/raid1/www/Hosts/bankrupt/TCR_Public/020913.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, September 13, 2002, Vol. 6, No. 182
Headlines
ADELPHIA COMMS: Retaining 5 Law Firms for Cooperating Employees
AIR 2 US: Moody's Cuts Ratings On Enhanced Equipment Notes C & D
AIR CANADA: Reaches Agreement Flight Attendants' Union
ANC RENTAL: Consolidating Operations at Orange County Airport
ALPHA TECHS: May Default Credit Pact If Lease Transaction Fails
AT&T CANADA: Defers Bond Interest Payments Due September 15 & 23
BIGSTAR ENTERTAINMENT: Going Concern Ability Looks Doubtful
BORDEN CHEMICALS: Seeking Court Approval Of Disclosure Statement
BUDGET GROUP: Unsecured Panel Taps Brown Rudnick as Counsel
BUFFALO SABRES: May File For Bankruptcy To Settle $157MM Debt
CANFIBRE: Talks Fail & Lenders Foreclose on Lackawanna Facility
CONSECO, INC.: Who Are the Bank Lenders Granting those Waivers?
COVANTA ENERGY: Merrill Lynch Pursues Insurance Coverage Dispute
CUMBERLAND TECHNOLOGIES: Nasdaq To Delist Shares Today
CYBERADS: Upside Down Balance Sheet Raises Going Concern Doubts
EXODUS: Pursuing Court Approval on Settlement Deal with Kangaroo
FLAG TELECOM: Airs Objections to PSINet's Duplicative Claims
FRUIT OF THE LOOM: FOL Trust Settles Dispute with Farley, et al
GASEL: Losses Raise Doubts on Ability to Continue Operations
GE CAPITAL: Fitch Affirms 5 Series 2001-2 Classes at Low-B Level
GENESEE CORP: Reports Changes in Net Assets in Liquidation
GLOBAL CROSSING: Settles Qwest Communications Set-Off Issues
GTC TELECOM: Independent Accountants Air Going Concern Doubts
HEALTHWATCH: Directors Tucker, Provow & Blue Resign From Board
HOMELAND STORES: Emerges From Bankruptcy as AWG's Subsidiary
INTEGRATED HEALTH: Gets 9th Removal Period Extension to Dec. 2
INTERPLAY: Nasdaq Hearing re Listing Status Set for Sept. 19
JAM JOE: Court Converts Bankruptcy Case To Ch. 7 Liquidation
KMART: Court Denies KM-TB's Demand for Prompt Decision on Lease
KMART: IRT Property Provides Update on Store Closing's Impact
METALS USA: Disclosure Statement Hearing Set for September 18
METALS USA: Reliance Steel Acquires Oregon Business For $30 Mil
METROMEDIA INT'L: Opts to Suspend Preferred Stock Dividend
NATIONSRENT: Committee Has Until September 16 to Challenge Liens
NORTHLAND CABLE: S&P Junks Corp. Rating Due to Limited Liquidity
OWOSSO: Sells Motor Products Assets To Satisfy Nasdaq Condition
PACIFIC GAS: Unveils List of Confirmation Hearing Fact Witnesses
PCSUPPORT.COM: Files For Bankruptcy And Ceases Operations
PINNACLE ENTERTAINMENT: S&P Revises Ratings Outlook to Stable
PSINET: Liquidator Has Until Sept. 30 to Make Claim Objections
SAFETY-KLEEN: Closes Chemical Services Div Sale to Clean Harbors
SANMINA-SCI: S&P Drops Corp Credit & Sr. Sec. Loan Ratings to BB
SERVICE MERCHANDISE: Sells Warehouse to M.D. Hodges for $7.4 Mil
SKM-LIBERTYVIEW: Moody's Puts Notes Under Review For Downgrade
SOFTBANK: Moody's Concerned Over Impact of Increased Competition
SONUS CORP: Special Shareholders' Meeting Set For October 22
SOUTH STREET CBO: Fitch Downgrades Ratings on 8 Bond Classes
TECH LABORATORIES: Liquidity Problems Spur Going Concern Doubts
TELIGENT INC.: Will Exit Bankruptcy By September 16
UNITED AIRLINES: Considers Asking US for More Time to Seek Loan
US AIRWAYS: Turning to McGuireWoods for Restructuring Advice
TRANSCARE CORPORATION: Wants to Continue Willkie Farr Engagement
TYCO INT'L: Appoints David J. Fitzpatrick as New EVP & CFO
VICWEST CORP.: Defers Interest Payment on Subordinated Notes
VISKASE COMPANIES: Launches Exchange Offer for 8% Sr. Sec. Notes
VSOURCE: Notifies Shareholders of Conversion Price Reduction
WEBLINK: Completes Reorganization & Names Buckenham Chairman
WEIRTON STEEL: CEO Proposes Extension of Steel Tariff Percentage
WHELAND: Creditors Reject Livingston's $1.65M Bid For Foundry
WORLDCOM INC: Government Charges 2 Former Execs with Sec. Fraud
* BOOK REVIEW: Bankruptcy Crimes
*********
ADELPHIA COMMS: Retaining 5 Law Firms for Cooperating Employees
---------------------------------------------------------------
Several government entities and agencies have commenced
investigations concerning Adelphia Communications and its
debtor-affiliates. The scope of these Investigations includes
issues involving the massive alleged self-dealing and alleged
fraudulent conduct on the part of members of the Rigas family
and others. The governmental entities and agencies that have
commenced these investigations include the Securities and
Exchange Commission, the United States Attorneys' Office for the
Southern District of New York and the United States Attorneys'
Office for the Middle District of Pennsylvania. Myron Trepper,
Esq., at Willkie Farr & Gallagher, in New York, relates that
certain employees of the Debtors have been or will be asked to
serve as witnesses in the ongoing governmental investigations.
The Debtors seek authority from the U.S. Bankruptcy Court for
the Southern District of New York to employ these counsels nunc
pro tunc to June 25, 2002, to represent the Cooperating
Employees in connection with pending criminal investigations:
-- Clifford Chance Rogers & Wells LLP;
-- O'Melveny & Myers LLP;
-- Montgomery McCracken Walker & Rhoads LLP;
-- Henry Putzel III; and
-- Kaye Scholer Fierman Hays & Handler LLP.
Several of the Cooperating Employees have been placed on paid
administrative leave so that they may be better able to focus on
participating in the Investigations without distraction.
Notwithstanding the fact that several of the Cooperating
Employees may also be targets of the Investigations, the Debtors
believe that the employees' knowledge and cooperation with
governmental officials is needed to achieve a thorough and
expeditious resolution of the Investigations and a successful
reorganization of these cases.
To facilitate the Cooperating Employees' continued cooperation
and ensure that their legal rights are protected, the
Cooperating Employees require representation by counsel.
Because the Investigations are of critical importance to the
administration of the Debtors' estates, the Debtors intend to
employ and compensate counsel for services rendered on behalf of
the Cooperating Employees.
Mr. Trepper relates that the Defense Counsels have been
providing legal representation to the Cooperating Employees.
The Defense Counsels are expected to:
-- represent the Cooperating Employees in connection with
specific Investigations or similar matters relating to the
Debtors involving any branches and agencies of the United
States government as well as similar matters initiated by any
other local, state or foreign entity;
-- represent the Cooperating Employees in any litigation or
arbitration matters relating to the foregoing;
-- attend meetings on behalf of the Cooperating Employees with
third parties respecting the foregoing;
-- appear before the Bankruptcy Court, any district or
appellate courts, and the United States Trustee on behalf of
the Cooperating Employees;
-- facilitate and coordinate communications between the
Cooperating Employees and other parties in connection with
the Investigations; and
-- perform other necessary services that are normally
associated with the aforementioned matters.
Although the Debtors are paying the fees and expenses of the
Defense Counsels, Mr. Trepper assures the Court that in each
instance, the attorney-client relationship will be between the
Cooperating Employee and the particular Defense Counsel. The
ethical obligations of the Defense Counsel will run directly and
solely to its particular Cooperating Employee clients. The
Debtors will not instruct the Defense Counsel regarding any
matters. If a Cooperating Employee resigns, the Debtors may
continue to pay the Defense Counsel's fees of that Cooperating
Employee as long as the interests of that particular Employee
remains aligned with the Debtors' interests.
Without the assistance of a Defense Counsel, many of the
Cooperating Employees might be unwilling or unable to obtain
adequate representation in connection with the Investigations.
The Debtors believe this development would hinder the progress
of the Investigations, which, in turn, could jeopardize their
reorganization efforts.
Each Defense Counsel will prepare and file an affidavit,
pursuant to Section 327 of the Bankruptcy Code, providing
disclosure of any conflicts and connections with the Debtors,
their creditors and other parties-in-interest no later than
September 22, 2002.
To the best of the Debtors' knowledge and except as may be
disclosed in the Affidavits:
-- None of the Defense Counsel nor any attorneys at their
respective firms holds or represents an interest adverse to
the Debtors or the estates with respect to the matters on
which the Defense Counsel are to be retained;
-- Neither the Defense Counsel nor any of the attorneys at their
respective firms are or were creditors or insiders of the
Debtors;
-- Neither the Defense Counsel nor any attorney at their
respective firms are or were, within three years before the
filing of the Debtors' Chapter 11 cases, an investment banker
for any security of the Debtors, or any attorney for an
investment banker in connection with the offer, sale or
issuance of any security of the Debtors;
-- Neither the Defense Counsel nor any of the attorneys at their
respective firms are or were, within two years before the
Petition Date, a director, officer, or employee of the
Debtors or of an investment banker of the Debtors;
-- The Defense Counsel does not have an interest materially
adverse to the interests of the estates or of any class of
creditors or equity security holders, by reason of any direct
or indirect relationship to, connection with or interest in
the Debtors or an investment banker specified in the
foregoing paragraphs, with respect to the matters on which
the Defense Counsel are to be retained; and
-- No attorney at each of the Defense Counsel's firms is related
to any United States District Judge or U.S. Bankruptcy Judge
for the Southern District of New York or to the U.S. Trustee
for the district or to any known employee of the office.
Furthermore, the Debtors believe that the Defense Counsel:
a. do not hold or represent any interest which is adverse to
the Debtors' estates with respect to the matters on which
the Defense Counsel is to be retained, and
b. are "disinterested persons" as that term is defined in
Section 101(14) of the Bankruptcy Code for the purpose of
the representation described.
Mr. Trepper contends that the retroactive approval of the
Defense Counsels' retentions is appropriate because Defense
Counsels have been providing valuable legal services to the
Cooperating Employees even before the Petition Date. (Adelphia
Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service,
Inc., 609/392-0900)
AIR 2 US: Moody's Cuts Ratings On Enhanced Equipment Notes C & D
----------------------------------------------------------------
Moody's Investors Service took these rating actions on the notes
issued in the Air 2 US aircraft leasing securitization:
* US $637.6 million Series A Enhanced Equipment Notes due
October 1, 2020, rated A1 under review for possible
downgrade.
* US$ 226.4 million Series B Enhanced Equipment Notes due
October 1, 2020, rated Ba1under review for possible
downgrade.
* US$ 127.1 million Series C Enhanced Equipment Notes due
October 1, 2020, downgraded to B3 from B1.
* US$ 76.2 million Series D Enhanced Equipment Notes due
October 1, 2020, downgraded to Caa2 from Caa1.
Approximately $1.08 billion of asset-backed securities are
affected.
Accordingly, these actions follow Moody's downgrade of United
Air Lines' ratings to junk over increased financial stress, and
confirmation of the low-B Senior Implied Rating of American
Airlines. They serve as the two lessees in the transaction.
The ability of Air 2 US to service each Series of notes depends
on the frequency of default of American and United and the
ability of Airbus to release the aircraft following an event of
default, states Moody's.
In its review of the Series A and B Enhanced Equipment Notes
Moody's will focus on: (1) probability and impact of non-payment
of sublease payments when due; (2) volatility of lease revenues
from possible releasing of the underlying aircraft pool in an
environment subject to financial weakness and overcapacity; (3)
the market for A300-600s currently on lease to American Airlines
in the current environment.
AIR CANADA: Reaches Agreement Flight Attendants' Union
------------------------------------------------------
Air Canada, ZIP AIR Inc. and the Air Canada Component of the
Canadian Union of Public Employees (CUPE) reached a tentative
agreement relating to flight attendants working at ZIP. This
agreement, which must be ratified, will form part of the Air
Canada/CUPE collective agreement currently under negotiation.
Until then, the terms of the agreement remain confidential.
Pending ratification, CUPE will ask the Canada Industrial
Relations Board (CIRB) to adjourn its common employer
application.
Under the terms of this agreement the previously announced lay-
off of permanent cabin personnel will be mitigated.
ZIP will launch on September 22, 2002 with CUPE-represented
cabin personnel. The wholly owned subsidiary of Air Canada will
offer low fare, high value service between Edmonton, Vancouver,
Calgary and Winnipeg.
* * *
As previously reported, Standard & Poor's downgraded its senior
unsecured debt rating for Air Canada to 'B' from 'B+',
reflecting reduced asset protection for unsecured creditors and
application of revised criteria for "notching" down of such debt
ratings based on the proportion of secured debt in a company's
capital structure.
According to the report, the rating actions did not indicate a
changed estimate of default risk, but rather poorer prospects
for recovery on senior unsecured obligations if the affected
airline were to become insolvent.
DebtTraders reports that Air Canada's 10.250% bonds due 2011
(AIRC11CAN1) are trading between 72 and 74. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=AIRC11CAN1
for more real-time bond pricing.
ANC RENTAL: Consolidating Operations at Orange County Airport
-------------------------------------------------------------
ANC Rental Corporation and its debtor-affiliates seek authority
from the U.S. Bankruptcy Court for the District of Delaware to:
-- reject the Alamo Concession and Lease Agreement dated October
25, 2000 between Alamo and Orange County, California, and
-- assume the National Concession and Lease Agreement dated
October 25, 2000 between National and Orange County and
assign it to ANC.
Under the agreements, Bonnie Glantz Fatell, Esq., at Blank Rome
Comisky & McCauley LLP, in Wilmington, Delaware, tells the Court
that Orange County granted to National and Alamo non-exclusive
rights to operate car rental concessions and lease certain
premises at the John Wayne Airport in Orange County, California.
Such assignment will allow ANC to operate as a single operator
under the National and Alamo trade names. The agreements do not
prohibit dual branding. The Debtors do not have any outstanding
obligations in any of the leases.
Ms. Fatell states that the Court should approve the relief
requested because it will result in savings to the Debtors of
over $1,151,000 per year in fixed facility costs and other
operational cost savings. (ANC Rental Bankruptcy News, Issue No.
19; Bankruptcy Creditors' Service, Inc., 609/392-0900)
ALPHA TECHS: May Default Credit Pact If Lease Transaction Fails
---------------------------------------------------------------
Alpha Technologies Group, Inc. (Nasdaq:ATGI) announced that
revenue for the three months ended July 28, 2002 was
$15,258,000, an increase of 9.5% compared to revenue of
$13,933,000 for the second quarter of fiscal 2002. For the third
quarter of fiscal 2001, revenue was $16,655,000.
Net income (before a goodwill impairment charge) was $121,000,
or $0.02 per diluted share. After a goodwill impairment charge
of $15,602,000 (before taxes) from the write-off of goodwill
associated with the acquisition of National Northeast (NNE) in
January 2001, the net loss was $9,833,000, or $1.38 per share.
This compares to net income before an extraordinary item of
$16,000, or $0.00 per diluted share, for this year's second
quarter. For the third quarter of fiscal 2001, the net loss was
$426,000, or $0.06 per share.
"Higher sales and sharply reduced expenses contributed to
Alpha's improved operating performance for the third quarter
compared to the second, which in turn was an improvement
compared to the first quarter. With our efficient operations and
lower costs, Alpha is capable of generating substantially higher
earnings when the economic recovery gains momentum and supports
more vigorous revenue growth," said Chairman and Chief Executive
Officer Lawrence Butler.
For the nine months ended July 28, 2002, the net loss (before
the goodwill impairment charge and extraordinary item) was
$177,000, or $0.02 per share, on revenue of $41,778,000. After
the goodwill impairment charge and extraordinary item, the net
loss was $10,495,000, or $1.48 per share. For the first nine
months of fiscal 2001, net income from continuing operations was
$1,432,000, or $0.19 per diluted share, on revenue of
$52,453,000.
Cash flow, as measured by earnings from continuing operations
before interest, taxes, depreciation and amortization (EBITDA),
was $1,769,000 for this year's third quarter and $4,470,000 for
this year's first nine months. This compares to EBITDA of
$1,416,000 and $7,466,000 for the third quarter and first nine
months of fiscal 2001, respectively.
The Company repaid $750,000 of long-term debt during the third
quarter of fiscal 2002. At July 28, 2002, stockholders' equity
(after the goodwill impairment charge) was $26,572,000, or
approximately $3.74 per diluted share.
The Company has orally accepted an offer of $4.75 million for a
sale and leaseback transaction of its Pelham, New Hampshire
facility which will provide net cash proceeds of approximately
$4.5 million from a group which includes a director of the
Company and two other private investors. The director has a 50%
ownership interest in this group. This transaction includes the
issuance of 250,000 warrants of Company stock to the buyers at
the market price of the Company's common stock on the date the
transaction closes. The parties are currently in the final
stages of documenting the transaction. The Company understands
that the Purchasers are in the process of completing the loan
documents to finance their acquisition.
The transaction includes a 15-year lease for the building. The
lease, which will be accounted for as an operating lease in
accordance with SFAS No. 13, "Accounting for Leases," requires
minimum annual rental payments of approximately $629,000 subject
to annual adjustments ranging from 2% to 2.5%. The Company
expects to complete the sale and leaseback transaction before
September 30, 2002. If it does not, it will be in default under
the Credit Agreement and its lenders will have the right, among
other things, to declare the entire debt outstanding amount to
be due and payable.
About Alpha Technologies Group
Alpha Technologies Group, Inc. is engaged in the manufacture,
fabrication and sale of thermal management products and aluminum
extrusions. The Company is one of the leading manufacturers of
thermal management products in the United States. Thermal
management products, principally heat sinks, dissipate unwanted
heat generated by electronic components. The Company's thermal
management products serve the automotive, telecommunication,
industrial controls, transportation, power supply, factory
automation, consumer electronics, aerospace, defense,
microprocessor, and computer industries. The Company also sells
aluminum extrusions to various industries including the
construction, sporting goods and other leisure activity markets.
AT&T CANADA: Defers Bond Interest Payments Due September 15 & 23
----------------------------------------------------------------
AT&T Canada Inc. (NASDAQ: ATTC) (TSX: TEL.B) elected not to make
bond interest payments totaling approximately US$47.8 million,
due on September 15, 2002 and approximately CDN$5.4 million due
on September 23, 2002.
At August 31, 2002 the company had approximately CDN$400 million
in cash on hand and expects to receive a further CDN$240 million
from the exercise of employee stock options upon the closing of
the back-end transaction with AT&T Corp.
"We are in constructive discussions with our bondholders, our
bank syndicate, AT&T Corp. and their respective representatives,
and we are encouraged by our discussions thus far. Our objective
remains to achieve a restructuring of our public debt that has
the support of our bondholders and ensures the appropriate
capital structure to enable AT&T Canada to be a strong long-term
competitor. We view a consensual restructuring as achievable and
in the best interests of all of our stakeholders. AT&T Canada's
business continues to be strong, and it remains business as
usual with our customers and suppliers as we continue to provide
state-of-the-art telecommunications services," said David
Lazzarato, Executive Vice President and CFO, AT&T Canada.
The interest payments due on September 15, 2002 are: (1) US$
38.25 million on a 7.65% US$1 billion note due on September 12,
2006; and (2) US$ 9.53 million on a 7.625% US$250 million note
due March 15, 2003. The interest payment due on September 23,
2002 is CDN$5.4 million on a 7.15% CDN $150 million note. Under
the terms of the indentures governing these series of bonds, the
Company has 30 days from the scheduled interest payment date to
make the required interest payment. If payment has not been made
by this time, the company's debtholders would have the right to
demand accelerated and immediate payment of these facilities
and/or all of AT&T Canada's outstanding debt.
As previously disclosed, in the event that holders of the
company's public debt, or lenders under the Senior Credit
Facility, were to demand accelerated and immediate payment, the
Company would not have the resources to fulfill those
obligations in the absence of a successful capital
restructuring.
AT&T Canada is the country's largest competitor to the
incumbent telecom companies. With over 18,700 route kilometers
of local and long haul broadband fiber optic network, world
class managed service offerings in data, Internet, voice and IT
Services, AT&T Canada provides a full range of integrated
communications products and services to help Canadian businesses
communicate locally, nationally and globally. AT&T Canada Inc.
is a public company with its stock traded on the Toronto Stock
Exchange under the symbol TEL.B and on the NASDAQ National
Market System under the symbol ATTC. Visit AT&T Canada's web
site, http://www.attcanada.com for more information about the
company.
DebtTraders reports that AT&T Canada Inc.'s 10.750% bonds due
2007 (ATTC07CAR1) are trading between 11 and 12. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ATTC07CAR1
for more real-time bond pricing.
BIGSTAR ENTERTAINMENT: Going Concern Ability Looks Doubtful
-----------------------------------------------------------
Bigstar Entertainment, Inc. had been an online retailer of
filmed entertainment products and a provider of entertainment
industry information. Through its website, Bigstar.com, Bigstar
had been selling videos and digital video discs or DVDs,
including feature films, children's movies, and educational,
health and fitness, and instructional videos, and provided
information on these products. In addition to selling filmed
entertainment, Bigstar.com featured biographies, movie stills
and star interviews. Bigstar.com also hosted Bigstar Broadband
Theater which offered visitors to its website the ability to
stream and view on their computer movie trailers and feature
films. As of December 31, 2001, the Company has ceased operating
its website.
Bigstar is continuing to pursue other opportunities. The
Company's management will consider recommending to the Board of
Directors alternative plans which may include, but not be
limited to, redeployment of the remaining cash assets into a new
business venture, liquidation of all corporate assets and
distribution of remaining proceeds to its stockholders or some
other alternative to be determined. There can be no assurance
that Bigstar will be successful in this regard or be able to
continue in existence.
Since as of December 31, 2001, the Company ceased operating its
website there were no revenues, or cost of revenues, for the six
months ended June 30, 2002.
Bigstar has an accumulated deficit of approximately $47,738,000
as of June 30, 2002. The Company has incurred a loss from
operations in all periods since inception and has funded
operations to date primarily through the sale of common stock,
however, the Company has been unsuccessful in raising additional
funding. The Company may seek additional funding through public
or private financing or other arrangements to pursue new
business opportunities. Adequate funds may not be available when
needed or may not be available on terms acceptable to the
Company. If additional funds are raised by issuing equity
securities, dilution to existing stockholders will result. If
funding is insufficient at any time in the future, the Company
may be unable to take advantage of business opportunities which
could have a material adverse effect on its business and
financial condition. These matters raise substantial doubt about
the Company's ability to continue as a going concern.
BORDEN CHEMICALS: Seeking Court Approval Of Disclosure Statement
----------------------------------------------------------------
Borden Chemicals and Plastics Operating Limited Partnership and
its debtor-affiliates ask the U.S. Bankruptcy Court for the
District of Delaware to approve their proposed Disclosure
Statement and to schedule a hearing on December 19, 2002 at
11:30 a.m. to confirm the Liquidating Chapter 11 Plan.
The Debtors request that the Court find their Disclosure
Statement contains "adequate information" in accordance with
section 1125 of the Bankruptcy Code. The Debtors say the
disclosure document is more than sufficient because it contains:
a) the circumstances that gave rise to the filing of the
bankruptcy petition;
b) a complete description of the available assets and their
value;
c) the anticipated future of the debtor;
d) the source of the information provided in the disclosure
statement;
e) a disclaimer, which typically indicated that no
statements or information concerning the debtor or its
assets or securities are authorized, other than those
provided in the disclosure statement;
f) the financial condition and performance of the debtor
while in chapter 11;
g) information regarding claims against the debtors'
estates;
h) a liquidation analysis identifying the estimated return
that creditors would receive if the debtor's bankruptcy
case was under chapter 7 of the Bankruptcy Code;
i) the accounting and valuation methods used to produce the
financial information in the disclosure statement;
j) information regarding the future management of the
debtor, including the amount of compensation to be paid
to any insiders, directors or officers of the debtor;
k) a summary of the plan of reorganization;
l) an estimate of all administrative expenses, including
attorney's fees and accountant's fee;
m) the collectibility of any accounts receivable;
n) any financial information, valuation or pro forma
projections that would be relevant to creditors
determination of whether to accept or reject the plan of
reorganization;
o) information relevant to the risks being taken by the
creditors and interests holders;
p) the actual or projected value that could be obtained
from avoidable transfers;
q) the existence, likelihood and possible success of
nonbankruptcy litigation;
r) the tax consequences of the plan or reorganization; and
s) the relationship of the debtor with its affiliates.
The Debtors want all written objections to confirmation of the
Plan to be filed with the Court not later than November 15,
2002, and wants objectors to serve copies of those objections on
all counsel to each of the Debtors, counsel to the BCP/BCP
Finance Creditors' Committee, counsel to the BCPM Creditors'
Committee, and the U.S. Trustee.
Borden Chemicals and Plastics Operating Limited Partnership,
producer PVC resins, filed for chapter 11 protection on April 3,
2001. Michael Lastowski, Esq. at Duane, Morris, & Hecksher
represents the Debtors in their restructuring efforts.
DebtTraders reports that Borden Chemicals & Plastics' 9.500%
bonds due 2005 (BCPU05USR1) are trading between 0.5 and 2. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=BCPU05USR1
for real-time bond pricing.
BUDGET GROUP: Unsecured Panel Taps Brown Rudnick as Counsel
-----------------------------------------------------------
The Official Committee of Unsecured Creditors in the Chapter 11
cases of Budget Group Inc., and its debtor-affiliates, seeks the
Delaware Bankruptcy Court's authority to retain Brown Rudnick
Berlack Israels LLP as counsel nunc pro tunc to August 8, 2002.
Committee Chairperson Lisa A. Miller tells the Court the
Committee selected Brown Rudnick because of its extensive
experience and knowledge of bankruptcy matters. Brown Rudnick
has represented the official committees in these prominent
Chapter 11 cases: A.H. Robbins Company, Inc., Allis-Chalmers
Corporation, Anglo Energy Limited Business Express Inc.,
Comdisco Inc., Continental Airlines, Inc. (S.D. Tex.) Days Inns
of America Inc. and Global Crossing Ltd.
Ms. Miller adds that Brown Rudnick is well qualified to
represent the Committee due to its prepetition representation of
an ad hoc steering committee of holders of the Debtors' 9-1/8%
Senior Notes. In that capacity, Brown Rudnick developed a
significant knowledge base regarding the Debtors' complex
capital and corporate structures. More importantly, Brown
Rudnick has, for some time, been involved in the Debtors'
restructuring and sale process. Thus, Brown Rudnick can provide
the Committee with immediate advice and guidance required in the
Debtors' rapidly progressing cases.
The professional services Brown Rudnick will provide to the
Committee includes:
A. Assisting and advising the Committee in its discussions with
the Debtors and other parties in interest regarding the
overall administration of these cases;
B. Representing the Committee at hearings to be held before this
Court and communicating with the Committee regarding matters
heard and the issues raised as well as the decisions and
consideration of this Court;
C. Assisting and advising the Committee in its examination and
analysis of the conduct of the Debtors' affairs;
D. Reviewing and analyzing pleadings, orders, schedules, and
other documents filed and to be filed with this Court by
interested parties in these cases, advising the Committee as
to the necessity, propriety, and impact of the foregoing upon
these cases; and consenting or objecting to pleadings or
orders on behalf of the Committee, as appropriate;
E. Assisting the Committee in preparing applications, motions,
memoranda, proposed orders, and other pleadings as may be
required in support of positions taken by the Committee,
including all trial preparation as may be necessary;
F. Conferring with the professionals retained by the Debtors and
other parties in interest, as well as with any other
professionals selected and employed by the Committee;
G. Coordinating the receipt and dissemination of information
prepared by and received from the Debtors' professionals, as
well as any information as may be received from professionals
engaged by the Committee or other parties in interest in
these cases;
H. Participating in examinations of the Debtors and other
witnesses as may be necessary in order to analyze and
determine, among other things, the Debtors' assets and
financial condition, whether the Debtors have made any
avoidable transfers or property, or whether causes of action
exist on behalf of the Debtors' estates;
I. Negotiating and formulating a plan of reorganization for the
Debtors or other restructuring or sale of the Debtors'
businesses; and
J. Assisting the Committee generally in performing any other
services as may be desirable or required for the discharge of
the Committee's duties pursuant to Section 1103 of the
Bankruptcy Code.
Aside from reimbursement of reasonable out-of-pocket expenses,
Brown Rudnick will be compensated for its services rendered
based on the hourly rates of these professionals:
Edward S. Weisfelner - $525
Peter J. Antoszyk - $445
Harold J. Marcus - $425
Other Brown Rudnick attorneys or paraprofessionals will, from
time to time, provide legal services on behalf of the Committee.
The prevailing hourly rates of these professionals, subject to
periodic adjustments, are:
Attorneys - $120 to $600
Paraprofessionals - $80 to $200
Ms. Miller informs the Court that Brown Rudnick, in connection
with its prepetition representation of the Ad Hoc Senior
Noteholders Committee, holds a $73,219.43 retainer paid by the
Debtors. The Committee proposes that this retainer be applied
towards postpetition fees and expenses allowed by the Court.
Brown Rudnick member Peter J. Antoszyk assures the Court that
the Firm is a "disinterested person" as that term is defined in
Section 101(14) of the Bankruptcy Code. In addition, Brown
Rudnick does not hold or represent an interest adverse to the
estates that would impair its ability to objectively perform the
services for the Committee, in accordance with Section 327 of
the Bankruptcy Code. However, Brown Rudnick currently performs
or has previously performed services in matters unrelated to
these cases to these entities: United Bank Switzerland, R2
Investments LP, General Reinsurance Corp., Oppenheimer Funds,
Magten Asset Management, Indosuez, Redwood Capital, Fleet Bank,
Credit Suisse First Boston, Bank of America, Chase Manhattan
Bank, Bank of New York, BNP Paribas, Dresdner Bank, General
Electric Capital Corporation, Merrill Lynch, Toronto-Dominion
Bank, Fleet, Wells Fargo Bank, JP Morgan Securities, Bear
Sterns, Wachovia Bank/First Union Bank, Morgan Stanley, State
Street Bank, Deutsche Bank AG, Citibank, Donaldson, Lufkin &
Jenrette, Goldman Sachs, Boston Safe Deposit & Trust, Computer
Sciences Corp., AT&T, and Prudential Securities. (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.
BUFFALO SABRES: May File For Bankruptcy To Settle $157MM Debt
-------------------------------------------------------------
The Buffalo Sabres may be forced to declare bankruptcy to settle
their $157 million debt to troubled cable company Adelphia
Communications before being cleared for any potential sale,
reported the Associated Press. "Bankruptcy might be inevitable,"
Erie County executive Joel Giambra said Tuesday, reported the
newswire. "That's how screwed up the books are." Giambra said
bankruptcy became a possibility after he had numerous
discussions with various ownership groups that have expressed
interest in buying the team. The Sabres signed a 25-year lease
to move into HSBC Arena in 1996. The Sabres' debt - of which $40
million is secured debt - stems from Adelphia money that former
Adelphia boss John Rigas used to help purchase and operate the
team. (ABI World, September 11, 2002)
NHL commissioner Gary Bettman, however, called it inappropriate
and speculative for anyone to suggest that Buffalo Sabres will
declare bankruptcy before they can be sold, AP reports.
According to him, "We enjoy a very cooperative relationship with
Adelphia, and I do not believe there is any reason for anyone to
suggest a Sabres bankruptcy."
The NHL has taken over operational control of the Sabres since
June. It is currently seeking bids from prospective ownership
groups to keep the team in Buffalo.
CANFIBRE: Talks Fail & Lenders Foreclose on Lackawanna Facility
---------------------------------------------------------------
The CanFibre Group Ltd., (YCF: TSX Venture Exchange), is sorry
to announce that its ongoing discussions with the senior secured
lenders, (the "Bondholders") to conclude a debt restructuring
agreement for CanFibre's Lackawanna MDF facility, have concluded
without concluding an agreement. Notice has been received from
the Bondholders that they have elected to foreclose on
CanFibre's ownership of the facility effective immediately.
In August 2002, CanFibre had negotiated the terms of a possible
restructuring agreement with the Bondholders that resulted in a
fully funded offer being made to the Bondholders to invest
significant new equity into the facility in exchange for certain
debt reductions. The offer met all of the terms and conditions
being requested by the Bondholders at the time. Ultimately, the
Bondholders have decided to sell the facility instead.
It is CanFibre's understanding that the Bondholders intend to
continue to fund operations while the facility is prepared for a
sale. Accordingly, all calls or inquiries regarding operations
should be directed to the Lackawanna Facility at 716-827-3008.
Inquiries regarding the public company should continue to be
directed toward CanFibre.
CanFibre Group has always maintained a very strong belief that
the facility could be successful and profitable once all of the
external problems were cured and CanFibre believes that it was
very close to accomplishing that objective. As described in
prior announcements, these external problems have included the
bankruptcy of the general contractor of the facility in
mid-construction, the bankruptcy of CanFibre's former parent
company, the bankruptcy of CanFibre's largest financial
investor, and the need to use most of the $15 million start-up
reserve to complete construction of the plant thus leaving the
facility in a perpetual state of liquidity crisis. The facility
now finds itself in an excellent position of growth with high
market acceptance of its products and proven production
abilities. All that remains for complete success is to operate
the facility at its full capacity.
CanFibre will pursue all of its legal rights throughout the
transition process but believes that its best opportunity in the
future is to become a bidder for the assets. CanFibre is
maintaining a positive working relationship with the Bondholders
and as such, is working toward converting its restructuring
offer into a fully funded purchase offer for the Lackawanna
Facility.
CONSECO, INC.: Who Are the Bank Lenders Granting those Waivers?
---------------------------------------------------------------
According to data obtained from LoanDataSource.com, the 61
current members of the lending consortium backing Conseco,
Inc.'s $1,500,000,000 Five-Year Credit Agreement dated as of
September 25, 1998, are:
* BANK OF AMERICA, N.A.
* JPMORGAN CHASE BANK
* BEAR STEARNS & CO INC.
* DEUTSCHE BANK AKTIENGESELLSCHAFT
* SILVER OAK CAPITAL LLC
* FLEET NATIONAL BANK
* DEUTSCHE BANK TRUST COMPANY AMERICAS
* DK ACQUISITION PARTNERS
* THE BANK OF NEW YORK
* BANK OF TOKYO-MITSUBISHI LTD NEW YORK BRANCH
* CREDIT SUISSE FIRST BOSTON
* SOCIETE GENERALE
* GOLDMAN SACHS CREDIT PARTNERS LP
* COMERICA BANK
* OAKTREE CAPITAL MANAGEMENT, LLC, as general partner and/or
investment manager of certain funds and accounts it
manages
* PERRY PRINCIPALS, LLC
* KEYBANK NA
* WELLS FARGO BANK NA
* SATELLITE SENIOR INCOME FUND LLC
* MARINER LDC
* NORTHWOODS CAPITAL III LIMITED (by Angelo, Gordon & Co.,
L.P.)
* KENSINGTON INTERNATIONAL LIMITED (by Elliott International
Capital Advisors Inc. as attorney-in-fact)
* PAM CAPITAL FUNDING LP (by Highland Capital Management,
L.P.)
* NORDDEUTSCHE LANDESBNK GIROZENTRALE
* SUNTRUST BANK
* CERES II FINANCE LTD (by INVESCO Senior Secured Management,
Inc.)
* FERNWOOD ASSOCIATES LP
* US BANK NA
* BANK OF AMERICA, N.A. DEBT TRADING
* ML CBO IV CAYMAN LTD. (by Highland Capital Management,
L.P.)
* NATIONAL CITY BANK OF INDIANA
* PAMCO CAYMAN LTD. (by Highland Capital Management, L.P.)
* PRESIDENT & FELLOWS OF HARVARD
* BRENCOURT SEC MASTER LTD
* CANPARTNERS INVESTMENTS IV LLC
* MERRILL LYNCH PIERCE FENNER & SMITH
* NUVEEN SENIOR INCOME FUND
* AG CAPITAL FUNDING PARTNERS LP (by Angelo, Gordan & Co.,
L.P.)
* HARBOURVIEW CDO II LTD
* SRF 2000 LLC
* SRF TRADING INC
* STEIN ROE FLOATING RATE LIMITED LIABILITY COMPANY (by Stein
Roe & Farnham Incorporated)
* MORGAN STANLEY EMERGING MARKETS INC.
* AMMC CDO II, LTD (by American Money Management Corp.)
* NORTHWOODS CAPITAL LIMITED (by Angelo, Gordon & Co., L.P.)
* KZH CNC LLC
* AMMC/CDO I LIMITED (by American Money Management Corp.)
* NORTHWOODS CAPITAL II LTD (by Angelo, Gordon & Co., L.P.)
* WINGED FOOT FUNDING TRUST
* LIBERTY-STEIN ROE ADVISOR FLOATING RATE ADVANTAGE FUND (by
Stein Roe & Farnham Incorporated)
* OPPENHEIMER SENIOR FLOATING FUND
* KZH RIVERSIDE LLC
* ALLIANCE CAPITAL MANAGEMENT L.P., as Manager on behalf of
ALLIANCE CAPITAL FUNDING, L.L.C., as Assignee (by
ALLIANCE CAPITAL MANAGEMENT CORPORATION, General Partner
of Alliance Capital Management L.P.)
* AMARANTH FUND LP
* AVALON CAPITAL LTD. 2 (by INVESCO Senior Secured Management
Inc.)
* HARBOURVIEW CLO IV LTD
* SRS STRATEGIES (CAYMAN) LP (by Stanfield Capital Partners
LLC)
* AMARA 2 FINANCE LTD. (by INVESCO Senior Secured Management,
Inc.)
* AMARA-1 FINANCE LTD. (by INVESCO Senior Secured Management,
Inc.)
* OASIS COLLATERALIZED HIGH INCOME PORTFOLIOS-1, LTD. (by
INVESCO Senior Secured Management Inc.)
* AXIS/SRS LIMITED (by Stanfield Capital Partners LLC)
LoanDataSource.com reports that the lenders backing the loans to
Conseco directors and officers used to purchase Conseco stock
are:
* BANK OF AMERICA, N.A.
* DEUTSCHE BANK AG, New York and/or Cayman Island Branches
* WACHOVIA BANK, NATIONAL ASSOCIATION
* FLEET NATIONAL BANK
* SUN TRUST BANK
* GENERAL ELECTRIC CAPITAL CORPORATION
Monday, Conseco, Inc. (OTCBB:CNCE) announced it obtained a
temporary waiver from its senior lenders of certain cross-
default provisions under the Company's credit agreement, and has
received
an extension of the temporary waiver previously granted by its
senior lenders with respect to the Company's non-compliance with
its 0.400:1.0 debt to capitalization ratio covenant as of June
30, 2002, as well as a limited waiver of potential non-
compliance of a 0.375:1.0 debt to capitalization ratio covenant
as of September 30, 2002. The Company also said that it has
obtained temporary waivers of certain cross-default provisions
and covenant defaults from the lenders under the D&O loans with
respect to the Company's guarantees of these loans. All of these
waivers are scheduled to expire on October 17, 2002, are subject
to various conditions and may be revoked at any time by a
majority in interest of the lenders (on a facility by facility
basis).
In addition, Conseco Finance obtained a temporary waiver of a
cross default provision from the one lender whose financing
agreement contains a cross default to events of default under
the
Company's bond debt. The Company's finance and insurance
subsidiaries are not borrowers under the Company's senior credit
agreement or indentures, and the Company's insurance
subsidiaries are not party to any indebtedness that would be
subject to any cross-default provisions with respect to defaults
under the
Company's debt.
Conseco, Inc., has initiated discussions with an ad-hoc
committee of holders of public notes issued by the company.
The ad-hoc committee has engaged:
* Fried, Frank, Harris, Shriver & Jacobson as legal advisor,
and
* Houlihan Lokey Howard & Zukin as financial advisor.
Conseco has hired:
* Kirkland & Ellis as its legal advisors; and
* Lazard Freres & Co. as its financial advisors.
On September 8, 2002, a 30-day grace period expired and much of
the Company's bond-related debt is in default. Conseco is
pursuing a financial restructuring to address the holding
company's current leverage and liquidity situation.
COVANTA ENERGY: Merrill Lynch Pursues Insurance Coverage Dispute
----------------------------------------------------------------
Merrill Lynch & Co., Inc. and Merrill Lynch/WFC/L, Inc. ask the
Court for the Chapter 11 cases of Covanta Energy and its debtor-
affiliates to:
(a) lift the automatic stay to permit the claimants to
proceed with their third-party action against Ogden
Facility Holdings, Inc. f/k/a Ogden Allied Building &
Airport Services, Inc., currently pending in the New York
State Supreme Court, County of New York, which forms the
basis of the claimants' claim against Ogden's bankruptcy
estate, to the extent of the Debtors' available insurance
proceeds; and
(b) direct National Union Fire Insurance Company of
Pittsburgh, the liability insurance carrier of Ogden, to
defend and indemnify Ogden in the claimants' action
pursuant to the terms of the policy of insurance issued
by National Union to Ogden under policy number RM GL 143-
78-09 for the policy period August 31, 1996 to August 31,
1997.
Jeffrey M. Burkhoff, Esq., at Carole A. Burns & Associates, in
Mineola, New York, relates that in July 1996, Ogden entered into
a janitorial maintenance service agreement with Merrill Lynch in
which Ogden agreed to perform janitorial maintenance services at
various facilities, including the World Financial Center --
North Tower, in 250 Vesey Street, New York -- the Premises.
Under the Agreement, Ogden agreed to indemnify, defend and hold
harmless Merrill Lynch against and all suits for personal
injuries arising out of Ogden's acts or omissions.
On November 20, 1997, Mr. Burkhoff reports, Hava Paljevic, an
Ogden employee, commenced a personal injury action in the
Supreme Court of the State of New York against Battery Park City
Authority, WFC Tower D Company and Merrill Lynch & Company, Inc.
Ms. Paljevic alleged that she sustained personal injuries when
she fell on May 19, 1997 at the Premises due to the defendants'
negligence.
Accordingly, on December 4, 1998, Merrill Lynch reminded
National Union of Ogden's defense and indemnity obligations
under the lease agreement and requested that it assume the
defense of Merrill Lynch and indemnify Merrill Lynch pursuant to
the policy of insurance applicable to the Paljevic Action. On
January 7, 1999, the defendants in the Paljevic Action commenced
a third-party action against Ogden with respect to its
obligation under the Agreement.
On February 22, 2002, the jury returned a unanimous verdict
against Ms. Paljevic. The Court also found that Ogden was
contractually obligated to defend and indemnify the defendants
for all costs expended in the defense of the Paljevic Action.
Furthermore, the Court also ordered a hearing to determine the
specific amount of costs to which Merrill Lynch is entitled to
recover from Ogden.
By these facts, Mr. Burkhoff contends that the relief requested
should be granted because:
-- Merrill Lynch's third-party action against Ogden for its
costs sustained in defending the Paljevic Action will not
create a personal liability for Ogden since the insurance
carrier would be required to pay anything;
-- the insurance proceeds to pay Merrill Lynch are not
necessary to an effective reorganization of the Debtors;
and
-- the policy limit of $10,000,000 is sufficient to satisfy
any judgment it may obtain against Ogden. (Covanta
Bankruptcy News, Issue No. 13; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
CUMBERLAND TECHNOLOGIES: Nasdaq To Delist Shares Today
------------------------------------------------------
Cumberland Technologies, Inc. (Nasdaq: CUMB) recently received
notice from the Nasdaq Stock Market, Inc. to the effect that its
shares will be delisted from the Nasdaq SmallCap Market at the
opening of business on September 13, 2002.
The Nasdaq notice said Cumberland does not comply with the
market value of publicly held shares for continued listing, and
that the Cumberland common stock is therefore subject to
delisting from the Nasdaq SmallCap Market.
Cumberland said it does not intend to appeal the delisting
notice. The Company said it is seeking arrangements for a
broker-dealer to make a market in the Company's shares on the
Nasdaq OTC Bulletin Board.
Cumberland Technologies, Inc. and its subsidiaries provide
advanced software technology to insurance agencies, which focus
on the selling and delivery of surety insurance products to
consumers. Through our insurance subsidiaries, we provide
Performance and Payment surety bonds for the construction
industry and Commercial surety bonds to federal and local
government agencies.
Cumberland Technologies, Inc. is headquartered in Tampa,
Florida, with offices in Atlanta, Georgia; Greenville, South
Carolina; Dallas, Texas; Phoenix, Arizona and Redondo Beach,
California.
CYBERADS: Upside Down Balance Sheet Raises Going Concern Doubts
---------------------------------------------------------------
CyberAds, Inc.'s current period loss, working capital
deficiency, and stockholders' deficiency of $1,726,484,
$2,078,800 and $1,617,956, respectively, raise substantial doubt
about its ability to continue as a going concern.
The Company plans to raise additional funds through loans from
third parties and the sale of common stock for cash. The Company
has negotiated a more advantageous advance rate with its factor
that should ease its need for new capital and is of the opinion
that the cash generated from these resources will be sufficient
to provide adequate liquidity and capital resources. The Company
anticipates that revenues will increase from the offering of new
products and cellular phone service with new carriers.
The ability of the Company to continue as a going concern is
dependent on the Company's ability to raise additional capital
and implement its business plan. Management believes that when
it accomplishes certain intended steps that the Company will
have sufficient liquidity to remain viable for at least the
next twelve months.
CyberAds, Inc. began operations in the fourth quarter of 2000
and began generating revenues in December 2000. Through its
wholly-owned subsidiary, IDS Cellular, Inc. (d/b/a "Wireless
Choices"), it generates revenues by marketing cell phone
services to potential consumers it is introduced to through its
internet affiliate program and other third party telemarketing
services.
Commencing in the fourth quarter 2001, it began operating as a
direct reseller of cellular phone service, which provides it
with increased revenues as well as a requirement to provide
cellular telephones with each sale and to maintain an inventory
of cellular telephones. In late January 2002, CyberAds commenced
the operations of Cyad Cellular Distributors, Inc., an 80% owned
subsidiary. Cyad is a wholesale distributor of cellular
telephones to retail operations. Revenues for Cyad, net of
inter-company sales, for the three and six month periods ended
June 30, 2002 were approximately $208,000 and $430,000,
respectively. Cyad operations have ceased as of August 2002.
Total revenues were $2,110,368 for the three months ended June
30, 2002 and $517,100 for the three months ended June 30, 2001.
Revenues were $4,240,529 for the six months ended June 30, 2002
and $939,748 for the six months ended June 30, 2001. The
$1,593,268 increase in revenues for the three months ended June
30, 2002 as compared to June 30, 2001, and the $3,300,781
increase in revenues for the six months ended June 30, 2002 as
compared to June 30, 2001, primarily reflect the growth of
business since commencement of its cellular phone services.
The cost of revenues was $1,080,582 and $1,882,107 for the three
and six months ended June 30, 2002, respectively, consisting
principally of the cost of cellular telephones. The gross profit
for the three month period was $1,029,786, or 48.8%, and
$2,358,422, or 55.6%, for the six month period.
Net loss for the three months ended June 30, 2002 increased by
$907,431 to $1,119,555 from a net loss of $212,124 for the three
months ended June 30, 2001. Net loss for the six months ended
June 30, 2002 increased by $1,385,109 to $1,726,484 from a net
loss of $341,375 for the six months ended
June 30, 2001. The increase in net loss was due primarily to
increases in expenses.
Liquidity and Capital Resources
As of June 30, 2002, CyberAds had an accumulated deficit of
$3,366,198 and cash in the bank of $40,857. It had a working
capital deficit at June 30, 2002 of $2,078,800. The deficit was
funded during the six month period ended June 30, 2002 by
proceeds from the exercise of options ($55,000), proceeds from
the issuance of convertible debentures ($60,000), net advances
from related parties ($274,826) and net advances on accounts
receivable under its factoring agreements with Rockland Credit
Finance LLC and WebBank ($270,724).
Net accounts receivable decreased $761,115 from $2,034,927 as of
December 31, 2001 to $1,273,812 as of June 30, 2002. This
decrease is primarily the result of an improvement in collection
of receivables.
The Company is non-compliant with respect to payment of employee
and employer payroll-related taxes. The liability exceeds
$223,000 as of June 30, 2002 and does not include the impact of
penalties and interest. The Company recently initiated
communications with the IRS to pursue a satisfactory settlement
arrangement.
Since its inception CyberAds has experienced negative cash flow
and have met cash requirements by issuing, through a private
placement, common stock and by issuing stock as compensation for
services provided. It has also funded current obligations
through the issuance of common stock and convertible debentures,
and related party loans and generated additional funds through
borrowings from a related party.
On July 21, 2002, MCI WorldCom Wireless, a significant customer
of CyberAds, filed for Chapter 11 bankruptcy protection under
the U.S. bankruptcy code. CyberAds is owed approximately
$512,000 from MCI as of June 30, 2002 and has reserved $435,000
(approximately 85%) of the total due as an allowance for
doubtful accounts.
While CyberAds' auditors have expressed substantial doubt as to
its ability to continue as a going concern, CyberAds' management
anticipates that funds received from loans and cash generated
from operations should be sufficient to satisfy the
contemplated cash requirements for the next 12 months. The
Company intends to take several steps that will provide the
capital resources required to insure viability over the next 12
months. Its direct relationship with cellular providers has
improved its cash collections. In addition, it may increase the
use of telemarketing companies to provide new sales leads.
Management believes the advantage to using telemarketing
companies is that telemarketing companies are only paid for
successful leads. The incentive for telemarketing companies to
find successful leads may increase CyberAds' future sales.
Finally, the Company intends to continue its affiliate program,
from which results have improved over the past several months.
It may also attempt to raise additional funds through private or
public offerings and may seek additional borrowings through a
new credit facility or other lenders.
EXODUS: Pursuing Court Approval on Settlement Deal with Kangaroo
----------------------------------------------------------------
EXDS (formerly known as Exodus Communications, Inc.), together
with its debtor-affiliates, and Kangaroo Properties LLC are both
successors-in-interest to a certain Lease Agreement dated July
10, 2000 for the lease of certain property located at 1920 Maple
Avenue in El Segundo, California.
The parties now wish to resolve their disputes regarding the
removal and sale of all improvements to the property that were
constructed by the Debtors, as tenants. Accordingly, EXDS
sought and obtained the Court's approval of the Settlement
Agreement with Kangaroo.
The Settlement Agreement provides, in pertinent part:
A. Lease Rejection: The Lease is rejected effective as of 11:59
p.m. Eastern Daylight Time on August 27, 2002;
B. Obligations of EXDS: In consideration for the obligations of
Kangaroo, as Landlord, EXDS agrees:
* Transfer of the Improvements: EXDS sells, transfers,
assigns and conveys unto Landlord all right, title and
interest in and to:
1. the Improvements,
2. all manufacturer's or other warranties, operations
manuals and the like relating to the Improvements,
3. all governmental licenses, approvals and permits
relating to the use and operations of the Improvements,
and
4. all building plans and specifications and site plans
relating to the Premises.
EXDS sells, transfers, assigns and conveys only the title
and interest as it may hold in said assigned assets. It is
the intent of the Parties that the assigned assets are
sold, transferred, assigned and conveyed free and clear of
all:
1. liens, encumbrances and adverse claims, other than
Permitted Encumbrances that are not yet due and payable,
2. local, county, state and federal laws, ordinances or
governmental regulations relating to the Assigned
Assets, and
3. title exceptions;
* Utility Payments: EXDS agrees to make all postpetition
utility payments that it is required to make under the
terms of the Lease with respect to the Premises directly to
the providers thereof for periods through the effective
date of the Lease termination; and
* Further Assurances: As soon as practicable, EXDS will
surrender possession of the premises to the Landlord, turn
over to the Landlord all keys and entry cards to the
premises of whatever kind or nature in EXDS' possession and
reasonably cooperate with the Landlord for the transfer to
Landlord of all utilities with respect to the premises any
interruption of service or operation. EXDS will further
cooperate with the Landlord for the transfer of the
assigned assets; and
C. Obligations of Landlord. Landlord agrees:
* Sale or Lease Transactions: In the event that the Landlord
sells or leases the premises between now August 31, 2003,
Landlord agrees to pay to EXDS via wire transfer in readily
available currency of the United States of America, within
seven business days of the closing date in the case of a
sale, or within 30 days after the date the lease agreement
was entered into in the case of a lease, corresponding to
the date of the purchase agreement in the case of a sale:
Transaction Date Cash Component
---------------- --------------
08/22/02 to 02/01/02 $750,000
12/02/02 to 12/31/02 $675,110
01/01/03 to 01/31/03 $600,000
02/01/03 to 02/28/03 $525,000
03/01/03 to 03/31/03 $450,000
04/01/03 to 04/30/03 $375,000
05/01/03 to 05/31/03 $300,000
06/01/03 to 06/30/03 $225,000
07/01/03 to 07/31/03 $150,000
08/01/03 to 08/31/03 $75,000
* In the event that landlord agrees only to sale of the part
of the premises, the Landlord will pay to EXDS a pro rata
share of the cash component. The share will be calculated
by multiplying the otherwise applicable Cash Component by a
factor equal to the square footage of the premises subject
to the partial transaction divided by the total leasable
square footage of the premises (i.e., pro rata share of
cash component); and
* The landlord agrees to use its best reasonable commercial
efforts to enter into a Transaction or Transactions to sell
or lease the entire Premises as quickly as possible.
(Exodus Bankruptcy News, Issue No. 24; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
FLAG TELECOM: Airs Objections to PSINet's Duplicative Claims
------------------------------------------------------------
PSINet, a debtor in another Chapter 11 case pending before the
United States Bankruptcy Court for the Southern District of New
York, filed three identical proofs of claim against FLAG
Telecom Holdings Limited and its debtor-affiliates. These claims
are identified in the Debtors' claim registry as claim numbers
00008, 00009 and 00010.
Each Claim is for $23,800,000 and seeks to recover an alleged
preferential payment to the Debtors by PSINet on account of an
antecedent debt, within 90 days prior to the filing of PSINet's
Chapter 11 cases. PSINet has commenced an adversary proceeding
against FLAG in its bankruptcy case.
But the Debtors argue that PSINet's claims:
(a) do not give rise to a preferential payment, which can be
avoided pursuant to Sections 547 and 550 of the
Bankruptcy Code,
(b) are asserted against entities that did not receive any
payment or transfer, and
(c) are subject to set-off or counter-claim.
Conor D. Reilly, Esq., at Gibson, Dunn & Crutcher LLP, argues
that PSINet's claims do not sufficiently allege the facts and
legal basis for avoidance under Sections 547 and 550 of the
Bankruptcy Code:
(a) The payment in question was made in connection with a
Restated Capacity Right of Use Agreement, between FLAG
Atlantic Limited, FLAG Atlantic USA Limited and PSINet,
dated March 19, 2001. FLAG Telecom Holdings Limited is
not a party to the Agreement. To the extent the Claims
are asserted against FTHL, they do not satisfy the
requirements that the transfer be to or for the benefit
of a creditor, or that it be on account of an antecedent
debt. To the extent the Claims are asserted against FLAG
Atlantic USA Limited, they do not satisfy the requirement
that the transfer be to or for the benefit of a creditor
because FLAG Atlantic USA Limited did not receive the
transfer;
(b) The alleged transfer is not for or on account of an
antecedent debt owed by PSINet to the Debtors before the
alleged transfer was made;
(c) The alleged transfer is not avoidable because it was a
contemporaneous exchange for new value given to PSINet;
(d) The alleged transfer is not avoidable because it was in
payment of a debt incurred by PSINet in the ordinary
course of business or financial affairs of PSINet and the
Debtors, made in the ordinary course of the business or
financial affairs of PSINet and the Debtors, and made
according to ordinary business terms; and
(e) The Debtors are continuing to inquire whether PSINet was
insolvent at the time of the alleged transfer to the
Debtors.
To the extent that one or more of the Debtors received a
transfer, which may be avoided under Sections 547 and 550, Mr.
Reilly asserts that the Debtors have rights of recoupment and/or
setoff pursuant to Sections 502(b)(1), 553 and 558 of the
Bankruptcy Code.
According to Mr. Reilly, the Debtors have filed claims regarding
these debts in PSINet's Chapter 11 cases:
(a) On July 8, 2002, FLAG Atlantic Limited and FLAG Atlantic
USA Limited each filed a prepetition proof of claim
against PSINet. Each of the prepetition claims were for
all contract damages arising from the rejection and
breach of these two executory contracts:
(i) Restated Capacity Right of Use Agreement dated on
or about March 19, 2001, among FAL and FA USA and
PSINet, and
(ii) Agreement dated on or about March 19, 2001, among
FLAG, FLAG Atlantic UK Limited, PSINet Inc. and
London Hosting Centre Limited.
The amount of each claim is $50,380,000; and
(b) On July 8, 2002, FAL and FA-USA each filed an
administrative proof of claim against PSINet. Each of
the administrative claims seeks payment of all operations
and maintenance payments due and owing to FLAG pursuant
to the Restated Agreement and payment of interest. The
amount of each claim is $4,587,652. (Flag Telecom
Bankruptcy News, Issue No. 14; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
FRUIT OF THE LOOM: FOL Trust Settles Dispute with Farley, et al
---------------------------------------------------------------
FOL Liquidation Trust and William F. Farley, Biotechvest L.P.,
Lia Inc., Biotechvest II, ONX Inc., OPT Inc., and Liam Ventures
sought and obtained approval regarding their drafted Settlement
Agreement resolving their dispute.
The Dispute
Risa M. Rosenberg, Esq., at Milbank, Tweed, Hadley & McCloy,
reminds the Court that Fruit of the Loom was party to a guaranty
agreement with Bank of America and Credit Suisse First Boston.
Fruit of the Loom guaranteed a $65,000,000 loan to Mr. Farley.
Postpetition, the lenders asserted that Mr. Farley defaulted on
his obligations under the loan terms. To date, the outstanding
principal balance of Mr. Farley's loan, excluding interest, fees
and amounts owed under letters of credit, reach $57,132,231.57.
Prepetition, NWI-I, Inc., formerly known as Fruit of the Loom
Inc., maintained a Senior Officer Deferred Compensation Plan and
Trust. It was established around March 17, 1997 and held trust
assets. Mr. Farley and the Debtors dispute whether the Rabbi
Trust assets continue to be held in the trust after the Petition
Date. This Court established procedures and deferred
consideration of the ownership of these assets pending
resolution of an adversary proceeding commenced by Fruit of the
Loom.
On August 11, 2000, Mr. Farley filed proofs of claim asserting
various claims and rights of setoff against multiple Debtors.
The Debtors disputed these proofs of claim. In connection with
the Settlement, Mr. Farley has agreed to withdraw his proofs of
claim.
On October 27, 2000, the Agent for the Lenders commenced an
action against Mr. Farley in the Supreme Court of New York,
County of New York, styled: Bank of America, N.A. v. Farley, No.
00CIV.9346 (DC). This action was removed to the U.S. District
Court for the Southern District of New York. The Agent was able
to obtain a judgment against Mr. Farley.
The Settlement
The Settlement Agreement provides that:
(a) Mr. Farley pays $10,000,000 in cash on the settlement
consummation date;
(b) Mr. Farley delivers a promissory note to the Trust
promising to pay $2,000,000 in cash by June 1, 2004;
(c) Mr. Farley delivers to the Trust a letter of credit
reimbursement agreement in which Mr. Farley agrees to
reimburse Bank of America for all draws under
outstanding letters of credit in the amount of
$2,200,000 by August 31, 2003;
(d) Mr. Farley delivers collateral documents mortgaging
real property, pledging stock and perfecting security
interests as directed by the Trust;
(e) Mr. Farley surrenders life insurance policies and
delivers the cash surrender value to the Trust;
(f) Mr. Farley delivers artwork to the Trust. (Fruit of the
Loom Bankruptcy News, Issue No. 59; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
GASEL: Losses Raise Doubts on Ability to Continue Operations
------------------------------------------------------------
Gasel Transportation Lines earned approximately $100,796 in
1999, and sustained losses of $1,045,402 and $870,583 in 2000
and 2001, respectively, as well as a loss of $266,446 during the
six months ended June 30, 2002. At June 30, 2002, current
liabilities exceed current assets by approximately $4,880,424.
Current liabilities include revenue equipment obligations due in
the next 12 months of $4,088,398 that the Company expects to
meet via future cash flows from normal operations. The Company
had an accumulated deficit of approximately $1,187,285 at
December 31, 2001, and $1,453,731 at June 30, 2002. These
factors raise substantial doubt about the ability of the Company
to continue as a going concern for a reasonable period of time.
The Company says it is continuing to develop and implement
corrective actions to generate positive earnings and cash flows
from its operations. Significant among these actions is the
Company's acquisition of a freight brokerage operation in
December, 2000, that established a market presence in the
greater Columbus, Ohio. This is an area in which the Company is
working to increase its freight volume and rates via a larger
customer base.
Late in the second quarter, the Company set in motion a plan to
change its sales mix to increase the freight volume, rates and
margins via the addition of large national shippers that the
Company expects to realize through its enhanced sales force.
Management believes it has the capability to obtain additional
capitalization through a combination of debt and equity to
appropriately fund the Company. Additionally, in an effort to
mitigate certain external conditions that could adversely effect
the Company's financial performance (e.g., diesel fuel prices,
insurance and the general economy,) management believes the
Company is instituting adequate contingencies.
GE CAPITAL: Fitch Affirms 5 Series 2001-2 Classes at Low-B Level
----------------------------------------------------------------
GE Capital Corp.'s commercial mortgage pass-through
certificates, series 2001-2 have been affirmed by Fitch Ratings
as follows: $40.8 million class A-1, $96.9 million class A-2,
$112 million class A-3, $519.5 million class A-4, $994.8 million
class X-1 and $562.8 million class X-2 at 'AAA'; $40.1 million
class B at 'AA'; $45.1 million class C at 'A'; $12.5 million
class D at 'A-'; $10 million class E at 'BBB+'; $18.8 million
class F at 'BBB'; $11.3 million class G at 'BBB-'; $21.3 million
class H at 'BB+'; $18.8 million class I at 'BB'; $5 million
class J at 'BB-'; $7.5 million class K at 'B+' and $12.5 million
class L at 'B'. Fitch does not rate classes M and N. The rating
affirmations follow Fitch's annual review of the transaction,
which closed in August 2001.
The pool has performed fairly consistently over the past year
with minimal paydown from amortization and no loan payoffs.
While the overall debt service coverage ratio (DSCR) has
decreased to a 1.36 times at year-end 2001 (based upon 79.4% of
financial statements collected by the servicer) from a 1.42x at
issuance, there is only one small loan, representing 0.6% of the
pool in special servicing at this time. Additionally, for eight
of the top ten loans that have reported financials, representing
21% of the pool, coverage remains strong at a 1.56x. The pool is
also well diversified by loan balance and geography.
The main concern with the pool is the declining performance of
the largest loan in the transaction, the Holiday Inn 57th
Street, representing 4.2% of the pool. This loan was shadow
rated investment grade by Fitch at issuance. The property is a
full service hotel consisting of 596 rooms and offers numerous
amenities including an outdoor rooftop pool, sundeck, fitness
center, concierge service, banquet facilities, meeting rooms and
two restaurants.
As with other hotels in Manhattan, this hotel experienced a
decline in revenue per available room (Rev Par) following the
events of September 11th and the loan's DSCR dropped from a
2.93x at issuance to a 2.00x for year-end 2001. While the DSCR
dropped significantly, the current coverage is still considered
strong. Fitch has been following the performance of the loan
throughout the year and for the seven months ended July 31,
2002, the property is performing in line with budgeted numbers
with a positive trend in Rev Par for the first two quarters of
2002.
Fitch also took into account the specially serviced loan and
other under-performing in its analysis. The credit enhancement
that resulted from remodeling the pool, coupled with the lack of
expected losses resulted in sufficient credit enhancement to
affirm the ratings.
GENESEE CORP: Reports Changes in Net Assets in Liquidation
----------------------------------------------------------
Genesee Corporation (Nasdaq: GENBB) updated management's best
estimate of net assets that are expected to ultimately be
distributed to shareholders by issuing its statement of net
assets in liquidation and statement of changes in net assets in
liquidation as of and for the first fiscal quarter ended July
27, 2002.
The Corporation is currently operating under a plan of
liquidation and dissolution that was approved by shareholders in
October 2000. Under this plan, the Corporation sold its brewing
and equipment leasing businesses in December 2000 and its Foods
Division in October 2001. On May 31, 2002 the Corporation sold
its investment in the Clinton Square office building in
Rochester, New York for $2.4 million in cash.
In accordance with generally accepted accounting principles, the
Corporation has adopted the liquidation basis of accounting.
Under the liquidation basis of accounting, the Corporation does
not report results from continuing or discontinued operations.
Instead, the Corporation reports only net assets in liquidation
and changes in net assets in liquidation.
The Corporation reported net assets in liquidation at July 27,
2002 of $29.9 million, or $17.87 in net assets per share,
compared to net assets in liquidation at April 27, 2002 of $29.6
million, or $17.69 in net assets per share. The $300,000
increase in net assets in liquidation in the first fiscal
quarter reflects an adjustment to the net realizable value of
the Corporation's interests in its two remaining real estate
investments based on independent appraisals of those properties
and negotiations with potential purchasers, as well as
management's current estimates of the net realizable value of
the Corporation's other assets and the settlement costs of the
Corporation's liabilities. The actual values and costs are
expected to differ from the amounts shown herein and could be
greater or lesser than the amounts recorded.
NOTE: The Corporation paid partial liquidating distributions of
$7.50 per share on March 1, 2001, $13.00 per share on November
1, 2001, $5.00 per share on May 17, 2002 and $5.00 per share on
August 26, 2002 under the plan of liquidation and dissolution
adopted by the Corporation's shareholders in October 2000.
GLOBAL CROSSING: Settles Qwest Communications Set-Off Issues
------------------------------------------------------------
According to Michael F. Walsh, Esq., at Weil Gotshal & Manges
LLP, in New York, Qwest Communications Corporation, Qwest
Corporation and Qwest Transoceanic, Inc., and Global Crossing
Telecommunications, Inc., Global Crossing North American
Networks, Inc., and Global Crossing Bandwidth, Inc. provided
various prepetition telecommunications services to one another.
Qwest and Global Crossing have reviewed outstanding balances
between them as of the Petition Date and have determined that
there are $2,857,447.99 in mutual debts outstanding under dozens
of Qwest or Global Crossing billing account numbers, which are
subject to setoff under applicable non-bankruptcy law.
Qwest and Global Crossing have also determined that upon setoff
of the amounts, Qwest entities have no further indebtedness to
Global Crossing entities as of the Petition Date. Global
Crossing also acknowledges that its subsidiaries remain indebted
to Qwest for these amounts as of the Petition Date:
Debtor Entity Amount
-------------------------- -------------
GC North American Networks $3,401,080.40
GC Telecommunications 5,677,907.60
In the ordinary course of business, numerous billing disputes
arise between Qwest and Global Crossing. As of Petition Date,
Qwest disputed outstanding Global Crossing charges of
$233,874.64 and Global Crossing disputed outstanding Qwest
charges of $191,622.93.
In the interests of maintaining a good, working relationship
between the parties and to avoid the costs and burdens of
arbitration or litigation concerning the Disputed Charges, the
parties stipulate agree that:
A. Qwest and Global Crossing will setoff the Mutual Debts;
B. Each of the Global Crossing Prepetition Obligations will be
deemed an allowed claim against the respective debtor,
subject to the rights of the Debtors, their estates and any
entity with appropriate standing to assert a defense or right
under Section 502(d) of the Bankruptcy Code. The Allowed
Claims represents the total indebtedness of Global Crossing
to Qwest as of the Petition Date. Each Allowed Claim will be
a general unsecured claim; provided, however, that to the
extent any executory contract or contracts hereafter assumed
by Global Crossing requires all or a portion of such Allowed
Claim to be paid as a cure amount pursuant to Section 365(b)
of the Bankruptcy Code, this cure amount will constitute as
an administrative expense claim. In addition, Qwest reserves
its right to assert additional prepetition claims against
Global Crossing or its affiliates in the event Global
Crossing or any of its affiliate rejects any executory
contract with Qwest pursuant to Section 365 of the Bankruptcy
Code. Global Crossing expressly reserves its right to object
to any Damage Claim; and
C. The Disputed Charges will be deemed fully resolved without
the payment of money by either Global Crossing or Qwest.
Accordingly, Judge Gerber puts his stamp of approval on the
parties' Stipulation. (Global Crossing Bankruptcy News, Issue
No. 20; Bankruptcy Creditors' Service, Inc., 609/392-0900)
GTC TELECOM: Independent Accountants Air Going Concern Doubts
-------------------------------------------------------------
GTC Telecom Corp. provides various telecommunication services,
including long distance telephone and calling card services,
various Internet related services including Internet Service
Provider access and web page hosting. GTC Telecom Corp. was
organized as a Nevada Corporation on May 17, 1994 and is
currently based in Costa Mesa, California. The Company's common
stock currently trades on the NASD OTC Bulletin Board under the
symbol "GTCC."
The Company's revenues increased by $3,797,329, or 27.2%, from
$13,964,544 for the year ended June 30, 2001, to $17,761,873 for
the year ended June 30, 2002. The increase was due primarily to
the increase in telecommunications revenues of $3,169,942 and in
Internet revenues of $627,387. The backbone of GTC's overall
market and development strategy involves the pursuit and
establishment of strategic affiliations and alliances with
major telecommunication and Internet service companies through
partnerships and co-branding. The Company had 2,719 and 86
affiliates as of June 30, 2002 and 2001, respectively. In
addition, as of June 30, 2002, the Company had approximately
155,848 long distance customers and 8,623 internet customers,
with usage of long distance services of approximately
255,702,000 minutes for the year ended June 30, 2002 as compared
with approximately 116,824 long distance customers and 1,450
internet customers, with usage of long distance services of
approximately 218,540,000 minutes for the year ended June 30,
2001.
Net loss was $1,311,667, or $0.06 loss per share, and a net loss
of $2,832,258, or $0.14 loss per share, for the years ended June
30, 2002 and 2001, respectively.
Assets decreased by $219,449 from $2,178,045 at June 30, 2001 to
$1,958,596 at June 30, 2002. The decrease was due to net
decreases in accounts receivables of $190,317, decreases in
related party note receivable of $100,000 and other assets of
$19,736; net of increases in cash and cash equivalents of
$6,188, deposits of $43,400, prepaid expenses of $9,549, and
property and equipment of $31,467.
Liabilities increased by $1,035,982 from $7,458,312 at June 30,
2001 to $8,494,294 at June 30, 2002. The increase was due to
increases in accounts payable and accrued expenses of $1,864,951
(net of the conversion of $4,861,604 of previously recorded
accounts payable into a short-term note payable), primarily for
amounts owed to WorldCom (associated with the increase in
customer usage), and decreases in accrued payroll and payroll
related liabilities of $382,533 (primarily for amounts
associated with past due payroll taxes), notes payable of
$378,230 (including the conversion of $4,861,604 of previously
recorded accounts payable into a short-term note payable, the
addition of a note payable of $70,400 and principal repayments
of $448,630), obligations under capital lease of $64,733 (net of
the increase in long term capital lease of $15,303) primarily
due to principal repayments, and deferred income of $3,473,
associated with the increase in telecommunications service
costs, Internet service provider access fees and customer
service operations as a result of the increase in customers.
Stockholders' deficit increased by $1,255,431 from $5,280,267 at
June 30, 2001 to $6,535,698 at June 30, 2002. The increase was
attributable to the current year net loss of $1,311,667,
expenses made on the Company's registration statement of
$148,164, offset primarily by the amortization of compensation
expense related to previously issued options to employees in the
amount of $132,300, the fair market value of warrants granted
under a third party agreements of $39,000, the fair market value
of stock issued for services of $33,000, and the exercise of
stock options by an officer of the Company of $100.
GTC's says its funds from operations are currently sufficient to
fund daily operations. In addition, repayment of the Company's
monthly obligations on its WorldCom Note and its past due
payroll taxes are currently being met by the Company's funds
from operations. However, the Company's funds from operations
are currently insufficient to fund immediate repayment of its
short and long-term debts and contingent liabilities.
Therefore, the Company may be required to seek additional funds
either through debt or equity financing to finance these debts
and contingencies. Failure to raise additional funds, may have
a material adverse effect on the Company's long-term operational
viability.
The Company's independent certified public accountants have
stated in their report included in its most recently filed
financial information, that the Company has incurred operating
losses in the last two years, has a working capital deficit and
a significant stockholders' deficit. These conditions raise
substantial doubt about the Company's ability to continue as a
going concern.
HEALTHWATCH: Directors Tucker, Provow & Blue Resign From Board
--------------------------------------------------------------
Effective August 28, 2002, Directors Robert Tucker, Lee Provow
and Harold Blue have resigned from the Board of Directors of
HealthWatch, Inc. Paul Harrison will remain as Chairman of the
Board and CEO of the Company.
HealthWatch provides information technology and services to
address the enterprise information needs of healthcare
organizations with cost-effective, functionally rich systems
solutions for physicians, hospitals, payers and the extended
healthcare delivery system. HealthWatch utilizes a proprietary
breakthrough process to produce high performance applications,
which are architected to run efficiently on a variety of
hardware, operating systems, relational databases and network
protocols, including the Internet.
As of March 31, 2002, HealthWatch's balance sheet showed that
the company sustained a working capital deficit of about $912K.
HOMELAND STORES: Emerges From Bankruptcy as AWG's Subsidiary
------------------------------------------------------------
Homeland Stores emerged from bankruptcy midnight Saturday, upon
the approval of its reorganization plan by the U.S. Bankruptcy
Court for the Western District of Oklahoma, with the transfer of
assets to Associated Wholesale Grocers (AWG).
Still operating under the Homeland name, the new AWG subsidiary
comprises 43 stores in Oklahoma.
"We are excited about the opportunity to revitalize Homeland
into a viable player at the local level in the communities and
neighborhoods we serve," Larry Willis, newly appointed president
and CEO of the new Homeland, told the Associated Press.
AWG, one of the nation's largest independent grocery
wholesalers, was Homeland's key supplier of groceries before and
after Homeland sought reorganization in August 2001, the AP
reports.
INTEGRATED HEALTH: Gets 9th Removal Period Extension to Dec. 2
--------------------------------------------------------------
Integrated Health Services, Inc., and its debtor-affiliates
sought and obtained a ninth extension of the deadline by which
they must elect to remove any prepetition lawsuit or other
administrative action pending against their estates before
Federal court and transfer the case to the District of Delaware
for final resolution. Pursuant to Rule 9027 of the Federal
Rules of Bankruptcy Procedure, Judge Walrath extends the
Debtors' Removal Period through December 2, 2002. (Integrated
Health Bankruptcy News, Issue No. 42; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
INTERPLAY: Nasdaq Hearing re Listing Status Set for Sept. 19
------------------------------------------------------------
Interplay Entertainment Corp. (Nasdaq: IPLY) announced that its
request for a hearing by written submission before the Nasdaq
Listing Qualifications Panel has been approved. The hearing
will be held Thursday, September 19, 2002.
As previously announced, the Company received a Nasdaq Staff
Determination letter on August 14, 2002 indicating that the
Company failed to regain compliance with the minimum $1.00 bid
price per share requirement for continued listing on The Nasdaq
SmallCap Market, and that the Company's securities would be
delisted from this market unless the Company requested a hearing
before the Nasdaq Listing Qualifications Panel to review the
Staff's determination. The Company requested a hearing by
written submission, and the Staff's determination to delist the
Company's securities has been stayed pending the Panel's
determination.
Interplay has provided to the Nasdaq Listing Qualifications
Panel a written submission demonstrating how the Company intends
to regain compliance with the minimum $1.00 bid price per share
requirement, as well as the continued listing requirement set
forth in Marketplace Rule 4310c(2)(B) for which the Company
currently is not in compliance. Under this Rule, the Company
must maintain (i) stockholders' equity of at least $2.5 million,
(ii) a market capitalization of at least $35 million, or (iii)
net income of $500,000 (excluding extraordinary or non-recurring
items) in the most recently completed fiscal year or in two of
the last three most recently completed fiscal years.
There can be no assurance that the Panel will respond favorably
to the Company's submission and grant its request to remain
listed on the Nasdaq SmallCap Market.
Interplay Entertainment is a leading developer, publisher and
distributor of interactive entertainment software for both core
gamers and the mass market. Interplay develops games for
personal computers as well as next generation video game
consoles, many of which have garnered industry accolades and
awards. Interplay releases products through Interplay, Digital
Mayhem, Black Isle Studios, its distribution partners, and its
wholly owned subsidiary Interplay OEM Inc.
JAM JOE: Court Converts Bankruptcy Case To Ch. 7 Liquidation
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
Jam Joe LLC and Allie, LLC's motion to convert their chapter 11
cases to Chapter 7 liquidation proceedings.
As a result of the conversion of Jam Joe and Allie's cases to
chapter 7, Jam Joe and Allie vacates the joint administration of
their chapter 11 cases with Dietz Enterprises, Inc.
Prior to the Petition Date, Jam Joe owned and Allie operated the
restaurant commonly known as The Brandywine Company. David
Dietz is the sole shareholder of DEI. DEI, in turn, is the sole
member of Allie, LLC. David and Jennifer Dietz are members of
Jam Joe, LLC.
KMART: Court Denies KM-TB's Demand for Prompt Decision on Lease
---------------------------------------------------------------
KM-TB LLC wants Kmart Corporation and its debtor-affiliates to
determine whether to assume or reject a July 1993 Real Property
Lease with the American National Bank and Trust Company of
Chicago.
The Debtors leased a property within a 680,000 square foot
regional shopping center in Broadview Village Square in
Broadview, Illinois. American National Bank is the trustee for
the Property. On June 24, 1998, KM-TB assumed the Lease from
American National Bank.
Pursuant to the Broadview Lease, the Debtors are obligated to
pay to KM-TB an annual rent of $1,585,366. Since the Petition
Date, the Debtors have continued to pay a portion of the rent as
required under the Bankruptcy Code. The Debtors are also
required under the Broadview Lease to pay real estate taxes on
the Premises directly to the Cook County Collector and to pay to
KM-TB additional sums for the Debtors' use of common areas and a
retention pond.
Since the Petition Date, the Debtors have failed to pay $570,632
to the Cook County Collector for their First Installment on the
2001 real estate taxes that became due in March 2002. The
Debtors also disregarded additional late fee penalties at $8,559
per month. The late fee penalties continue to accrue since the
due date. In addition, the Debtors have paid only a portion of
the CAM Charges. The Debtors are delinquent to the extent of
$25,427 in CAM Charges through July 2002.
William S. Hackney, Esq., at Much Shelist Freed Denenberg Ament
& Rubenstein P.C., in Chicago, Illinois, tells the Court that
the Debtors' failure to comply with its payment obligations
under the Lease has put KM-TB at a risk of foreclosure. Under
KM-TB's mortgage, it is obligated to pay all taxes on a timely
basis. The Debtors' non-performance under the Lease, however,
has caused KM-TB to breach its obligations under the mortgage.
Mr. Hackney states that the Second Installment on the real
estate tax will likely to exceed the amount of the First
Installment and will be due around November 1, 2002. KM-TB
expects the Debtors' delinquency in taxes to exceed $1,200,000
by November.
According to Mr. Hackney, the Debtors' non-performance has put
KM-TB at substantial risk of foreclosure by its mortgage lender.
KM-TB is prohibited from borrowing funds to pay the debtors'
delinquent taxes because KM-TB is a so-called "special purpose
entity." KM-TB is prohibited by its mortgage lender from all
borrowing other than the mortgage loan. In order to pay the
delinquent taxes and avoid foreclosure, the only alternative to
KM-TB is to institute a capital call among all its members.
Consequently, KM-TB needs to know now whether the Debtors will
assume or reject the Lease. If the Debtors reject the Lease,
then KM-TB's members may not be willing to contribute the amount
in excess of $1,200,000 needed to pay the taxes. The mortgage
lenders could institute foreclosure proceedings. If the Debtors
assume the Leases then KM-TB's members will be more willing to
contribute funds necessary to pay the delinquent taxes, assuming
that they have funds to do so.
Mr. Hackney, however, anticipates that the Debtors will assume
the Lease since it is one of the Debtors' most profitable
leases. The Debtors' Broadview Store is reported to be among the
Debtors' highest performing locations, generating over
$55,000,000 in sales every year.
In view of that, KM-TB asks Judge Sonderby to order the Debtors
to assume or reject the Lease within 30 days and to pay all of
their delinquent taxes and CAM Charges.
* * *
After due deliberation, Judge Sonderby denies the Motion.
(Kmart Bankruptcy News, Issue No. 32; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
KMART: IRT Property Provides Update on Store Closing's Impact
-------------------------------------------------------------
IRT Property Company (NYSE: IRT) reported that the prospective
purchaser of the Kmart leasehold interest at Siegen Village in
Baton Rouge, LA, did not complete the proposed transaction with
Kmart and Kmart has subsequently rejected this lease. As
previously reported, this is one of two locations in the IRT
portfolio where Kmart had closed their store.
James G. Levy, executive vice president and chief financial
officer, stated, "While it is unfortunate that the buyer elected
not to proceed with the closing, we now have control of this
location. We are in conversation with several prospective
tenants. Consistent with our original announcement of these
store closings in March 2002, we expect less than a $0.01 per
share impact on funds from operations during the second half of
2002."
A self-administered equity real estate investment trust, IRT
specializes in Southeastern United States shopping centers.
Anchor tenants include Publix, Kroger, Harris Teeter, Wal-Mart
and other popular national and regional chain stores. The
portfolio of 93 shopping center investments includes
approximately 9.9 million square feet of retail space.
METALS USA: Disclosure Statement Hearing Set for September 18
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas has
set September 18, 2002 as the hearing date to consider approving
Disclosure Statement of Metals USA, Inc., and its debtor-
affiliates. At the Disclosure Statement hearing, the Debtors
will also ask the Court to:
-- approve the procedures for solicitation of the Plan,
including the fixing of the record date, and
-- set dates and times for the hearing to consider the
confirmation of their Reorganization Plan and objections
thereto.
The Notice Procedures
Zack A. Clement, Esq., at Fulbright & Jaworski LLP, in Houston,
Texas, relates that the Debtors propose to serve, by September
20, 2002, on all holders of Class 3, 4 and 5 Claims and Class 6
Interests, a Plan Solicitation Package consisting of:
* a Notice of the dates and times for filing acceptances or
rejections to Debtors' Plan, filing objections to confirmation
of Debtors' Plan and the hearing to consider confirmation of
Debtors' Plan,
* the Disclosure Statement (with exhibits, including the Plan),
and
* an appropriate ballot or ballots.
Holders of Priority Tax Claims, DIP Loan Claims, and Class 1 or
2 Claims and parties who appear on the list of Assumed
Agreements who are not Class 4 or 5 Claimants will be served
only the Notice and the Disclosure Statement. The Notice will
include instructions on how to obtain the Disclosure Statement
and Plan from the Balloting Agent or the Debtors' website. The
Debtors will be providing a copy of the Disclosure Statement and
Plan, at the Debtors' expense, to any party who submits a
written request for it. The Debtors propose to publish the
Notice once in the Wall Street Journal National Edition and the
Houston Chronicle no later than Wednesday, September 25, 2002.
The Voting Procedures
The Debtors want to establish these rules, standards and
protocols for the allowance of each claim or interest against
them for voting purposes only:
A. With respect to a claim or interest identified in the
Schedules as liquidated, non-contingent or undisputed, and
for which no proof of claim has been filed timely, the claim
or interest amount for voting purposes will be the amount as
identified in the Schedules;
B. With respect to a liquidated, non-contingent, undisputed
claim or interest as to which proof of claim or proof of
interest has been timely filed and as to which no objection
has yet been filed, the amount and classification of the
claim or interest will be that specified in the proof of
claim, subject to limitations;
C. With respect to a proof of claim or proof of interest, which
is the subject of an objection filed at least 10 days prior
to the Voting Deadline, the claim or interest represented by
the proof of claim or proof of interests will be disallowed
for voting purposes unless the Court orders otherwise on
motion filed by the claimant, so long as the Court
determination occurs prior to the conclusion of the
Confirmation Hearing;
D. With respect to a proof of claim or proof of interest which,
according to the records of the Debtors' Claims Agent,
Poorman-Douglas Corporation, was not timely filed -- i.e.,
was filed after the July 8, 2002, the Court-set deadline --
the claim or interest will be disallowed for voting purposes,
except with respect to the amount listed in Debtors'
schedules as liquidated, non-contingent and undisputed, and
unless otherwise ordered by the Court;
E. With respect to a claim or interest that is unliquidated,
contingent and disputed in part, the holder of the claim or
interest will be entitled to vote only that portion of
the claim or interest that is liquidated, non-contingent and
undisputed in the liquidated, non-contingent and undisputed
amount, subject to any limitations set forth herein, unless
otherwise ordered by the Court;
F. A holder will not be entitled to vote a claim or interest to
the extent the claim or interest duplicates or has been
superceded by another claim or interest of the holder;
G. A claim or interest, represented by a timely-filed proof of
claim or proof of interest, asserted against more than one
Debtor will only be counted as a single claim in the asserted
amount for voting purposes, and all other duplicative claims
or interests will be provisionally disallowed for voting
purposes only, unless otherwise ordered by the Court;
H. A timely-filed proof of claim or interest, or a claim or
interest that is listed in the schedules, as wholly-
unliquidated and contingent will be accorded one vote valued
at $1 or one share unless the Court orders otherwise on
timely motion filed by the claimant, so long as the Court
determination occurs prior to the conclusion of the
Confirmation Hearing;
I. With respect to a proof of claim that is the subject of an
objection solely to the classification asserted in the proof
of claim, the claim will be allowed provisionally for voting
purposes in the amount asserted in the claim and in the
classification to which the objection seeks to re-classify
the claim, unless the Court orders otherwise on motion filed
by the claimant; and
J. With respect to a claim or interest, which has been estimated
or otherwise allowed for voting purposes by order of the
Court, the amount and classification of the claim or interest
will be that set by the Court.
The Balloting Procedures
The Debtors intend to employ these special procedures for
balloting and for the tabulation of ballots with respect to the
Plan:
A. For the purpose of voting on the Plan, Poorman-Douglas, as
Balloting Agent, will be deemed to be in constructive receipt
of any ballot or Master Ballot timely delivered to the
address that the Balloting Agent designates for the receipt
of ballots or Master Ballots;
B. Any ballot or Master Ballot received by the Balloting Agent
after the deadline for submission of ballots or Master
Ballots will not be counted, unless the Court orders
otherwise;
C. Whenever a holder of a claim or interest submits more than
one ballot voting the same claim or interest prior to the
deadline for submission of ballots, the last ballot timely
received will supersede and revoke any earlier received
ballot. Whenever more than one Master Ballot, the last Master
Ballot timely received will supersede and revoke and earlier
received Master Ballot;
D. Creditors and Interest Holders must vote all of their claims
or interests within a particular Plan class either to accept
or reject the Plan and may not split their vote. A ballot
that partially rejects and partially accepts the Plan or that
does not indicate an acceptance or a rejection of the Plan
will not be counted. In addition, votes to accept or reject
the Plan must be unequivocal and not conditional or qualified
in any way;
E. If a ballot is signed by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations, or
others acting in a fiduciary or representative capacity,
these persons should indicate the capacity when signing and,
unless otherwise determined by Debtors, must submit proper
evidence satisfactory to the Balloting Agent and Debtors to
so act on behalf of the beneficial interest holder;
F. Ballots will not be counted if they are delivered by
facsimile, email or any other electronic means or that does
not contain an original signature;
G. All votes must be cast using the ballots distributed to the
holders of claims or interests. Votes cast in any manner
other than by using the ballots will not be counted;
H. Any holder of a claim or interest in an impaired class who
has delivered a valid ballot voting on the Plan may withdraw
or change the vote solely in accordance with Rule 3018(a) of
the Federal Rules of Bankruptcy Procedure; and
I. Subject to any contrary order of the Bankruptcy Court, the
Debtors reserve the absolute right to reject any and all
ballots or Master Ballots not proper in form, the acceptance
of which would, in the opinion of Debtors or their counsel,
not be in accordance with the provisions of the Bankruptcy
Code.
Special Procedures
The Debtors propose these procedures with respect to the
solicitation and tabulation of ballots of beneficial holders of
Notes and Equity:
A. The Balloting Agent will contact each custodian or registered
holder to determine the number of sets of Plan Solicitation
Packages each Custodian requires based upon the number of
beneficial holders each represents. The Balloting Agent will
transmit to the Custodian the appropriate number of Plan
Solicitation Packages either in hard copy form or in
electronic form;
B. Each Custodian will be responsible and authorized to transmit
the Plan Solicitation Package to the beneficial holders that
each represents;
C. In order for a beneficial holder's ballot to count, the
ballot must be completed in accordance with the procedures
set forth herein, and returned so as to be received by the
transmitting Custodian no later than the Voting Deadline;
D. In order for the votes of its beneficial holders to be
counted, each Custodian must tabulate the votes of its
beneficial holders on a Master Ballot which will indicate:
-- the total number of holders voting to accept the Plan and
the aggregate principal amount of Notes or number of
shares owned by them and the total number of Holders
voting to reject the Plan and the aggregate principal
amount of Notes or number of shares owned by them,
-- the vote of each individual holder, by account or other
identification number, together with the principal amount
of Notes or number of shares owned by the holder, and
-- a certification by the Custodian that it is the holder of
record, custodian, representative or otherwise entitled to
act as proxy for the indicated amount of Notes or
Interests on behalf of the beneficial holders listed on
the Master Ballot, that it properly transmitted a Plan
Solicitation Package to each Holder and that it properly
summarized and recorded the votes of each holder;
E. In order to be timely, a Master Ballot must be actually
received by the Balloting Agent no later than the Voting
Deadline; and
F. As part of the voting report, the Balloting Agent will
include a summary of the Master Ballots which will indicate
the number of holders and the principal amount of Notes or
number of shares that voted to accept and to reject the Plan,
and will further contain a certification as to the accuracy
of the summary of the Master Ballots.
Deadlines
Alongside the proposed procedures, the Debtors ask the Court to
approve the timeline leading up to acceptance of the Plan:
A. Deadline for voting on Plan: Receipt by Balloting Agent no
later than October 16, 2002 at 5:00 p.m. Pacific Time;
B. Deadline for filing objections with the Bankruptcy Court and
service upon counsel for the Debtors, counsel to the
Committee, the U.S. Trustee, and counsel for the Debtor-in-
Possession lenders to the Plan's confirmation: October 16,
2002, at 5:00 p.m. Central Time.
Any objections must:
-- be in writing,
-- state the name, address and phone number of the objecting
party and nature of the claim or interest of the party,
-- state with particularity the basis and nature of any
objection,
-- if applicable, propose specific language changes to the
Plan to cure the objection and indicate the corresponding
sections and page in the Plan to which the modifications
are proposed to be made, and
-- include a memorandum of legal authorities;
C. Deadline for filing and service of written responses to
objections to confirmation of the Plan: October 17, 2002, at
5:00 p.m. Central Time;
D. Deadline for filing report of Plan voting: October 18, 2002,
at 3:00 p.m. Central Time;
E. Commencement of Confirmation Hearing: October 18, 2002, at
3:00 p.m. Central Time; and
F. Any objection not timely filed and served will be deemed to
be waived and to be a consent to the Court's entry of an
order confirming the Plan. (Metals USA Bankruptcy News, Issue
No. 19; Bankruptcy Creditors' Service, Inc., 609/392-0900)
METALS USA: Reliance Steel Acquires Oregon Business For $30 Mil
---------------------------------------------------------------
Reliance Steel & Aluminum Co. (NYSE:RS) has completed the
previously announced acquisition of the assets of a Metals USA,
Inc. business, Metals USA Specialty Metals Northwest, Inc.,
after final approval of the U.S. Bankruptcy Court, in connection
with Metals USA's bankruptcy filing. The assets were purchased
for $30 million in cash.
The assets of Metals USA Specialty Metals Northwest, Inc. were
acquired through a newly formed subsidiary. The business is
based in Portland, Oregon, with additional facilities in Eugene
and Medford, Oregon; Kent (Seattle) and Spokane, Washington;
Billings, Montana and Boise, Idaho. This business will operate
as a wholly owned subsidiary of Reliance under its original
name, Pacific Metal Company. Pacific Metal Company, which has
operated in Portland since 1883, processes and distributes
mainly aluminum and coated carbon steel products. Sales were
$76.2 million for the year ended December 31, 2001. Current
management, including the president of Pacific Metal Company, J.
Sandy Nosler, will continue to operate these facilities.
"These seven facilities bring two new states to our geographic
diversity, broaden our product offerings, add new customers and
fit quite well with our existing domestic operations," said
Chief Executive Officer of Reliance Steel & Aluminum Co., David
H. Hannah.
On August 7, 2002, Reliance also announced that it had signed an
agreement to acquire the Milwaukee, Wisconsin operation of
Metals USA Plates and Shapes Northcentral, Inc., subject to the
overbid procedures and final approval of the U.S. Bankruptcy
Court, in connection with Metals USA's bankruptcy filing. The
thirty-day Court-required auction process concluded in early
September 2002, and an additional bid was made for this business
through the Court process. Reliance Steel & Aluminum Co. did not
continue to bid. "Although we are disappointed that our initial
bid to acquire this business was not successful, we are firm
believers that our disciplined acquisition strategy, including
stringent return on investment criteria, serves us well," Hannah
added.
Reliance Steel & Aluminum Co., headquartered in Los Angeles,
California, is one of the largest metals service center
companies in the United States. Through a network of 97
processing and distribution centers in 27 states and France and
South Korea, the Company provides value-added metals processing
services and distributes a full line of over 85,000 metal
products. These products include galvanized, hot-rolled and
cold-finished steel; stainless steel; aluminum; brass; copper;
titanium and alloy steel sold to more than 75,000 customers in
various industries.
Reliance Steel & Aluminum Co.'s press releases and additional
information are available on the Company's Web site at
http://www.rsac.com.The Company was ranked No. 1 in sales and
EPS growth (five-year average) in the metals industry category
of the 2002 Forbes Platinum 400 List of America's Best Big
Companies and was also named to the 2001 and 2000 lists.
METROMEDIA INT'L: Opts to Suspend Preferred Stock Dividend
----------------------------------------------------------
Metromedia International Group, Inc.(AMEX:MMG), the owner of
various interests in communications and media businesses in
Eastern Europe, the Commonwealth of Independent States and other
emerging markets, announced that to facilitate any potential
future restructuring of the Company, the Company has elected to
not declare a dividend on its 7 1/4% cumulative convertible
preferred stock for the quarterly dividend period ending on
September 15, 2002.
As a result of this action, the Company's 7 1/4% cumulative
convertible preferred stockholders are entitled to elect, at the
next regular or special meeting of stockholders of the Company,
two members to the Company's Board of Directors to fill newly
created directorships.
About Metromedia International Group
Metromedia International Group, Inc. is a global communications
and media company. Through its wholly owned subsidiaries and its
business ventures, the Company owns and operates communications
and media businesses in Eastern Europe, the Commonwealth of
Independent States, China and other emerging markets. These
include a variety of telephony businesses including cellular
operators, providers of local, long distance and international
services over fiber-optic and satellite-based networks,
international toll calling, fixed wireless local loop, wireless
and wired cable television networks and broadband networks, FM
radio stations, and e-commerce.
The Company also owns Snapper, Inc. Snapper manufactures
premium-priced power lawnmowers, garden tillers, snow throwers,
utility vehicles and related parts and accessories.
NATIONSRENT: Committee Has Until September 16 to Challenge Liens
----------------------------------------------------------------
The Final Debtors-in-Possession Financing Order entered by the
U.S. Bankruptcy Court for the District of Delaware on March 6,
2002, afforded the Official Committee of Unsecured Creditors in
the Chapter 11 cases of NationsRent Inc. and its debtor-
affiliates to challenge the validity, extend, perfection or
priority of Fleet National Bank's and the Debtors' other
Prepetition Lenders' prepetition claims and liens against the
Debtors' estates. The deadline expired on September 2, 2002.
Accordingly, the Debtors and Fleet National Bank, as
Administrative Agent for itself and on behalf of the DIP
lenders, agree to give the Committee more time to commence
litigation. As approved by the Court, the parties stipulate and
agree that:
A. The Deadline is further extended to September 16, 2002;
B. The extension of the Deadline is effective only as to the
Committee and will not affect any other deadline enumerated
in the Final DIP Order. The extension is without prejudice
to:
(a) the Committee's right to seek further extensions of the
Deadline, either by consent of the parties hereto or upon
motion to this Court; and
(b) the right of Fleet or any Prepetition Lender or the
Debtors to contest the Committee's motion. (NationsRent
Bankruptcy News, Issue No. 18; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
DebtTraders reports that NationsRent Inc.'s 10.375% bonds due
2008 (NRNT08USR1) are 1 and 2. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=NRNT08USR1
for more real-time bond pricing.
NORTHLAND CABLE: S&P Junks Corp. Rating Due to Limited Liquidity
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on rural cable television operator Northland Cable
Television Inc. to triple-'C' from single-'B'-plus based on the
company's limited liquidity position and the weak fundamentals
of the rural television cable industry.
The senior secured bank loan was also lowered to triple-'C' from
double-'B'. The outlook is negative. As of June 30, 2002,
Seattle, Wash.-based Northland had total debt outstanding of
about $170 million.
"As of June 30, 2002, Northland had a cash balance of $3 million
and availability under the $75 million secured bank facility was
$4.7 million," Standard & Poor's credit analyst Rosemarie
Kalinowski said. "With secured debt per subscriber of about
$630, the bank facility was lowered to the same level as the
corporate credit rating due to weakened asset valuations for
rural cable TV properties and the uncertainty for full recovery
under a distressed scenario simulated by Standard & Poor's."
Standard & Poor's said Northland's cash flow measures are
anticipated to remain weak in the near term due to competition
and the loss of basic subscribers. Limited liquidity and limited
access to capital markets could impact the company's ability to
meet increasing debt maturities that commence in 2003.
The number of basic subscribers, including system sales in 2001,
has declined about 4.8% since June 30, 2001, due to competition
and the economy. As of June 30, 2002, basic subscribers totaled
111,095 with a penetration rate of 58%, below the industry
average. Digital subscribers totaled 10,692, compared with 5,296
on June 30, 2001, resulting in a digital penetration rate of
10%. To stem the decline in its subscriber base, the company
will be aggressively marketing its digital offerings in the
latter half of 2002 and addressing previously disconnected
subscribers.
In the second quarter of 2002, average revenue per basic
subscriber increased 8% to $46.13, about average for the rural
cable TV industry, from $42.72 in the second quarter of 2001.
This increase primarily reflected rate increases and higher
penetration of new product tiers. Debt to EBITDA was 6.49 times.
Including deferred management fees, this ratio would be about
5.7x. EBITDA interest coverage was about 1.7x in the second
quarter of 2002.
OWOSSO: Sells Motor Products Assets To Satisfy Nasdaq Condition
---------------------------------------------------------------
Owosso Corporation (Nasdaq: OWOS) released a Form 8-K reflecting
shareholders' equity of $7,225,000, as of July 28, 2002, giving
effect to the Company's July 30, 2002 divestiture of its Motor
Products subsidiaries as if the divestiture had occurred on July
28, 2002. This satisfied a condition imposed in August 2002 by
a Nasdaq Listing Qualifications Panel for continued listing of
the Company's common stock on the Nasdaq SmallCap Market. In
order to avoid delisting, however, the Company's common stock
must have a closing bid price of at least $1.00 per share on or
before February 10, 2003 and, immediately thereafter, maintain a
closing bid price of at least $1.00 per share for a minimum of
ten consecutive trading days.
In 1998, the Company formulated a long-term plan to concentrate
on value- added components for industry. In connection with its
implementation of that plan and a significant downturn in its
operating results, the Company began a series of divestitures in
order to stabilize its capital structure. The divestiture of
the Motor Products subsidiaries marks the end of that process
with Stature Electric, Inc. remaining as the Company's sole
operating subsidiary. However, the Company does intend to
dispose of two former manufacturing facilities of its Cramer and
Snowmax subsidiaries still owned by the Company as soon as
practicable, and net proceeds from such sales are anticipated to
between $1.5 and $2.5 million.
As a result of this divestiture process, the Company has been
able to reduce its long-term debt from a peak as of January 31,
1999 of $69,613,000, to $13,861,000 as of July 28, 2002 giving
effect to the Motor Products divestiture as if it had occurred
on July 28, 2002 ($24,561,000 as of July 28, 2002 on an actual
basis). The Company's President and CEO, George B. Lemmon, Jr.
said, "I am very pleased with the amount of debt reduction that
we have been able to achieve over the last three and a half
years. It has been a very difficult process selling
manufacturing assets during the longest recession in the
manufacturing industry since the end of World War II. Our goal
has been to focus our business as well as stabilize our capital
structure. Throughout this process we also have reduced our
corporate expense and our selling, general and administrative
expenses. Given the current financing markets, the Company
still faces several challenges as far as securing long-term
debt, but it is a lot easier refinancing $14 million of debt
versus $70 million of debt. I believe the Company is very well
positioned from a cost perspective to maximize its earnings once
the manufacturing sector begins to strengthen."
In addition, the Company also filed its Quarterly Report on Form
10-Q for its third quarter ended July 28, 2002. Net sales for
the third quarter of 2002 decreased 17.4%, or $2.4 million, to
$11.4 million, as compared to net sales of $13.8 million in the
prior year quarter. The Company reported a loss from operations
of $1,154,000 as compared to loss from operations of $686,000 in
the prior year third quarter. Net loss available for common
shareholders was $1.5 million, or $0.25 per share, in the third
quarter of 2002, as compared to a net loss of $1.3 million, or
$0.22 per share, in the prior year quarter.
Owosso is a manufacturer of fractional and integral horsepower
motors, gear motors, and motor part sets.
PACIFIC GAS: Unveils List of Confirmation Hearing Fact Witnesses
----------------------------------------------------------------
Pacific Gas and Electric Company and PG&E Corporation jointly
submit the names of fact witnesses, who may testify at the
confirmation trial:
A. Greg D. Benz
Tax Director
PG&E Corporation
Mr. Benz will testify regarding the tax consequences of the
competing plans of reorganization.
B. Shan Bhattacharya
Vice President, Distribution Engineering and Planning
Pacific Gas and Electric Company
Mr. Bhattacharya will testify regarding PG&E's long-term
capital and revenue needs and how PG&E's plan provides
sufficient resources to meet those needs.
C. Thomas E. Bottorff
Vice President, Customer Service
Pacific Gas and Electric Company
Mr. Bottorff will testify about PG&E's post-filing process in
formulating its proposed plan of reorganization and
consideration of alternative plans. He will also testify
regarding permit, license, franchise transfer and re-issuance
actions that may be required as a result of disaggregation.
Mr. Bottorff will also testify about certain historical facts
underlying the energy crisis.
D. Walter L. Campbell
Director, Business and Financial Planning
Pacific Gas and Electric Company
Mr. Campbell will testify regarding the financial feasibility
of the competing plans, including the financial projections
used by PG&E and the CPUC in developing their respective
proposals, the valuation of assets, liabilities and expenses
of PG&E, and how PG&E's plan provides sufficient resources to
meet its financial needs.
E. Gary P. Encinas
Chief Counsel
PG&E Corporation
Mr. Encinas will testify regarding the reasonable costs and
expenses incurred by PG&E Corporation in connection with
PG&E's bankruptcy case and as a co-proponent of the PG&E
plan.
F. David S. Gee
Vice President, Strategic Planning
PG&E Corporation
Mr. Gee will testify regarding the solicitation of votes by
PG&E and PG&E Corporation to accept and prefer PG&E's plan
and to reject the CPUC plan.
G. Robert D. Glynn, Jr.
Chairman of the Board of Pacific Gas and Electric Company
Chairman, Chief Executive Officer and President
PG&E Corporation
Mr. Glynn will testify about PG&E's objectives and process in
formulating a plan of reorganization, including consideration
of any alternatives. He will provide an overview of PG&E's
plan and describe how the plan fulfills PG&E's objectives,
its capital requirement obligations and furthers the goals of
the bankruptcy process. He will also testify about the
investment and operational landscape that the reorganized
entities would confront under each of the competing plans.
H. Kent M. Harvey
Senior Vice President, Chief Financial Officer and Treasurer
Pacific Gas and Electric Company
Mr. Harvey will testify about certain historical financial
issues including the impact of the events underlying the
energy crisis on PG&E's finances and the state of PG&E's
finances at the time of transfers between it and PG&E
Corporation. He will also testify about PG&E's business
decisions in making these transfers.
Mr. Harvey will also testify about the elements of PG&E's
plan and how the plan complies with applicable provisions of
the bankruptcy code. Mr. Harvey will discuss the financing
mechanisms of PG&E's plan, the treatment of various creditor
classes under the plan, and PG&E's ability to satisfy
mortgage debt. He will explain why PG&E believes its plan
can be implemented, why the elements of its plan are needed
to successfully reorganize, and why the PG&E plan leaves the
reorganized entities in a sustainable financial position.
Mr. Harvey will also address some of the financial issues
raised by the plan proposed by the CPUC, including the nature
and effect of the dismissal of the causes of action and
releases set forth in the CPUC's plan and the CPUC plan's
treatment of equity.
I. Kirk Johnson
Director, Gas Systems Operations Department
California Gas Transmission Unit
Pacific Gas and Electric Company
Mr. Johnson will testify about the manner in which PG&E's
natural gas transmission operations are currently conducted
and regulated, the way in which PG&E's natural gas and
distribution operations would be separated under PG&E's plan,
and the manner in which GTrans' gas transmission operations
would be conducted and regulated following implementation of
the PG&E's plan.
J. Roy M. Kuga
Director, Gas and Electric Supply
Pacific Gas and Electric Company
Mr. Kuga will testify about certain historical facts
underlying the energy crisis. Mr. Kuga will also testify
about the reasonableness of the PSA.
K. Christine C. McManus
Lead Director, Regulatory Relations
Pacific Gas and Electric Company
Ms. McManus will testify regarding rate issues under the
competing plans of reorganization.
L. Stephen J. Metague
Director, Electric Transmission Rates
Pacific Gas and Electric Company
Mr. Metague will testify about the manner in which PG&E's
electric transmission services are currently regulated, the
elements of PG&E's plan that would affect PG&E's electric
transmission services and operations, and the manner in which
ETrans' electric transmission services will be regulated
following implementation of PG&E's plan.
M. Terry A. Morford
Director, Special Project
Pacific Gas and Electric Company
Mr. Morford will testify about the manner in which PG&E's
electric operations are currently conducted and regulated,
the way in which the reorganized entities and ETrans'
electric operations will be separated under PG&E's plan, and
the manner in which ETrans' electric operations will be
conducted and regulated following implementation of PG&E's
plan.
N. Judi K. Mosley
Director, Interconnection Services
Pacific Gas and Electric Company
Ms. Mosley will testify regarding the merits of certain
claims described in the objections to PG&E's plan.
O. Gregory M. Rueger
Senior Vice President, Generation and Chief Nuclear Officer
Pacific Gas and Electric Company
Mr. Rueger will testify regarding the overall claims
resolution process, including assumption of contracts,
assumption and assignment of contracts, and adequate
assurances of future performance by the transferees. He will
also testify about the nuclear decommissioning trusts and the
transfer of the beneficial interests in the trusts under
PG&E's plan. Mr. Rueger will also testify regarding PG&E's
long-term capital and revenue needs and how PG&E's plan
provides sufficient resources to meet those needs.
Mr. Rueger will also testify regarding the operational
feasibility and reliability provided by the separation
agreements to implement PG&E's plan. He will also testify
about the establishment, operational feasibility, and
structure of Gen.
P. Joseph C. Sauvage
Managing Director
Lehman Brothers
Global Power Group
Mr. Sauvage will testify regarding the formulation of the
PG&E plan, the financeability of the plan and the basis for
Lehman Brother's conclusion that the plan should provide a
basis on which the reorganized entities will be able to raise
the financing necessary to consummate the plan. Mr. Sauvage
will also testify regarding the process that led to the
formulation of the plan.
Q. Gordon R. Smith
President and Chief Executive Officer
Pacific Gas and Electric Company
Mr. Smith will testify regarding the basic elements of PG&E's
plan and how the plan allows PG&E to emerge from bankruptcy.
Mr. Smith will also describe the objectives of PG&E in
formulating the plan and how the plan meets those
objectives. He will also testify about the investment and
operational landscape the reorganized entities will confront
under each of the competing plans.
R. Jane Sullivan
Voting Agent
Innisfree M & A Incorporated
Ms. Sullivan will testify that the mailing of voting
materials and ballots, solicitation of votes, and tabulation
of ballots by the Voting Agent was undertaken in accordance
with the procedures established by Order of the Bankruptcy
Court and was consistent with the Voting Agent's prior
practice and experience. She will also testify regarding the
acceptances, rejections and preferences tabulated by the
Voting Agent for each voting class under PG&E's plan and the
CPUC plan.
S. Norman F. Sweeney
Manager of Power Generation Strategic Planning
Pacific Gas and Electric Company
Mr. Sweeney will testify about PG&E's land use and hydro
practices of PG&E's plan. He will also testify regarding the
regulation of PG&E's land.
T. Kathleen D. Tappero
Manager of Finance
PG&E Corporation
Ms. Tappero will testify regarding resolution and current
status of certain financial claims.
U. Daniel F. Thomas
Director of California Gas Transmission, Products and Sales
Division
Pacific Gas and Electric Company
Mr. Thomas will testify about how the separated gas
transmission and distribution businesses will be structured
and regulated following the implementation of PG&E's plan.
V. Karen A. Tomcala
Vice President, Regulatory Relations
Pacific Gas and Electric Company
Ms. Tomcala will testify about the current regulation of
PG&E, the regulatory regimes that will apply following
implementation of PG&E's plan, and proper regulatory
oversight of the reorganized entities.
W. Fong Wan
Vice President, Risk Initiatives
PG&E Corporation Support Services, Inc.
Mr. Wan will testify regarding the resolution and current
status of certain claims, including certain claims in Classes
5, 6 and 7.
X. Christopher R. Yowell
President, Celerity Consulting Group, Inc.
Mr. Yowell will testify about certain document authentication
issues and summaries of information regarding the claims
process. (Pacific Gas Bankruptcy News, Issue No. 44;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
PCSUPPORT.COM: Files For Bankruptcy And Ceases Operations
---------------------------------------------------------
PCSupport.com Inc. (OTCBB: PCSP - News) has filed for bankruptcy
protection under Canada's Bankruptcy and Insolvency Act and has
ceased all operations. Deloitte and Touche has been appointed as
the bankruptcy trustee.
"We regret the requirement of taking this step. As previously
announced, Voyus has acquired our assets and is now serving
former PCSupport.com customers. PCSupport.com is no longer
operational and must therefore seek bankruptcy protection", said
Mike McLean, CEO of PCSupport.com.
PINNACLE ENTERTAINMENT: S&P Revises Ratings Outlook to Stable
-------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
Pinnacle Entertainment Inc. to stable from negative and affirmed
the company's 'B' corporate credit rating and other ratings.
The action followed improved operating results for the six
months ended June 30, 2002, for the Glendale, California-
headquartered casino owner and operator and reflected Standard &
Poor's expectation that the positive momentum will continue in
the near term, leading to improved credit measures. Pinnacle had
total debt outstanding at June 30, 2002, of slightly less than
$500 million.
Pinnacle Entertainment owns and operates casino facilities in
Reno, Nev.; New Orleans and Bossier City, La.; Biloxi, Miss.;
and Switzerland County, Ind. It also operates casino facilities
in Argentina.
"Ratings stability reflects the expectation that the company
will maintain its market positions and that operating
performance will gradually improve, somewhat offsetting the
risks associated with Pinnacle's increased capital spending
plans," said Standard & Poor's credit analyst Michael Scerbo.
In Louisiana, the substantial completion of the Bossier City
facility's $25 million renovation and re-branding project should
help to improve operations at this property.
The Boomtown Reno property, which has performed well, could be
negatively affected over the next few years by the increase in
Native American gaming in northern California.
The company's growth opportunities include the construction of a
$325 million dockside gaming facility in Lake Charles, La. While
the market has steadily grown, the Pinnacle project will
increase capacity significantly. The company's estimated costs
are expected to include significant contingencies to cover cost
overruns. Groundbreaking is scheduled within the next few
quarters, with opening planned for mid-2004.
In addition, Pinnacle expects to add a 300-room hotel tower
within the next 18 months at its Belterra riverboat facility in
southern Indiana, which is expected to enhance performance.
Financial flexibility is currently adequate, with about $100
million in excess cash on hand, full availability under the
existing revolving credit facility, and no near-term maturities.
However, the company's capital expenditure plans over the next
few years will use excess cash and increase debt levels.
PSINET: Liquidator Has Until Sept. 30 to Make Claim Objections
--------------------------------------------------------------
Pursuant to the Confirmation of the Plan, substantially all of
PSINet, Inc.'s and its debtor-affiliates' assets were
transferred and assigned on the Effective Date to PSINet
Liquidating LLC, a New York limited liability company formed for
the purpose of winding up the Debtors' affairs and making
distributions to creditors. Stop Recovery LLC was appointed as
the Liquidating Manager of PSINet Liquidating LLC and charged
with all duties, powers and authority necessary to implement the
Plan, subject to the oversight of a Liquidating Committee.
The Liquidating Manager has to review all filed claims to
determine if objections to the claims should be raised. Under
the Plan, proofs of claim in liquidated and non-contingent
amounts will become Allowed Claims if they are not objected to
within the Claims Objection Deadline.
Thus, if Liquidating Manager has not completed its review of all
filed claims before the Claims Objection Dea
dline, it is possible that invalid or excessive claims might
become Allowed Claims, which would reduce the recoveries of
legitimate creditors.
The Liquidating Manager knows it should not allow this to
happen. But the Liquidating Manager is unable to complete the
review within the originally set time frame. More than 2,500
proofs of claim were filed in these cases. Hundreds of these
claims were filed only in the past few months, many of which in
significant amounts. The Liquidating Manager reminds the Court
that it has no prior affiliation or familiarity with the
Debtors' specific businesses and history, and it is required to
review all these claims while handling other duties at the same
time.
Accordingly, the Liquidating Manager sought and obtained a Court
order extending the Claims Objection Deadline through and
including September 30, 2002. (PSINet Bankruptcy News, Issue No.
27; Bankruptcy Creditors' Service, Inc., 609/392-0900)
SAFETY-KLEEN: Closes Chemical Services Div Sale to Clean Harbors
----------------------------------------------------------------
Safety-Kleen Corp. completed the sale of its Chemical Services
Division (CSD) to Clean Harbors, Inc. (Nasdaq: CLHB).
"Bringing this sale to closure has been one of our primary
objectives during the past several months," said Safety-Kleen
Chairman, CEO and President Ronald A. Rittenmeyer. "Completing
this transaction represents a significant step forward in our
plans to emerge from bankruptcy by the end of this year, and
that is clearly in the best interests of our stakeholders,
customers and employees."
"With the sale now complete, we can focus exclusively on Safety-
Kleen's core business in the parts washer and waste management
services industry," Rittenmeyer said, "and our former CSD
customers know they will be working with an established industry
leader that puts customer service and environmental protection
first."
Safety-Kleen Corp. is the leading industrial waste management
company in North America, serving customers in the United
States, Canada, Mexico and Puerto Rico. Safety-Kleen Corp. is
currently under Chapter 11 bankruptcy protection, which it
entered into voluntarily on June 9, 2000.
Clean Harbors purchased the division for $34.3 million in cash
and the assumption of certain environmental liabilities valued
at approximately $265 million. The Company had originally
announced a cash component of $46.3 million, which was reduced
prior to closing, primarily due to a reduction in the amount of
working capital assumed.
To help Clean Harbors complete the transaction, certain senior
term notes, subordinated term notes and preferred stock were
funded by Ableco Finance LLC, an affiliate of Cerberus Capital
Management, L.P. and Oak Hill Securities Funds and other related
accounts.
Clean Harbors, Inc., through its subsidiaries, provides a wide
range of environmental and waste management services to a
diversified customer base including a majority of the Fortune
500 companies, thousands of smaller private entities and
numerous governmental agencies. For more information, visit the
Clean Harbors Web site at http://www.cleanharbors.com
SANMINA-SCI: S&P Drops Corp Credit & Sr. Sec. Loan Ratings to BB
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
and senior secured bank loan ratings on Sanmina-SCI Corp to
double-'B' from double-'B'-plus and its subordinated note
ratings to single-'B'-plus from double-'B'-minus. The rating
actions were based on subpar operating performance leading to
weaker credit measures and the likelihood that credit measures
will remain pressured in the near term due to weak end-market
conditions. The outlook is negative.
San Jose, California-based Sanmina-SCI is a leading provider of
electronic manufacturing services for the computing,
telecommunications and data communications industries. It had
$2.6 billion of debt outstanding at June 30, 2002.
Credit measures are considerably weaker than anticipated,
primarily due to a more severe and prolonged industry downturn,
which also significantly hurt profitability. Standard & Poor's
expects that management's focus will be to materially reduce
debt in the near term.
"Ratings could be lowered in the near term unless credit
measures recover through material debt reduction and meaningful
sequential improvement in operating performance," Standard &
Poor's credit analyst Andrew Watt said.
Capacity utilization is well below desired levels, particularly
in its printed circuit board (PCB) fabrication business, which
had been a major contributor to profitability and cash flow
generation. Major customers for PCB fabrication business have
been communications equipment OEMs, which are facing very
difficult business conditions. Standard & Poor's is also
concerned that the composition of Sanmina-SCI's business, much
of which is high volume, may require considerable operational
and management effort to improve profitability measures.
Moreover, challenging business conditions in the near to
intermediate term exacerbate the challenge of completing the
integration of the SCI operations.
Standard & Poor's expects that operating performance over the
near to intermediate term will be helped by management's
restructuring actions, which have reduced headcount and
manufacturing capacity by more than one-quarter since the
beginning of 2001.
SERVICE MERCHANDISE: Sells Warehouse to M.D. Hodges for $7.4 Mil
----------------------------------------------------------------
Service Merchandise Company, Inc., and its debtor-affiliates
sought and obtained authority from the U.S. Bankruptcy Court for
the District of Tennessee to sell a warehouse located at 245
Great Circle Road in Nashville, Tennessee, as well as certain
fixtures and personal property, free and clear of all liens,
claims, and encumbrances and interests, to M.D. Hodges
Enterprises Inc. for $7,400,000.
All liens, claims, encumbrances and interests will attach to the
proceeds of the sale of the Property in the same relative
priority as existed with respect to the Property, subject to the
rights and defenses, if any, of the Debtors and parties-in-
interest.
Beth A. Dunning, Esq., at Bass, Berry & Sims PLC, in Nashville,
Tennessee, advises that any person or entity that has filed
financing statements, mortgages, mechanic's liens, pending
suits, or other documents or agreements evidencing liens,
claims, encumbrances or interests in the Property must deliver
to the Debtors, before the Closing of the sale, termination
statements, instruments of satisfaction, releases of all liens,
claims, encumbrances, and interests that the person or entity
has with respect to the Property. If that entity fails to
deliver these documents, then:
(a) the Debtors are authorized to execute and file
statements, instruments, releases and other documents on
behalf of the person or entity with respect to the
Property; and
(b) the Successful Bidder is authorized to file, register or
record a certified copy of this Order which will
constitute conclusive evidence of the release of all
liens, claims, encumbrances and interests of any kind or
nature whatsoever in the Property.
In the event that the Successful Bidder fails to close for any
reason, Ms. Dunning says the Debtors will consummate the sale
transaction with the next highest and best bidder.
The salient terms of the Asset Purchase Agreement between the
Debtors and M.D. Hodges are:
Price: $7,400,000 payable on the closing date.
The payment terms are as follows:
-- initial deposit of $75,000 via wire transfer
or certified check 3 days after the Execution
date;
-- an additional deposit of $285,000 within 24
hours after being notified by the Debtor;
-- payment of the remaining balance, plus/minus
prorations by wire transfer at Closing.
M.D. Hodges will not assume any liabilities.
Assets: Warehouse located in Nashville, Tennessee and
certain Fixtures and Personal Property of the
Company.
The Real Estate and the Properties are to be
transferred free and clear of all Liens, other
than permitted Exceptions, each in form and
substance reasonably satisfactory to M.D. Hodges.
Assumption
of Executory
Contracts: The Debtors will assign to M.D. Hodges certain
Assumed Contracts. No contracts will exist
relating to the Real Estate or the Personal
Property that cannot be cancelled not more than
90 days' notice.
Right to
Terminate: The Debtors and M.D. Hodges may terminate the
Agreement at any time but not later than the
Closing Date:
(i) by mutual consent;
(ii) by the Debtors if the Closing does not
occur on the Closing Date due to default by
M.D. Hodges; provided, that the Debtors
will not be entitled to terminate the
Agreement if the Debtors or their
affiliates are in breach of this agreement,
or has failed to satisfy any condition to
Closing;
(iii) by M.D. Hodges, if the Auction has not
occurred and the Court has not approved the
Sale Order by August 25,2002; etc.
(Service Merchandise Bankruptcy News, Issue No. 37; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
DebtTraders reports that Service Merchandise's 9.000% bonds due
2004 (SVCD04USR1) are trading between 5 and 8. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=SVCD04USR1
for more real-time bond pricing.
SKM-LIBERTYVIEW: Moody's Puts Notes Under Review For Downgrade
--------------------------------------------------------------
Moody's Investors Service put the ratings of two classes of
notes issued by SKM-Libertyview CBO I Limited under review for
possible downgrade:
Tranche: U.S. $5,000,000 Class C Floating Rate Notes Due 2011
Previous Rating: Baa2
Current Rating: Baa2, on watch for possible downgrade
Tranche: U.S. $9,000,000 Class C Fixed Rate Notes Due 2011
Previous Rating: Baa2
Current Rating: Baa2, on watch for possible downgrade
Tranche: U.S. $18,500,000 Class D Fixed Rate Notes Due 2011
Previous Rating: Ba3
Current Rating: Ba3, on watch for possible downgrade
The loss of par and reduction in the overall credit quality of
the underlying assets may have increased the credit risk
associated with the notes to the point where the risk may no
longer be consistent with each note's respective rating, says
Moody's.
SOFTBANK: Moody's Concerned Over Impact of Increased Competition
----------------------------------------------------------------
Moody's Investors Service has placed the B1 senior unsecured
long-term debt rating of Tokyo-based Softbank Corp. under review
for possible downgrade.
Moody's is concerned that Softbank's earnings and cash flow will
remain under pressure due to the increasingly competitive
operating environment for its asymmetric digital subscriber line
(ADSL)-based internet access service.
In the review, Moody's relates it will assess Softbank's
strategy to maintain rapid growth in its number of subscribers,
given under the circumstance where Softbank's price
competitiveness has been declining, and how its strategy will
impact the company's earnings structure.
Softbank Corp. is a leading global provider of various internet-
related businesses. The company also engages in software
distribution, networking, and publishing services.
SONUS CORP: Special Shareholders' Meeting Set For October 22
------------------------------------------------------------
CIBC Mellon Trust Company, in behalf of its principal, Sonus
Corp, confirmed the following dates regarding the Special
Meeting of Shareholders:
Date of Meeting: October 22, 2002
Record Date: September 13, 2002
Material Mail Date: September 17, 2002
Applicable Securities Cusip No.
Common Shares 835691106
Contact: Donald A. Santini, Senior Administrator, Client
Relations, (403) 232-2413, donald_santini@cibcmellon.com
Sonus Corp. is the largest audiology-based retailer of hearing
instruments in North America. Sonus' 1,433 company-owned and
affiliated hearing centers provide a full range of products and
services to hearing impaired patients. The Company's vision is
to become the premier network of hearing centers in North
America. The Company reported a Working Capital Deficit of about
$5.5M as of April 30, 2002.
SOUTH STREET CBO: Fitch Downgrades Ratings on 8 Bond Classes
------------------------------------------------------------
Fitch Ratings has downgraded the ratings on eight classes issued
by South Street CBO 1999-1 Ltd. ('South Street 1999'), a
collateralized bond obligation (CBO) backed by high yield bonds.
The following securities have been downgraded and removed from
Rating Watch Negative:
--$10,000,000 class A-1LB notes to 'A' from 'AAA'; --$55,000,000
class A-1 notes to 'A' from 'AAA'; --$36,000,000 class A-2 notes
to 'B-' from 'AA-'; --$24,000,000 class A-2L notes to 'B-' from
'AA-'; --$45,500,000 class A-3 notes to 'CC' from 'BB'; --
$7,000,000 class B-1A notes to 'C' from 'B-'; --$8,000,000 class
B-1B notes to 'C' from 'B-'; --$12,000,000 class B-2 notes to
'C' from 'CCC'.
Erosion of collateral credit quality is the primary cause for
this downgrade. South Street 1999 has experienced over $26
million (11.0%) in defaults since the last Fitch ratings
downgrade, September 5, 2001.
According to its July 17, 2002 trustee report, South Street 1999
collateral includes a par amount of $39.97 million (16.8%)
defaulted assets. The deal also contains 13.7% assets rated
'CCC+' or below, excluding defaults. Overcollateralization tests
for class A and B notes are failing at 90.1% and 80.3%, versus
their triggers of 115% and 104%, respectively. Pursuant to the
South Street 1999 indenture, having scores below 90% of their
required overcollateralization ratio eliminates the investment
advisor's trading flexibility.
In reaching this rating action, a Fitch committee reviewed the
results of multiple cash flow model runs, incorporating several
different stress scenarios. Also, Fitch discussed with Colonial
Advisory Services, Inc., the investment advisor, their
expectations and opinions of the portfolio, especially their
view on how a lack of trading ability will influence the future
performance of this CBO.
TECH LABORATORIES: Liquidity Problems Spur Going Concern Doubts
---------------------------------------------------------------
As a result of operating losses and negative cash flows
experienced during 2001, Tech Labs has a tenuous liquidity
position. If sales do not improve or alternate financing is not
obtained, substantial doubt exists about the Company's ability
to continue as a going concern.
The Company's sales were $171,859 for the second quarter of 2002
as compared to $154,278 for the similar period of 2001. This
increase is minor and the Company is still suffering the effects
of the economic downturn which began in 2001.
Cost of sales of $113,427 for the second quarter of 2002 have
increased by $47,513 compared to the same period of 2001,
primarily due to increased sales of IDS Sensors in 2002 versus
DynaTraX(TM) in 2001. IDS Sensors have a higher cost than
DynaTraX(TM).
Selling, administrative, and general expenses increased by
$104,662 compared to the same period of 2001 due to increased
professional fees, which were the result of the Company's
efforts to raise additional capital, the Event of Default
occurring under the terms of the Convertible Notes and the
subsequent attempted negotiations to cure the Event of Default.
Loss from operations of $222,999 declined $149,101 compared to a
loss of $73,898 for the prior period as a direct result of
increases in cost of sales due to Product net Change and higher
professional fees.
On August 2, 2002, the Company announced that an Event of
Default occurred on its Convertible Notes. The Company was
unable to have its registration statement filed April 5, 2002
declared effective by June 29, 2002, and was unable to reach a
new agreement with the holders of the Convertible Notes prior to
the expiration of the waiver the Company had been granted by the
noteholders, which had been granted in order to permit the
parties time to negotiate a new agreement. The Company continues
to seek a cure for the default with the holders of the
Convertible Notes.
TELIGENT INC.: Will Exit Bankruptcy By September 16
---------------------------------------------------
Teligent Inc. announced that the U.S. Bankruptcy Court has
confirmed its Plan of Reorganization. Teligent will exit
bankruptcy on or before September 16, 2002, when the Plan is
scheduled to become effective. The company's senior secured
lenders have committed to fund Teligent's new business model and
will own 100% of the stock of the restructured company. Teligent
will be privately held and operated by the existing management
team that has been in place since May of 2001. Teligent's new
business model will be focused on its fixed-wireless spectrum,
assets and expertise. (New Generation Research, September 11,
2002)
UNITED AIRLINES: Considers Asking US for More Time to Seek Loan
---------------------------------------------------------------
United Airlines said it could ask the federal government for an
extension of a mid-September deadline to revise its application
for a federal loan guarantee, the New York Times reported.
Executives told the unions last month that UAL, United's parent
company, planned to file by Sept. 16 a revised application for a
federal loan guarantee and that the company needed its labor
groups to agree to $1.5 billion in annual concessions to bolster
the application. In its original application, United asked for a
$1.8 billion loan guarantee on $2 billion in private loans. But
it said federal officials balked because United had not shown
deep concessions from employees and suppliers. According to the
Times, Mr. Creighton, who stepped down as United's interim chief
executive on Sept.2, said last month that United could be forced
to file for bankruptcy protection if it did not get the federal
loan guarantee. (ABI World, September 11, 2002)
US AIRWAYS: Turning to McGuireWoods for Restructuring Advice
------------------------------------------------------------
US Airways Group Inc., together with its debtor-affiliates seek
the Court's authority to employ McGuireWoods of McLean,
Virginia, as restructuring and bankruptcy co-counsel. Prior to
the Petition Date, the Debtors sought McGuireWoods' services for
the preparation of the Chapter 11 proceedings.
Lawrence E. Rifken, Esq., at McGuireWoods, tells the Court that
the Debtors and the firm are parties to an engagement agreement
dated July 18, 2002. According to Mr. Rifken, McGuireWoods'
continued representation is critical to the Debtors' efforts to
restructure their business because McGuireWoods has achieved a
high level of familiarity with its business, legal and financial
affairs. McGuireWoods also has experience with the local
practice before the Eastern District of Virginia Bankruptcy
Court with respect to large chapter 11 cases. For example,
McGuireWoods served as debtor's counsel in In re Best Products
Co, Inc., In re Heilig Meyers Co., et al., In re AMF Bowling
Worldwide, Inc., et al., and In re Motient Corporation, et al.
In addition, the Debtors selected McGuireWoods as attorneys
because of the firm's experience and knowledge in the field of
debtors' and creditors' rights.
Because of the extensive legal services that will be required,
the Debtors desire to employ McGuireWoods under a general
retainer. Skadden, Arps, Slate, Meagher & Flom has been
retained as lead counsel in these proceedings. Both firms have
assured Debtors that they will use their best efforts to avoid
duplication of services.
McGuireWoods is expected to:
(a) advise the Debtors with on their powers and
duties as debtors and debtors-in-possession in the
continued management and operation of their business
and properties;
(b) attend meetings and negotiate with representatives of
creditors and other parties in interest and advise and
consult on the conduct of the case, including all of
the legal and administrative requirements of operating
in Chapter 11;
(c) advise the Debtors with any contemplated sales of
assets or business combinations, including negotiation
of asset, stock purchase, merger or joint venture
agreements, formulate and implement bidding procedures,
evaluate competing offers, draft appropriate corporate
documents with respect to the proposed sales, and
counsel the Debtors with the closing of such sales;
(d) advise the Debtors with postpetition financing and cash
collateral arrangements, and negotiate and draft
related documents, provide advice and counsel with r
respect to prepetition financing arrangements, and
provide advice to the Debtors in connection with the
emergence financing and capital structure, and
negotiate and draft related documents relating;
(e) advise the Debtors on matters relating to the
evaluation of the assumption, rejection or assignment
of unexpired leases and executory contracts;
(f) provide advice to the Debtors with respect to legal
issues arising in or relating to the Debtors' ordinary
course of business including attendance at senior
management meetings, meetings with the Debtors'
financial and turnaround advisors and meetings of the
board of directors, and advice on employee, workers'
compensation, employee benefits, labor, tax,
environmental, banking, insurance, securities,
corporate, business operation, contracts, joint
ventures, real property, press/public affairs and
regulatory matters and advise the Debtors with respect
to continuing disclosure and reporting obligations, if
any, under securities laws;
(g) take all necessary action to protect and preserve the
Debtors' estates, including the prosecution of actions
on their behalf, the defense of any actions commenced
against those estates, negotiations concerning all
litigation in which the Debtors may be involved and
objections to claims filed against the estates;
(h) prepare, on behalf of the Debtors, all motions,
applications, answers, orders, reports and papers
necessary to the administration of the estates;
(i) negotiate and prepare on the Debtors' behalf plan(s) of
reorganization, disclosure statement(s) and all related
agreements and documents and take any necessary
action on behalf of the Debtors to obtain confirmation
of such plan(s);
(j) attend meetings with third parties and participate in
negotiations with respect to these matters;
(k) appear before this Court, any appellate courts, and the
U.S. Trustee, and protect the interests of the Debtors'
estates before such courts and the U.S. Trustee; and
(l) perform all other necessary legal services and provide
all other necessary legal advice to the Debtors in
connection with these Chapter 11 cases.
Mr. Rifken asserts that the members, counsel and associates of
McGuireWoods:
-- do not have any connection with any of the Debtors, their
affiliates, their creditors, the U.S. Trustee, any person
employed in the Office of the U.S. Trustee, or any other
party-in-interest, or their respective attorneys and
accountants, and
-- are "disinterested persons," as that term is defined in
Section 101(14) of the Bankruptcy Code.
According to Mr. Rifken, McGuireWoods previously rendered legal
services to the Debtors for which it was compensated. Certain
McGuireWoods attorneys may own common stock of US Airways Group,
either directly or indirectly. McGuireWoods attorneys may also
hold US Air common stock in managed accounts over which they
have no control. In addition, many McGuireWoods attorneys are
participants -- with open balances -- in the Debtors' Dividend
Miles.
The Engagement Agreement provided for a $200,000 retainer
program, which the Debtors have funded, for professional
services rendered previously and in the future. According to
McGuireWoods' books and records, for the period July 11, 2002 to
August 11, 2002, the total amount of services billed to the
Debtors in connection with contingency planning was $128,816.10
with an additional $4,581.15 in costs and expenses.
McGuireWoods' books and records also indicate that on August 9,
2002, the firm received $133,397.25 from the Debtors, exclusive
of the Retainer. McGuireWoods' total fees were $143,129.00,
less a 10% discount of $14,312.90, which brought the total
adjusted fees to $128,816.10.
Pursuant to the Engagement Agreement, McGuireWoods provides the
Debtors with periodic statements for services rendered and costs
and expenses incurred. During the reorganization cases, the
periodic statements will constitute a request for an interim
payment. For professional services, McGuireWoods' fees are
based on its standard hourly rates, which are periodically
adjusted. The firm will provide professional services to the
Debtors under its standard rate schedules and, therefore,
McGuireWoods will not be seeking to be separately compensated
for staff, clerical and resource charges. McGuireWoods' hourly
rates range from:
$270 - 575 partners
155 - 325 associates
100 - 190 legal assistants and support staff.
McGuireWoods has agreed to give the Debtors a 10% discount on
all of the Firm's fees. This discount does not apply to costs
and expenses incurred by McGuireWoods. The hourly rates are
subject to periodic increases in the normal course of
McGuireWoods' business, often due to the increased experience of
a particular professional.
Mr. Rifken relates that the firm intends to apply to the Court
for allowance of compensation for professional services rendered
and reimbursement of charges and disbursements incurred. It is
McGuireWoods' policy to charge its clients in all areas of
practice for all include photocopying, witness fees, travel
expenses, secretarial and other overtime expenses, filing and
recording fees, long distance telephone calls, postage, express
mail and messenger charges, computerized legal research charges
and other computer services, expenses for working meals and
telecopier charges. (US Airways Bankruptcy News, Issue No. 4;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
DebtTRaders reports that US Airways Inc.'s 10.375% bonds due
2013 (U13USR2) are trading between 10 and 20. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=U13USR2for
more real-time bond pricing.
TRANSCARE CORPORATION: Wants to Continue Willkie Farr Engagement
----------------------------------------------------------------
Transcare Corporation and its debtor-affiliates want to employ
Willkie Farr & Gallagher as their bankruptcy attorneys. The
Debtors tell the U.S. Bankruptcy Court for the Southern District
of New York they retained Willkie Farr prior to the Petition
Date to advise them with respect to restructuring matters and
the commencement of these cases. The Debtors hope to continue
Willkie Farr's employment to provide such legal services as
necessary and requested by the Debtors, including bankruptcy,
corporate finance, and litigation services relating to their
reorganization.
The Debtors expect Willkie Farr to:
a) perform all necessary services as the Debtors' counsel,
including providing the Debtors with advice,
representing the Debtors, and preparing all necessary
documents on behalf of the Debtors, in the areas of debt
restructuring, bankruptcy, restructuring tax issues and
asset dispositions;
b) take all necessary actions to protect and preserve the
Debtors' estates during these chapter 11 cases,
including the prosecution of actions by the Debtors, the
defense of any actions commenced against the Debtors,
negotiations concerning certain litigation in which the
Debtors are involved, objecting to claims filed against
the estates, and seeking to have the Court estimate
certain claims;
c) prepare on behalf of the Debtors, as debtors in
possession, all necessary motions, applications,
answers, orders, reports and papers in connection with
the administration of these chapter 11 cases;
d) counsel the Debtors with regard to their rights and
obligations as debtors in possession; and
e) perform all other necessary and appropriate legal
services reasonably requested by the Debtors.
The Debtors are also seeking to retain Nixon Peabody LLP as
special corporate, regulatory and litigation counsel. The
Debtors assure the Court that they are committed to reduce
professional costs and avoid duplication of services. To that
end, Willkie Farr is prepared work closely with each of the
professionals to ensure that there is no unnecessary duplication
of effort or cost.
The Debtors will pay Willkie Farr at its standard hourly rates:
Attorneys $205 and $695 per hour
Paralegals $105 and $145 per hour
TransCare, a privately held corporation, is one of the largest
privately owned providers of ambulance and ambulette services in
the United States, providing both emergency and non-emergency
services, primarily on a fee-for-service basis. The Company
filed for chapter 11 protection on September 9, 2002. Matthew
Allen Feldman, Esq., at Willkie Farr & Gallagher represents the
Debtors in their restructuring efforts. When the Debtors sought
protection from its creditors, it listed an estimated assets of
$10 million to $50 million and debts of over $100 million.
TYCO INT'L: Appoints David J. Fitzpatrick as New EVP & CFO
----------------------------------------------------------
Tyco International Ltd. (NYSE: TYC, BSX: TTYI) announced that
David J. FitzPatrick has been appointed Executive Vice President
and Chief Financial Officer for the company.
Mr. FitzPatrick joins Tyco from United Technologies Corporation,
where he has been Senior Vice President and Chief Financial
Officer since 1998.
Edward D. Breen, Chairman and Chief Executive Officer of Tyco,
said, "One of my highest priorities is building an exceptionally
capable management team that will bring top talent and
experience to the challenges and opportunities we face at Tyco.
Dave FitzPatrick is a world-class executive with exceptional
credibility in the financial community and I am extremely
pleased that he is joining the new team at Tyco. His experience
and accomplishments at United Technologies and earlier at Kodak
and General Motors are right on target for the needs here.
Dave's respect and reputation among the financial community
for uncompromising integrity, and his overall grasp of financial
and business issues, are strengths that I value highly. He is a
perfect fit for Tyco."
Mr. FitzPatrick said, "Tyco represents a tremendous opportunity
for me. The company's operating businesses are familiar to me
and playing a role in maximizing value with Ed Breen and his
management team is a great professional challenge. Ed's
commitment to building a strong management team dedicated to the
highest standards of corporate governance was a prerequisite.
Tyco faces significant challenges, yet I am confident we will
meet them while serving the interests of investors, customers
and employees."
Mr. FitzPatrick's appointment is effective immediately. He
succeeds Mark Swartz, who, as previously reported, has resigned
from the company.
Mr. FitzPatrick has served as Senior Vice President and Chief
Financial Officer for United Technologies Corp. since June 1998.
United Technologies Corp. (UTC) is a global leader of building
systems and aerospace products. Carrier, Otis, Pratt & Whitney,
Hamilton Sundstrand, and Sikorsky are among its well-known
subsidiaries.
Earlier, Mr. FitzPatrick was Vice President and Corporate
Controller for Eastman Kodak Company. He also enjoyed an 18-
year career with the General Motors Corporation, culminating
with his responsibilities as Chief Financial Officer, Cadillac
Luxury Car Division.
Mr. FitzPatrick graduated from the J. L. Kellogg School at
Northwestern University with a master's degree in management.
He also holds a bachelor's degree in accounting from the
University of Illinois, where he graduated with high honors.
Tyco International Ltd. is a diversified manufacturing and
service company. Tyco is the world's largest manufacturer and
servicer of electrical and electronic components; the world's
largest designer, manufacturer, installer and servicer of
undersea telecommunications systems; the world's largest
manufacturer, installer and provider of fire protection systems
and electronic security services and the world's largest
manufacturer of specialty valves. Tyco also holds strong
leadership positions in medical device products, and plastics
and adhesives. Tyco operates in more than 100 countries and had
fiscal 2001 revenues from continuing operations of approximately
$34 billion.
VICWEST CORP.: Defers Interest Payment on Subordinated Notes
------------------------------------------------------------
As previously reported, Vicwest continues to be in discussions
with its senior lenders to rectify an event of default under its
senior credit facility due to non- compliance with financial
covenants. Until the event of default is rectified or the senior
lenders otherwise agree, Vicwest is prohibited from paying
interest to the holders of Vicwest's subordinated notes. As a
result, Vicwest did not make the interest payment on the
subordinated notes which was scheduled for September 10, 2002.
The subordinated notes are listed on the TSX Venture Exchange
under the symbol MGT.DB.
VISKASE COMPANIES: Launches Exchange Offer for 8% Sr. Sec. Notes
----------------------------------------------------------------
Viskase Companies, Inc. is offering to exchange $367.96271
principal amount of 8% Senior Subordinated Secured Notes Due
2008 and 126.82448 shares of 6% Series A Convertible Preferred
Stock for each $1,000 principal amount of its outstanding 10
1/4% Senior Notes Due 2001. The Exchange Offer will expire at,
and tendered notes can be withdrawn until, 5:00 P.M., New York
City time, on September 19, 2002, unless extended or earlier
terminated.
The Company may pay interest on the new notes in kind until 2004
or later. It may redeem the new notes at any time at their
principal amount plus accrued interest. The new notes will be
subordinated to up to $25,000,000 principal amount of secured
working capital debt. The new notes will be secured by
substantially all of the Company's assets other than assets
subject to the General Electric Capital Corporation ("GECC")
sale and leaseback transaction lease agreement and certain real
estate.
The preferred stock will have a liquidation preference of $5.00
per share and will be convertible into shares of Viskase common
stock representing in the aggregate approximately 91.5% of its
fully diluted common stock immediately following consummation of
the exchange offer. The preferred stock will vote on an as-
converted basis with the common stock.
The exchange offer is subject to conditions, including the valid
tender of all old notes.
The exchange offer is being made in accordance with a
restructuring agreement Viskase has entered into with the
holders of 54.1% of the old notes. These holders have agreed to
tender their old notes in the exchange offer and to vote in
favor of the prepackaged plan of reorganization. On consummation
of the exchange offer, the Company Board of Directors will be
reconstituted to consist of the chief executive officer of
Viskase and four other directors designated by these holders.
Viskase Companies, Inc. has its major interests in food
packaging. Principal products manufactured are cellulosic and
nylon casings used in the preparation and packaging of processed
meat products.
* * *
As previously reported, Viskase Corporation, a wholly-owned
subsidiary of Viskase Companies, Inc., executed a Forbearance
and Consent Agreement between Viskase and General Electric
Capital Corporation, whereby GECC, Viskase's equipment lessor,
has agreed to forbear until November 30, 2002, subject to
certain conditions, from exercising its rights and remedies
because of any default or event of default under any lease
documents arising from (i) Viskase's failure to meet the Fixed
Charge Coverage Ratio for the fiscal quarters ended March 31,
2002, June 30, 2002 and September 30, 2002 and (ii) the Company
being a debtor under Chapter 11 of the Bankruptcy Code.
VSOURCE: Notifies Shareholders of Conversion Price Reduction
------------------------------------------------------------
Dennis M. Smith,, Vice-Chairman, Chief Financial Officer and
Chief Strategy Officer of Vsource, Inc. has sent notices to
holders of the Company's Series 1-A Convertible Preferred Stock
and Series 2-A Convertible Preferred Stock with regard to a
reduction of the conversion price of said stock.
In accordance with the terms of the Certificate of Incorporation
of Vsource, Inc., the Company has certified that the Conversion
Price of its outstanding Series 1-A Convertible Preferred Stock
has been adjusted to $0.68. As a result, a holder of Series 1-A
Preferred Stock will receive 3.67 shares of the Company's common
stock for each share of Series 1-A Preferred Stock that is
converted.
According to the Company the adjustment has been made because,
as of August 15, 2002, (i) $2,989,196 of principal amount of its
Series B-1 exchangeable promissory notes issued pursuant to an
Exchangeable Note and Warrant Purchase Agreement dated January
28, 2002 between the Company and the Purchasers set forth
therein, became convertible into $2,989,196 principal amount of
the Company's Series A Convertible Notes, which notes, in turn
and assuming conversion as of the Effective Date, are now
convertible into 29,891,960 shares of common stock and (ii)
warrants to purchase 25,000 shares of common stock were issued
pursuant to the Series B-1 Agreement, for a total of 30,141,960
Additional Shares of common stock. In accordance with Section
C5(d)(6)(A) of Article 4 of the Certificate, the Conversion
Price was adjusted to $0.68, being the existing Conversion Price
of $0.82 multiplied by a fraction, the numerator of which was
127,188,729 being comprised of (A) 34,811,704 shares of common
stock outstanding at the close of business on the day next
preceding the Effective Date, plus (B) 3,666,091 shares of
common stock which the aggregate consideration received (or
deemed to have been received) by the Company for the total
number of Additional Shares of common stock so issued would
purchase at the then Conversion Price, plus (C) 88,710,934
shares of common stock underlying Other Securities and the
denominator of which was 153,664,598, being comprised of (X)
64,953,664 shares of common stock outstanding at the close of
business on the Effective Date, after giving effect to the issue
of Additional Shares of common stock, plus (Y) 88,710,934 of
common stock underlying the Other Securities at the close of
business on the Effective Date.
In regard to the Series 2-A Convertible Preferred Stock the
change was made in accordance with the terms of the Certificate
of Designation dated November 8, 2000 relating to said Series 2-
A Convertible Preferred Stock of Vsource, Inc. The Company
certified that the Conversion Price of its outstanding Series 2-
A Preferred Stock has been adjusted to $1.63. As a result, a
holder of Series 2-A Preferred Stock will receive 3.94 shares of
the Company's common stock for each share of Series 2-A
Preferred Stock that is converted.
According to the Company the foregoing adjustment has been made
because, as of August 15, 2002, (i) $2,989,196 of principal
amount of its Series B-1 exchangeable promissory notes issued
pursuant to an Exchangeable Note and Warrant Purchase Agreement
dated January 28, 2002 between the Company and the Purchasers
set forth therein, became convertible into $2,989,196 principal
amount of the Company's Series A Convertible Notes, which notes,
in turn and assuming conversion as of the Effective Date, are
now convertible into 29,891,960 shares of common stock and (ii)
warrants to purchase 25,000 shares of common stock were issued
pursuant to the Series B-1 Agreement, for a total of 30,141,960
Additional Shares of common stock.
In accordance with Section 7d(6) of the Certificate, the
Conversion Price was adjusted to $1.63, being the existing
Conversion Price of $2.00 multiplied by a fraction, the
numerator of which was 125,030,688 being comprised of (A)
34,811,704 shares of common stock outstanding at the close of
business on the day next preceding the Effective Date, plus (B)
1,508,050 shares of common stock which the aggregate
consideration received (or deemed to have been received) by the
Company for the total number of Additional Shares of common
stock so issued would purchase at the then Conversion Price,
plus (C) 88,710,934 shares of common stock underlying Other
Securities and the denominator of which was 153,664,598, being
comprised of (X) 64,953,664 shares of common stock outstanding
at the close of business on the Effective Date, after giving
effect to the issue of Additional Shares of common stock, plus
(Y) 88,710,934 of common stock underlying the Other Securities
at the close of business on the Effective Date.
Vsource, Inc., based in San Diego, California, provides business
process outsourcing services -- under the Vsource Versatile
Solutions(TM) trade name -- to Fortune 500 and Global 500
organizations across the Asia-Pacific region. Vsource Versatile
Solutions include Integrated Technical Service Solutions,
Payroll and Claims Solutions, Sales Solutions and Vsource
Foundation Solutions(TM), which include Financial Services,
Customer Relationship Management and Supply Chain Management.
Vsource operates shared customer service centers (Vsource
Customer Centers) in Malaysia and Japan and has offices in the
United States, Hong Kong and Singapore. Vsource clients include
ABN AMRO, Agilent Technologies, EMC, Gateway, Haworth, Network
Appliance and other Fortune 500 and Global 500 companies.
For more information, visit the Vsource Web site:
http://www.vsource.com
At April 30, 2002, Vsource's balance sheet shows a total
shareholders' equity deficit of about $3.4 million.
WEBLINK: Completes Reorganization & Names Buckenham Chairman
------------------------------------------------------------
WebLink Wireless, Inc., a leading wireless data company,
announced that its previously confirmed Plan of Reorganization
has become final and effective on Sept. 9, 2002. In addition
the company announced that Mr. N. Ross Buckenham, the company's
president, CEO and lead restructuring officer throughout the
process, was elected to the additional title of Chairman of the
Board.
"I would like to thank all WebLink Wireless stakeholders,
employees and customers for their support and loyalty during the
reorganization process which we are very happy to have
successfully completed," said N. Ross Buckenham. "Now, WebLink
Wireless is a healthy, cash flow positive company with a strong
balance sheet and we are looking forward to meeting the growing
needs of our wireless data partners and customers."
WebLink Wireless continues to solidify its strength in the
industry as it provides guidance to suppliers in bringing the
next generation of subscriber devices to the market. This
proven leadership has allowed WebLink Wireless to remain the
preferred provider for wireless data services to many of the
nation's largest telephone companies as well as other major
wireless messaging companies and paging resellers.
WebLink Wireless, Inc., a leader in the wireless data industry,
operates the largest ReFLEX network in the United States. The
Dallas-based company provides 2way wireless messaging, wireless
email, mobile Internet information, customized wireless business
solutions, telemetry and paging to more than 1.2 million
business and consumer customers. WebLink Wireless is the
preferred wireless data network provider for many of the largest
telecommunication companies in the United States who resell
WebLink services under their own brand names. WebLink's
reliable simulcast network covers approximately 90 percent of
the U.S. population and, through roaming agreements, extends
throughout most of North America. For more information on
WebLink Wireless visit http://www.weblinkwireless.com
WEIRTON STEEL: CEO Proposes Extension of Steel Tariff Percentage
----------------------------------------------------------------
Weirton Steel Corp.'s president and chief executive officer has
proposed the federal government consider extending the 30
percent tariff on steel imports for longer than one year.
John H. Walker presented the idea to Grant D. Aldonas, under
secretary for international trade in the U.S. Commerce
Department. Walker was invited by U.S. Rep. Shelley Moore
Capito, R-W.Va., to meet with Aldonas in Charleston, W.Va., to
discuss steel issues.
Last March, President Bush imposed three-year descending tariffs
on various categories of steel imports. Most of those imports
received a 30 percent tariff for the first year followed by a
drop to 24 percent in year two and down to 18 percent in the
final year.
"I suggested the 30 percent tariff be carried through year two.
At the end of the second year, the administration could review
the matter and determine whether or not to retain or lower the
tariff," Walker remarked.
"We sincerely thank the Bush administration for imposing the
tariffs to curb harmful steel imports and for providing a three-
year break for our industry to regain its competitiveness. But
the expected turnaround in our industry after four years of
unfair imports is not happening as quickly as we thought it
would. We are six months into the tariff program and just
beginning to see some industry-wide improvements. Extending the
30 percent tariff beyond one year would greatly benefit our goal
and that of the administration."
In addition, from June through August of this year, the
government granted 727 tariff exclusions for some steel imports
like those made by U.S. steel firms. Walker noted that
increased imports will enter domestic markets and U.S.
steelmakers adversely impacted by the exclusions could increase
their presence in those markets, forcing greater competition
among domestic mills.
"I believe the under secretary is at least pondering the tariff
suggestion and will present it to the administration. I will
follow up our meeting with a letter to various members of the
administration and hope the issue will be discussed further,"
Walker commented.
Other issues discussed included appeals by various nations to
have the World Trade Organization (WTO) determine if the tariffs
conform with WTO regulations; the need to ensure that additional
exclusions do not negatively affect U.S. steel producers; the
need to address legacy costs to promote consolidation within the
domestic industry; and the importance of maintaining the
Emergency Steel Loan Guarantee Program for steel companies
seeking federally guaranteed bank loans.
Weirton Steel is the seventh largest U.S. integrated steel
company and the nation's second largest producer of tin mill
products.
DebtTraders reports that Weirton Steel's 11.375% bonds due 2004
(WRTL04USR1) are trading between 34.5 and 36.5 . See
http://www.debttraders.com/price.cfm?dt_sec_ticker=WRTL04USR1
for more real-time bond pricing.
WHELAND: Creditors Reject Livingston's $1.65M Bid For Foundry
-------------------------------------------------------------
Livingston Co.'s $1.65 million bid to buy a former Wheland
Automotive Industries foundry was rejected by the group
representing the company's creditors, the Associated Press
reports.
Scott Probasco III, Livingston's board chairman, said the
company had hopes of restarting it and would have immediately
hired 100 workers, with plans of employing 400 in the fourth
year of operation. Two former Wheland executives had already
agreed to take management roles and some former customers were
planning to return, he said.
Mayor Bob Corker was quite disappointed over the failed efforts
to revive a former Wheland foundry in Chattanooga. "I'm really
sick that this plant will be unable to reopen in a mode that
would have employed hundreds of Chattanoogans," he said.
Wheland's creditors, owed more than $110 million, auctioned
Wheland's machinery and property Tuesday and earned nearly $2.7
million.
"The decision group decided that individual bids, coupled with
the anticipated proceeds to the creditors, would bring a much
higher value to the estate," said Bob Braman, president of the
Houston-based company handling the liquidation.
Following a failed expansion and a sag in the automotive supply
market, Wheland filed for bankruptcy in November 7, 2001 at the
U.S. Bankruptcy Court for the Eastern District of Tennessee in
Chattanooga. Richard C. Kennedy, Esq. of Kennedy, Koontz &
Farinash represented the company in its case.
Wheland, which once supplied parts to half of all U.S. built
cars and trucks, employed 2,000 workers in Chattanooga and
Warrenton.
WORLDCOM INC: Government Charges 2 Former Execs with Sec. Fraud
---------------------------------------------------------------
On August 28, 2002, a grand jury charged former WorldCom Inc.
Chief Financial Officer Scott Sullivan and former Director of
General Accounting Buford Yates, Jr. with conspiracy to commit
securities fraud and false filings with the SEC in connection
with the $7,680,000,000 accounting fraud in the bankrupt telecom
giant.
The grand jury indictment paves the way for a trial in the
Southern District of New York Federal Court. Mr. Sullivan could
get a maximum sentence of 65 years in prison if convicted. Mr.
Sullivan is currently free on a $10,000,000 bail.
In a press release, Attorney General John Ashcroft remarks that:
"[August 28]'s indictments of WorldCom executives Scott D.
Sullivan and Buford Yates, Jr., are the result of sustained
law enforcement actions aimed at prosecuting corporate law-
breakers and protecting the savings and pensions of
Americans. With each arrest, indictment and prosecution, we
send this clear message: corrupt corporate executives will be
punished. The Department of Justice is committed to ensuring
that corporate executives never profit by victimizing their
own employees and investors."
Special attorney James B. Comey of the Department of Justice
lays-out the story for the District Court:
-- Beginning July 2000, WorldCom's expenses as a percentage of
its total revenue began to increase, resulting in decline in
the rate of growth of WorldCom's earnings. As Messrs.
Sullivan and Yates recognized, the decline in earnings
created a substantial risk that, unless WorldCom's
performance improved, its earnings would fail to meet
analysts' expectations and the market price of WorldCom's
securities would therefore decline.
-- From on or about October 2000 through June 2002, Messrs.
Sullivan and Yates engaged in an illegal scheme to inflate
artificially WorldCom's publicly reported earnings by falsely
and fraudulently reducing reported line costs. To effect
this illegal scheme, Messrs. Sullivan and Yates made entries
in WorldCom's general ledger, crediting line costs and
debiting, various reserve and capital accounts. As Messrs.
Sullivan and Yates well know, there was no justification
under GAAP for these entries. Messrs. Sullivan and Yates
made these false and fraudulent journal entries in WorldCom's
general ledger, knowing and intending:
1. that these journal entries would ultimately be reflected
in WorldCom's financial statement and public filings with
the SEC;
2. that WorldCom's financial statements and public filings
would falsely overstate WorldCom's earnings; and
3. that the investing public would rely upon these overstated
earnings.
-- In October 2000, after reviewing preliminary financial
statements for the third quarter of 2000, Mr. Sullivan
determined that WorldCom's expenses as a percentage of
revenue were too high to meet analysts' expectations and were
substantially higher than management's previous "guidance" to
professional securities analysts and members of the investing
public. To meet analysts' expectations, Mr. Sullivan
instructed WorldCom Controller David F. Myers, and his
subordinates, including Mr. Yates, WorldCom Director of
Management Reporting Betty L. Vinson, and WorldCom Director
of Legal Entity Accounting Troy M. Normand, to falsely and
fraudulently book certain entries in WorldCom's general
ledger, which were designed to reduce WorldCom's reported
line costs and thereby increase WorldCom's reported earnings.
Neither Mr. Sullivan nor Mr. Myers provided Yates, Vinson, or
Normand with any supporting documentation or any proper
business rationale for the entries. Nevertheless, Yates,
Vinson, Normand, and others booked certain entries in
WorldCom's general ledger, which had the net effect of
reducing line costs by $828,000,000, and thereby increasing
WorldCom's publicly reported earnings for the third quarter
of 2000 by the same amount.
-- In February 2001, after reviewing WorldCom's preliminary
financial statements for the fourth quarter of 2000, Mr.
Sullivan again determined that WorldCom's expenses as a
percentage of revenue were too high to meet analysts'
expectations and were substantially higher than management's
earlier "guidance." Mr. Sullivan again instructed Mr. Myers
and his subordinates, including Yates, Vinson, and Normand,
to falsely and fraudulently book certain entries in
WorldCom's general ledger, which were designed to reduce
Worldcom's reported line costs and thereby increase
WorldCom's reported earnings. Neither Mr. Sullivan nor Mr.
Myers provided Yates, Vinson, or Normand with any supporting
documentation or any proper business rationale for the
entries. Nevertheless, Yates, Vinson, Normand, and others
booked certain entries in WorldCom's general ledger, which
had the net effect of reducing line costs by $407,000,000,
and thereby increasing WorldCom's publicly reported earnings
for the fourth quarter of 2000 by the same amount.
-- In April 2001, after reviewing WorldCom's preliminary
financial statements for the first quarter of 2001, Mr.
Sullivan again determined that WorldCom's expenses as a
percentage of revenue were too high to meet analysts'
expectations. Messrs. Sullivan, Myers, and Yates agreed that
it was no longer possible to disguise WorldCom's rising ratio
of expenses to revenue by reducing various reserves on
WorldCom's general ledger. Therefore, the conspirators
discussed a scheme to hide WorldCom's increasing expenses by
causing substantial portions of WorldCom's line costs to be
transferred from current expense accounts into capital
expenditure accounts. This transfer would allow WorldCom to
defer recognizing a substantial portion of its current
operating expenses, thereby allowing WorldCom to report
higher earnings.
-- To implement this scheme, Mr. Sullivan instructed Mr. Myers
to direct employees of WorldCom's general accounting
department to make various journal entries necessary to
transfer certain line costs from expense accounts on
WorldCom's general ledger to capital expenditure accounts on
WorldCom's general ledger.
-- In furtherance of this plan, Mr. Sullivan and Mr. Myers
instructed certain subordinates, including Yates, Vinson, and
Normand to make journal entries transferring certain line
costs from expense accounts in WorldCom's general ledger to
certain general ledger accounts for capital expenditures. As
a result of these transfers, billions of dollars of
WorldCom's current expenses were transferred from expenses on
its Income Statement to assets on its Balance Sheet.
Contrary to WorldCom's usual practices and prevailing
accounting industry norms, no documentary support existed for
any of these entries, which reclassified certain line costs
as capital expenditures.
-- Beginning at the end of the first quarter of 2001 and
continuing through the first quarter of 2002, Yates, Vinson,
and Normand executed the instructions of Mr. Sullivan, and
Mr. Myers by making certain journal entries in the general
ledger to transfer $3,800,000,000 from line cost expense
accounts to capital expenditure accounts.
-- In April 2001, Mr. Normand telephoned WorldCom's Director of
Property Accounting and instructed him to adjust the
schedules he maintained for certain Property, Plant &
Equipment capital expenditure accounts by increasing certain
capital accounts for "prepaid capacity." Correspondingly, a
subordinate of Mr. Normand made journal entries in WorldCom's
general ledger, transferring $771,000,000 from certain line
cost expense accounts to certain PP&E capital expenditure
accounts.
-- In July 2001, Mr. Normand called the DPA and again instructed
him to adjust the PP&E Roll-Forward by increasing certain
capital accounts for "prepaid capacity." As a result, Ms.
Vinson made journal entries in WorldCom's general ledger
that effectively transferred $560,000,000 from certain line
cost expense accounts to certain PP&E capital expenditure
accounts.
-- In October 2001, Mr. Normand called the DPA and again
instructed him to adjust the PP&E Roll-Forward by increasing
certain capital accounts for "prepaid capacity." As a
result, a subordinate of Ms. Vinson made journal entries in
WorldCom's general ledger that effectively transferred
$743,000,000 from certain line cost expense accounts to
certain PP&E capital expenditure accounts.
-- In February 2002, Mr. Normand called the DPA and again
instructed him to adjust the PP&E Roll-Forward by increasing
certain capital accounts for "prepaid capacity". As a
result, Ms. Vinson made journal entries in WorldCom's general
ledger that effectively transferred $941,000,000 from certain
line cost expense accounts to certain PP&E capital
expenditure accounts.
-- In April 2002, Mr. Normand called the DPA and again
instructed him to adjust the PP&E Roll-Forward by increasing
certain capital accounts for "prepaid capacity." As a
result, Ms. Vinson made journal entries in WorldCom's general
ledger that effectively transferred $818,000,000 from certain
line cost expense accounts to certain PP&E capital
expenditure accounts.
-- As Messrs. Sullivan and Yates well knew, there was no basis
in fact to capitalize these line costs and the journal
entries were made solely for the purpose of falsely and
fraudulently reducing WorldCom's publicly reported expenses
and increasing its publicly reported earnings. Moreover, the
accounting treatment of line costs was not in accordance with
GAAP.
Failure to Disclose Transfers to Auditors
-- Neither Messrs. Sullivan nor Yates, nor any other Worldcom
officer, disclosed to members of the Arthur Andersen
engagement team, during the course of its audits, that
WorldCom had begun to capitalize third-party line costs.
Neither Messrs. Sullivan nor Yates, nor any other WorldCom
officer, disclosed to members of the Arthur Andersen
engagement team any of the journal entries. Neither Messrs.
Sullivan nor Yates, nor any other WorldCom officer, disclosed
to members of the Arthur Andersen engagement team, during the
course of its audits, a list of "top-side" entries -- entries
made at the corporate level -- as Arthur Andersen from time
to time requested. Neither Messrs. Sullivan nor Yates, nor
any other WorldCom officer, disclosed to members of the
Arthur Andersen engagement team, during the course of its
audits, that WorldCom had changed its accounting practices
for certain line costs, namely that certain line costs had
been capitalized rather than treated as an expense, even
though Arthur Andersen had asked Mr. Sullivan whether
WorldCom had implemented any changes in accounting practices.
False Statements in Public Filings
-- Neither Messrs. Sullivan nor Yates publicly disclosed the
decision to capitalize a substantial portion of WorldCom's
line costs in WorldCom's public filings with the SEC from the
first quarter of 2001 through the first quarter of 2002, or
in any other publicly-issued statement known to the SEC.
-- By falsely concealing line costs and thereby lowering
publicly reported expenses, Messrs. Sullivan nor Yates were
able to assure that WorldCom's 2001 Form 10-K reported to the
investing public that WorldCom's line costs expressed as a
percentage of overall company revenues remained fairly
consistent over a 3-year period, namely 41% for 1999; 39.6%
for 2000, and 41.9% for 2001, when, in truth and in fact,
line costs as a percentage of overall company revenue for
2001 had grown to 50%. Moreover, as a result of the
fraudulent journal entries, Messrs. Sullivan and Yates were
able to assure that WorldCom's reported earnings exceeded it
actual earnings for the period from October 2000 through
April 2002 by about $5,000,000,000. (Worldcom Bankruptcy
News, Issue No. 6; Bankruptcy Creditors' Service, Inc.,
609/392-0900)
DebtTraders reports that Worldcom Inc.'s 6.500% bonds due 2004
(WCOM04USN1) are trading between 14 and 15. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=WCOM04USN1
for real-time bond pricing.
* BOOK REVIEW: Bankruptcy Crimes
--------------------------------
Author: Stephanie Wickouski
Publisher: Beard Books
Softcover: 395 Pages
List Price: $124.95
Review by Gail Owens Hoelscher
Order your personal copy today at
http://amazon.com/exec/obidos/ASIN/1893122832/internetbankrupt
Did you know that you could be executed for non-payment of debt
in England in the 1700s? Or that the nailing of an ear was the
sentence for perjury in bankruptcy cases in 1604? While ruling
out such archaic penalties, Stephanie Wickouski does believe "in
the need for criminal sanctions against bankruptcy fraud and for
consistent, effective enforcement of those sanctions." She
decries the harm done to individuals through fraud schemes and
laments the resulting erosion in public confidence in the
judicial system. This leading authoritative treatise on the
subject of bankruptcy fraud, first published in August 2000 and
updated annually with new material, will prove invaluable for
bankruptcy law practitioners, white collar criminal
practitioners, and prosecutors faced with criminal activity in
bankruptcy cases. Indeed, E. Lawrence Barcella, Jr. of Paul,
Hastings, Janofsky, and Walker, in Washington, DC, says, "If I
were a lawyer involved in a bankruptcy matter, whether civil or
criminal, and had only one reference work that I could rely
upon, it would be this book." And, Thomas J. Moloney with
Cleary, Gottlieb, Steen & Hamilton describes the book as "an
essential reference tool."
An estimated ten percent of bankruptcy cases involve some kind
of abuse or fraud. Since launching Operation Total Disclosure in
1992, the U.S. Department of Justice has endeavored to send the
message that bankruptcy fraud will not be tolerated. Bankruptcy
judges and trustees are required to report suspected bankruptcy
crimes to a U.S. attorney. The decision to prosecute is based on
the level of loss or injury, the existence of sufficient
evidence, and the clarity of the law. In some cases, civil
penalties for fraud are deemed sufficient to punish and deter.
Ms. Wickouski suggests that some lawyers might not recognize
criminal activity that the DOJ now targets for investigation.
She gives several examples, including filing for bankruptcy
using an incorrect Social Security number, and receiving
payments from a bankruptcy debtor that were not approved by the
bankruptcy court. In both of these real life examples, DOJ
investigations led to convictions and jail time.
Ms. Wickouski says that although new schemes in bankruptcy fraud
have come along, others have been around for centuries. She
takes the reader through the most common traditional schemes,
including skimming, the bustout, the bleedout, and looting, as
well as some new ones, including the bankruptcy mill.
The main substance of Bankruptcy Crimes is Ms. Wickouski's
detailed analysis of the U.S. Bankruptcy Criminal Code, chapter
9 of title 18, the Federal Criminal Code. She painstakingly
analyzes each provision, carefully defining terms and providing
clear and useful examples of actual cases. She ends with a good
chapter on ethics and professional responsibility, and provides
a comprehensive set of annexes.
Bankruptcy Crimes is never dry, and some of the cases will make
you nostalgic for the days of ear-nailing. This comprehensive,
well researched treatise is a particularly invaluable guide for
debtors' counsel in dealing with conflicts, attorney-client
relationships, asset planning, and an array of legal and ethical
issues that lawyers and bankruptcy fiduciaries often face in
advising clients in financially distressed situations.
Stephanie Wickouski is a partner in the Washington, D.C. firm of
Arent Fox Kintner Plotkin & Kahn, PLLC. Her practice is
concentrated in business bankruptcy, insolvency, and commercial
litigation.
This book may be ordered by calling 888-563-4573 or through your
favorite Internet bookseller or through your local bookstore.
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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.
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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, Aileen M. Quijano and Peter A.
Chapman, Editors.
Copyright 2002. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
prior written permission of the publishers. Information
contained herein is obtained from sources believed to be
reliable, but is not guaranteed.
The TCR subscription rate is $625 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Christopher
Beard at 240/629-3300.
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