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/raid1/www/Hosts/bankrupt/TCR_Public/030716.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, July 16, 2003, Vol. 7, No. 139 Headlines AEGIS COMMS: Inks Definitive Merger Agreement with AllServe AIR CANADA: Undertakes Additional Management Job Reductions AMERCO: Gets Court Nod to Continue Using Cash Management System AMERICAN CELLULAR: $1.6-Billion Debt Restructuring Underway AMERISOURCEBERGEN: Completes $1.05 Bill. Securitization Program ANC RENTAL: Debtor Wants Until Aug. 15 to File Creditors' Claims ATMI INC: Consummates Acquisition of ESC Inc.'s Assets ATMI INC: Files Patent Infringement Suit against Praxair Inc. AURORA FOODS: J.W. Childs Makes $200 Million Capital Infusion BISTRO 2000-6: Fitch Knocks Class C & D Note Ratings Down to C/D BOISE CASCADE: Will Acquire OfficeMax for about $1 Billion BOISE CASCADE: Taps Goldman Sachs to Aid in Reviewing Options BOISE CASCADE: S&P Sees OfficeMax Deal will Increase Leverage BRIGHTPOINT INC: Will Publish Second Quarter Results on July 28 BROADBANDNOW!: Sells All Assets to Interquest Communications CARAUSTAR INDUSTRIES: Q2 2003 Conference Call Slated for July 29 CHARLES J. MILLER: Case Summary & 20 Largest Unsecured Creditors CHART IND.: Files Prepack. Plan & Disclosure Statement in Del. CHARTER COMMS: S&P Further Junks Corporate Credit Rating to CC CKE RESTAURANTS: S&P Affirms B Rating & Revises Outlook to Neg. COEUR D'ALENE MINES: Further Cuts Convertible Debt by $34 Mill. COM21 INC: Files for Chapter 11 Protection in N.D. of California COM21 INC: Voluntary Chapter 11 Case Summary EL PASO ELECTRIC: Will Publish Second Quarter Results on July 28 ENRON CORP: Court Approves Proposed Buernegia Bidding Protocol FAIRFAX FINANCIAL: Completes U.S. Private Convertible Debt Issue FLEMING COS. Pacific Exchange Delists Shares Effective July 11 GAUNTLET ENERGY: Hires FirstEnergy Capital for Financial Advice GENESIS HEALTH: Inks Restructuring Agreement with ElderTrust GENUITY INC: Court Approves Kirkland & Ellis as Special Counsel GILAT SATELLITE: Names Bill Gerety as New CEO of Spacenet Unit GLOBAL CROSSING: Asks Court to Approve Microsoft Settlement Pact GOLF TRUST: Reaches Non-Monetary Settlement of Crossley Suit GREATE BAY CASINO: Board Approves Sands Hotel Debt Exchange Deal HEADWAY CORP: Files Plan and Disclosure Statement in New York HENRY CO.: S&P Ups Credit Rating to B- over Improved Liquidity IMCLONE SYSTEMS: Reports Progress in Several Pipeline Programs INTERSTATE BAKERIES: May Quarter Net Loss Stands Tops $4.5 Mill. JABIL CIRCUIT: Senior Unsec. Notes & Bank Loans Get BB+ Ratings KENTUCKY ELECTRIC: Selling Substantially All Assets for $3MM KMART CORP: Court Approves LB Richland Settlement Agreement LORAL SPACE: Begins Chapter 11 Proceeding to Effect Asset Sale LORAL SPACE: Case Summary & 20 Largest Unsecured Creditors MAGELLAN HEALTH: Wins Nod to File Retention Program Under Seal MALDEN MILLS: Gets Court OK to Hire N. Hahn as Investment Banker NATIONAL EQUIPMENT: Employing Kirkland & Ellis as Attorneys NATIONSRENT INC: Court Approves ICX Corp. Financing Agreement NRG ENERGY: Gets Blessing to Hire Ordinary Course Professionals OBECO INC: Enters Agreement to Sell Assets to Art's-Way Manufac. OCWEN RESIDENTIAL: Fitch Takes Various Rating Actions on 4 Issues OMNICARE: Completes Redemption of Conv. Subordinated Debentures OXFORD INDUSTRIES: Board Declares Quarterly Cash Dividend PG&E NATIONAL: Wants Blessing to Maintain Existing Bank Accounts PHLO CORP: Pulls Plug on Marcum & Kliegman Engagement as Auditor PHLO CORP: Intends to Spin-Off Part of Biotechnologies Business PILLOWTEX: Term Loan Lenders Extend Forbearance Pact to July 21 PRESIDENT CASINOS: May 31 Balance Sheet Upside-Down by $49 Mill. PRO RATA FUNDING: S&P Assigns BB Prelim. Rating to Class D Notes REGUS BUSINESS: Court Approves Togut Segal as Conflicts Counsel SCHOOL SPECIALTY: S&P Assigns B+ Rating to $100-Mil. Sub. Notes SFA COLLATERALIZED: Fitch Hatchets 3 Note Class Ratings to B-/C SOLECTRON: Obtains Covenant Amendments Under Credit Facilities SOLUTIA: Renews Call for Expedited Appeal to Penn. Supreme Court SONO-TEK CORP: Reports Slight Decline in First Quarter Results SPIEGEL INC: Honoring & Paying Prepetition Insurance Obligations TANBRIDGE CORP: Primary Lender Agrees to Forbear Until July 21 TECHCANA INC: Initiates Restructuring Program for Pan-O-Starr TERAYON COMMS: Names Douglas Sabella as Chief Operating Officer TRISM INC: Court Schedules Plan Confirmation Hearing for Aug. 4 UNITED AIRLINES: Airs Comments on Mechanics' Election Results UNIFAB INT'L: Resets Annual Shareholders' Meeting for August 1 UNITED AIRLINES: HSBC Gets Stay Relief to Make L. A. Payments UPC POLSKA: Files Prepackaged Plan in Delaware Bankruptcy Court U.S HOME: Richard Grandy Resigns as Company President and COO US MINERAL: Murray Serving as Prof. Taggart's Investment Banker WEIRTON STEEL: US Steel Wants Prompt Decision on Coke Agreement WESTAR ENERGY: Will Publish Second-Quarter Results on August 8 WESTPOINT STEVENS: Court OKs Cash Collateral Use on Final Basis WHEELING: Earns Court Nod to Continue GRC Engagement as Broker WORLDCOM INC: Wants Blessing to Pull Plug on 113 Service Orders XEROX CORP: Names Michael D. Brannigan as Corporate Vice Pres. * Charles Noski Agrees to Act as Senior Advisor to Blackstone * Kirkpatrick & Lockhart Expands Boston Office with 4 Attorneys * The Garden City Group Opens West Coast Regional Headquarters * Meetings, Conferences and Seminars ********* AEGIS COMMS: Inks Definitive Merger Agreement with AllServe ----------------------------------------------------------- Aegis Communications Group, Inc. (OTC Bulletin Board: AGIS), a marketing services company that enables clients to make customer contact efforts more profitable, and AllServe Systems, PLC, a global IT enabled services company headquartered in Ascot, England, announced the signing of a definitive agreement of merger providing that Aegis will be acquired and become a subsidiary of AllServe through a merger. The definitive agreement requires AllServe to pay approximately $22.75 million in cash at closing and to assume all trade liabilities. After a comprehensive process managed by SunTrust Robinson Humphrey, Aegis' Board of Directors determined that this offer was the best proposal for all of the company's stakeholders, including creditors, equity holders and employees. In accordance with the terms of its existing senior and subordinated loans, as well as the terms of the agreement with AllServe, Aegis will be required to repay its obligations to various lenders from the proceeds of this transaction. The costs of the transaction will also be paid out of these proceeds. Given the level of the total consideration and the existing debt obligations of Aegis, the company currently does not envision any payments to its preferred stockholders (other than possibly the Series B) or to its common stockholders. Aegis, as the surviving entity in the merger, will be a wholly owned subsidiary of AllServe Systems, PLC. The merger agreement is subject to certain conditions, including approval of the merger by the stockholders of Aegis. It is anticipated that a special meeting of Aegis stockholders will be held, and the merger closed, during the third quarter of 2003. "Earlier this year we were able to negotiate an extension of our bank line, however it became clear that to ensure the viability of Aegis, we had to find new sources of funding before year-end. As a result, we hired SunTrust Robinson Humphrey to help us in identifying either new sources of equity capital or an attractive merger partner. After a diligent marketing process, the AllServe proposal was deemed the most attractive by our Board of Directors and we pursued the negotiation of the Merger Agreement," stated Herman Schwarz, President & CEO of Aegis. "The teleservices industry has undergone many changes in the last several years including falling overall demand, international competition and regulatory changes. Given the company's capital structure, cost base and competitive position, the Board determined that the AllServe offer presents the best course of action for the company," continued Mr. Schwarz. "We look forward to the recapitalization of our business and the additional investments in technology and off-shore capacity that will be possible given the financial flexibility provided by AllServe. We believe that this transaction will enable Aegis to be more competitive in our industry and will further our goal of being the provider of choice for our present and prospective clients." Mr. A Kapoor, Chief Operating Officer for AllServe, noted, "AllServe will bring much needed financial strength to Aegis and will make substantial investments in upgrading the technology infrastructure and marketing programs. Aegis' strong brand in the US market combined with AllServe's strong European presence will allow Aegis to leverage the European markets and build a global service delivery model. This transaction will benefit both Aegis' employees and its customers, who will be able to get more value added services through a global service delivery model." Aegis Communications Group, Inc. -- whose December 31, 2002 balance sheet shows a total shareholders' equity deficit of about $45 million -- is a marketing services company that shows companies how to make customer care and acquisition more profitable. Aegis' services are provided to a blue chip, multinational client portfolio through a network of client service centers employing approximately 4,300 people and utilizing over 5,100 production workstations. Further information regarding Aegis and its services can be found on its Web site at http://www.aegiscomgroup.com AllServe Systems is a UK based company with global presence. It provides IT Enabled services and IT services to global fortune 1000 customers. In the last 10 years AllServe has built a creditable track record and reputation for delivering high quality services and processes. AllServe's businesses are organized around a number of major industry verticals and its team of 1500 strong IT professionals brings strong domain expertise, extensive technology skills & continuous innovation. As a company, we are committed to continually invest in people, processes, infrastructure and facilities to ensure highest levels of performance and 100 percent customer satisfaction. AllServe and its services can be found on its Web site at http://www.allservesystems.com AIR CANADA: Undertakes Additional Management Job Reductions ----------------------------------------------------------- Air Canada announced the reorganization of its executive management team and the reduction of an additional 300 management and non-unionized positions bringing the total management and non- unionized job reduction to 1,100. "The additional management job reductions are consistent with the realignment of responsibilities at the executive level and our ongoing focus on a leaner, more efficient and cost effective operation," said Robert Milton, President and Chief Executive Officer. "As we restructure the airline to compete profitably in the new environment, we are eliminating a layer of executive management in many areas and pushing more responsibility down to the next level of management. Management ranks will be reduced by more than 25 per cent when the reorganization is completed," he said. The airline announced the following changes at the executive level: - Ross MacCormack, Senior Vice President, International & Alliances is retiring effective September 30, 2003 after 32 years with Air Canada. The International and Alliances group will report directly to Montie Brewer, Executive Vice President, Commercial. - Doug Port, Senior Vice President, Customer Service is retiring effective September 30, 2003 after 30 years with Air Canada. Effective October 1st, Brad Moore, currently Senior Director, Inflight Services will assume the role of Vice President, Customer Service. - Robin Wohnsigl, Senior Vice President, Air Canada Maintenance, will be leaving Air Canada to pursue other interests. Effective August 1, 2003, Jon Turner, currently General Manager, Aircraft Programs, will assume Robin's responsibilities as General Manager, Air Canada Maintenance and Aircraft Programs. - Steve Markey, Vice President, Government Relations & Regulatory Affairs will be leaving Air Canada to pursue other interests. Duncan Dee, Vice President, Corporate Affairs, will assume direct responsibility for the government relations and regulatory affairs portfolio. - Alice Keung, Vice President, Information Technology and Chief Information Officer, has left the company to pursue other interests. Lise Fournel, President and CEO, Destina, will assume, on an interim basis, the Chief Information Officer portfolio. "The departing executives have, without exception, all made important contributions throughout their careers with Air Canada and we wish them well as they move into new phases of their careers and lives," said Mr. Milton. This realignment positions Air Canada as having the least number of vice-presidents of any international network carrier in North America. As part of the restructuring process, 1,100 management and non- unionized jobs are being eliminated contributing to an overall payroll cost reduction for this employee group of almost 40 per cent. The airline is currently implementing these job reductions on an ongoing basis with approximately 650 non-unionized positions already eliminated and a target for completion by the end of the year. AMERCO: Gets Court Nod to Continue Using Cash Management System --------------------------------------------------------------- The United States Trustee requires that all chapter 11 debtors close their prepetition bank accounts and open new post-petition bank accounts. The purpose of doing that is to draw a bright line between pre-petition and post-petition transactions. CFO Andrew A. Stevens explains that AMERCO has a sophisticated cash management system that that drastic measure would be more disruptive than productive in AMERCO's chapter 11 case. Accordingly, pursuant to Sections 105(a) and 363 of the Bankruptcy Code, AMERCO asks the Court for authority to: (a) maintain all existing bank accounts; (b) continue using its existing cash management system; (c) continue using all prepetition business forms; and (d) engage in Intercompany transactions with non-debtor subsidiaries and affiliates. The Cash Management System Bruce T. Beesley, Esq., at Beesley, Peck & Matteoni, Ltd., in Reno, Nevada, relates that AMERCO's business and financial affairs are integrally related with its many non-debtor subsidiaries and affiliates. In the ordinary course of business, U-Haul International, Inc., uses an integrated, centralized cash management system, of which AMERCO is a part. Funds collected by affiliates in the ordinary course of their business are, through a series of transactions, used to pay certain operating expenses of AMERCO and its affiliates. In addition, funds are regularly transferred to and from AMERCO for the purpose of investing excess cash on a short-term basis to ensure that sufficient funds remain available in the cash management system to pay current operating expenses of AMERCO and its affiliates. Through the use of U-Haul's cash management system, Mr. Beesley notes that AMERCO and its affiliates are able to facilitate cash forecasting and reporting, monitor collection and disbursement of funds, and maintain control over the administration of the various bank accounts required to effect the collection, disbursement and movement of cash. The cash management system is driven by more than 2,500 rental and storage centers the affiliates operated. Funds generated by business operations at the Centers are deposited daily into local deposit accounts. In turn, the funds are transferred on a regular basis into one of approximately 350 field depository accounts U- Haul maintains. Funds in the Field Depository Accounts are further transferred, 85% of the dollar value on a daily basis and the balance twice weekly, into a special concentration account U- Haul maintains at Bank One Arizona. AMERCO routinely deposit and withdraw funds into and out of the various bank accounts by different methods, including by check, wire transfer, Automated Clearing House transfer and electronic funds transfer. Funds required for payment of obligations AMERCO and its affiliates owed are regularly transferred from the Main Concentration Account to various disbursement accounts in amounts sufficient to cover items presented for payment against funds contained in the disbursement accounts. On average, more than $7,000,000 to $9,000,000 passes through the cash management system daily. Mr. Beesley notes that most of AMERCO's operating expenses, including payroll, employee benefits, tax obligations and operating expenses, are paid from one or more of the disbursement accounts U-Haul maintains. Accordingly, AMERCO and its estate pay the bulk of its operating expenses and no funds or property of the estate will be required to continue meeting these operating expenses postpetition. This is why AMERCO is not seeking authorization to pay accrued wages, salaries, benefits or other operating expenses out of the estate but merely seeks to continue the operation of the cash management system in the ordinary course of business, Mr. Beesley explains. AMERCO's Bank Accounts Mr. Beesley reports that the Bank Accounts consist of several types of accounts including: A. Special Account AMERCO maintains an account at Bank One, Arizona wherein, on a daily basis, surplus funds in the Main Concentration Account are swept into the Special Account. AMERCO invests these funds in the Investment Fund. If an event arises where amounts in the Main Concentration Account are insufficient to meet the daily operating expenses of AMERCO and its affiliates, AMERCO withdraws an amount equal to the amount of the shortfall from the Investment Account and transfers the same amount to the Main Concentration Account to ensure payment of all operating expenses. As of April 30, 2003, the Special Account had an approximate balance of $225,755. B. Clearing Account In the ordinary course of its business, AMERCO maintains an account with JPMorgan Chase to pay principal and interest payments due under the $205,000,000 revolving under the Credit Facility. On a regular basis, AMERCO deposits funds from the Special Account into the Clearing Account in an amount sufficient to pay principal and interest that is presently due and payable. JPMorgan Chase charges the Clearing Account and distributes available funds to the participating banks. As of April 30, 2003, the Clearing Account has an approximate balance of $18,337. C. Investment Account AMERCO maintains an Investment Account with Federated Investors Prime Market Money Fund. Prepetition, surplus funds were swept on a daily basis from the Main Concentration Account into the Special Account to permit AMERCO to invest those funds in the Investment Account to generate a cash reserve to ensure that operating expenses were timely paid. AMERCO withdrew funds from the Investment Account as needed if amounts available in the Main Concentration Account were insufficient to pay present operating expenses. On June 4, 2003, AMERCO transferred funds available in the Investment Account to a similar investment account with Federated Investment Prime Market Money Fun to ensure the stability of funds available to pay any shortfalls in the operating expenses of AMERCO and its affiliates. D. Reserve Accounts Prepetition, AMERCO established three reserve accounts at Compass Bank in the ordinary course of business to ensure that it had access to a reserve of operating funds. As of April 30, 2003, each Reserve Account had an approximate balance of $1,000. No activity has been conducted regarding the Reserve Accounts since November 2002. Mr. Beesley fears that if the U.S. Trustee's requirements are not waived, it would cause enormous and unnecessary disruption in AMERCO's business would cause the estate tremendous and unnecessary expense and would impair its efforts to reorganized and pursue other alternatives to maximize the value of its estate. Indeed, AMERCO's Bank Accounts comprise a part of an established cash management system that it needs in order to ensure smooth collection and disbursements in the ordinary course of their business. AMERCO further seeks authorization to continue operating, in the ordinary course of business, under depository or similar contracts between itself and the depository banks where the Bank Accounts are located. Under the usual and ordinary terms of contracts that existed prepetition, the Depository Banks are permitted to charge back and revoke provisional credits for deposited items which are returned unpaid and charge the amounts of these items against balances from time to time on deposit in the Bank Accounts, and to assess and deduct from the Bank Accounts customary service charges on a periodic basis. Granting this relief, Mr. Beesley argues, avoids delays in payments to administrative creditors, to ensure a smooth Chapter 11 transition with minimal disruption and to aid in AMERCO's efforts to successfully and rapidly complete this case and to minimize disruptions in the usual and ordinary business and financial affairs of the Affiliates. Benefit to the Estate Mr. Stevens tells Judge Zive that AMERCO's Cash Management System provides significant benefits to the estate and its affiliates, including the ability to: (a) control corporate funds centrally; (b) invest idle cash; (c) ensure the availability of funds when necessary; (d) allocate and distribute interest earned on funds in centralized accounts to AMERCO and its affiliates; and (e) reduce administrative costs by facilitating the movement of funds and the development of more timely and accurate balance and presently information. In addition, the use of the cash management system reduces interest expenses by enabling AMERCO and its affiliates to utilize all funds within the system rather than relying on short-term borrowing to fund their cash management system. Mr. Stevens cautions that if AMERCO were required to adopt new, segmented cash management systems, that would create unnecessary administrative problems, would negatively impact the usual and ordinary operations of the non-debtor Affiliates and would be more disruptive than productive. This would adversely impact AMERCO's ability to reorganize. Moreover, as a practical matter, due to AMERCO's complex corporate and financial structure, it would not be possible to establish a new system of accounts and a new cash management and disbursement system without substantial additional costs and expenses to AMERCO's estate and a significant disruption of its business operations. Mr. Stevens assures the Court that AMERCO will continue to maintain detailed records reflecting all transfers of funds between itself and any of its Affiliates, so that all Intercompany transactions can be readily ascertained. In furtherance of this goal, AMERCO requests that all affected Banks be authorized and directed to continue to administer the Bank Accounts as they were maintained prepetition. Protecting the Banks To the extent that any Depository Bank has a valid prepetition claim again AMERCO that is subject to a right of setoff, funds held in a Bank Account with the Depository Bank may constitute cash collateral under Section 363d(c)(2) of the Bankruptcy Code. Since the adequate protection provision is a prerequisite to use the cash collateral, AMERCO proposes to provide the adequate protection to any Depository Bank with an allowable prepetition claim against it in the form of a first priority postpetition replacement lien on postpetition deposits to its Bank Accounts to the extent the Depository Bank allows any types of withdrawals from the Bank Accounts postpetition. A Depository Bank would not be required to allow the withdrawal of funds constituting cash collateral subject to an administrative freeze the adequate protection will be without prejudice to the rights of any Depository Bank to apply to this Court for additional or alternative adequate protection. Continued Use of Business Forms Mr. Beesley continues that AMERCO will be able to minimize estate expenses and disruption of its business if it is allowed to use all correspondences, business forms and checks in the form that they exist immediately prior to the Petition Date, without reference to its status as debtor-in-possession. It's no secret that AMERCO's in bankruptcy. The filing was front-page news in every business newspaper around the globe. Continued Intercompany Transactions Since AMERCO's affairs are integrally related, Intercompany fund transfers take place from time to time among AMERCO and its affiliates. AMERCO's ability to continue making payments and providing funding to its affiliates is necessary in order to maintain and preserve the value of its interest in its affiliates. Sec. 345 Investment Guidelines In addition, Mr. Beesley asserts that cause exist for waiving the investment and deposit guidelines of Section 345 given that all deposits and investments are prudent and designed to yield the maximum reasonable net return on the funds investment, taking into account the safety of the deposits and investments. AMERCO believes that the banks where the Bank Accounts are maintained are financially stable banking institutions and are FDIC insured. AMERCO proposes to invest its cash in its sole discretion in: (i) securities issued or fully guaranteed or insured by the U.S. Government or it agency; (ii) interest-bearing certificates of deposit, time deposits and bankers' acceptances; (iii) commercial paper having at least an "A2/P2" credit rating from Standard & Poor's Corporation or Moody's Investor Service, Inc.; (iv) repurchase obligations whose: -- collateral meets the investment criteria; -- market value of the collateral must be at least 102% of the purchase price of the repurchase agreements at all times; and -- dealer is on the approved dealer list; and (v) money market funds that: -- have at least $500,000,000 in assets; -- offer immediate redemption of shares; -- have a minimum three years of investment history; and -- meet credit criteria required for outright purchases. This proposed investment guidelines, Mr. Beesley comments, will enable AMERCO to maintain the security of its investments while at the same time providing it with the flexibility required to maximize the yield on the investment and deposit of cash, given that: (a) the proposed investment guidelines permit investments only in government and governmental agency securities and private corporations and institutions of substantial financial strength as evaluation by respected and well established investment rating agencies; and (b) the requirement of obtaining a bond secured by the undertaking of a corporate security from each of the financial institutions with which AMERCO deposits or invest funds would be prohibitively expensive and administratively burdensome and could offset much of the financial gain derived from investing in private as well as federal or federally guaranteed securities. * * * At the First Day Hearing, Judge Zive granted AMERCO's request in all respects. (AMERCO Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 609/392-0900) AMERICAN CELLULAR: $1.6-Billion Debt Restructuring Underway ----------------------------------------------------------- Dobson Communications Corporation (Nasdaq:DCEL) and American Cellular Corporation, in which Dobson holds a 50% indirect interest, jointly announced that they are pursuing a plan to restructure American Cellular's $1.6 billion of indebtedness, including the full repayment of American Cellular's bank credit facility. Holders in excess of two-thirds in principal amount of American Cellular's outstanding 9-1/2% senior subordinated notes ("Notes") have signed agreements to support this restructuring. The restructuring plan will be effected either through a voluntary exchange of the Notes, with a minimum tender requirement of 99.5 percent, or, alternatively, if the voluntary exchange is not completed, through a pre-packaged bankruptcy plan for American Cellular. The pre-packaged bankruptcy plan, if implemented, would apply only to American Cellular and its subsidiaries, and would not involve Dobson Communications. If all the Notes are exchanged, holders of the outstanding $700 million aggregate principal amount of American Cellular's 9-1/2% senior subordinated notes would receive an aggregate recovery consisting of: -- $50 million in cash; -- 45,054,800 shares of Dobson Communications Class A common stock; and -- 700,000 shares of a new series of Dobson Communications convertible preferred stock with the following principal terms: (i) an aggregate liquidation preference of $125 million; (ii) initially convertible at an $8.75 conversion price into 14,285,714 shares of Dobson's Class A common stock; (iii) a 6% cash dividend or, at the option of Dobson Communications, a 7% dividend payable in additional shares of convertible preferred stock; and (iv) mandatorily redeemable in 13 years. Dobson Communications will capitalize a recently formed, wholly owned, indirect subsidiary with $50 million, and the subsidiary will seek to raise approximately $900 million through new senior notes. The new senior notes will be non-recourse to Dobson Communications. To complete the restructuring, the recently formed Dobson subsidiary would merge with American Cellular, and the subsidiary's available cash, including the net proceeds from the issue of new senior notes, would be used to fully repay American Cellular's existing bank credit facility. Upon completion of the restructuring, American Cellular would become a wholly owned consolidated subsidiary of Dobson Communications. The proposed plan is also subject to the ability of the Dobson Communications subsidiary to raise $900 million from the issuance of new senior notes on terms satisfactory to Dobson Communications; to approval of a pre-packaged bankruptcy plan, if necessary; and to other customary closing conditions. Neither the new senior notes, nor the common and preferred shares to be issued by Dobson, nor any equity securities that may be issued by American Cellular will be registered under the Securities Act of 1933. Any new senior notes, any Dobson common and preferred shares, and any equity securities of American Cellular that are issued as part of a voluntary exchange transaction, and not as part of the pre-packaged bankruptcy plan, may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act of 1933. The new senior notes will be offered and sold only to qualified institutions or to non- U.S. persons in transactions that are exempt from the registration requirements of the Securities Act. No assurance can be given that a final plan for the restructuring of American Cellular's debt will be consummated, or, if consummated, what the final terms may be. This announcement does not constitute an offer to sell, or the solicitation of an offer to purchase, any securities. Chanin Capital Partners, LLC is the financial advisor to a special committee of the holders of American Cellular's 9-1/2% senior subordinated notes. Holders of these Notes may contact Mr. Ernie Sibal at Chanin Capital Partners, LLC, (310) 445-4010, Extension 286, for more information regarding the plan for restructuring. On June 17, 2003, Dobson exchanged its two remaining wireless properties in California for two AT&T Wireless (NYSE:AWE) properties in Alaska. AT&T Wireless also transferred to Dobson all of the Dobson Series AA preferred stock that AT&T Wireless owned. Dobson reclassified its financial statement as of and for the years ended December 31, 2002, 2001 and 2000 to reflect the discontinued operations of its California properties. These unaudited reclassified financial statements, as well as certain pro forma financial information not previously disclosed to the public, are attached as exhibits to Dobson's Form 8-K that was filed on the date of this press release. KPMG LLP, Dobson's independent auditor, is presently auditing these reclassified financial statements. No assurances can be given that the audit will not result in further adjustments to these reclassified financial statements. Dobson Communications is a leading provider of wireless phone services to rural markets in the United States. Headquartered in Oklahoma City, the Company owns or manages wireless operations in 16 states. For additional information on the Company and its operations, please visit its Web site at http://www.dobson.net AMERISOURCEBERGEN: Completes $1.05 Bill. Securitization Program --------------------------------------------------------------- AmerisourceBergen Corporation (NYSE:ABC), the largest pharmaceutical services company in the U.S. dedicated solely to the pharmaceutical supply channel, announced the completion of a $1.05 billion securitization program for the Company's trade receivables. The new program provides $550 million under a three- year revolving tranche and $500 million under a 364-day revolving tranche. The new program replaces two separate securitization programs, which the Company inherited from its two previous companies at the time of the August 2001 merger that created AmerisourceBergen. AmerisourceBergen (NYSE:ABC) is the largest pharmaceutical services company in the United States dedicated solely to the pharmaceutical supply chain. It is the leading distributor of pharmaceutical products and services to the hospital systems/acute care market, physician's offices, alternate care and mail order facilities, independent community pharmacies, and regional chain pharmacies. The Company is also a leader in the long term care pharmacy and workers' compensation fulfillment marketplaces. With more than $40 billion in annualized operating revenue, AmerisourceBergen is headquartered in Valley Forge, PA, and employs more than 13,000 people. AmerisourceBergen is ranked #24 on the Fortune 500 list and was ranked #6 in the 2003 Business Week 50, a list of the 50 best performing companies in the S & P 500. For more information, go to http://www.amerisourcebergen.com Standard & Poor's Ratings Services raised its corporate credit rating on AmeriSource-Bergen Corp., to 'BB+' from 'BB' based on continued solid operating progress and improved credit measures. The outlook remains positive. The Chesterbrook, Pennsylvania- based drug wholesaler has $2.1 billion in debt. ANC RENTAL: Debtor Wants Until Aug. 15 to File Creditors' Claims ---------------------------------------------------------------- ANC Rental Corporation and its debtor-affiliates ask the Court to further extend the time within which they may file claims on behalf of creditors through and including August 15, 2003. In accordance with the provisions of the Bar Date Order, the Debtors served the notice of the Bar Date on over 132,500 potential creditors. As of the Bar Date, over 8,600 proofs of claim have been filed. Since the Bar Date, the Debtors have been diligently working to resolve and reconcile the numerous proofs of claims that have been filed. However, it has been impossible for the Debtors to have reviewed all the proofs of claim to determine whether there are any creditors for whom the Debtors believe that a proof of claim should be filed in order to have the claim addressed through the plan process. Elio Battista, Jr., Esq., at Blank Rome LLP, in Wilmington, Delaware, contends that an extension of time will afford the Debtors a sufficient opportunity to assess whether there are existing creditors on whose behalf the Debtors should file a proof of claim. The Court will convene a hearing on July 21, 2003 to consider the Debtors' request. By application of Del.Bankr.LR 9006-2, the Debtors' deadline to file a creditor claim is automatically extended through the conclusion of that hearing. (ANC Rental Bankruptcy News, Issue No. 35; Bankruptcy Creditors' Service, Inc., 609/392-0900) ATMI INC: Consummates Acquisition of ESC Inc.'s Assets ------------------------------------------------------ ATMI, Inc. (Nasdaq: ATMI), a supplier of materials and services to the world's leading semiconductor manufacturers, announced the acquisition of ESC, Inc. of Bethlehem, Pennsylvania. ESC produces novel surface preparation and cleaning materials for copper and advanced interconnect microelectronic fabrication processes. Gene Banucci, ATMI CEO, said, "ATMI has been investing heavily in copper and advanced interconnect materials. A key step in advanced interconnect processing is surface preparation and cleaning, especially post CMP processing. ESC has a series of patent protected products that provide the unique wafer cleaning capabilities that copper processing requires. We believe this acquisition will provide ATMI with a capability that amplifies our presence in both copper materials and CMP." Shahri Naghshineh, President of ESC, said, "Precision surface preparation and cleaning are now critical steps in the fabrication of semiconductor devices. ESC delivers enabling, value added cleaning solutions designed to increase the process yield for the most advanced semiconductor fabrication processes. By combining ESC's surface preparation products and expertise and ATMI's extensive copper and advanced interconnect support suites, we ease the path for copper metallization and low-k dielectric processes to become mainstream fabrication processes." Dan Sharkey, CFO of ATMI, said, "Although immediately accretive, ATMI does not expect that the ESC acquisition will add materially to its financial results in 2003. Detailed terms of the deal will not be announced." ESC, Inc. began selling its first product in 1999. From there it has expanded its semiconductor process cleaning materials offerings to encompass solutions for the most advanced semiconductor production processes. ESC has ISO-certified production facilities in Pennsylvania and Texas. For more information, visit http://www.esccorp.net ATMI provides specialty materials, and related equipment and services, to the worldwide semiconductor industry. As the Source of Semiconductor Process Efficiency, ATMI helps customers improve wafer yields and lower operating costs. For more information, please visit atmi.com. As previously reported, Standard & Poor's assigned its single-'B'- plus corporate credit and single-'B'-minus convertible subordinated notes ratings to ATMI Inc., a Danbury, Conn. Based supplier of specialty chemicals used to manufacture of semiconductors. The ratings on ATMI reflect the company's good niche position in the semiconductor capital goods industry, offset by that industry's volatility, substantial technology risks, and an aggressive acquisition policy. ATMI is a leading supplier of specialty chemicals used to manufacture semiconductors, as well as equipment to deliver those chemicals, and related environmental control products. ATMI INC: Files Patent Infringement Suit against Praxair Inc. ------------------------------------------------------------- ATMI, Inc. (Nasdaq: ATMI), announced that on Friday, July 11, 2003 its subsidiary Advanced Technology Materials, Inc. filed suit against Praxair, Inc., the parent company of Praxair Electronics, charging it with knowingly and willfully infringing upon two patents ATMI holds for certain sub-atmospheric gas delivery technologies used in semiconductor fabrication processes. Oliver Zitzmann, ATMI Chief Legal Officer states, "The suit, which was filed in the United States District Court for the Southern District of New of York alleges that Praxair has infringed, and is actively inducing others to infringe ATMI's United States Patent Nos. 6,101,816 and 6,343,476, related to our VAC(TM) (Vacuum- Actuated Cylinder) product. ATMI is seeking treble damages and an injunction. With more than 345 issued US patents, ATMI respects the value of intellectual property, and protects it accordingly." Doug Neugold, ATMI President, said, "We are confident that ATMI's patents on sub-atmospheric gas storage and delivery protect our adsorbent- and mechanical-based methods of delivering gases below atmospheric pressure. These create safe products that can eliminate the potential for a catastrophic gas release. ATMI provides specialty materials, packaging, delivery systems, sensors, and abatement products and services to the worldwide semiconductor industry. As the Source of Semiconductor Process Efficiency, ATMI helps customers improve wafer yields and lower operating costs. For more information, visit http://www.atmi.com AURORA FOODS: J.W. Childs Makes $200 Million Capital Infusion ------------------------------------------------------------- Aurora Foods Inc. (OTC Bulletin Board: AURF), a producer and marketer of leading food brands, has entered into a definitive agreement with regard to its previously announced agreement in principle with J.W. Childs Associates, L.P. Under the terms of the definitive agreement, J.W. Childs will make a $200 million equity investment in Aurora in a transaction valued at approximately $925 million. The equity investment by J.W. Childs is part of a comprehensive financial restructuring designed to reduce Aurora's outstanding indebtedness, strengthen its balance sheet and improve its liquidity. J.W. Childs is a Boston-based private equity investment firm with over $3.4 billion of equity capital under management. The terms of the definitive agreement call for J.W. Childs to purchase shares of Aurora's common stock representing a 65.6% equity interest in the reorganized Company. Concurrently with the closing of the restructuring, J.W. Childs will be entitled to designate a majority of the members on the Company's Board of Directors. The definitive agreement contemplates that following the restructuring Aurora's existing common and preferred stockholders will hold approximately 4.9% of the reorganized Company's outstanding equity. The Company intends to use the $200 million of proceeds from the sale of the common stock to consummate the restructuring and to pay down its existing indebtedness. "Aurora has made great strides in the last several months under the leadership of Chairman and interim Chief Executive Officer Dale F. Morrison in improving operations and reducing costs," said Thomas M. Hudgins, an independent director of the Company. "The progress made by Dale and his team has securely positioned the Company for this transaction, and we look forward to Dale's continued leadership until the restructuring process is complete." Upon completion of the restructuring, Mr. Morrison will continue as an operating partner of Fenway Partners, Inc., a New York-based private equity firm with $1.4 billion under management and a portfolio of leading branded goods companies. At that time, pursuant to the definitive agreement, Lawrence K. Hathaway will succeed Mr. Morrison as Chief Executive Officer of Aurora. The definitive agreement provides that the transaction with J.W. Childs will be effected through a pre-negotiated plan of reorganization under Chapter 11, and include the following elements: -- The Company's existing bank lenders will be paid in full, receiving approximately $458 million in cash and approximately $197 million in new senior unsecured notes with a 10-year maturity. Aurora and J.W. Childs intend to raise approximately $441 million of new bank financing in connection with the restructuring, including a $50 million revolving credit facility (which is expected to be undrawn at closing), and will seek to effect a high yield offering in an amount sufficient to pay cash to the bank lenders in lieu of the new senior unsecured notes. The definitive agreement contemplates that the Company's existing bank lenders will waive any right to the excess leverage fee and the asset sale fee, which are provided for in the Company's credit agreement. -- The Company's existing accounts receivable sales facility will be paid down and terminated. -- Holders of the Company's 12% senior unsecured notes due 2006 will be paid in full, receiving approximately $29 million of new senior unsecured notes with a 10-year maturity, unless J.W. Childs effects a high yield offering in an amount sufficient to pay cash in lieu of such unsecured notes. -- Holders of the Company's outstanding 8.75% and 9.875% senior subordinated notes due 2008 and 2007, respectively, will receive a 50% recovery through cash in the aggregate amount of approximately $110 million and approximately 29.5% (approximately $90 million) of the common stock of the reorganized Company. -- Existing common and preferred stockholders will receive approximately 4.9% (approximately $15 million) of common stock of the reorganized Company, and the existing common and preferred shares will be cancelled in connection with the restructuring. The closing of the restructuring is subject to a number of conditions, including the consent of the Company's bank lenders and bondholders to the plan of reorganization, bankruptcy court approval of the plan of reorganization, completion of the re- financing of the Company's existing indebtedness in accordance with the terms of the restructuring, and customary regulatory approvals. Subject to the satisfaction of these conditions, the Company expects the closing of the restructuring to occur in the fourth quarter of 2003. The Company is currently in discussions with its bank group and bondholders regarding the terms of the restructuring. However, no assurance can be given that these discussions will lead to an agreement, that the conditions to closing will be satisfied, or that the restructuring will ultimately be consummated. Aurora Foods Inc., based in St. Louis, Missouri, is a producer and marketer of leading food brands. More information about Aurora may be found on the Company's Web site at http://www.aurorafoods.com J.W. Childs Associates, L.P. is a leading private equity investment firm based in Boston, Massachusetts which is focused on the consumer products, health care and specialty retail industries. J.W. Childs presently manages $3.4 billion of equity capital from leading financial institutions, pension funds, foundations and university endowments. BISTRO 2000-6: Fitch Knocks Class C & D Note Ratings Down to C/D ---------------------------------------------------------------- Fitch Ratings has downgraded four classes of notes from the Bistro 2000-6 program. Bistro 2000-6 is a synthetic balance sheet collateralized debt obligation established by JP Morgan to provide credit protection on a $4 billion portfolio of investment grade loans. The following classes have been downgraded: -- $300,000,000 class A to 'AA-' from 'AAA'; -- $100,000,000 class B to 'BB' from 'AA'; -- $100,000,000 class C to 'C' from 'CCC-'; -- $30,000,000 class D to 'D' from 'C'. Fitch's rating action reflects the deterioration in credit quality of several of the underlying assets as well as higher than expected credit protection payments under the credit default swap. As a result, there is a diminished level of credit enhancement for the notes. BOISE CASCADE: Will Acquire OfficeMax for about $1 Billion ---------------------------------------------------------- OfficeMax, Inc. (NYSE: OMX) has reached a definitive agreement with Boise Cascade Corporation (NYSE: BCC) to combine with its Boise Office Solutions group, giving OfficeMax shareholders an approximate purchase price of $1.2 billion, or $9.00 per fully diluted share. The price represents a 25 percent premium over OfficeMax's closing price on July 11, 2003 and a premium of 30 percent over OfficeMax's average trading price over the last 30 days. Boise will pay the purchase price in cash and common stock, using 30 percent cash and 70 percent common stock. Prior to the OfficeMax shareholders meeting, Boise may elect to use as much as 45 percent cash and 55 percent common stock. The common stock consideration is subject to a customary price collar of plus or minus 10 percent from the closing price of Boise's common stock on July 11, 2003 of $23.43 per share. Under the conditions of the collar, if Boise's average stock price prior to closing is at or below $21.09, the exchange ratio shall be 0.4268. If Boise's average stock price prior to closing is between $21.09 and $25.77, the exchange ratio shall be adjusted to deliver combined cash and stock consideration valued at $9.00 per share. If Boise's average stock price prior to closing is at or above $25.77, the exchange ratio shall be 0.3492. If Boise elects to increase the cash component and Boise's stock price prior to closing is outside of the collar, the per share cash consideration will be adjusted up or down, as appropriate, so that the aggregate consideration received by OfficeMax's shareholders remains unchanged regardless of Boise's election. The consideration to be received in the transaction will be fully taxable to OfficeMax shareholders. Michael Feuer, OfficeMax's co-founder, chairman and chief executive officer, said, "This business combination gives the newly formulated organization the ability to better serve all channels of the office products market from home offices to small businesses to large corporations. Together, OfficeMax with Boise will be strategically and financially stronger and rival the size of its closest competitors. From a single store in suburban Cleveland 15 years ago, OfficeMax has emerged as one of North America's leading and largest specialty retailers, serving small business through our retail superstores, e-commerce, catalog and with a direct sales force. Boise Office Solutions primarily serves the larger institutional and corporate business segments. Melded into one, OfficeMax with Boise will equal huge benefits for all constituencies, including customers, associates of both companies, vendor partners and our respective shareholders." George Harad, Boise's chairman and chief executive officer, said, "We are delighted and proud of our new proposed association with the OfficeMax organization. Over the last year, under a strong management team, OfficeMax has led the industry in same-store sales growth, introduced new store formats, and improved productivity and margins in its operations. OfficeMax's proven retail expertise and powerful brand complement Boise Office Solutions' exceptional strength in the contract customer segment and our strong commitment to customer service supported by leading-edge technology." This transaction is the result of an initial contact made by OfficeMax earlier in 2003, according to Mr. Feuer. "Over the past six months OfficeMax, working closely with its financial advisors, the KeyBanc Capital Markets unit of McDonald Investments Inc. and Lehman Brothers Inc., assessed the viability of this type of combination and its potential to enhance OfficeMax shareholder value." OfficeMax's combination with Boise has already been unanimously approved by both companies' boards of directors and is subject to customary approvals under antitrust laws and by the shareholders of OfficeMax and Boise. At this time, the transaction is expected to be completed in late fall or early winter. OfficeMax serves its customers through nearly 1,000 superstores, e-commerce Web sites and direct-mail catalogs. The Company has operations in the United States, Canada, Puerto Rico, the U.S. Virgin Islands and Mexico. In addition to offering office products, business machines and related items, OfficeMax superstores feature CopyMax and FurnitureMax, store-within-a-store modules devoted exclusively to "print-for-pay" services and office furniture. The Company also reaches customers in the United States with an offering of over 40,000 items through its award winning e- commerce site, OfficeMax.com, its direct-mail catalogs and its outside sales force, all of which are serviced by its three PowerMax distribution facilities, 17 delivery centers and two national customer call and contact centers. Boise Office Solutions is a premier multinational distributor of office technology products, office furniture, and paper and had 2002 sales of $3.5 billion. Office Solutions posted domestic e- commerce sales of more than $1 billion in 2002. Headquartered in Itasca, Illinois, Boise Office Solutions has customers ranging in size from small organizations to multinational corporations. Boise Office Solutions has operations throughout the United States, Australia, New Zealand, Canada and Mexico. Boise delivers office, building, and paper solutions that help our customers to manage productive offices and construct well-built homes -- two of the most important activities in our society. Boise's 24,000 employees help people work more efficiently, build more effectively, and create new ways to meet business challenges. Boise also provides constructive solutions for environmental conservation by managing natural resources for the benefit of future generations. Boise had sales of $7.4 billion in 2002. Visit the Boise Web site at http://www.bc.com/ As previously reported, Standard & Poor's assigned its 'BB+' preliminary rating to Boise Cascade Corp.'s (BB+/Stable/--) $500 million shelf. Rating outlook is stable. Standard & Poor's assigned its double-'B'-plus rating to Boise Cascade Corp.'s $150 million 7.5% senior unsecured notes due February 1, 2008. Proceeds from the issue will be used to pay down debt and for general corporate purposes. BOISE CASCADE: Taps Goldman Sachs to Aid in Reviewing Options ------------------------------------------------------------- Boise Cascade Corporation (NYSE: BCC) (S&P, BB+ Corporate Credit Rating) has reached a definitive agreement to acquire OfficeMax, Inc., (NYSE: OMX) for approximately $1.154 billion, or $9.00 per fully diluted share. The purchase price represents a 25% premium over the OfficeMax closing price on July 11, 2003. Boise will pay the purchase price in cash and common stock, using 30% cash and 70% common stock. Boise has the option of increasing the cash component to 45% and decreasing the stock component to 55%, at its discretion. This transaction has been unanimously approved by the boards of directors of both companies and is subject to approval by shareholders of both companies as well as regulatory authorities. Boise expects to complete the transaction in fourth quarter 2003. Commenting on the transaction, Boise's chairman and chief executive officer, George Harad, said: "Our acquisition of OfficeMax represents a major step in the transformation of Boise's office products distribution business and Boise as a whole. Together, OfficeMax and Boise will be strategically stronger and better able to deliver compelling value to office products customers through all channels and across all segments of the market. "At the same time, the size and impact of this transaction offer Boise the potential opportunity to enhance shareholder value by actively evaluating strategic alternatives for our paper and building products businesses. We have engaged Goldman, Sachs & Co. to assist us in developing and implementing these alternatives and expect to take appropriate steps over the 12 to 18 months following the close of the OfficeMax transaction." Christopher C. Milliken, division president and chief executive officer of Boise Office Solutions, said, "We are delighted and proud to welcome OfficeMax to our organization. Over the last year, under a strong management team, OfficeMax has led the industry in same-store sales growth, introduced new store formats, and improved productivity and margins in its operations. OfficeMax's proven retail expertise and powerful brand will fit well with Boise Office Solutions' exceptional strength in the contract customer segment." Michael Feuer, OfficeMax's co-founder, chairman, and chief executive officer, added, "Combining the strengths of OfficeMax and Boise Office Solutions will generate strategic synergies resulting in enhanced capabilities to better serve customers across all channels from small business to large corporations." Boise expects the transaction to contribute 15 cents to 30 cents, before integration costs, to earnings per share in 2004, and the contribution should increase in subsequent years. Including integration costs, the impact of the transaction on 2004 earnings should be approximately neutral. Boise expects synergy benefits to reach approximately $160 million when fully implemented. Synergies will come from purchasing leverage due to increased scale, logistics, marketing, paper sales, and administration. Under the terms of the agreement, all of the issued and outstanding shares of OfficeMax will be converted, at the election of the holder, into either cash or Boise stock with a value of $9.00 per share, subject to a collar mechanism. OfficeMax shareholders' election of cash or stock will be pro rated, to the extent necessary, so as to maintain the consideration mix selected by Boise prior to the shareholder election. The exchange ratio for OfficeMax shares to be converted into Boise stock will depend on Boise's stock price during an averaging period shortly prior to closing. If Boise's average stock price is between $21.09 and $25.77, the exchange ratio shall be adjusted to deliver Boise stock valued at $9.00 per share. If Boise's average stock price is at or above $25.77, the exchange ratio shall be 0.3492 Boise share per OfficeMax share. If Boise's average stock price is at or below $21.09, the exchange ratio shall be 0.4268. If Boise elects to increase the cash component, the value of the additional cash consideration will be equal to the value of the stock consideration replaced. Boise's election will not change the total consideration otherwise payable to OfficeMax shareholders. Boise has obtained committed financing from an affiliate of Goldman, Sachs & Co., to fund the cash portion of the consideration and to fund transaction costs. OfficeMax serves its customers through nearly 1,000 superstores, E-commerce websites, and direct-mail catalogs. The company, headquartered in Cleveland, Ohio, has operations in the United States, Canada, Puerto Rico, the U.S. Virgin Islands, and Mexico. In addition to offering office products, business machines, and related items, OfficeMax superstores feature CopyMax and FurnitureMax, store-within-a-store modules devoted exclusively to "print- for-pay" services and office furniture. The company also reaches customers in the United States with an offering of over 40,000 items through its award winning E-commerce site, OfficeMax.com, its direct-mail catalogs, and its outside sales force, all of which are serviced by its three PowerMax distribution facilities, 17 delivery centers, and two national customer call and contact centers. OfficeMax reported sales of $4.8 billion in 2002. Boise, headquartered in Boise, Idaho, delivers office, building, and paper solutions that help our customers to manage productive offices and construct well-built homes -- two of the most important activities in our society. Boise's 24,000 employees help people work more efficiently, build more effectively, and create new ways to meet business challenges. Boise owns or controls 2.4 million acres of timberlands, mostly in the U.S., and had sales of $7.4 billion in 2002. Additional information about the company is available from Boise's Web site at http://www.bc.com/ Boise Office Solutions, headquartered in Itasca, Illinois, is a division of Boise and a premier multinational distributor of office and technology products, office furniture, and paper. Boise Office Solutions had 2002 sales of $3.5 billion, including more than $1 billion of domestic E-commerce sales. Boise Office Solutions serves customers ranging in size from small organizations to multinational corporations through 63 distribution centers, two outbound sales centers, four customer service centers, and over 100 retail stores in the United States, Canada, Mexico, Australia, and New Zealand. Boise Paper Solutions, headquartered in Boise, Idaho, is a division of Boise and recorded 2002 sales of $1.9 billion. In 2002, Boise Paper Solutions manufactured 1.6 million tons of office, printing, forms, and converting papers; 1.3 million tons of newsprint; market pulp, and containerboard; and 4.6 billion square feet of corrugated containers. The business operates five pulp and paper mills, two paper converting facilities, six paper distribution facilities, and five corrugated container plants in the United States. Boise Building Solutions, headquartered in Boise, Idaho, is a division of Boise and manufactures plywood, oriented strand board, lumber, particleboard, and engineered wood products at 25 manufacturing facilities in the United States, Canada, and Brazil. The business also operates 28 facilities that distribute a broad line of building materials, including wood products manufactured by Boise, to retail lumber dealers, home centers specializing in the do-it-yourself market, and industrial customers. Boise Building Solutions posted manufacturing sales of $800 million and distribution sales of $1.7 billion in 2002. BOISE CASCADE: S&P Sees OfficeMax Deal will Increase Leverage ------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'BB+' corporate credit rating on Boise Cascade Corp., a diversified forest products manufacturer and distributor of office and building products, on CreditWatch with negative implications following the company's announcement that it has reached an agreement to acquire office products retailer OfficeMax Inc. for $1.154 billion. "Standard & Poor's believes expansion into the increasingly competitive office superstore market is a risk for the company," said Standard & Poor's credit analyst Pamela Rice. OfficeMax has improved its performance over the past few years, but most operating and credit measures still lag behind those of its larger competitors, Staples Inc. and Office Depot Inc. "In addition," said Ms. Rice, "although Boise expects to finance the transaction using 70% equity and 30% cash, Standard & Poor's believes the transaction will create a more highly leveraged capital structure, when adjusting debt for OfficeMax's substantial operating leases." Boise's total debt at March 31, 2003, including operating leases and accounts receivable sold, was $2.2 billion. Boise, based in Boise, Idaho, has expanded its office products distribution business over the past few years through acquisitions and internal initiatives, in part to mitigate the more cyclical financial performance of its paper and wood products segments. Standard & Poor's said that it will meet with Boise's management shortly to discuss the company's strategic direction, potential acquisition synergies, financial projections, capital structure, and financing arrangements to determine the impact of this transaction on the ratings on the company. BRIGHTPOINT INC: Will Publish Second Quarter Results on July 28 --------------------------------------------------------------- Brightpoint, Inc. (NASDAQ:CELL) will announce its financial results for the quarter ended June 30, 2003 on Monday, July 28, 2003 at approximately 4:00 p.m. EDT (New York time). At approximately 5:15 p.m. EDT, following Brightpoint's Annual Meeting of Stockholders, Brightpoint will conduct a conference call and webcast of the stockholder presentation and its review of the Company's operations and financial performance in the second quarter. Representing Brightpoint will be Robert J. Laikin, Chairman and Chief Executive Officer, J. Mark Howell, President, and Frank Terence, Executive Vice President and Chief Financial Officer. The Company will comment on both operations and financial results and will answer participant's questions. The live webcast of the conference call, including both audio and slides, can be accessed through the Investors section of the Company's Web site at http://www.brightpoint.com For those who prefer to join the conference call telephonically, use the following information and dial in several minutes prior to the start of the call: U.S. toll-free dial-in number: 800-810-0924 International dial-in number: 913-981-4900 Following the live presentation, archives of the webcast will be available through the Investors section of the Company's Web site at http://www.brightpoint.comfor approximately one year. Brightpoint is one of the world's largest distributors of mobile phones. Brightpoint supports the global wireless telecommunications and data industry, providing quickly deployed, flexible and cost effective third party solutions. Brightpoint's innovative services include distribution, channel management, fulfillment, eBusiness solutions and other outsourced services that integrate seamlessly with its customers. Additional information about Brightpoint can be found on its Web site at http://www.brightpoint.com As reported in Troubled Company Reporter's April 11, 2003 edition, Standard & Poor's Ratings Services revised its outlook on Brightpoint Inc., to stable from negative. The outlook revision reflects the company's improved profitability and financial profile. Standard & Poor's also affirmed its 'B' corporate credit rating on this Indianapolis, Indiana-based distributor and provider of value-added logistics services in the wireless communications products distribution market. Total debt outstanding is about $10 million. BROADBANDNOW!: Sells All Assets to Interquest Communications ------------------------------------------------------------ Interquest Communications, a leading provider of broadband Internet services to the multi-family real estate industry, and one of the "Top 100" venture funded companies of 2002, according to Venture Reporter, has purchased substantially all of the assets of the BroadBandNow! Network. BroadBandNow!, one of the last remaining first generation multi- family high-speed Internet service providers, filed for Chapter 11 bankruptcy protection in February, 2003. The company provided broadband services to approximately 80,000 apartment units at 220 properties located within Texas, Colorado, California and Oregon. The acquisition will increase Interquest's reach to over 350 properties serving over 120,000 individual apartments, making it one of the largest multi-family broadband ISP's in the country. Interquest has successfully deployed its on-premise high-speed Ethernet and DSL services in over 130 multi-family communities in seven western states owned and operated by some of the nation's largest property management firms since September 2001, when it acquired assets of several other defunct service providers. "We are very pleased with the opportunity to acquire these assets. Through this strategic acquisition we will have gained a critical mass of properties and subscribers well in advance of our projected schedule. Overlaying our service and marketing approach into these newly acquired properties offers a tremendous opportunity to substantially increase our subscriber base. This accelerates our business model by nearly two full years," stated Glenn Meyer, Interquest CEO. "This gives us the kind of economies of scale in each of the markets in which we operate that we had envisioned at the outset. With scale comes efficiency, which is a critical key to success in this business." "Interquest has been, and continues to be an outstanding ISP for a number of Camden communities. I have heard nothing but good things from Camden residents regarding their service experience with InterQuest," stated Greg McDonald, Director of Telecommunications at Camden Property Trust. "I am excited about the new business opportunities this merger will create for our two companies. Their recent acquisition of Broadband Now will expand the competitive environment to many more Camden communities." "Interquest has once again demonstrated its vision and market leadership by making this strategic acquisition," said Cliff Higgerson, Partner at ComVentures. "We are confident that the company is well positioned to achieve tremendous success and will continue to provide their customers with superior service." "We knew from day one that in order to build this company on the schedule we had envisioned, we were going have to make strategic acquisitions. This portfolio is an excellent fit for us, it is completely within our existing footprint, we won't have to make any significant changes to our network infrastructure, and our existing back office capabilities can comfortably handle the addition. Our biggest concerns are making sure the property transitions are seamless, the management staffs are kept informed, and most importantly, the customers experience an increased service level. If our subscriber take rates in these new properties follow the same path as our existing properties, we will have a great platform on which to grow into more markets," stated Doug Woods, Interquest COO. Interquest is a national leader in providing broadband Internet services to the multi-family and condominium industry as well as commercial office buildings. It was named by Venture Reporter as one of the "Top 100 Venture Funded Companies of 2002." The company is headquartered in Seattle, Washington and maintains a regional office in Walnut Creek, California. For more information please visit http://www.Interquest.net Camden Property Trust is a real estate company engaged in the ownership, development, acquisition, management and disposition of multifamily apartment communities. Camden owns interests in and operates 141 properties containing 50,398 apartment homes in the Sunbelt and Midwestern markets from Florida to California. Upon completion of four properties under development, the Company's portfolio will increase to 51,882 apartment homes in 145 properties. For more information please visit http://www.CamdenLiving.com ComVentures, based in Palo Alto, California, is a venture capital firm managing over $1.2 billion. ComVentures focuses its investment expertise on pioneering, progressive companies that capitalize on the constant drive to build next-generation network infrastructure, software, and services. ComVentures consistently uncovers groundbreaking communications technologies, helps lead and grow its portfolio companies, and assists these companies in deploying new technologies in an ever-changing marketplace. For more information, visit http://www.comventures.com CARAUSTAR INDUSTRIES: Q2 2003 Conference Call Slated for July 29 ---------------------------------------------------------------- Caraustar Industries, Inc. (Nasdaq: CSAR) announces the following Webcast: What: Caraustar Industries, Inc. Second Quarter 2003 Conference Call When: 07/29/03 at 11:00 a.m. Eastern Where: http://www.caraustar.comand click on the "Investor Relations" page (and then proceed to the "Calendar" icon). or http://www.firstcallevents.com/service/ajwz384941151gf12.html How: Live over the Internet -- Simply log on to the web at the address above. Contact: Janice Kuntz Investor Relations 404-352-2841 If you are unable to participate during the live webcast, the call will be archived on the Web site at http://www.caraustar.com To access the Web site replay, go to the "Investor Relations" page and then proceed to the "Calendar" icon. Caraustar, a recycled packaging company, is one of the largest and most cost-effective manufacturers and converters of recycled paperboard and packaging products in the United States. The company has developed its leadership position in the industry through diversification and integration from raw materials to finished products. Caraustar serves the four principal recycled paperboard product markets: tubes, cores and cans; folding cartons and custom packaging; gypsum wallboard facing paper; and miscellaneous "other specialty" and converted products. As reported in Troubled Company Reporter's June 20, 2003 edition, Standard & Poor's Ratings Services revised its outlook on recycled paperboard producer Caraustar Industries Inc., to negative from stable based on continuing credit measure weakness. Standard & Poor's said that at the same time it affirmed its 'BB' corporate credit rating on the Austell, Georgia-based company. Caraustar's debt outstanding stood at $570 million at March 31, 2003. CHARLES J. MILLER: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Lead Debtor: Charles J. Miller, Inc. 3514 Basler Road Hampstead, Maryland 21074 Bankruptcy Case No.: 03-80504 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Miller Asphalt Products, Inc. 03-80506 Chapter 11 Petition Date: July 14, 2003 Court: District of Maryland (Baltimore) Judge: E. Stephen Derby Debtor's Counsel: James A. Vidmar, Jr., Esq. Linowes and Blocher, LLP 7200 Wisconsin Avenue Suite 800 Bethesda, MD 20814-4842 Fax: (301) 961-5126 Estimated Assets: $10 Million to $50 Million Estimated Debts: $10 Million to $50 Million Debtors' 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Miller Asphalt Products, Inc. $2,102,255 3514 Basler Road Hampstead, MD 21074 Redland Genstar, Inc. $1,230,391 d/b/a Lafarge 300 East Joppa Road, Suite 200 Towson, MD 21276 Belair Road Supply Co., Inc. $162,800 Belair Road Supply Co., Inc. $162,800 Rinker Materials $159,804 Lehigh Cement Company $130,243 Arundel Corp. $113,917 Lafarge North America $106,479 Venable, Baetjer and Howard, LLP $194,628 Highway and Safety Services, Inc. $86,440 Ameriast $78,151 Alban Tractor Co., Inc. $72,285 W.F. Wilson and Sons, Inc. $64,641 Atlantic Concrete Products, Inc. $57,768 Hanson Pipe and Products, Inc. $45,821 Daniel Schuster, Inc. $45,645 Baltimore Mack Trucks, Inc. $35,891 Carmeuse Lime, Inc. $29,648 F.L. Cooke & Sons $29,648 Carroll Land Services, Inc. $27,536 CHART IND.: Files Prepack. Plan & Disclosure Statement in Del. -------------------------------------------------------------- Chart Industries, Inc., and its debtor-affiliates filed their Prepackaged Reorganization Plan and and accompanying Disclosure Statement with the U.S. Bankruptcy Court for the District of Delaware. Full-text copies of the documents are available for a fee at: http://www.researcharchives.com/bin/download?id=030709230736 and http://www.researcharchives.com/bin/download?id=030709230444 The Debtors report that in the first quarter of 2003, they and JPMorgan Chase Bank and JPMorgan Securities, Inc., the Prepetition Lenders, began to negotiate the terms of a settlement and restructuring of the senior secured claims arising under the Prepetition Credit Facilities. The Parties now determined to reach a definitive agreement on the terms of the parties' settlement intended to be implemented through a prepackaged chapter 11 plan of reorganization. The Plan provides for the restructuring of the Debtors' liabilities to the Prepetition Lenders and other creditors in a manner designed to maximize available recoveries to various creditors and equity holders, protect and preserve the going concern value of the Debtors' businesses, and deleverage and enhance the financial viability of the reorganized Debtors on a consensual basis. Among other things, the pre-packaged Plan contemplates: -- payment of general unsecured creditors in full, with the exception of certain intercompany claims; -- restructuring of the Debtors' indebtedness to the Prepetition Lenders under the Prepetition Credit Facilities into a $120 million term loan under a new term credit agreement; -- issuance to the Prepetition Lenders of 5,059,064 shares of new common stock in reorganized Chart, representing 950 of the new common stock to be issued upon consummation of the Plan; -- issuance to the existing holders of Chart's common stock of 266,267 shares of new common stock in reorganized Chart, representing 50 of the new common stock to be issued upon consummation of the Plan; -- issuance to the existing holders of Chart's common stock of warrants to purchase 280,281 shares of new common stock in reorganized Chart (subject to adjustment under the anti-dilution provisions of the warrants); -- provision by certain of the Prepetition Lenders of a $40 million DIP credit facility that will be amended and restated on the effective date of the Plan as a $40 million exit revolving credit facility; -- cancellation of all existing equity interests in the Debtors and issuance of new equity interests in Chart's subsidiaries to maintain the Debtors' corporate organizational structure substantially as such structure existed on the Petition Date; and -- discharge of intercompany claims against the Debtors by certain of their non-Debtor, foreign affiliates which will not operate as components of the reorganized Debtors' global business enterprise. The Plan provides for the summary of classification and treatment of claims and interests. The Plan does not provide for substantive consolidation of the Debtors' Estates. A Claim or Interest is placed in a particular Class only to the extent that it falls within the description of that Class, and is classified in other Classes to the extent that any portion falls within the description of other Classes. Specifically, the Plan groups the claims against its estates into 7 classes and 3 interests: Class Description Impairment Voting Status ----- ----------- ---------- ------------- 1 Other Priority Claims Unimpaired Deemed to have accepted the Plan and not entitled to vote 2 Senior Lender Claims Impaired Entitled to vote 3 Other Secured Claims Unimpaired Deemed to have accepted the Plan and not entitled to vote 4 General Unsecured Unimpaired Deemed to have Claims accepted the Plan and not entitled to vote 5 Unimpaired Intercompany Unimpaired Deemed to have Claims accepted the Plan and not entitled to vote 6 Impaired Intercompany Impaired Deemed to have Claims rejected the Plan and not entitled to vote 7 Old Chart Common Stock Impaired If the Bankruptcy Interests Court enters the Solicitation Order, Class 7 will be deemed to have rejected the Plan and, therefore, not be entitled to vote 8 Old Subsidiary Equity Impaired Deemed to have Interests rejected the Plan and not entitled to vote 9 Other Equity Interests Impaired Deemed to have rejected the Plan and not entitled to vote 10 Subordinated Claims Impaired Deemed to have rejected the Plan and not entitled to vote Chart Industries, Inc., headquartered in Cleveland, Ohio, are suppliers of standard and custom-engineered products and systems serving a wide variety of low-temperature and cryogenic operations. The Company filed for chapter 11 protection on July 8, 2003 (Bankr. Del. Case No. 03-12114). Mark S. Chehi, Esq., at Skadden, Arps, Slate, Meagher & Flom represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $268,082,000 in total assets and $361,228,000 in total debts. CHARTER COMMS: S&P Further Junks Corporate Credit Rating to CC -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Charter Communications Inc. to 'CC' from 'CCC+', and lowered the senior debt rating to 'C' from 'CCC-'. All ratings on Charter remain on CreditWatch with negative implications, where they were initially placed on Aug. 20, 2002, because of concern surrounding a federal grand jury investigation into the company's accounting practices. The investigation, as well as a subsequent SEC probe, are unresolved. Standard & Poor's is lowering its ratings on the company after Charter's announcement that it is offering $900 million cash for $1.1 billion in convertible senior notes maturing in 2005 and 2006. Although the deal modestly eases financial pressure by reducing near-term debt maturities, Standard & Poor's is concerned that the transaction impairs recovery prospects by noteholders, who must choose between accepting less than the bond face amount and foregoing an attractive interest rate, or risk a future potential default of a debt issue maturing in the relatively near term. The tender offers are predicated on Charter's issuance of $1.7 billion in 10-year senior notes at two new subsidiaries of Charter Communications Holdings LLC. The new issues will create about $900 million in incremental debt structurally senior to any debt not tendered, including $276.5 million for which Charter is not soliciting tenders. The additional debt also reduces the company's financial flexibility, because it is being issued as a permitted incurrence under terms described in Charter Communications oldings' debt indenture agreements, and is not subject to a 8.75x debt to EBITDA incurrence test in the agreement-a test with which the company was not in compliance at the end of the first quarter of 2003. "Upon completion of the convertible debt tender offer, which Standard & Poor's views as tantamount to a default on the original debt issue terms, the corporate credit rating on Charter Communications Inc. will be lowered to 'SD', designating a selective default, and the rating on the convertible issues will be lowered to 'D'," said Standard & Poor's credit analyst Eric Geil. "Subsequently, the corporate credit rating and senior debt ratings on non-tendered debt will likely be reassigned at 'CCC+' and 'CCC-', respectively." Charter is also offering about $230 million cash for $285 million in face amount of various longer dated notes issued by Charter Communications Holdings LLC. Standard & Poor's does not believe that the recovery prospects on these longer dated notes will be impaired, because of the relatively long time frame for repayment compared with the shorter term convertible debt. In addition, about $500 million of subsidiary bank debt will be repaid with the debt offering, which should modestly reduce pressure from tightening covenants and rising amortization payments. CKE RESTAURANTS: S&P Affirms B Rating & Revises Outlook to Neg. --------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on CKE Restaurants Inc. to negative from stable and affirmed its 'B' corporate credit rating on the company. Santa Barbara, California-based CKE is an operator and franchisor of quick-service restaurants, operating primarily under the Carl's Jr. and Hardee's brand names. "The outlook revision is based on the refinancing risk facing the company compounded by the risks of its menu conversion at its Hardee's brand to premium products, and financial difficulties some of its franchisees are experiencing," said credit analyst Robert Lichtenstein. The company's $100 million revolving credit facility matures in December 2003. It is extendable to November 2006, provided that the company is able to refinance its $122 million convertible subordinated notes that mature in March 2004. At the same time, CKE is attempting to revitalize Hardee's by changing its menu to one that emphasizes premium products. Although this strategy, if successful, could enhance long-term profit, in the near term it increases the company's business risk. Currently profitability is being negatively affected by the transition. Moreover, some of Hardee's franchisees are experiencing financial difficulties reducing the company's franchise income. The company is highly leveraged with total debt to EBITDA of 5.5x for the 12 months ended May 19, 2003. Cash flow protection measures are weak, with EBITDA coverage of interest expense at 1.8x for the 12 months ended May 19, 2003. Because of high leverage, cash flow protection measure could quickly diminish if operating performance continues to decline. Free operating cash flow was negative $17.4 million in 2002. Standard & Poor's expects that operating cash flow, cash balances, and availability on its revolving credit facility will be adequate to service CKE's debt and fund its capital expenditures provided that the company refinances its credit facility. COEUR D'ALENE MINES: Further Cuts Convertible Debt by $34 Mill. --------------------------------------------------------------- Coeur d'Alene Mines Corporation (NYSE: CDE), the world's largest primary silver producer, has reduced the Company's outstanding convertible indebtedness by an additional $34 million. That amount represents a 66% reduction in Company-wide debt since the end of the first quarter of 2003. After these recent debt reductions, the Company's convertible indebtedness due in December 2003 and 2004 totals $15.2 million. Coeur's cash and cash equivalents as of June 30, 2003 was $19.8 million. Since the beginning of 1998, Coeur's total debenture indebtedness has been reduced from $288.6 million to the current $28.9 million. "Coeur is pleased to announce additional meaningful reductions in the Company's remaining indebtedness, further strengthening our balance sheet and essentially completing the major restructuring begun five years ago," said Dennis E. Wheeler, Chairman and Chief Executive Officer. "The timing of this debt reduction is also beneficial to current shareholders since Coeur is issuing less shares now than if the convertible notes had been held to full maturity. "Meanwhile, our cash position remains strong, with nearly $20 million of cash and equivalents as of the end of June. This allows us to aggressively pursue our growth strategy, led by Coeur's new generation of high grade/low cost mines in South America, which have combined to fuel our production growth, lower cash costs, and significantly improve Coeur's cash-flow profile," Mr. Wheeler added. The transactions involved the conversion of 27.5 million shares of common stock for $32.6 million principal amount of the Company's 9% Senior Subordinated Notes due February 2007. The exchange of the 9% Senior Subordinated Notes resulted in a 1.1 million share reduction in the number of shares that would have been issued had the Notes been outstanding until maturity. In addition, the Company exchanged .4 million shares of common stock for $0.5 million principal amount of 6.375% Convertible Subordinated Debentures due January 2004, and the exchange of .6 million shares of common stock for $0.8 million principal amount of 7.25% Convertible Subordinated Debentures due October 2005 in privately negotiated transactions. After taking these exchanges and other recent conversions into account, Coeur now has approximately 178.6 million shares outstanding. Additional information will be presented in a Current Report on Form 8-K to be filed by Coeur with the SEC. Coeur d'Alene Mines Corporation is the world's largest primary silver producer, as well as a significant, low-cost producer of gold. The Company has mining interests in Nevada, Idaho, Alaska, Argentina, Chile and Bolivia. * * * Going Concern Uncertainty In the Company's 2002 Annual Report filed on SEC Form 10-K, the Company's independent auditors, KPMG LLP, issue the following statement, dated February 28, 2003: "We have audited the 2002 financial statements of Coeur d'Alene Mines Corporation (an Idaho Corporation) and subsidiaries (the Company) as listed in the accompanying index. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. The 2001 and 2000 financial statements of Coeur d'Alene Mines Corporation, as listed in the accompanying index, were audited by other auditors who have ceased operations and whose report, dated February 15, 2002, expressed an unqualified opinion on those financial statements and included an explanatory paragraph that stated that the Company had suffered recurring losses from operations, had a significant portion of its convertible debentures that needed to be repaid or refinanced in June 2002 and had declining amounts of cash and cash equivalents and unrestricted short-term investments, all of which raised substantial doubt about its ability to continue as a going concern." COM21 INC: Files for Chapter 11 Protection in N.D. of California ---------------------------------------------------------------- Com21, Inc. (OTC Bulletin Board: CMTO), has voluntarily filed for protection under Chapter 11 of the U.S. Bankruptcy Code with the U.S. Bankruptcy Court for the Northern District of California. The Company intends to utilize the Chapter 11 process to restructure the Company and plans to sell certain key assets including the DOCSIS CMTS product line and Com21's Irish subsidiary to ARRIS International, while retaining selected employees to facilitate the sale of those assets. In accordance with all applicable laws, vendors and suppliers who provided goods and services before today's filing may have pre- petition claims, which will be frozen pending court authorization of payment. Since its founding in 1992, Com21, Inc. -- http://www.com21.com-- became a global supplier of system solutions for the broadband access market. The company's DOCSIS, EuroDOCSIS, and ATM-based products have enabled cable operators and service providers to deliver high-speed, cost-effective Internet, telephony, and video applications to corporate telecommuters, small businesses, home offices, and residential users. Com21 has shipped over two million cable modems and over 2,000 headend controllers worldwide. COM21 INC: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: Com21, Inc. 750 Tasman Drive Milpitas, California 95035 Bankruptcy Case No.: 03-54533 Type of Business: Global supplier of system solutions for the broadband access market Chapter 11 Petition Date: July 15, 2003 Court: Northern District of California (San Jose) Judge: Marilyn Morgan Debtors' Counsel: David S. Caplan, Esq. Law Offices of Brooks and Raub 721 Colorado Ave. #101 Palo Alto, CA 94303-3913 Tel: (650) 321-1400 Total Assets: $18,305,000 (as of March 31, 2003) Total Debts: $30,535,000 (as of March 31, 2003) EL PASO ELECTRIC: Will Publish Second Quarter Results on July 28 ---------------------------------------------------------------- El Paso Electric (NYSE: EE) expects to release second quarter earnings on the morning of July 28, 2003. El Paso Electric will host a conference call about the Second Quarter Earnings Release: Date: July 28, 2003 Time: 2:00 p.m. MT (4:00 ET) Dial in #: 877-915-2768 Passcode: 2003 Conference Leader: Terry Bassham Replay #: 800-337-4108 No passcode required Replay through August 11, 2003 The conference call will be webcast live on EPE's website and StreetEvents.com . A replay of the webcast will be available one hour after the call. Webcast Address: http://www.epelectric.com http://www.streetevents.com El Paso Electric is a regional electric utility providing generation, transmission and distribution service to approximately 320,000 retail customers in a 10,000 square mile area of the Rio Grande valley in west Texas and southern New Mexico, including wholesale customers in New Mexico, Texas and Mexico. EPE has a net installed generating capacity of approximately 1,500 MW. EPE's common stock trades on the New York Stock Exchange under the symbol EE. As reported in Troubled Company Reporter's April 28, 2003 edition, Fitch Ratings withdrew the ratings of El Paso Electric Company. At the time of withdrawal, the ratings were as listed below, and the Rating Outlook was Stable. -- First mortgage bonds 'BBB-'; -- Unsecured pollution control revenue bonds 'BB+'. ENRON CORP: Court Approves Proposed Buernegia Bidding Protocol -------------------------------------------------------------- Pursuant to the proposed sale of their Buenergia Interests to Extremedura, Enron Corporation and its debtor-affiliates sought and obtained a Court order: (a) scheduling an Auction on July 29, 2003 at which the Enron Parties will solicit bids for the Assets; (b) approving certain Bidding Procedures; (c) scheduling July 31, 2003 at 10:00 a.m. as the date and time for the Sale Hearing to approve the sale of the Assets to Extremedura or the winning bidder at the Auction; and (e) setting July 25, 2003 at 5:00 p.m. as the date and time for the deadline to file objections to the Sale Motion. Martin A. Sosland, Esq., at Weil, Gotshal & Manges LLP, in New York, contends that a competitive bidding process will maximize the value of the Assets for the benefit of the Debtors, their creditors and their Chapter 11 estates. A. Auction Date and Time The Enron Parties are authorized to conduct the Auction for the sale of the Assets at the offices of Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York 10153, on July 29, 2003, at 10:00 a.m. or at other time and date as the Enron Parties may determine, upon prior consultation with the Creditors' Committee. The Auction may be adjourned as the Enron Parties, upon consultation with the Creditors' Committee, deem appropriate. Reasonable notice of the adjournment and the time and place for the resumption of the Auction will be given to Extremedura, all entities submitting Competing Bids, and the Creditors' Committee. B. Competing Bids Any entity that wishes to make a bid for the Assets must provide the Enron Parties with sufficient and adequate information to demonstrate, to the sole and absolute satisfaction of the Enron Parties, upon consultation with the Creditors' Committee, that the bidder has the financial wherewithal and ability to consummate the transactions contemplated in the purchase agreement submitted with the Competing Bid including evidence of adequate financing, and including, without limitation, a parent guaranty, if deemed appropriate, in a form agreed upon by the Enron Parties, in consultation with the Creditors' Committee. C. Due Diligence and Questions Prior to Submitting Bids To conduct due diligence regarding the Assets, parties may contact: Stefan Feuerabendt Managing Director The Blackstone Group L.P. 345 Park Avenue New York, New York 10154 Telephone 212-583-5866 Facsimile 212-583-5707 Email feuerabendt@blackstone.com for the due diligence procedures. Before a party will be allowed to conduct due diligence, if not previously executed, they must execute the Confidentiality Agreement. D. Bid Requirements The Enron Parties, upon consultation with the Creditors' Committee, will entertain bids that are on substantially the same terms and conditions as those terms set forth in the Purchase Agreement. Each Competing Bid must be accompanied by a cash deposit at Least equal to 10% of the bidder's proposed Preliminary Purchase Price -- the Earnest Money Deposit. Prior to the Bid Deadline, the Earnest Money Deposit is to be delivered to the Enron Parties by wire or cashier's check to Enron's lawyers at Weil Gotshal. If a bidder, other than Extremedura, is a Winning Bidder, then immediately upon execution of a purchase agreement by the Enron Parties and that bidder after the Auction, the Winning Bidder will direct Weil Gotshal & Manges to transfer the Earnest Money Deposit into an escrow account as required by the purchase agreement. Competing Bids must be: (a) in writing, (b) signed by an individual authorized to bind the prospective purchaser, and (c) received no later than 12:00 p.m. noon (New York Time) on July 23, 2003 by: (i) The Blackstone Group L.P., 345 Park Avenue, New York, New York 10154, 212-583-5866; Facsimile 212-583-5707; E-mail: feuerabendt@blackstone.com financial advisors to the Enron Parties; (ii) Weil, Gotshal & Manges LLP, 200 Crescent Court, Suite 300, Dallas, Texas 75201, Attention: Martin A. Sosland, Esq. E-mail martin.sosland@weil.com Facsimile: 214-746-7777), Attorneys for the Enron Parties; (iii) Squire, Sanders & Dempsey L.L.P., 312 Walnut St., Suite 3500, Cincinnati, OH 45202-4036, Attention: Stephen D. Lerner, Esq. E-mail: slerner@ssd.com and Facsimile: 513-361-1201, Attorneys for the Creditors' Committee; and (iv) Akin Gump Strauss Hauer & Feld LLP, 711 Louisiana Street, Suite 1900, Houston, Texas 77002, Attn: L. Todd Gremillion, Esq. E-mail: tgremillion@akingump.com and Facsimile 713-236-0822, Attorneys for Extremedura. Any Competing Bid must be presented under a contract substantially similar to the Purchase Agreement marked to show any modifications made to the Purchase Agreement, including the amount of consideration, name of purchaser, and other conforming changes that must be made to reflect the purchaser and its bid, and the bid must not be subject to due diligence review, board approval obtaining financing, or the receipt of any non-governmental consents not otherwise required by the Purchase Agreement. A Competing Bid for the Assets must contain an initial overbid that is at least $10,000,000 greater than the $130,000,000 Preliminary Purchase Price. Parties not submitting Competing Bids by the Bid Deadline may not be permitted to participate at the Auction. All bids for the purchase of the Assets will be subject to Bankruptcy Court approval. The Enron Parties will, after the Bid Deadline and prior to the Auction, upon consultation with the Creditors' Committee: (i) evaluate all Competing Bids received, (ii) invite certain parties to participate in the Auction, and (iii) determine which Competing Bid reflects the highest or best offer. During the Auction, the Enron Parties will inform each bidder which Competing Bid reflects the highest or best offer. The Enron Parties, in their business judgment and sole absolute discretion, in consultation with the Creditors' Committee, may reject any Competing Bid not in conformity with the requirements of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules of the Court, this Procedures Order or that is contrary to the best interests of the Enron Parties or their estates or creditors. All Competing Bids, the Auction, and the Bidding Procedures are subject to other terms and conditions as are announced by the Enron Parties, in consultation with the Creditors' Committee, to the extent the same are not inconsistent with the terms of the Bidding Procedures Order. The Bidding Procedures may be modified by the Enron Parties, in consultation with the Creditors' Committee, as may be determined to be in the best interests of the Enron Parties' estates or creditors to the extent the same are not inconsistent with the terms of the Bidding Procedures Order. E. Subsequent Bidding at the Auction Subsequent bids at the Auction, including those of Extremedura, must be in increments of at least $2,000,000. If Extremedura is the Winning Bidder by virtue of a subsequent bid in an amount that exceeds the Preliminary Purchase Price plus the Initial Overbid, it will be entitled to a credit against the Purchase Price at Closing equal to the $8,000,000 Break-Up Fee that will not be required to be paid by LNG Power. F. Irrevocability of Bids The Winning Bidder's bid will remain irrevocable in accordance with the terms of the purchase agreement executed by the Winning Bidder. The bid of the bidder that submits the next highest or best bid will be irrevocable until the earlier to occur of: (i) the Asset Sale closing, and (ii) 30 days after the last Auction date; provided, however, if Extremedura is the Back-up Bidder, then its highest or best bid will remain irrevocable only to the extent provided in the Purchase Agreement. If Extremedura is neither the Winning Bidder nor the Back-up Bidder, then the highest or best bid Extremedura submitted will, in addition to the bids of the Winning Bidder and the Back-up Bidder, remain irrevocable only to the limited extent provided in the Purchase Agreement. G. Retention of Deposits The Winning Bidder's Earnest Money Deposit will be retained by the Enron Parties in accordance with the terms of the purchase agreement executed by the Winning Bidder. The Earnest Money Deposit of the Back-up Bidder will be retained by the Enron Parties until the earlier to occur of: (i) the Assets Sale closing; and (ii) 30 days after the last Auction date; provided, however, if Extremedura is the Back-up Bidder, then the Enron Parties will retain the Deposit in accordance with the Purchase Agreement terms. If Extremedura is neither the Winning Bidder nor the Back-up Bidder, then, in addition to the retention of the Earnest Money Deposits of the Winning Bidder and the Back-up Bidder, the Enron Parties will retain Extremedura's Deposit in accordance with the terms of the Purchase Agreement. H. Failure to Close In the event a bidder other than Extremedura is the Winning Bidder, and that Winning Bidder fails to consummate the proposed transaction by the closing date contemplated in the purchase agreement agreed to by the parties for any reason, the Enron Parties: (i) will retain the Earnest Money Deposit of that bidder to the extent provided in the purchase agreement, and reserve the right to pursue all available remedies, whether legal or equitable, available to them, and (ii) upon consultation with the Creditors' Committee, will be free to consummate the proposed transaction with the next highest bidder at the highest price bid by that bidder at the Auction without the need for an additional Court hearing or order. In the event that Extremedura is the Winning Bidder and breaches any obligations under the Purchase Agreement, any rights and remedies of the Enron Parties will be governed by the terms of the Purchase Agreement. I. Non-Conforming Bids The Enron Parties, in consultation with the Creditors' Committee, will have the right to entertain non-conforming bids; including without limitation, bids for less than all of the Assets covered by the Purchase Agreement. J. Expenses Any bidders, including Extremedura, presenting bids will bear their own expenses in connection with the sale of the Assets, whether or not the sale is ultimately approved. In the event Extremedura becomes entitled to the $8,000,000 Break-Up Fee, Mr. Sosland informs Judge Gonzalez that the fee will be paid directly from the proceeds LNG Power will receive from the Winning Bidder prior to any distribution or allocation of the sale proceeds to any other party, including, but not limited to, Enron or LNG Power's affiliates. Notice Procedure The Debtors will send a notice of the Sale to: (a) all known persons holding a claim, lien or other interests in the Assets; (b) all non-debtor contracting parties to the contracts at issue; (c) all parties known to the Enron Parties to be affected by the relief requested; (d) all parties who submitted a prior bid for the Assets; and (e) any party who has expressed in writing to the Enron Parties an interest in the Assets. (Enron Bankruptcy News, Issue No. 73; Bankruptcy Creditors' Service, Inc., 609/392-0900) FAIRFAX FINANCIAL: Completes U.S. Private Convertible Debt Issue ---------------------------------------------------------------- Fairfax Financial Holdings Limited has completed its previously announced offering of US$150 million of 5% convertible senior debentures due July 15, 2023 at an issue price of 100%. This amount does not include a 30-day option granted to the initial purchasers to acquire up to US$50 million of additional debentures. The debentures were sold on a private placement basis in the United States in reliance upon Rule 144A of the U.S. Securities Act of 1933. These debentures and the subordinate voting shares issuable upon conversion will not be registered under the U.S. Securities Act of 1933 or any state securities laws and may not be offered or sold in the United States absent an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act of 1933 and any applicable state securities laws. The debentures and the subordinate voting shares issuable upon conversion will not be qualified for sale under the securities laws of any province or territory of Canada and are not being offered for sale in Canada or to any resident of Canada, or to or for the account of any resident of Canada, except in accordance with applicable Canadian securities laws. Fairfax Financial Holdings Limited is a financial services holding company which, through its subsidiaries, is engaged in property, casualty and life insurance and reinsurance, investment management and insurance claims management. As reported in Troubled Company Reporter's April 1, 2003 edition, Fitch Ratings downgraded the ratings of Fairfax Financial Holdings Ltd. and most of its insurance company subsidiaries and affiliates and removed the ratings from Rating Watch Negative. Included was a downgrade of Fairfax's senior debt and long-term issuer ratings to 'B+' from 'BB'. The Rating Outlook is Negative. These actions reflect Fitch's view that Fairfax has become increasingly challenged over the past few years in its ability to meet its considerable holding company debt obligations, and that the margin of safety, at least in the near-to-intermediate term, is inconsistent with the prior ratings level. FLEMING COS. Pacific Exchange Delists Shares Effective July 11 -------------------------------------------------------------- The Securities and Exchange Commission approved Pacific Exchange Inc.'s application to strike from listing and registration Fleming Companies Inc.'s common stock, $2.50 par value, effective at the opening of business on July 11, 2003. Pacific Exchange believes that Fleming's Security does not qualify for continued listing and registration. According to quote statistics on April 2, 2003, Fleming's closing share bid price was $0.26 per share, as reported by Bloomberg. As a matter of policy, PCXE Rule 5.5 states that when a listed company fails to meet any of the listing maintenance requirements and has more than one class of securities listed, Pacific Exchange will give consideration to delisting all such classes. However, the Exchange may continue the listing of one class of securities regardless of its decision to delist another class. The securities of a company will be subject to suspension or withdrawal from listing and registration as a listed issue of the Exchange finds that a listed company fails to meet the maintenance requirements or fails to comply with its listing policies or agreements. Pacific Exchange will consider delisting a company's common stock, if these requirements are not met: -- At least 300,000 publicly held shares and at least $500,000 in market value; -- 250 public beneficial holders; -- At least $500,000 in total net tangible or at least $2,000,000 in net worth; and -- At least $1 in share bid price. On April 3, 2003, Pacific Exchange advised Fleming by letter of its non-compliance with the maintenance requirements for share bid price. Pacific Exchange offered Fleming an opportunity to submit any further information for the Exchange to review on April 17, 2003 and briefly explained the initial delisting procedures. At a meeting held on April 17, 2003, Pacific Exchange reviewed Fleming's eligibility for continued listing. Based on Fleming's failure to submit a remediation plan for the Exchange's review and the $0.26 per share bid price, Pacific Exchange decided to delist the common stock. By allowing time to elapse, Fleming waived its right to a hearing. The SEC granted Pacific Exchange's application in view of "public interest and protection of investors." (Fleming Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc., 609/392-0900) GAUNTLET ENERGY: Hires FirstEnergy Capital for Financial Advice --------------------------------------------------------------- Gauntlet Energy Corporation has engaged FirstEnergy Capital Corp., s exclusive financial advisor to the Special Committee of the Board of Directors in connection with its previously announced process to develop a financial restructuring plan under the Companies' Creditors Arrangement Act. GENESIS HEALTH: Inks Restructuring Agreement with ElderTrust ------------------------------------------------------------ ElderTrust (NYSE:ETT), an equity healthcare REIT, has entered into a non-binding letter of intent with Genesis Health Ventures, Inc. (NASDAQ:GHVI). As has been previously announced, Genesis intends to spin-off its ElderCare division which will be known as Genesis HealthCare Corporation. Operations of ElderTrust assets that are leased to Genesis would be spun off to HealthCare as part of the transaction and, as a result, ElderTrust has certain approval rights with respect to the Spin-Off. The Agreement sets forth the proposed terms of the restructuring of the Company's current transactions with Genesis and approval of the Spin-Off. The Agreement also addresses assets currently leased by the Company to Crozer/Genesis ElderCare Limited Partnership and Genesis Eldercare Partnership of New England, L.P. ("NDNE"). Under the terms of the Agreement, and exclusive of the NDNE transaction: -- Six properties, including the Harston property currently leased to Crozer, would be sold to HealthCare; -- HealthCare will replace the Company as primary lessee on seven properties currently subleased to Genesis and accounted for by the Company as capital leases; -- The three remaining properties currently leased to Crozer would be leased to, and these leases would be guaranteed by, HealthCare; -- Rents on three properties would be reduced in exchange for a cash payment; and, -- The Company would agree to a change of the guarantor from Genesis to HealthCare and to make other modifications to the leases affecting this change. Total consideration for the above transactions, exclusive of the NDNE transaction, would be approximately $132.1 million, of which approximately $49.2 million would be paid in cash and $82.9 million through the assumption of existing debt and capitalized lease obligations. Of these amounts, $5 million would be allocable to the guarantor change and related lease modifications. Subsequent to the transactions, and on a preliminary pro forma basis, the Company would have total assets of $208.3 million of which $41.5 million, or $5.15 per diluted share, would consist of unrestricted cash. The parties have agreed to complete the proposed transactions as soon as possible but in any event no later than December 31, 2003. The Company is filing a Current Report on Form 8-K with the SEC concurrent with this press release that contains a more detailed description of the transactions and preliminary pro forma financial information and preliminary funds from operations information giving effect to the proposed transactions, exclusive of the NDNE transaction. The Form 8-K can also be found under the "Documents" tab at http://www.eldertrust.com Additional information will be provided on the NDNE transaction, if consummated, at a future date. Because the transactions are subject to conditions precedent, including negotiation and execution of definitive documentation for the transactions and final board and lender approvals for each party to the transactions, there can be no assurance that the transactions contemplated by the Agreement will be completed as proposed. In addition, the Company noted that the $14.3 million mortgage loan secured by the Harston Hall and Pennsburg properties had been extended to August 10, 2003. The Company also noted that on July 2, 2003, the loan was sold. Based on preliminary discussions with the new lender, the new lender has indicated a willingness to settle the loan for $11.5 million. Due to the timing of the Harston/Pennsburg transaction, the Company will record an impairment loss of approximately $2.0 million on the Harston property during the quarter ended June 30, 2003. The remaining impact of this transaction will be recorded in future quarters as either the transaction becomes more definitive or it closes, as required under generally accepted accounting principles. Finally, the Company announced that it does not currently anticipate changing its dividend policy as a result of these transactions. The Company currently distributes $0.64 per common share annually, or $0.16 per share per quarter. Commenting on the proposed transactions, D. Lee McCreary, Jr., ElderTrust's President and Chief Executive Officer, said, "Since going public in January 1998, we have had to address the Medicare Prospective Payment System, overbuilding in the assisted living facility industry, the Florida professional liability situation and the bankruptcy by Genesis, our most significant tenant. These events left the Company with an over-levered balance sheet and assets whose performance is not what they once were or were hoped to be. When completed, the proposed transactions with Genesis will significantly de-lever our balance sheet and we believe will put the Company in a stronger position from which to move forward." Michael Walker, Chairman of ElderTrust, stated, "From the beginning, our goal has been to create shareholder value. We believe that when completed the proposed transactions with Genesis not only will increase shareholder value but will provide a strong foundation from which we can pursue future opportunities." ElderTrust is a real estate investment trust that invests in real estate properties used in the healthcare services industry, principally along the East Coast of the United States. Since commencing operations in January 1998, the Company has acquired interests in 31 properties. For more information on ElderTrust visit ElderTrust's Web site at http://www.eldertrust.com GENUITY INC: Court Approves Kirkland & Ellis as Special Counsel --------------------------------------------------------------- Genuity Inc., and its debtor-affiliates obtained permission from the Court to employ the firm of Kirkland & Ellis, as of the Petition Date, to represent them as their Special Counsel in connection with their Chapter 11 cases. Since June 2000, Kirkland & Ellis has performed extensive legal work for the Debtors in connection with certain litigation matters. As a result of representing the Debtors on these matters, Kirkland & Ellis has acquired extensive knowledge of the Debtors and their businesses. Kirkland & Ellis will continue to render various services to the Debtors regarding certain matters that have been pending since before the Petition Date and that continue to be active, as well as proofs of claim and disputes as to cure amounts in the Genuity case that overlap with prepetition litigation, including: A. 360 Networks Bankruptcy: Kirkland & Ellis is representing Genuity as a creditor in the 360 Networks bankruptcy proceedings. B. Netnitco Service Agreement: Kirkland & Ellis is representing Genuity in the enforcement of a service agreement with Netnitco through negotiation and, if necessary, through litigation. C. Global Crossing: Kirkland & Ellis is representing Genuity as a creditor in the Global Crossing Ltd. bankruptcy proceedings pending in the United States Bankruptcy Court for the Southern District of New York. D. Capital Printing: Kirkland & Ellis is defending Genuity against claims brought against it by Capital Printing and is asserting counterclaims for payment of termination fees. Kirkland & Ellis may also represent Genuity in objecting to any proof of claim filed by Capital Printing. E. Nortel Take or Pay Contract: Kirkland & Ellis is representing Genuity regarding a breach of contract suit against Nortel Networks Inc. and Nortel Networks Corporation seeking $14,000,000 owed by Nortel to Genuity under a "take or pay" contract that Nortel breached. F. Nortel Qtera: Kirkland & Ellis is advising Genuity regarding various commercial disputes between Genuity, Nortel, and Nortel's subsidiary, Qtera. G. Nortel Proofs of Claim: Kirkland & Ellis is defending Genuity against claims made by Nortel in its proofs of claim filed against the Debtors. The proofs of claim include the same contract as the Take-or-Pay litigation, as well as other outstanding disputes between the parties. Kirkland & Ellis will assist in preparing objections to those claims and asserting counterclaims against Nortel on Genuity's behalf and will, if necessary, represent Genuity in the litigation of those claims. The Debtors' primary bankruptcy counsel, Ropes & Gray LLP, will handle plan objections, if any, by Nortel. Ropes & Gray and Kirkland & Ellis will coordinate their efforts to avoid duplication and appropriately coordinate litigation. H. Starnet, Inc. Bankruptcy: Kirkland & Ellis is representing Genuity Solutions, Inc. as a creditor in the bankruptcy filings of the International Intelligence Agency, Inc. and Starnet, Inc. Both cases are pending before the Bankruptcy Court for the Northern District of Illinois. I. John Does 1 through 46 and Unknown Illinois State University Football Players vs. Franco Productions, Dan Franco, et al.: The Debtors were dismissed from this case by the United States District Court for the Northern District of Illinois. The plaintiffs have appealed that decision to the Seventh Circuit. The Debtors have consented to stay relief to allow that appeal to proceed, and desire to have Kirkland & Ellis represent them since Kirkland & Ellis is familiar with the case. Kirkland & Ellis may also assist the Debtors' bankruptcy counsel, Ropes & Gray, with objecting to proofs of claim filed by the plaintiffs. Kirkland & Ellis will be compensated at these hourly rates: Attorneys $140 - 640 Legal Assistants 80 - 180 (Genuity Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service, Inc., 609/392-0900) GILAT SATELLITE: Names Bill Gerety as New CEO of Spacenet Unit -------------------------------------------------------------- Gilat Satellite Networks Ltd. (Nasdaq: GILTF) has named Bill Gerety as the new CEO of its Spacenet subsidiary. Gerety takes over from Nick Supron, who served as Spacenet's CEO for the last two years. The change was made effective on July 1. During his tenure, Supron led a successful effort at Spacenet to optimize operations, streamline processes and increase efficiencies, in an effort to adapt the company to the changing characteristics of the market and business environment. The company noted that Supron elected to step down in order to spend more time with his family and to pursue other business opportunities. Bill Gerety joins Spacenet with an intimate understanding of the satellite and telecommunications industries. Immediately prior to joining Spacenet, Gerety served as acting CEO and Chief Operating Officer of Astrolink International, a broadband satellite venture headed by Liberty Media, Lockheed Martin, TRW and Telespazio. Gerety has also had a distinguished career as a senior officer in the US Army, and continues to serve as a colonel in the US Army Reserve. He holds a BS from the US Military Academy at West Point, an MS in Strategic Studies from the US Army War College, as well as an MS in Contracts & Acquisition Management and an MBA from the Florida Institute of Technology. After spending four years at Spacenet in the early 90s, Bill served as COO of international telecom service provider World Access/Facilicom International; and he led international network sales efforts at Sprint International. Spacenet Inc. provides two-way satellite-based broadband networking solutions throughout North America under the Connexstar brand, and has more than 15 years' experience in providing connectivity, provisioning, operations and maintenance to enterprise and government customers, including some of the largest satellite-based networks in the world. Spacenet is based in McLean, Virginia, and is a wholly owned subsidiary of Gilat Satellite Networks, Ltd. Visit Spacenet at http://www.spacenet.com Gilat Satellite Networks Ltd., with its global subsidiaries Spacenet Inc., Gilat Latin America and rStar Corporation (RTRCE), is a leading provider of telecommunications solutions based on Very Small Aperture Terminal satellite network technology -- with nearly 400,000 VSATs shipped worldwide. Gilat, headquartered in Petah Tikva, Israel, markets the Skystar Advantage(R), DialAw@y IP(TM), FaraWay(TM), Skystar 360E(TM) and SkyBlaster* 360 VSAT products in more than 70 countries around the world. Gilat provides satellite-based, end-to-end enterprise networking and rural telephony solutions to customers across six continents, and markets interactive broadband data services. Gilat is a joint venture partner with SES GLOBAL in SATLYNX, a provider of two-way satellite broadband services in Europe. Skystar Advantage, Skystar 360, DialAw@y IP and FaraWay are trademarks or registered trademarks of Gilat Satellite Networks Ltd. or its subsidiaries. Visit Gilat at http://www.gilat.com As reported in Troubled Company Reporter's July 3, 2003 edition, Gilat Satellite Networks put into operation a comprehensive restructuring program aimed at increasing efficiency and substantially cutting down corporate expenses. The program includes a variety of measures, including organizational and structural changes and office consolidation leading to increased efficiency, and a reduction in the worldwide workforce, significantly reducing the company's labor costs. The cost cutting and workforce reductions were done segmentally, by unit, according to specific goals and targets, rather than an across the board reduction. The Company believes that the measures included in this program, together with those already taken in the past, culminating with the successful conclusion of the company's financial restructuring plan in April, will lead to reduced costs, improved margins and profitability and position Gilat for growth in the future. GLOBAL CROSSING: Asks Court to Approve Microsoft Settlement Pact ---------------------------------------------------------------- The Global Crossing Debtors, Microsoft, and Softbank are parties to a Subscription and Shareholders Agreement, dated September 8, 1999. Pursuant to the Shareholders Agreement, the GX Debtors transferred portions of their telecommunications network to a new company, Asia Global Crossing Ltd. The GX Debtors, Microsoft, and Softbank each acquired equity ownership in AGX, with the GX Debtors as the controlling shareholder. According to Michael F. Walsh, Esq., at Weil Gotshal & Manges LLP, in New York, the GX Debtors, Microsoft, and Softbank entered into a Capacity Commitment Agreement in connection with the Shareholders Agreement, among other reasons, as consideration for Microsoft's and Softbank's purchase from Global Crossing of their interest in AGX and to facilitate the sale of network capacity by the GX Debtors to Microsoft and Softbank. Pursuant to the CCA, Microsoft and Softbank each agreed to purchase $100,000,000 in network capacity on specified portions of the Network from the GX Debtors under certain terms and conditions. Each of Microsoft and Softbank are severally liable for their own commitments. Mr. Walsh states that Microsoft made the first two purchases required by the Microsoft Agreement and has paid a portion of the remaining amounts due. On October 18, 2002, the GX Debtors invoiced Microsoft for amounts that were due under the Microsoft Agreement. According to the Invoice, $76,135,000 was allegedly due from Microsoft to Global Crossing under the Microsoft Agreement. Microsoft disputes the GX Debtors' allegations. Since October 2002, Microsoft has made certain payments under the Microsoft Agreement. Pursuant to the Court's Order approving procedures for assumption of contracts and unexpired leases dated October 31, 2002, the Debtors created a database with a listing of those executory contracts and unexpired non-residential real property leases that the Debtors intended to assume as of the effective date of the Plan. The Debtors listed the entirety of the CCA, along with other executory contracts with Microsoft, on the Database. Microsoft objected to the assumption of the CCA. The Objection alleged that the Debtors: (i) had failed to maintain certain minimum standards for performance availability on the Network, (ii) were incapable of performing under the CCA, and (iii) were incapable of providing adequate assurance of future performance. In addition, Microsoft asserted claims against the Debtors related to the proposed formation of a joint venture between their one time web-hosting subsidiary, GlobalCenter, and AGX, which was not consummated and was later abandoned. The Debtors dispute Microsoft's allegation that it has any claims related to the Proposed Venture. Following extensive, arm's-length negotiations, the Debtors and Microsoft entered into a Settlement Agreement, which amends the Microsoft Agreement, to provide for, among other things, a reduction in the Capacity Commitment and revised payment terms. The salient terms of the Settlement Agreement are: A. The Remaining Commitment is reduced to $60,581,371, to be paid in these installments: -- $7,500,000, 31 days after the Settlement Date; -- $22,790,685, 31 days after the Effective Date; -- $15,145,343, by the later of December 31, 2003 or 31 days after the Effective Date; and -- $15,145,343, 31 days after the later of the Effective Date or successful completion of the Performance Test. B. The Reduced Commitment may be applied towards all capacity and services offered by the Debtors. C. Microsoft will receive most favored nation pricing for the Capacity and the Services, which is the lowest price paid to the Debtors for reasonably comparable Capacity and Services of reasonably similar volume and reasonably similar terms and conditions taking into account the totality of the Reduced Commitment and the payment schedule. D. Microsoft will have the right to market or resell the Services either directly or indirectly through marketing representatives. E. The Debtors will complete a satisfactory performance test on 13 private line circuits under lease by Microsoft. The Performance Test requires six consecutive months of individual circuit availability no less than 99.995%, which must be completed before December 31, 2003. Any failure in the Performance Test will result in a 25% reduction of the Reduced Commitment. F. Microsoft fully releases and forever discharges the Debtors from any claims related to the Proposed Venture. G. The Debtors will assume the Amended Microsoft Agreement as of the Effective Date. Effective Date will mean the "Closing Date" as defined in the Purchase Agreement, provided, however, that for the purposes of the Settlement Agreement, the Effective Date will be deemed not to occur unless: a) The $237,500,000 aggregate purchase price, in consideration of the issuance by the reorganized Debtors of the New Common Shares and the New Preferred Shares, as provided for in the Purchase Agreement is paid by: (i) Hutchison and STT, either jointly or severally, (ii) a purchaser that is a telecommunications provider like Hutchison or STT, to which Microsoft consents, which consent will not be unreasonably withheld, or (iii) a purchaser that is not a telecommunications provider, to which Microsoft, in its sole discretion, consents; or b) The occurrence of the Effective Date, as defined in a modified or new plan of reorganization, including a "stand-alone" plan by Global Crossing, to which Microsoft in its sole discretion consents, provided, that, if the new plan provides for the payment of $237,500,000 by a purchaser that is a telecommunications provider like Hutchison or STT, Microsoft's consent will not be unreasonably withheld. Mr. Walsh contends that the Settlement is fair and equitable and falls well within the range of reasonableness as it enables the parties to avoid the costs of litigation relating to Microsoft's allegations that the Debtors are unable to perform their obligations under the Microsoft Agreement or provide adequate assurance of future performance. Given the complexity of the factual issues relating to the parties' claims under the Microsoft Agreement and the dollar amounts at stake, the litigation of the issues surrounding the Microsoft Agreement could be lengthy and expensive. These undertakings would continue to be a drain on the Debtors' monetary resources and divert the attention of their management and legal personnel from the reorganization efforts. (Global Crossing Bankruptcy News, Issue No. 43; Bankruptcy Creditors' Service, Inc., 609/392-0900) GOLF TRUST: Reaches Non-Monetary Settlement of Crossley Suit ------------------------------------------------------------ Golf Trust of America, Inc. (AMEX:GTA) has reached a non-monetary settlement with the plaintiff in a suit filed last year in Baltimore Circuit Court against Golf Trust of America, Inc., its current board members, and one former board member. On May 21, 2003, the court granted the Golf Trust defendants' motion for summary judgment and dismissed the case in its entirety. The non- monetary settlement and mutual release, reached after the court's ruling, provided that the plaintiff will not appeal the court's ruling, and that the Golf Trust defendants will not seek attorneys' fees or costs from the plaintiff. Golf Trust of America, Inc. was formerly a real estate investment trust but is now engaged in the liquidation of its interests in golf courses in the United States pursuant to a plan of liquidation approved by its stockholders. The Company currently owns an interest in five properties (9.0 eighteen-hole equivalent golf courses). Additional information, including an archive of all corporate press releases, is available on the Company's Web site at http://www.golftrust.com * * * In its Form 10-Q filed with the SEC on November 14, 2002, the Company reported: "On February 25, 2001 our board of directors adopted, and on May 22, 2001 our common and preferred stockholders approved, a plan of liquidation for our Company. The events and considerations leading our board to adopt the plan of liquidation are summarized in our Proxy Statement dated April 6, 2001, and in our most recent Annual Report on Form 10-K. The plan of liquidation contemplates the sale of all of our assets and the payment of (or provision for) our liabilities and expenses, and authorizes us to establish a reserve to fund our contingent liabilities. The plan of liquidation gives our board of directors the power to sell any and all of our assets without further approval by our stockholders. However, the plan of liquidation constrains our ability to enter into sale agreements that provide for gross proceeds below the low end of the range of gross proceeds that our management estimated would be received from the sale of such assets absent a fairness opinion, an appraisal or other evidence satisfactory to our board of directors that the proposed sale is in the best interest of our Company and our stockholders. "At the time we prepared our Proxy Statement soliciting stockholder approval for the plan of liquidation, we expected that our liquidation would be completed within 12 to 24 months from the date of stockholder approval on May 22, 2001. While we have made significant progress, our ability to complete the plan of liquidation within this time-frame and within the range of liquidating distributions per share set forth in our Proxy Statement is now far less likely, particularly insofar as the disposition of our lender's interest in the Innisbrook Resort is concerned. With respect to our dispositions, as of November 8, 2002, we have sold 25 of our 34 properties (stated in 18-hole equivalents, 31.0 of our 47.0 golf courses). In the aggregate, the gross sales proceeds of $229.5 million are within the range originally contemplated by management for those golf courses during the preparation of our Proxy Statement dated April 6, 2001, which we refer to as the Original Range; however, two of our properties (2.5 golf courses) that were sold in 2001 were sold for a combined 1%, or $193,000, less than the low end of their combined Original Range. The sales prices of the assets sold in 2002 have been evaluated against Houlihan Lokey Howard & Zukin Financial Advisors, Inc., or Houlihan Lokey's March 15, 2002, updated range (discussed in further detail below), which we refer to as the Updated Range. Of the three properties (5.0 golf courses) sold in 2002, one (1.5 golf courses) was below the low end of the Updated Range by 4%, or $150,000. Nonetheless, considering the environment in which we and the nation were operating in at that time, our board determined that the three transactions closed at prices below the Original Range (including the one transaction that closed below the Updated Range) were fair to, and in the best interest of, our Company and our stockholders. "The golf industry continues to face declining performance and increased competition. Two of the economic sectors most affected by the recession have been the leisure and travel sectors of the economy. Golf courses, and particularly destination-resort golf courses, are at the intersection of these sectors. Accordingly, we believe our business continues to be significantly impacted by the economic recession. As reported in our most recently filed Form 10-K, on February 13, 2002, we retained Houlihan Lokey to advise us on strategic alternatives available to seek to enhance stockholder value under our plan of liquidation. In connection with this engagement Houlihan Lokey, reviewed (i) our corporate strategy; (ii) various possible strategic alternatives available to us with a view towards determining the best approach of maximizing stockholder value in the context of our existing plan of liquidation, and (iii) other strategic alternatives independent of the plan of liquidation. Houlihan Lokey's evaluation of Innisbrook valued this asset under two different scenarios, both of which assumed that we would obtain a fee simple interest in the asset as a result of successfully completing a negotiated settlement or foreclosing on our mortgage interest. Under the first scenario, Houlihan Lokey analyzed immediate liquidation of the asset, and under the second scenario, Houlihan Lokey analyzed holding the asset for a period of approximately 36-months ending not later than December 31, 2005 to seek to regain the financial performance levels achieved prior to 2001. In a report dated March 15, 2002, subject to various assumptions, Houlihan Lokey's analysis concluded that we may realize between $45 million and $50 million for the Innisbrook asset under the first scenario, and between $60 million and $70 million under the second scenario. "Following receipt of Houlihan Lokey's letter on March 15, 2002, and after consideration of other relevant facts and circumstances then available to us, our board of directors unanimously voted to proceed with our plan of liquidation without modification. We currently expect that liquidating distributions to our common stockholders will not begin until we sell our interest in the Innisbrook Resort, which might not occur until late 2005. All of our other assets were valued and are recorded on our books at their estimated immediate liquidation value and are being marketed for immediate sale. "As of November 8, 2002, we owed approximately $70.7 million under our credit agreement, which matures on December 31, 2002. We are currently seeking to obtain our lenders' consent to further extend the term of our credit agreement before it matures. If our lenders do not consent to our request for a further extension and we are not able to secure refinancing through another source, we might be compelled to sell assets at further reduced prices in order to repay our debt in a timely manner. We recently obtained a preliminary indication of the lenders' willingness to extend the term of our credit facility until June 30, 2003." GREATE BAY CASINO: Board Approves Sands Hotel Debt Exchange Deal ---------------------------------------------------------------- GB Holdings Inc. (Amex: GBH), which through its wholly-owned subsidiary Greate Bay Hotel & Casino, Inc., owns and operates The Sands Hotel and Casino in Atlantic City, announced that its Board of Directors, acting through a special committee, has approved a transaction involving an exchange offer for GB Property Funding Corp.'s debt, subject to receipt of applicable opinions and government approvals and the completion of applicable documents and filings. Brown Enthusiastic About The Deal Richard P. Brown, The Sands CEO said, "This transaction will relieve The Sands of a substantial portion of its indebtedness that would otherwise come due in 2005 and extend that debt until at least 2008. Assuming the transaction closes this year and all of the debt is exchanged, after deducting the cost of the payment to the holders of the Existing Notes (as defined below), the transaction will free up an aggregate of $13.2 Million of cash flow representing the interest payment for years 2004 and 2005. Therefore, the transaction will strengthen our balance sheet, thereby allowing The Sands Management Team to focus its attention on providing an enhanced gaming entertainment experience for our players. The execution of this exchange will create a tremendous win for The Sands. The Sands is currently considering the construction of added hotel rooms and this transaction will provide us with the necessary financial flexibility if we determine to implement the initiative. Since emerging from bankruptcy, we have invested in excess of $44 Million in improvements to The Sands, with more than 50% of that on back-of-the-house investment which is not very visible to the gaming public. We are continuing to make improvements that will drive business and entice customers such as our recently added Swingers Bar, renovating the Copa Showroom and the Plaza and Platinum Clubs, and adding newer gaming equipment and related technology. In addition, in keeping with the tradition of The Sands as a center of high roller action, we have instituted gaming with extremely high limits, so that our customers can play at levels that they determine will enhance their gaming experience. As new entrants emerge in the market we will possess a distinct advantage over our competitors if we are not under the pressure of servicing long-term debt. As a result, while other Atlantic City casinos may experience operating pressures from significant debt, The Sands will have the flexibility to invest in its business, improve its facilities and offer our patrons the personalized, high quality value-oriented experience that they expect to receive at a casino called 'The Sands' -- truly one of the legendary names in our industry." Icahn Supports Exchange Carl C. Icahn and his affiliated companies hold in excess of 77% of the stock of the Company and 58% of the debt and Mr. Icahn has indicated that he will support the transaction. "This transaction will allow The Sands to continue to add to its facilities and will maintain The Sands as a financially stable participant in the Atlantic City market place. The Sands has recently added Mr. Brown as CEO and Mr. Tom Davis as President and they are moving aggressively to improve and optimize The Sands. This exchange will enhance their freedom to continue to improve the facility and the overall gaming experience of its patrons," Mr. Icahn said. The Transaction The Company's wholly owned subsidiary, GB Property Funding Corp., currently has outstanding $110 million in secured notes (the "Existing Notes") due in September 2005 which bear interest at the rate of 11% per annum. The Existing Notes were issued under an Indenture (the "Existing Indenture"), are guaranteed by the Company and GBHC and are secured by liens on certain of assets of GBHC. The proposed transaction would involve the following: -- The amendment of the Existing Indenture to remove certain provisions and covenants and the release of the liens on The Sands assets, which is the collateral for the Existing Notes, thereby allowing the transfer of these assets and those now held at GBH to a newly formed wholly-owned subsidiary of the Company, free and clear of all liens and all obligations under the Existing Indenture. Newco will undertake to provide the funds to Parent to meet scheduled interest payments on the Existing Notes through their scheduled maturity. -- The solicitation of the exchange of the Existing Notes, dollar for dollar, for up to $110 million of notes due September 2008 which will bear interest at 3% per annum, payable at maturity. The New Notes will be secured by a first lien on the assets of Newco. -- The payment of $100 by the Company to the holders of the Existing Notes for each $1,000 in principal amount exchanged together with all interest accrued on such Existing Notes through the date of such exchange. -- The holders of a majority of the principal amount of the New Notes have the option at any time prior to the New Maturity Date to cause the entire class of New Notes to simultaneously convert into shares of Newco Stock. Shares of Newco Stock issued upon such conversion of the New Notes will represent 72.5% of the Newco Stock if all of the Existing Notes participate in the Note Exchange. If less than all of the Existing Notes participate in the Note Exchange, then, in the event of the conversion of the New Notes into shares of Newco Stock, such shares would equal on a fully diluted basis (after giving effect to the exercise of the Newco Warrants and the conversion of the New Notes) the product of (a) 72.5% and (b) a fraction, the numerator of which is the principal amount of the New Notes and the denominator of which is the total principal amount of the Existing Notes immediately prior to the Exchange Offer. -- At the election of the holders of a majority of the principal amount of the New Notes, the holders of the New Notes may be given the ability to convert the New Notes at their option. -- The distribution to the Company's common stockholders of warrants exercisable (following the occurrence of certain events) for 27.5% of the common stock of Newco (on a fully diluted basis). -- If all of the Existing Notes do not participate in the Note Exchange, the proposed transaction will result in the Company owning shares of Newco Stock which would represent on a fully diluted basis (after giving effect to the exercise of the Newco Warrants and conversion of the New Notes) a percentage of the Newco Stock equal to the product of (a) 72.5% and (b) a fraction, the numerator of which is the principal amount of the Existing Notes that are not exchanged for New Notes and the denominator of which is the total principal amount of the Existing Notes immediately prior to the Exchange Offer. The proposed transaction is subject to the consent of the holders of a majority of the Existing Notes, the exchange of a majority in principal amount of the Existing Notes, the approval of stockholders owning a majority of the common stock of the Company, the effectiveness of all required filings under applicable securities laws, and the receipt of all required governmental and third party approvals. HEADWAY CORP: Files Plan and Disclosure Statement in New York ------------------------------------------------------------- Headway Corporate Resources, Inc., filed its Chapter 11 Reorganization Plan with the accompanying Disclosure Statement with the U.S. Bankruptcy Court for the Southern District of New York. Full-text copies of the documents are available for a fee at: http://www.researcharchives.com/bin/download?id=030709225849 and http://www.researcharchives.com/bin/download?id=030709225401 The Plan provides for the treatment of claims against the estate and groups them into 6 classes and 2 interests: Class Description Treatment ----- ----------- --------- N/A Administrative Paid in full in cash on the Expenses Consummation Date N/A Priority Tax Will be paid equal to the Allowed Claims Priority Tax Claim on the Consummation Date or in the ordinary course of business 1 Priority Non- Unimpaired; Tax Claims Will be paid in the ordinary course of business 2 Secured Credit Impaired; Agreement Claims Will receive its ratable proportion of 1) 100% of the New Common Stock and ii) notes to be issued in the New Credit Agreement will be in the principal amount of $26.6 million 3 Other Secured Unimpaired; Claims Will be reinstated or rendered unimpaired and claims which are not due on the Consummation Date will be paid in the ordinary course of business 4 Old Senior Impaired; Subordinated Note Will receive, in full satisfaction of Claims Claim in consideration of the discharge and satisfaction of all claims, its Pro-Rated New Convertible Sub Note 5 General Unsecured Deemed Rejected; Claims The Debtor will be discharged from any obligations to holders of General Unsecured Claim and shall not receive or retain any property or interests in property on account of its claim 6 Old Preferred Deemed Rejected; Stock Interests Will be cancelled on the Consummation Date; and holders will not be entitled to any property or interest on account of such claim 7 Old Common Stock Deemed Rejected; Interests Will be cancelled on the Consummation Date; and holders will not be entitled to any property or interest on account of such claim 8 Old Warrants Deemed Rejected; Will be cancelled on the Consummation Date; and holders will not be entitled to any property or interest on account of such claim The Plan provides for a major restructuring of Headway's financial obligations. In essence, the Plan of Reorganization: i) provides each holder of a Secured Credit Agreement Claim in the aggregate approximate principal amount of $74.9 million, including accrued and unpaid interest through the Petition Date, with its Ratable Proportion of 100% of Headway's New Common Stock, subject to dilution by the New Convertible Subordinated Note, plus its Ratable Proportion of the notes in the aggregate principal amount of $26.6 million, including $1.6 million in letters of credit, to be issued pursuant to the New Credit Agreement and ii) provides the holders of Old Senior Subordinated Notes with their Ratable Proportion of the New Convertible Subordinated Note. Headway believes that the proposed restructuring will provide it with the necessary liquidity to fund essential capital expenditures and to compete effectively in today's business environment. Headway believes, and assures the Bankruptcy Court, that creditors and shareholders will receive at least as much, if not more, in value under the Plan of Reorganization than they would receive in a liquidation case under chapter 7 of the Bankruptcy Code. Headway Corporate Resources, Inc., with its headquarters in New York, New York, provides human resource and staffing services. The Company filed for chapter 11 protection on July 1, 2003 (Bankr. S.D.N.Y. Case No. 03-14270). Jeffrey L. Tanenbaum, Esq., at Weil, Gotshal & Manges, LLP represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed estimated assets of over $10 million and estimated debts of more than $50 Million. HENRY CO.: S&P Ups Credit Rating to B- over Improved Liquidity -------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on building products manufacturer Henry Co. to 'B-' from 'CCC+' reflecting improved liquidity prospects and strengthened cash flow protection measures. Huntington Park, California-based Henry Co. had $90 million of debt outstanding as of March 31, 2003. The current outlook is stable. "The financial profile continues to benefit from substantially increased sales of the company's premium branded product," said Standard & Poor's analyst Wesley E. Chinn. Standard & Poor's said that Henry Co.'s credit quality reflects the company's solid position in niche markets for roof and driveway sealing and waterproofing products as well as strengthened business fundamentals because of greater sales of its premium 'Henry' branded product. However, these positives are overshadowed by a modest revenue base ($200 million to $225 million annually), a narrow product offering in a mature, small, and highly competitive market, considerable operating margin vulnerability to petroleum-based raw materials costs, fragile financial ratios, aggressive debt leverage, and still modest liquidity. IMCLONE SYSTEMS: Reports Progress in Several Pipeline Programs -------------------------------------------------------------- ImClone Systems Incorporated (NASDAQ: IMCL) presented preclinical data highlighting progress made in the development of several pipeline programs at the 94th Annual Meeting of the American Association for Cancer Research held July 11 - 14th. The Company presented a number of abstracts at the conference, including presentations on monoclonal antibody therapeutics being developed as angiogenesis and growth factor inhibitors, including: VEGF Receptor-1 Research - Abstract Number 6340 Company researchers presented preclinical data demonstrating that an investigational monoclonal antibody that targets the Vascular Endothelial Growth Factor Receptor-1 (also known as VEGFR-1 or FLT-1) inhibits tumor cell growth in a xenograft mouse model of VEGFR-1-expressing human breast cancer. VEGFR-1 is known to play an important role in blood vessel growth, and more recently, its expression has been identified on a number of human cancers. ImClone Systems scientists have previously shown that inhibition of the VEGFR-1 receptor on blood vessel cells leads to inhibition of angiogenesis and, indirectly, to inhibition of tumor growth. Together, these findings provide additional evidence that a VEGFR- 1-targeting antibody may be a particularly novel approach to treating VEGFR-1-positive breast cancer because of its ability to block both tumor cell growth and tumor angiogenesis. IGF-1 Receptor Research - Abstract Number 761 ImClone Systems researchers presented preclinical findings on the Company's fully human Insulin-like Growth Factor-1 Receptor (also known as IGF-1R) investigational antibody (referred to as A12) demonstrating that it effectively blocked the binding of IGF-1 to its receptor with high affinity and inhibited ligand-dependent signaling to the cell in human breast, colon and pancreatic tumor cell lines. In addition, blockade of IGF-1R function in tumor cells by A12 caused a marked inhibition of receptor autophosphorylation, as well as other cell signaling pathways, resulting in a significant reduction of cancer cell proliferation and survival. These findings demonstrate that IGF-1R may represent a novel target for the development of a new class of apoptosis- inducing agents. VE-Cadherin Research -- Abstract Number 2953 ImClone Systems scientists presented additional preclinical data on E4G10, an experimental monoclonal antibody that targets vascular-endothelial cadherin (VE-cadherin), a cell surface protein that promotes the clustering and adhesion of blood cells to form new blood vessels. The current data supports previous Company research demonstrating that E4G10 specifically targets tumor-related blood vessels and inhibits the growth of certain tumors by slowing angiogenesis, without negatively affecting normal blood vessels. Specifically, the new data presented identifies E4G10's unique antibody binding site on VE-cadherin, which is a region on the protein that is necessary for VE-cadherin function. Additionally, this region appears to be accessible only prior to cell-cell contact, and therefore is expected to be exposed only on newly developing blood vessels, such as those found in tumors. In contrast, it is believed that this region is not accessible to the monoclonal antibody in established (normal) vasculature. The findings of this preclinical study demonstrate the importance of E4G10's binding site in VE-cadherin-mediated adhesion and establish it as a novel target for inhibiting blood vessel formation in tumors. VEGF Receptor-2 Research -- Abstract Number 1175 ImClone Systems scientists presented preclinical findings on the role of the Vascular Endothelial Growth Factor Receptor-2 (VEGFR- 2) in human cancers. The study evaluated the responsiveness of p53-deficient tumors to blockade by a VEGFR-2-neutralizing investigational antibody (DC101) was tested. The p53 gene is frequently mutated in human cancers. These mutations are thought to contribute to increased survival of tumor cells. The data showed that blockade of VEGFR-2 by DC101 significantly inhibited the growth of p53-deficient tumors and tumor-related angiogenesis in various human tumor xenograft models. Additionally, data from the study showed that the antitumor effects of VEGFR-2 blockade by DC101 in models of p53-deficient tumors was similar to that observed in models of p53-wild-type tumors. These findings suggest that p53-deficient human cancers may also be responsive to VEGFR-2 blockade. "We're pleased with the progress that ImClone Systems' pipeline programs have made this year and with the valuable contribution that these data will make on our future research and development in these areas," stated Harlan W. Waksal, M.D., Chief Scientific Officer of ImClone Systems Incorporated. "The Company will continue to focus its oncology drug discovery and development efforts on antibodies that interfere with critical cellular functions, most notably in areas such as angiogenesis inhibitors and growth factor blockers." ImClone Systems Incorporated, whose March 31, 2003 balance sheet shows a total shareholders' equity deficit of about $220 million, is committed to advancing oncology care by developing a portfolio of targeted biologic treatments, designed to address the medical needs of patients with a variety of cancers. The Company's three programs include growth factor blockers, angiogenesis inhibitors and cancer vaccines. ImClone Systems' strategy is to become a fully integrated biopharmaceutical company, taking its development programs from the research stage to the market. ImClone Systems' headquarters and research operations are located in New York City, with additional administration and manufacturing facilities in Somerville, New Jersey. INTERSTATE BAKERIES: May Quarter Net Loss Stands Tops $4.5 Mill. ---------------------------------------------------------------- Interstate Bakeries Corporation (NYSE:IBC), the nation's largest baker and distributor of fresh baked bread and sweet goods, reported a loss per share of $.10 on reduced net sales for the twelve-week fourth quarter ended May 31, 2003. Included in the quarter's reporting were restructuring charges of $3,460,000, or $.05 per share. The Company said a reduction in branded sales volume, coupled with significant cost increases in ingredients, energy and employee- related costs, resulted in the quarter's decline in profit performance in comparison to the prior year. Further impacting fourth quarter results, the Company incurred expense of approximately $8,400,000, or $.12 per share, primarily related to a change in the Company's estimated self-insurance reserves. For the twelve weeks ended May 31, 2003, the Company reported: - Net sales of $818,019,000, a 1.8 percent decrease in comparison to the prior year's $832,786,000. - Operating income of $2,433,000, compared to the previous year's $43,359,000. Impacting the current quarter operating income were restructuring charges of $3,460,000, relating to certain closures and restructurings of bakery operations and thrift stores initiated in the second and third quarters of fiscal 2003 and the $8,400,000 expense discussed above. - Net loss of $4,568,000 compared to the prior year's net income of $22,005,000. - Loss per share of $.10 (including the items discussed above) compared to the previous year's earnings of $.45 per diluted share. For the 52 weeks ended May 31, 2003, the Company reported: - Net sales of $3,525,780,000, a decrease of 0.2 percent compared to the prior year's $3,531,623,000. - Operating income of $83,268,000, compared to the previous year's $147,357,000. Impacting current year-to-date operating income were other charges of $3,591,000, or $.05 per share, relating to the common stock award made on October 1, 2002 to the retiring IBC Chief Executive Officer and restructuring charges of $9,910,000, or $.14 per share, relating to certain closures and restructurings of bakeries and thrift stores. Fiscal 2002 year- to-date other charges were $25,700,000, or $.31 per share, relating to closure of a bakery and settlement of employment litigation. - Net income of $27,450,000, compared to the prior year's $69,789,000. - Earnings per diluted share of $.61 (including restructuring and other charges of $.19 per share), in comparison to the previous year's $1.36 (including other charges of $.31 per share). "We are disappointed with our results in what proved to be another difficult quarter," IBC 's Chief Executive Officer, James R. Elsesser, said. "The soft economy has been a particular problem for snack cake over recent quarters, but branded bread, too, is proving not to be immune to the soft sales environment," he said. The Company reported sweet goods unit volume for the quarter was down 8.2 percent from last year while total bread volume fell 1.7 percent compared to a year ago. For the quarter, branded bread units were down 6.6 percent. Mr. Elsesser said that the Company is addressing the soft sales environment "with actions designed to establish sustainable base volume growth by focusing on the fundamental elements of the business: quality, service and value." "We have great brands that are still very relevant to consumers," Mr. Elsesser said. "But in today's dynamic marketplace relevance and brand awareness are only a part of the value equation. To better understand the value equation in current market conditions, we are conducting market tests this quarter. This knowledge will be key to future volume growth. We also are strengthening the advertising support for IBC's branded bread and sweet goods. New campaigns for both Wonder bread and Hostess cake will air during this first quarter, as will a new Home Pride bread campaign supporting the introduction of Home Pride Country breads in the Midwest," he added. Regarding cost pressures, Mr. Elsesser commented, "There was no respite from the high costs of cocoa and shortenings in the fourth quarter. Our flour costs were also significantly higher than the prior year. These higher ingredient costs, along with higher energy and employee- related costs, resulted in an increase in our cost of products sold for the quarter to 50.5 percent of net sales, up from 47.1 percent a year ago." To confront its operational issues, the Company has initiated a review of production capacity and is eliminating sales activities considered only marginally profitable. "To be successful and to build a platform for sustainable profitable growth, we need to have more efficient production and distribution systems, as well as a more focused brand- building program," Mr. Elsesser said. "IBC, as announced previously, is in the midst of a major, Company-wide project internally referred to as Program SOAR, an acronym for Systems Optimization and Re- engineering. This program will help us re-engineer our business processes, become more efficient and focused, reduce the ongoing cost of production, distribution and administrative functionality, and help identify profitable growth opportunities," he added. "In conjunction with Program SOAR, we have undertaken a comprehensive review of all aspects of our operations at two of our underperforming bakeries. This review is expected to result in an improvement in profitability at these two locations in fiscal 2004 through a concentrated emphasis on identifying efficiencies in the day-to-day production and sales work flow processes and retraining personnel in proper execution. We hope to utilize the information we glean from this effort as a roadmap to instituting more efficient processes at other locations," he added. Looking ahead, Mr. Elsesser said, "We understand the challenges we face in making the decisions necessary to return our Company to acceptable levels of profitability. The initiatives we have undertaken, including Program SOAR, are designed to drive profound long-term change in how we perceive and operate our business and to enable us to clearly define the strategic path we must follow to maximize the long-term value of our Company." In light of the uncertainties surrounding the timing of the beneficial effects of the Program SOAR initiative, and in view of changes in the regulatory environment regarding pro forma disclosure, the Company announced that it will not be providing an earnings per share target by quarter or for the year. The Company said that it will continue to provide information, as appropriate, on its strategic initiatives and other relevant issues affecting its business. Interstate Bakeries Corporation is the nation's largest baker and distributor of fresh baked bread and sweet goods in the U.S., under various national brand names including Wonder, Hostess, Dolly Madison, Merita and Drake's. The Company, with 58 bread and cake bakeries located in strategic markets from coast to coast, is headquartered in Kansas City, Missouri. Interstate Bakeries' May 31, 2003 balance sheet shows that its total current liabilities exceeded its total current assets by about $100 million. As reported in Troubled Company Reporter's May 5, 2003 edition, Standard & Poor's Ratings Services lowered its corporate credit and bank loan ratings on fresh baked goods manufacturer Interstate Bakeries Corp. to 'BB+' from 'BBB-'. At the same time, the preliminary senior unsecured and subordinated debt ratings on the company were both lowered to 'BB- ' from 'BBB-' and 'BB+', respectively. All the ratings have been removed from CreditWatch where they were placed on April 9, 2003. The outlook is negative. JABIL CIRCUIT: Senior Unsec. Notes & Bank Loans Get BB+ Ratings --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB+' rating to Jabil Circuit Inc.'s proposed $300 million senior unsecured notes due 2010 and its 'BB+' senior unsecured bank loan rating to the company's $400 million revolving credit facility due 2005. Jabil's $400 million credit facility amends and replaces its existing $600 million credit facility. Proceeds from the notes issue would be used to repay the company's $100 million outstanding term loan, issued under the existing facility, and to fund working capital and possible acquisitions. At the same time, Standard & Poor's affirmed Jabil's 'BB+' corporate credit and other ratings. The outlook remains stable. Pro forma for the notes issue and term loan repayment, St. Petersburg, Florida-based Jabil Circuits had about $750 million in total lease-adjusted debt outstanding at May 2003. Jabil is a leading provider of electronic manufacturing services to such leading original equipment manufacturers as Cisco Systems Inc. (not rated) Koninklijke Philips Electronics N.V. (A-/Negative/A- 2), and Hewlett-Packard Co. (A-/Stable/A-1). Jabil's emphasis on customer focus and strong customer relationships are key differentiators in its strategic approach, resulting in solid sales growth with existing customers. Still, management's acquisition strategy entails somewhat greater business risk. Jabil is the most profitable top-tier EMS provider. Standard & Poor's believes operating margins are likely to trend downward as operating efficiency lags because of the integration of sizable acquisitions like Philips, and weak end-market demand. "Given Jabil's financial profile, the company has the capacity to continue recent levels of acquisitions without impairing credit quality," said Standard & Poor's credit analyst Emile Courtney. "Ratings improvement is limited by the company's market position, successful integration of recent acquisitions, and operational challenges associated with difficult industry conditions." KENTUCKY ELECTRIC: Selling Substantially All Assets for $3MM ------------------------------------------------------------ Kentucky Electric Steel, Inc. has signed a definitive agreement for the purchase by KES Acquisition Company, LLC of substantially all of the Company's assets. KES Acquisition is a newly formed limited liability company the principal members of which are Libra Securities Holdings, LLC and certain of its institutional clients. KES Acquisition will pay an aggregate of $2,998,414 at the closing of the transaction. KES Acquisition may also, at their election, assume at closing certain future contractual obligations of the Company. The closing of the transaction is subject to customary conditions, including Bankruptcy Court approval. The transaction is also subject to higher or better bids for the Company's assets, which may be obtained at an auction to be held on August 13, 2003, pursuant to Bankruptcy Court procedures. The Company has the right to accept a higher and better bid which might be received at the auction and terminate the Agreement with KES Acquisition, subject to payment of a break-up fee. In addition, KES Acquisition has the right to terminate the Agreement under certain circumstances set forth in the Agreement. The Company does not anticipate that any proceeds from the disposition of its assets to KES Acquisition will be distributed to its general unsecured creditors or its stockholders. The Company intends to promptly file a liquidating plan of reorganization. As previously reported, a shut down of the Company's production facilities has been implemented and on February 5, 2003, the Company filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Kentucky with the stated intention to facilitate the orderly sale of its assets. KMART CORP: Court Approves LB Richland Settlement Agreement ----------------------------------------------------------- The U.S. Bankruptcy Court approved an agreement between the Kmart Debtors, LB Richland LLC and the Heritage Development Company settling a dispute on the demolition and redevelopment of a mall in Johnstown, Pennsylvania, where a Kmart Store is located. The agreement resolves an adversary proceeding the Debtors initiated against LB Richland and Heritage. The Debtors have complained that LB Richland and Heritage were attempting to deprive their estate of its property and contract rights by causing a material alteration of a commercial leasehold located in the Richland Mall near Johnstown, Pennsylvania. The Debtors lease from LB Richland space for Kmart Store No. 3183. The Debtors argued that LB Richland and Heritage's activities directly violate the long-term, written lease Johnstown Lease. Richland planned to sell the Mall to Heritage or its designee. Heritage, in turn, intended to demolish the Mall and redevelop it as an open-air strip center. On August 7, 2002, the Debtors filed a complaint for breach of lease, negligence, and injunctive relief. The parties conducted a mediation with Judge Schwartz but were unable to reach a settlement. In February 26, the Debtors asked the Court to issue a temporary restraining order and preliminary injunction. However, the Court denied the Debtors' request. The Debtors appealed the Court's decision in March 2003. To avoid the uncertainty of further litigation with respect to the Appeal and possible adverse outcomes that could result in connection with such litigation, the parties have agreed that: (1) LB Richland and Heritage will pay the Debtors $3,500,000; (2) The Debtors will vacate the leased premises; (3) The Lease is terminated effective as of May 31, 2003 or on other dates that the parties will agree; and (4) The parties will dismiss the adversary proceeding with prejudice. The Debtors have conducted store closing sales before vacating the premises. (Kmart Bankruptcy News, Issue No. 59; Bankruptcy Creditors' Service, Inc., 609/392-0900) LORAL SPACE: Begins Chapter 11 Proceeding to Effect Asset Sale -------------------------------------------------------------- Intelsat, Ltd., a global satellite communications leader providing services in over 200 countries and territories, has signed a $1.0 billion definitive asset purchase agreement with Loral Space & Communications Corporation for six satellites and the rights to their orbital locations. The proposed acquisition of the Loral assets would complement Intelsat's global network, which includes capacity on 26 satellites, by adding complete coverage of the important North American market and by increasing Intelsat's customer base in the cable television and broadcasting segments. The total consideration for the assets may increase or decrease based on business performance and as provided for in the agreement. Of the six satellites to be purchased, four are operational, serving cable television, broadcast and private data network customers in North America. Two satellites are currently under construction and are scheduled to be launched into North American orbital locations in the coming year. Intelsat would assume responsibility for launch and insurance-related costs for one of the satellites currently under construction and would make a $100 million secured down payment on a future satellite to be built by Space Systems/Loral to Intelsat's specifications. "Intelsat has been pursuing a focused strategy that includes seeking strategic transactions that enhance Intelsat's service application mix and geographic coverage," said Conny Kullman, chief executive officer of Intelsat. "This transaction, if consummated, meets both of these objectives and enhances our position as a global leader in the fixed satellite services sector. The transaction would provide Intelsat a North American franchise that, given the scarcity of orbital locations, is virtually impossible to build on an organic basis and can be quickly integrated into our business." Kullman continued, "We look forward to offering North American broadcast and cable customers the high reliability, stability, and experience that Intelsat has delivered for nearly 40 years. Existing and future customers will benefit through global access and our investment in new technology and infrastructure. This opportunity comes at a time when Intelsat's satellite fleet replacement program is nearing completion, and the resulting strong cash flows enable us to adopt a transaction financing structure that preserves our strong balance sheet." Early Tuesday, Loral filed a voluntary petition for reorganization under Chapter 11 under the U.S. Bankruptcy Code, and the acquisition is expected to occur at the conclusion of an auction process under Section 363(b) of the Code. If approved by the bankruptcy court, the transaction will be subject to the receipt of regulatory approvals and the satisfaction of other conditions. The transaction is also subject to Intelsat shareholder approval. The company has secured financing commitments, subject to certain conditions, for the full transaction consideration, and the Intelsat Board of Directors has approved the transaction. Intelsat expects that all required approvals could be obtained, and conditions to closing could be satisfied, by early to mid-2004. The assets to be purchased include the Telstar 4, Telstar 5, Telstar 6 and Telstar 7 satellites, which today provide North American coverage from the 89 degrees W, 97 degrees W, 93 degrees W, and 129 degrees W orbital locations. The agreement also includes two satellites currently under construction, Telstar 8 and Telstar 13. The Telstar 13 satellite, co-owned with EchoStar Communications Corporation, is expected to launch in early August and will be located at the 121 degrees W orbital location. The Telstar 8 satellite is scheduled to launch into the 89 degrees W orbital location in early 2004, at which time Telstar 4 will move to 77 degrees W. The in-orbit satellites to be acquired currently carry traffic for premiere broadcasters, cable operators and private data network operators, such as CBS and Fox Broadcasting, and have a contracted backlog of approximately $550 million. Collectively, the satellites have an average remaining orbital maneuver life of 13.7 years. Morgan Stanley is acting as sole financial advisor to Intelsat in connection with this transaction. In addition, Morgan Stanley is structuring the acquisition financing for Intelsat. Sullivan & Cromwell LLP is acting as legal advisor to Intelsat. Financing for the transaction will be arranged by Citigroup, BNP Paribas and Morgan Stanley. Intelsat, Ltd., offers telephony, corporate network, video and Internet solutions around the globe via capacity on 26 geosynchronous satellites in prime orbital locations. Customers in approximately 200 countries rely on Intelsat satellites and ground resources for quality connections, global reach and reliability. For more information, visit http://www.intelsat.com LORAL SPACE: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Lead Debtor: Loral Space & Communications Ltd. c/o Loral SpaceCom Corporation 600 Third Avenue New York, New York 10016 Bankruptcy Case No.: 03-41710 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Loral SpaceCom Corporation 03-41709 Loral Space & Communications Corporation 03-41711 Loral Satellite, Inc. 03-41712 Space Systems/Loral, Inc. 03-41713 Loral Communications Services, Inc. 03-41714 Loral Ground Services, L.L.C. 03-41715 Loral Orion, Inc. 03-41716 Loral CyberStar Global Services, Inc. 03-41717 Loral CyberStar GmbH 03-41718 Loral CyberStar Japan, Inc. 03-41719 Loral CyberStar Services, Inc. 03-41720 Loral CyberStar Holdings, L.L.C. 03-41721 Loral CyberStar International, Inc. 03-41722 Loral Asia Pacific Satellite (HK) Limited 03-41723 SS/L Export Corporation 03-41724 CyberStar, L.P. 03-41725 CyberStar, L.L.C. 03-41726 Loral Skynet Network Services, Inc. 03-41727 Loral Licensing, Ltd. 03-41728 Type of Business: The Debtor, together with its affiliates, is one of the world's leading satellite communications companies with substantial activities in satellite-based communications services and satellite manufacturing. Chapter 11 Petition Date: July 15, 2003 Court: Southern District of New York (Manhattan) Judge: Robert D. Drain Debtors' Counsel: Stephen Karotkin, Esq. Lori R. Fife, Esq. Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, NY 10153 Tel: (212) 310-8350 Fax: (212) 310-8007 Total Assets: $2,654,000,000 Total Debts: $3,061,000,000 Debtors' 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Deutsche Bank Trust Co. Public Bond Debt $613,000,000 Americas Corporate Trust & Agency Services, as trustee for holders of 10% Sr Notes due 2006 issued by Loral Orion, Inc. Susan Johnson 280 Park Avenue MS-NYC03-0914 New York, NY 10017 Tel.: 212-454-4225 Fax: 212-454-2223 Bank of New York, as Public Bond Debt $350,000,000 trustee for holders of 9.5% Sr Notes due 2006 issued by Loral Space & Communications Ltd. Attn: Robert Hirsch 101 Barclay Street, 21W New York, NY 10286 Tel.: 212-815-3192 Fax: 212-815-5704 Deutsche Bank Trust Co. Public Bond Debt $49,000,000 Americas Corporate Trust & Agency Services, as trustee for holders of 12.5% Sr Discount Notes due 2007 issued by Loral Orion, Inc. Susan Johnson 280 Park Avenue MS-NYC03-0914 New York, NY 10017 Tel.: 212-454-4225 Fax: 212-454-2223 Deutsche Bank Trust Co. Public Bond Debt $37,000,000 Americas Corporate Trust & Agency Services, as trustee for holders of 11.25% Sr Notes due 2007 issued by Loral Orion, Inc. Susan Johnson 280 Park Avenue MS-NYC03-0914 New York, NY 10017 Tel.: 212-454-4225 Fax: 212-454-2223 Alenia Spazio SpA Trade Debt $21,268,905 Carlo Alberto Penazzi Sede Via Saccomuro 24 Rome, Italy 00131 Tel: 06-4151-4387 Fax: 06-4151-2627 Alenia Marconi Systems (ASI), Inc. (U.S. Affiliate) James Freney 11300 W. 80th Street Overland Park, KS 66214 Tel: 913-495-2600 Fax: 913-492-0870 Alcatel Trade Debt $20,258,906 Yves De -La Serre or Sylvia Lassery 5 rue Noel Pons, 92737 Nanterre, France Tel: 335-3435-5247 Fax: 335-3435-5603 Alcatel Americas (U.S. Affiliate) Mike Quigley 3400 Plano Pkwy Plano, TX Tel: 972-519-3000 Fax: 972-519-4122 Sea Launch Company, LLC Trade Debt $13,010,000 Robert Stonick/James Maser One World Trade Center Suite 950 Long Beach, CA 90831-0950 Tel.: 562-499-4765 Fax: 562-499-4755 DASA (Astrium GmbH) Trade Debt $7,409,214 Andreas Walther Ludwig Bolkow Allee, Tor 2 Gebaude 5.1 81663 Munich, Germany Tel: 4989-6072-3968 Fax: 4989-6072-5538 Astrium North America, Inc. (U.S. Affiliate) 1020 Bay Area Blvd. Houston, TX 77058 Tel: 281-461-8409 Fax: 281-461-9158 Lockheed Martin Corp Trade Debt $3,775,043 Marika L. Long 1111 Lockheed Martin Way Sunnyvale, CA 94089 Tel.: 408-742-1128 Fax: 408-756-9353 Hyundai Trade Debt $2,484,917 Taek Jin Sa c/o Hynix Semiconductor, KPO 1010 Ichon, Korea Tel: 82-2-3459-5498 Fax: 82-2-3459-5513 Hyundai Merchant Marine (America) Co., Ltd (U.S. Affiliate) 879 W. 190th St., 7 Fl. Gardena, CA 90248 Tel: 310-515-2822 Fax: 310-516-1323 Raytheon Company Trade Debt $2,004,111 Stephen Martinez 75 Coromar Drive Goleta, CA 93317 Tel.: 805-562-7224 Fax: 805-562-7740 Boeing Electron Dynamic, Trade Debt $1,902,183 The Boeing Company Chris Stephens 3100 West Lomita Blvd Torrance, CA Tel.: 310-517-5200 Fax: 310-517-5055 L-3 Communications Trade Debt $1,496,385 Holdings, Inc. Joe Langille 107 Woodmere Road Folsom, CA 95630 Tel.: 916-351-4500 Fax: 916-351-4550 Aeroflex Laboratories Inc. Trade Debt $1,398,148 John E. Buyko 35 South Service Road Plainview, NY 11803 Tel.: 516-694-6700 Fax: 516694-6771 Mitsubishi Electric Trade Debt $1,274,468 Yutaka Kazekami 2-2-3 Chome Marunouchi Chiyoda Ku, Tokyo, Japan Tel: 81-3-3218-3496 Fax: 81-3-3218-3314 MELCO (Mitsubishi International Corp) (U.S. Affiliate) Palo Alto Branch 850 Hansen Way, Suite 100 Palo Alto, CA 94304 Tel: 650-494-1545 Fax: 650-493-0318 TRW Astro Aerospace Corp Trade Debt $1,115,000 Chris Yamada 6384 Via Real Carpinteria, CA 93013 Tel: 805-684-6641 Intelsat LLC Trade Debt $550,000 Bette Sheid 3400 Int'l Drive NW Washington, DC 20008-3098 Tel: 202-944-7442 Fax: 202-944-7266 Honeywell Corp Trade Debt $512,525 Dr. Deborah Bamhart 13350 US Highway 19 North Clearwater, FL 33764 Tel: 727-539-3463 Fax: 727-539-2324 SES Americom, Trade Debt $481,028 an SES Global Company Rick Avery/Richard Watson 4 Research Way Princeton, NJ 08540-6684 Tel: 609-987-4575/4171 Fax: 609-987-4080/4196 Eagle Picher Technologies, Trade Debt $430,547 Inc. Lou Lupo P.O. Box 47 Joplin, MO 64802 Tel: 417-623-8000 x 405 Fax: 417-623-0233 MAGELLAN HEALTH: Wins Nod to File Retention Program Under Seal -------------------------------------------------------------- Magellan Health Services, Inc. and its debtor-affiliates obtained the Court's permission to implement an Employee Retention Program and to file the Retention Program Motion under seal. The Retention Program Motion has been made available, on a confidential basis, to the attorneys for the statutory committee of unsecured creditors and the attorneys for the agent for the Debtors' prepetition lenders. (Magellan Bankruptcy News, Issue No. 10: Bankruptcy Creditors' Service, Inc., 609/392-0900) MALDEN MILLS: Gets Court OK to Hire N. Hahn as Investment Banker ---------------------------------------------------------------- Malden Mills Industries, Inc., and its debtor-affiliates sought and obtained approval from the U.S. Bankruptcy Court for the District of Massachusetts to retain N. Hahn as their Investment Banker. The Debtors are employing Nicolas H. Kim and the investment banking firm of N. Hahn & Co., Inc., in connection with a cash-out for creditors option under the Debtors' proposed Chapter 11 Reorganization Plan. Mr. Kim will identify and secure sources of financing for the Acquisition Option set forth in the Plan. The essential component of these services involves negotiating a guarantee or other financing from the Export-Import Bank, an independent U.S. government agency established in 1934 to create jobs through exports. The Debtors and N. Hahn agrees the initial term of the retention through July 31, 2003 and an automatic renewal for successive 30 day Renewal Terms, absent 30 day advance written non-renewal notification. The Debtors also agree to pay N. Hahn a two-part Retainer Fee: a) For the Initial Term -- $60,000 earned at the inception of the engagement b) Renewal Term -- $10,000 per month due and payable in advance. Additionally, the Debtors will pay N. Hahn a two-tier Success Fee equal to: a) 2% on any and all capital raised by N. Hahn, including without limitation any Ex-Im Bank guaranteed amount; and b) 0.5% on any Ex-lm Bank guaranteed capital that is raised independently of the contact, assistance, effort, and/or involvement of N. Hahn. Malden Mills Industries, Inc., a worldwide producer of high- quality branded fabric for apparel, footwear and home furnishings, filed for chapter 11 protection on November 29, 2001 (Bankr. Mass. Case No. 01-47214). Richard E. Mikels, Esq., and John T. Morrier, Esq., at Mintz, Levin, Cohn, Ferris represent the Debtors in their restructuring efforts. NATIONAL EQUIPMENT: Employing Kirkland & Ellis as Attorneys ----------------------------------------------------------- National Equipment Services, Inc., and its debtor-affiliates ask for permission from the U.S. Bankruptcy Court for the Northern District of Illinois to employ Kirkland Ellis as their attorneys. The Debtors expect Kirkland & Ellis to: a. advise the Debtors with respect to their powers and duties as debtors in possession in the continued management and operation of their businesses and properties; b. attend meetings mid negotiate with representatives of creditors and other parties in interest; c. take all necessary action to protect and preserve the Debtors' estates, including prosecuting actions on the Debtors' behalf, defending any action commenced against the Debtors and representing the Debtors' interests in negotiations concerning all litigation in which the Debtors are involved, including, but nut limited to, objections to claims filed against the estates; d. prepare on Debtors' behalf all motions, applications, answers, orders, reports, and papers necessary to the administration of the estates; e. take any necessary action on behalf of the Debtors to obtain confirmation of the Debtors' plan of reorganization; f. represent the Debtors in connection with obtaining postpetition loan; g. advise the Debtors it, connection with any potential sale of assets; h. appear before this Court, any appellate courts and the United States Trustee and protect the interests of the Debtors' estates before those Courts and the United States Trustee; i. consult with the Debtors regarding tax matters; and j. perform all other necessary legal services and provide all other necessary legal advice to the Debtors in connection with the Chapter 11 Cases. The Debtors seek to retain Kirkland & Ellis as their attorneys because the firm has extensive experience and knowledge in the field of debtors' and creditors' rights and business reorganizations under chapter 11 of the Bankruptcy Code. James A. Stempel, a partner of Kirkland & Ellis reports that his firm's hourly rates for attorneys employed in Restructuring, Insolvency, Workout & Bankruptcy group currently range from $255 to $730 per hour. National Equipment Services, headquartered in Evanston, Illinois, rents specialty and general equipment to industrial and construction end users. The Company filed for chapter 11 protection on June 27, 2003 (Bankr. N.D. Ill. Case No. 03-27626). James A. Stempel, Esq., at Kirkland & Ellis represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed debts and assets of over $100 million each. NATIONSRENT INC: Court Approves ICX Corp. Financing Agreement ------------------------------------------------------------- U.S. Bankruptcy Court Judge Walsh approves the NationsRent Debtors' financing agreements with ICX Corporation. Backgrounder NationsRent Inc., and its debtor-affiliates identified a significant number of equipment agreements that were denominated as leases but are actually financing arrangements. In June and July 2002, the Debtors commenced adversary proceedings against certain of their equipment lessors seeking to recharacterize these equipment leases as financing agreements. In particular, the Debtors initiated separate adversary proceedings against Banc of America Leasing & Capital Inc., ICX Corporation and M Credit Inc., to recharacterize their prepetition agreements. The Debtors and the three lessors are parties to various leasing and financing arrangements within which the Debtors regularly obtain equipment for their rental fleet. Since that time, the Debtors and the lessors have actively been involved in arm's-length discussions regarding their obligations under the Prepetition Agreements. Consequently, the parties agree to enter into separate Master Inventory Financing, Security and Settlement Agreements. Under each Agreement, the lessors will sell the Debtors certain equipment that was subject to the Prepetition Agreements. The Debtors will finance the purchase of the inventory by borrowing these amounts: Lessor Amount ------ ------ Banc of America $2,862,232 ICX Corporation 2,995,000 M Credit 8,648,750 On the effective date of the sale, the lessors will make loans to the Debtors at 7% interest rate per annum. For each loan, the Debtors will issue to the lessors promissory notes, identifying the equipment subject to the loan. The Debtors will pay the interest quarterly in arrears starting July 1, 2003. To secure the Debtors' outstanding obligations under the Master Agreements and with respect to the Loans, the lessors will retain or acquire a security interest in the Inventory, including certain proceeds. The Master Agreements also contemplate the modification of the automatic stay to permit the lessors to: -- file necessary documents to perfect their interests and liens granted with respect to the Master Agreements; and -- on the occurrence of an event of default: (a) terminate the Master Agreements, each promissory note and any other documents and agreements in connection with the Loans; (b) declare the Debtors' outstanding obligations under the Master Agreements and each note immediately due and payable; (c) exercise the rights of a secured party under the Uniform Commercial Code to take possession and dispose of the collateral under the Master Agreement and the Loans; and (d) exercise any other rights and remedies under applicable law. The Master Agreements also contemplate the termination of the Debtors' Prepetition Agreements with the lessors on the effective date of the sale. As a consequence, each lessor will have an allowed unsecured non-priority claim on account of the deficiency claims and other general unsecured claims against the Debtors pursuant to the Prepetition Agreements: Lessor Amount ------ ------ Banc of America $1,127,904 ICX Corporation 3,021,199 M Credit 4,004,125 The lessors will have no further claims. (NationsRent Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Service, Inc., 609/392- 0900) NRG ENERGY: Gets Blessing to Hire Ordinary Course Professionals --------------------------------------------------------------- Matthew A. Cantor, Esq., at Kirkland & Ellis, in New York, tells the Court that NRG Energy, Inc., and its debtor-affiliates desire to continue to employ certain professionals in the ordinary course of business. These professionals render a wide range of legal, tax, real estate, finance, insurance and other services that impact the Debtors' daily operations and will inevitably be necessary to assist with the reorganization of the Debtors' business operations. Accordingly, the Debtors sought and obtained the Court's authority, pursuant to Sections 105(a), 327, 328, and 330 of the Bankruptcy Code, to employ the Ordinary Course Professionals without the submission of a separate employment application, affidavit, and the issuance of a separate retention order for each individual professional. The Court orders each professional firm or company retained as an Ordinary Course Professional to file and serve an affidavit and retention questionnaire to the U.S. Trustee. Mr. Cantor notes that the affidavit and retention questionnaire will set forth that the professional firm or company does not represent or hold any interest adverse to the Debtors or their estates with respect to the matter on which the professional is to be employed. The Debtors are authorized to supplement the list of Ordinary Course Professionals from time to time as necessary. The Debtors will file a notice with this Court listing the additional Ordinary Course Professionals that the Debtors intend to employ and to serve the notice on: -- the U.S. Trustee; -- the attorneys for the Debtors' secured prepetition lenders; -- the attorneys for the Debtors' postpetition lenders; -- the attorneys for any statutory committees appointed in these cases; and -- all other parties that have filed a notice of appearance in these Chapter 11 cases. The Debtors are authorized, but not required, to make periodic payments for postpetition compensation and reimbursement of postpetition expenses to each of the Ordinary Course Professionals in the manner customarily made by the Debtors prior to the commencement of these cases in the full amount billed by any Ordinary Course Professional, upon receipt of reasonable detailed invoices indicating the nature of the professional services rendered and disbursements actually incurred, and calculated in accordance with the professional's standard billing practices. However, if any Ordinary Course Professional's fees and disbursements exceed $50,000 per month or $600,000 annually in the aggregate, then the payment to the Ordinary Course Professional or the excess will be subject to Court approval. The total aggregate payments to all Ordinary Course Professionals must not exceed $9,650,000 over the course of these Chapter 11 cases. (NRG Energy Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 609/392-0900) OBECO INC: Enters Agreement to Sell Assets to Art's-Way Manufac. ---------------------------------------------------------------- Art's-Way Manufacturing Co., Inc. (Nasdaq: ARTW) has entered into an agreement to purchase OBECO Incorporated, a manufacturer of steel truck bodies located in Cherokee, Iowa. The agreement includes the purchase of real estate, all inventory, intellectual materials, machinery, tooling, fixtures and the company name. The name of the Company will change to Cherokee Truck Bodies, Incorporated, but the truck bodies will continue to be sold under the recognized name OBECO. The company will continue to be located in Cherokee, Iowa. The United States Bankruptcy Court has approved the sale and the anticipated closing date for the acquisition is set for July 25, 2003. It is anticipated that this transaction will cost approximately $500,000. This acquisition fits in with Art's-Way metal fabrication capability and provides diversification to its agricultural implement product offerings. We believe this action will facilitate growing the business and improving shareholder value. Art's-Way is primarily engaged in the fabrication and sale of metal products in the agricultural sector of the United Stated economy. Major products offerings include animal feed processing equipment, sugar beet and potato harvesting equipment, land maintenance equipment, finished mowing and crop shredding equipment, and seed planting equipment. A significant part of the Company's business is supplying tillage, hay blowers and finish mowers to several original equipment manufactures. After market service parts availability is also an important part of the Company's business. OCWEN RESIDENTIAL: Fitch Takes Various Rating Actions on 4 Issues ----------------------------------------------------------------- Fitch Ratings has taken rating action on the following Ocwen Residential MBS Corporation issues: Ocwen 1998-R1 -- Class A1,A3,A-WAC affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BBB'. Ocwen 1998-R2 -- Class A1A,A2A,A3A,A2F,PF,XF,AP affirmed at 'AAA'. Ocwen 1998-R3 -- Class A1,A-WAC affirmed at 'AAA'; -- Class B-1 rated 'AA' placed on Rating Watch Negative. -- Class B-2 downgraded to 'BB' from 'BBB'. Ocwen 1999-R1- Group A -- Class A1-A,AP-A affirmed at 'AAA'; -- Class B-1A affirmed at 'AA'; -- Class B-2A affirmed at 'A'; -- Class B-3A affirmed at 'BBB'; -- Class B-4A affirmed at 'BB'; -- Class B-5A downgraded to 'CCC' from 'B'. Ocwen 1999-R1- Group F -- Class A1-F,AP-F affirmed at 'AAA'; -- Class B-1F affirmed at 'AA'; -- Class B-2F affirmed at 'A'; -- Class B-3F affirmed at 'BBB'; -- Class B-4F downgraded to 'B' from 'BB'. The negative rating actions are taken due to the level of losses incurred and the high delinquencies in relation to the applicable credit support levels as of the May 25, 2003 distribution date. OMNICARE: Completes Redemption of Conv. Subordinated Debentures --------------------------------------------------------------- Omnicare, Inc. (NYSE: OCR), has completed the previously announced redemption of the entire $345 million aggregate principal amount of the Company's outstanding 5% convertible subordinated debentures due 2007 and convertible into 8,712,121 shares of common stock. Omnicare financed the redemption with the net proceeds from its previously announced offering of 4% trust PIERS (Preferred Income Equity Redeemable Securities) and a portion of the net proceeds from its previously announced offering of 6,468,750 shares of common stock, both completed on June 13, 2003. The Company had purchased $106.5 million of the aggregate principal amount of the outstanding 5% convertible subordinated debentures during the period June 18 to June 30, 2003, and the remaining $238.5 million of the aggregate principal amount of the debentures by July 14, 2003. The total redemption price, including the call premium, was approximately $353.9 million. The call premium, along with the write-off of remaining unamortized debt issuance costs relating to the 5% convertible debentures, will be recognized in the period in which the debentures were redeemed. Accordingly, $4.1 million pre-tax will be recognized in the quarter ended June 30, 2003 and $8.6 million pre-tax will be recognized in the quarter ended September 30, 2003. Omnicare, based in Covington, Kentucky, is a leading provider of pharmaceutical care for the elderly. Omnicare serves residents in long-term care facilities comprising approximately 935,000 beds in 47 states, making it the nation's largest provider of professional pharmacy, related consulting and data management services for skilled nursing, assisted living and other institutional healthcare providers. Omnicare also provides clinical research services for the pharmaceutical and biotechnology industries in 29 countries worldwide. Visit http://www.omnicare.comfor more information. As reported in Troubled Company Reporter's June 6, 2003 edition, Standard & Poor's Ratings Services assigned its 'BBB-' rating to Omnicare Inc.'s $500 million unsecured revolving credit facility due 2007 and its $250 million senior unsecured term loan due 2007. Standard & Poor's also assigned a 'BB+' rating to the company's $250 million senior subordinated notes due 2013, and a 'BB' rating to the company's $250 million convertible trust preferred income equity redeemable securities (Trust PIERS) due 2033. Both the senior subordinated notes and the Trust PIERS are shelf drawdowns. At the same time, Standard & Poor's affirmed the 'BBB-' corporate credit rating on Omnicare, an institutional pharmacy chain. The ratings are removed from CreditWatch, where they were originally placed after Omnicare announced that it would acquire rival institutional pharmacy provider NCS Healthcare Inc. OXFORD INDUSTRIES: Board Declares Quarterly Cash Dividend --------------------------------------------------------- The Board of Directors of Oxford Industries, Inc. (NYSE: OXM) declared a cash dividend of $0.21 per share on Common Stock payable August 30, 2003 to stockholders of record on August 18, 2003. This is the 173rd consecutive quarterly cash dividend since Oxford became publicly-owned in 1960. Oxford Industries, Inc. is a diversified international manufacturer and wholesale marketer of branded and private label apparel for men, women and children. With manufacturing and sourcing operations in over 40 countries around the globe, Oxford provides retailers and consumer with a wide variety of apparel products and services to suit their individual needs. Major licensed brands include Tommy Hilfiger(R), Nautica(R), Geoffrey Beene(R), Slates(R), and Oscar de la Renta(R). Oxford's private label customers are found in every major channel of distribution including national chains, specialty catalogs, mass merchandisers, department stores, specialty stores and Internet retailers. Oxford Industries recently purchased Viewpoint International, the owner of the Tommy Bahama brand of lifestyle apparel and home furnishings. This brand includes upscale men's and women's sportswear, swimwear, accessories and a complete home collection. Viewpoint also produces two additional collections under the Tommy Bahama label, Indigo Palms(TM) and Island Soft(TM). It operates over 30 Tommy Bahama retail locations across the country, including six retail/restaurant compounds. Oxford's stock has traded on the NYSE since 1964 under the symbol OXM. Visit its Web site at http://www.oxfordinc.comfor more information. As reported in Troubled Company Reporter's May 1, 2003 edition, Standard & Poor's Ratings Services assigned its 'BB-' long-term corporate credit rating to Oxford Industries Inc. At the same time, Standard & Poor's assigned its 'B' unsecured debt rating to the company's proposed $175 million senior notes due 2011. The notes are being offered pursuant to Rule 144A under the Securities Act of 1933, with registration rights. The ratings outlook on Oxford is stable. The senior notes' rating is subject to Standard & Poor's review of the final documentation. The senior unsecured debt rating is two notches below the corporate credit rating due to its junior position relative to the large amount of secured bank debt. PG&E NATIONAL: Wants Blessing to Maintain Existing Bank Accounts ---------------------------------------------------------------- In the ordinary course business, the PG&E National Energy Group Debtors maintain collection and disbursement accounts for the benefit of individual entities. NEG maintains two bank accounts for collection and disbursement at Mellon Bank and Citibank, N.A. NEG previously received funds into the NEG Bank Accounts from four primary sources: * Advances under the Corporate Revolver and the Senior Notes; * Equity contributions from PG&E Corporation; * Dividends, taxes and loan repayments from Subsidiaries; and * Interest income. The primary disbursements made from the NEG Bank Accounts were: (a) principal and interest payments under the Senior Notes and Corporate Revolver; (b) reimbursements to non-debtor subsidiaries Power Services Company or NEG Services Company, LLC for expenses incurred on NEG's behalf; (c) equity contributions and intercompany loans to subsidiaries; and (d) tax payments, employee benefits reimbursements and miscellaneous reimbursements to PG&E Corporation. NEG also pays some of its professionals periodic fees and expenses from these accounts. ET has 18 Bank Accounts for collection and disbursement: * Seven collection and disbursement accounts maintained with Mellon Bank; * Four accounts that serve as collateral for third parties maintained at different bank institutions and a tax reserve account; * Two payroll related accounts maintained with Mellon Bank; * Three accounts related to conducting business with Canadian vendors; and * The ET Concentration Account maintained with Mellon Bank in the name of ET Holdings. The primary disbursements made from the ET Bank Accounts are: (a) Margin and settlement payments to counterparties; (b) Payroll expenses; (c) Miscellaneous cash payments to third parties respecting taxes, customs and other transportation costs relating to the operation of ET's business; (d) Reimbursements to Power Services or NEG Services for expenses incurred on behalf of the ET Debtors; (e) Dividends to NEG; and (e) Reimbursements to its parent, PG&E Corporation for tax payments, employee benefits and miscellaneous allocated general and administrative costs. The United States Trustee has established certain operating guidelines for debtors-in-possession that operate their businesses. One provision requires a Chapter 11 debtor to open new bank accounts and close all existing accounts. This requirement, designed to provide a clear line of demarcation between prepetition and postpetition claims and payments, helps to protect against the inadvertent payment of prepetition claims by preventing the banks from honoring checks drawn before the Petition Date. But Martin T. Fletcher, Esq., at Whiteford, Taylor & Preston, LLP, in Baltimore, Maryland, contends that if the guidelines were enforced in the NEG Debtors' cases, it would cause enormous disruption in the Debtors' businesses and would impair their efforts to reorganize. Requiring the NEG Debtors to substitute new debtor-in-possession accounts, while continuing the existence of the remaining Bank Accounts for their non-debtor Affiliates, would cause unnecessary delays and confusion. To ensure a smooth transition into Chapter 11, the Court waives the U.S. Trustee's requirement on an interim basis and authorizes the Debtors to maintain existing Bank Accounts postpetition. The Debtors are also authorized to open or close bank accounts in their discretion as they deem necessary, or as required under further Court order. Every bank at which a Debtor Account is maintained is authorized to continue servicing and administering such Accounts as debtors-in-possession accounts without interruption and in the usual and ordinary course. The banks are also directed to receive, process, honor and pay any and all checks and drafts drawn on, and electronic transfer requests made on, those Accounts on or after the Petition Date. (PG&E National Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 609/392-0900) PHLO CORP: Pulls Plug on Marcum & Kliegman Engagement as Auditor ---------------------------------------------------------------- On July 2, 2003, Phlo Corporation dismissed Marcum & Kliegman LLP as its independent accountant. The Company's decision was approved by the Company's Board of Directors. M&K's reports on the Company's financial statements for fiscal years 2002 and 2001 included a going-concern opinion, in which M&K reported that the Company's financial statements had been prepared assuming that the Company will continue as a going concern and that the Company's financial condition raised substantial doubt at the time each report was issued about the Company's ability to continue as a going concern. M&K has not issued an audit report on any of the Company's financial statements since the Company filed its annual report on July 15, 2002, for the Company's fiscal year ended March 31, 2002. After the completion of an initial screening process, the Company has been approved as a client of a new independent accounting firm for the audit of the Company's financial statements, subject to the successful completion of the final stages of this accounting firm's due diligence investigation. The Company will make the appropriate filings with the Commission upon the engagement of the new independent accounting firm. PHLO CORP: Intends to Spin-Off Part of Biotechnologies Business --------------------------------------------------------------- Phlo Corporation intends to spin-off the portion of its business that involves the development and commercialization of biotechnologies capable of being incorporated into primarily liquid products (for oral consumption) and foods, the manufacturing and marketing of products resulting therefrom, and the licensing or sublicensing of other biotechnologies. The Company anticipates that the spin-off will be accomplished by the distribution to Company shareholders of capital stock of an affiliated company. The assets of the affiliated company that the Company intends to spin-off shall include, but may not be limited to, all rights pursuant to an exclusive license for all uses (including nutraceutical, biotechnological and pharmaceutical), worldwide, of an invention, and all enhancements thereto, related to VEP/PPC (Vitamin E phosphate/polyenylphosphatidylcholine) in a micro- particle delivery system; all intellectual property related to the Aquis Oral Rehydration Solution; biotechnology related to modified pectin liposomal products and its possible use as a cancer treatment; and biotechnology related to insulin liposomal products and its possible use as a treatment for diabetes. The Company plans to complete the spin-off as expeditiously as possible. The Company believes that the proposed spin-off will provide greater value to shareholders by creating two public corporate entities that focus on separate scientific platforms and businesses. In addition, the spin-off will allow the management of each company to better focus on the individual businesses of the respective companies and facilitate the establishment of executive compensation that is more closely tied to the performance of each individual company's results. Finally, the Company believes that the proposed spin-off will enhance each company's access to financing. Phlo Corporation's December 31, 2002 balance sheet shows a working capital deficit of about $2 million, and a total shareholders' equity deficit of about $2 million. Phlo Corporation, a Delaware corporation incorporated in December 1995, and its affiliates is a manufacturer of beverages and liquids containing patented and patent-pending biotechnologies. The Company sells its products to distributors, who offer the products for sale in high volume chain stores, such as supermarkets and drug and convenience stores. The Company is positioned as a biotechnology company which is using high volume distribution networks to commercialize its technology. Central to the Company's strategic development plan is the development, acquisition, and/or exclusive licensing of proprietary technology, nutraceutical, biotechnological and/or pharmaceutical in nature, which the Company initially plans to convey to consumers through the use of liquid formulations and beverage systems. The Company is focusing its technology acquisition efforts of those technologies related to preventing or ameliorating cancer, reducing the effects of aging, and enhancing cognition and personal performance. PILLOWTEX: Term Loan Lenders Extend Forbearance Pact to July 21 --------------------------------------------------------------- Pillowtex Corporation's (OTC Bulletin Board: PWTX) term loan lenders have extended a forbearance agreement set to expire July 14, 2003. The Company's lenders agreed to abstain from exercising the rights and remedies available to them as a result of certain defaults under the Company's term loan agreement. The forbearance agreement is now in effect through July 21, 2003. The Company is continuing to work with its term loan and revolving loan lenders in reviewing its strategic alternatives. Pillowtex Corporation, headquartered in Kannapolis, N.C., is a leading designer, marketer and producer of home fashion products including towels, sheets, rugs, blankets, pillows, mattress pads, feather beds, comforters and decorative bedroom and bath accessories. The Company markets products under its own brand names including Cannon(R), Fieldcrest(R), Royal Velvet(R) and Charisma(R). The Company also designs and manufactures private- label home textile products for leading retailers. Pillowtex operates manufacturing and distribution facilities in the U.S. and Canada and employs approximately 7,800 people. PRESIDENT CASINOS: May 31 Balance Sheet Upside-Down by $49 Mill. ---------------------------------------------------------------- President Casinos, Inc. (OTC:PREZ) announced results of operations for the first quarter ended May 31, 2003. For the first quarter ended May 31, 2003, the Company reported net income of $0.4 million, compared to a net loss of $2.7 million for the first quarter ended May 31, 2002. Revenues for the first quarter ended May 31, 2003 were $32.1 million, compared to revenues of $33.4 million for the first quarter ended May 31, 2002. The increase in income is primarily the result of a $2.7 million decrease in interest expense resulting from the June 20, 2002 voluntary petition under Chapter 11 of the Bankruptcy Code, whereby the noteholders of the Senior Exchange Notes and the Secured Notes were deemed by management to be undersecured and as a result, interest ceased to accrue as of the date thereof. Expense reductions in Biloxi offset a $0.4 million decline in revenue, resulting in a $0.2 million increase in Biloxi's operating income. Cost controls in St. Louis partially offset a $0.9 million decrease in revenue limiting the reduction of operating income to $0.2 million. In addition, corporate administrative costs were reduced by $0.3 million for the same period. These factors resulted in an increase of operating income to $2.5 million for the period ending May 31, 2003 from $2.2 million for the period ending May 31, 2002, resulting in a positive increase in operating income of $0.3 million. At May 31, 2003, the Company's balance sheet shows a total shareholders' equity deficit of about $49 million. President Casinos, Inc. owns and operates dockside gaming facilities in Biloxi, Mississippi and downtown St. Louis, Missouri, north of the Gateway Arch. PRO RATA FUNDING: S&P Assigns BB Prelim. Rating to Class D Notes ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to Pro Rata Funding Ltd./Pro Rata Funding Inc.'s $150 million floating-rate notes. The preliminary ratings are based on information as of July 14, 2003. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect: -- The expected commensurate level of credit support in the form of subordination to be provided by the notes junior to the respective classes; -- The cash flow structure, which is subject to various stresses requested by Standard & Poor's; -- The experience of the collateral manager; and -- The legal structure of the transaction, which includes the bankruptcy remoteness of the issuer. PRELIMINARY RATINGS ASSIGNED Pro Rata Funding Ltd./Pro Rata Funding Inc. Class Rating Amount (mil. $) A AAA 43 B A- 54 C BBB 13 D BB 7 Preferred equity certificates N.R. 33 REGUS BUSINESS: Court Approves Togut Segal as Conflicts Counsel --------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in Regus Business Centre Corp., and its debtor-affiliates' on-going chapter 11 cases sought and obtained approval from the U.S. Bankruptcy Court for the Southern District of New York to employ Togut Segal & Segal LLP as Special Conflicts Counsel. Upon review, Regus Business Centre Corporation, a Debtor in these chapter 11 cases, maintains, among others, a principal operating account, out of which it manages cash receipts and disbursements, an investment sweep account, where funds from the principal operating account are allowed to accrue interest overnight, and a deposit account, into which RBCC has deposited a certificate of deposit for the cash collateralization of the letters of credit that RBCC has posted for the benefit of certain of its landlords, with JP Morgan Chase. Based on these relationships, Chase has asserted that it is a secured creditor of the Debtors and their affiliates. The United States Trustee has requested that the Committee retain conflicts counsel to deal with Chase-related matters because Kaye Scholer may represent Chase in matters unrelated to the Debtors' chapter 11 cases. Accordingly, the Committee wants to retain Togut Segal as its special conflicts counsel to deal with all Chase-related matters in these cases. Frank Oswald, Esq., a member of Togut Segal reports that the current hourly rates charged by Togut Segal for professionals and paraprofessionals employed in its offices are provided: Partners $550 - $675 per hour Associates $205 - $470 per hour Paraprofessionals $100 - $170 per hour The Committee reports that they have selected Ernst & Young Corporate Finance LLP to serve as its financial advisor in Regus' cases. Regus Business Centre Corp., filed for chapter 11 protection on January 14, 2003 (Bankr. S.D.N.Y. Case No. 03-20026). Karen Dine, Esq., at Pillsbury Winthrop LLP represents the Debtors in their restructuring efforts. When the Debtors filed for protection from its creditors, it listed debts and assets of: Total Assets: Total Debts: ------------- ------------ Regus Business Centre Corp. $161,619,000 $277,559,000 Regus Business Centre BV $157,292,000 $160,193,000 Regus PLC $568,383,000 $27,961,000 Stratis Business Centers Inc. $245,000 $2,327,000 SCHOOL SPECIALTY: S&P Assigns B+ Rating to $100-Mil. Sub. Notes --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' rating to School Specialty Inc.'s planned $100 million convertible subordinated notes due 2023. The notes will be issued under Rule 144A with registration rights and the proceeds will be used to reduce the balance on the company's revolving credit facility. At the same time, Standard & Poor's affirmed its 'BB' corporate credit rating on the company. The outlook is stable. Greenville, Wis.-based School Specialty has a leading position in the school supplies industry with a 14% market share. "The ratings on School Specialty reflect its participation in the highly competitive and fragmented school supplies industry, competition in certain segments from larger office products companies, and the risks associated with its aggressive acquisition growth strategy," stated credit analyst Robert Lichtenstein. These factors are offset in part by the company's market leadership, stable industry growth prospects, and good cash flow. Operating performance improved in the fiscal year ended April 26, 2003, with EBITDA increasing 47% to $101.5 million. The increase is attributable to acquisitions and margin enhancement at acquired and existing specialty businesses partially offset by softness in the traditional segment. As a result, credit protection measures improved with EBITDA coverage of interest of about 4.5x for the 12 months ended April 26, 2003, compared with about 3.3x the year before, while total debt to EBITDA, which includes $46 million in off-balance-sheet accounts receivable securitization, declined to 3.5x from about 3.7x the year before. Credit protection measures are expected to continue to improve as the company realizes operating efficiencies from integrating acquired entities. Liquidity is adequate, with $2.4 million in cash and a $250 million revolving credit facility of which $126 million was outstanding as of April 26, 2003. Borrowings under the credit facility are significantly higher during the first two quarters of the company's fiscal year to meet working capital needs for its peak-selling season. The credit facility matures in April 2006 and the existing convertible subordinated notes mature in 2008; otherwise, the company's debt maturity schedule is light over the next several years. Standard & Poor's expects operating cash flow will be the company's primary source to service debt and fund capital expenditures. School Specialty is expected to continue to make strategic acquisitions as the main component of its growth strategy over the next several years. Although the company has good cash flow generation, its aggressive growth strategy through debt-financed acquisitions limits the potential for an upgrade. SFA COLLATERALIZED: Fitch Hatchets 3 Note Class Ratings to B-/C --------------------------------------------------------------- Fitch Ratings downgrades and removes from Rating Watch Negative four classes of notes issued by SFA Collateralized Asset-Backed Securities I Trust. The transaction, a collateralized debt obligation, is supported by a diversified portfolio of asset- backed securities, residential mortgage-backed securities and commercial mortgage-backed securities. The rating actions are based on the recent deterioration of the credit fundamentals of the portfolio to the point where the risk is no longer consistent with the current ratings. The portfolio contains a number of securities whereby default is probable, although only two assets in the current portfolio are classified as defaulted. In addition, the current interest rate environment has placed increased pressure on excess spread. The deterioration in excess spread has caused the class C to begin to pay in kind (PIK) as there is not enough cash to meet current coupon accruals. Deferred interest is currently $1,236,210. The following classes have been downgraded and removed from Rating Watch Negative: SFA Collateralized Asset-Backed Securities I Trust -- Class A floating-rate notes 'AA+' from 'AAA'; -- Class B-1 floating-rate notes 'B-' from 'BBB'; -- Class B-2 fixed-rate notes 'B-' from 'BBB'; -- Class C fixed-rate notes 'C' from 'B'. SFA CABS I Trust, managed by Structured Finance Advisors, Inc., was established in June 2000 to issue $250 million in notes and trust certificates. According to the June 2003 trustee report, the transaction is failing the weighted average coupon test, the Fitch weighted average rating factor test and class A, B and C overcollateralization tests. The Fitch WARF was 29.30 during this period, which far exceeds the rating limitation of 14. This is a substantial decline in the WARF since our last review of the transaction (in the fall of 2002) when the WARF was 19.97. The decline in the WARF underscores the substantial worsening of credit quality of the collateral pool since closing. CABS I holds a number of securities that Fitch has identified as having an increased potential for adverse impact on the ability of the CDO to pay timely interest and ultimate principal on the class A and B notes and ultimate interest and principal on the class C notes and the trust certificates. Several assets in the collateral pool have experienced substantial deterioration in credit quality, including exposure to mutual fund fee and aircraft transactions. The class A overcollateralization test breached the 122.0% trigger, with an actual ratio of 118.41%. The class B OC test breached the 109.5% trigger, with an actual ratio of 105.27%. The class C OC test breached the 101.5% trigger, with an actual ratio of 96.97%, causing an amortization of the notes. SOLECTRON: Obtains Covenant Amendments Under Credit Facilities -------------------------------------------------------------- Solectron Corporation (NYSE:SLR), a leading provider of electronics manufacturing and supply-chain services, has obtained amendments to the definitions of minimum tangible net worth covenants of the company's undrawn, $450 million credit fcilities. As a result, the company remains in compliance with all of its debt covenants. The amendments were obtained July 9 and are effective rtroactively to May 30, 2003. In its June 19 earnings release, Solectron said it was seeking the amendments as a result of non-cash charges recorded in the company's fiscal third quarter, which ended in May. Information about the amendments was contained in Solectron's Form 10-Q report filed Friday with the Securities and Exchange Commission. Solectron -- http://www.solectron.com-- provides a full range of global manufacturing and supply-chain management services to the world's premier high-tech electronics companies. Solectron's offerings include new-product design and introduction services, materials management, high-tech product manufacturing, and product warranty and end-of-life support. The company is based in Milpitas, Calif., and had sales of $12.3 billion in fiscal 2002. * * * As reported in Troubled Company Reporter's June 24, 2003 edition, Fitch Ratings placed Solectron Corporation's 'BB' senior unsecured debt, 'BB+' $450 million senior secured credit facility, and 'B+' Adjustable Conversion Rate Equity Security Units on Rating Watch Negative. Approximately $3.1 billion of debt is affected by Fitch's action. Standard & Poor's Ratings Services placed its 'BB-' corporate credit and its other ratings for Solectron Corp. on CreditWatch with negative implications following the company's announcement of lower-than-expected profitability in the May 2003 quarter, as well as a bank covenant violation and a number of large accounting charges. SOLUTIA: Renews Call for Expedited Appeal to Penn. Supreme Court ---------------------------------------------------------------- Solutia (NYSE: SOI) has filed a brief responding to the Commonwealth of Pennsylvania's position on Solutia's appeal of a 2002 ruling by the Commonwealth Court. The case involves Solutia's liability for the cost of replacing the Transportation and Safety Building in Harrisburg that had been occupied by the Pennsylvania Department of Transportation and was the site of a major fire in 1994. In its brief to the Pennsylvania Supreme Court, Solutia said there are several major flaws in the State's response to Solutia's appeal. The Company's brief makes the following key points: -- The Commonwealth has ignored the major legal issues raised by this case, notably the radical expansion of tort liability by the lower court, which transformed strict liability to absolute liability and which permitted, for the first time in Pennsylvania history, replacement cost damages for an office building, without limitation to the building's actual value. -- The court eliminated the long-standing requirement for expert testimony, even in the case of complex scientific causation issues. -- The lower court permitted the case to proceed even though the evidence was that any risks to building occupants associated with PCBs was either zero or well below background risks for such everyday activities as breathing the air in one's own home, eating food and drinking tap water. -- The lower court permitted the Commonwealth to place before the jury damages for a new $135 million building even though it was undisputed that their old building could have been remediated in a matter of weeks for about $500,000 (assuming any remediation was actually necessary). -- The lower court permitted the case to proceed even though PennDOT's own health study of its workers showed no actual PCB exposure. -- The state's position that a catastrophic fire, the worst in the history of Harrisburg, represented an intended use of the product is totally contrary to Pennsylvania law. If the trial court's decision is applied to other building construction materials, contents and components that could emit toxic chemicals when burned in a building fire -- such as wood, computers, telephones, wallpaper and desks -- manufacturers of such products could be found absolutely liable as well. -- The nations leading academic authorities on products liability, after reviewing the trial record in this case, submitted a brief to the Supreme Court in which they forcefully asserted that the Commonwealth failed to prove that Solutia's product was "unreasonably dangerous" as required under Pennsylvania law. -- Under Pennsylvania product liability law, the Commonwealth's evidence on its product defect claim is insufficient and inadmissible to prove a strict liability case. -- The court ruled that Monsanto was not denied its right to a fair and impartial jury despite the fact that the jury foreman, who cast the deciding vote against Monsanto, failed to disclose his unsubstantiated belief that exposure to PCBs caused a close family member to develop cancer. Solutia, the successor company to Monsanto, the original producer of the PCBs in question, has requested that the Pennsylvania Supreme Court expedite its review of the case. "The company believes that its position in this matter is strong, that there is a large body of informed legal opinion that agrees with its position, and looks forward to having the opportunity to present its arguments before the Pennsylvania Supreme Court," said Solutia's Glenn Ruskin. Solutia -- http://www.Solutia.com-- uses world-class skills in applied chemistry to create value-added solutions for customers, whose products improve the lives of consumers every day. Solutia is a world leader in performance films for laminated safety glass and after-market applications; process development and scale-up services for pharmaceutical fine chemicals; specialties such as water treatment chemicals, heat transfer fluids and aviation hydraulic fluid and an integrated family of nylon products including high-performance polymers and fibers. At March 31, 2003, the Company's balance sheet shows a total shareholders' equity deficit of about $232 million. SONO-TEK CORP: Reports Slight Decline in First Quarter Results -------------------------------------------------------------- Sono-Tek Corporation (OTC Bulletin Board: SOTK) announced sales of $758,523 for the three months ended May 31, 2003, a decrease of 3% or $22,335 compared to sales of $780,858 for the same period of last year. Operating income for the first three months of the year was $60,783 or 8% of sales compared to $66,814 or 9% of sales for the prior year period. For the three months ended May 31, 2003 the Company had net income of $11,047 compared to $33,426 for the prior year period. Our balance sheet is improved from last year at this time with working capital at $445,149 at May 31, 2003 from working capital of $260,840 last year, liabilities have been reduced from $2,269,590 at May 31, 2002 to $2,047,411 at May 31, 2003, and shareholders' deficiency reduced from $749,128 at May 31, 2002 to $628,406 at May 31, 2003. Management has taken action to preserve working capital by seeking longer term financing, and by restructuring agreements with current lenders to defer payments of principal. The Company has experienced a turn-around in profitability during the last eight quarters as a result of changes in management, discontinuance of unprofitable business segments, reductions in the cost structure, and settlements with creditors. The Company has benefited from maintaining a stable work force and a cohesive management team. The Company expects these benefits to be strategic assets as the economy recovers. The Company has returned its focus to its core business, ultrasonic nozzles and systems, and has partially offset the downturn in its traditional electronics industry offerings by developing new uses for its products in the growing medical products field, the defense industry, liquid metal powder manufacturing, glass coatings, non- woven fabrics, and spray drying. According to Dr. Christopher L. Coccio, Sono-Tek's CEO and President, "The Company has developed and introduced the SonoFlux 2000F fluxer and a new liquid metal nozzle system and has sold over 50 nozzle systems specifically designed for coating arterial stents. We are continuing to develop coating systems for medical device customers and other customers in a diverse range of industries, and expect to continue to create new business opportunities in these fields". For further information, visit http://www.sono-tek.com Sono-Tek Corporation is a leading developer and manufacturer of liquid spray products based on its proprietary ultrasonic nozzle technology. Founded in 1975, the Company's products have long been recognized for their performance, quality, and reliability. As reported in Troubled Company Reporter's June 4, 2003 edition, the Company's balance sheet is slightly improved from last year at this time with working capital at $527,085 at February 28, 2003 from working capital of $499,948 last year, liabilities have been reduced from $2,452,461 at February 28, 2002 to $2,074,807 at February 28, 2003, and shareholders' deficiency reduced from $782,554 at February 28, 2002 to $639,453 at February 28, 2003. Management has taken action to preserve working capital by seeking longer term financing, and by restructuring agreements with current lenders to defer payments of principal. The Company experienced a turn-around in profitability during the last seven quarters as a result of changes in management, discontinuance of unprofitable business segments, reductions in the cost structure, and settlements with creditors. The Company has benefited from having a stable work force and a cohesive management team and expects this to be an asset as the economy recovers. The Company returned its focus to its core business, ultrasonic nozzles and systems, and partially offset the downturn in the electronics industry by developing new uses for its products in the growing medical products field, and the defense industry. SPIEGEL INC: Honoring & Paying Prepetition Insurance Obligations ---------------------------------------------------------------- As previously reported, The Spiegel Inc., and its debtor- affiliates sought and obtained the Court's authority to pay prepetition obligations necessary to maintain their insurance coverage in effect. However, the relief granted in the First Day Insurance Order only authorized the Debtors to make payments of prepetition obligations necessary to maintain those insurance policies in effect that were set forth in the First Day Insurance Motion which -- based on an oversight by the Debtors -- did not include prepetition premium payments on their excess liability insurance. The Spiegel Group has a long-standing relationship with the European insurance community, specifically with the insurance company Haftpflichtverband der Deutschen Industrie Versicherungsverein auf Gegenseitigkeit or HDI, a German corporation, and its U.S. subsidiary, Insurance Company of Hannover or ICH. The Spiegel Group developed this relationship with HDI and ICH due to the Spiegel Group's relationship with Spiegel Holdings, Inc. and Otto GmbH. All of Spiegel's voting Class B shares, representing 89% of the economic interest in Spiegel's equity, are held by Spiegel Holdings. The Debtors understand that Dr. Michael Otto and family beneficially own more than 50% of Spiegel Holdings common stock. Dr. Otto is the Chairman of the Spiegel Board of Directors and is the Chief Executive Officer and Chairman of the Board of Directors of Otto GmbH. The Debtors also understand that HDI underwrites various insurance policies provided to Otto GmbH and its affiliates. The Spiegel Group has maintained liability insurance and excess liability insurance with HDI and ICH that provides broad coverage terms and self-administered claim handling. The Spiegel Group believes that its self-management of these insurance programs has kept its total liability insurance costs below the median average for companies of similar size. The Spiegel Group currently maintains $21,000,000 in general liability coverage underwritten by ICH at a $363,000 cost to the Debtors. In addition, the Spiegel Group also maintains an additional $79,000,000 of excess liability coverage due to the size and the nature of its total operations. The Excess Liability Coverage is underwritten by HDI at a EUR137,060 cost to the Debtors. The Excess Liability Coverage is provided under two policies. The first $4,000,000 of the Excess Liability Coverage is written as part of a master global policy, covering certain members of the Otto Group and the Spiegel Group. The remaining $75,000,000 is written for the Spiegel Group's liability exposure in the United States. The Spiegel Group has participated in each of these excess liability policies for three years because it is more cost effective to work with the Otto Group to obtain the Excess Liability Policy, due to the Otto Group's relationships with HDI and ICH, than it would have been for the Spiegel Group to purchase a similar policy on its own. The Debtors understand that one of the Otto Group members acts as the broker to the Excess Liability Policy. In the ordinary course of their prepetition practice, the Debtors would pay ICH directly for the General Liability Coverage and, as of the Petition Date, were current in their payments. However, each year, members of the Otto Group would pay the entire premium for the Excess Liability Policy, and would then invoice the Spiegel Group for its pro rata portion of the Excess Liability Premium. For the period from March 1, 2003 to March 1, 2004, members of the Otto Group were invoiced for the Excess Liability Premium by HDI, and paid the entire amount in April 2003. This payment included the $161,000 of the Excess Liability Premium that is allocable to the Spiegel Group in respect of coverage for the period. The Debtors have determined that this allocation of the total Excess Liability Premium appropriately reflects the actual cost of the Excess Liability Policy that is attributable to the coverage. Consequently, the Spiegel Group would reimburse the Otto Group members for their premium portion within 30 days after the members had made the payment. However, due to their intervening Chapter 11 cases, the Debtors did not reimburse in respect of the Spiegel Excess Liability Premium for the 2003 to 2004 policy period. On a pro-rated basis, $7,000 of the $161,000 of the Excess Liability Premium relates to the prepetition period beginning March 1, 2003 to March 16, 2003. The Debtors understand that the Otto Group has the ability to cancel the Excess Liability Policy related to the Spiegel Group for the non-payment of premium. The Debtors have consulted with their insurance broker and understand that, in the event the Excess Liability Policy were to be cancelled and assuming that they could obtain substitute excess liability coverage on similar terms, their insurance premiums would increase by at least $114,000 from the current cost of $161,000 to between $275,000 and $400,000. Furthermore, the Spiegel Group's insurance broker has advised that due to the Chapter 11 cases, it might be difficult to find an insurance company willing to provide them with substitute excess liability insurance. Since ICH is a subsidiary of HDI, if the Debtors' Excess Liability Coverage were to be cancelled by HDI and when their current General Liability Coverage with ICH expires on March 1, 2004, there is also a substantial possibility that it would be difficult to renew the policy for the coverage. For these reasons, the Debtors sought and obtained the Court's authority to pay prepetition obligations necessary to maintain current Excess Liability Insurance Coverage. The Court allowed the Debtors to pay the Spiegel Excess Liability Premium, which includes the $7,000 Prepetition Excess Liability Premium. (Spiegel Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 609/392-0900) TANBRIDGE CORP: Primary Lender Agrees to Forbear Until July 21 -------------------------------------------------------------- The Tanbridge Corporation received notice that its primary lender has agreed to forbear from enforcing its rights under its existing credit facility as against Tanbridge and its assets to and including July 21, 2003. The notice advised this forebearance is to permit Tanbridge an opportunity to develop a plan satisfactory to the primary lender for recovery of the lender's loans to Tanbridge. Prior to receipt of the notice, Tanbridge had been operating under a plan of restructuring which was accepted by the primary lender on March 3, 2003. Since that time Tanbridge has continued to drive for profitability, cash management and debt reduction. Despite these efforts, the lender has determined that Tanbridge's operating revenues have not met plan expectations and has set a July 21, 2003 deadline to develop a satisfactory revised plan. Tanbridge understands that, after that deadline, the primary lender will continue to make operating credit available to Tanbridge, subject to the lender's rights. Tanbridge has retained the services of Kroll Restructuring Ltd. to assist it in developing a plan that would be satisfactory to the primary lender. The Tanbridge Corporation is Canada's largest leather producer, with plants located in Manitoba and Pennsylvania, as well as a freeze-dry processor of food and other biological products, with plants located in Ontario and New York. Its common shares are traded on the Toronto Stock Exchange under the symbol TNB. TECHCANA INC: Initiates Restructuring Program for Pan-O-Starr ------------------------------------------------------------- TechCana Inc. (TSX-VN: TCN) announced that during the last quarter ending April 30th, 2003, the Company has undertaken a refinancing program for its subsidiary Pan-O-Starr inc., that has required a new injection of capital in the amount of $1.5M from Innovatech Regions Ressources and the reorganization of both secured and non secured debts of the subsidiary. Principally, the injection of funds in the amount of $1.5M into the Company was done with the issue of equity amounting to $1.5M in the Company through the issue of 10,000,000 shares valued at $0.10 per share in favor of Innovatech and a convertible debenture of $0.5M with 10% interest, maturity date set for July 31, 2008. Interest on this debenture is capitalizable over the 12 months following disbursement. As for arrangements with the secured and non secured creditors, an amount of $2.7M in non-secured debt has been stricken from the debenture conversion of IRR ($452k) in capital shares of POS and from the Investissement-Quebec loan ($350k) and the capital reimbursements carried forward that amounts to $200k for the last 12 months. These arrangements have resulted in an extraordinary gain of close to $2.5M in POS financial statements and bring about an important adjustment in the financial structure. However, this reorganization has resulted in bringing the number of TechCana shares up from 11 969 355 to 21 969 355 before dilution. So, as of April 30, 2003, the Company's working capital is over $1M, liquid assets are over $1M and shareholder assets amount to $1.9M compared to a deficit in assets in the amount of $1.9M reflected in the last quarter ending January 31, 2003. The period benefits of $1.8M is mainly attributable to reorganization with the preferential creditors of the subsidiary, which means a profit per share of 0.084 before dilution. In this context of extraordinary earnings, the verification committee is of the opinion that certain items on the balance sheet could be depreciated between now and the end of the financial year, mainly the pre-operating costs that were capitalized during the start-up operation of the Company. This item will be re-evaluated between now and the financial year-end of TechCana. During the last quarter the Pan-O-Starr subsidiary has achieved sales in the amount of $412k and an arrangement with its creditors that paralyzed a portion of its regular manufacturing operations. Furthermore, a recovery plan was put into place involving its inventory levels bringing about a devaluation of $210K. The results for the period are an operating loss in the amount of $643k, that is a loss per share of $0.029 before dilution and adjustment. Consequently, in order to allow installation of new equipment that was planned for in the fixed assets portion of the investment program, Techcana's management and members of the board of directors decided to cease operations starting July 11, 2003 for a period of a few weeks. This temporary operation stoppage would allow time to change the plant layout and add in certain pieces of equipment necessary to increase production levels in answer to customer requirements. Management and members of the board of directors are confident that these measures will allow the Pan-O-Starr subsidiary to meet its financial returns objectives. This new type of 100% solid wood panel made up of edge-glued boards laminated with various wood species will succeed in making the Company a leader in the supply of solid wood panels -- http://www.panostarr.com TERAYON COMMS: Names Douglas Sabella as Chief Operating Officer --------------------------------------------------------------- Terayon Communication Systems, Inc. (Nasdaq: TERN), a leading provider of broadband solutions, announced the appointment of Douglas Sabella as Chief Operating Officer. In this role, Sabella will be responsible for directing the execution of the company's operating and growth strategies, and will report directly to Terayon's CEO Zaki Rakib. Sabella brings an extensive operations and executive management background in the telecommunications and software industries to Terayon. Most recently, Sabella served as president and COO of Tumbleweed Communications Corp., a provider of secure Internet communications software products. During his tenure there, the company managed a successful repositioning in the enterprise software market while also achieving sequential bottom-line financial improvement for eight consecutive quarters. Sabella also spent more than 15 years in executive management positions at Lucent Technologies and AT&T, where he was responsible for significant businesses, including the Communications Application Group and the Octel Messaging Division. "With the continuing strong growth prospects for broadband access and our DOCSIS 2.0 leadership, Doug joins the company at an opportune time to help us achieve the ambitious goals we have set for ourselves," said Rakib. "Doug has the proven ability to focus a company's operational efforts, and his experience will help enable us to execute with the precision necessary to maximize the opportunities ahead of us." Terayon Communication Systems, Inc. provides innovative broadband systems and solutions for the delivery of advanced voice, data and video services that are deployed by the world's leading cable television operators. Terayon, headquartered in Santa Clara, California, has sales and support offices worldwide, and is traded on the Nasdaq under the symbol TERN. Terayon can be found on the Web at http://www.terayon.com * * * As previously reported, Standard & Poor's revised its outlook on cable Internet equipment company Terayon Communications Systems Inc., to negative from stable after Terayon said that it expected lower revenues for the June 2002 quarter than it had previously. At the same time, Standard & Poor's affirmed Santa Clara, California-based Terayon's single-'B'-minus corporate credit rating and triple-'C' subordinated debt rating. Terayon lowered its revenue expectations following a drop in sales of proprietary cable products. The company also faces cable modem pricing pressures and customer financial difficulties. TRISM INC: Court Schedules Plan Confirmation Hearing for Aug. 4 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Missouri approves the Disclosure Statement concerning the Joint Chapter 11 Liquidating Plan filed by Trism, Inc., on April 17, 2003. The Court determines that the Disclosure Statement contains adequate information for the Debtors' creditors to arrive at reasoned decisions when they vote on whether to accept or reject the Debtors' Plan. Written objections, if any, to confirmation of the Plan must be filed not later than 4:00 p.m. on July 28, 2003 and must be received by: i) Counsel for the Debtors: Mark G. Stingley, Esq. Bryan Cave LLP 1200 Main Street, Suite 3500 Kansas City, Missouri 64105 Fax: (816) 374-3300 ii) Counsel for Creditors Committee Lisa A. Epps, Esq. Scott J. Goldstein, Esq. Spencer Fane Britt & Browne LLP 1000 Walnut Street, Suite 1400 Kansas City, MO 64106 Fax: (816) 474-3216 iii) Office of the U.S. Trustee Jerry L. Phillips 400 E. 9th Street, Room 3440 Kansas City, Missouri 64106 Fax: (816) 512-1967 iv) Nicholas A. Franke, Esq. Spencer Fane Britt & Browne LLP 120 S. Central Avenue, 5th Floor St. Louis, MO 63105 Fax: (816) 862-4656 The Hearing to consider confirmation of the Plan is scheduled on August 4, 2003 at 9:00 a.m., Kansas City Time, before the Honorable Jerry W. Venters, at the United States Bankruptcy Court, Western District of Missouri at Kansas City, 400 East 9th Street, Kansas City, Missouri 64106. Trism, Inc., the nation's largest trucking company specializing in the transportation of heavy and over-dimensional freight and equipment, as well as material such as munitions, explosives and radioactive and hazardous waste, filed for chapter 11 protection on December 18, 2001 (Bankr. W.D. Mo. Case No. 01-31323). Laurence M. Frazen, Esq., at Bryan Cave LLP represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $155 million in assets and $149 million in debts. UNITED AIRLINES: Airs Comments on Mechanics' Election Results ------------------------------------------------------------- United Airlines, Inc. (OTC Bulletin Board: UALAQ) issued the following statement by Sara Fields, United's Senior Vice President - People, in response to the National Mediation Board's announcement that United's mechanics and related employees voted to change their union representation to the Aircraft Mechanics Fraternal Association: "United has always respected our employees' right to select their union representation. We will work professionally and cooperatively with all our unions as we move forward to make United a more competitive and profitable enterprise for the long- term." These employees were formerly represented by the International Association of Machinists and Aerospace Workers, District Lodge 141M (IAM 141M). Sixty- three percent (8,239 of 13,144) of the eligible group voted; of the eligible employees who voted, 64% (5,234) voted in favor of representation by AMFA. The NMB, a federal agency that oversees union negotiations and elections in the airline industry, tallied the final count in Washington, D.C., shortly after the polls officially closed today at 2 PM EDT. All terms of the mechanics' contract including current terms of wages, work rules and benefits, remain in place through April 2009, the negotiated duration of the collective bargaining agreement. IAM will continue to represent United's ramp, public contact, food service and security officers, maintenance instructors and fleet technical instructors who were not involved in the election. United and United Express operate more than 3,300 flights a day on a route network that spans the globe. News releases and other information about United may be found at the company's Web site at http://www.united.com UNIFAB INT'L: Resets Annual Shareholders' Meeting for August 1 -------------------------------------------------------------- UNIFAB International, Inc. will hold its annual meeting of shareholders on Friday, August 1, 2003, at 10:00 A.M. CDT, at the headquarters of the Company, 5007 Port Road, New Iberia, Louisiana 70562. The meeting will be held to consider and vote upon the following proposals and to transact such other business as may properly come before the annual meeting. 1. To elect eight directors to serve until the 2004 annual meeting or until their respective successors are duly elected and qualified; 2. To ratify the appointment of Deloitte & Touche LLP as UNIFAB's independent auditors to audit our financial statements for 2003; 3. To amend the Company's Articles of Incorporation to increase the number of authorized shares of Company common stock to 150,000,000; and 4. To amend the Company's Articles of Incorporation to effect a one-for-ten reverse stock split pursuant to which every ten shares of Company common stock would be converted into one share of Company common stock. Record Date: Close of business on June 2, 2003. UNIFAB International, Inc. is a custom fabricator of topside facilities, equipment modules and other structures used in the development and production of oil and gas reserves. In addition, the Company designs and manufactures specialized process systems, refurbishes and retrofits existing jackets and decks and provides design, repair, refurbishment and conversion services for oil and gas drilling rigs. * * * As previously reported in the Troubled Company Reporter, revenue levels for the Company's structural fabrication, process system design and fabrication and international project management and design services are approximately forty percent of those in the same period last year. During the first nine months of the year, the Company has experienced reduced opportunities to bid on projects and was eliminated from bidding on various projects as a result of the substantial deterioration of the Company's financial condition and results of operations experienced during the 2001 fiscal year. Further, the Company was unable to post sufficient collateral to secure performance bonds and as a result was unable to qualify to bid on various contracts. At September 30, 2002, backlog was approximately $4.2 million. On August 13, 2002 the Company completed a debt restructuring and recapitalization transaction with Midland substantially improving the financial position, working capital and liquidity of the Company. Since August 13, 2002, there has been a substantial increase in proposal activity in the Company's main fabrication and process equipment markets. In addition, the Company's capacity to provide performance bonds on projects has improved significantly. As a result, backlog at December 17, 2002 was approximately $24.2 million. Gross profit (loss) for the three months ended September 30, 2002 decreased to a loss of $1.6 million from a profit of $1.6 million for the same period last year. In the nine-month period ended September 30, 2002 gross profit (loss) decreased to a loss of $2.7 million from a profit of $3.4 million in the nine-month period ended September 30, 2001. The decrease in gross profit is primarily due to costs in excess of revenue for the Company's process system design and fabrication services and at the Company's deep water facility in Lake Charles, Louisiana and adjustments of $550,000 related to disputes on several contracts, $387,000 related to valuation reserves on inventory, and $253,000 related to a charge for asset impairment. The effect of these adjustments was offset in part by a $1.1 million contract loss reserve recorded last year. Additionally, decreased man hour levels in the quarter and nine-month periods ended September 30, 2002 compared to the same periods last year at the Company facilities caused hourly fixed overhead rates to increase and resulted in increased costs relative to revenue. For the three and nine month periods ended September 30, 2002 the Company's losses were $3,525 and $23,034, respectively. For comparison, for the three and nine month periods ended September 30, 2001 the Company's losses were $9,117 and $25,227, respectively. Notwithstanding the losses, management believes that its available funds, cash generated by operating activities and funds available under its Credit Agreement will be sufficient to fund its working capital needs and planned capital expenditures for the next 12 months. UNITED AIRLINES: HSBC Gets Stay Relief to Make L. A. Payments ------------------------------------------------------------- HSBC Bank USA, as Successor Trustee, obtained relief from the automatic stay allowing HSBC to apply and disburse trust funds held in Interest and Reserve Accounts for the Bondholders' benefit. Backgrounder A trust agreement, between the California Statewide Communities Development Authority and Chase Manhattan Bank and Trust Company, governs a $190,240,000 Bond issuance. The Agreement was entered on November 1, 1997. The Bonds are titled, "the California Statewide Communities Development Authority Special Facilities Revenue Bonds, Series 1997 (United Airlines, Inc.-Los Angeles International Airport Projects)." The Bonds were used to finance the construction, modification and expansion of buildings and improvements at Los Angeles International Airport. United and the Authority agreed that interest would be paid every April 1 and October 1, until the Bonds mature in 2034. United makes payments to the Trustee, who then places the money in a Bond Fund, which is divided into an Interest Account, a Principal Account and a Reserve Account. The Reserve Account exists so the Trustee can make payments if funds in the Interest and Principal Account are insufficient. The Interest and Reserve Accounts are to be used for payment of principal, premium and interest on the Bonds. In other words, these accounts are not for use by the Debtors. United's bankruptcy filing did not alter these rights; the funds are to be used only to pay interest and principal on the Bonds. The Trustee has a first and exclusive lien on monies in the Interest and Reserve Account to secure payment of the Bonds. The Trustee's security interest in the Accounts has been perfected. On April 1, 2003, a scheduled interest payment was due on the Bonds. An event of default exists because United failed to make its required payment. (United Airlines Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service, Inc., 609/392-0900) UPC POLSKA: Files Prepackaged Plan in Delaware Bankruptcy Court --------------------------------------------------------------- UPC Polska, Inc., formerly known as @Entertainment, Inc., a Delaware corporation together with UPC Polska Finance, Inc., a newly formed company incorporated under the laws of the State of Delaware that will become a wholly-owned subsidiary of UPC Telecom B.V. upon consummation of the Restructuring, jointly submit Chapter 11 Plan of Reorganization with the U.S. Bankruptcy Court for the Southern District of New York. The Debtor's Plan is available for a fee at: http://www.researcharchives.com/bin/download?id=030709224855 The Plan designates 6 classes of claims and 1 class of interests classifying all Claims against and Interests in the Debtor: Class Description Impaired/ Voting Status Unimpaired ----- ----------- ----------- ------------- None Administrative Claims N/A N/A and Priority Tax Claims 1 Priority Claims Unimpaired Not entitled to vote 2 Critical Creditor Claims Unimpaired Not entitled to vote 3 UPC Polska Note Claims Impaired Entitled to (excluding Telecom Owned vote UPC Polska Note Claims) 4 Telecom Owned UPC Polska Impaired Entitled to Note Claims, Belmarken Note vote Claims, Telecom Pari Passu Note Claims and Affiliate Indebtedness Claims 5 General Unsecured Claims Impaired Entitled to vote 6 Telecom Junior Note Claims Impaired Not entitled to vote 7 UPC Polska Equity Impaired Not entitled to Interests vote The Debtor anticipates that the Company may convert into a limited liability company after the restructuring. UPC Polska, Inc., who holds headquarters in Denver, Colorado, is an affiliate of United Pan-Europe Communications N.V. The Debtors is a holding company, which owns various direct and indirect subsidiaries operating the largest cable television systems in Poland. The Company filed for chapter 11 protection in July 7, 2003 (Bankr. S.D.N.Y. Case No. 03-14358). Ali M.M. Mojdehi, Esq., and Ira A. Reid, Esq., at Baker & McKenzie represent the Debtor in its restructuring efforts. As of March 31, 2003, the Debtor listed $704,000,000 in total assets and $940,000,000 in total debts. U.S HOME: Richard Grandy Resigns as Company President and COO ------------------------------------------------------------- U.S. Home & Garden Inc. (OTCBB: USHG) announced that Richard Grandy, its Chief Operating Officer and the President of its subsidiary Easy Gardner, Inc; resigned from these positions effective June 30, 2003, the date on which his employment agreement expired. Mr. Grandy's duties will be assumed by a senior management team led by Dick Kurz, Chief Financial Officer of the Company and Easy Gardner, Sheila Jones, Vice President, Operations of Easy Gardener, and Senior Sales Personnel. Mr. Grandy is pursuing the purchase of the assets of Easy Gardener and certain other subsidiaries of the Company in a leveraged buyout by a company that he has formed. Although the Company held discussions with Mr. Grandy concerning the possible extension of his contract, Mr. Grandy determined not to continue his employment with the Company. Mr. Grandy stated, "I am very optimistic about the future of the lawn and garden industry. I have enjoyed working with the current management team and wish them every success. However, at this stage in my career I believe that my role as a participant in the industry is best served as a principal." The Company anticipates no interruption to its business operations. U.S. Home & Garden Inc. is a leading manufacturer and marketer of a broad range of consumer lawn and garden products including weed preventative landscape fabrics, fertilizer spikes, decorative landscape edging, shade cloth and root feeders which are sold under various recognized brand names including Weed Block(R) , Jobe's(R), Emerald Edge(R), Shade Fabric(TM) Ross(R), and Tensar(R). The Company markets its products through most large national home improvement and mass merchant retailers. To learn more about U.S. Home & Garden Inc., please visit its Web site at http://www.ushg.com At December 31, 2002, the Company's balance sheet shows a total shareholders' equity deficit of about $4.3 million. US MINERAL: Murray Serving as Prof. Taggart's Investment Banker --------------------------------------------------------------- Professor Walter Taggart, the legal representative for future asbestos personal injury claimants of United States Mineral Products Company doing business as Isolatek International, sought and obtained approval from the U.S. Bankruptcy Court for the District of Delaware to hire Murray, Devine & Co., Inc., as his Investment Banker. Mr. Taggart has determined that the employment and retention of an investment banker is crucial to his effective representation of the Future Claimants in order to evaluate the assets and liabilities of the Debtor, its value and its ability to pay present claims and future demands. In this retention, Murray Devine is expected to: a) review and evaluate the Valuation Report prepared by Curtis Securities, LLC, for the Debtor; b) review and evaluate material concerning the Debtor's business that is made available by the financial advisers retained by the Asbestos Committee or provided directly by the Debtor; c) meet with management of the Debtor to review the Company's historic, current, and prospective operations, business and financial conditions; d) advise the Legal Representative concerning the Company's value, future cash flow and profits, and general outlook for the future operation of the Debtor; e) advise the Legal Representative concerning securities that are proposed to be issued under a plan of reorganization and assist the Legal Representative in formulating proposals for securities to be issued under a plan of reorganization as well as any other issues relevant to maximizing the amount available to pay asbestos disease claimants; and f) evaluate business plans and financial projections prepared by the Debtor or its professionals, including any cash flow projections, long term or short term business plans. James L. Allison tells the Legal Representative that Murray & Devine's will charge flat monthly fees for service: First Month $15,000 Second Month $15,000 Third Month $10,000 United States Mineral Products Company manufactures and sells spray-applied fire resistive material, insulation and acoustical products to the commercial and industrial construction industry in North America, Central America, South America and the Caribbean. The Company filed for chapter 11 bankruptcy protection on June 23, 2001 (Bankr. Del. Case No. 01-2471). Aaron A. Garber, Esq., David M. Fournier, Esq., and David B. Stratton, Esq., at Pepper Hamilton LLP represent the Debtor in its restructuring efforts. The Legal Representative for Future Claimants is represented by Michael L. Temin, Esq., at Wolf, Block, Schorr and Solis-Cohen LLP. WEIRTON STEEL: US Steel Wants Prompt Decision on Coke Agreement --------------------------------------------------------------- Michael Kaminski, Esq., at DKW Law Group, PC, in Pittsburgh, Pennsylvania, relates that Weirton Steel Corporation entered into a Memorandum of Understanding with United States Steel Corporation and 1314B Partnership on March 1, 2002 to purchase 650,000 net tons of blast furnace coke per year for three years, commencing on January 1, 2002. In January 2003, the Debtor and USS agreed to amend the Memorandum of Understanding to increase the coke U.S. Steel will supply to the Debtor to 750,000 net tons per year. At the time of the filing of the Debtor's Chapter 11 Petition, the Debtor owed U.S. Steel approximately $11,800,000 for coke U.S. Steel sold to the Debtor pursuant to the terms of the Memorandum of Understanding. Mr. Kaminski notes that U.S. Steel also supplies coke to other integrated steel producers, and is a consumer of coke for steel, which it produces. However, at present, U.S. Steel is having difficulty supplying its own and other commercial sales needs for coke since domestic need for coke exceeds domestic production by approximately 3,000,000 tons per year due to a variety of factors including environmental regulation by government agencies. Thus, it is necessary to import coke. The primary supplier of imported coke is China. However, there has been a major expansion in steel production in China over the last several years. In effect, the availability of coke from China and other foreign sources has decreased. Since the Debtor's ability to continue receiving coke from U.S. Steel is critical to its ability to operate, Mr. Kaminski asserts, it should not be necessary for the Debtor to take until confirmation of a plan in which to determine whether the Memorandum of Understanding should be assumed or rejected. U.S. Steel is being harmed by the Debtor's deferral of its decision to assume or reject the Memorandum of Understanding because it cannot fulfill all of the coke requirement of its other customers and, more importantly, because it is being required to import coke for its own production of steel. Given the importance of a continued supply of coke to the Debtor, and given the harm being suffered by U.S. Steel due to the Debtor's deferral of the decision to assume or reject, cause exists for establishing a date certain by which the Debtor must determine whether to assume or reject the Memorandum of Understanding, Mr. Kaminski asserts. U.S. Steel believes that a date within the first 60 days of the Debtor's Chapter 11 filing would provide ample time for the Debtor to determine whether it should assume or reject the Memorandum of Understanding. Thus, U.S. Steel asks the Court to establish July 19, 2003 as the date by which the Debtor must determine whether to assume or reject its Memorandum of Understanding with U.S. Steel. Creditors' Committee Objects As of June 12, 2003, the Debtor's Chapter 11 case is less than four weeks old. The Official Committee of Unsecured Creditors of Weirton Steel believes that it is far too early in the case to compel the Debtor to assume or reject a significant executory contract like the Memorandum of Understanding with U.S. Steel. Marc E. Richards, Esq., at Blank Rome, in New York, relates that when confronted with a motion to compel assumption or rejection of an executory contract within a specified period of time, courts have indicated that a debtor must have a reasonable time within which to determine whether assumption or rejection would be beneficial to an effective reorganization. U.S. Steel wants the Debtor to either assume or reject their Memorandum of Understanding on July 19, 2003. However, Mr. Richards argues that it is impractical for the Debtor to determine whether to assume or reject the Memorandum of Understanding before the Debtor, in consultation with the Committee, formulates a business plan for emerging from Chapter 11. For example, the Committee is advised that it is possible for the Debtor to emerge from Chapter 11 as a "tin and finishing" operation, which would obviate the need for the coke provided pursuant to the Memorandum of Understanding. The Debtor could also determine to sell its operating assets pursuant to Section 363 of the Bankruptcy Code. Moreover, the assumption of the Memorandum of Understanding would require the Debtor to make a substantial cure payment of approximately $11,800,000 to U.S. Steel as a condition to assumption pursuant to Section 365(b)(1)(A) of the Bankruptcy Code. Mr. Richards reiterates that it is far too early in the Debtor's case to undertake a substantial obligation. The assumption of the Memorandum of Understanding could result in a significant administrative expense claim by U.S. Steel in the event the Memorandum of Understanding will be breached postpetition. The Committee was advised that the Debtor's decision to reject the Memorandum of Understanding in the near future could cause the immediate cessation of going concern operations or a shut- down of blast furnaces and corresponding steel slabs purchase in the open market because: (a) coke is a critical element of the steel slabs manufacturing used in the production of the Debtor's products, and (b) the Debtor does not, at this time, have a coke supplier able to provide a sufficient quantity of coke necessary for the Debtor's continued operations. However, Mr. Richards emphasizes, the non-debtor party to an executory contract must continue to perform its obligations pending the debtor's decision to assume or reject the contract. Therefore, provided that the Debtor continues to perform its obligations under the Memorandum of Understanding postpetition and provided U.S. Steel is afforded adequate assurance of postpetition payment under the Memorandum of Understanding to the extent it is entitled under the Uniform Commercial Code, U.S. Steel should be compelled to perform postpetition under the Memorandum of Understanding, in accordance with its terms. Accordingly, the Committee asks the Court to deny U.S. Steel's request. (Weirton Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., 609/392-0900) WESTAR ENERGY: Will Publish Second-Quarter Results on August 8 -------------------------------------------------------------- On August 8, 2003, Westar Energy, Inc. (NYSE:WR) will release second-quarter 2003 earnings, and Jim Haines, Westar Energy president and chief executive officer, will host a conference call and audio webcast at 9:30 a.m. Eastern Time (8:30 a.m. Central). Event: Westar Energy Second-Quarter 2003 Earnings Conference Call and Webcast Date: August 8, 2003 Time: 9:30 a.m. Eastern (8:30 a.m. Central) Location: 1) Phone conference call 1-800-223-9488, participant code WESTAR or 2) Log on to the webcast at http://www.wr.com A replay of the conference call will be available from about noon Eastern August 8 through August 22 at 800-945-0830. The replay also will be available on the Westar Energy Web site at http://www.wr.com Westar Energy, Inc. (NYSE: WR) is the largest electric utility in Kansas and owns interests in monitored security and other investments. Westar Energy provides electric service to about 653,000 customers in the state. Westar Energy has nearly 6,000 megawatts of electric generation capacity and operates and coordinates more than 36,600 miles of electric distribution and transmission lines. The company has total assets of approximately $6.9 billion, including security company holdings through ownership of Protection One, Inc. (NYSE: POI). Through its ownership in ONEOK, Inc. (NYSE: OKE), a Tulsa, Okla.-based natural gas company, Westar Energy has a 27.5 percent interest in one of the largest natural gas distribution companies in the nation, serving more than 1.9 million customers. For more information about Westar Energy, visit http://www.wr.com * * * As reported in Troubled Company Reporter's April 2, 2003 edition, Standard & Poor's Ratings Services said that its ratings on Westar Energy Inc. (BB+/Developing/--) and subsidiary Kansas Gas & Electric Co. (BB+/Developing/--) would not be affected by the company's announcement of an annual loss of $793.4 million in 2002. The bulk of this charge had already been recorded in the first quarter of 2002 and relates to valuation adjustments for the impairment of goodwill and other intangible assets associated with 88%-owned Protection One Alarm Monitoring Inc., Westar Energy's monitored security business. The credit outlook is developing, indicating that ratings may be raised, lowered, or affirmed. WESTPOINT STEVENS: Court OKs Cash Collateral Use on Final Basis --------------------------------------------------------------- U.S. Bankruptcy Court Judge Drain authorizes the WestPoint Stevens Debtors' use of their Lenders' Cash Collateral on a final basis. As adequate protection for and to the extent of the diminution in value of the Prepetition Secured Lenders' interests in the Prepetition Collateral: A. The Debtors will pay to the Administrative Agent and to the Second Lien Agent, for the benefit of each of the Prepetition Secured Lenders under the respective Prepetition Credit Agreements, current interest and letter of credit fees and charges accruing on the Senior Secured Obligations; provided, that any fees and charges that accrued prior to the Petition Date, including any unpaid interest and letter of credit fees and charges that came due under the respective Prepetition Credit Agreements prior to the Petition Date will be paid within 5 days after the entry of this Order. B. The Debtors grant, assign and pledge to the Collateral Agent, for the ratable benefit of and as adequate protection for the Prepetition First Lien Secured Lenders, and to the Second Lien Agent, for the ratable benefit of and as adequate protection for the Prepetition Second Lien Secured Lenders, postpetition replacement security interests and liens in and to: (i) all proceeds from the disposition of any of the Prepetition Collateral; (ii) all of the DIP Collateral now owned or hereafter acquired by any of the Debtors; (iii) any other assets of the Debtors acquired postpetition; and (iv) all proceeds of the Postpetition Collateral. C. The Prepetition Secured Lenders are granted a superpriority allowed claim pursuant to Section 507(b) of the Bankruptcy Code, limited in amount to the aggregate diminution in value of the Prepetition Secured Lenders' interests in the Prepetition Collateral after the Petition Date, and senior to all other priority or superpriority claims in these bankruptcy cases, subject and subordinate only to: (i) the superpriority claim established in favor of the DIP Agent and the DIP Lenders with respect to the repayment of the DIP Facility, and (ii) the Carve-Out. D. The Debtors will pay monthly, after the submission of invoices and related documentation, all reasonable fees, charges, expenses and other amounts owing to the Collateral Agent or the Administrative Agent as required under the Prepetition First Lien Credit Agreement, the Collateral Trust Agreement or any of other Prepetition Collateral Documents, and the reasonable fees, charges, expenses and other amounts owing to the Second Lien Agent under the Prepetition Second Lien Credit Agreement, including any of the fees, charges, expenses and other amounts which were incurred or accrued but unpaid prior to the Petition Date. (WestPoint Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service, Inc., 609/392-0900) WHEELING: Earns Court Nod to Continue GRC Engagement as Broker -------------------------------------------------------------- Wheeling-Pittsburgh Corporation asks Judge Bodoh's approval of its continued employment of General Realty Co. as broker to sell the balance of WPC's unimproved real property located in Bethany, Brooke County, West Virginia, for a commission equaling 6% of the sale price of the land. Scott N. Opincar, Esq., at Calfee Halter & Griswold LLP in Cleveland, reminds Judge Bodoh that, in November 2001, and again in June 2002, he approved the payment of a 6% sale commission to GRC as a commission upon the sale of other real property owned by the Debtors in Brooke County, West Virginia. WPC wants to sell the remainder of this property and to employ GRC as the broker for that purpose. C. A. Flouhouse, the owner and principal of General Realty Co. in Wheeling, West Virginia, avers that he and GRC are disinterested persons under the Bankruptcy Code and neither hold nor represent any interests adverse to the Debtor on the matter for which employment approval is sought. GRC's only connection with WPC has been the sale of previous parcels of land in West Virginia. Judge Bodoh has no hesitation in approving this continued employment. (Wheeling-Pittsburgh Bankruptcy News, Issue No. 43; Bankruptcy Creditors' Service, Inc., 609/392-0900) WORLDCOM INC: Wants Blessing to Pull Plug on 113 Service Orders --------------------------------------------------------------- Worldcom Inc. and its debtor-affiliates seek the Court's authority to reject the Service Orders associated with: (i) 29 circuits purchased through tariff service orders from SBC or its affiliates, and (ii) 84 circuits purchased under MSAs, of which 83 were purchased from Verizon or its affiliates, and one was purchased from SBC or one of its affiliates. The Debtors currently have no traffic on the Circuits purchased under the Service Orders, under which they incur $95,569 in monthly charges. Thus, the Circuits provided under the Service Orders are unnecessary and costly to the Debtors' estates. By rejecting the Service Orders, the Debtors save the estates $1,144,922 in administrative expenses per annum or $2,198,924 for the remainder of the terms of the Service Orders for capacity that they do not need or use. For these reasons, in the Debtors' business judgment, the Service Orders for the Circuits should be rejected effective as of the disconnect date set forth in the disconnect notice for each Circuit. (Worldcom Bankruptcy News, Issue No. 31; Bankruptcy Creditors' Service, Inc., 609/392-0900) XEROX CORP: Names Michael D. Brannigan as Corporate Vice Pres. -------------------------------------------------------------- Xerox Corporation's (NYSE:XRX) Board of Directors elected Michael D. Brannigan to the additional post of corporate vice president. As senior vice president of the company's North American field sales operations, Brannigan is responsible for a direct sales force of 2,500 that sells and supports Xerox products and services in the United States and Canada. Brannigan, 55, joined Xerox in 1972 as a sales representative and has since held a variety of senior management positions including vice president of Xerox's upstate New York sales group, vice president of the federal public sector business and senior vice president of North American public sector operations. Brannigan holds a bachelor's degree in economics from the University of Maryland and a master's degree in business administration from Loyola College of Maryland. As reported in Troubled Company Reporter's June 24, 2003 edition, Fitch Ratings raised Xerox Corp. and its subsidiaries' senior unsecured debt rating to 'BB' from 'BB-', affirmed the 'B' convertible trust preferred securities, assigned a 'B' rating to the newly issued mandatorily convertible preferred stock, and the new $1.0 billion bank credit facility is rated 'BBB-'. The company is removed from Rating Watch Positive and the Rating Outlook is Stable. Approximately $12 billion of debt is affected by Fitch's action. The rating actions and stable outlook reflect the company's improved credit protection measures and adequate liquidity profile (which is enhanced by the recent capital markets transactions), stabilized financial performance, and simplified capital structure. Xerox continues to execute its operating strategy and significant cost reduction programs, and Fitch believes stable operating performance could be achieved despite challenging prospects for growth in the near-term. In addition, execution risk of the remaining restructuring program is minimal and the management team seems to have stabilized. * Charles Noski Agrees to Act as Senior Advisor to Blackstone ------------------------------------------------------------- The Blackstone Group announced that Charles H. Noski, former Vice Chairman of AT&T, has agreed to act as a Senior Advisor to the firm. Stephen A. Schwarzman, President and CEO of The Blackstone Group, said, "We are fortunate to have the counsel and advice of someone of Chuck's stature and experience in both communications and media to help us evaluate, pursue and manage new and existing investments in those sectors. We are delighted that he has chosen to work with us in this capacity." Chuck Noski added, "There are many exciting possibilities in the communications and media sectors today. I am very pleased to be working with a firm that has the reputation and financial strength of Blackstone." Mr. Noski retired from AT&T as Vice Chairman in November 2002, after serving as AT&T's Chief Financial Officer from December 1999 to June 2002. Prior to joining AT&T, he was President and Chief Operating Officer and a member of the board of directors of Hughes Electronics Corporation. Before joining Hughes in 1990, he was a partner in the international accounting and consulting firm of Deloitte & Touche. Mr. Noski is a member of the boards of directors of Air Products and Chemicals Inc., Northrop Grumman Corporation, and Teledyne Technologies Incorporated. The Blackstone Group, a private investment bank with offices in New York and London, was founded in 1985. The firm has raised over $14 billion for Private Equity Investing including Blackstone Capital Partners IV, the largest Private Equity fund ever raised at $6.45 billion. In addition to Private Equity Investing, The Blackstone Group's core businesses are Private Real Estate Investing, Corporate Debt Investing, Marketable Alternative Asset Management, Mergers and Acquisitions Advisory, and Restructuring and Reorganization Advisory. * Kirkpatrick & Lockhart Expands Boston Office with 4 Attorneys --------------------------------------------------------------- Kirkpatrick & Lockhart LLP announced the expansion of its Boston office with the addition of four attorneys, bolstering the firm's strength across several practice areas. The attorneys joining the Boston office are Sarah J. Blowers, Joyce C. Hersh, Clair E. Pagnano and George J. Zornada. Mr. Zornada has relocated from K&L's Washington, D.C. office. "Kirkpatrick & Lockhart is committed to servicing the increasingly sophisticated legal interests of our clients and the addition of these attorneys to K&L's Boston office furthers that commitment, said Mark E. Haddad, the administrative partner for the Boston office. "Each of these individuals provides either depth or experience in areas of strategic importance to both our Boston and national clientele. We are delighted that they are now part of our team." Sarah J. Blowers concentrates her practice in the probate litigation and trusts and estates areas. She is a member of both the American and Boston bar associations and is admitted to the bar in Massachusetts. She received her law degree from Boston College in 2002 and her undergraduate degree from the University of Pennsylvania in 1998. Joyce C. Hersh, Ph.D., is a patent prosecution attorney in the life sciences field. Both a scientist and an attorney, she regularly prosecutes domestic and foreign patent applications in the fields of molecular biology, genetics, plant science, agriculture, genomics, proteins and peptides, and related areas. Dr. Hersh creates and maintains patent portfolios for start-up companies, and provides studies and opinions on infringement, invalidity, freedom-to-operate, and other aspects of intellectual- property law, including trademarks, materials-transfer agreements, and employee intellectual-property agreements. She was the group leader on the human genome project at the Whitehead Institute for Biomedical Research/MIT Center for Genome Research in Cambridge, Mass., and was a postdoctoral associate at the University of Texas Health Science Center at Houston and at the University of Wisconsin Department of Agronomy. Dr. Hersh received her B.S. degree from the University of Massachusetts, and her doctorate from Cornell University. She received her law degree from Suffolk University in 1999, is admitted to the Massachusetts bar, and is registered to prosecute patents before the U.S. Patent & Trademark Office. Clair E. Pagnano concentrates her practice in the investment management area. Prior to joining K&L, Ms. Pagnano was an associate for a large New York law firm. From 1999 - 2001 she was a legal product manager for Fidelity Investments. Ms. Pagnano is a member of the bar in Maine, Massachusetts and New York. She received her law degree from the University of Maine in 1999 and her undergraduate degree from Colby College in 1996. George J. Zornada has practiced investment management and securities law in K&L's Washington, D.C. office since 2000. He regularly represents investment advisers, open- and closed-end investment companies and their boards of directors, and private investment entities such as employees' securities companies. Mr. Zornada also advises industrial and technology companies regarding the scope and coverage of the Investment Company Act of 1940.Prior to joining K&L's Washington. office, he worked in the U.S. Securities and Exchange Commission's Division of Investment Management. He was branch chief, Office of Investment Company Regulation from 1998 to 2000 and previously was senior counsel and team leader in the Office of Disclosure Regulation and an attorney in the Office of the General Counsel. He received his law degree from Washington University School of Law in 1990 and his undergraduate degree from Ripon College in 1987. Kirkpatrick & Lockhart is a national law firm with approximately 700 lawyers in Boston, Dallas, Harrisburg, Los Angeles, Miami, Newark, New York, Pittsburgh, San Francisco and Washington. K&L serves a dynamic and growing clientele in regional, national and international markets, currently representing over half of the Fortune 100. For more information, visit http://www.kl.com * The Garden City Group Opens West Coast Regional Headquarters -------------------------------------------------------------- David A. Isaac, president of The Garden City Group, Inc., recently announced the expansion of the company's operations to include a west coast office in Seattle, Washington, which will be headed up by Jennifer Keough, a seasoned class action business analyst. "Our Seattle location puts GCG in close proximity to many clients on the west coast," said Isaac. "The west coast regional headquarters will complement our existing branches in Manhattan; Sarasota, Florida; Columbus, Ohio; and Reston, Virginia." GCG's new west coast regional headquarters is located at Two Union Square, 601 Union Street, Suite 4200, in Seattle, Washington, and the general phone number is 206-652-3680. Keough has been appointed as senior vice president and managing director of GCG's west coast operations. "I look forward to the challenges of this new role and to contributing to the further growth and success of GCG," said Keough. "Being based in Seattle provides an excellent opportunity to educate legal and business professionals in the region about the full range of GCG services. We will continue to demonstrate our commitment to the highest quality and cost-effective service that has made GCG an industry leader," continued Keough. Before joining GCG, Keough was responsible for managing the settlement implementation and administration process for large class action settlements at Washington's largest law firm and prior to that, gained her legal expertise while working for a highly regarded civil litigation firm in Seattle. The Garden City Group, a subsidiary of Crawford & Company, administers class action settlements, manages Chapter 11 claims administration, designs legal notice programs, and provides expert consultation services. Its web address is http://www.gardencitygroup.com. Based in Atlanta, Georgia, Crawford & Company -- http://www.crawfordandcompany.com-- is the world's largest independent provider of claims management solutions to insurance companies and self-insured entities, with a global network of more than 700 offices in 67 countries. Major service lines include workers' compensation claims administration and healthcare management services, property and casualty claims management, class action services, and risk management information services. The Company's shares are traded on the NYSE under the symbols CRDA and CRDB. * Meetings, Conferences and Seminars ------------------------------------ July 10-12, 2003 ALI-ABA Partnerships, LLCs, and LLPs: Uniform Acts, Taxation, Drafting, Securities, and Bankruptcy Eldorado Hotel, Santa Fe, New Mexico Contact: 1-800-CLE-NEWS or http://www.ali-aba.org July 17-20, 2003 Northeast Bankruptcy Conference AMERICAN BANKRUPTCY INSTITUTE Hyatt Regency, Newport, RI Contact: 1-703-739-0800 or http://www.abiworld.org July 30-Aug. 2, 2003 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz-Carlton, Amelia Island, FL Contact: 1-703-739-0800 or http://www.abiworld.org July 31, 2003 FOUNDATION FOR ACCOUNTING EDUCATION Bankruptcy and Financial Reorganization Conference New York, NY Contact: 1-800-537-3635 or visit www.nysscpa.org September 18-21, 2003 AMERICAN BANKRUPTCY INSTITUTE Southwest Bankruptcy Conference The Venetian, Las Vegas, NV Contact: 1-703-739-0800 or http://www.abiworld.org September 12, 2003 AMERICAN BANKRUPTCY INSTITUTE ABI/GULC "Views from the Bench" Georgetown Univ. Law Center, Washington, DC Contact: 1-703-739-0800 or http://www.abiworld.org October 2-3, 2003 EUROFORUM INTERNATIONAL European Securitisation Hilton London Green Park Contact: http://www.euro-legal.co.uk October 10 and 11, 2003 AMERICAN BANKRUPTCY INSTITUTE Symposium on 25th Anniversary of the Bankruptcy Code Georgetown Univ. Law Center, Washington, DC Contact: 1-703-739-0800 or http://www.abiworld.org October 15-18, 2003 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES Seventy Sixth Annual Meeting San Diego, CA Contact: http://www.ncbj.org/ October 16-17, 2003 EUROFORUM INTERNATIONAL Russian Corporate Bonds Renaissance Hotel, Moscow Contact: http://www.ef-international.co.uk November 12-14, 2003 AMERICAN BANKRUPTCY INSTITUTE Litigation Skills Symposium Emory University, Atlanta, GA Contact: 1-703-739-0800 or http://www.abiworld.org December 1-2, 2003 RENAISSANCE AMERICAN MANAGEMENT, INC. Distressed Investing The Plaza Hotel, New York City, NY Contact: 800-726-2524 or http://renaissanceamerican.com December 3-7, 2003 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference La Quinta, La Quinta, California Contact: 1-703-739-0800 or http://www.abiworld.org February 5-7, 2004 AMERICAN BANKRUPTCY INSTITUTE Rocky Mountain Bankruptcy Conference Westin Tabor Center, Denver, CO Contact: 1-703-739-0800 or http://www.abiworld.org March 5, 2004 AMERICAN BANKRUPTCY INSTITUTE Bankruptcy Battleground West The Century Plaza, Los Angeles, CA Contact: 1-703-739-0800 or http://www.abiworld.org April 15-18, 2004 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting J.W. Marriott, Washington, D.C. Contact: 1-703-739-0800 or http://www.abiworld.org April 29-May 1, 2004 ALI-ABA Partnerships, LLCs, and LLPs: Uniform Acts, Taxation, Drafting, Securities, and Bankruptcy Fairmont Hotel, New Orleans Contact: 1-800-CLE-NEWS or http://www.ali-aba.org May 3, 2004 AMERICAN BANKRUPTCY INSTITUTE New York City Bankruptcy Conference Millennium Broadway Conference Center, New York, NY Contact: 1-703-739-0800 or http://www.abiworld.org June 2-5, 2004 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort, Traverse City, MI Contact: 1-703-739-0800 or http://www.abiworld.org June 24-26,2004 AMERICAN BANKRUPTCY INSTITUTE Hawaii Bankruptcy Workshop Hyatt Regency Kauai, Kauai, Hawaii Contact: 1-703-739-0800 or http://www.abiworld.org July 15-18, 2004 AMERICAN BANKRUPTCY INSTITUTE The Mount Washington Hotel Bretton Woods, NH Contact: 1-703-739-0800 or http://www.abiworld.org July 28-31, 2004 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz-Carlton Reynolds Plantation, Lake Oconee, GA Contact: 1-703-739-0800 or http://www.abiworld.org September 18-21, 2004 AMERICAN BANKRUPTCY INSTITUTE Southwest Bankruptcy Conference The Bellagio, Las Vegas, NV Contact: 1-703-739-0800 or http://www.abiworld.org October 10-13, 2003 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES Seventy Seventh Annual Meeting Nashville, TN Contact: http://www.ncbj.org/ December 2-4, 2004 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Marriott's Camelback Inn, Scottsdale, AZ Contact: 1-703-739-0800 or http://www.abiworld.org April 28- May 1, 2005 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting J.W. Marriot, Washington, DC Contact: 1-703-739-0800 or http://www.abiworld.org July 14 -17, 2005 AMERICAN BANKRUPTCY INSTITUTE Ocean Edge Resort, Brewster, MA Contact: 1-703-739-0800 or http://www.abiworld.org July 27- 30, 2005 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop Kiawah Island Resort and Spa, Kiawah Island, SC Contact: 1-703-739-0800 or http://www.abiworld.org November 2-5, 2005 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES Seventy Eighth Annual Meeting San Antonio, TX Contact: http://www.ncbj.org/ December 1-3, 2005 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Hyatt Grand Champions Resort, Indian Wells, CA Contact: 1-703-739-0800 or http://www.abiworld.org The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* 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. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com. Bond pricing, appearing in each Thursday's edition of the TCR, is provided by DebtTraders in New York. DebtTraders is a specialist in global high yield securities, providing clients unparalleled services in the identification, assessment, and sourcing of attractive high yield debt investments. For more information on institutional services, contact Scott Johnson at 1-212-247-5300. To view our research and find out about private client accounts, contact Peter Fitzpatrick at 1-212-247-3800. Real-time pricing available at http://www.debttraders.com/ Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ USA, and Beard Group, Inc., Washington, DC USA. Yvonne L. Metzler, Bernadette C. de Roda, Donnabel C. Salcedo, Ronald P. Villavelez and Peter A. Chapman, Editors. Copyright 2003. 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 $675 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***