 7. Without such a carve-out, the Court would effectively be unable to convert these cases to cases under Chapter 7 of the Bankruptcy Code. INSPIRE INSURANCE: Files Chapter 11 Plan & Disclosure Statement --------------------------------------------------------------- INSpire Insurance Solutions, Inc., (OTC Pink Sheets: NSPRQ.PK) filed with the U.S. Bankruptcy Court for the Northern District of Texas Fort Worth Division a proposed plan of reorganization and a proposed disclosure statement describing the Plan on August 27, 2002. The Plan is subject to continuing negotiations and contemplates the sale of the Company's operating assets to CGI Group, Inc. (NYSE: GIB; Toronto: GIB.A). If the court approves the plan, INSpire will then commence solicitation of votes for approval of the Plan. The Plan, along with all other filings, can be obtained from the company's Web site at http://www.nspr.com Execution of a definitive purchase agreement with CGI Group, Inc. is subject not only to the Bankruptcy Court's approval of the Plan, but also the negotiation of an agreement satisfactory to both parties and other conditions set forth in the letter of intent. The plan anticipates that INSpire's business operations will be integrated within CGI, continuing to offer complete policy and claims administration outsourcing, IT outsourcing, and software services. INSpire anticipates that all of its customer contracts will be assumed by and assigned to CGI Group, Inc. and will work with its customers to make the transaction as smooth as possible. If the Plan is approved, the Company's existing common stock will be cancelled on the effective date of the Plan. Under the Plan, any money that the Company receives (and remaining assets, if any) will be transferred to a trust. The cash proceeds from the trust will be used to satisfy claims of the Company. If creditors are paid in full, and after the expenses incurred in implementing the plan are satisfied, any remaining cash will be divided pro rata to shareholders according to shares of Company common stock held as of the effective date. At this time, the Company is unable to determine whether there will be any remaining cash to distribute to shareholders. INSpire Insurance Solutions, Inc., offers policy and claims administration solutions for property and casualty insurance carriers, managing general agencies, and brokers. As one of the foremost providers of integrated software systems and turnkey business process outsourcing, INSpire serves clients with needs to enter new markets quickly, reduce expenses, increase customer satisfaction and focus on core competencies. Additional information can be obtained from INSpire's Web site at http://www.nspr.comor by calling 817-348-3999. INTELLICORP INC: Files for Chapter 11 Reorganization in Delaware ---------------------------------------------------------------- IntelliCorp, Inc. (OTCBB:INAI.OB), a leading provider of business process optimization solutions, announced revenues of $11.6 million and net loss to common shareholders of $13.7 million for its fiscal year ending June 30, 2002. During the fourth quarter of fiscal year 2002, the Company posted revenues of $2.3 million and a net loss to common shareholders of $3.2 million. "Like many other companies in our sector, our revenues were severely and adversely impacted throughout this period by reduced and delayed business spending, especially on IT projects. Although we aggressively reduced operating expenses by over $10 million vs. last year to position IntelliCorp to 'survive' this unusually protracted market downturn, and enjoyed the continuing support of our key investor to meet our immediate cash needs, our revenues continued to decline and we suffered additional losses," said Jerry Klajbor, IntelliCorp's CFO. "In the first quarter of this new fiscal year, we made further reductions in our worldwide staffing levels and temporarily furloughed additional staff members. After a thorough assessment of current market conditions by both senior management and our Board of Directors, it was very clear that the Company needed to take a more drastic measure and fully reorganize. This included the need to clearly redefine our business strategies, further reduce expenses and secure additional long-term financing in the Company. It was determined that this could not be done effectively, given existing day-to-day requirements and obligations (including excess office space and other cash requirements), without a change in our status. Therefore, we have decided to file a petition for Reorganization under Chapter 11 as an interim step, giving us the time and flexibility to rebuild IntelliCorp," said Jerry Klajbor. IntelliCorp has completed the initial phases of its strategic initiative to redefine its market, and how best to position IntelliCorp's solutions into that market. The Company has reorganized its executive management team under the leadership of Jerry Klajbor, VP of Finance and CFO, to fully capitalize on their respective skills and background. The team will be comprised of Jeffrey Dalton, VP of Global Services; George D'Auteuil, VP of Global Marketing and Sales; Jerry Klajbor, VP of Finance and CFO; and Chris Trueman, VP of Product Development. "As demonstrated in our Plan of Reorganization [filed Friday] in Delaware, concurrently with an agreement for DIP (Debtor in Possession) financing, we firmly believe we will be able to rapidly finalize our plans for reorganization and will emerge as a stronger and more focused IntelliCorp. Our 'Plan' includes a further reduction of expenses of 20 to 25% going forward, $2 million in DIP financing, and over $1.5 million in exit financing, which will strengthen the Company over both the short-term and the long-term. This will enable us, as a strong and stable Company, to support our customers with the high level and quality of service that they have come to expect from IntelliCorp," added Jerry Klajbor. The Company also announced that Mr. Raymond Moreau has resigned as the Company's CEO and Member of the Board of Directors in order to pursue other business opportunities. The Board of Directors would like to acknowledge Mr. Moreau for his contributions to IntelliCorp over the past two years and wish him the best in his future endeavors. Jerry Klajbor concluded, "Finally, I want to thank all of our staff members for their unwavering support and hard work as well as our customers for their continued business this past year and as we press forward into the new year ahead of us." IntelliCorp is a leading solutions and services firm focused on the optimization of key business processes across the entire enterprise requiring extensive technical integration and business process expertise. Today's challenging business climate requires the tight integration of front-office processes with back-office systems to reduce cost and improve operational efficiencies, while increasing customer satisfaction and retention. IntelliCorp has deep capability and experience with SAP R3, MySAP.com, Siebel eBusiness Applications, and a number of other dominant software suites and components. In addition, IntelliCorp offers a suite of software solutions, tools, and applications for business process management and support of the integration and management of SAP's back office systems. Headquartered in Mountain View, CA, the company has offices across the United States and throughout Europe. IntelliCorp's Web site is http://www.intellicorp.com INTELLICORP INC: Case Summary & 25 Largest Unsecured Creditors -------------------------------------------------------------- Lead Debtor: IntelliCorp, Inc. 1975 El Camino Real West Mountain View, California 94040-2216 Bankruptcy Case No.: 02-12563 Debtor affiliate filing separate chapter 11 petition: Entity Case No. ------ -------- Megaknowledge, Inc. 02-12564 Type of Business: Intellicorp, Inc. develops, markets and supports a suite of process management, applications integration, customer relationship management tools, training and consulting to maximize ERP efficiencies and data utilization. Chapter 11 Petition Date: September 6, 2002 Court: District of Delaware Judge: Mary F. Walrath Debtors' Counsel: Christopher S. Sontchi, Esq. Ashby & Geddes 222 Delaware Avenue 17th Floor Wilmington, DE 19899 302 654-1888 Fax : 302-654-2067 Total Assets: $2,864,704 Total Debts: $6,423,176 Debtor's 25 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ El Camino Office Trade $229,686 Investments EPAM Systems, LLC Trade $53,410 Henderson Elmwood Trade $41,845 Associates Ernst & Young & Young Trade $35,000 Loewenstein & Associates, Trade $30,898 Inc. Srinivas, Ramachandra Trade $26,880 KPMG Consulting, Ltd. Trade $21,465 RHI Consulting - Illinois Trade $18,988 Strategic Staffing Trade $18,933 Solutions One Time Payment - Trade $18,020 Berlex Refund Nizwer Husain Trade $16,750 Crown Worldwide Moving Trade $15,989 Exigen (formerly Portera) Trade $13,000 American Express - BTA Trade $12,905 Premiere Conferencing Trade $12,511 Squire Sanders & Company Trade $12,122 HR Link Group, Inc. Trade $12,080 Butler Service Group Inc. Trade $10,000 Techtarget $8,775 Progress Pacific Trade $8,605 PlaceWare Trade $7,995 Business Wire Trade $7,050 Fitzpatrick's Security Trade $5,790 Systems RHI Consulting - San Trade $5,632 Francisco SAP America, Inc. Trade $5,500 KAISER ALUMINUM: Retirees' Committee Signs-Up Jaspan as Counsel --------------------------------------------------------------- The Official Committee of Retired Employees in the Chapter 11 cases of Kaiser Aluminum Corporation and its debtor-affiliates sought and obtained authority from the U.S. Bankruptcy Court for the District of Delaware to retain and employ Jaspan Schlesinger Hoffman LLP as local counsel in these Chapter 11 cases, nunc pro tunc to June 11, 2002. In connection with the firm's representation of the Retirees' Committee, Jaspan will charge its standard hourly rates in effect at the time the professional services are performed, subject to Court approval. Jaspan will also seek reimbursement of actual, necessary expenses that it has incurred. Jaspan's standard hourly rates are: partners & counsel $315 - 410 associates 170 - 315 legal assistants 140 Frederick B. Rosner, Esq., whose hourly rate is $320, will lead the firm's representation of the Retiree Committee. (Kaiser Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service, Inc., 609/392-0900) DebtTraders reports that Kaiser Aluminum & Chemicals' 12.750% bonds due 2003 (KLU03USR1) are trading between 17 and 21. See http://www.debttraders.com/price.cfm?dt_sec_ticker=KLU03USR1for more real-time bond pricing. KMART CORP: Proposes to Modify Personal Injury Claims Protocol -------------------------------------------------------------- Kmart Corporation and its debtor-affiliates propose to modify the personal injury claims resolution procedures previously approved by this Court. Specifically, the Debtors want to require the participation of third party indemnitors and insurance carriers during mediations and arbitrations of claims. The Debtors want to include these portions into the Claims Resolution Procedures: (a) The Claims Resolution Procedure should not be construed to alter the rights or obligations of any Insurer of the Debtors. In all instances where an Insurer: (i) has a right to receive notice; (ii) participate in the resolution of a Personal Injury Claim; or (iii) decide upon or approve the resolution of a Personal Injury Claim; that right is preserved; (b) The Claims Resolution Procedure should not be construed to authorize the Debtors to act on behalf of or as an agent for any Insurer of the Debtors; and (c) The Mediation/Arbitration Organization will have the authority, without further order of the Bankruptcy Court, to direct the attendance, at any Mediation or Arbitration, of a representative of the applicable Third Party Indemnitor or Insurer, if any, with authority to settle and pay any settlement reached or award entered. Although the order approving the Claims Resolution Procedures and the Procedures themselves contain significant reservation of rights and notice requirements with respect to Insurers and Third Party Indemnitors, John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, in Chicago, Illinois, observes that there is no corresponding requirement that the Insurers and Third Party Indemnitors must participate in mediations or arbitrations where necessary to assist all parties in attempting to resolve the underlying personal injury disputes. This is important in the case of Judgment Claims as to which appeal bonds have been posted and which currently are the subject of ongoing mediations under the supervision of retired Judge Erwin I. Katz. Mr. Butler explains that the need for this requirement became clear with the recent mediation of the personal injury Judgment Claim held by Dan Rhyne and Alice Rhyne. The Rhyne Judgment Claim was one of the first Judgment Claims to be mediated under the Claims Resolution Procedures. On August 13, 2002, Judge Katz attempted to mediate the Rhyne Judgment Claim, which involves complex legal issues and potential damages of up to $23,000,000. The mediation took place with the Debtors' representative and the Rhynes' counsel. However, the mediation of the Rhyne Judgment Claim ultimately was unsuccessful. Mr. Butler elaborates that the mediation was exceptionally frustrating and disappointing to all parties because the Insurer's counsel did not participate in the mediation. The Insurer's failure to appear came as a complete surprise to the Debtors and the Rhynes. Although the Insurer advised the Debtors that no representative appeared because of a scheduling mistake -- because the Rhyne Judgment Claim potentially triggers insurance coverage well in excess of the Debtors' $2,000,000 self-insured retention limits -- the Insurer clearly was a necessary party to the mediation. "Whatever the reason for the Insurer's failure to appear, it is clear that Insurer's must be present in person at mediations," Mr. Butler remarks. Other Judgment Claims also involve a potential settlement range in excess of the $2,000,000 self-insured amount. Consequently, the Debtors have determined that participation in the mediations by Third Party Indemnitors and Insurers must be required so that useful, effective mediations of Judgment Claims may result. By this motion, the Debtors ask Judge Sonderby to vest authority to Judge Katz to require the participation of relevant Third Party Indemnitors and Insurers in mediations and arbitrations. (Kmart Bankruptcy News, Issue No. 32; Bankruptcy Creditors' Service, Inc., 609/392-0900) LANTRONIX: Will Publish Q4 & FY 2002 Final Results on Thursday -------------------------------------------------------------- Lantronix, Inc., (Nasdaq: LTRX) will report substantial losses for the fourth quarter and fiscal year ended June 30, 2002. Previously, the company had indicated revenues for the fourth quarter would likely be 10-15% lower than Q3, and that fourth quarter results could be impacted as a result of year-end asset impairment and one-time charges. The company stated that it now expects revenues for the quarter to be $11.5-12.5 million. Net loss for the quarter, including the impact of substantial impairment of intangible assets and other one-time charges, is currently expected to be in the range of $60-75 million. The loss is subject to further accounting review and revisions, and completion of the company's annual audit. Lantronix expects to announce its final results the morning of September 12, and plans to host an analyst and investor conference call that same day at 9:00 AM Eastern Time/6:00 AM Pacific Time to review the company's financial results and business outlook. The call is open to all interested investors through a live audio webcast via CCBN and the company's Web site http://www.lantronix.com Lantronix, Inc., (Nasdaq: LTRX) is a provider of hardware and software solutions ranging from systems that allow users to remotely manage network infrastructure equipment to technologies that network-enable devices and appliances. Lantronix was established in 1989, and its worldwide headquarters are in Irvine, Calif. For more information, visit the company on the Internet at http://www.lantronix.com * * * As reported in Troubled Company Reporter's June 3, 2002, edition, Lantronix received notification from Nasdaq on May 23, 2002 that it does not meet the filing requirements for continued listing on the Nasdaq National Market and is therefore subject to delisting. Lantronix has requested a hearing before a Nasdaq listing qualifications panel to review the Staff Determination. There can be no assurance the Panel will grant the company's request for continued listing. The notice from NASDAQ was sent as a result of the company's current non-compliance with Marketplace Rule 4310(C)(14), which requires timely filing of the company's quarterly report on Form 10-Q. The company intends to file its quarterly report promptly upon the completion of the internal review. LA QUINTA: S&P Changes Ratings Outlook to Stable from Negative -------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on La Quinta Corp. to stable from negative. The action followed the lodging company's improved credit measures resulting from its successful asset-sale program and use of proceeds towards debt reduction. At the same time, Standard & Poor's affirmed its 'BB- ' corporate credit rating and other ratings on the Dallas, Texas, company. Debt outstanding totaled $812 million at June 30, 2002, down from $1 billion at the end of 2001. As of June, the company had reduced the size of its health-care assets to $51 million (net of impairments) and had used all proceeds to reduce debt. Total debt to EBITDA leverage (excluding nonrecurring items) is expected to end 2002 in the mid-to-high 3 times area as the company makes further progress on its asset-sale program. "The stable outlook reflects credit measures that are in line with La Quinta's current rating and expectations that management will continue to manage its balance sheet prudently throughout the challenging lodging environment," said Standard & Poor's credit analyst Stella Kapur. La Quinta's portfolio consists of 289 owned hotels and 50 franchised hotels operating in the mid-price, limited-service segment. The La Quinta brand is primarily positioned in the Southern and Western areas of the U.S., with its largest concentrations in Texas (32% of rooms) and Florida (12%). LODGIAN: Asks Court to Fix October 22 as Admin. Claims Bar Date --------------------------------------------------------------- Deborah J. Piazza, Esq., at Cadwalader Wickersham & Taft, in New York, tells the Court that the circumstances in these cases justify the setting of the Administrative Expense Bar Date with respect to the filing of Administrative Expense Claims at this time. It is anticipated that the Plan will be accepted by the requisite majorities of creditors and any applicable equity interest holders entitled to vote and that the Confirmation Hearing will take place in accordance with the proposed schedule. In order to achieve confirmation and consummation of the Plan most efficiently, it is essential that Lodgian, Inc., and its debtor-affiliates be able to ascertain the amount of Administrative Expense Claims in a timely fashion prior to consummation of the Plan. The Debtors ask the Court to fix October 22, 2002 at 4:00 p.m. Pacific Time as the "Administrative Expense Bar Date, by which time all parties who allegedly hold Administrative Expense Claims must file requests for payment of these expenses in these Chapter 11 cases or be forever barred from asserting these claims. Ms. Piazza explains that the Administrative Expense Bar Date will apply to all postpetition claims which arose during the period on and after the Petition Date and through and including the Administrative Expense Bar Date, including any claims relating to services provided by, the Debtors during this period. The Debtors contend that this date will give creditors sufficient time to prepare and file requests for payment of Administrative Expense Claims. Pursuant to the Disclosure Statement Approval Order, any person or entity asserting an Administrative Expense Claim against the Debtors that arose during the period on and after the Petition Date and through and including the Administrative Expense Bar Date must file, on or before the Administrative Expense Bar Date, an Administrative Expense Claim so as to be actually received at the appropriate destination not later than 4:00 p.m. Pacific Time on or before the Administrative Expense Bar Date, by mailing the original to Poorman-Douglas, the Debtors' Vote Tabulation Agent, at: -- Lodgian, Inc., et al. c/o Poorman-Douglas Corporation P.O. Box 4230, Portland, Oregon 97208-4230 with a copy to: -- Cadwalader, Wickersham & Taft, 100 Maiden Lane, New York, New York 10038 (Attn: Adam C. Rogoff, Esq.) and -- Debevoise & Plimpton, 919 Third Avenue, New York, New York 10022 (Attn: George E.B. Maguire, Esq.). An Administrative Expense Claim will be deemed timely filed only when actually received on or before the Administrative Expense Bar Date. These persons or entities are not required to file an Administrative Expense Claim by the Administrative Expense Bar Date: -- any person or entity which has already filed an Administrative Expense Claim against the Debtors; -- holders of Administrative Expense Claims previously allowed by order(s) of this Court; -- any professionals retained in these Chapter 11 cases by the Debtors or the Committee, for professional fees and reimbursement of expenses, and any of the current officers and directors of each of the Debtors; -- holders of administrative expense claims which arise and are due and payable solely in the ordinary course of the Debtors' business operations; provide however, that any holder of an "ordinary course" administrative expense claim which remains outstanding and unpaid by the Debtors beyond ordinary business terms or prior course of business dealings with the Debtors must file an Administrative Expense Claim on or before the Administrative Expense Bar Date; and -- any claims by one Debtor against another Debtor. Except for those creditors holding Administrative Expense Claims, Ms. Piazza relates that the claims of all other creditors of the Debtors will be subject to the Original Bar Date. In this regard, any failure of a creditor to file a timely proof of claim pursuant to the Original Bar Date does not entitle the creditor to file a claim pursuant to the Administrative Expense Bar Date set forth in the Disclosure Statement Approval Order. The Debtors propose that any alleged holder of an Administrative Expense Claim who is required to, but fails to, file an Administrative Expense Claim in accordance with the Disclosure Statement Approval Order on or before the Administrative Expense Bar Date will be forever barred, estopped and enjoined from asserting an Administrative Expense Claim against the Debtors. Accordingly, the Debtors will be forever discharged from any and all indebtedness or liability with respect to the Administrative Expense Claim, and the holder will not be permitted to participate in any distribution in the Debtors' Chapter 11 cases on account of the Administrative Expense Claim or to receive any further notice regarding the Administrative Expense Claim. (Lodgian Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., 609/392-0900) LTV CORP: Seeks Approval to Retain Nationwide as Appraisers ----------------------------------------------------------- LTV Steel Company and its debtor-affiliates seek the Court's authority to employ Nationwide Consulting Company Inc., as appraisers, nunc pro tunc to July 9, 2002. David G. Heiman, Esq., Heather Lennox, Esq., and Leah J. Sellers, Esq., at Jones Day Reavis & Pogue, in Cleveland, and Jeffrey B. Ellman, Esq., at Jones Day, in Columbus, tell the Court that the Debtors have engaged Nationwide as an "ordinary course professional" to perform appraisal services for their businesses on an ad hoc basis. As these cases progressed, the Debtors asked Nationwide to perform appraisals of their personal property in connection with their application for a $250 million loan from National City Bank and KeyBank, N.A. This loan was to be guaranteed in part under the Federal Emergency Steel Guaranteed Loan Program. The Loan Guaranty Appraisal was required under this program. But the loan guaranty did not push through, forcing the Debtors to seek authority to implement the APP. Nationwide also performed appraisal for the Debtors in connection with the sale of certain assets owned by non-debtor affiliates -- the River Terminal Railway Company, Chicago Short Line Railway Company, and the Cuyahoga Valley Railway Company -- as part of the Integrated Steel Sale. Specifically, the need for the Railroad Appraisal arose from the obligations of LTV Steel and the Railroad Subsidiaries under the Allocation Agreement dated February 26, 2002, which has now been approved. The Debtors foresee the need for Nationwide's appraisal services in connection with the APP and the Debtors' marketing of the Metal Fabrication Business. The Debtors expect that the total cost of the nationwide Appraisals will exceed the $25,000 average monthly fee limitation per fee reporting period established by the Ordinary Course Professionals Order. While the Debtors believe that Nationwide is a Service Provider -- not a Covered Professional -- and therefore, not subject to the fee cap, the Debtors nonetheless make this Application out of an abundance of caution. Nationwide's Services The Debtors anticipate that Nationwide will render Future Appraisals and in that connection will: (1) advise and assist the Debtors and their professionals in preparing machinery and equipment appraisals to assist them in implementing the APP and related asset sales; (2) advise and assist the Debtors and their professionals in their negotiation and due diligence efforts with other parties; (3) attend and participate in hearings and meeting on matters within the scope of Nationwide's retention; and (4) advise and assist the Debtors with respect to such other related matters as the Debtors or their professionals may request from time to time. Payment of Nationwide Fees Nationwide intends to: (a) charge for its professional services on an hourly basis in accordance with its ordinary and customary hourly rates in effect on the date services are rendered; and (b) seek reimbursement of actual and necessary out-of-pocket expenses. Nationwide's hourly rates vary with the experience and seniority of the individuals assigned, and may be adjusted by Nationwide from time to time. John J. Connolly, III, Senior Vice President of Nationwide, assures Judge Bodoh that Nationwide will make every effort to coordinate with the Debtors and other retained professional firms in these cases to ensure that services provided by Nationwide are not duplicative of those provided by other professional firms. Mr. Connolly reports that, in addition to the $117,925 received by Nationwide from the Debtors prior to the Petition Date, the Debtors have paid Nationwide a total of $220,906.20 subsequent to the Petition Date in connection with the Federal Guaranty Appraisal and the Railroad Appraisal, which payment exceeds the Fee Cap. Mr. Connolly further assures the Court that, to the best of his and Nationwide's knowledge: (1) Nationwide is not and has not been employed by any entity other than the Debtors in matters related to these chapter 11 cases; (2) Prior to the Petition Date, Nationwide performed professional services for the Debtors similar to those described in this Application; however, Nationwide was fully compensated for those prepetition services; (3) From time to time, Nationwide has performed services, and likely will continue to provide services, to certain creditors of the Debtors and various other parties adverse to the Debtors in matters unrelated to these chapter 11 cases; and (4) Nationwide personnel may have business associations with certain creditors of the Debtors unrelated to these chapter 11 cases. In addition, in the ordinary course of its business, Nationwide may engage counsel or other professionals in unrelated matters that now represent, or who may in the future represent, creditors or other interested parties in these cases. In the interest of full disclosure, Mr. Connolly describes the work performed for parties interested in these cases: Client/Affiliate Relationship To Debtors Nature of Work ---------------- ----------------------- -------------- Anheuser-Busch Companies Major Affiliation of Property Tax Debtors' Officers Consulting & Directors Coca-Cola Enterprises Major Affiliation of Property Tax Debtors' Officers Consulting & Directors Marathon Oil Co. One of the Debtors' Appraisal Largest Unsecured Creditors Metlife Insurance Co. One of the Debtors' Property Tax Largest Unsecured Consulting Creditors Aetna Life Insurance One of the Debtors' Property Tax Largest Unsecured Consulting Creditors BP Amoco PLC Significant Lessor Appraisal & Sublessors to Debtors CIT Group Significant Lessor Appraisal & Sublessors to Debtors Sherwin-Williams Significant Lessor Property Tax & Sublessors to Debtors Consulting BP Amoco Corp. Lessors Appraisal Cit Group/Equipment Lessors Appraisal Financing Inc. Despite diligent efforts to identify and disclose Nationwide's connections with parties-in-interest in these cases, because the Debtors are a large enterprise with thousands of creditors and other relationships, Mr. Connolly explains that Nationwide is unable to state with certainty that every client relationship or other connection has been disclosed. In this regard, if Nationwide discovers additional information that requires disclosure, Nationwide will file a supplemental disclosure with the Court as promptly as possible. Mr. Connolly concludes that Nationwide neither holds nor represents any interest adverse to the Debtors or their respective estates in the matters for which Nationwide is to be retained. Nationwide is a "disinterested person" as defined by the Bankruptcy Code. (LTV Bankruptcy News, Issue No. 36; Bankruptcy Creditors' Service, Inc., 609/392-00900) MIDLAND COGENERATION: Fitch Ratchets Rating of $567M Bonds to BB ---------------------------------------------------------------- Fitch Ratings lowered the rating of Midland Cogeneration Venture LP's $567 million subordinate lease obligation bonds to 'BB' from 'BB+'. The rating remains on Rating Watch Negative. The rating action follows the recent downgrade of the senior unsecured debt of Consumers Energy Co., MCV's principal offtaker, to 'BB' from 'BB+'; Consumers remains on Rating Watch Negative. Absent counterparty credit concerns, Fitch views the credit quality of the MCV bonds to be of low investment grade quality. MCV is a nominal 1,500 MW gas-fired cogeneration facility located in Midland, Michigan. MCV sells electrical energy to Consumers under a long-term power purchase agreement. Revenues under the PPA provided approximately 94% of MCV's total revenue for the year ended December 31, 2001. The remaining revenue was earned primarily from steam and electric sales under long-term contracts with nearby Dow Chemical and Dow Corning facilities. Considering the economic significance of the Consumers PPA, MCV's credit quality is constrained by the counterparty rating of Consumers. On September 4, 2002, Fitch downgraded the senior unsecured debt of CMS Energy to 'B+' from 'BB-'. The rating remains on Rating Watch Negative due to concerns surrounding CMS' weak liquidity position, high parent debt levels, and limited financial flexibility. The downgrade of Consumers, a regulated utility and subsidiary of CMS, reflects Fitch's notching criteria with respect to parent and subsidiary ratings. The revised ratings for CMS and Consumers reflect concerns regarding projected cash constraints at each of the companies for the remainder of the year. Consumers' operating cash flow is forecasted to be negatively impacted over the next several months due to high capital expenditure requirements for environmental compliance, gas purchases made during the summer months and a $103 million dividend to CMS in October. Consumers and CMS continue to be constrained by the inability to access the capital markets due to CMS' need to restate its 2000 and 2001 financial statements to eliminate the effects of 'wash trades' with other energy companies. The credit quality of MCV is significantly enhanced by the amount of cash reserved at the project. Due to terms of the project financing documents, distributions to MCV partners are severely restricted and all residual cash flow to date has been retained at the project, with the exception of a $9.5 million partner tax distribution made in 1991. Fitch expects a significant portion of future residual cash flow to be retained and for cash reserves to build and eventually exceed the amount of outstanding debt. Going forward, withdrawal of cash reserves may be required to supplement operating cash flow and fulfill MCV's rental lease payments in the event of unfavorable market conditions or regulatory actions. Fitch believes the cash reserve should be adequate to offset reasonably foreseeable events and, thus, provide timely payment of debt service until the MCV bonds mature in 2009. The MCV bonds were issued by Midland Funding Corp. II ($367 million taxable due 2005 and 2006) and Midland County Economic Development Corp. ($200 million tax-exempt due 2009). NATIONAL STEEL: Court Extends EPA's Bar Date to November 6, 2002 ---------------------------------------------------------------- The Environmental Protection Agency and National Steel Corporation, together with its debtor-affiliates, have been engaged in discussions concerning potential environmental claims. In this regard, the EPA has requested additional time to file claims in order to continue its discussions with the Debtors. Allowing the EPA more time will give both parties an opportunity to attempt to reach agreements on the treatment of environmental claims. Consequently, the Court approved the parties' stipulation extending the Bar Date by which the EPA and any federal natural resources trustee must file proofs of prepetition claims to November 6, 2002. (National Steel Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service, Inc., 609/392-0900) DebtTraders reports that National Steel Corp.'s 9.875% bonds due 2009 (NSTL09USR1) are trading between 38 and 42. See http://www.debttraders.com/price.cfm?dt_sec_ticker=NSTL09USR1 for real-time bond pricing. ON SEMICONDUCTOR: Expects Third Quarter Revenues to be Flat ----------------------------------------------------------- ON Semiconductor (Nasdaq:ONNN), a leading supplier of power management and data management products to broad end markets, updated its third quarter 2002 guidance. With the slowness of the current economy affecting the semiconductor industry, ON Semiconductor now expects third quarter revenues to be flat to slightly down. As the company continues to execute on its higher-margin new products and cost- savings initiatives, it expects its gross margins to expand by an estimated 100 basis points for the current quarter. "As we expected, the automotive market is seasonably down due to model changeovers. The consumer market remains somewhat soft, but we've limited the effect on our revenues by our further penetration of the game-console arena," said Steve Hanson, ON Semiconductor president and CEO. "The wireless market continues to show strength and our recent product introductions are designed to take advantage of this trend. During the historically slow summer market, we've continued to make progress in numerous areas, most notably in the area of power management. "China Certification Center for Energy Conservation Product, China's highest authority for certifying energy conservation products, last month recognized the company for its contribution to the reduction of 'leaky electricity,'" Hanson said. "Leaky electricity is a major source of wasted energy from gadgets and appliances that continue to consume power in the standby mode after the user has turned off these devices. Leaky electricity accounts for energy losses that are the equivalent of 5- gigawatts, or five power plants, last year in the United States. We also have maintained our investment in research and development and our new product development efforts continue as planned," Hanson added. ON Semiconductor continues to develop its technology in power management and recently announced an initiative to expand its presence in the portable and wireless markets. The company introduced the NCP4100 series, a family of Power-Management Application Specific Integrated Circuits, designed for next- generation cell-phones and Personal Digital Assistants. ON Semiconductor continues to develop other technologies and plans to introduce a significant packaging-technology within the next couple of weeks. The company continues to develop its proprietary intellectual property in power MOS technology and plans to introduce new trench products, which are critical power management building blocks, with samples scheduled to be delivered in the fourth quarter of 2002. "Consistent with our desire to take a conservative approach on revenue recognition, especially given the limited visibility that faces the semiconductor industry resulting from the softness in the consumer and computing markets, our policy has been and continues to be a conservative approach. We report our revenues with respect to distributor sales based upon the distributors' resale of products to end users, giving us a much clearer picture of end-user demand, and thus, more control over our factory build schedules. Our distributor inventory at the end of June was 15 weeks and is roughly at the same level today," Hanson noted. "The control of this important channel of distribution for our products is a key to our successful asset management program, especially as distributors more actively manage their working capital." The company will present at the Salomon Smith Barney Technology Industry Conference, scheduled for 9:30 a.m. Eastern time (EST) today at the Sheraton New York Hotel in New York. Hanson will provide an overview of the company's strategy and highlight the company's ongoing initiatives in China. ON Semiconductor will provide a webcast of the presentation on its Investor Relations Web page at http://www.onsemi.comand will make the presentation available at this site for two weeks following the event. ON Semiconductor (Nasdaq:ONNN) offers an extensive portfolio of power- and data-management semiconductors and standard semiconductor components that address the design needs of today's sophisticated electronic products, appliances and automobiles. For more information visit ON Semiconductor's Web site at http://www.onsemi.com * * * As reported in Troubled Company Reporter's July 24, 2002, edition, ON Semiconductor's June 28, 2002 balance sheet shows a total shareholders' equity deficit of about $596 million. ORBITAL SCIENCES: Fitch Affirms B+ Sr. Secured Facility Rating -------------------------------------------------------------- Fitch Ratings has removed Orbital Sciences' ratings from Rating Watch Negative, and has affirmed the rating on ORB's senior secured credit facility at 'B+' and the rating on ORB's convertible subordinated notes at 'B-'. Fitch also assigns a 'B' rating to ORB's second priority secured notes, which are issued under Rule 144A. The Rating Outlook is Stable for all classes of debt. ORB's ratings were on Rating Watch Negative primarily as a result of liquidity pressure related to the maturity of $100 million of convertible subordinated notes in October 2002. On August 22, 2002, ORB completed the sale of $135 million of second priority secured notes, and ORB stated it will use most of the proceeds to retire the convertible subordinated notes. The second priority secured note transaction relieves ORB's liquidity pressure, which Fitch considered to be ORB's main risk, and prompts the removal of ORB's ratings from Rating Watch Negative. The 'B'-rated second priority secured notes pay a 12% coupon and are due in August 2006. The notes are secured by substantially all of ORB's assets, but are subordinate to senior debt, including the $35 million secured credit facility. The indenture for the notes includes various covenants, including limits on Orbital's ability to incur additional debt, including senior debt. The transaction included detachable warrants for the purchase of approximately 16.5 million ORB shares at an exercise price of $3.86. In addition to retiring the subordinated convertible notes, ORB will use the proceeds to prepay a $25 million term loan. The ratings reflect ORB's strong position in missile defense programs, improved satellite manufacturing performance, solid backlog, and significant debt reduction over the past 18 months. Remaining concerns are negative near-term cash flow and the weak commercial space market, although ORB has generated several new orders in this sector within the past year. Fitch believes that Orbital has potentially valuable assets and technology, and credit quality will continue to improve if the company executes its business plan. The Stable Outlook is based on ORB's financial performance through the first six months of 2002, the benefits of the company's restructuring program, and the favorable national security spending environment. Orbital projects negative operating cash flow of $60-$65 million for the year, mainly from the elimination of a $50 million vendor payable that was paid off as of June 30, and the reduction of $20 million in deferred revenue. The company also has one cash-negative satellite project remaining (OrbView-3), which should be launched later this year. With cash of $57 million as of June 30 and proceeds from the credit facility, Fitch believes that Orbital should be able to fund operations and capital expenditures for the year. Fitch expects ORB to generate positive cash from operations next year. OWENS CORNING: Seeks 4th Exclusivity Extension to Jan. 31, 2003 --------------------------------------------------------------- Norman L. Pernick, Esq., at Saul Ewing LLP, in Wilmington, Delaware, relates that although Owens Corning and its debtor- affiliates have made significant progress towards reorganization since the Petition Date, they are seeking to extend -- for the fourth time -- their Exclusive Plan Proposal and Solicitation Periods to give them more time to develop a Reorganization Plan. Specifically, the Debtors ask the Court to extend their exclusive periods to file a plan until January 31, 2003 and solicit acceptances of that plan until March 31, 2003, without prejudice to their right to seek additional extensions. In determining whether cause exists to extend the Exclusive Periods, the Courts have routinely examined, among others, these factors: -- the size and complexity of the Debtors' cases, -- the Debtors' progress in resolving issues facing their estates, and -- whether an extension of time will harm the Debtors' creditors. Mr. Pernick asserts that the circumstances in the Debtors' cases satisfy these requirements. The Debtors' Cases Are Complex Mr. Pernick points out that by any reasonable standard, the Debtors' cases are both exceedingly large and complex. As of the Petition Date, the Debtors had scheduled assets exceeding $14,000,000,000, scheduled liabilities over $11,000,000,000 and employed more than 16,000 employees. Apart from their size, the Debtors' cases are extremely complex since they involve 18 debtors and dozens of non-debtor entities, with assets and business operations spread throughout the United States and numerous foreign countries. Compounding the complexity of the Debtors' cases are the complex inter-creditor issues, involving numerous competing creditor groups including bondholders, an unsecured bank group, trade creditors and other parties holding present and future asbestos claims. The asbestos claims in these cases, Mr. Pernick continues, raise many difficult issues for the Debtors' reorganization. Among other things, due to the number of asbestos claims in the Debtors' cases -- which is expected to be hundreds of thousands -- the Debtors face huge logistical issues with respect to the establishment of bar dates, associated to notice issues and the processing of filed asbestos-related claims. The logistical issues also arise in connection with the Debtors' non-asbestos related claims, which are expected to reach tens of thousands. "The valuation of the present and future asbestos claims is also a major issue in this case that the Debtors and each major constituency and their respective experts have been analyzing for a number of months," Mr. Pernick adds. There is Progress Towards Proposing A Plan Mr. Pernick points out that the Debtors have made significant progress in their Chapter 11 cases, including: A. Business Operations: Since the Petition Date, and continuing throughout the Debtors' cases, the Debtors' management has focused on stabilizing and running the Debtors' businesses and responding to the many time-consuming demands that accompany the commencement and management of a Chapter 11 case, including responding to inquiries from vendors, taxing authorities, utilities, landlords, customers, professionals, the Committees, the Future Representative, the Bank Group, and other parties-in-interest; B. Compliance with Administrative Requirements: The Debtors have continued to comply with the various administrative requirements imposed upon Chapter 11 debtors, including the timely filing of monthly operating reports; C. Bank Standstill and Waiver Agreement: The Debtors extensively negotiated and entered into a Standstill and Waiver Agreement, approved by the Court on or about June 19, 2001, with respect to the adversary complaint and accompanying request for injunctive relief filed at the outset of these cases against 47 banks and their assignees and participants. The Debtors continue to negotiate with the three banks which are not parties to this agreement in an effort to enter into a separate standstill and waiver agreement and anticipate reaching standstill and waiver agreements with some, if not all of those banks in the near future; D. Bank Setoff Litigation: The Debtors litigated and eventually settled in a manner favorable to the estates the very complicated issue of the Banks' claimed setoffs of funds of the Debtors. This resulted in the recovery exceeding $18,000,000 for the estates; E. Inter-Creditor Project: In accordance with the Stipulation and Order Regarding Resolution of Inter-Creditor Issues, the Debtors have devoted and continue to devote substantial effort towards the assembly of documents and other information relating to certain inter-creditor issues and have established an information and document depository with respect to this data. The participating parties continue to review and analyze the information and meet monthly regarding the project. Monthly status reports are given to the Court. The Debtors have been developing proposed factual stipulations and proffering them to the participating parties for review and comment. All parties have generally complied with the Court-approved deadlines for the factual stipulations that were previously approved by the Court, which means that the overall timeframe that the Debtors' presented to the Court last February still appears feasible. On November 15, 2002, the participating parties are to submit undisputed factual stipulations and outlines of disputed facts and issues to the Court. A status conference is scheduled for November 25, 2002 to address the factual stipulations, legal issues, and determine a process for proceeding forward. The process has allowed all of the key constituencies to educate themselves about the myriad of factual and legal issues relating to the Bank Guaranties and numerous related issues in a very efficient and comprehensive fashion and in a relatively short timeframe compared to what would have occurred if these issues were handled in a normal litigation framework; F. Business Transactions: The Debtors have sought and obtained Court approval under Section 363(b) of the Bankruptcy Code for various special business transactions; G. Statements and Schedules: The Debtors have amended their schedules of assets and liabilities, in connection with their filing of the motion for the establishment of a bar date for the filing of non-asbestos claims against the Debtors; H. Bar Date: April 15, 2002 was established as the bar date for the filing of non-asbestos claims. The Debtors are in the process of reviewing, analyzing and evaluating the numerous claims filed. The Debtors have sought and obtained omnibus orders disallowing and expunging certain claims. The Debtors will continue to object to disputed claims; I. Executory Contracts and Unexpired Leases: The Debtors are engaged in an ongoing review of their remaining executory contracts and unexpired leases to determine whether the rejection or assumption and assignment of the agreements is in the best interests of their respective estates. The Debtors have sought and obtained Court approval under Section 365 of the Bankruptcy Code to reject various unneeded executory contracts and leases and also to assume, or assume as modified, certain executory contracts; J. Review of Asbestos Claims: The Debtors and the major constituents are performing a substantial analysis and valuation of the asbestos claims asserted against them. The Debtors are exploring the most efficient and effective way of addressing these claims in a Reorganization Plan; K. Vendor Issues: The Debtors have identified various prepetition, mutual obligations with certain vendors and creditors and have continued to negotiate and resolve the setoffs; L. Reclamation Claims: The have Debtors filed their Initial Reclamation Procedures Motion, which was granted on October 6, 2000. As anticipated, the Debtors received a large number of Reclamation Claims -- 220 claims, with a total amount of $33,360,353. The Debtors have devoted substantial time and effort in reviewing and analyzing these claims and have filed four motions to reconcile claims. In certain instances, the Debtors are proceeding with reclamation litigation; M. Avoidance Actions: The Debtors have largely completed an extensive review and analysis of potential preference and fraudulent conveyance actions and have met with the Committees and Future Representative regarding potential avoidance actions and tolling agreements and the Debtors' proposed actions with respect to those actions. The Debtors are in the process of providing the Committees and the Futures Representative with the requested backup information; N. Development of a Reorganization Plan: The Debtors have continued to perform an in-depth review and analysis of a myriad of plan issues and to outline a strategy for the development of a plan of reorganization. The Debtors have prepared their own internal detailed drafts of a plan term sheet, and are in the process of preparing a draft Disclosure Statement. The Debtors have met several times since June 2002 with representatives of the key constituencies to discuss possible plan alternatives. The Debtors have also had numerous meetings and discussions with the Court-appointed mediator, Francis McGovern, in an effort to arrive at a plan term sheet. The Debtors have also continued to work on most of the major prerequisites to the proposal and confirmation of any plan of reorganization. The Debtors informed the Court months ago of their desired plan timeline: a term sheet by September and the filing of a plan and disclosure statement by December 31, 2002. The Debtors continue to work diligently towards that goal. The Debtors continue to hope that the participating parties will over the next couple of months negotiate the terms of a consensual plan and that the Debtors will be in a position to develop a confirmable plan on the aforementioned timetable; and O. Appointment of Mediator: The Debtors have sought and obtained the appointment of Francis E. McGovern as a mediator in these Chapter 11 cases. The mediator has commenced negotiations with the Committees, Future Representative, and the Debtors in an effort to consensually resolve the Debtors' cases. If the current deadline is not extended, Mr. Pernick fears that the Debtors' progress will be severely disrupted. Extension Not Meant To Pressure Creditors Mr. Pernick assures the Court that the requested extension is not a negotiation tactic. "It is merely a reflection of the fact that an extension is required to afford a full and fair opportunity to negotiate, propose, and seek acceptances of a Chapter 11 Plan," Mr. Pernick explains. The Debtors have consistently attempted to work closely and share information with the Committees and the Future Representative to minimize the number of disputed matters requiring the Court's determination and facilitate the consensual resolution of these cases. Face-to-face meetings are regularly scheduled with the Committees, Future Representative, and Bank Group to address specific case matters, including the inter-creditor project, potential avoidance actions, and asbestos valuation issues. The Debtors and their professionals have no intention to discontinue this exchange of information if requested extension is granted. The Court will convene a hearing on September 24, 2002 to consider the Debtors' request. By application of Local Rule 9006-2, the Debtors' exclusive period to file a plan is automatically extended through that date. (Owens Corning Bankruptcy News, Issue No. 37; Bankruptcy Creditors' Service, Inc., 609/392-0900) DebtTraders reports that Owens Corning's 7.700% bonds due 2008 (OWC08USR1) are trading between 38.75 and 40. See http://www.debttraders.com/price.cfm?dt_sec_ticker=OWC08USR1for real-time bond pricing. PHOENIX GROUP: Bringing-In Kirkpatrick & Lockhart as Co-Counsel --------------------------------------------------------------- The Phoenix Group Corporation and Americare Management, Inc., ask for permission from the U.S. Bankruptcy Court for the District of Delaware to retain and employ Kirkpatrick & Lockhart, LLP as their co-counsel in connection with their chapter 11 cases. Kirkpatrick & Lockhart will advise and represent the Debtors with respect to all reorganization, litigation, securities, tax, and general corporate law matters, as well as any other matters that may arise in the company's chapter 11 cases. Specifically, Kirkpatrick & Lockhart will: a) provide legal advice with respect to the Debtors' powers and duties as debtors in possession in the continued operation of their business and the management of their properties; b) take all necessary action to protect and preserve the Debtors' estates, including the prosecution of actions on behalf of the Debtors, the defense of any actions commenced against the Debtors, negotiations concerning all litigation in which the Debtors are involved, and objections to claims filed against the Debtors' estates; c) prepare on behalf of the Debtors all necessary motions, answers, orders, reports, and other legal papers in connection with the administration of their estates in these cases; d) assist the Debtors in preparing for and filing one or more disclosure statements in accordance with Section 1125 of the Bankruptcy Code; e) assist the Debtors in preparing for and filing one or more plans of reorganization at the earliest possible date; f) perform any and all other legal service for the Debtors in connection with the Chapter 11 cases; and g) perform such legal services as the Debtors may request with respect to any matter, including corporate finance and governance, contracts, antitrust, labor, and trust. Kirkpatrick & Lockhart will charge the Debtors for legal services at the Firm's customary hourly rates: Partners $260 - $600 Associates $145 - $325 Legal Assistants $ 45 - $160 The Phoenix Group Corporation is a holding company for subsidiaries providing healthcare management and ancillary services to the long-term care industry and business acquisitions in the home health care industry. The Company filed for chapter 11 protection on August 21, 2002 in the U.S. Bankruptcy Court for the District of Delaware Francis A. Monaco Jr., Esq., Joseph J. Bodnar, Esq., at Walsh, Monzack & Monaco, PA and Jeffrey N. Rich, Esq., Robert N. Michaelson, Esq., at Kirkpatrick & Lockhart LLP represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $18,876,457 in assets and $16,693,089 in debts. POLYMER GROUP: Court to Consider Reorg. Plan on Sept. 30, 2002 -------------------------------------------------------------- On August 15, 2002, a hearing was held to approve the adequacy of the Amended Disclosure Statement prepared by Polymer Group, Inc., and its debtor-affiliates, explaining the Company's Plan of Reorganization. At the conclusion of that hearing, the U.S. Bankruptcy Court for the District of South Carolina approved the Debtors' Disclosure Statement and authorized that document to be circulated to the Debtors' creditors. The Court also allowed the Debtors to start soliciting creditors' votes to accept the plan. The Honorable John E. Waites also will convene a hearing to consider confirmation of the Debtors' Joint Plan of Reorganization on September 30, 2002 at 4:00 p.m. prevailing Eastern Time. The Plan may be modified, if necessary, pursuant to 11 U.S.C. Sec. 1127 before, during and as a result of the Confirmation Hearing. All objections to the confirmation of the Plan must be received by the Clerk of the Bankruptcy Court before 4:30 p.m. on September 20, 2002, with copies served upon: (a) Counsel for Debtors and Debtors-in-Possession (i) Kirkland & Ellis 200 E. Randolph Street Chicago, Illinois 60601 Phone: 312-861-2000 Fax: 312-861-2200 Attn: James A. Stempel, Esq. Jonathan Friedland, Esq. (ii) Nelson, Mullins, Riley & Scarborough, LLP 1330 lady Street, Third Floor Columbia, South Carolina 29201-3332 Phone: 803-799-2000 Fax: 803-265-7500 Attn: George B. Cauthen, Esq. (b) Counsel to the Agent for Prepetition Lenders (i) Milbank, Tweed, Hadley & McCloy One Chase Manhattan Plaza New York, New York 10005-1413 Phone: 212-530-5270 Fax: 212-530-5219 Attn: Dennis Dunne, Esq. (ii) Nexsen Pruet Jacobs & Pollard, LLC 1441 Main Street, Suite 1500 Columbia, South Carolina 29202 Phone: 803-253-8277 Attn: Rick Mendoza, Jr., Esq. (c) Counsel to the Agent for Debtor-in-Possession Lenders Morgan, Lewis & Bockius LLP 101 Park Avenue New York, New York 10178-0060 Phone: 212-309-6000 Fax: 212-309-6273 Attn: Robert H. Scheibe, Esq. (d) Counsel for the United States Trustee Office of the United States Trustee 1835 Assembly Street - Room 953 Columbia, South Carolina 29201 Phone: 803-765-5250 Fax: 803-765-5260 (e) Counsel for the Committee (i) Kasowitz, Benson, Torres & Friedman LLP 1633 Broadway New York, New York 10019 Phone: 212-506-1700 Fax: 212-506-1800 Attn: David Rosner, Esq. Robert Novick, Esq. (ii) The McNair Law Firm, P.A. PO Box 11390 (29211) 1301 Gervais Street Columbia, South Carolina 29211 Phone: 803-799-9800 Fax: 803-933-1447 Attn: Michael Beal, Esq. (f) Counsel for GOF (i) Orrick, Herrington & Sutcliff LLP 400 Capitol Mall, Suite 3000 Sacramento, California 59814-4497 Phone: 916-447-9200 Fax: 916-329-4900 Attn: Marc Levinson, Esq. (ii) Haynsworth Sincler Boyd P.A. 1426 Main Street, Suite 1200 Columbia, South Carolina 29201-2834 Phone: 803-540-7836 Fax: 803-765-1243 Attn: H. Stanley McGuffin, Esq. Polymer Group, Inc., the world's third largest producer of nonwovens, is a global, technology-driven developer, producer and marketer of engineered materials. The Company filed for Chapter 11 protection on May 11, 2002. George Cauthen, Esq., at Nelson at Mullins Riley & Scarborough, LLP and James A. Stempel, Esq., Jonathan P. Friedland, Esq., at Kirkland & Ellis are helping the Debtors in its restructuring efforts. DebtTraders reports that Polymer Group Inc.'s 9.000% bonds due 2007 (PMGP07USR1) are trading between 19 and 21. See http://www.debttraders.com/price.cfm?dt_sec_ticker=PMGP07USR1 for real-time bond pricing. PROVANT INC: Seeks Listing Transfer to Nasdaq SmallCap Market ------------------------------------------------------------- Provant, Inc. (NASDAQ: POVT), a leading provider of performance improvement training services and products, announced that The Nasdaq Stock Market has notified Provant that as a result of Provant's acquisition of Strategic Interactive, Inc., in October 1998 it is not in compliance with Nasdaq's shareholder approval requirements, as set forth in Nasdaq Marketplace Rule 4350(i)(1), and that the Company's non-compliance would be considered by the Nasdaq Listing Qualifications Panel when deciding whether to proceed with Provant's application for its common stock to be traded on The Nasdaq SmallCap Market. As previously announced, the Company had received notification from The Nasdaq Stock Market that it intended to delist the Company's common stock from The Nasdaq National Market, due to the Company's failure to comply with the U.S. $1.00 minimum bid price requirement for continued listing on that market. In response, the Company requested to have its common stock listed on The Nasdaq SmallCap Market and its request was approved, subject to Nasdaq's approval of the Company's application materials that the Company has filed with Nasdaq. As a leading provider of performance improvement training services and products, Provant helps its clients maximize their effectiveness and profitability by improving the performance of their people. With over 1,500 corporate and government clients, the Company offers blended solutions combining web-based and instructor-led offerings that produce measurable results by strengthening the performance and productivity of both individual employees and organizations as a whole. For the latest Provant news, or to request faxed or mailed information about Provant, call the Company's toll-free shareholder communications service at 1-877-PROVANT. This service is available 24 hours a day, seven days a week. Shareholder information is also available on the World Wide Web at http://www.provant.com QUANTUM CORP: Inks Pact to Acquire Benchmark Storage Innovations ---------------------------------------------------------------- Quantum Corp. (NYSE:DSS), a leading provider of data protection and network storage systems, has signed a definitive agreement to acquire Benchmark Storage Innovations, a privately held supplier of DLTtape(TM) drives, media and autoloaders. Quantum also announced a definitive agreement to outsource its current tape drive manufacturing to Jabil Circuit, a leader in electronic manufacturing services. With these actions, Quantum will further strengthen its DLTtape Group business by expanding its revenue and customer base through a broader product portfolio and by improving the efficiency of its manufacturing model. In addition, today's announcements build on the momentum Quantum's DLTtape Group has gained with the launch of the industry-leading SDLT 320 tape drive and also will benefit Quantum's Storage Solutions Group business and customers. Benchmark Acquisition Under the terms of the agreement with Benchmark, Quantum will acquire all of Benchmark, including its tape drive and tape media products which will be integrated into Quantum's DLTtape Group. Quantum, which already holds close to a 20 percent interest in Benchmark, will pay Benchmark's other equity holders a total of approximately 13.1 million shares of Quantum stock and $11 million in cash upon closing of the transaction. In addition, Quantum will pay these equity holders up to approximately 1.9 million shares of Quantum stock if the DLTtape Group achieves certain performance milestones with the Benchmark product lines in the first year after the completion of the acquisition. Quantum expects the acquisition to close within the fourth calendar quarter of 2002 and the transaction to be accretive within the first year after closing. The acquisition will enable Quantum to expand its DLTtape business by leveraging Benchmark's complementary products to serve the data protection needs of both new and existing customers in a part of the market beyond Quantum's current offerings. It combines Quantum's leadership in providing high- performance, high-capacity tape drives with Benchmark's expertise in delivering high-quality tape products at lower price points for more value-oriented customers. This expertise has enabled Benchmark to achieve much success in a relatively short period of time. In just four years, the company has gained strong customer acceptance, shipping more than 200,000 tape drives to systems OEMs and library partners such as ADIC, Dell, HP, IBM, Overland Storage and Tandberg Data. Benchmark has also generated revenues of approximately $80 million over the last 12 months, and it has achieved profitability even in the current environment of constrained IT spending. As a result of the acquisition, Quantum will now be able to offer customers exceptional reliability, superior price/performance, and investment protection across an even broader line of tape drives -- ranging from 80 to 320 gigabytes of capacity (compressed) -- that includes Benchmark's new ValuSmart Tape 160. Customers will also benefit from working with a single supplier and from being able to focus on a single product roadmap that leverages an installed base of nearly two million drives with over 80 million cartridges sold. "Through Quantum's acquisition of Benchmark, it's clear that they are committed to providing a broad, scalable range of best- in-class data protection solutions to customers around the world," said Dennis Waid, president, Peripheral Research. "I am confident that the quality found in Benchmark's family of value- line DLTtape-based drives and media will enhance Quantum's high- performance tape drive solutions while providing customers with the industry's most reliable, dependable products for safeguarding ever-increasing volumes of business-critical data. The acquisition is a win for Quantum and customers, alike." Quantum will continue to manufacture Benchmark products through Benchmark's current outsourcing partners, Mitsumi Electric and Beyonics Technology. Outsourced Manufacturing Quantum will outsource its current tape drive manufacturing to Jabil, which will also benefit customers. Outsourcing to Jabil will enable Quantum's DLTtape Group to reduce costs and more efficiently focus its resources on developing and delivering innovative products, while maintaining the high quality of Quantum's tape drives. Jabil is Quantum's largest and highest- rated supplier of tape drive components and has an extensive base of electronic component suppliers for inventory, manufacturing and logistics management. Under the terms of the outsourcing agreement, Jabil will utilize Quantum's manufacturing facility in Penang, Malaysia, and purchase raw materials, work-in-process production inventory and production fixed assets from Quantum. Jabil will hire the majority of Quantum's current employees at the facility and continue manufacturing Quantum's tape drive products there. From the point of view of Quantum's customers, the transition will be seamless. Quantum expects that it will begin to realize costs savings resulting from the outsourcing agreement next year. Later this month, Quantum will announce severance and other special charges related to the transaction that will be recorded in the current quarter. "Quantum takes a strategic step forward by outsourcing its manufacturing to Jabil," said Robert Amatruda, research manager at IDC. "This move will allow Quantum greater operational efficiency to meet OEM customer needs." Momentum in Quantum's DLTtape Business Thursday's announcements build on the momentum in Quantum's DLTtape business resulting from the launch of the SDLT 320. It is the industry's leading super drive, with 60 percent greater capacity, higher performance and lower cost-per-gigabyte than the nearest competitive offering. In addition, the SDLT 320 is the latest milestone on Quantum's Super DLTtapeT roadmap, which extends DLTtape technology through four new generations to a native capacity of more than one terabyte on a single cartridge. This roadmap ensures IT departments that Quantum will remain a strong partner in helping them protect their business-critical information for years to come while maintaining access to data archived on previous-generation tape media. HP, Overland Storage, Qualstar, StorageTek, Tandberg Data and Quantum are currently shipping SDLT 320, and qualifications are underway at all other major systems OEMs and library partners. DLTtape technology is the industry's most widely adopted tape platform and the de facto standard for mid-range tape backup and archiving of customers' data. DLTtape technology is sold by all server OEMs and tape automation suppliers and used by 98 percent of Fortune 500 companies. In addition, within the last few months, Sony joined Fujifilm and Maxell as a qualified manufacturer of DLTtape IV media and Fujifilm qualified as a manufacturer of Super DLTtape I media, further reinforcing the essential role this technology plays in the industry. "As a long-standing partner in helping customers meet their data protection needs, Quantum is committed to expanding its portfolio of tape drives and media products and to ensuring that our underlying cost structure enables us to do so," said John Gannon, president of Quantum's DLTtape Group. "Both the acquisition of Benchmark and the decision to outsource manufacturing reinforce this commitment, and we look forward to serving an even broader range of customers in the future." Thursday's announcements will also benefit Quantum's Storage Solutions Group business and its customers. Benchmark's autoloader products will be integrated into SSG's tape automation line, already the broadest in the industry, and will complement the Quantum SuperLoader(TM). Quantum will build on the strong success that Benchmark's ValuSmart Tape 640 Blade autoloader has had with OEMs by supplying it through SSG's worldwide distributor, VAR, and reseller channels. The ValuSmart Tape 640 Blade addresses the growing number of more value-oriented users that are migrating to rack-mounted storage solutions. In addition, as part of the agreement with Jabil, Quantum will outsource the manufacturing of some tape automation products, which are currently made at Quantum's Penang facility. As a result, Quantum's SSG customers will also benefit from the enhanced manufacturing efficiencies and continued high-quality production provided by Jabil. Quantum Corp., founded in 1980, is a global leader in data protection and network storage systems, meeting the needs of business customers with enterprise-wide storage solutions and services. Quantum is the world's largest supplier of tape drives, and its DLTtape(TM) technology is the de facto standard for backup, archiving, and recovery of mission-critical data. Quantum is a leader in the design, manufacture and service of automated tape libraries used to manage, store and transfer data. In addition to having the largest installed base of Network Attached Storage appliances of any NAS supplier, Quantum is the leader in the workgroup NAS market category. Quantum sales for the fiscal year ending March 31, 2002, were approximately $1.1 billion. Quantum Corp., 501 Sycamore Dr., Milpitas, CA 95035, 408-944-4000, http://www.quantum.com * * * As reported in Troubled Company Reporter's August 29, 2002 edition, Standard & Poor's Ratings Services placed its double- 'B' corporate credit rating and single-'B'-plus subordinated debt ratings on tape-based enterprise storage company, Quantum Corp., on CreditWatch with negative implications. The action is results from weakened operating performance. Quantum, based in Milpitas, Calif., had $390 million of debt outstanding as of June 30, 2002. "Quantum's operating performance reflects the ongoing slump in spending by enterprise customers on information technology. Revenues of $211 million in the quarter ended June 30, 2002 declined 13% sequentially. Despite being at the beginning of a positive product cycle, Quantum is suffering from weak volume demand, pricing pressure in certain product areas, and increased tape media inventories in the channel," said Standard & Poor's credit analyst Joshua Davis. QWEST COMMS: S&P Affirms B- Rating After Seeing Loan Amendments --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its single-'B'-minus corporate credit rating on diversified telecommunications carrier Qwest Communications International Inc. based on receipt of amendments to the company's existing $3.4 billion bank loan agreement, which loosens the debt-to-EBITDA test to 6 times from 4x as of year-end 2002. In addition, the maturity on this facility has been extended by two years to May 2005. The rating was also removed from CreditWatch. The outlook is developing. Denver, Colorado-based Qwest had $26 billion total debt as of June 30, 2002. A triple-'C'-plus rating was also assigned to Qwest Services Corp.'s $3.4 billion bank loan, secured by a first lien on the stock of Qwest Corp. and a second lien on the stock and certain assets of the Qwest directories business. The bank loan is guaranteed by Qwest Communications International. "The combination of the bank amendments, coupled with the receipt of an additional $750 million from a new secured bank loan at the directories subsidiary and $7.05 billion in expected proceeds from the sale of the directories business, provides reasonable liquidity to the company through at least 2003," Standard & Poor's credit analyst Catherine Cosentino said. Standard & Poor's said the developing outlook reflects the fact that Qwest's longer-term prospects are tied to resolution of several key issues, which could be either detrimental or beneficial to its creditworthiness. The company continues to face significant risks related to the ongoing SEC investigation of several of its accounting practices, the Department of Justice criminal investigation, and numerous shareholder lawsuits. While the financial effect of these issues has not been quantified, they are ongoing sources of concern to Standard & Poor's. Yet Standard & Poor's ascribes significant value to Qwest's 17- million access line base and accompanying leading position in its local telecommunications markets. Despite somewhat disappointing operating performance over the past six months, as demonstrated by the level of operating cash flow generated during this time frame, if Qwest is able to stabilize performance for its telecommunications businesses in the latter half of 2002 through 2003, the business risk for the company may support a higher rating. Qwest's business position should also benefit from the eventual receipt of long-distance relief in its various state jurisdictions, assuming the pending investigations do not delay FCC support for the company's filings. The ratings on Qwest incorporate the expectation that the company will obtain the entire proceeds from the directory sales by the end of 2003. Moreover, given the $1 billion Qwest Corp. debt maturing in mid-2003, the receipt of the first phase of the directory sales proceeds prior to this requirement is factored into the ratings. RHYNO CBO: S&P Places B Class A-3 Rating on Watch Negative ---------------------------------------------------------- Standard & Poor's Ratings Services placed its single-'B' rating on the class A-3 notes issued by RHYNO CBO 1997-1 Ltd., an arbitrage CBO transaction originated in August 1997, on CreditWatch with negative implications. At the same time, the triple-'A' ratings assigned to the class A-1 and A-2 notes are affirmed. The rating assigned to the class A-3 notes had previously been lowered on April 5, 2002. The CreditWatch placement of the rating assigned to the class A- 3 notes reflects factors that have negatively affected the credit enhancement available to support the notes since the April 2002 rating action was undertaken. The primary factor affecting the credit enhancement has been par erosion of the collateral pool securing the rated notes. The affirmations of the ratings assigned to the class A-1 and A-2 notes are based on the amount of overcollateralization available to support the class A-1 and A-2 tranches. As a result of asset defaults during the past several months, the transaction's overcollateralization ratios have deteriorated. Standard & Poor's noted that, as of the most recent available monthly trustee report (August 2, 2002), the class A overcollateralization ratio was 104.4%, compared to a ratio of 108.9% at the time of the April 2002 rating action. The minimum required overcollateralization ratio for the class A notes is 121%. Currently, 9.5% of the assets within the collateral pool come from obligors rated 'D' or 'SD' by Standard & Poor's, and another 3.97% of the assets come from obligors rated double-'C', thus classified as being highly vulnerable to default. In addition, 10.47% of the total assets come from obligors with ratings currently in the triple-'C' range. Standard & Poor's will be reviewing the results of current cash flow runs generated for RHYNO CBO 1997-1 Ltd. to determine the level of future defaults the rated tranches can withstand under various stressed default timing scenarios, while still paying all of the rated interest and principal due on the rated notes. The results of these cash flow runs will be compared with the projected default performance of the performing assets in the collateral pool to determine whether the level of credit enhancement available to support the class A-3 notes is consistent with the single-'B' rating currently assigned. RATING PLACED ON CREDITWATCH NEGATIVE RHYNO CBO 1997-1 Ltd. Rating Class To From Current Balance(Mil. $) A-3 B/Watch Neg B 127 RATINGS AFFIRMED RHYNO CBO 1997-1 Ltd. Class Rating Current Balance (Mil. $) A-1 AAA 34.884 A-2 AAA 30 SAFETY-KLEEN: Retaining Rosenthal as Special Litigation Counsel --------------------------------------------------------------- The local counsel to the Official Committee of Unsecured Creditors in the Chapter 11 cases of Safety-Kleen Corp. and its debtor-affiliates -- Morris Nichols Arsht & Tunnell -- will not be able to continue its capacity as special litigation counsel in the adversary proceeding styled, "Official Committee of Unsecured Creditors v. Toronto Dominion (Texas) Inc." It was not explained why. Rosenthal, Monhait, Gross & Goddess PA was eyed as the replacement for Morris Nichols Arsht & Tunnell. The Committee sought and obtained approval from the Court to retain Rosenthal, Monhait, Gross & Goddess PA, nunc pro tunc to June 19, 2002, as special litigation counsel in the adversary proceeding against Toronto Dominion. The firm will charge its fees on an hourly basis. Among the Rosenthal professionals who will be representing the Committee, and their current hourly rates are: Kevin Gross $325 Herbert Mondros $250 Edward Rosenthal $200 These hourly rates are subject to periodic increases in the firm's ordinary course of business. (Safety-Kleen Bankruptcy News, Issue No. 44; Bankruptcy Creditors' Service, Inc., 609/392-0900) SAIRGROUP FINANCE: Look for Schedules & Statements on October 3 --------------------------------------------------------------- By order of the U.S. Bankruptcy Court for the Southern District of New York, SairGroup Finance (USA), Inc., obtained an extension of time to file comprehensive schedules of assets and liabilities and a statement of financial affairs required pursuant to 11 U.S.C. Sec. 521(1) and Rule 1007 of the Federal Rules of Bankruptcy Procedure. The Court gives the Debtor until October 3, 2002 to file its Schedules and Statements. Prior to the petition date, SairGroup Finance (USA), Inc. participated in and assisted with financing transactions on behalf of its parent and sole shareholder, SAirGroup. The Company filed for chapter 11 protection on September 3, 2002. David C.L. Frauman, Esq., at Allen & Overy represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $460,161,000 in assets and $582,888,000 in debts. SCIENT INC: Auction Sale Scheduled for September 13, 2002 --------------------------------------------------------- Scient Inc., and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of New York to sell all of their Assets to SBI and Company and SBI Scient, Inc., for a purchase price of $15,470,000, subject to higher and better offers. The Court has scheduled a hearing to consider approval of the sale on September 13, 2002 at 10:00 a.m. before the Honorable Arthur Gonzalez. All objections to the Sale Motion must be in writing and filed with the court before 5:00 p.m. on September 11. Copies must also be served on: (i) Attorneys for the Debtors Greenberg Traurig, P.A. 1221 Brickell Avenue Miami, Florida 33131 Attn: Linda Worton Jackson, Esq. Greenberg Traurig, P.A. 200 Park Avenue New York, New York 10166 Attn: Howard J. Berman, Esq. (ii) Attorneys for the Purchaser Schulte Roth & Zabel, LLP 919 Third Avenue New York, New York 10022 Attn: Jeffrey F. Sabin, Esq. David J. Ciminesi, Esq. (iii) the Office of the United States Trustee 33 Whitehall Street, 21st Floor New York, New York 10004 Attn: Richard C. Morrisey, Esq. (iv) Counsel to the Official Committee of Unsecured Creditors Olshan Grundman Frome Rosenzweig & Wolosky LLP 505 Park Avenue New York, New York 10022 Attn: Andrew I. Silfen, Esq. Judge Gonzalez previously approved a $150,000 break-up fee in favor of SBI, plus up to $250,000 of SBI's out-of-pocket expenses which will be payable in cash at the closing from the sale proceeds of any higher Qualified Bids. Scient, headquartered in New York with offices in London and key regions throughout the United States, is a leading consulting and professional services company focused on transforming clients' businesses through the creation of multi-channel experiences that strengthen connections among people, businesses and communities. The Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court for the Southern District of New York. Linda Worton Jackson, Esq., at Greenberg Traurig, P.A., Miami, Florida and Howard J. Berman, Esq., at Greenberg Traurig, New York, represent the Debtors in their restructuring efforts. SEITEL INC: Second Quarter Net Loss Balloons to $79 Million ----------------------------------------------------------- Seitel, Inc., (NYSE: SEI) recently filed with the Securities and Exchange Commission its Form 10-Q for the second quarter and first six months of 2002. Among other things, it reported a substantial increase in net losses over the first quarter due to special charges. The Company reported that revenues from its core seismic database business more than doubled over the first quarter of 2002 and that cash sales increased over the first quarter of 2002 and comparable second quarter of 2001. The Company also reported its cash position has improved considerably and that substantial reductions in overhead have been and are being implemented. Seitel reported the following financial results in the second quarter: Second Quarter Operating Results -- A net loss of $78.9 million for the quarter compared to a net loss of $18.3 million in the first quarter of 2002, and a net loss of $3.2 million in the second quarter of 2001. The second quarter of 2002 net loss reflects charges, net of tax, of (i) $56.8 million related to the discontinuation of DDD Energy, Inc.'s operations, (ii) $16.7 million related to the impairment of seismic data, (iii) $5.7 million related to the allowance for the recovery of former executives' advances and receivables and Company funds improperly converted for the personal benefit of former executives, (iv) $1.2 million related to unusual professional fees and (v) $1.1 million related to a valuation allowance on deferred income tax assets, exclusive of amounts related to discontinued operations. The first quarter of 2002 net loss reflects the change in accounting policy adopted in the second quarter of 2002 related to the Company's amortization of its created seismic data retroactive to January 1, 2002. In the first quarter of 2002, the Company recorded special charges of $16,000, net of tax, related to Company funds improperly converted for the personal benefit of former executives, and a loss of $876,000 related to discontinued operations. In the second quarter of 2001, Seitel recorded special charges of $131,000, net of tax, related to Company funds improperly converted for the personal benefit of former executives, and a loss of $4.5 million related to discontinued operations. Second Quarter Revenues -- Revenue from Seitel's core seismic division was $46.9 million - more than double the $22.5 million in the first quarter of 2002. -- Of these $46.9 million in revenues, new cash sales (as opposed to recognition of previously deferred revenue) were $25.2 million in the quarter, compared to $13.4 million in the first quarter of 2002, and $24.8 million in the second quarter of 2001. New non-cash sales of seismic data were $5.6 million, compared to $3.1 million in the first quarter of 2002, and $8.3 million in the second quarter of 2001. New non-cash sales represented 18% of total new sales in the second quarter of 2002. Progress Update on Status with Senior Noteholders Seitel has met all milestones under its standstill agreement with its lenders, including the submission of a proposed three- year comprehensive strategic plan in furtherance of negotiations toward a long term restructuring of the Company's debt. The proposed Strategic Plan provides that the Company would focus on the core seismic database business and maximize the value of its multi-client seismic library. The proposed Plan also provides for overhead reductions consistent with the Company's strategic goals and commits management to focus on maximizing cash flow and profitability, and to transparency in financial reporting and accounting issues. As previously announced, Seitel executed a standstill agreement with its Senior Noteholders on July 17, 2002, as a result of the violation of various loan covenants. Seitel is in compliance with all conditions and milestones of that agreement. It is current on the payment of all interest and principal to the Noteholders, and the Company has never missed a payment of principal or interest to the Noteholders. In accordance with the Noteholder agreement, all outstanding interest on the Senior Notes accrued as of August 2, 2002 in the amount of $7.1 million was paid. Seitel has agreed to pay interest monthly beginning with September 2002. Although there can be no assurances that the Company will be able to reach an agreement with the Noteholders to restructure its debt, Seitel continues to have a constructive and positive dialogue with the Noteholders. Second Quarter Cash/Receivables Position -- As of August 15, 2002, Seitel had cash and equivalents of $20.4 million -- $11.5 million in cash and $8.9 million in cash in an escrow account pursuant to the standstill agreement with the Company's Noteholders. This compares to cash and cash equivalents of $13.2 million at March 31, 2002, and $7.2 million at June 30, 2002. -- At June 30, 2002 the Company had receivables of $41.4 million and deferred revenue of $75.3 million. -- In addition, as of June 30, 2002 the Company had outstanding $275.1 million in long-term debt, including capital lease obligations. Reduction in Overheads and Capital Expenditures Seitel has: -- Reduced personnel by approximately 23%, relocated its headquarters to its data center in West Houston at a projected savings of approximately $800,000 annually, and expects to reduce its total personnel compensation expenses from $29 million in 2001 to a budgeted $17 million for FY 2003. -- Reduced its capital expenditure budget from $140.2 million in 2001 to an expected $89.8 million in 2002. In the second quarter of 2002, capital expenditures were $26.4 million, which includes $19.0 million for seismic data additions (of which $5.6 million are non-cash additions), $2.7 million for oil and gas properties and $4.7 million for other property, plant and equipment. -- Focused on strategic acquisitions of data and creation of data with the objective of having customers finance 65% or more of the direct costs of the creation of data. -- Scaled down expenditures on Seitel Solutions in order for Solutions to primarily service the Company's own seismic data library. Sale of DDD Energy On August 5, 2002, Seitel announced the sale of the substantial majority of the assets of DDD Energy, Inc., Seitel's wholly- owned subsidiary involved in the direct exploration and production of oil and natural gas, to Rising Star Energy, L.L.C., for net cash proceeds of $23.8 million. A final adjustment, if any, is to be made within 90 days following the closing of the sale. The sale of DDD Energy will allow Seitel to better focus on its core seismic data business. Additionally, the cash received from the sale has improved Seitel's liquidity position. The Company announced today that Rising Star has agreed to purchase two additional oil and gas properties from Seitel for approximately $1.75 million. The Company expects that sale to close on or about September 13, 2002. Seitel's remaining oil and gas properties are currently being actively marketed. Core Seismic Personnel Base Remains Intact As Seitel has focused on its seismic data library business, it has retained the core personnel engaged in providing services ranging from multi-client seismic surveys to servicing the wide- ranging needs of its customers in seismic data acquisition and providing clients with high-quality data from its seismic data library. In addition, Seitel announced that it has hired John Lentsch as the President of Seitel Solutions Canada. Mr. Lentsch has over 30 years experience in the scientific computing and IT field, with 20 years of this experience in the oil and gas industry. He has held technical and managerial positions with Atlantic Richfield and several oil service companies, including Teknica- GECO Geophysical, Schlumberger GeoQuest and QC Data. While he was with QC Data, he was the Managing Director of QC Data UK, Ltd., whose principal client was Common Data Access Limited, an industry consortium formed to reduce the cost of storing and retrieving E&P data and to improve efficiency and accessibility to that data. Transparency in Financial Reporting -- Seitel's CEO and acting CFO certified the second quarter financial results in compliance with the Sarbanes-Oxley legislation. -- Effective January 1, 2002, the Company adopted a new accounting policy related to amortization of its created seismic data. Under its new accounting policy, the Company determines amortization for created seismic data as the greater of the income forecast method or 10-year straight line amortization at the individual survey level. Seismic Data Library Book Value and Other Financial Disclosures Seitel reported that its seismic data library had a net book value of $416.0 million as of June 30, 2002. In the second quarter of 2002, Seitel recorded a one-time non-cash impairment charge of $25.7 million ($16.7 million net of tax) related to the marine and Rocky Mountain region portion of its seismic data library. This impairment charge is related to lower than expected revenues in these areas due to, among other factors, energy industry conditions. As of June 30, 2002, after the impairment, the marine portion of the seismic data library had a book value of approximately $63 million. In the quarter ended June 30, 2002, Seitel recorded a pre-tax book loss of $56.8 million related to the sale of assets of DDD Energy, Inc. This writedown reflects the difference between the book value of the DDD assets and the purchase price for the producing properties sold along with the projected value of proven reserves and unevaluated properties remaining after the sale. Updates on Regulatory Matters, NYSE Listing -- The Company continues to cooperate fully with the SEC with respect to the SEC's investigation of the alleged improprieties committed by the Company's former CEO and CFO. Additionally, Seitel recently received notification from the U.S. Attorney's Office for the Southern District of Texas of its inquiry into the alleged improprieties committed by the Company's former CEO and CFO, and the Company intends to fully cooperate. -- As previously announced, the Company received notification from the New York Stock Exchange (NYSE) that the Company's stock has fallen below the NYSE continued listing standards due to the Company's stock trading at a price of below $1.00 per share for a consecutive 30-day trading period. In accordance with the rules and procedures of the NYSE, the Company has six months within which to cure this price per share deficiency, prior to the NYSE commencing suspension and de- listing procedures. The Company has responded to the notification letter, informing the NYSE of the Company's intent to cure the deficiency. In addition, Seitel has received a second notification from the NYSE that the Company has fallen below the NYSE continued listing standard requiring market capitalization of $15 million or greater. The Company is in the process of responding to this second notification, which will include a proposed business plan for the Company's future operations. Seitel markets its proprietary seismic information/technology to more than 400 petroleum companies, selling data from its library and creating new seismic surveys under multi-client projects. SOLECTRON CORP: Will Provide Manufacturing Services for Asyst ------------------------------------------------------------- Solectron Corporation (NYSE: SLR), a leading provider of electronics manufacturing and supply-chain management services, has been selected as the sole provider of electro-mechanical manufacturing services for Asyst Technologies, Inc. (Nasdaq: ASYT). Asyst is a leading provider of integrated automation solutions that maximize the productivity of semiconductor manufacturing. The five-year agreement is expected to generate $100 million in revenue the first year, and increase over the life of the agreement. Under the agreement, Solectron will provide Asyst with complete product life-cycle services, including product design and test, new product introduction, printed circuit board assembly, systems build, systems integration, distribution and in-factory repair. Solectron will perform systems-build and integration services in a specialized clean-room environment necessary for Asyst's automated equipment. Following a transition period, Solectron expects to transfer production to its NPI and manufacturing centers in the United States and Asia. "We look forward to working with Asyst -- a leader in semiconductor manufacturing automation," said Rick Rollinson, Solectron senior vice president and president of Solectron Systems Solutions. "This agreement takes advantage of our complete product life-cycle solutions for robotics and automated equipment, and allows us to expand our reach in this very important sector." "We believe the transition to a leveraged manufacturing model will allow us to better meet our global customer commitments and to make our cost structure more variable in a highly cyclical industry," said Frederick Tiso, senior vice president, manufacturing operations, for Asyst. "Asyst and Solectron are focused on maintaining and building upon every metric of customer satisfaction, including on-time delivery, quality and reliability, as well as assuring no disruption in current customer commitments. This also gives us the opportunity to match our historical strengths in technology with a focus on time-to-market, time-to-volume and time-to-cost." The partnership is expected to include the manufacturing service of most Asyst product lines over the life of the agreement. Solectron's end-to-end product life-cycle services will enable Asyst to streamline its supply chain, accelerate product time- to-market and reduce costs, while enabling it to focus on core competencies such as research and development. As part of the agreement, Solectron will make a one-time, $20 million purchase of inventory from Asyst to support production. About 180 Asyst employees will also join Solectron for support during the transition period. "As the sole provider of electro-mechanical manufacturing services for Asyst, we look forward to building the company's complex automated products for the next five years," said Rollinson. "We appreciate that Asyst made this comprehensive outsourcing decision carefully. We believe we were chosen because of our stringent quality requirements and breadth of services, especially our industry-leading electro-mechanical services that will allow us to successfully integrate Asyst's advanced technologies." Solectron -- http://www.solectron.com-- provides a full range of global manufacturing and supply-chain management services to the world's premier high-tech electronics companies. Solectron's offerings include new-product design and introduction services, materials management, high-tech product manufacturing, and product warranty and end-of-life support. Solectron, based in Milpitas, Calif., is the first two-time winner of the Malcolm Baldrige National Quality Award. * * * As reported in Troubled Company Reporter's March 27, 2002 edition, Fitch Ratings lowered Solectron Corporation's ratings as follows: senior bank credit facility from 'BBB-' to 'BB', senior unsecured debt from 'BBB-' to 'BB', and the Adjustable Conversion Rate Equity Security Units from 'BB+' to 'B+'. The Rating Outlook remains Negative. The downgrades reflect the prolonged, significant reduction in demand from Solectron's customers, which continues to weaken operational performance and credit protection measures. In addition, with the delay in new business as customers defer ramping new projects in the face of continuing weak end-markets, Fitch believes any sustainable recovery will not materialize in 2002. The ratings also consider Solectron's top-tier position in the electronic manufacturing services (EMS) industry, diversity of end-markets and geographies, recent improvements in its capital structure, solid cash position, and recent working capital improvements albeit in an industry downturn. The Negative Rating Outlook indicates that if adverse market conditions persist, outsourcing contracts do not materialize from new customers, the company makes significant cash acquisitions, or if it is unsuccessful in execution of planned cost reductions the ratings may continue to be negatively impacted. SOLECTRON: Will Release Fiscal Year 2002 Results on Sept. 26 ------------------------------------------------------------ Solectron Corporation (NYSE: SLR), a leading provider of electronics manufacturing and supply-chain management services, will announce its fourth quarter and fiscal year 2002 earnings for the year ended Aug. 30, 2002, at 1:01 p.m. PT/4:01 p.m. ET, Sept. 26, 2002, immediately after the market closes. Also, the company's regularly scheduled conference call will be broadcast live on the Internet. The news release and market-specific information about the company's earnings will be posted by 1:30 p.m. PT/4:30 p.m. ET on the company's Web site at http://www.solectron.com/investor A taped replay will also be available Sept. 26, one hour after the conclusion of the call, through Oct. 3. Call 800-642-1687 from within the United States, or 706-645-9291 from outside the United States, and specify password "5530151." Solectron -- http://www.solectron.com-- provides a full range of global manufacturing and supply-chain management services to the world's premier high-tech electronics companies. Solectron's offerings include new-product design and introduction services, materials management, high-tech product manufacturing, and product repair and end-of-life support services. Solectron, the first two-time winner of the Malcolm Baldrige National Quality Award, has a full range of industry-leading supply-chain services on five continents. Its headquarters are in Milpitas, Calif. * * * As reported in Troubled Company Reporter's March 27, 2002 edition, Fitch Ratings lowered Solectron Corporation's ratings as follows: senior bank credit facility from 'BBB-' to 'BB', senior unsecured debt from 'BBB-' to 'BB', and the Adjustable Conversion Rate Equity Security Units from 'BB+' to 'B+'. The Rating Outlook remains Negative. The downgrades reflect the prolonged, significant reduction in demand from Solectron's customers, which continues to weaken operational performance and credit protection measures. In addition, with the delay in new business as customers defer ramping new projects in the face of continuing weak end-markets, Fitch believes any sustainable recovery will not materialize in 2002. The ratings also consider Solectron's top-tier position in the electronic manufacturing services (EMS) industry, diversity of end-markets and geographies, recent improvements in its capital structure, solid cash position, and recent working capital improvements albeit in an industry downturn. The Negative Rating Outlook indicates that if adverse market conditions persist, outsourcing contracts do not materialize from new customers, the company makes significant cash acquisitions, or if it is unsuccessful in execution of planned cost reductions the ratings may continue to be negatively impacted. SOLID RESOURCES: Closes $4M Sale of Well Testing Div. to Lonkar --------------------------------------------------------------- Alvin Harter, President and CEO of Solid Resources Ltd. (TSXV:SRW) announced that last closing condition of the sale of the Company's well testing services division to Lonkar Well Testing Services Ltd. has been satisfied and the transaction is now closed. The transaction has resulted in net proceeds to the Company in the amount of $4,490,000 of which $300,000 is being held back by Lonkar pending the discharge of registered encumbrances. It is anticipated that the proceeds will be disbursed as part of the Plan of Arrangement. * * * As previously reported in the July 8, 2002 edition of the Troubled Company Reporter, Alvin Harter, President and CEO of Solid Resources Ltd. (TSXV:SRW) announced that an Order was granted on July 3, 2002 extending the Company Creditors' Arrangement Act stay to September 30, 2002. This extension should allow the Company sufficient time to implement the Plan of Arrangement and allow the creditors to vote on the Plan September 5 and 6th, 2002. The Court of Queens Bench also allowed the filing of a petition for bankruptcy solely for the purpose of preserving any limitation periods. The Court immediately stayed all proceedings under this petition so as to not adversely affect the CCAA process. SOLID RESOURCES: Creditors Approve Proposed Plan of Arrangement --------------------------------------------------------------- Alvin Harter, President and CEO of Solid Resources Ltd. (TSXV: SRW) announced that both the unsecured creditors and the secured creditors unanimously voted to approve the proposed Plan of Arrangement. In the meeting of unsecured creditors, held Thursday September 5, 2002, the one hundred and fifty-four unsecured creditors unanimously voted in favour of accepting the Plan. The secured creditors also unanimously voted in favour of the Plan in a meeting that was held on September 6, 2002. As a result of these meetings the Company will now seek approval of the Plan by the Court of Queens Bench of Alberta as required by the provisions of the Companies' Creditors Arrangement Act. Following approval of the Court the Company will be in a position to implement the Plan and make distributions to Creditors in accordance with the Plan. TERION INC: Successfully Emerges from Chapter 11 Proceeding ----------------------------------------------------------- Terion, Inc., a leading provider of trailer monitoring systems, announced that its reorganization became effective on August 30, 2002. Terion's investor group has supported the reorganization and has funded the company with an additional $10.8 million. Terion has restructured its business to focus on the FleetView(TM) product. Its successful restructuring efforts included funding from existing and new investors. Investors include SCP Private Equity Partners II LP, HVFM-II LP in which Harris Corporation is the major investor, Crossbow Ventures, and ING Capital LLC. Ken Cranston, Terion president and CEO commented, "Terion has tremendous investor and customer support. We will continue to focus on enhancing the quality of our service offering and supporting our customers in driving inefficiency out of the supply chain." FleetView(TM) supplies fleet management information through the Internet from its patented innovative hardware and software design. The design integrates GPS and cellular technology for comprehensive coverage throughout the United States and Canada. The system is concealed to provide a covert installation. It communicates real-time trailer location and event status when the trailer is tethered to or untethered from a tractor, including an accurate determination of loading and unloading events with FleetView's Cargo Sensor. The system uniquely supports over-the-air software downloads for device settings and software upgrades. Terion's FleetView(TM) operates in a standard browser environment on standard PC hardware. With approximately 50,000 units in the field, FleetView(TM) is the leading untethered trailer-tracking product in the North American market. Terion, Inc. -- http://www.terion.com-- is a leading two-way wireless data communication and information solution provider for mobile and remote business-to-business applications focusing on the transportation industry. Terion provides valued added products and services, robust application content software accessed through the Internet, and reliable, high-quality hardware designed specifically for our target markets. TTR TECHNOLOGIES: Fails to Satisfy Nasdaq Listing Requirements -------------------------------------------------------------- TTR Technologies, Inc., (Nasdaq NM: TTRE) has been notified by The Nasdaq Stock Market, Inc., that the Company does not currently satisfy the minimum $4.0 million net tangible assets requirement or the minimum $10.0 million stockholders' equity requirement for continued listing on the Nasdaq National Market. The Company expects to present a plan to Nasdaq which is intended to achieve and sustain compliance with the requirements for continued listing on the Nasdaq National Market. If Nasdaq does not find this plan acceptable, the Company's common stock will be delisted from the Nasdaq National Market, subject to appeal by the Company. This notification from Nasdaq is the formal notice that the Company anticipated receiving, as was disclosed in its Form 10-Q for the quarter ended June 30, 2002. The Company is also currently studying the possible alternative of applying to list its securities on the Nasdaq SmallCap Market. There can be no assurance that the Company will be able to maintain its Nasdaq National Market listing or that the Company will be able to successfully transfer to the Nasdaq SmallCap Market. The Company also announced today that it was recently served with a summons and complaint regarding a lawsuit filed in United States District Court for the Southern District of New York alleging, among other things, certain violations of federal securities laws by the Company and certain of its current and former officers and directors relating to statements made in press releases and public conference calls. The Company is reviewing the complaint. TTR -- http://www.ttrtech.com-- designs, markets and sells proprietary anti-piracy products. The company has developed and commercialized products for the software and entertainment industries and is expanding its product range and reach through in-house development and joint ventures. In addition to developing SAFEAUDIO(TM), TTR is investing in Digital Rights Management Protection technologies as well as security solutions for the DVD-ROM market. TTR has a joint development and marketing agreement for music CD copy protection with Macrovision Corporation (Nasdaq: MVSN - News). TTR's shares are listed on the Nasdaq National Market (TTRE). UNIROYAL TECHNOLOGY: Hires Bayard Firm as Bankruptcy Counsel ------------------------------------------------------------ Uniroyal Technolgy Corporation and its debtor-affiliates seek permission from the U.S. Bankruptcy Court for the District of Delaware to tap the legal services of The Bayard Firm, PA as bankruptcy counsel. Bayard is expected to: a) take all necessary action to protect and preserve the estates of the Debtors, including the prosecution of actions on the Debtors' behalf, the defense of any actions commenced against the Debtors, the negotiation of disputes in which the Debtors are involved, and the preparation of objections to claims filed against the Debtors' estates; b) provide legal advice with respect to the Debtors' powers and duties as debtors-in-possession in the continued operation of their businesses and management of their properties; c) negotiate, prepare and pursue confirmation of a plan and approval of a disclosure statement; d) prepare on behalf of the Debtors, as debtors-in- possession, necessary motions, applications, answers, orders, reports, and other legal papers in connection with the administration of the Debtors' estates; e) appear in Court and to protect the interests of the Debtors before the Court; f) assist with any disposition of the Debtors' assets, by sale or otherwise; and g) perform all other legal services in connection with these chapter 11 cases as may reasonably required. The principal attorneys and paralegals proposed to represent the Debtors and their hourly rates are: Jeffrey M. Schlerf $395 per hour Christopher P. Simon $275 per hour Eric M. Sutty $250 per hour Lina Shaw (paralegal) $130 per hour Prior to the Petition Date, Bayard was retained by the Debtors to provide bankruptcy advice, including assisting in the preparation of the requisite petitions, pleadings, exhibits, lists and schedules in connection with the commencement of these cases. In connection to these services, Bayard received a retainer of approximately $35,000 for legal fees and expenses. The remaining balance for the Retainer will be held against future fees and expenses. Uniroyal Technology Corporation and its subsidiaries are engaged in the development, manufacture and sale of a broad range of materials employing compound semiconductor technologies, plastic vinyl coated fabrics and specialty chemicals used in the production of consumer, commercial and industrial products. The Company filed for chapter 11 protection on August 25, 2002 Eric Michael Sutty, Esq., and Jeffrey M. Schlerf, Esq., at The Bayard Firm represent the Debtors in their restructuring efforts. When the Debtors filed for protection from its creditors, it listed $85,842,000 in assets and $68,676,000 in debts. UNIROYAL TECH.: Commences Trading on National Quotation Bureau -------------------------------------------------------------- Uniroyal Technology Corporation (Nasdaq: UTCI) announced that its common stock and warrants to purchase its common stock will be traded as an over-the-counter equity security under the symbol "UTCIQ," effective September 6. Quotation service will be provided by the National Quotation Bureau, LLC "Pink Sheets". The Company has been notified that its securities will no longer be traded on the NASDAQ SmallCap market pursuant to Marketplace Rules 4430(a)(1) and 4330(a)(3). For further information, please contact Roger Gillott or Robert Emmers, +1-310-788-2850, for Uniroyal Technology Corporation. UNITED AIRLINES: Flight Attendants Welcome New CEO Glenn Tilton --------------------------------------------------------------- Association of Flight Attendants, AFL- CIO, United Master Executive Council President Greg Davidowitch issued this statement following his Wednesday meeting with the leaders of the other unions representing workers at United, at which the airline's new CEO, Glenn Tilton was introduced by outgoing CEO Jack Creighton: "United's employees met [Thurs]day to do the work that the airline's recently replaced management team failed to do -- lay the framework that will provide United with a strategic plan for the airline's return to its former status as the premier air carrier in the world. We will continue to meet with the other labor groups at United and the new management team until we have solved our airline's short-term and long-term problems. "The Flight Attendants are encouraged that in Glenn Tilton, United seems to have finally found a leader with a vision. We look forward to working with our new CEO in developing a solution that provides for the stabilization of our airline outside of the bankruptcy process, protects the long-term best interests of United's front-line employees, and doesn't blame employees for United's troubles. "The Flight Attendants approve of the shake-up in the senior executive suite that came with the naming of the new CEO, and we look forward to a new relationship being cultivated at United, where the focus needs to be put on employees being led, rather than just supervised. The old management team created an adversarial relationship. In the coming days, we hope to see Mr. Tilton show through his actions that the future of United will be established through a collaborative process. "A loan guarantee from the Air Transportation Stabilization Board may be part of United's recovery plan. However, in the Union Coalition meeting we reiterated to Mr. Tilton that the Flight Attendants are extremely troubled that the White House is not using the ATSB process to stabilize the industry, but to unilaterally cut the pay of airline workers through a forced restructuring of the industry." The United Union Coalition meeting included representatives from AFA, Air Line Pilots Association, International Association of Machinists, Transport Workers Union, and Professional Airline Flight Control Association. More than 50,000 Flight Attendants, including the 26,000 Flight Attendants at United, join together to form AFA, the world's largest Flight Attendant union. Visit us at http://www.unitedafa.org DebtTraders reports that United Air Lines' 10.670% bonds due 2004 (UAL04USR1) are trading between 20 and 22. See http://www.debttraders.com/price.cfm?dt_sec_ticker=UAL04USR1for more real-time bond pricing. US AIRWAYS: Brings-In O'Melveny & Myers as Special Labor Counsel ---------------------------------------------------------------- US Airways Group Inc. sought and obtained the Court's authority to employ O'Melveny & Myers as special labor, regulatory, antitrust and litigation counsel. O'Melveny has performed similar work in the past for US Air and is familiar with its businesses and operations. According to US Air CEO David N. Siegel, O'Melveny is "especially attuned to the unique labor, regulatory and antitrust issues that arise in the airline industry. Several members of the firm have extensive experience in airline law and its interplay with restructuring and bankruptcy law." Mr. Siegel assures the Court that the employment of O'Melveny will enhance, not duplicate, the employment of Skadden, Arps, Slate, Meagher & Flom, as well as other professionals retained in these cases. The O'Melveny attorneys expected to be responsible for matters in these cases and their hourly rates are: Labor Matters ------------- Robert Siegel $600 Tom Jerman $540 Chris Hollinger $460 Robert E. Winter $355 Rachel A. Shapiro $320 Regulatory Matters ------------------ Joel Burton $600 Patrick Rizzi $390 Benjamin Bradshaw $355 Antitrust and Litigation Matters -------------------------------- Henry Thumann $660 Tad Allen $540 Neil Gilman $390 O'Melveny will automatically reduce all fees and expenses by 10%. Specifically, O'Melveny will provide these services: 1) Advertising: Consult, advise and prepare regulatory pleadings and comments on compliance with advertising regulations; 2) Regulatory Matters: Review, consult, advise and prepare regulatory pleadings on foreign and domestic aviation issues, including applications, renewals, responses to regulatory proceedings, inquiries, investigations, enforcement actions, legislative matters and rulemakings, industry research and analysis; 3) Consumer Issues: Consult, advise and prepare regulatory pleadings and comments on marketing and customer service issues, including regulatory compliance, inquiries and investigations; 4) High Density Rule: Consult, advise and prepare regulatory pleadings and comments on airport issues, including slots and airport access; 5) International Route Proceedings: Prepare and analyze regulatory pleadings concerning international route authorities, operations and bilateral/multilateral negotiations and agreements; 6) Domestic and International Codeshare Agreements and Alliances: Consult, advise and prepare regulatory pleadings and comments on codeshare agreements and global alliances; 7) Express and Commuter Issues: Consult, advise and prepare regulatory pleadings and comments concerning the creation, organization and operation of express affiliates and subsidiaries: 8) Labor: Provide advice in connection with labor and employment issues related to bankruptcy; 9) Section 1113: Prepare and prosecute motions pursuant to Section 1113 of the Code; 10) CBAs: Participate in negotiations of collective bargaining agreements with US Air's labor unions; and 11) Other Matters: Assist with additional labor or employment matters as Debtors direct. Robert Siegel, Esq., asserts that O'Melveny does not hold or represent any interest adverse to the Debtors or any other party-in-interest in relation to these Chapter 11 cases. Mr. Siegel reports that in the 90 days leading up to the Petition Date, the Debtors paid O'Melveny $2,942,180 in fees and expenses for advice and legal services, plus $850,000 as an "evergreen" retainer. (US Airways Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service, Inc., 609/392-0900) DebtTraders reports that US Airways Inc.'s 9.820% bonds due 2013 (U13USR1) are trading between 10 and 20. See http://www.debttraders.com/price.cfm?dt_sec_ticker=U13USR1for real-time bond pricing. U.S. STEEL CORP: Seeking Reversal of Indiana Tax Board Ruling ------------------------------------------------------------- United States Steel Corporation filed an appeal Thursday in the Indiana Tax Court seeking reversal of an August 6, 2002, Order of the Indiana Board of Tax Review (Indiana Board) which rejected U. S. Steel's claims for refund of property tax overpayments in 1995, 1996 and 1997. In its appeal, U. S. Steel alleges that for these years, Lake County officials illegally omitted or failed to count -- without statutory authority -- more than $200 million of property in Calumet Township alone in determining the assessed value of property and tax rates in Lake County. This resulted in higher tax rates for all Lake County taxpayers. The Indiana Board has thus far, on narrow procedural grounds, shielded the County from any efforts by taxpayers to challenge these unjustified actions and denied U. S. Steel an opportunity to present its factual case. Thursday's filing was necessary, not only for U. S. Steel to protect its right to the refund, but to protect the rights of all taxpayers in Lake County and throughout the State of Indiana to have tax rates set in accordance with Indiana Law. "We were extremely disappointed with the Board's decision to summarily dismiss our appeal on narrow technical grounds," said George Babcoke, Gary Works general manager. "In our petition, we presented a compelling case challenging the methods by which Lake County government officials kept their books and records, and we were denied the opportunity to have the facts heard and a decision rendered on the basis of the evidence. "At U. S. Steel and at Gary Works, we are committed to taking aggressive steps to enhance our cost-competitiveness in an extremely competitive global steel industry. The excessive, unfair taxes we pay in Lake County represent costs we must address. Our property taxes here are far in excess of what other Northwest Indiana steel producers pay and approximately 10 times more than the taxes paid at any of our facilities in other states." * * * As reported in Troubled Company Reporter's August 12, 2002 edition, Fitch Ratings affirmed the senior unsecured long-term ratings of U.S. Steel at 'BB' and assigned a 'BB+' rating to the company's senior secured revolver. The Rating Outlook is Stable. Since the beginning of the year, the prices of hot-rolled and cold rolled steel sheet have risen dramatically and with them U.S. Steel's profits. On shipment increases of 619 thousand tons and price realizations of $12/ton more, U.S. Steel has turned an operating loss of $61 million in the first quarter of 2002 into an operating profit of $47 million in the second quarter. Price increases have been announced effective in August and September; the company's order book is extended into October; and the weaker dollar in concert with 30% disputed steel tariffs should temper future imports. U.S. Steel's seven domestic furnaces are operating at near capacity, and the company is projecting a profit for the year. Liquidity is strong following the company's mid-May stock offering. U.S. Steel will likely somehow figure into the politically encouraged consolidation going on in the steel industry (Nucor/Trico/Birmingham and Corus/CSN). Recent discussions have included a potential combination with National Steel, and U.S. Steel is continuing discussions with third parties. The company purchased U.S. Steel Kosice (Slovak Republic) in November 2000. Any substantive change in the business profile of U.S. Steel could impact the company's ratings. WILLIAMS COMMS: Unsecured Panel Taps Anderson Kill as Counsel ------------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 cases of Williams Communications Group, Inc., and its debtor- affiliates sought and obtained authority from the U.S. Bankruptcy Court for the Southern District of New York to retain Anderson Kill & Olick P.C., nunc pro tunc to July 26, 2002 as its legal conflicts counsel. Committee Chairperson Robert McCormick relates that they selected Anderson Kill because the firm has considerable experience and knowledge in the field of creditors' rights and business reorganizations under Chapter 11 of the Bankruptcy Code, and in other areas of law related to this Chapter 11 case, including litigation and corporate law matters. Prior to the Petition Date, the Debtors had negotiated a pre- arranged plan of reorganization with a number of their principal creditors including, among others, the Debtors' pre-petition bank lenders and an ad hoc committee of the Debtors' Noteholders. The Ad Hoc Committee included a number of financial institutions that held an aggregate of approximately one-third the Debtors' outstanding issue of Senior Notes. Most of the members of the Creditors' Committee were also members of the Ad Hoc Committee. The Committee earlier retained Kirkland & Ellis as its legal counsel. Accordingly, the professional services that Anderson Kill will render to the Committee will be limited to these conflicts matters and related work: (i) matters which relate to agreements and understandings entered into among the Debtors, members of the Ad Hoc Committee and others prior to the Petition Date as to which the Ad Hoc Committee was represented by Kirkland & Ellis; and (ii) certain other matters in which the Committee potentially could take positions which are adverse to other third parties who are clients of Kirkland & Ellis in matters which are unrelated to these cases, including Morgan Stanley Dean Witter, Citicorp USA, JP Morgan Chase, Lehman Brothers, Platinum Equity LLC, WCS Acquisition II LLC, and SBC Communications. As legal conflicts counsel, Anderson Kill will: -- assist and advise the Committee with respect to the Conflicts Matters; -- represent the Committee at hearings held before the Court and communicate with the Committee regarding issues raised in connection with Conflicts Matters, as well as the decisions of the Court; -- assist the Committee in preparing the applications, motions and orders in support of positions taken by the Committee with respect to Conflicts Matters, as well as prepare witnesses and review documents in this regard; -- assist the Committee with any other services as it may contribute to the confirmation of a plan of reorganization; and -- advise and assist the Committee in evaluating and prosecuting any Conflicts Matters which pertain to claims which the Debtors may have against Conflicts Parties; Anderson Kill will charge for its legal services on an hourly basis in accordance with its customary rates. The firm will also seek reimbursement of out-of-pocket expenses incurred in connection with this engagement. The attorneys who will be principally involved in this engagement and their current hourly rates are: J. Andrew Rahl, Jr. $580 Larry D. Henin $430 Steven Cooper $425 Other attorneys may, from time to time, assist Mr. Rahl, Mr. Henin, and Mr. Cooper. The current range of hourly rates for Anderson Kill's other attorneys and professionals are: Attorneys $165 - 650 Paraprofessionals 95 - 180 Larry D. Henin, Esq., a member of Anderson Kill, assures the Court that neither the Firm nor any of its members and associates, represent any interest adverse to the Debtors, its estates, its creditors or the Committee, in the matters upon which Anderson Kill is to be engaged. In addition, Anderson Kill is a "disinterested person" within the meaning of Sections 101(14) and 101(31) of the Bankruptcy Code. However, Mr. Henin informs the Court that: -- Anderson Kill has in the past and continues to represent Committee member PPM America, Inc. in a number of matters which are not related to these cases; -- Anderson Kill also is currently acting as conflicts counsel for the Official Committee of Unsecured Creditors in the Flag Communications Holdings, Ltd. and affiliates Chapter 11 cases which also are now pending in this District. Committee Members PPM America, Inc. and Pacific Investment Management Company LLC are also members of that committee; and -- Anderson Kill is currently engaged in two matters where Anderson Kill has taken positions on behalf of clients which are adverse to the interests of JP Morgan Chase: a. Anderson Kill acts as special counsel to the Official Committee of Unsecured Creditors in the Owens Corning, Inc. Chapter 11 cases which are pending in the District of Delaware; and b. Anderson Kill represents certain participant lenders to a special purpose entity that is an affiliate of Enron Corp., whose Chapter 11 case is currently pending in this District. (Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc., 609/392-0900) WORLDCOM: Hires Squire Sanders & Dempsey as Conflict Counsel ------------------------------------------------------------ Worldcom Inc., Senior Vice President Susan Mayer acknowledges that Weil Gotshal will not be able to represent the Debtors in all matters in these cases. That's why the Debtors have selected Squire Sanders & Dempsey LLP to represent them in matters in which Weil Gotshal cannot. In the event that there are circumstances in which neither Weil Gotshal nor Squire Sanders is able to act for the Debtors, both firms will advise the Debtors to retain other conflicts counsel to undertake the representation. Accordingly, the Debtors seek the Court's authority to employ and retain Squire Sanders & Dempsey LLP as their attorneys in these Chapter 11 cases in connection with matters in which Weil Gotshal cannot or does not act nunc pro tunc to July 21, 2002. Ms. Mayer contends that Squire Sanders is particularly suited to serve as the Debtors' Conflicts Counsel in these cases. With more than 750 attorneys in 28 offices worldwide, the firm has broad-based practice groups with expertise in virtually all areas of law that may be significant in these cases, including bankruptcy and restructuring, telecommunications, regulatory, corporate finance and commercial litigation. Moreover, Squire Sanders has recognized expertise in bankruptcy matters, having been actively involved in major Chapter 11 cases, including: In re Enron Corp. (committee); In re Drug Emporium, Inc. (debtor); In re Eagle-Picher Industries, Inc. (committee); In re McCullouch Corp. (committee); In re National Airlines, Inc. (debtor); In re Baptist Foundation of Arizona (debtor); In re Lodestar Energy, Inc. (debtor); In re White Motor Co. (debtor), In re Kaiser Group International, Inc. (debtor); In re Stuart Entertainment, Inc. (debtor); In re Las Medanos Health Care Corp. (committee); and In re Boston Chicken, Inc. (bank committee). Ms. Mayer points out that Squire Sanders also has obtained familiarity with the Debtors' businesses and affairs through its prepetition representation of the several of the Debtors. Squire Sanders has represented MCI Communications Corp. for many years and, most recently, Squire Sanders has served as Sixth Circuit Regional Counsel for several WorldCom Companies. Pursuant to the Interim Order authorizing the Debtors to employ professionals utilized in the ordinary course of business entered by the Court on July 23, 2002, Squire Sanders was retained as ordinary course counsel for the Debtors in these cases. However, Debtors plan to remove Squire Sanders from the list of ordinary course professionals and propose to retain them pursuant to Section 327 of the Bankruptcy Code. As Sixth Circuit Regional Counsel, Ms. Mayer relates that Squire Sanders presently represents the WorldCom Companies in numerous litigation matters. There are 19 open Ohio litigation matters and 1 open litigation matter in Pennsylvania for breach of contract claims, unauthorized advertising, bankruptcy and restructuring proceedings, confirmation of arbitration awards, breach of executive retention agreements, eminent domain proceedings, customer contract disputes, contract bid protests and discrimination cases. Squire Sanders currently represents MCI in 8 wage and hour claims in California. Squire Sanders expect to continue its representation in the Ohio litigation and California wage and hour cases. In addition, Ms. Mayer notes that attorneys in many of the Firm's offices, including Washington, D.C., Tyson's Corner, Brussels, Prague, Hong Kong, Taipei, and Milan, have provided advice to and continue to advise the Debtors on telecommunications and regulatory matters. In the past, Squire Sanders attorneys in Russia also provided advice to WorldCom Companies on licensing and importation matters. Attorneys in the Firm's Brussels office advise WorldCom Companies on European and Member State law and attorneys in several offices represent WorldCom Companies before the European Court of First Instance. Among the WorldCom Companies that Squire Sanders has represented are MCI Communications Corp.; MCI Telecommunications Corp.; MCI WorldCom Wireless, Inc; MCI WorldCom Network Services, Inc.; UUNet; Intermedia Communication, Inc.; MCI WorldCom Communications, Inc.; Intermedia Communication, Inc.; Skytel and MCI WorldCom Telecommunications Corp. WorldCom Wireless Communications, Inc. With respect to ordinary course services, Squire Sanders expects to receive periodic assignments in which it will be asked to give advice on international telecommunications and regulatory matters. The Debtors intend to retain Squire Sanders to perform the same scope of duties as Weil Gotshal, without any unnecessary duplication. In particular, the Debtors want Squire Sanders to perform these tasks when and to the extent that Weil Gotshal does not: -- take all necessary action to protect and preserve the estates of the Debtors, including the prosecution of actions on the Debtors' behalf, the defense of any actions commenced against the Debtors, the negotiation of disputes in which the Debtors are involved, and the preparation of objections to claims filed against the Debtors' estates; -- prepare, on behalf of the Debtors, all necessary motions, applications, answers, orders, reports, and other papers in connection with the administration of the Debtors' estates; -- negotiate and prepare on behalf of the Debtors a plan of reorganization and all related documents thereto; and -- perform all other necessary legal services in connection with the prosecution of these Chapter 11 cases. Squire Sanders seek compensation on an hourly basis at rates that are in accordance with routine charges for professional services rendered in comparable matters plus reimbursement of actual and necessary out-of-pocket expenses incurred in connection with the representation of the Debtors. At present, Squire Sander's hourly rates range from: Partners $300 - 550 Counsel and Associates 200 - 525 Legal Assistants 60 - 250 Squire Sanders Partner Stephen D. Lerner, Esq., assures the Court that the firm does not hold or represent an interest adverse to the Debtors' estates and is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code, with respect to the matters for which it is to be retained. Moreover, the partners, counsel and associates of Squire Sanders do not have any connection with the Debtors, their estates or any other party-in-interest, their respective attorneys and accountants, the United States Trustee or any person employed in the office of the United States Trustee. Mr. Lerner informs the Court that Squire Sanders currently is owed $293,459.91 in accounts receivable for services rendered to the Debtors prior to the Petition Date and has additional unbilled time on behalf of the Debtors for $83,153.38. Squire Sanders will write-off these amounts. (Worldcom Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., 609/392-0900) DebtTraders reports Worldcom Inc.'s 11.250% bonds due 2007 (WCOM07USA1) are trading between 22.5 and 27. See http://www.debttraders.com/price.cfm?dt_sec_ticker=WCOM07USA1 for real-time bond pricing. * Leonard Hyman Affiliates With R.J. Rudden Associates, Inc. ------------------------------------------------------------ R.J. Rudden Associates, Inc., announced that Leonard S. Hyman has become affiliated with the firm as a Senior Associate Consultant. Mr. Hyman is an international energy industry strategist, well known in the energy and financial services sectors for the many books and articles that he has published on energy, water and telecommunications, for his involvement in utility restructurings, financings and privatizations, and for his highly expert, in-depth utility industry research analysis. For more than ten years, Mr. Hyman was selected by Institutional Investor magazine as one of the industry's leading research analysts. "We are extremely pleased that Leonard has joined us. He will add tremendous breadth and depth to our firm's strategic consulting practice, to which he will bring his knowledge in international energy economics and finance, regulatory policy, industry restructuring, privatization, and market liberalization," said Richard J. Rudden, President and CEO of Rudden. "Our firm's strategic energy consulting practice has expanded substantially in recent years, and Leonard will add further depth and quality to the full range of our services, as well as new momentum to our growth. We look forward to Leonard's participation in our continuing leadership role in the industry." Mr. Hyman added, "I am looking forward to working with Rich Rudden and the Rudden team. Nowadays, to get it right, you need engineers, economists, lawyers, accountants, executives and marketers working together, and Rich has that kind of team." In addition to his consulting association with Rudden, Mr. Hyman serves as a Senior Industry Advisor to Salomon Smith Barney's Global Power Group, and is on the advisory boards of Enertech Capital, Excelergy, and the International Foundation for Research in Experimental Economics. Previously, he was head of the Utility Research Group and First Vice President at Merrill Lynch. While there, he was also a member of the privatization teams for offerings of British, Spanish, Mexican, Argentine and Brazilian utilities. He has worked extensively on the creation and financing of independent transmission companies, testified before Congress, was a member of four advisory panels for the U.S. Congress Office of Technology Assessment, was on the advisory board of EPRI, and was a member of Blue Ribbon Task Force advising on the reorganization of the North American Electric Reliability Council. Mr. Hyman is co-author of "America's Electric Utilities: Past, Present and Future, Unlocking the Benefits of Restructuring: A Blueprint for Transmission," and editor of "The Privatization of Public Utilities." He is a Chartered Financial Analyst, and holds a B.A. degree from New York University, and an M.A. in economics from Cornell University. R.J. Rudden Associates, Inc., is among the world's premier strategic, economic and management consulting firms specializing in energy matters. Throughout its history, Rudden has assisted clients in such mission-critical areas as: economic and financial analysis; strategic, management and marketing services; industry restructuring support; litigation and regulatory support; technical analysis; and implementation support. Serving more than 300 clients worldwide, Rudden's energy industry professionals include experienced energy company senior executives, energy economists, senior policy experts and regulatory officials, engineers, renowned futurists, and internationally respected subject matter experts. Many are widely published and each is highly regarded for his or her unique insight and targeted approach to problem solving. Rudden's clients encompass the full range of the energy value chain and cut across all market sectors, including energy producers, the financial community, the legal and regulatory community, new business ventures, and large energy consumers. Rudden has offices in New York; Washington, D.C.; Houston; Atlanta; Augusta, Maine; and San Francisco. * BOND PRICING: For the week of September 9 - 13, 2002 ------------------------------------------------------ Issuer Coupon Maturity Price ------ ------ -------- ----- AES Corporation 4.500% 08/15/05 35 AES Corporation 8.000% 12/31/08 35 AES Corporation 8.750% 06/15/08 38 AES Corporation 8.875% 02/15/11 31 AES Corporation 9.375% 09/15/10 60 AES Corporation 9.500% 06/01/09 59 Adelphia Communications 10.875% 10/01/10 35 Advanced Energy 5.250% 11/15/06 72 Advanced Micro Devices Inc. 4.750% 02/01/22 69 Aether Systems 6.000% 03/22/05 63 Alternative Living Services (Alterra) 5.250% 12/15/02 4 Alkermes Inc. 3.750% 02/15/07 46 Alexion Pharmaceuticals Inc. 5.750% 03/15/07 61 Amazon.com Inc. 4.750% 02/01/09 62 Amazon.com Inc. 4.750% 02/01/09 63 American Tower Corp. 9.375% 02/01/09 64 American Tower Corp. 6.250% 10/15/09 46 American & Foreign Power 5.000% 03/01/30 61 Amkor Technology Inc. 9.250% 05/01/06 74 Amkor Technology Inc. 9.250% 02/15/08 74 AnnTaylor Stores 0.550% 06/18/19 62 Armstrong World Industries 9.750% 04/15/08 45 AMR Corporation 9.000% 09/15/16 74 AMR Corporation 9.750% 08/15/21 75 AMR Corporation 9.800% 10/01/21 75 Asarco Inc. 8.500% 05/01/25 35 Atlas Air Inc. 9.250% 04/15/08 51 AT&T Corp. 6.500% 03/15/29 75 AT&T Wireless 8.750% 03/01/31 75 Best Buy Co. Inc. 0.684% 06?27/21 64 Best Buy Co. Inc. 2.250% 01/15/22 80 Bethlehem Steel 8.450% 03/01/05 14 Borden Inc. 7.875% 02/15/23 59 Borden Inc. 8.375% 04/15/16 61 Borden Inc. 9.250% 06/15/19 66 Borden Inc. 9.200% 03/15/21 62 Boston Celtics 6.000% 06/30/38 63 Brocade Communication Systems 2.000% 01/01/07 75 Brooks Automatic 4.750% 06/01/08 74 Browning-Ferris Industries Inc. 7.400% 09/15/35 73 Burlington Northern 3.200% 01/01/45 52 Burlington Northern 3.800% 01/01/20 73 CSC Holdings Inc. 7.625% 07/15/18 70 CSC Holdings Inc. 7.625% 04/01/18 74 CSC Holdings Inc. 7.875% 02/15/18 70 CSC Holdings Inc. 8.125% 07/15/09 74 Calpine Corp. 4.000% 12/26/06 55 Calpine Corp. 8.500% 02/15/11 55 Capital One Financial 7.125% 08/01/08 68 Case Corp. 7.250% 01/15/16 71 Centennial Cell 10.750% 12/15/08 57 Century Communications 8.875% 01/15/07 34 Champion Enterprises 7.625% 05/15/09 36 Charter Communications, Inc. 4.750% 06/01/06 44 Charter Communications Holdings 8.625% 04/01/09 67 Charter Communications Holdings 9.625% 11/15/09 65 Charter Communications Holdings 10.000% 04/01/09 56 Charter Communications Holdings 10.000% 05/15/11 62 Charter Communications Holdings 10.250% 01/15/10 55 Charter Communications Holdings 10.750% 10/01/09 70 Charter Communications Holdings 11.125% 01/15/11 68 Ciena Corporation 3.750% 02/01/08 59 Cincinnati Bell Telephone (Broadwing) 6.300% 12/01/28 70 Cincinnati Bell Inc. (Broadwing) 7.250% 06/15/23 72 CIT Group Holdings 5.875% 10/15/08 74 Coastal Corp. 6.375% 02/01/09 57 Coastal Corp. 6.500% 05/15/06 73 Coastal Corp. 6.500% 06/01/08 60 Coastal Corp. 6.950% 06/01/28 49 Coastal Corp. 7.750% 10/15/35 53 Coeur D'Alene 6.375% 01/31/05 73 Coeur D'Alene 7.250% 10/31/05 70 Comcast Corp. 2.000% 10/15/29 19 Comforce Operating 12.000% 12/01/07 56 Computer Associates 5.000% 03/15/07 72 Conexant Systems 8.750% 10/15/08 74 Conseco Inc. 8.750% 02/09/04 8 Continental Airlines 4.500% 02/01/07 60 Continental Airlines 7.568% 12/01/06 74 Corning Inc. 3.500% 11/01/08 56 Corning Inc. 6.300% 03/01/09 61 Corning Inc. 6.750% 09/15/13 61 Corning Inc. 6.850% 03/01/29 49 Corning Inc. 8.875% 08/15/21 64 Corning Glass 8.875% 03/15/16 69 Cox Communications Inc. 0.348% 02/23/21 69 Cox Communications Inc. 0.426% 04/19/20 37 Cox Communications Inc. 3.000% 03/14/30 27 Cox Communications Inc. 6.800% 08/01/28 75 Cox Communications Inc. 6.950% 01/15/28 73 Cox Communications Inc. 7.750% 11/15/29 26 Critical Path 5.750% 04/01/05 63 Critical Path 5.750% 04/01/05 63 Crown Castle International 9.000% 05/15/11 53 Crown Castle International 9.375% 08/01/11 56 Crown Castle International 9.500% 08/01/11 55 Crown Castle International 10.750% 08/01/11 67 Crown Cork & Seal 7.375% 12/15/26 52 Crown Cork & Seal 8.375% 01/15/05 74 Cubist Pharmacy 5.500% 11/01/08 50 Cummins Engine 5.650% 03/01/98 65 Dana Corp. 7.000% 03/01/29 72 Dana Corp. 7.000% 03/15/28 72 Delta Air Lines 8.300% 12/15/29 59 Delta Air Lines 9.000% 05/15/16 70 Delta Air Lines 9.250% 03/15/22 67 Delta Air Lines 9.750% 05/15/21 71 Delta Air Lines 10.375% 12/15/22 74 Dillard Department Store 7.000% 12/01/28 70 Dobson Communications Corp. 10.875% 07/01/10 69 Dobson/Sygnet 12.250% 12/15/08 74 Dresser Industries 7.600% 08/15/96 60 Dynegy Holdings Inc. 6.875% 04/01/11 74 EOTT Energy Partner 11.000% 10/01/09 67 Echostar Communications 5.750% 05/15/08 74 El Paso Corp. 7.750% 01/15/32 56 El Paso Energy 6.750% 05/15/09 69 Enzon Inc. 4.500% 07/01/08 71 Equistar Chemicals 7.550% 02/15/26 65 E*Trade Group 6.000% 02/01/07 64 Finisar Corp. 5.250% 10/15/08 55 Finova Group 7.500% 11/15/09 30 Fleming Companies Inc. 5.250% 03/15/09 74 Fort James Corp. 7.750% 11/15/23 74 Foster Wheeler 6.750% 11/15/05 58 General Physics 6.000% 06/30/04 52 Georgia-Pacific 7.375% 12/01/25 70 Georgia-Pacific 7.750% 11/15/29 72 Goodyear Tire 7.000% 03/15/28 71 Gulf Mobile Ohio 5.000% 12/01/56 62 Hanover Compress 4.750% 03/15/08 70 Hasbro Inc. 6.600% 07/15/28 70 Health Management Associates Inc. 0.250% 08/16/20 67 HealthSouth Corp. 7.000% 06/15/08 69 Human Genome 3.750% 03/15/07 65 Human Genome 3.750% 03/15/07 66 Huntsman Polymer 11.750% 12/01/04 67 ICN Pharmaceuticals Inc. 6.500% 07/15/08 65 IMC Global Inc. 7.300% 01/15/28 75 IMC Global Inc. 7.375% 08/01/18 69 Ikon Office 6.750% 12/01/25 69 Ikon Office 7.300% 11/01/27 74 Imcera Group 7.000% 12/15/13 60 Inhale Therapeutic Systems Inc. 3.500% 10/17/07 44 Inland Steel Co. 7.900% 01/15/07 58 Interpublic Group 1.870% 06/01/06 67 Juniper Networks 4.750% 03/15/07 71 Kmart Corporation 9.375% 02/01/06 27 Kulicke & Soffa Industries Inc. 5.250% 08/15/06 62 LTX Corporation 4.250% 08/15/06 71 Lehman Brothers Holding 8.000% 11/13/03 66 Level 3 Communications 6.000% 09/15/09 34 Level 3 Communications 6.000% 03/15/09 34 Level 3 Communications 9.125% 05/01/08 62 Level 3 Communications 11.000% 05/01/08 60 Liberty Media 3.500% 01/15/31 65 Liberty Media 3.750% 02/15/30 46 Liberty Media 4.000% 11/15/29 48 Lucent Technologies 5.500% 11/15/08 55 Lucent Technologies 6.450% 03/15/29 54 Lucent Technologies 6.500% 01/15/28 36 Lucent Technologies 7.250% 07/15/06 65 Magellan Health 9.000% 02/15/08 30 Mail-Well I Corp. 8.750% 12/15/08 46 Medarex Inc. 4.500% 07/01/06 67 Mediacom Communications 5.250% 07/01/06 67 Mediacom LLC 7.875% 02/15/11 64 Mediacom LLC 8.500% 04/15/08 75 Mediacom LLC 9.500% 01/15/13 68 Metris Companies 10.125% 07/15/06 75 Mikohn Gaming 11.875% 08/15/08 74 Mirant Corp. 5.750% 07/15/07 62 Mirant Americas 7.200% 10/01/08 41 Mirant Americas 7.625% 05/01/06 56 Mirant Americas 8.300% 05/01/11 36 Mirant Americas 8.500% 10/01/21 30 Mission Energy 13.500% 07/15/08 75 Missouri Pacific Railroad 4.750% 01/01/20 70 Missouri Pacific Railroad 4.750% 01/01/30 63 Missouri Pacific Railroad 5.000% 01/01/45 60 Motorola Inc. 5.220% 10/01/21 56 MSX International 11.375% 01/15/08 66 NTL Communications 7.000% 12/15/08 14 National Vision 12.000% 03/30/09 60 Nextel Communications 4.750% 07/01/07 69 Nextel Communications 5.250% 01/15/10 64 Nextel Communications 6.000% 06/01/11 67 Nextel Communications 9.375% 11/15/09 74 Nextel Communications 9.500% 02/01/09 64 Nextel Communications 12.000% 11/01/11 74 Nextel Partners 11.000% 03/15/10 59 Noram Energy 6.000% 03/15/12 70 Northern Pacific Railway 3.000% 01/01/47 50 Northern Pacific Railway 3.000% 01/01/47 50 ONI Systems Corporation 5.000% 10/15/05 70 OSI Pharmaceuticals 4.000% 02/01/09 75 PG&E National Energy 10.375% 05/16/11 74 Panamsat Corp. 6.875% 01/15/28 72 Pegasus Satellite 12.375% 08/01/06 49 Primedia Inc. 7.625% 04/01/08 65 Primedia Inc. 8.875% 05/15/11 71 Providian Financial 3.250% 08/15/05 57 Public Service Electric & Gas 5.000% 07/01/37 72 Photronics Inc. 4.750% 12/15/06 69 Quanta Services 4.000% 07/01/07 48 Qwest Capital Funding 7.750% 02/15/31 55 RF Micro Devices 3.750% 08/15/05 74 RF Micro Devices 3.750% 08/15/05 74 Redback Networks 5.000% 04/01/07 33 Rite Aid Corp. 7.125% 01/15/07 68 Rockwell Int'l 5.200% 01/15/98 72 Royster-Clark 10.250% 04/01/09 72 Rural Cellular 9.625% 05/15/08 58 Ryder System Inc. 5.000% 02/25/21 74 SBA Communications 10.250% 02/01/09 50 SCI Systems Inc. 3.000% 03/15/07 60 Saks Inc. 7.375% 02/15/19 74 Sepracor Inc. 5.000% 02/15/07 42 Sepracor Inc. 7.000% 12/15/05 54 Silicon Graphics 5.250% 09/01/04 54 Solutia Inc. 7.375% 10/15/27 69 Sotheby's Holdings 6.875% 02/01/09 70 Sprint Capital Corp. 6.375% 05/01/09 70 Sprint Capital Corp. 6.900% 05/01/19 70 TCI Communications Inc. 7.125% 02/15/28 74 Tenneco Inc. 11.625% 10/15/09 72 Time Warner Enterprises 8.375% 03/15/23 74 Time Warner Inc. 6.625% 05/15/29 69 Time Warner Inc. 6.950% 01/15/28 73 Time Warner Telecom 9.750% 07/15/08 54 Transwitch Corp. 4.500% 09/12/05 59 Tribune Company 2.000% 05/15/29 66 Triton PCS Inc. 8.750% 11/15/11 73 Trump Atlantic 11.250% 05/01/06 74 Turner Broadcasting 8.375% 07/01/13 74 US Airways Passenger 6.820% 01/30/14 71 US Airways Inc. 7.960% 01/20/18 73 Ugly Duckling 11.000% 04/15/07 60 United Air Lines 10.670% 05/01/04 22 United Air Lines 11.210% 05/01/14 33 Universal Health Services 0.426% 06/23/20 59 US Timberlands 9.625% 11/15/07 62 US West Capital 6.875% 07/15/28 67 US West Communications 6.875% 09/15/33 71 US West Communications 7.125% 11/15/43 73 Vesta Insurance Group 8.750% 07/15/25 73 Viropharma Inc. 6.000% 03/01/07 35 Weirton Steel 10.750% 06/01/05 74 Westpoint Stevens 7.875% 06/15/08 44 Williams Companies 7.125% 09/01/11 64 Witco Corp. 6.875% 02/01/26 67 Witco Corp. 7.750% 04/01/23 74 Xerox Corp. 0.570% 04/21/18 55 Xerox Credit 7.200% 08/05/12 64 ********* 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. 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