/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/030917.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, September 17, 2003, Vol. 7, No. 184 Headlines ACTERNA CORP: Gets Nod to Pay $1.2MM Break-Up Fee to Golden Gate ACTRADE FINANCIAL: Wins Nod to Sell Certain Assets to CIT Group ALLEGHENY ENERGY: Unit Closes Sale of Calif. Contract for $354MM AMERCO: Nasdaq Updates Symbol to UHALQ Due to Filing Status AMERCO: Asks Court to Extend AREC Lease Decision Time to Dec. 17 AMERICAN HOMEPATIENT: Tenn Court Nixes Confirmation Order Appeal AMERICAN SEAFOODS: Commences Tender Offer for 10-1/8% Sr. Notes AMES DEPARTMENT: Selling Monroevilee Property for $1.7 Million ANTARES PHARMA: Completes Conversion of All Debt into Equity AVALON DIGITAL: Section 341(a) Meeting to Convene on October 2 BLUE DOT SERVICES: Bank Agrees to Forbear Until October 31, 2003 BMC INDUSTRIES: Continues Talks with Banks on Waiver Extension BURLINGTON INDUSTRIES: Enters Fifth Amendment to DIP Credit Pact CANNONDALE MOTORSPORTS: ATK Motorcycles Buys Out All Inventory CARVER CORP.: Chapter 7 Trustee Discovers & Recovers Assets CHAMBERS STREET: S&P Further Cuts Low-B Ratings on Classes C & D CONSECO FINANCE: Plan of Reorganization Declared Effective CONSECO INC: Court Approves Gary Wendt Settlement Agreement COVANTA ENERGY: Court Approves Grant Thornton as Accountant CTC COMMS: Files Plan and Disclosure Statement in Delaware CWMBS (INDYMAC): Fitch Takes Rating Actions on Two Transactions DELTA AIR LINES: CEO Stresses Plan for Airline Industry Survival DIRECTV LATIN: Lease Decision Period Extended Until November 17 DOBSON COMMS: $183 Million of 12.25% Senior Notes Tendered FIRST NATIONWIDE: Fitch Ups & Affirms Ratings of 4 Transactions FRANK'S NURSERY: Aug 10 Working Capital Deficit Narrows to $110K GENZYME CORP: Completes Acquisition of SangStat Medical Corp. GLOBAL CROSSING: Launches Enhanced Videoconferencing Service GLOBAL CROSSING: Supplies Conferencing Services to Zurich Fin'l GOODYEAR TIRE: Steelworkers Ratify New Three-Year Labor Contract GREAT WALL CASINO: Case Summary & 7 Largest Unsecured Creditors HANGER ORTHOPEDIC: Amends Cash Tender Offer for Senior Sub Notes HAYES LEMMERZ: Second Quarter Fin'l Results Enter Positive Zone HAYES LEMMERZ: HLI Trust Asks Court to Subpoena Former Employees HINES HORTICULTURE: Unit Commences Sr. Notes Private Placement IMAGING TECHNOLOGIES: Hires Pohl McNabola as New Accountants INTERMET CORP: Plans to Build and Operate New Foundry in Mexico J/Z CBO (DELAWARE): B+ Class C Note Rating on Watch Negative KASPER A.S.L.: Files Second Amended Plan & Disclosure Statement KMART CORP: Working to Resolve Landlords' Cure Claims LASERSIGHT: U.S. Trustee to Meet with Creditors on October 14 LEAP WIRELESS: Closes Sale of Spectrum in Idaho and Twin Falls LIBERTY MEDIA: Appoints Michael P. Zeisser as Sr. Vice President LTWC CORP: Consummates Sale of LTWC's Assets to Markado, Inc. MAGELLAN HEALTH: Wants Nod to Assign Amended California Lease MEDMIRA INC: Reports Significantly Improved Results for 2003 METROPCS: S&P Junks $150 Million Senior Unsecured Notes at CCC+ MICROSLATE CORP: Voluntary Chapter 11 Case Summary MIKOHN GAMING: Recapitalization Plans Spur S&P's Ratings Watch MOBILE ENERGY: Court Confirms Third Amended Joint Reorg. Plan NAHIGIAN BROS.: Wants More Time to File Schedules & Statements NATIONAL EQUIPMENT: Relocates Corporate Offices to W. Bryn Mawr NATIONAL STEEL: Secures Open-Ended Removal Period Extension NORTHWEST AIRLINES: Makes $369 Million Pension Plan Contribution NORTHWESTERN CORP: Selling Expanets Inc. to Cerberus and TenX NORTHWESTERN: S&P Drops Credit Rating to D over Ch. 11 Filing NORTHWESTERN CORP: Senior Unsecured Debt Rating Dives Down to DD NRG ENERGY: NRG McClain Gets Go-Signal to Use Cash Collateral NUCENTRIX BROADBAND: Has Until October 6 to File Schedules ORBITAL IMAGING: Enters Settlement Pact with MacDonald Dettwiler PG&E NATIONAL: Court Approves Willkie Farr as Lead Counsel PRIDE INT'L: Fitch Assigns B+ Senior Unsecured Debt Rating PRIMUS TELECOMMS: Closes $132MM of 3.75% Conv. Senior Notes Sale RAMSEY STEEL: Case Summary & 20 Largest Unsecured Creditors RECOTON CORP: Court Fixes September 30, 2003 as Claims Bar Date RELIANT RESOURCES: Will Present at Merrill Lynch Conf. Tomorrow ROHN INDUSTRIES: Files for Chapter 11 Protection in Indiana ROYAL & SUN: S&P Takes Rating Actions on Related Transactions S&S GRAPHICS: Case Summary & 21 Largest Unsecured Creditors SAFETY-KLEEN: Sues NationsBanc Montgomery to Recover Transfers SK GLOBAL AMERICA: Obtains Court Injunction against Utility Cos. SKM LIBERTYVIEW: S&P Puts BB Class B Note Ratings on Watch Neg. SMART WORLD: Consent Unnecessary to Settle Juno Litigation SNYDERS DRUG: Seeks OK to Continue Hiring Ordinary Course Profs. STATION CASINOS: S&P Affirms Ratings over Good Operating Results UNITED AIRLINES: Committee Wins Nod to Expand KPMG Engagement US UNWIRED: Selling PCS Spectrum and Cellular Ops. to Cingular VINTAGE PETROLEUM: Declares Cash Dividend Payable on October 7 WCI STEEL: Files for Chapter 11 Protection in Youngstown, Ohio WCI STEEL INC: Case Summary & 40 Largest Unsecured Creditors WEIRTON STEEL: Seeks Clearance for Weirton City Settlement Pact WORKFLOW MANAGEMENT: First Quarter FY 2004 Net Loss Drops 77% WORLDCOM: Reports Slight Improvement in July Operating Results WORLDCOM: Agrees to Toll Time Periods Under 7-1/8% Debentures W.R. GRACE: Committees Balk At Proposed State Street Engagement * Philip Kirstein Joins Kirkpatrick & Lockhart's New York Office * Jefferies Hires Ted Cook as Investment Banking Managing Direc. * Meetings, Conferences and Seminars ********* ACTERNA CORP: Gets Nod to Pay $1.2MM Break-Up Fee to Golden Gate ---------------------------------------------------------------- In the event that Golden Gate Capital is not the successful bidder at the conclusion of the Auction for the Itronix Business, it will be entitled to a $1,200,000 break-up payment pursuant to the Sale Agreement. The Court authorizes Acterna Corp., and its debtor-affiliates to pay Golden Gate 50% of the Break-Up Fee and a reimbursement of expenses not exceeding $700,000. The other half of the Break-Up Fee is payable only upon consummation of a competing transaction. The Debtors will only pay Golden Gate an expense reimbursement after a hearing and upon notice to: -- the U.S. Trustee; -- the attorneys for the Creditors' Committee; -- the attorneys for the Lenders' Agent; and -- all parties entitled to notice. The expense reimbursement will only be payable upon termination of the Sale Agreement for reasons other than as a result of a material breach by either parties. The Debtors believe that the Break-Up Fee and Expense Reimbursement is fair and reasonable in proportion to the time, effort, cost, and expense that Golden Gate incurred in negotiating the Sale Agreement as a "stalking horse." (Acterna Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc., 609/392- 0900) ACTRADE FINANCIAL: Wins Nod to Sell Certain Assets to CIT Group --------------------------------------------------------------- On September 11, 2003, the United States Bankruptcy Court for the Southern District of New York entered an order approving the motion of Actrade Financial Technologies Ltd. and one of its domestic subsidiaries under Section 363 of the U.S. Bankruptcy Code to allow the sale of certain intellectual property assets of the Company, including the Company's patent, patent applications and trademarks to The CIT Group/Commercial Services, Inc. for $200,000. The Debtor is a publicly traded holding company incorporated in the State of Delaware. Its business operations are conducted through its subsidiaries that provide payment technology solutions that automate financial processes and enhance business-to-business commerce relationships. Actrade Financial filed for Chapter 11 reorganization on December 12, 2002, in the U.S. Bankruptcy Court for the Southern District of New York (Manhattan) (Lead Bankr. Case No. 02-16212). ALLEGHENY ENERGY: Unit Closes Sale of Calif. Contract for $354MM ---------------------------------------------------------------- Allegheny Energy, Inc.'s (NYSE:AYE) subsidiary, Allegheny Energy Supply Company, LLC, and its Allegheny Trading Finance unit have completed the sale of the energy supply contract with the California Department of Water Resources and associated hedge transactions to J. Aron & Company, a subsidiary of The Goldman Sachs Group (NYSE:GS), for approximately $354 million. Much of the adjustment from the estimated sale price of $405 million, announced on July 28, 2003, was attributable to contracts with one counterparty, valued at $38.6 million, which were removed from the sale by mutual agreement of the parties. Changes in the mark-to-market value of the remaining contracts at closing and a reduction in the number of remaining trades assumed by J. Aron accounted for the rest of the adjustment. The proceeds to Allegheny Energy Supply from the sale of the CDWR contract and associated hedge transactions will be applied, in large part, to fund the termination of the Williams and Las Vegas Cogeneration II tolling agreements and certain related hedging arrangements. Allegheny has obtained from its creditors authorization to deposit the remainder of the proceeds into a cash collateral account instead of using those funds to redeem secured debt as otherwise required by the Company's Borrowing Facilities. Paul J. Evanson, Chairman, President, and Chief Executive Officer of Allegheny Energy, said, "The completion of this sale is a major step in strengthening our financial position. The closing effectively achieves our goal of exiting the Western energy markets, thereby significantly reducing our financial risk profile. We will now focus our trading on optimizing our core generation assets." Twenty percent of the proceeds of the CDWR contract sale and associated hedges will be held in escrow. The escrow will be subsequently delivered to Allegheny Energy Supply when the Securities and Exchange Commission approves a parent guarantee by Supply to back up Allegheny Trading Finance's obligation to indemnify J. Aron or when ATF is merged into Allegheny Energy Supply. The escrow is expected to be released before the end of the year. Citigroup served as Allegheny's financial advisor for the transaction. With headquarters in Hagerstown, Md., Allegheny Energy (Fitch, BB- 11-7/8% Convertible Debt and Preferred Share Ratings) is an integrated energy company with a balanced portfolio of businesses, including Allegheny Energy Supply, which owns and operates electric generating facilities and supplies energy and energy- related commodities, and Allegheny Power, which delivers low-cost, reliable electric and natural gas service to about three million people in Maryland, Ohio, Pennsylvania, Virginia, and West Virginia. More information about the Company is available at http://www.alleghenyenergy.com AMERCO: Nasdaq Updates Symbol to UHALQ Due to Filing Status ----------------------------------------------------------- AMERCO (Nasdaq: UHAEQ) has been advised by Nasdaq that its trading symbol will be changed from UHAEQ to UHALQ, in recognition of the Company's current filing status. The fifth character "Q" will remain appended to the Company's symbol pending its emergence from Chapter 11. The trading symbol will be changed from UHAEQ to UHALQ effective with the open of business on September 16, 2003. AMERCO: Asks Court to Extend AREC Lease Decision Time to Dec. 17 ---------------------------------------------------------------- With AREC's filing for Chapter 11 protection on August 13, 2003, it currently has until October 12, 2003 to decide whether to assume or reject its executory contracts and unexpired leases. Bruce T. Beesley, Esq., at Beesley, Peck & Matteoni, Ltd., in Reno, Nevada, relates that AREC is currently a party to 80 unexpired non-residential real property leases, as both lessor and lessee. AREC is current on all of its obligations to the non-debtor parties under the Leases and will remain current on those obligations postpetition. Mr. Beesley tells Judge Zive that since AREC's Petition Date, the AMERCO Debtors' restructuring efforts have been primarily focused on formulating a plan or plans of reorganization in these jointly administered cases. It is anticipated that the plan or plans will provide for the assumption or rejection of the Leases. In line with the lease decision extension granted to Amerco, the Debtors ask the Court to extend AREC's time to assume or reject the Leases until December 17, 2003, pursuant to Section 365(d)(4) of the Bankruptcy Code. Mr. Beesley contends that the requested extension should be approved because: (a) The Debtors' cases are still in their early stages and their reorganization efforts thus far have focused on, among other things, rationalizing their capital structure, maintaining access to insurance coverage necessary for the operation of U-Haul International's business, obtaining access to cash collateral and DIP Financing, and formulating a plan or plans of reorganization; (b) The Debtors determined that deciding whether to assume or reject a lease should not be made until they have finalized their strategy for emerging from Chapter 11 to reduce unnecessary administrative costs to the estates; (c) The extension will not prejudice any non-debtor party to any Lease; (d) The extension will allow the Debtors to further focus on their restructuring efforts and obtain a better understanding of those leases and contracts that they wish to assume or reject; and (e) The extension preserves the value of AREC's interest in the Leases. (AMERCO Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 609/392-0900) AMERICAN HOMEPATIENT: Tenn Court Nixes Confirmation Order Appeal ---------------------------------------------------------------- American HomePatient, Inc. (OTCBB:AHOM) announced that the United States District Court for the Middle District of Tennessee rejected the appeal by the Company's secured lenders of the previously announced order by the U.S. Bankruptcy Court for the Middle District of Tennessee confirming the Company's plan of reorganization under Chapter 11 of the United States Bankruptcy Code. The secured lenders previously had requested from the District Court a stay of the Bankruptcy Court's order, which also had been rejected. As previously announced, American HomePatient emerged from bankruptcy on July 1, 2003 pursuant to a confirmed plan that allows the Company to continue its business operations uninterrupted, led by its current management team. The confirmed plan accomplishes the Company's primary goal of restructuring its long term debt obligations to its secured lenders. In addition, the confirmed plan provides that the Company's shareholders retain their equity interest in the Company, and all of the Company's creditors and vendors will be paid 100% of all amounts they are owed, either immediately or over time with interest. The Company's secured lenders now may appeal the Bankruptcy Court's order to the United States Court of Appeals for the Sixth Circuit. In the event of an appeal, the Company intends to vigorously defend the confirmation order entered by the Bankruptcy Court and upheld by the District Court. A copy of the District Court's order will be filed by the Company with the Securities and Exchange Commission as an exhibit to a Form 8-K, to be available via the Edgar database at http://www.sec.gov Founded in 1983, American HomePatient, Inc. is one of the nation's largest home health care providers with 289 centers in 35 states. Its product and service offerings include respiratory services, infusion therapy, parenteral and enteral nutrition, and medical equipment for patients in their home. Additional information about the Company is available at http://www.ahom.com AMERICAN SEAFOODS: Commences Tender Offer for 10-1/8% Sr. Notes --------------------------------------------------------------- American Seafoods Group LLC and American Seafoods Finance, Inc., have commenced a cash tender offer to purchase any and all of their outstanding 10-1/8% Senior Subordinated Notes due 2010 (CUSIP No. 02944PAB5). In conjunction with the offer, American Seafoods Group LLC and American Seafoods Finance, Inc. are soliciting consents to certain proposed amendments to the indenture governing the Notes. The proposed amendments to the indenture would eliminate substantially all of the restrictive covenants, certain repurchase rights and certain events of default and related provisions contained in such indenture. Holders who tender Notes pursuant to the offer on or prior to the consent expiration date are obligated to consent to the proposed amendments. Holders that consent to the proposed amendments with respect to the Notes are required to tender their Notes in the offer and may not revoke such consent without withdrawing the previously tendered Notes to which such consent relates. The total consideration for each $1,000 principal amount of Notes tendered pursuant to the offer, payable to Holders who tender Notes and consent to the proposed amendments prior to the consent expiration date, is equal to: The sum of (x) $385.4375 (which equals 35% of the equity claw-back price) and (y) 65% of the fixed spread price (such price being rounded to the nearest cent per $1,000 principal amount of Notes). The fixed spread price is equal to the present value on the payment date of all future cash flows on the Notes to April 15, 2006, (the first date on which the Notes may be redeemed at the option of American Seafoods Group LLC), calculated in accordance with standard market practice, based on the assumption that the Notes would be redeemed in full at $1,050.63 per $1,000 principal amount on the earliest redemption date and that the yield to the earliest redemption date is equal to the sum of (a) the yield on the 5.625% U.S. Treasury Note due Feb. 15, 2006, the reference security, as calculated by the Dealer Manager in accordance with standard market practice, based on the bid side price for the reference security, as of 2:00 p.m., New York City time, on Sept. 29, 2003, provided that if the expiration date is extended to a date that is at least 10 business days subsequent to the date on which American Seafoods first gives notices of such extension to the Holders, by public announcement or otherwise, then the bid side price for the reference security shall be calculated on the tenth business day immediately preceding the new expiration date, as displayed on the Bloomberg Government Pricing Monitor, Page PX5 (or any recognized quotation source selected by the Dealer Manager in its discretion if the Bloomberg Government Pricing Monitor is not available or is manifestly erroneous), plus (b) 75 basis points (such price being rounded to the nearest cent per $1,000 principal amount of Notes); minus accrued and unpaid interest to, but not including, the payment date. The yield on the reference security as of 2:00 p.m., New York City time, on Sept. 12, 2003, was 1.832%. If the yield on the date that the price is determined is the same and assuming a payment date of Oct. 16, 2003, the total consideration would equal $1,184.14 for each $1,000 principal amount of Notes tendered. The consent payment is equal to $30.00 per $1,000 principal amount of Notes. The tender offer consideration is equal to the total consideration less the consent payment. In addition to the total consideration or the tender offer consideration, as the case may be, tendering Holders will receive accrued and unpaid interest up to, but not including, the payment date. The solicitation will expire at 5:00 P.M., New York City time, on Sept. 26, 2003, unless extended. The offer will expire at 12:00 midnight, New York City time, on Oct. 10, 2003, unless extended. Holders who tender their Notes after the consent expiration date will not be entitled to receive the consent payment. Tendered Notes may be withdrawn and related consents may be revoked at any time on or prior to the consent expiration date for the offer, but not thereafter. Consummation of the offer is subject to certain conditions, including (1) the consummation of certain financing transactions contemplated by the registration statement on Form S-1 (File No. 333-105499) as amended by Amendment No. 1 thereto and as may be amended from time to time, filed with the Securities and Exchange Commission by American Seafoods Corporation, an affiliate of American Seafoods Group LLC and American Seafoods Finance, Inc., and (2) the receipt of the requisite consents with respect to certain proposed amendments and the execution of the related supplemental indenture to the indenture governing the Notes. Subject to applicable law, American Seafoods Group LLC and American Seafoods Finance, Inc. may, in their sole discretion, waive or amend any condition to the offer or solicitation, or extend, terminate or otherwise amend the offer or solicitation. Credit Suisse First Boston LLC, or CSFB, is the dealer manager for the offer and the solicitation agent for the solicitation. MacKenzie Partners, Inc. is the information agent and Wells Fargo Bank Minnesota, National Association is the depositary in connection with the offer and solicitation. The offer and solicitation are being made pursuant to the Offer to Purchase and Consent Solicitation Statement, dated Sept. 15, 2003, and the related Consent and Letter of Transmittal, which together set forth the complete terms of the offer and solicitation. Copies of the Offer to Purchase and Consent Solicitation Statement and related documents may be obtained from MacKenzie Partners, Inc. at 212-929-5500. Additional information concerning the terms of the offer and the solicitation may be obtained by contacting CSFB at 1-800-820-1653. Copies of the registration statement may be obtained from the Securities and Exchange Commission's Internet site. The site's Internet address is http://www.sec.gov American Seafoods (S&P, BB- Corporate Credit Rating, Positive), headquartered in Seattle, Washington, is the largest harvester and at-sea processor of pollock and the largest processor of catfish in the United States. AMES DEPARTMENT: Selling Monroevilee Property for $1.7 Million -------------------------------------------------------------- Ames Department Stores, Inc., and its debtor-affiliates lease 8.25 acres of land with 67,557 square feet of rentable space under a May 15, 1978 lease with the McKeesport Industrial Development Authority. The Real Property is located at 5070 William Penn Highway in Monroeville, Pennsylvania. The Debtors formerly used the premises as an Ames store. They own all personal property located at the store. Concurrent with their liquidation efforts, the Debtors actively sought a purchaser for the Monroeville Property. The Debtors believe that the offer made by PDMS Realty Monroeville is the best offer made to date. Accordingly, the Debtors actively sought a purchaser for their Monroeville Property, and the offer made by PDMS Realty Monroeville is the best offer made to date. The Debtors and PDMS entered into a Purchasing Agreement with respect to the Monroeville Property. The substantive terms and conditions of the Purchase Agreement are: (1) Assets to be Purchased: * the Land and the Improvements and all easements, tenements, hereditaments, rights, licenses, privileges and appurtenances belonging or relating to, together with all of Ames Realty's right, title and interest in and to any streets, roads, alleys or other public ways adjoining or serving the Land; and * all equipment and furnishings and all other tangible personal property owned by Ames Realty and located on the Premises on the Closing Date. (2) IDA Lease Termination As of the Closing, the Debtors, in accordance with Section 365(a) of the Bankruptcy Code, will assume the IDA Lease and in accordance with the terms of the IDA Lease, immediately cause it to be terminated and the fee title to the Real Property to be conveyed and transferred by the IDA to Ames Realty in accordance with the terms and conditions of the IDA Lease. (3) Easements Agreement Ames Realty is a party to a certain Agreement and Grant of Easements, Restrictions and Covenants Running with the Land, dated January 31, 1970, which applies to certain reciprocal parking and other rights at the Real Property and adjoining properties. As part of the Approval Order: * The Easements Agreement will be deemed in full force and effect and nothing in the Easements Agreement imposes any monetary obligation on the Debtors' part to any other party; * Pursuant to Sections 365(a) and (f) of the Bankruptcy Code, the Easements Agreement will be assumed by Ames Realty and assigned to PDMS; and * All Easement Parties are estopped from asserting that the Easements Agreement is not in full force and effect and that PDMS is not, by virtue of the assignment by the Debtors, a party to the agreement entitled to all rights, Benefits and remedies. (4) Purchase Price The Purchase Price for the Property is $1,700,000 payable in cash as: * an $85,000 deposit will be delivered by PDMS to the Debtors upon the execution of the Purchase Agreement; and * the balance, $1,615,000, will be paid in cash at the Closing, subject to prorations and adjustments as may be provided under the Purchase Agreement. (5) Closing Closing on the sale of the Property to PDMS is to occur 15 days after the Approval Order has been entered, but in no event later than 75 days after the date of the Purchase Agreement. (6) No Representations or Warranties The Property is being sold to PDMS on an "as is, where is" basis. The Purchase Agreement contains the customary representations contained in real estate transactions. Under the IDA Lease, Ames Realty has the right to convert its leasehold interests in the Real Property to fee title provided that: (i) it is not in default; (ii) a $10 termination fee, as provided, is paid by Ames Realty; and (iii) the related fee mortgage securing commercial development bond that were issued in connection with the development of the Real Property pursuant to the IDA Lease is satisfied in full by Ames Realty. The Bonds are currently held by The Prudential Insurance Company of America and Everest Reinsurance Company. Based upon written advice from Prudential and Everest, the outstanding amounts payable pursuant to the Bonds, including principal, interest and legal fees as of August 30, 2003 for Prudential is $435,605, and as of July 31, 2003 for Everest is $151,296, subject to accrual of both interest and fees through the Closing. In connection with the proposed sale to PDMS, Ames Realty will, before the Closing, complete arrangements with IDA for: * termination of the IDA Lease, and * vesting of fee title in the Real Property with Ames Realty. The Bond obligations to Prudential and Everest, which are secured by the Mortgage, will be satisfied by payment of the Bond Amount from the proceeds that will be received by the Debtors pursuant to the Purchase Agreement. IDA has agreed that the transfer of title to the Real Property from IDA to Ames Realty will occur as of the Closing Date, and only upon an actual closing of the transactions with PDMS under the Purchase Agreement. These understandings with IDA were confirmed by a letter from Ames' counsel to IDA's attorney dated August 7, 2003. It is the Debtors' intent to have: (a) the termination of the IDA Lease; (b) payment of the Bond Amount to Prudential and Everest; (c) satisfaction of the Mortgage; and (d) conveyance of the fee interest in the Real Property, all to occur simultaneously with the actual Closing. Against this backdrop, the Debtors sought and obtained the Court's authority to sell the Monroeville Property and to enter into transactions in connection with the IDA Lease, the Mortgage and the Easements Agreement in accordance with the terms of the Purchase Agreement. An auction to consider higher and better offers for the Monroeville Property will be held on September 25, 2003 at 2 p.m. at the offices of Togut, Segal & Segal LLP, at One Penn Plaza, Suite 3335, in New York, New York. Judge Gerber will hold a hearing on September 26, 2003 at 9:45 a.m. to consider: * the assumption of the Debtors' lease with IDA for the Property; * the conveyance of the Property to the Debtors by the IDA; and * the subsequent sale of the Property to PDMS, or to any other successful bidder, pursuant to the terms of the Purchase Agreement. (AMES Bankruptcy News, Issue No. 43; Bankruptcy Creditors' Service, Inc., 609/392-0900) ANTARES PHARMA: Completes Conversion of All Debt into Equity ------------------------------------------------------------ Antares Pharma, Inc. (OTC Bulletin Board: ANTR) announced the conversion of all existing debt to equity. The 8% Convertible Debentures held by Xmark Fund, L.P., Xmark Fund, Ltd. and SDS Merchant Fund, L.P. have been exchanged for shares of the Company's Series D Convertible Preferred Stock. This stock is non-voting and is convertible into an aggregate of 2,437,490 shares of the Company's common stock, the same number of shares into which the debentures were convertible. Concurrent with the closing of the transaction, the Xmark funds and SDS also agreed to terminate the security interest they held in the Company's assets. Additionally, the Company's largest shareholder, Dr. Jacques Gonella, converted the short-term debt owed to him by the Company into 2,398,635 shares of the Company's common stock, at a conversion price of $1.00 per share. The Company also issued to Dr. Gonella a five-year warrant to purchase an aggregate of 1,798,976 shares of common stock at a per share exercise price of $1.25. Mr. Lawrence Christian, Chief Financial Officer of Antares Pharma, stated, "These conversions enable us to free our balance sheet of debt and demonstrate the confidence that these investors have in our drug delivery business plans." Antares Pharma -- whose June 30, 2003 balance sheet shows a total shareholders' equity deficit of about $6 million -- develops pharmaceutical delivery systems, including needle-free and mini- needle injector systems and transdermal gel technologies. These delivery systems are designed to improve both the efficiency of drug therapies and the patient's quality of life. The Company currently distributes its needle-free injector systems in more than 20 countries. In addition, Antares Pharma conducts research and development with transdermal gel products and currently has several products in clinical evaluation with partners in the US and Europe. The Company is also conducting ongoing research to create new products that combine various elements of the Company's technology portfolio. Antares Pharma has corporate headquarters in Exton, Pennsylvania, with manufacturing and research facilities in Minneapolis, Minnesota, and research facilities in Basel, Switzerland. AVALON DIGITAL: Section 341(a) Meeting to Convene on October 2 -------------------------------------------------------------- The United States Trustee will convene a meeting of Avalon Digital Marketing Systems' creditors on October 2, 2003, 10:00 a.m., at Boston Building, 1st Floor, 9 Exchange Place, 355 South Main, Salt Lake City, Utah 84111. This is the first meeting of creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. A digital marketing company headquartered in Provo, Utah, Avalon Digital Marketing Systems filed for chapter 11 protection on September 5, 2003 (Bankr. Utah Case No. 03-35180). Penrod W. Keith, Esq., and Ryan L. Jensen, Esq., at Durham Jones and Pinegar represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $3,327,496 in total assets and $10,773,111 in total debts. BLUE DOT SERVICES: Bank Agrees to Forbear Until October 31, 2003 ---------------------------------------------------------------- Blue Dot Services Inc., a heating, ventilation and air conditioning and plumbing company, completed the sale of six business locations during the third quarter of 2003 and has reduced the balance under its existing credit facility from $20 million to less than $10 million. The Company also reported that it extended through Oct. 31, 2003, a forbearance agreement with its bank and continues to work to further reduce the outstanding balance under its credit facility. Dan Newell, president and CEO of Blue Dot, said the Company's sale of its business locations generated net proceeds enabling the Company to reduce the balance on its credit facility and satisfy other obligations. Newell said Blue Dot is continuing to work with its majority stockholder, NorthWestern Corporation (NYSE: NOR), on the sale of its remaining business locations and expects proceeds to be used to further reduce its credit facility and improve Blue Dot's liquidity. Newell said that Blue Dot and its subsidiaries are not included in NorthWestern's Chapter 11 reorganization filing. Newell added that Blue Dot's cash on hand, plus ongoing cash flow from operations, should be sufficient to meet its expected operating requirements through the end of 2003. Blue Dot and its business locations continue to pay its vendors and suppliers in the ordinary course of business, and it does not expect NorthWestern's Chapter 11 reorganization filing to materially affect the Company's ongoing operations. BMC INDUSTRIES: Continues Talks with Banks on Waiver Extension -------------------------------------------------------------- BMC Industries, Inc. (OTCBB:BMMI) continues discussions with its lenders regarding an additional waiver extension and interest deferral to its credit agreement. The company has been operating under a 60-day waiver granted on July 15, 2003, and a temporary deferral agreement of interest payments, both of which expire as of September 15, 2003. BMC had received an initial two-week waiver on June 30, 2003, and a subsequent 60-day waiver on July 15, 2003, following notice by BMC to its bank group that the company expected to fall outside of compliance with certain covenants and obligations under its credit agreement as of June 30, 2003. That waiver extended the time period for BMC to make certain scheduled principal and fee payments. In addition, the company has been operating under a temporary deferral agreement relating to interest payments of approximately $1.8 million that also expires as of September 15, 2003. BMC Industries, Inc., founded in 1907, is comprised of two business segments: Optical Products and Buckbee-Mears. The Optical Products group, operating under the Vision-Ease Lens trade name, is a leading designer, manufacturer and distributor of polycarbonate and glass eyewear lenses. Vision-Ease Lens also distributes plastic eyewear lenses. Vision-Ease Lens is a technology and a market share leader in the polycarbonate lens segment of the market. Polycarbonate lenses are thinner and lighter than lenses made of other materials, while providing inherent ultraviolet (UV) filtering and impact resistant characteristics. The Buckbee-Mears group is the only North American manufacturer of aperture masks, a key component in color television picture tubes. For more information about BMC Industries, Inc., visit the company's Web site at http://www.bmcind.com BURLINGTON INDUSTRIES: Enters Fifth Amendment to DIP Credit Pact ---------------------------------------------------------------- Rebecca L. Booth, Esq., at Richards, Layton & Finger, in Wilmington, Delaware, reports that as of August 22, 2003, there are no borrowings outstanding under the Burlington Industries Debtors' Revolving Credit and Guaranty Agreement. However, there are Letters of Credit outstanding under the Facility for $19,000,000. These Letters of Credit support various aspects of the Debtors' day-to-day business operations, including their workers' compensation insurance obligations, their third-party treaty insurance obligations, certain international tax and duty obligations and certain obligations to lessors and vendors. Furthermore, 10 Letters of Credit, totaling $10,300,000, are up for renewal on November 14, 2003 and would require JPMorgan Chase to provide notice of non-renewal. On receipt of that notice, the beneficiary is entitled to draw the full amount of the Letter of Credit. Section 2.03 of the Credit Agreement provides that: (a) upon a draw of any Letter of Credit, the draw will be reimbursed by the Borrower by no later than one business day from the date of the draw, and (b) the Borrower may effect the reimbursement: (1) if the draw occurs prior to the Termination Date, in cash or through a borrowing under the Credit Agreement, or (2) if the draw occurs on or after the Termination Date, in cash. To avoid the termination of the Letters of Credit and the resulting Reimbursement Obligations, the Debtors and JPMorgan Chase have agreed to amend the Credit Agreement. Accordingly, the Court allows the Debtors to implement a fifth amendment to the Credit Agreement, which provides that: (a) the permanent reduction of the Total Commitment to the amount that equals the undrawn stated amount of the Letters of Credit; (b) the release of: (1) the DIP Lenders, including JPMorgan Chase, from any further obligation to make any Loans pursuant to Section 2.01 of the Credit Agreement, and (2) the DIP Lenders, other than JPMorgan Chase, from any further obligation to make any payments to JPMorgan Chase as the Fronting Bank on account of existing Letters of Credit, and Letters of Credit issued after the Effective Date pursuant to Section 2.03(e) of the Credit Agreement; (c) a maturity date of December 31, 2004; (d) a Commitment by JPMorgan Chase to provide up to $25,000,000 for the issuance of one or more Letters of Credit, provided that no new Letter Credit will be issued from and after the Effective Date: (1) unless the Borrower will have deposited in the Letter of Credit Account cash in an amount equal to 105% of the face amount of the new Letter of Credit to be issued by JPMorgan Chase as collateral security for the Borrower's obligations in connection therewith, and (2) if after giving effect to the issuance, the aggregate Letter of Credit outstanding will exceed $25,000,000; (e) the elimination of the annual administration fee and the collateral fee required under a certain fee letter referenced in Section 2.19 of the Credit Agreement due on November 15, 2003 and November 15, 2004; and (f) the payment of an additional $25,000 administration fee to JPMorgan Chase on November 15, 2004 in the event that the Termination Date has not occurred by that date. The Fifth Amendment to the Credit Agreement will not become effective until: (a) the date on which the amendment is executed by the Borrower, the Guarantors and JPMorgan Chase and the Agent has received evidence satisfactory to it of the execution, (b) the Court has entered an order in form and substance satisfactory to the Agent authorizing the terms of the amendment and the payment by the Borrower to JPMorgan Chase, for its own account, of an amendment fee equal to $50,000, (c) the amendment fee is received by JPMorgan Chase for its own account, and (d) the Borrower has deposited cash in the Letter of Credit Account in an amount equal to 105% of the undrawn stated amount of the existing Letters of Credit as collateral security for the Borrower's obligations in connection therewith. Ms. Booth relates that the Fifth Amendment will permit the Debtors to maintain the Letters of Credit with JPMorgan Chase until the Letters of Credit are replaced or collateralized by the Buyer or otherwise terminated or cancelled by the Debtors. Moreover, the terms of the Fifth Amendment are necessary to facilitate a smooth transition of the Debtors' businesses and assets to the Buyer in connection with the closing of the sale and the consummation of the Plan. (Burlington Bankruptcy News, Issue No. 39; Bankruptcy Creditors' Service, Inc., 609/392-0900) CANNONDALE MOTORSPORTS: ATK Motorcycles Buys Out All Inventory -------------------------------------------------------------- America's second oldest motorcycle manufacturer, ATK Motorcycles has taken delivery of all remaining Cannondale Motorsports inventory, paving the way for Cannondale dealers to resume providing parts and service to thousands of off-road motorcycle and ATV riders worldwide. In January 2003, Cannondale Motorsports filed bankruptcy, leaving industry experts unsure of the future of Cannondale, and dealers unable to obtain Cannondale products and spare parts (see http://www.cannondaler.com). The inventory, valued at more than $13MM, will enable ATK to provide products, parts and service to Cannondale Motorsports dealers and owners into the future. ATK has already begun shipping parts through the existing Cannondale dealer network. According to ATK President Frank White, the off-road motorcycle industry sells about 300,000 units per year. Armed with new American technology and innovation, ATK is now poised to move into the fast-growing ATV market, which sold more than 760,000 units last year alone, with growth continuing at more than 20 percent annually. "This is a huge market, and Cannondale was on the cutting edge of technology and design. We want to incorporate that kind of forward-thinking into future ATK models." ATK plans to introduce new models in 2004, made from high-quality Cannondale parts, incorporating design improvements in an effort to make the product more reliable. As parts and inventory are sold, ATK plans to begin manufacturing parts for both Cannondale and ATK products, ensuring continued availablility for dealers and enthusiasts worldwide. ATK also plans to expand its Homeland Defender lineup of law-enforcement and military off-road vehicles, many of which are used by police departments in America. CARVER CORP.: Chapter 7 Trustee Discovers & Recovers Assets ----------------------------------------------------------- Following a default under its chapter 11 plan in May 2003, Judge Steiner directed appointment of a chapter 7 trustee to oversee Carver Corp.'s liquidation. Dennis Lee Burman, the Chapter 7 Trustee overseeing Carver's liquidation, advises the U.S. Bankruptcy Court for the Western District of Washington that he's discovered and recovered assets that may be sufficient to make a distribution to unsecured creditors. Against that backdrop, the Clerk has mailed proof of claim forms to all known creditors and directs all unsecured creditors to file proofs of claim on or before December 10, 2003. Carver Corporation -- a consumer hi-fidelity audio products design and manufacturing company -- filed for chapter 11 protection in May 1999 (Bankr. W.D. Wash. Case No. 99-05793) after creditors filed collection suits and started making a run for the company's assets. The Company filed for chapter 11 protection and confirmed a long-term pay-out plan. The Company defaulted under the Plan in May 2003. The Company's Web sites at http://www.carvercorp.comhas vanished. That Internet domain is registered to: Marian Lundberg Carver Corporation P.O. Box 1589 5210 Bickford Ave. Snohomish , WA 98290 Telephone 425.335.4748 Fax 425.335.4746 E-mail: marian@SUNFIRE.COM CHAMBERS STREET: S&P Further Cuts Low-B Ratings on Classes C & D ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on the class C and D tranches of Chambers Street CDO Ltd.'s floating-rate notes. At the same time, Standard & Poor's affirmed its ratings on the class A and B tranches. Concurrently, all ratings were removed from CreditWatch, where they were placed April 29, 2003. The rating actions reflect the valuation prices of previously defaulted reference credits and credit deterioration in the $1 billion pool of reference credits. The notional amount of the reference pool will be reduced as a result of the defaults. The rating actions also reflect the level of credit enhancement provided by subordination, Chambers Street's ability to meet its payment obligations as issuer of the notes, and Chambers Street's commitment to follow guidelines established for maintenance of the pool of reference credits. RATINGS LOWERED AND REMOVED FROM CREDITWATCH Chambers Street CDO Ltd. Class Rating To From C BB BBB-/Watch Neg D B- BB-/Watch Neg RATINGS AFFIRMED AND REMOVED FROM CREDITWATCH Chambers Street CDO Ltd. Class Rating To From A AAA AAA/Watch Neg B AA- AA-/Watch Neg CONSECO FINANCE: Plan of Reorganization Declared Effective ---------------------------------------------------------- Conseco, Inc. (NYSE:CNO) announced that the Sixth Amended Plan of Reorganization for its former Conseco Finance subsidiary, which was confirmed by the U.S. Bankruptcy Court on Sept. 9, 2003, became effective at 4 pm (CDT) Monday, Sept. 15, 2003. The Sixth Amended Plan of Reorganization, the notice of effective date and related documents are available at http://www.bmccorp.net/conseco CONSECO INC: Court Approves Gary Wendt Settlement Agreement ----------------------------------------------------------- James H.M. Sprayregen, Esq., at Kirkland & Ellis, relates that the Reorganizing Debtors and Gary Wendt have negotiated a global settlement, which is designed to resolve Mr. Wendt's objections to the Plan and all matters relating to his employment-related agreements. Thus, the Conseco Debtors sought and obtained the Court's authority to reject certain employment agreements and enter into other settlement agreements with Mr. Wendt. Mr. Sprayregen outlines the terms of the Settlement Agreement: 1) The Reorganizing Debtors withdraw its request to reject Mr. Wendt's Retirement Agreement, Stock Option Agreement and Restricted Stock Agreement; 2) The Reorganizing Debtors withdraw the Deemed Amount Motion as it relates to any claims by Mr. Wendt; 3) The Retirement Agreement and the Indemnity Agreement between the Debtors and Mr. Wendt will remain in full force with the Benefit Amount reduced from $1,500,000 per year to $1,325,000 per year; 4) Mr. Wendt and his spouse will be entitled to participate in all Conseco health insurance programs; 5) Under the Plan, Mr. Wendt is a "Releasee" and will receive the same benefits as other directors and officers; 6) The Indemnity Claims are withdrawn; 7) Mr. Wendt has an Allowed Class 8A Claim for $1,500,000; 8) The Stock Option Agreement and the Restricted Stock Agreement are deemed rejected and the Plan Objection is withdrawn; and 9) The Debtors and Mr. Wendt will exchange mutual releases. Mr. Sprayregen explains that further litigation with Mr. Wendt will be complex and protracted, potentially delaying the Plan Confirmation process. The Settlement Agreement reduces the benefits the Debtors have to pay Mr. Wendt by over $4,000,000 and resolves numerous contested issues. (Conseco Bankruptcy News, Issue No. 31; Bankruptcy Creditors' Service, Inc., 609/392-0900) COVANTA ENERGY: Court Approves Grant Thornton as Accountant ----------------------------------------------------------- Covanta Energy Corporation and its debtor-affiliates sought and obtained the Court's authority to employ Grant Thornton LLP as their independent certified public accountants to perform certain due diligence services with respect to a third party that has expressed an interest in investing in Covanta in conjunction with a plan of reorganization. Deborah M. Buell, Esq., at Cleary, Gottlieb, Steen & Hamilton, in New York, tells the Court that Grant Thornton is a respected and experienced professional services firm that is well recognized in the fields of audit, tax and bankruptcy. Grant Thornton is frequently engaged by debtors and creditors involved in proceedings before the U.S. Bankruptcy Courts. As the Debtors' accountants, Grant Thornton will be: (a) providing limited due diligence assistance regarding a Potential Investor's U.S. federal taxable income and losses for all open tax years as of the date of the Engagement Letter to assist management and the Debtors concerning a potential transaction with a Potential Investor; (b) analyzing the Potential Investor's financial statements, U.S. federal income tax returns and work papers prepared by the Potential Investor or its tax preparation professionals and other company records; (c) making inquiries of the Potential Investor's management and tax preparation professionals and commenting on the information obtained; (d) drafting a written report of findings and comments for the Debtors; and (e) providing oral commentary and oral presentations to the Debtors with respect to findings and comments. Grant Thornton will charge these hourly rates in performing the services: Partner/Principal/Director $525 Senior Manager 475 Manager 450 Senior Accountants 350 Associates 250 Administrative Assistants 95 Ms. Buell states that Grant Thornton's employment as independent certified public accountants is necessary and essential to enable the Debtors to execute their duties as debtors-in-possession. In particular, the services to be performed by Grant Thornton are critical in assessing the viability of a possible transaction with the Potential Investor as part of a plan of reorganization. The services Grant Thornton will render are not intended to be duplicative in any manner with the services to be performed by any other professionals retained by the Debtors. Ms. Buell clarifies that Grant Thornton is not being employed to provide any independent auditing services being provided by Deloitte & Touche LLP or any reorganization advisory services being provided by Chilmark Partners LLP or Loughlin Meghji + Co., the Debtors' financial advisors. Grant Thornton researched its client databases and distributed internal communications to determine whether it had any relationships with the entities in connection with the present Chapter 11 cases. To the best of its knowledge, Grant Thornton has not been retained to assist any entity or person other than the Debtors on matters relating to, or in connection with these Chapter 11 cases. Grant Thornton agrees not accept any engagement or perform any service in the present cases for any entity or person other than the Debtors. However, Grant Thornton may continue to provide professional services to, and engage in commercial or professional relationships with, entities or persons that may be creditors of the Debtors; provided, that the services do not and will not relate to, or have any direct connection with, these present cases. The Debtors do not presently owe any amounts to Grant Thornton in respect of prepetition services. Thomas G. Butler, a Grant Thornton member, discloses that Grant Thornton, its partners, principals or professional employees do not hold or represent any interest adverse to the Debtors. Grant Thornton is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b). (Covanta Bankruptcy News, Issue No. 35; Bankruptcy Creditors' Service, Inc., 609/392-0900) CTC COMMS: Files Plan and Disclosure Statement in Delaware ---------------------------------------------------------- CTC Communications Group, Inc., and its subsidiaries have filed their joint plan of reorganization and disclosure statement with the United States Bankruptcy Court for the District of Delaware. This represents an important milestone in CTC's reorganization following its October 2002 Chapter 11 filing. Pursuant to the plan of reorganization, CTC proposes to implement its previously-announced investment transaction with Columbia Ventures Broadband LLC. CTC must first obtain Bankruptcy Court approval for the disclosure statement, which provides details regarding the Plan, before the Company can solicit votes on its Plan. Following Court approval of the disclosure statement, the Plan would become effective only after receiving the votes required under bankruptcy law, confirmation by the Court and consummation of the CVC transaction. The Plan has the support of CTC's largest secured lenders, whose claims represent a majority of all creditor claims. Under the Plan, as proposed, and subject to approval by the Bankruptcy Court: -- All liabilities incurred after CTC filed its Chapter 11 petition and certain priority claims would be paid in full. -- Secured equipment lenders would receive such amounts as they may agree with CTC. Settlements have been reached with CTC's largest equipment lenders. If a settlement has not been reached between CTC and a secured equipment lender, the creditor would receive the value of, or return of, its collateral. -- CTC's secured lenders, Verizon and Cisco would share a fund comprised of CTC's cash on hand as of the effective date of the Plan, a portion of the proceeds of CTC's new equity issue to CVC under the investment agreement, both subject to certain adjustments, and certain other consideration. -- CTC's unsecured creditors whose allowed claims exceed $5,000 would receive the New CTC Warrant (as described in the disclosure statement) to purchase 5% of the equity of Reorganized CTC for nominal consideration and would share with the secured lenders and Verizon in the proceeds, if any, of certain causes of action. Provided that this class of unsecured creditors votes in favor of the Plan (i) these creditors would have a $500,000 prior share in any proceeds of certain causes of action before deficiency claims of the secured lenders and Verizon would share in those proceeds; and (ii) the deficiency claims of the secured lenders and Verizon would not share in the New CTC Warrant. -- CTC's unsecured creditors whose allowed claims are $5,000 or less, and creditors with claims aggregating between $5,000 and $10,000 who voluntarily reduce their claims to $5,000, would constitute a convenience class and receive 15% of their allowed claims in cash. -- CTC's existing common and preferred shareholders would not receive a distribution under the Plan. The existing common and preferred stock of CTC and all options to purchase equity securities would be canceled. -- The equity issued to Columbia Ventures Broadband LLC and the New CTC Warrant would constitute the only shareholder interests in CTC. CTC's Interim CEO, Michael Katzenstein, said, "We are pleased to be taking this important step in CTC's reorganization and we look forward to obtaining Bankruptcy Court approval to present this Plan and disclosure statement to our creditors. Upon consummation of the Plan, CTC's balance sheet will be significantly stronger. Its return to financial health, under new ownership and with new growth capital, will enable it to compete in the marketplace, provide excellent customer service and introduce innovative new services." CTC is a "next generation" Integrated Communications Carrier utilizing advanced technology and providing its customers with converged voice, data, Internet and video services on a broadband, packet-based network, called the PowerPath(R) Network. The Company serves medium and larger business customers from Virginia to Maine, which includes the most robust telecommunications region in the world -- the Washington D.C. to Boston corridor. CTC's Cisco Powered IP+ATM packet network and its top-tier sales and service teams provide contiguous marketing and technology coverage throughout the Northeast and Mid-Atlantic States. The Company, through its dedicated commitment to exceptional customer service, has achieved an industry-leading market share in the Northeast. CTC can be found on the worldwide Web at http://www.ctcnet.com CWMBS (INDYMAC): Fitch Takes Rating Actions on Two Transactions --------------------------------------------------------------- Fitch takes rating actions on the following CWMBS (IndyMac) Inc.'s mortgage pass-through certificates: CWMBS (IndyMac) 2000-C (RAST 2000-A3): -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'AA'; -- Class B2 affirmed at 'A'; -- Class B3 affirmed at 'BBB' -- Class B4 downgraded to 'CCC' from 'B'; -- Class B5 downgraded to 'D' from 'C'. CWMBS (IndyMac) 2000-H (RAST 2000-A8): -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'AA'; -- Class B2 affirmed at 'A'; -- Class B3 downgraded to 'B' from 'BB'; -- Class B4 downgraded to 'D' from 'CC'. These 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 August 25, 2003 distribution. DELTA AIR LINES: CEO Stresses Plan for Airline Industry Survival ---------------------------------------------------------------- Delta Air Lines (NYSE: DAL) pledged continued support for an additional five-year period to Cincinnati's economic development agency being relaunched next year, under the name of Cincinnati USA. "In the Cincinnati area, as in other communities with major airline hub airports, easy access also drives business decisions and draws new business opportunities," Delta Air Lines Chairman and CEO Leo F. Mullin told attendees Monday at the International Economic Development Council's Annual Conference. "While aviation benefits our entire nation, cities and communities with 'hub' airport operations benefit most," said Mullin. Additionally, Mullin asserted that it is possible for the nation's major airlines to survive, but only if three major actions are undertaken immediately. The three-point plan includes: 1. Airlines must continue cost reduction programs. "The absolute essential restructuring of costs in order to achieve competitive status in all markets is underway at virtually every major airline, and certainly at Delta," Mullin stated. "The difficult step of cutting jobs has already been taken. Labor contracts agreed to in prosperous times will need to be re-negotiated," said Mullin. Airlines also need support from suppliers, financial organizations, airport operators, and others who have a huge stake in ensuring the success of the industry. 2. Government must make permanent its responsibility for aviation security costs. "The government imposes, and continues to expand, a long list of 9/11 related security requirements and airlines," Mullin added. "These costs are appropriately part of national security and airlines, like all other industries, should be released from this unique burden. We are hopeful that the government will make this understanding of national security responsibilities a basic tenet in future budget considerations." 3. Government should enable appropriate restructuring. The government must enable appropriate industry restructuring to take place, including steps by bankrupt carriers, as well as possible mergers, alliances, or asset sales among the various carriers in the industry. "An industry structure that does not allow financial success for most of its participants can no longer be allowed to prevail," said Mullin. "I strongly believe that the potential for recovery, tough as the road may be, is still there," said Mullin. "Decision makers, particularly in the public sector, know full-well that our country crucially needs a vibrant aviation system to serve as the engine for a healthy economy." Delta Air Lines (S&P/BB-/Negative), the world's second largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offers 5,813 flights each day to 447 destinations in 81 countries on Delta, Song, Delta Express, Delta Shuttle, Delta Connection and Delta's worldwide partners. Delta is a founding member of SkyTeam, a global airline alliance that provides customers with extensive worldwide destinations, flights and services. For more information, go to http://www.delta.com DIRECTV LATIN: Lease Decision Period Extended Until November 17 --------------------------------------------------------------- DirecTV Latin America, LLC obtained approval from the Court to extend the time by which it must assume or reject its unexpired non-residential property leases through and including November 17, 2003. DirecTV is a party to two unexpired non-residential real property leases: Lease Premises Lessor -------------- ------ 2400 East Commercial Blvd. CB Richard Ellis Fort Lauderdale, Florida 2400 East Commercial Blvd. 33308 Suite 708 Fort Lauderdale, Florida 33308 New Town Commerce Center Iron Mountain 3821 SW 47th Avenue New Town Commerce Center Fort Lauderdale, Florida 3821 SW 47th Avenue 33314 Fort Lauderdale, Florida 33314 Attn: Daniel Melendez DirecTV is presently considering and assessing various options regarding the formulation of a reorganization plan. Forcing DirecTV to assume the Unexpired Leases would subject the estate to unnecessary administrative expense. Then again, forcing DirecTV to reject and seek new office and storage space would disrupt its operations and reorganization efforts. (DirecTV Latin America Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service, Inc., 609/392-0900) DOBSON COMMS: $183 Million of 12.25% Senior Notes Tendered ---------------------------------------------------------- Dobson Communications Corporation (Nasdaq:DCEL) announced that, as of the close of business on Friday, September 12, 2003, an aggregate of $183,255,000 principal amount of Dobson/Sygnet Communications Corporation's outstanding 12.25% Senior Notes (CUSIP No. 25607PAB4), or 97.2% of the total outstanding, have been tendered in connection with Dobson/Sygnet's Offer to Purchase and Consent Solicitation for these notes. The Consent Solicitation, in which Dobson/Sygnet is seeking the necessary consents to remove certain covenants from the indenture governing its outstanding Notes, expired at 5 p.m. ET, Friday, September 12, 2003. The Offer to Purchase continues in effect and will expire at 5 p.m. ET, October 7, 2003. Dobson/Sygnet expects to close the Offer to Purchase on Tuesday, October 7, 2003, or as soon thereafter as is practicable. Pursuant to the Offer to Purchase and the Consent Solicitation, Dobson/Sygnet will pay the holders of Notes who tendered prior to the Consent Solicitation expiration date aggregate consideration of $1,077.57 per $1,000 principal amount of Notes tendered, plus accrued and unpaid interest on the tendered principal amount. Holders of Notes who tender their Notes after the Consent Solicitation expiration date, but prior to the Offer to Purchase expiration date, will receive $1,047.57 per $1,000 principal amount of Notes tendered, plus accrued and unpaid interest on the tendered principal amount. Dobson/Sygnet intends to execute a Supplemental Indenture that will, among other things, eliminate all events of default with respect to the Notes other than events of default relating to the failure to pay principal of and interest on the Notes and eliminate covenants in the Indenture that, among other things, have limited Dobson/Sygnet's ability to pay dividends, make distributions and certain investments, acquire or prepay junior securities, incur debt, sell assets, enter into certain transactions with affiliates and incur liens. The Supplemental Indenture will be operative upon consummation of the Offer to Purchase. As reported in Troubled Company Reporter's Monday Edition, Standard & Poor's Ratings Services assigned its 'CCC+' rating to Dobson Communications Corp.'s $600 million senior notes due 2013, issued under Rule 144A with registration rights, and its 'B-' to Dobson Cellular Systems, Inc.'s new $700 million secured credit facility based on preliminary documentation. The 'B-' corporate credit rating for Dobson Communications and Dobson Operating Company LLC was affirmed, and Dobson Operating Company's 'B-' bank loan rating was also affirmed. The outlook is stable. Upon completion of the new credit facility, Dobson Operating Company's bank loan rating will be withdrawn. FIRST NATIONWIDE: Fitch Ups & Affirms Ratings of 4 Transactions --------------------------------------------------------------- Fitch Ratings has taken rating actions on the following First Nationwide Trust, residential mortgage-backed certificates: First Nationwide Trust, Mortgage Pass-Through Certificates, Series 1999-2 Groups I & II -- Classes IPP-A, IIPP-A affirmed at 'AAA' -- Class C-B-1 upgraded to 'AA+' from 'AA' -- Class C-B-2 affirmed at 'A' -- Class C-B-3 affirmed at 'BBB' -- Class C-B-4 affirmed at 'BB' -- Class C-B-5 affirmed at 'B.' First Nationwide Trust, Mortgage Pass-Through Certificates, Series 1999-2 Groups III & IV -- Classes III-A, IV-A affirmed at 'AAA' -- Class D-B-1 affirmed at 'AAA' -- Class D-B-2 upgraded to 'AAA' from 'AA+' -- Class D-B-3 upgraded to 'AAA' from 'AA-' -- Class D-B-4 affirmed at 'BBB-' -- Class D-B-5 affirmed at 'B.' First Nationwide Trust, Mortgage Pass-Through Certificates, Series 1999-3 Groups I & II -- Classes IPP-A, IIPP-A affirmed at 'AAA' -- Class C-B-1 affirmed at 'AA' -- Class C-B-2 affirmed at 'A' -- Class C-B-3 affirmed at 'BBB.' First Nationwide Trust, Mortgage Pass-Through Certificates, Series 1999-4 Groups I, II, III & IV -- Class IPP-A, IIPP-A, IIIPP-A, IVPP-A affirmed at 'AAA' -- Class C-B-1 affirmed at 'AA' -- Class C-B-2 affirmed at 'A' -- Class C-B-3 affirmed at 'AA' -- Class C-B-4 affirmed at 'AA' -- Class C-B-5 affirmed at 'BB' -- Class C-B-6 affirmed at 'B.' First Nationwide Trust, Mortgage Pass-Through Certificates, Series 1999-5 Groups I & III -- Classes IPP-A, IIIPP-A affirmed at 'AAA' -- Class C-B-1 affirmed at 'AAA' -- Class C-B-2 upgraded to 'AA' from 'A+' -- Class C-B-3 upgraded to 'A-' from 'BBB+' -- Class C-B-4 affirmed at 'BB+' -- Class C-B-5 affirmed at 'B.' First Nationwide Trust, Mortgage Pass-Through Certificates, Series 1999-5 Groups II -- Classes II-A affirmed at 'AAA' The upgrades reflect an increase in credit enhancement relative to future loss expectations and the affirmations on the above classes reflect credit enhancement consistent with future loss expectations. FNT 1999-2 class D-B-1 as well as 1999-4 classes C-B-3 and C-B-4 consist of guarantees provided by Commercial Guaranty Assurance, Ltd., whose insurer financial strength is rated 'AA' by Fitch. Although CGA no longer underwrites new business, it's runoff is being managed by ACE Financial Solutions, a division of ACE Ltd. CGA's claims-paying resources consist of two reinsurance policies provided by subsidiaries of ACE Ltd. covering up to $400 million of potential future losses. FRANK'S NURSERY: Aug 10 Working Capital Deficit Narrows to $110K ---------------------------------------------------------------- Frank's Nursery & Crafts, Inc. (OTC:FNCN) reported net earnings of $3.0 million for the second quarter ended August 10, 2003 versus net earnings of $2.8 million for the second quarter of 2002. For the first half of 2003, income before reorganization items was $4.0 million versus a loss of $22.8 million for the first half of 2002. Net sales for the second quarter of 2003 were $91.4 million compared to $89.1 million last year, a comparable increase of 2.6%. For the first half of 2003, sales were $208.0 million compared to $200.1 million last year, a comparable increase of 4.0%. The same 170 stores were open for all periods presented. At August 10, 2003, the Company's balance sheet shows that its total current liabilities exceeded its total current assets by about $110,000, while total shareholders' equity dwindled to about $14 million. "We are pleased with the sales and net earnings increases over last year's second quarter as we are comparing them to a relatively strong second quarter in 2002," stated Bruce Dale, Franks Nursery Chief Executive Officer. "In 2002, sales were aided by favorable weather and were up 15.2% over 2001. This year our associates rose to the challenge to beat last year's sales and net earnings as we continue to strive to improve all areas of our operation." Franks Nursery is the nation's largest lawn and garden specialty retailer and operates 170 stores in 14 states. Franks is also a leading retailer of indoor garden products and accessories, including silk floral arrangements, as well as Christmas decor merchandise. GENZYME CORP: Completes Acquisition of SangStat Medical Corp. ------------------------------------------------------------- Genzyme Corp. (Nasdaq: GENZ) has completed its acquisition of SangStat Medical Corp. Genzyme acquired SangStat through a tender offer for $22.50 per share, and a subsequent merger of a wholly-owned subsidiary with and into SangStat. SangStat shares have been delisted from Nasdaq, and ceased trading at the close of business on Sept. 12. With completion of the merger, Genzyme adds a profitable and growing business with a leading antibody product used in organ transplantation, and a significant product development program in immune-mediated diseases. "We are very pleased to capitalize on this opportunity to further expand our commercial focus, and to bolster our product development efforts in the area of immune-mediated diseases," said Henri A. Termeer, chairman and chief executive officer, Genzyme Corp. "The addition of SangStat will bring Genzyme a talented team of professionals with extensive commercial experience in transplantation, as well as a best-in-class product and an exciting and complementary pipeline." Thymoglobulin(R) (anti-thymocyte globulin), the lead product Genzyme gained through the acquisition, is used to treat acute rejection in patients with a renal transplant. Genzyme expects to drive Thymoglobulin growth in the coming years primarily by gaining a broader clinical label, and by expanding sales in Europe and Latin America. Recently, SangStat received clearance for two investigational drug applications from the U.S. Food and Drug Administration to initiate new studies of Thymoglobulin in living donor kidney transplant patients and in bone marrow transplantation. The sales force responsible for Thymoglobulin will also promote Gengraf(TM) (cyclosporine), a branded generic cyclosporine co-marketed with Abbott Laboratories that is used for chronic immunosuppression after transplantation. The addition of SangStat's pipeline will deepen Genzyme's existing portfolio of products in development for immune-mediated diseases (IMDs), which includes potential treatments for scleroderma, multiple sclerosis, and pulmonary fibrosis. SangStat's lead pipeline candidate, RDP58, is an anti- inflammatory peptide that the company is investigating across a range of IMDs, including ulcerative colitis. Genzyme also gains rights through a collaboration with Therapeutic Human Polyclonals, Inc. to an early stage research program focused on developing human polyclonal antibodies. Genzyme funded the acquisition of SangStat's shares with $300 million from its existing bank line of credit, and approximately $300 million from cash reserves. Genzyme Corporation (S&P, BB+ Subordinated Debt Rating, Positive) is a global biotechnology company dedicated to making a major positive impact on the lives of people with serious diseases. The company's broad product portfolio is focused on rare genetic disorders, renal disease, and osteoarthritis, and includes an industry-leading array of diagnostic products and services. Genzyme's commitment to innovation continues today with research into novel approaches to cancer, heart disease, and other areas of unmet medical need. Genzyme's more than 5,000 employees worldwide serve patients in more than 80 countries. GLOBAL CROSSING: Launches Enhanced Videoconferencing Service ------------------------------------------------------------ Global Crossing announced an enhanced videoconferencing service that delivers increased video quality, reliability, global reach and cost efficiencies. As a result, a growing number of leading multinational financial organizations have recently contracted to use Global Crossing's enhanced videoconferencing as well as Ready- Access(R) audio and Web-based conferencing services. The enhanced videoconferencing service is a new transport alternative to the traditional public switched integrated services digital network (ISDN) video services. iVideoconferencing -- the latest offering in Global Crossing's suite of videoconferencing services -- enables customers to place ISDN calls directly on the private Global Crossing IP backbone network rather than the public switched telephone network (PSTN). Calls are then provisioned into multi-point conferencing units (MCU's) that enable multiple sites to communicate simultaneously without additional routing, resulting in significant video quality improvements, extended global reach, and potential cost savings over traditional ISDN services. "This latest videoconferencing offer is a major leap forward in enhancing our customers' experience," said Anthony Christie, senior vice president for offer and product management. "International conferencing customers in particular will appreciate the increased video quality with fewer temporary disconnects and freeze frames, along with the potential for cost savings over their current videoconferencing expenses." By placing videoconferencing calls via Global Crossing's state-of- the-art fiber-optic network, connections take a direct and dedicated route to international destinations with increased ease, requiring no upgrades or changes to customers' end-point video equipment or infrastructure. In addition, Global Crossing's enhanced videoconferencing services provide customers the option to migrate to an entirely IP videoconferencing solution whenever they choose. "A significant number of major multinational financial organizations are quickly seeing the merits of our enhanced videoconferencing services, which are unique to the industry," said Neil Barua, vice president of conferencing. "New customers are already enjoying superb video quality, reliability and savings in certain locations." Videoconferencing calls placed over ISDN networks have traditionally been susceptible to problems such as freeze frames and temporary disconnects. Global Crossing has already provisioned more than 406,000 network minutes of enhanced videoconferencing service, linking large multinational corporations with sites in Europe, the America's and Pacific Rim, while achieving a significant reduction in temporary disconnects and other traditional video issues. Global Crossing's conferencing services are built around a streamlined global service delivery model that offers customers easy-to-use conferencing and collaboration tools that increase efficiency and productivity. Premier dedicated customer service is provided from state-of-the-art network operations centers (NOCs) and call centers worldwide on a 24-hour basis, seven days a week. Many of Global Crossing's voice, data and video services are delivered worldwide, via its IP network, which provides connectivity to 200 cities in more than 27 countries. Global Crossing's Tier 1 IP backbone leverages a single autonomous system (AS) number with multiprotocol label switching (MPLS) traffic engineering to deliver the minimum number of hops, for the fastest transmission speeds worldwide. Ready-Access(R) is Global Crossing's easy-to-use, on-demand, reservationless audio conferencing suite that has recently been expanded to include Ready-Access(R) Global "800" and Ready-Access Web Meeting. Ready-Access(R) Global "800" service allows users to access global toll-free numbers for Ready-Access conferences from key international business locations. Ready-Access Web Meeting, recently enhanced with several user-friendly features, is an on- demand Web-based conferencing service that enables users to share images online and record them synchronized to audio portions of meetings. Global Crossing's video conferencing is available over traditional ISDN lines as well as video-over-IP, providing superior video quality. Global Crossing provides telecommunications solutions over the world's first integrated global IP-based network, which reaches 27 countries and more than 200 major cities around the globe. Global Crossing serves many of the world's largest corporations, providing a full range of managed data and voice products and services. On January 28, 2002, Global Crossing Ltd. and certain of its subsidiaries (excluding Asia Global Crossing and its subsidiaries) commenced Chapter 11 cases in the United States Bankruptcy Court for the Southern District of New York (Bankruptcy Court) and coordinated proceedings in the Supreme Court of Bermuda (Bermuda Court). On the same date, the Bermuda Court granted an order appointing joint provisional liquidators with the power to oversee the continuation and reorganization of the Bermuda-incorporated companies' businesses under the control of their boards of directors and under the supervision of the Bankruptcy Court and the Bermuda Court. Additional Global Crossing subsidiaries commenced Chapter 11 cases on April 23, August 4 and August 30, 2002, with the Bermuda incorporated subsidiaries filing coordinated insolvency proceedings in the Bermuda Court. The administration of all the cases filed subsequent to Global Crossing's initial filing on January 28, 2002 has been consolidated with that of the cases commenced on January 28, 2002. Global Crossing's Plan of Reorganization, which was confirmed by the Bankruptcy Court on December 26, 2002, does not include a capital structure in which existing common or preferred equity will retain any value. On November 18, 2002, Asia Global Crossing Ltd., a majority-owned subsidiary of Global Crossing, and its subsidiary, Asia Global Crossing Development Co., commenced Chapter 11 cases in the United States Bankruptcy Court for the Southern District of New York and coordinated proceedings in the Supreme Court of Bermuda, both of which are separate from the cases of Global Crossing. Asia Global Crossing has announced that no recovery is expected for Asia Global Crossing's shareholders. Asia Netcom, a company organized by China Netcom Corporation (Hong Kong) on behalf of a consortium of investors, has acquired substantially all of Asia Global Crossing's operating subsidiaries except Pacific Crossing Ltd., a majority-owned subsidiary of Asia Global Crossing that filed separate bankruptcy proceedings on July 19, 2002. Global Crossing no longer has control of or effective ownership in any of the assets formerly operated by Asia Global Crossing. Visit http://www.globalcrossing.comfor more information about Global Crossing. GLOBAL CROSSING: Supplies Conferencing Services to Zurich Fin'l --------------------------------------------------------------- Global Crossing has signed a contract regarding the provision of audio, video and Web-based conferencing services to the Zurich Financial Services Group. Global Crossing will provide a full suite of conferencing services to offices around the globe, delivered over Global Crossing's 200-city network. John Legere, Global Crossing's CEO, said, "This is a significant contract leveraging Global Crossing's ability to meet the stringent requirements of one of the world's largest financial organizations operating across five continents." Global Crossing is a full-service conferencing solution provider offering automated and operator-assisted video conferencing services, Web conferencing, and audio conferencing. Backed by industry-leading redundancy protection and disaster recovery systems, Global Crossing's conferencing portfolio includes Ready- Access(R), Ready-Access(R) Web Meeting, Ready-Access(R) Global 800 Service, Videoconferencing, eMeeting, Event Call, Event Express, and Auto Event. Global Crossing's conferencing services are built around a streamlined global service delivery model that offers customers easy-to-use conferencing and collaboration tools that increase efficiency and productivity. Premier dedicated customer service is provided from state-of-the-art network operations centers (NOCs) and call centers worldwide on a 24-hour basis, seven days a week. Many of Global crossing's voice, data and video services are delivered worldwide, via its IP network, which provides connectivity to 200 cities in more than 27 countries. Global Crossing's Tier 1 IP backbone leverages a single autonomous system (AS) number with multiprotocol label switching (MPLS) traffic engineering to deliver the minimum number of hops, for the fastest transmission speeds worldwide. Ready-Access(R) is Global Crossing's easy-to-use, on-demand, reservation- less audio conferencing suite that has recently been expanded to include Ready-Access(R) Global "800" and Ready-Access Web Meeting. Ready-Access(R) Global "800" service allows users to access global toll-free numbers for Ready-Access conferences from key international business locations. Ready- Access Web Meeting, recently enhanced with several user-friendly features, is an on- demand Web-based conferencing service that enables users to share images online and record them synchronized to audio portions of meetings. Global Crossing's video conferencing is available over traditional ISDN lines as well as video-over-IP, providing superior video quality. Zurich Financial Services is an insurance-based financial services provider with an international network that focuses its activities on its key markets of North America, the United Kingdom and Continental Europe. Founded in 1872, Zurich is headquartered in Zurich, Switzerland. It has offices in more than 50 countries and employs about 64,000 people. Global Crossing provides telecommunications solutions over the world's first integrated global IP-based network, which reaches 27 countries and more than 200 major cities around the globe. Global Crossing serves many of the world's largest corporations, providing a full range of managed data and voice products and services. On January 28, 2002, Global Crossing Ltd. and certain of its subsidiaries (excluding Asia Global Crossing and its subsidiaries) commenced Chapter 11 cases in the United States Bankruptcy Court for the Southern District of New York (Bankruptcy Court) and coordinated proceedings in the Supreme Court of Bermuda (Bermuda Court). On the same date, the Bermuda Court granted an order appointing joint provisional liquidators with the power to oversee the continuation and reorganization of the Bermuda-incorporated companies' businesses under the control of their boards of directors and under the supervision of the Bankruptcy Court and the Bermuda Court. Additional Global Crossing subsidiaries commenced Chapter 11 cases on April 23, August 4 and August 30, 2002, with the Bermuda incorporated subsidiaries filing coordinated insolvency proceedings in the Bermuda Court. The administration of all the cases filed subsequent to Global Crossing's initial filing on January 28, 2002 has been consolidated with that of the cases commenced on January 28, 2002. Global Crossing's Plan of Reorganization, which was confirmed by the Bankruptcy Court on December 26, 2002, does not include a capital structure in which existing common or preferred equity will retain any value. On November 18, 2002, Asia Global Crossing Ltd., a majority-owned subsidiary of Global Crossing, and its subsidiary, Asia Global Crossing Development Co., commenced Chapter 11 cases in the United States Bankruptcy Court for the Southern District of New York and coordinated proceedings in the Supreme Court of Bermuda, both of which are separate from the cases of Global Crossing. Asia Global Crossing has announced that no recovery is expected for Asia Global Crossing's shareholders. Asia Netcom, a company organized by China Netcom Corporation (Hong Kong) on behalf of a consortium of investors, has acquired substantially all of Asia Global Crossing's operating subsidiaries except Pacific Crossing Ltd., a majority-owned subsidiary of Asia Global Crossing that filed separate bankruptcy proceedings on July 19, 2002. Global Crossing no longer has control of or effective ownership in any of the assets formerly operated by Asia Global Crossing. Visit http://www.globalcrossing.comfor more information about Global Crossing. GOODYEAR TIRE: Steelworkers Ratify New Three-Year Labor Contract ---------------------------------------------------------------- The United Steelworkers of America members at 14 plant locations throughout the U.S. have overwhelmingly ratified a new three-year contract with Goodyear Tire and Rubber. The tentative agreement was passed by more than a two-to-one margin. The new agreement provides workers with an unprecedented network of job security measures and implements a process where the financially troubled company will work with the Union to create more efficient workplaces, maintain quality health care benefits and restructure its finances. "We're pleased that we reached an agreement with Goodyear that makes our Union a true partner in the future success of the company, " said USWA International president Leo W. Gerard. "We were committed from the onset of the negotiations to saving Goodyear for our members, our retirees and their communities, many of which are in the heartland of America. Given the blatant abandonment of American manufacturing by global corporations in recent years - 2.7 million jobs in the last 30 months - the job security provisions in this contract are an achievement that mark a whole new era of labor-management relations in the tire and rubber industry." "Unfortunately, there was nothing that we could do prevent the closing of the company's facility in Huntsville, Alabama," said USWA International Vice President Andrew V. Palm, chair of the USWA Goodyear/Kelly-Springfield/ Dunlop bargaining team. "Although we were able to greatly minimize the negative consequences for our members there, the closure is still a bitter pill to swallow. Words can't express the deep sadness and disappointment we all feel." Goodyear's troubled financial circumstances presented major obstacles to a complicated bargaining process that lasted more than five months. The company had initially planned to substantially reduce its North American production by closing a number of plants and downsizing several others. That production was scheduled for transfer offshore with capital investments earmarked for foreign and non-union domestic facilities. In addition, the company was looking for USWA members and retirees to accept major wage, benefit and other contractual safeguard concessions. The USWA engaged a team of Wall Street experts to work with its own financial and legal experts to analyze Goodyear's finances, operations and business strategy. The Union came to the bargaining table with a strategy that focused on restructuring the company by improving production efficiencies, managing health care costs and eliminating excessive layers of management. "We made it clear that, for there to be a contract, our plants would stay open and capital expenditures would be made to keep them globally competitive, " stated USWA Executive vice president John Sellers, the head of the Steelworkers' Rubber/Plastic Industry Council. Imports will be restricted under the new contract, as well as the company's right to transfer production. Management will be downsized at both corporate headquarters and on the shop floor, with bargaining-unit members now empowered to make more of the critical decisions in the production process. The use of outside contractors will be greatly curtailed. The new contract provides for an intricate network of job security protections for USWA- members by designating twelve of the facilities as Protected Plants: The tire and engineered product facilities are located in Akron/Green, Ohio; Gadsden, Alabama; Buffalo, New York; St. Marys, Ohio; Lincoln, Nebraska (except the Global Distribution Center); Topeka, Kansas; Freeport, Illinois; Tyler, Texas; Danville, Virginia; Marysville, Ohio; Union City, Tennessee; Sun Prairie, Wisconsin; and, Fayetteville, North Carolina. The Tyler, Texas plant will have partial-Protected Plant status initially and will obtain protected status upon attaining certain goals. The Protected Plants must under all but the most extreme circumstances remain open during the terms of the agreement and minimum-staffing levels must be maintained. Transfer of production from a Protected Facility to non-USWA plants is restricted. Protected Plants must also be given "meaningful and significant first consideration and preference" for all new products developed for sale in North America. Goodyear must give the same consideration to USWA-facilities when designating capital expenditures for increasing capacity or modernized facilities for production of products for sale principally in North America. Huntsville members with 25 or more years of service will receive lump sum payments in addition to their basic and shutdown-enhanced pension benefits. Those with less than 25 years will receive a severance package that includes special weekly payments for an extended period. There will be a minimum of 15 such weekly payments. Huntsville employees will be entitled to priority in the preferential hiring process at the Gadsden, Alabama plant. In order to help create more jobs at the Gadsden facility, the company will transfer one million tires per year to that facility from non-USWA plants. All production from Huntsville will be transferred to USWA-represented plants. In addition to reaching an agreement to reduce salaried staffing level by 115% of the percentage reduction of bargaining unit employment as of the end of December 2002, the company will limit the ratio of non-bargaining unit employees, including contractors, in both tire plants and engineered product plants. The USWA will also have a seat on Goodyear's Board of Directors, a first in the tire and rubber products industries. Also, the new contract places limits on executive compensation, both in base salaries and in rewarding stock options. "In the short-term, we made certain sacrifices to provide the company with the flexibility it needs to financially restructure, while maintaining quality health care benefits for both our active and retired members," stated Gerard. "The debt restructuring commitments obligates management to take the necessary steps to turn Goodyear around in the right direction. Plus, the new profit- sharing plan will enable our members to share the fruits of success when this happens." The USWA expects to resume master contract bargaining shortly with Bridgestone-Firestone and Uniroyal/Goodrich, Michelin Tire. The Goodyear contract will serve as a pattern agreement for those negotiations. As reported in Troubled Company Reporter's July 2, 2003 edition, Fitch Ratings placed the Goodyear Tire & Rubber Company's senior unsecured rating of 'B' and the senior secured bank facilities rating of 'B+' on Rating Watch Negative. Approximately, $5 billion of debt is affected. GREAT WALL CASINO: Case Summary & 7 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Great Wall Casino Inc. 3121 S 38th Street Tacoma, WA 98409 dba Great Wall Casino and Restaurant Bankruptcy Case No.: 03-49159 Chapter 11 Petition Date: September 2, 2003 Court: Western District of Washington (Tacoma) Judge: Paul B. Snyder Debtor's Counsel: Bruce T. Clark, Esq. Law Offices of Bruce T. Clark 3645 N Pearl Street Tacoma, WA 98407 Tel: 253-752-8355 Estimated Assets: $100,000 to $500,000 Estimated Debts: $1 Million to $10 Million Debtor's 7 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ International Revenue Taxes $630,664 Service Dept. of Treasury Attn: Charles Washington City of Tacoma Taxes $109,848 Washington State Dept. of Taxes $16,948 Revenue Washington State Dept. Taxes $46,459 of L & I Northwest Bank Loan $86,738 Lucas & Lucas Legal Fees $26,000 Washington State Dept. Taxes $6,600 of E.S. HANGER ORTHOPEDIC: Amends Cash Tender Offer for Senior Sub Notes ---------------------------------------------------------------- Hanger Orthopedic Group, Inc. (NYSE: HGR) is amending its cash tender offer and consent solicitation for any and all of its $150,000,000 outstanding principal amount of 11-1/4% Senior Subordinated Notes due 2009 (CUSIP No. 41043FAB5) by (i) increasing the consent payment to 4.00% of the principal amount for the senior subordinated notes validly tendered and accepted for payment and (ii) extending the Consent Date to 5:00 p.m., New York City time, on September 22, 2003. The tender offer will still expire at 5:00 p.m., New York City time, on October 1, 2003, unless extended. Holders who tender their senior subordinated notes will receive the accrued and unpaid interest on such notes up to, but not including, the payment date in connection with the tender offer. The tender price for the senior subordinated notes will be payable to holders who validly tender and do not properly withdraw their senior subordinated notes on or prior to the tender offer expiration date. In order to receive the consent payment of 4.00% of the principal amount for the senior subordinated notes validly tendered and accepted for payment, holders must tender their notes and deliver their consents on or prior to 5:00 p.m., New York City time, on September 22, 2003, unless extended. Holders of notes who tender after 5:00 p.m., New York City time, on the Consent Date will not receive the consent payment. The tender offer and consent solicitation are being made pursuant to an Offer to Purchase and Consent Solicitation Statement dated September 2, 2003, and related Letter of Transmittal, which more fully set forth the terms of the tender offer. Lehman Brothers Inc. is the dealer manager for the tender offer and solicitation agent for the consent solicitation. Questions about the tender offer should be directed to Lehman Brothers Inc., toll-free at (800) 438-3242 or (212) 528-7581 (collect), attention: Liability Management. The information agent for the tender offer is D.F. King & Co. Inc. Requests for additional sets of the tender offer materials may be directed to D.F. King & Co. Inc., by calling toll-free at (888) 567-1626. Hanger Orthopedic Group, Inc. (S&P, B+ Corporate Credit Rating), headquartered in Bethesda, Maryland, is the world's premier provider of orthotic and prosthetic patient-care services. Hanger is the market leader in the United States, owning and operating 591 patient-care centers in 44 states and the District of Columbia, with 3,139 employees including 875 certified practitioners. Hanger is organized into two business segments: patient-care, which consists of nationwide orthotic and prosthetic practice centers, and distribution, which consists of distribution centers managing the supply chain of orthotic and prosthetic componentry to Hanger and third party patient-care centers. In addition, Hanger operates the largest orthotic and prosthetic managed care network in the country. HAYES LEMMERZ: Second Quarter Fin'l Results Enter Positive Zone --------------------------------------------------------------- Hayes Lemmerz International, Inc. (OTC Bulletin Board: HAYZ) posted operating income of $51.6 million (including the impact of certain gains and expenses related to emergence from Chapter 11 reorganization) for the second quarter ended July 31, 2003. This is sharply improved from a year earlier loss of $12.6 million, which also includes certain expenses related to the Company's Chapter 11 reorganization. Earnings from operations excluding these items was $20.4 million in the current quarter, compared with a year earlier loss of $7.2 million. Gross profit margin increased to 11.2% in the second quarter of 2003 from 7.6% in 2002. For the three months ended July 31, 2003, Hayes Lemmerz, a leading global supplier to the automotive industry, reported sales of $502.8 million, compared with year-earlier sales of $504.0 million. Based on industry reports, North American light vehicle production fell 8% from the same period a year earlier. "Our significantly improved operating results reflect the thought and effort we have put into reshaping Hayes Lemmerz so that it can compete profitably in today's automotive industry marketplace," said Curt Clawson, Chairman, President and CEO. "Our ability to improve operating income despite flat sales demonstrates the benefits of the many operational and management changes we have made in the last year." "We have a new management team in place with significant auto industry and 'best practices' management experience, final closure of an unprofitable plant in Bowling Green, Kentucky, and significant improvements at the Company's Montague, Michigan facility. The Company also has more than 150 'Operational Excellence' initiatives under way," Mr. Clawson said. "These have resulted in reduced mold changeover times, improved uptime, reduced scrap, better flow through plants and work cells, and freed-up floor space, all of which contribute to improved profitability," he noted. "Hayes Lemmerz emerged from Chapter 11 with a strong balance sheet and ample liquidity to support its operations and future growth," Mr. Clawson said. Through the Chapter 11 reorganization process, the Company significantly reduced its level of indebtedness. As of July 31, 2003, the Company had $782.3 million of net debt compared to $2.06 billion as of January 31, 2003. Additionally, the Company has no loans outstanding under its $100 million revolving credit facility and a cash balance of $140.6 million. Hayes Lemmerz International, Inc. is a leading global supplier of automotive and commercial highway wheels, brakes, powertrain, suspension, structural and other lightweight components. The Company has 43 plants, 3 joint venture facilities and 11,000 employees worldwide. More information about Hayes Lemmerz International, Inc. is available at its Web site at http://www.hayes-lemmerz.com HAYES LEMMERZ: HLI Trust Asks Court to Subpoena Former Employees ---------------------------------------------------------------- Pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure, the HLI Creditor Trust seeks the Court's authority to issue a subpoena for the production of documents and oral testimony of these former directors and officers of the Hayes Lemmerz Debtors: -- Ranko Cucuz; -- William D. Shovers; -- D. N. Vermilya; -- John S. Rodewig; -- Ray H. Witt; -- Cleveland A. Christopher; -- David Ying; -- Anthony Grillo; -- Paul Levy; -- Jeffrey Lightcap; -- Andrew Heyer; -- Horst Kukwa-Lemmerz; -- Wienand Meilicke; -- Ronald Kolakowski; -- Jesus Bonilla Valdez; -- James Jarrett; and -- Allen M. Buntin. Linda Richenderfer, Esq., at Saul Ewing, LLP, in Wilmington, Delaware, explains that although some of these persons may have been released from liability under the terms of the Modified Plan, each of them has knowledge of facts that bears directly on the Creditor Trust's claims against unreleased parties. Investigation and pursuit of the Trust Claims requires a detailed analysis of the Debtors' accounting practices and the extent of the knowledge of the directors and officers with respect to those practices. The information sought will allow the Creditor Trust to determine whether prosecution of the Trust Claims is warranted and the cost is justified. Hence, Ms. Richenderfer asserts, the Creditor Trusts' request should be approved. Former Directors and Officers Object The Debtors' former directors and officers argue that the Creditor Trust is clearly seeking an unrestrained post- confirmation fishing expedition in the form of Bankruptcy Rule 2004 examination to determine whether grounds exist to commence an action, to discover assets, and to investigate fraud. Furthermore, the Creditor Trust cannot satisfy its burden of showing good cause for subjecting them to what amounts to abuse of the wide-open powers of a Trustee to conduct examinations in aid of the reorganization process. The Creditor Trust has not even cited a single case in support of its request that dealt with a situation where the debtor's plan of reorganization has been confirmed and the reorganized debtor is attempting to use Rule 2004 examinations to determine whether to file a suit against third parties. Undoubtedly, the former directors and officers say, the Creditor Trust is trying to get two bites at the apple by being able to examine them under Rule 2004 and then take their depositions again after the anticipated adversary proceedings are filed against them. It is inappropriate for the Court to allow Rule 2004 examinations post-confirmation because the Debtors already had the opportunity to conduct this, but chose not to. Accordingly, the former directors and officers contend, a Rule 2004 examination conducted post-confirmation would constitute superfluous and inappropriate pre-compliant discovery against them. The Trust is attempting to take advantage of the lack of procedural safeguards afforded to examinees in a Rule 2004 examination. In comparison to discovery under the Federal Rules of Civil Procedure, Bankruptcy Rule 2004 does not require notice to a witness regarding the motion for discovery, the examinee has no right to representation by counsel, the right to object to questions is generally denied, and if counsel for the examinee is allowed to be present, their ability to cross-examine witnesses is left to the Court's discretion. Finally and most importantly, the inquiry in a Rule 2004 examination is not limited to the issues raised in the complaint. Therefore, the former directors and officers contend, the Creditor Trust's Rule 2004 examination request should be denied. (Hayes Lemmerz Bankruptcy News, Issue No. 38; Bankruptcy Creditors' Service, Inc., 609/392-0900) HINES HORTICULTURE: Unit Commences Sr. Notes Private Placement -------------------------------------------------------------- Hines Horticulture, Inc. announced on September 11, 2003 that Hines Nurseries, Inc., a wholly owned subsidiary of Hines Horticulture, intends to raise $175.0 million of gross proceeds through a private placement of senior notes, subject to market and other conditions. The offering of the senior notes is part of a proposed refinancing plan. The elements of the proposed Refinancing (including the payment of related costs and expenses) are: (i) the offering of the senior notes; (ii) a new credit facility for a term of five years which is expected to provide for a $145 million revolving credit facility, subject to a borrowing base, and a $40 million term loan facility; (iii) the repayment in full of all borrowings under Hines Nurseries' existing credit facility (consisting of revolving loans and term loans estimated to be approximately $143.5 million as of August 31, 2003); and (iv) the redemption of all of Hines Nurseries' outstanding 12.75% senior subordinated notes due 2005. As reported in Troubled Company Reporter's Monday Edition, Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on Hines Horticulture Inc., the parent guarantor of ornamental shrubs and plants producer Hines Nurseries Inc. The outlook on Hines Horticulture was revised to stable from positive. At the same time, Standard & Poor's assigned its 'BB-' rating to Hines Nurseries Inc.'s proposed $185 million senior secured credit facility and its 'B' rating to Hines Nurseries' proposed $175 million senior unsecured notes due 2011. The majority of the proceeds will be used to refinance existing senior secured credit facilities and other indebtedness at Hines Horticulture. Hines is the largest North American supplier of a wide variety of horticulture products. By achieving critical mass in the color sites through a series of acquisitions, Hines is taking a more focused approach to managing the production, distribution, and sale of its color and nursery product lines. Still, weather conditions can dramatically change consumer-purchasing patterns during the key spring selling season, which can hurt earnings in this highly seasonal business. With its broad national distribution capabilities, the company is well positioned to service large mass merchandisers and home improvement chains, which are taking an increasing share of the growing seasonal lawn and garden markets. However, customer concentration risk is a rating concern. The company's top five customers accounted for about 73% of 2002 sales, and Home Depot itself accounted for 47% of sales in fiscal 2002. IMAGING TECHNOLOGIES: Hires Pohl McNabola as New Accountants ------------------------------------------------------------ On September 3, 2003, Imaging Technologies Corporation appointed Pohl, McNabola, Berg & Company, LLP as its independent auditors upon the recommendation of its Audit Committee. The ITEC Audit Committee interviewed a number of candidates, including Stonefield Josephson, Inc., its prior independent auditors. The Audit Committee determined that it was in the best interests of the Company to engage a new independent auditor to perform services for ITEC and its subsidiaries, two of whose shares are publicly traded. Stonefield Josephson's audit report on the financial statements of the Company as of June 30, 2002 expressed its uncertainty as to the Company's ability to continue as a going concern. They cited recurring losses from operations, the Company's working capital deficiency, and limited cash resources. These circumstances were also present in the financial statements of the Company as of March 31, 2003 and in financial statements for several consecutive reporting periods. The Company expects that this condition will be reported in its audited financial statements for the fiscal year ended June 30, 2003. PMBC has been engaged to perform the audit for this fiscal year ended June 30, 2003. Imaging Technologies Corporation (OTC Bulletin Board: IMTO) was founded in 1982. Headquartered in San Diego, California, the Company produces and distributes imaging products; and provides a variety of professional services related to human resources to businesses. INTERMET CORP: Plans to Build and Operate New Foundry in Mexico --------------------------------------------------------------- In an effort to better serve its global customer base, INTERMET Corporation (Nasdaq: INMT), one of the world's leading manufacturers of cast-metal automotive components, plans to build and operate a ductile iron foundry in Mexico. This new plant will be located in the Monterrey area and will be dedicated to the production of automotive structural and safety components such as steering knuckles, control arms, and brake calipers and brackets, as well as other highly engineered ductile- iron parts. Construction of the 100,000-square-foot greenfield plant is expected to begin before the end of the year and be operational by mid-2004. Plans call for two casting lines featuring vertical, flaskless molding, along with medium-frequency induction furnace melting, a complete coldbox coremaking operation, and highly automated casting finishing and validation. At full production, annual revenue for the plant is expected to reach approximately $40 million, with the potential for expansion in either ductile iron or INTERMET's Blue Sand(TM) aluminum casting process, which also is focused on structural components. "The location of a casting operation in Mexico represents a critical step in INTERMET's global expansion plan," said Gary F. Ruff, INTERMET's President and CEO. "This state-of-the-science facility also fits well into our LASIK Vision strategy since it will utilize existing assets to minimize the cost and time for production startup. In addition, we believe the new foundry will fill a demand in the Mexican cast-metal industry for safety- critical components supported by the full-service capabilities of INTERMET in research, development, engineering and design." INTERMET currently manufactures components for most of the world's leading automotive OEMs and Tier 1 suppliers, and this new Mexican foundry should benefit its increasingly international customer base. The plant, which is expected to have a significant book of business at startup, has been designed to be highly efficient using lean-manufacturing concepts and a high level of automation to minimize variability -- critical factors in the production of highly engineered safety and structural castings. INTERMET Vice President Jesus M. Bonilla added, "Mexico is a major player in the global automotive industry. A number of automotive OEMs and system/module suppliers have assembly facilities there, but currently must import cast components to support their operations. With our new facility, INTERMET will be positioned to effectively serve our customer base. The site location in Monterrey, Nuevo Leon, places the plant in a region close to our major customers, near transportation routes, and provides a workforce skilled in the manufacturing and technical abilities needed for our industry." With headquarters in Troy, Michigan, INTERMET Corporation (S&P, BB- Corporate Credit Rating, Stable) is a manufacturer of powertrain, chassis/suspension and structural components for the automotive industry. INTERMET's strategy is to be the world's leading supplier of cast-metal automotive components. The company has more than 5,500 employees at facilities located in North America and Europe. More information is available on the Internet at http://www.intermet.com J/Z CBO (DELAWARE): B+ Class C Note Rating on Watch Negative ------------------------------------------------------------ Standard & Poor's Ratings Services placed its ratings on the class A, B, and C notes issued by J/Z CBO (Delaware) LLC, an arbitrage CBO transaction managed by J/Z Advisors, on CreditWatch with negative implications. The CreditWatch placements reflect factors that have negatively affected the credit enhancement available to support the notes since the last rating action in February 2003. According to the most recent trustee report (Aug. 15, 2003), the class A overcollateralization ratio was at 139.26%, versus the required 183%, and compared to a ratio of 152.37% at the time of the last rating action. For purposes of reporting its overcollateralization test ratios, J/Z CBO "haircuts" (or reduces the principal value of) assets that have a rating of 'CCC+' or lower. According to the August trustee report, the 'CCC+' or lower rated assets are at $46.03 million, compared to $25.02 million at the time of the last rating action. This has caused the haircut amount to increase to $11.24 million from $2.3 million at the time of the last rating action. The interest coverage ratio also deteriorated since the last rating action. As of the most recent trustee report, the interest coverage ratio is at 43.19%, versus the required ratio of 142%, and compared to a ratio of 66.84% at the time of the last rating action. Standard & Poor's will be reviewing the results of current cash flow runs generated for J/Z CBO (Delaware) LLC to determine the level of future defaults the rated classes can withstand under various stressed default timing and interest rate scenarios while still paying all of the interest and principal due on the notes. The results of these cash flow runs will be compared with the projected default performance of the performing assets in the collateral pool to determine whether the ratings currently assigned to the notes remain consistent with the credit enhancement available. RATINGS PLACED ON CREDITWATCH NEGATIVE J/Z CBO (Delaware) LLC Rating Class To From Balance (mil. $) A AA-/Watch Neg AA- 105.21 B BBB/Watch Neg BBB 21.77 C B+/Watch Neg B+ 21.50 KASPER A.S.L.: Files Second Amended Plan & Disclosure Statement --------------------------------------------------------------- Kasper A.S.L., Ltd. (KASPQ.OB) reported that on September 12, it filed its Second Amended and Restated Joint Plan of Reorganization and Second Amended and Restated Disclosure Statement. The Plan contemplates distribution of the proceeds, net of certain expenses, of the sale of the Company. The Plan has the full support of the Official Creditors' Committee. As previously announced, on August 7, 2003 an auction was conducted pursuant to Bankruptcy Court approved bidding procedures. Jones Apparel Group, Inc. (NYSE: JNY) was determined to have submitted the highest bid at the auction, and the Company entered into an agreement to be acquired by Jones for $204.0 million in cash and the assumption of deferred liabilities, primarily pre-paid royalties, projected to be approximately $11.5 million at closing, for an aggregate value of $215.5 million, subject to adjustments. The Plan requires, among other things, the approval of the requisite majority of the Company's creditors and confirmation by the Bankruptcy Court. The Company anticipates that the transaction will be consummated before the end of the year. John D. Idol, Chairman and Chief Executive Officer, said, "We are pleased that the bidding process has come to a conclusion and that the Plan has been filed. We believe the process has maximized the value of the Company and produced the best results for our customers, suppliers and shareholders." As more fully described in the Disclosure Statement, the ultimate distribution of the estate is contingent on, among other things: * Resolution of the Internal Revenue Service proposed adjustment. As disclosed in the Company's quarterly report on Form 10-Q for the period ended June 28, 2003, during the fiscal year ended December 28, 2002, the Internal Revenue Service ("IRS") issued a proposed adjustment that would have resulted in additional federal and state income taxes and reduced net operating loss carryforwards. On November 22, 2002, the Company filed an objection to the IRS claim. The Company has had continuing dialog with the IRS, however, any resolution of the proposed adjustment may result in the disallowance of certain deductions and result in additional tax payments. If the Company is unsuccessful at reaching a resolution, the proposed adjustment would result in additional tax payments and reduce the Company's net operating loss carryforwards of approximately $39.0 million at December 28, 2002 by approximately $34.1 million. * Determination by the Bankruptcy Court of the senior notes interest. The Company estimates that the aggregate senior notes claims are approximately $136 million, which includes prepetition interest calculated at the non-default rate (and does not include interest on interest or default interest), and does not include any postpetition interest, including interest on interest, or interest at the default rate, to which holders may be entitled. The Bankruptcy Court may award prepetition interest on interest, postpetition interest, including interest on interest, and may utilize the default rate of interest, in which event the Company estimates the aggregate senior notes claims at closing would be approximately $179 million. Interest will be paid in such amounts and at such rates as shall be determined by the Bankruptcy Court. Working capital adjustment. The purchase price is subject to an adjustment for the working capital, as defined, as of the consummation of the acquisition. As a result of these significant contingencies, among others, there can be no assurance that any distribution will be made to equity holders. Kasper A.S.L., Ltd. is a leading marketer and manufacturer of women's suits and sportswear. The Company's brands include Albert Nipon, Anne Klein, Kasper and Le Suit. These brands are sold in over 3,000 retail locations throughout the United States, Europe, the Middle East, Southeast Asia and Canada. The Company also licenses its Albert Nipon, Anne Klein, and Kasper brands for various men's and women's products. KMART CORP: Working to Resolve Landlords' Cure Claims ----------------------------------------------------- Under the Plan, the Kmart Corporation Debtors assumed unexpired non-residential property leases for 1,593 locations. The Debtors adopted two processes for reconciling cure claims for the 1,593 assumed locations: (i) an expedited process established by agreement with certain landlords in consideration for those landlords' withdrawal of their objections to the Plan; and (ii) a reconciliation process provided in the Plan. The Plan Cure Claims Reconciliation Process relates to cure claims filed in connection with the assumption of executory contracts or unexpired leases in accordance with the Plan. Cure Claims with respect to Assumed Leases that are to be reconciled pursuant to the Plan Cure Claims Reconciliation Process are referred to as Non-Expedited Cure Claims. As of the June 20, 2003 deadline for filing Non-Expedited Cure Claims, the Debtors received 1,162 Cure Claims with respect to the Assumed Leases. Of those 1,162 Cure Claims: -- 311 are actually subject to the Expedited Cure Claims Reconciliation Process; and -- 851 are Non-Expedited Cure Claims. By this Omnibus Objection, the Debtors ask the Court to: (a) allow 45 agreed cure claims for $1,328,611; (b) bar all cure claims filed after the Non-Expedited Cure Claim Deadline, including with respect to the 570 assumed leases where no cure claim was filed; (c) bar any multiple claims; (d) disallow and expunge: * 20 Ineligible Claims, which concerns leases that are expired, terminated or have already been assigned and assumed by the Debtors; * 22 Late-Filed Claims, which are claims filed after June 20, 2003; and * 136 Improperly Filed Claims, which are claims filed as either proof of claim or an administrative expense claim but not as a cure claim; and (e) authorize Landlords that have misdirected their claims to file a Cure Claim by August 19, 2003, thus, extending the Debtors' objection deadline until September 16, 2003. The Debtors report that 800 landlords filed cure claims aggregating $120,633,911 on account of certain Assumed Leases. The Debtors agree to allow $31,163,751 of the Landlord Claims. Six subtenants also filed cure claims totaling $47,205. The Debtors dispute the entire Subtenant Claims. The Debtors maintain that the asserted Landlord and Subtenant cure amounts are excessive, or that the Claims are inconsistent with their Books and Records or have insufficient documentation as to their accuracy. Thus, the Debtors ask Judge Sonderby to set a status hearing on September 23, 2003 for those Disputed Landlord And Subtenant Cure Claims. The Debtors dispute the Cure Claims because the amounts exceed from that allowed in the Bankruptcy Code, or that the Claims are inconsistent with the Debtors' Books and Records or have insufficient documentation as to its accuracy. The Debtors also object to Cure Claims due after the Effective Date. Under the Plan, an amount must be due and payable as of the Effective Date to be properly included as part of a Cure Claim. If it accrues after the Effective Date, the Debtors will instead pay or contest the amounts in the ordinary course of business. There may be more than one party to an Assumed Lease. There may also be more than one claim filed with respect to an Assumed Lease. A single liability against a Debtor cannot result in multiple recoveries to multiple creditors. Accordingly, the Debtors want these kinds of claims to be barred. The Debtors reserve the right to amend the omnibus objection and, should a ground be dismissed, the Debtors reserve the right to object on other grounds. Also, the Debtors reserve the right to further reduce the Cure Claims. To contest the Debtors' objection, Landlords are allowed to file a response. (Kmart Bankruptcy News, Issue No. 62; Bankruptcy Creditors' Service, Inc., 609/392-0900) LASERSIGHT: U.S. Trustee to Meet with Creditors on October 14 ------------------------------------------------------------- The United States Trustee reschedules the meeting of LaserSight Incorporated and its debtor-affiliates' creditors on October 14, 2003, 10:00 a.m., at SouthTrust Building, 6th Floor Suite 600, 135 West Central Boulevard, Orlando, Florida 32801. The meeting was previously scheduled for October 6, 2003. This is the first meeting of creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Winter Park, Florida, LaserSight Incorporated manufactures ophthalmic medical equipment. The Company filed for chapter 11 protection on September 5, 2003 (Bankr. M.D. Fla. Case No. 03-10371). Frank M. Wolff, Esq., at Wolff, Hill, Mcfarlin & Herron, P.A., represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $20,564,200 in total assets and $11,664,021 in total debts. LEAP WIRELESS: Closes Sale of Spectrum in Idaho and Twin Falls -------------------------------------------------------------- Leap Wireless International, Inc. (OTCBB:LWIQE), an innovator of wireless communications services, has completed the sale of 15 MHz of spectrum in each of the Idaho Falls and Twin Falls, Idaho markets to Edge Acquisitions, LLC for $3.25 million. The U.S. Bankruptcy Court for the Southern District of California in San Diego, Calif. approved the transaction on Sept. 9, 2003. Leap's subsidiary that owns these licenses, Cricket Licensee (Reauction), Inc., had previously entered into a license acquisition agreement with Edge Acquisitions, LLC. Competing bids were solicited on the licenses as required by the court. Leap, headquartered in San Diego, Calif., is a customer-focused company providing innovative communications services for the mass market. Leap pioneered the Cricket Comfortable Wireless(r) service that lets customers make all of their local calls from within their local calling area and receive calls from anywhere for one low, flat rate. For more information, please visit http://www.leapwireless.com LIBERTY MEDIA: Appoints Michael P. Zeisser as Sr. Vice President ---------------------------------------------------------------- Liberty Media Corporation (NYSE: L, LMC.B) has announced the appointment of Michael P. Zeisser to the position of Senior Vice President. Mr. Zeisser joins Liberty Media following a 12-year career at McKinsey & Company where he was a partner in the Media and Private Equity Practice. While at McKinsey & Company, Mr. Zeisser specialized in strategic consulting, mergers and acquisitions, due diligence, corporate restructuring and performance improvement. Mr. Zeisser's clients spanned the media, telecommunications, consumer, and business services industries. Mr. Zeisser will focus on strategic planning, mergers and acquisitions and business development for Liberty Media and its affiliated businesses throughout the world. Robert Bennett, Liberty Media's President and CEO, stated: "We are very pleased to welcome Michael to the Liberty Media family. Michael's background and expertise will be a tremendous addition for Liberty Media. In addition to his media and telecommunications background, Michael also brings a significant experience in the international marketplace." Liberty Media Corporation (NYSE: L, LMC.B) owns interests in a broad range of video programming, broadband distribution, interactive technology services and communications businesses. Liberty Media and its affiliated companies operate in the United States, Europe, South America and Asia with some of the world's most recognized and respected brands, including Encore, STARZ!, Discovery, QVC, Court TV and Sprint PCS. Liberty Media's 4.000% bonds due 2029 are currently trading at about 63 cents-on-the-dollar. LTWC CORP: Consummates Sale of LTWC's Assets to Markado, Inc. ------------------------------------------------------------- LTWC Corporation (OTC: LTWC) and its subsidiaries have closed the previously announced sale of substantially all of their assets (other than cash and cash equivalents) to Markado, Inc., pursuant to section 363 of Chapter 11 of the U.S. Bankruptcy Code. The total price paid by Markado, Inc. for the acquired assets was $1,019,898. To facilitate the sale, LTWC and its subsidiaries previously filed a voluntary petition for relief under Chapter 11 with the U.S. Bankruptcy Court for the District of Delaware. Under a section 363 asset sale, assets of a company are sold to a purchaser free and clear of virtually all liens, claims and interests. The sale of LTWC's assets to Markado received Bankruptcy Court approval by order on September 10, 2003. Markado, Inc. is expected to continue LTWC's permission-based e-mail marketing solutions and services business. LTWC expects to wind- down its operations and distribute its assets to its creditors in bankruptcy. There is not expected to be any recovery for LTWC's shareholders in the bankruptcy. Prior to the closing of the asset sale, LTWC provided permission- based e-mail marketing solutions and services that allowed its clients to build customer relationships and make real-time business decisions based on campaign results. Such services included: campaign strategy, creative development, customized database management, message distribution, in-depth reporting and response analysis. MAGELLAN HEALTH: Wants Nod to Assign Amended California Lease ------------------------------------------------------------- Magellan Health Services, Inc., and its debtor-affiliates seek the Court's authority to assume an amended lease for a California facility and assign it to Debtor Magellan Health Services, Inc. Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, in New York, informs the Court that as of the Petition Date, Debtor Magellan Behavioral Health, Inc. was a party to a January 5, 2000 non-residential property lease with Arden Realty Finance V, LLC. The Lease governs 21,138 square feet of office space on the premises known as 300 Continental Boulevard in El Segundo, California. The Lease requires Magellan Behavioral to pay a $28 per-square-foot-per-year rent. The Debtors currently use the premises as a regional service center to provide customer support. The Lease will expire in May 2005. Before the Petition Date, the Debtors initiated an internal operational restructuring program with the goal of decreasing operating costs without reducing the quality of the services rendered to their customers. In connection with this program, the Debtors determined to combine many of their regional service centers into fewer, larger care management centers located throughout the United States. To do so, the Debtors closed, or are in the process of closing, many of their regional service centers. The Debtors are also maintaining or expanding a select few service centers to serve as large care management centers to provide customer services to their customers and their members. The space rented at the El Segundo Service Center was not completely utilized by the Debtors. Consequently, in connection with the operational restructuring, the Debtors decided to consolidate two regional service centers located in the western United States with the El Segundo Service Center, thus converting the El Segundo Service Center into a new care management center. The El Segundo Service Center is an ideal location for the proposed consolidation of the regional centers because the consolidation will maximize the rented space. On July 25, 2003, the Debtors and Arden executed a third amendment to the Lease extending the Lease's term until January 1, 2006. The parties, however, may terminate the Lease sooner in accordance with its terms. The Third Amendment reduces the amount of rent owed under the Lease from $28 per square foot per year to $20 per square foot per year. To the Debtors' knowledge, there are no defaults under the Lease. Pursuant to the Third Amendment, Magellan Behavioral will assign all of its right, title and interest under the Lease to Magellan Health Services Inc. Magellan Behavioral is released from further liability under the Amended Lease. Arden consents to the Assignment. The Debtors believe that consolidating their regional service centers will enable them to cut overhead costs without jeopardizing the quality of the services provided to their customers. The consolidation of the regional service centers in the western United States will result in a $2,100,000 aggregate reduction of monthly rental costs over the next five years. The Debtors also believe that the consolidation of the Tacoma and San Francisco regional service centers with the El Segundo Service Center allows them to maximize the space currently occupied, and close down the other centers and realize the benefit of the cost savings. (Magellan Bankruptcy News, Issue No. 13: Bankruptcy Creditors' Service, Inc., 609/392-0900) MEDMIRA INC: Reports Significantly Improved Results for 2003 ------------------------------------------------------------ MedMira Inc. (TSX Venture: MIR) announced its financial results for the fourth quarter and year ended July 31, 2003. This is the first quarter that reflects the impact of US sales of the recently approved Reveal(TM) Rapid HIV-1 Antibody Test. Product sales in the fourth quarter increased sixteen-fold to $1.1 million, up from $66 thousand in the same quarter last year. License fee revenue was $137 thousand in the quarter ended July 31, 2003. The net loss for the quarter was $0.7 million or $0.02 per share compared with $2.5 million or $0.11 per share in the same period last year, a decrease of 72%. These results represent record high sales and record low losses for the quarter. For the year ended July 31, 2003 product sales increased to $1.2 million, ten times the $115 thousand recorded in the previous year. License fee revenue for the year was $137 thousand compared with $206 thousand for the previous year. The Company recorded a net loss for the year of $4.6 million or $0.18 per share as compared to $5.7 million or $0.27 per share for the same period in the previous year, an improvement of 19%. "This was a record quarter and year for MedMira, highlighted by our receipt of key regulatory approvals in the United States and China, the start of manufacturing operations and record financial results," said Stephen Sham, Chairman & CEO of MedMira Inc. "We are pleased with the progress we have made. The dedication and commitment of our staff has been crucial to our achievements this year. The market acceptance of our product in the United States and our plans for the China market make us optimistic about 2004," continued Sham. MedMira also announced that on September 12, 2003 the Board of Directors granted 363,193 stock options to Officers and Employee- Directors of the company with a $1.10 strike price. Of this amount Mr. Stephen Sham, Chairman & CEO received 190,597; Mr. Hermes Chan, Vice Chairman & COO received 119,123; Mr. William Gullage, CFO & Corporate Secretary received 34,413; and 19,060 were granted to an employee-director. All of the options granted have a five year term. Gross margin in the fourth quarter was 58%, which is in line with management's expectations, up from 12% for 2002 excluding the impact of a year-end inventory adjustment. Operating expenses for the fourth quarter decreased by 30% to $1.5 million from $2.1 million in the same period last year. This decrease is mainly attributable to a decrease in marketing costs associated with the cancellation of distribution agreements recorded last year and a reduction in interest expense resulting from the conversion of the shareholder loan to common shares. On an annual basis operating expenses were $5.2 million, down from $5.5 million in 2002, a decrease of 6%, resulting from the decrease in marketing and interest costs and a reduction in research and development expenses. These reductions were partially offset by increases in administration costs and wages and benefits. At July 31, 2003 the Company had total assets of $2.4 million of which $264 thousand was cash and cash equivalents, compared with $3.4 million in total assets and $1.0 million in cash and cash equivalents at July 31, 2002. Cash flow from operations increased to a deficit of $0.7 million in the fourth quarter of 2003, up from a deficit of $1.8 million for the same period last year, an increase of 59%. For the year ended July 31, 2003 cash flow from operations was a deficit of $3.0 million, down from $3.7 million in 2002, an increase of 17%. MedMira -- http://www.medmira.com-- is a commercial biotechnology company that develops, manufactures and markets qualitative, in vitro diagnostic tests for the detection of antibodies to certain diseases, such as HIV, in human serum, plasma or whole blood. MedMira's Reveal(TM) and MiraWell(TM) Rapid HIV Tests have recently been approved by the United States FDA and SDA in the People's Republic of China, respectively. All of MedMira's diagnostic tests are based on the same flow-through technology platform thus facilitating the development of future products. MedMira's technology provides a quick (under 3 minutes), accurate, portable, safe and cost-effective alternative to conventional laboratory testing. At April 30, 2003, MedMira's balance sheet shows a total shareholders' equity deficit of about $10 million. METROPCS: S&P Junks $150 Million Senior Unsecured Notes at CCC+ --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'CCC+' corporate credit rating to Dallas, Texas-based wireless service provider MetroPCS Inc. Also, a 'CCC+' rating was assigned to the company's proposed $150 million senior unsecured notes due 2011 issued under Rule 144A with full registration rights. The outlook is positive. Proceeds from the proposed notes will be used to improve existing networks and expand coverage. "The rating reflects MetroPCS's substantial business risk due to strong competition from better-capitalized wireless carriers and its limited operating history, in conjunction with its wireless business model for which longer-term viability has yet to be proven," said Standard & Poor's credit analyst Michael Tsao. With national wireless penetration already exceeding 52% and wireless number portability coming into effect in November, competitive pressure in the industry is likely to further intensify. Although MetroPCS offers a highly differentiated service, this alone may not be able to offset a number of competitive advantages that the major carriers have. These advantages include significant financial resources, network reach, negotiating power against vendors, brand awareness, and operating experience. The proposed new unsecured notes are rated the same as the corporate credit rating. This rating is based on MetroPCS's intention to not incur more than $100 million of bank debt in the near term based on its current business plan. These proposed notes are issued by the holding company and guaranteed by several intermediate subsidiaries (MetroPCS Wireless, Inc., MetroPCS Georgia, Inc., and MetroPCS CA/FL Inc.) and substantially all the operating subsidiaries that hold the spectrum licenses. The indenture does not contain any financial or performance covenants. Presently, only the $47 million in FCC notes rank senior to the proposed notes. Relative to estimated asset value, MetroPCS can have a maximum of $100 million in additional priority obligations and still stay within Standard & Poor's threshold for no notching below the corporate credit rating. With the issuance of the proposed $150 million in new notes and, separately, about $35 million in additional equity investment that MetroPCS will receive by November 2003, the company is likely to have adequate liquidity for at least the next two years. This estimate is based on the assumption that the company will keep cash burn moderate by not aggressively pursuing growth, maintaining an EBITDA margin of at least 20%, and adjusting capital expenditures based on business conditions. The company does not have significant debt maturities in the foreseeable future and is currently not subject to any financial or performance covenants. Given the attractiveness of markets in which MetroPCS holds spectrum licenses, some of the licenses could be monetized to satisfy a liquidity need. MICROSLATE CORP: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: MicroSlate Corp. 3615-A Isabelle Brossard, Quebec J4Y 2R2 Canada Bankruptcy Case No.: 03-23544 Type of Business: MicroSlate provides mobile hardware solutions for business and government organizations and designs and manufactures rugged mobile pen and notebook based computers and hardware systems. Chapter 11 Petition Date: September 12, 2003 Court: Southern District of New York (White Plains) Debtor's Counsel: Paul Hollender, Esq. Marylou Martin, Esq. Corash & Hollender, P.C. 1200 South Avenue Suite 201 Staten Island, NY 10314 Tel: (718) 442-4424 Fax: (718) 273-4847 Total Assets: $683,077 Total Debts: $2,518,596 MIKOHN GAMING: Recapitalization Plans Spur S&P's Ratings Watch -------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B-' corporate credit rating on Mikohn Gaming Corp. on CreditWatch with negative implications. The CreditWatch placement followed the announcement by the Las Vegas, Nevada-based slot-machine manufacturer that the company was evaluating strategies to recapitalize its balance sheet and that its new business model transition was not occurring as quickly as originally expected. Mikohn has about $105 million of long-term debt currently outstanding. "In resolving the CreditWatch listing, Standard & Poor's will review the company's recapitalization plan, strategic direction, operating performance, and liquidity position," said Standard & Poor's credit analyst Peggy P. Hwan. Mikohn Gaming is a developer and manufacturer of proprietary branded slot machines and table games. In addition, it manufactures casino signage, progressive jackpot systems, and both player and game tracking systems. MOBILE ENERGY: Court Confirms Third Amended Joint Reorg. Plan ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Alabama overruled Kimberly Clark Corporation's objection and confirmed Mobile Energy Services Company LLC's Third Joint Plan of Reorganization after finding that the Plan complies with each of the 13 standards articulated in Section 1129 of the Bankruptcy Code: (1) the Plan complies with the Bankruptcy Code; (2) the Debtors have complied with the Bankruptcy Code; (3) the Plan was proposed in good faith; (4) all plan-related cost and expense payments are reasonable; (5) the Plan identifies the individuals who will serve as officers and directors post-emergence; (6) Section 1129(a)(6) is inapplicable as no governmental regulatory commission has jurisdiction over any of the Debtors' rates; (7) creditors receive more under the plan than they would in a chapter 7 liquidation; (8) all impaired creditors have voted to accept the Plan, or, if they voted to reject, then the plan complies with the absolute priority rule; (9) the Plan provides for full payment of Priority Claims; (10) at least one non-insider impaired class voted to accept the Plan; (11) the Plan is feasible and confirmation is unlikely to be followed by a liquidation or need for further financial reorganization; (12) in this District, no fees are payable under Section 1930 of title 28; and (13) Section 1129(a)(13) if inapplicable to the Debtors since they do not have any retirement programs in place. Kimberly Clark objects to the Debtors' proposed assumption of the Pulp Mill Energy Services Agreement and the Tissue Mill Energy Services Agreement. However, the Court has determined that the Debtors' Plan satisfies the Bankruptcy Code's requirements for confirmation and the assumption of the Services Agreement is proper. The Plan provides for the continuation of the Debtors' existing business operations through continuation of services to its existing customer, Kimberly Clark. Additionally, the Plan also extinguishes over $300 million in prepetition secured debt and converts that debt to New Common Stock. Mobile Energy Services Company LLC owns and operates an energy and chemical recovery complex. In May 1998, the Debtors received a notice from Kimberly Clark Tissue Company that it planned to close the Pulp Mill and to terminate the ESA. This would result in Mobile Energy losing its largest customer in terms of annual revenue and principal source of inexpensive fuel, among other things. The Debtors did not believe they could meet their financial obligations, thus prompted the filing of chapter 11 bankruptcy protection with this Court. NAHIGIAN BROS.: Wants More Time to File Schedules & Statements -------------------------------------------------------------- Nahigian Brothers Galleries Incorporated asks for more time from the U.S. Bankruptcy Court for the Northern District of Illinois to file their schedules of assets and liabilities, statements of financial affairs and lists of executory contracts and unexpired leases required under 11 U.S.C. Sec. 521(1). The Debtor points out that its bankruptcy case was filed on an emergency basis. The Debtor and its bankruptcy counsel require additional time to review loan documents, leases, contracts and various other documents in other to properly prepare the Schedules and Statements. Consequently, the Debtor wants the Court to give it until October 7, 2003 to complete and file Schedules and Statements. The Debtor does not believe any party in interest will be prejudiced by the extension. Headquartered in Evanstan, Illinois, Nahigian Brothers Galleries Incorporated runs the handmade rug lease operations at Marshall Field's. The Company filed for chapter 11 protection on September 3, 2003 (Bankr. N.D. Ill. Case No. 03-36182). Michael L. Gesas, Esq., at Gesas, Pilati, Gesas and Golin, Ltd., represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed estimated assets and debts of more than $10 million each. NATIONAL EQUIPMENT: Relocates Corporate Offices to W. Bryn Mawr --------------------------------------------------------------- National Equipment Services, Inc. (OTC Bulletin Board: NEQS), a leading provider of specialty and general equipment to construction and industrial end-users, announced that effective September 15, 2003, NES has relocated its corporate offices to 8770 W. Bryn Mawr, 4th Floor, Chicago, IL 60631. "This move will help to further reduce our fixed costs, provide us with a more suitable office space that is better utilized and keep us on track to emerge from bankruptcy later this year," stated Michael Milligan, chief financial officer. NES is the fourth largest Company in the $25 billion equipment rental industry. The Company focuses on renting specialty and general equipment to industrial and construction end-users. It rents more than 750 types of machinery and equipment, and distributes new equipment for nationally recognized original equipment manufacturers. NES also sells used equipment as well as complementary parts, supplies and merchandise, and provides repair and maintenance services to its customers. In addition to the rental business NES is the second largest supplier of traffic and safety services to the construction industry. The company is a leading competitor in each geographic market it reaches, from its approximately 180 locations in 34 states and Canada. For More Information on NES, visit http://www.nesrentals.com NATIONAL STEEL: Secures Open-Ended Removal Period Extension ----------------------------------------------------------- National Steel Corporation and its debtor-affiliates are parties to numerous judicial and administrative proceedings currently pending in various state courts or administrative agencies throughout the United States and the world. Mark A. Berkoff, Esq., at Piper Rudnick, in Chicago, Illinois, relates that the Debtors require additional time to determine which of the state court actions they will remove. Thus, the Debtors sought and obtained extension of the period within which they may remove pending actions pursuant to Rule 9027 of the Federal Rules of Bankruptcy Procedure to: -- the Confirmation of their Plan, or in the event the Plan is rejected, until 30 days after the Confirmation Hearing; or -- 30 days after termination of the automatic stay with respect to any particular action to be removed. (National Steel Bankruptcy News, Issue No. 35; Bankruptcy Creditors' Service, Inc., 609/392-0900) NORTHWEST AIRLINES: Makes $369 Million Pension Plan Contribution ---------------------------------------------------------------- Northwest Airlines Corporation (Nasdaq: NWAC) made total contributions equivalent to $369 million to its contract employee, pilot and management pension plans. The contributions were funded with 11.4 million shares of common stock of its subsidiary, Pinnacle Airlines Corp., and $60 million in cash. The company made a voluntary $190 million contribution of Pinnacle stock to the pilot pension plan and required 2002 plan year contributions to the contract employee and management pension plans of $179 million (consisting of $119 million of Pinnacle stock and $60 million cash). On January 15, 2003, Northwest contributed 1.9 million shares of the Pinnacle common stock to the pension plans to satisfy approximately $44 million of 2002 plan year funding requirements. With these contributions, Northwest has met all contribution obligations due for pension plan year 2002 and for calendar year 2003. Regional Jets Northwest also announced that it has allocated the remaining 34 Canadair Regional Jets on firm order to Pinnacle Airlines. These regional jets are scheduled to be delivered through 2005. When these CRJs are delivered, Pinnacle will operate a fleet of 129 regional jetliners. Northwest Airlines (S&P, B+ Corporate Credit Rating) is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,500 daily departures. With its travel partners, Northwest serves nearly 750 cities in almost 120 countries on six continents. In 2002, consumers from throughout the world recognized Northwest's efforts to make travel easier. A 2002 J.D. Power and Associates study ranked airports at Detroit and Minneapolis/St. Paul, home to Northwest's two largest hubs, tied for second place among large domestic airports in overall customer satisfaction. Readers of TTG Asia and TTG China named Northwest "Best North American airline." For more information pertaining to Northwest, visit Northwest's Web site at http://www.nwa.com NORTHWESTERN CORP: Selling Expanets Inc. to Cerberus and TenX ------------------------------------------------------------- NorthWestern Corporation (NYSE: NOR) announced that its communications services subsidiary, Expanets, Inc., has signed a definitive agreement to sell substantially all of its assets to Cerberus Capital Management, L.P., and TenX Capital Management, Inc. Under the terms of the transaction, substantially all of the assets of Expanets will be sold for $107.5 million in cash, less the amount of debt and capitalized leases assumed, plus a contingent note that, depending on operating results after the closing, will pay up to an additional $27.5 million in principal amount. The cash amount is subject to an adjustment based on the net current assets of Expanets transferred at closing. The transaction is structured to permit a 45-day auction to be administered by Bear, Stearns & Co., under which NorthWestern may seek topping bids using defined auction procedures. Expanets was not included in NorthWestern's Chapter 11 reorganization filing on Sept. 14, 2003, and the sale agreement was entered into prior to the Chapter 11 filing. Expanets will continue operations in the ordinary course of business until the transaction is closed, which is anticipated to occur in the fourth quarter of 2003. The agreement is subject to customary closing conditions, including regulatory approvals. Cerberus Capital Management and its affiliates manage funds and accounts with capital in excess of $9 billion. TenX Capital Management is a private equity firm with investments in a select group of middle-market technology, communications and business services companies. Expanets is a nationwide provider of networked communications and data services to small and mid-sized businesses. According to Gary G. Drook, NorthWestern's President and Chief Executive Officer, the sale of Expanets is an important part of NorthWestern's Chapter 11 reorganization, as the Company has been pursing the sale of its nonutility subsidiaries, which include Expanets and Blue Dot, the Company's heating, ventilation and air conditioning business. "The objective of our reorganization is to divest our nonutility businesses, restructure our debt and emerge as a financially stable energy company," Drook said. "We believe the sale of Expanets will be beneficial for both NorthWestern's restructuring and Expanets' ongoing business, clients, manufacturing partners and employees." "We are excited at the prospect of becoming an independent company with significant resources behind us," said Chris Younger, Expanets' President. "The transaction will remove the uncertainty associated with NorthWestern's financial situation, give us financial backing of one of the largest private investment firms in the United States, and, most importantly, allow Expanets' 3,000 associates to focus on delivering our unique value proposition to our clients and manufacturing partners throughout the country." Cerberus and its affiliates manage funds and accounts with capital in excess of $9 billion. Cerberus focuses its investment efforts on debt and equity of middle-market companies exhibiting the potential for business improvement. The funds and accounts managed by Cerberus have holdings in the United States and throughout the world. Expanets is a nationwide provider of networked communications and data services to small and mid-sized businesses. While national in scope, Expanets delivers local service and solutions through its team of more than 3,000 associates based in more than 100 offices throughout the U.S. Its broad portfolio is based on its strategic relationships with industry-leading manufacturers, service providers, carriers and application developers. More information can be found on the Company's Web site at http://www.expanets.com NorthWestern Corporation is one of the largest providers of electricity and natural gas in the Upper Midwest and Northwest, serving more than 598,000 customers in Montana, South Dakota and Nebraska. NorthWestern also has investments in Expanets, Inc., a nationwide provider of networked communications and data services to small and mid-sized businesses, and Blue Dot Services Inc., a provider of heating, ventilation and air conditioning services to residential and commercial customers. More information can be found on the company's Web site at http://www.northwestern.com NORTHWESTERN: S&P Drops Credit Rating to D over Ch. 11 Filing ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Northwestern Corp. to 'D' from 'CCC-'. The Sioux Falls, South Dakota-based company has about $1.7 billion in debt and $370 million in preferred stock outstanding. "The rating action was taken in response to Northwestern's decision to file for bankruptcy protection under Chapter 11 of the U.S. bankruptcy code," said Standard & Poor's credit analyst Peter Otersen. The company filed for bankruptcy on Sept. 14, 2003. Northwestern decided to file for bankruptcy after its attempt to restructure the company's debt out of court failed. In addition, Northwestern had $30 million of interest on unsecured bonds due on Sept. 15, 2003, which will not be paid. However, Northwestern did not file its two nonregulated subsidiaries Expanets Inc. and Blue Dot Services Inc. because the company is currently in negotiation for their sale with interested third parties. Northwestern will continue to operate its regulated utility operations while under bankruptcy protection and operate its nonregulated business until they are sold. As of Sept. 12, 2003, Northwestern had $20 million of unrestricted cash on hand and has arranged for a $100 million debtor in possession loan from Bank One. Northwestern also reported that it had a signed agreement for the sale of Expanets for $107.5 million less outstanding debt and capitalized leases. In addition, Northwestern is still litigating to enforce the sales contracts with PPL Corp. for the Colstrip transmission assets. Northwestern expects a court decision to be made by December 2003 at the earliest. The contractual value of the Colstrip assets is about $97 million. Northwestern's hopes to emerge from bankruptcy with its two financially stable operating utility divisions, Northwest Energy Montana and Northwest Energy South Dakota, intact. NORTHWESTERN CORP: Senior Unsecured Debt Rating Dives Down to DD ---------------------------------------------------------------- Fitch Ratings lowers NorthWestern Corp.'s outstanding senior unsecured debt obligations to 'DD' from 'CCC' and its senior secured debt to 'DDD' from 'B-'. The rating for NOR's outstanding trust preferred securities is lowered to 'D'. This action reflects today's announcement by NOR of a voluntary petition for bankruptcy under Chapter 11 of the US Bankruptcy Code. The ratings assigned reflect relative recovery expectations between debt classes, based on Fitch's existing recovery analysis of the group. The 'DDD' rating assigned to NOR's secured obligations indicates the highest expected recovery (nominally between 90%-100%), while the 'DD' rating assigned to the unsecured obligations reflects lower recoveries (nominally between 50%-90%). The lowest rating of 'D', indicating recoveries of below 50%, has been assigned to the company's trust preferred securities. In its public statements, NOR has acknowledged that cash on hand has fallen to $20 million (from $50 million of unrestricted cash at June 30, 2003). The company has arranged DIP financing of a further $100 million. NOR has also announced an agreement to sell troubled communications and data services subsidiary Expanets, Inc., proceeds from which, should the sale be concluded, would assist in the company's liquidity in the coming months. Affected Ratings: NorthWestern Corp. -- $865 million outstanding first mortgage bonds, secured pollution control obligations, and secured medium term notes lowered to 'DDD' from 'B-'; -- $865 million outstanding senior unsecured notes and medium term notes lowered to 'DD' from 'CCC'. NWPS Capital Financing I, NorthWestern Capital Financing I, NorthWestern Capital Financing II; and NorthWestern Capital Financing III: -- $305 million outstanding trust originated preferred securities lowered to 'D' from 'C'. Montana Power Capital I: -- $65 million outstanding cumulative quarterly income preferred securities lowered to 'D' from 'C'. NRG ENERGY: NRG McClain Gets Go-Signal to Use Cash Collateral ------------------------------------------------------------- Pursuant to Sections 105, 361 and 363 of the Bankruptcy Code and Rules 2002, 4001 and 9014 of the Federal Rules of Bankruptcy Procedure, NRG McClain LLC seek the Court's authority to: (a) use Cash Collateral on an interim and final basis; (b) provide adequate protection to its Prepetition Secured Lenders with respect to any diminution in value of the Prepetition Secured Lenders' interests in the Prepetition Collateral, whether resulting from the: -- use of the Cash Collateral, -- use, sale, lease, depreciation or other decline in market price of any Prepetition Collateral other than the Cash Collateral, or -- imposition of the automatic stay. Proposed Use of Cash Collateral A. Budget An Omnibus Restructuring and Consent Agreement, dated as of August 18, 2003, was entered into among NRG McClain, the Prepetition Secured Lenders and the Prepetition Agent. Pursuant to the ORCA, NRG McClain's management and financial advisors formulated a budget for the use of the Cash Collateral. NRG McClain believes that the Budget will provide them with adequate liquidity to pay administrative expenses due and payable during the period covered by the Budget. NRG McClain, LLC 2003 Operating Budget July to December 2003 Operating Expenses Material and Services Normal $644,217 Major 907,830 Labor Regular 639,580 Overtime 107,276 Contract 12,012 Utilities and Aux. Power 306,312 Operator G&A 29,999 ----------- TOTAL OPERATING EXPENSES 2,647,226 Property & Other Taxes 62,502 Depreciation & Amortization 4,659,999 Operator Fee 223,302 Other Fees 12,106 Consultants 58,674 Insurance 380,879 G&A 46,200 ----------- TOTAL NON-OPERATING EXPENSES 5,443,662 =========== TOTAL OPERATING EXPENSES $8,090,888 =========== B. Carve-Out NRG McClain entered into a credit agreement, dated November 28, 2001, among the Debtor, certain Prepetition Secured Lenders and West LB AG, New York branch, as administrative agent and collateral agent for the Prepetition Secured Lenders. Pursuant to the Prepetition Credit Agreement, NRG McClain pledged substantially all of its assets, including all its cash, cash equivalents and cash proceeds of pledged assets. In addition, NRG pledged all of its membership interests in NRG McClain and issued a guarantee to the Prepetition Secured Lenders in respect of certain obligations of NRG McClain under the Existing Agreements. NRG's membership interests includes NRG McClain's pledged assets, including the Cash Collateral, the Prepetition Collateral and the liens and security interests in the Prepetition Collateral granted by NRG McClain to the Prepetition Agent -- the Prepetition Liens. All the Prepetition Agent and Secured Lenders' liens and claims, including the Prepetition Liens, the Adequate Protection Liens and the 507(b) Claim, will be subject to and subordinate to a carve-out for the payment of: (a) fees pursuant to Section 1930 of the Judicial Procedures Code and any fees payable to the Clerk of the Court, (b) fees and expenses incurred by any Chapter 7 Trustee up to an aggregate amount of $10,000, (c) the NRG Support Payment Amount, and (d) the Break-up Fee or the Expense Reimbursement, as applicable. The Carve-Out will have an administrative priority superior to the priority of all of the liens and the claims of the Prepetition Agent and the Prepetition Secured Lenders, including the Prepetition Liens, the Adequate Protection Liens and the 507(b) Claim. The Debtors agreed, commencing on the Effective Date of the ORCA, to provide financial support to NRG McClain sufficient to fund the Project's: -- working capital requirements, and -- expenses directly attributable to the Sale Transaction and fees and expenses of NRG McClain's legal counsel and bankruptcy administrative expenses directly attributable to the Chapter 11 Case to the extent NRG McClain cannot fund the Support Requirements out of the Project's revenue and cash collateral. NRG McClain agreed to reimburse the Debtors for all NRG Support Payments. C. Extraordinary Provisions (a) Section 506(c) Waiver The Interim Stipulation and Consent Order provides that, so long as the Prepetition Secured Lenders are consenting to or providing use of Cash Collateral, no administration expenses of the Chapter 11 Case or any future proceeding that may result, including liquidation in bankruptcy or other proceedings under the Bankruptcy Code, will be charged against or recovered from the Collateral. (b) Termination Events The Interim Stipulation and Consent Order provides that NRG McClain's right to use cash collateral will cease automatically upon the expiration of five business days after written notice by the Prepetition Agent to NRG McClain and the Committee of the occurrence of certain events including: (1) the Committee's filing of any motion in the Chapter 11 Case requesting standing to commence an action against the Prepetition Agent or the Prepetition Secured Lenders, and (2) the disputation by any party to the Interim Stipulation and Consent Order of the Prepetition Agent's or the Prepetition Secured Lenders' rights under Section 363(k) of the Bankruptcy Code. Matthew A. Cantor, Esq., at Kirkland & Ellis, in New York, tells Judge Beatty that an immediate need exists for NRG McClain to be able to use the Cash Collateral to continue its operations and fund its ongoing payment obligations to trade creditors. Settlement under Bankruptcy Rule 9019 The Interim Stipulation and Consent Order also contains a compromise and settlement reached after extensive negotiation among the Debtors, the Prepetition Agent, the Prepetition Secured Lenders and the Committee with respect to the extent of the Debtors' guarantee of certain of the Project's costs contained in the Existing Documents. While the Required Debt Service Reserve Amount is currently $4,500,000, the Prepetition Agent agreed to cap the amount at the lesser of: (a) $2,000,000, and (b) the Prepetition Debt amount not otherwise paid in full in accordance with the ORCA. Mr. Cantor points out that the Bankruptcy Rule 9019 compromise and settlement provides clear benefit to the NRG McClain estate by ensuring that the Committee gives the necessary consents to the deal that enables NRG McClain and Oklahoma Gas & Electric Company to go forward with the sale and allows the estates to avoid potentially prolonged and potentially costly litigation. Adequate Protection Furthermore, NRG McClain agreed to provide adequate protection to or for the benefit of the Prepetition Agent and the Prepetition Secured Lenders to secure payment of obligations under the Existing Agreements. A. Adequate Protection Liens NRG McClain proposes to grant the Prepetition Agent replacement liens upon and security interests in all of NRG McClain's property and the proceeds, whether existing on the NRG McClain Petition Date or acquired, that, on or as of the NRG McClain Petition Date, was otherwise unencumbered under the Existing Agreements. This includes NRG McClain's property that may subsequently have become subject to liens perfected after the NRG McClain Petition Date, the priority and perfection of which relate back to a date prior to the NRG McClain Petition Date as permitted by Sections 546(b) and 362(b)(18) of the Bankruptcy Code, including all cash and cash equivalents of NRG McClain and any investment of funds, inventory, accounts receivable, other rights to payment whether arising from the NRG McClain Petition Date, contracts, properties, plants, equipment, general intangibles, documents, instruments, interests in leaseholds, real properties, patents, copyrights, trademarks, trade names, other intellectual property and the proceeds. The Adequate Protection Liens will be valid, enforceable and perfected security interests in and liens upon the Adequate Protection Collateral, but will be subject and subordinate to the Carve-Out. B. Section 507(b) Claim NRG McClain also proposes to grant, subject to the Carve-Out, the Prepetition Agent a superpriority claim as provided for in Section 507(b) of the Bankruptcy Code against NRG McClain in respect of the Prepetition Debt. The Prepetition Agent will apply the proceeds of the Project Sale pursuant to an Alternative Transaction received by it, and other amounts at the time in the Collateral Accounts, in accordance with the terms and conditions of the ORCA. C. Payment of Interest, Professional Fees and Expenses NRG McClain proposes to pay all: (a) accrued and unpaid interest, including postpetition interest, on the Prepetition Debt in accordance with the ORCA, and (b) accrued and unpaid fees, costs and charges incurred by or on behalf of the Prepetition Agent under the Existing Agreements, and any fees, costs and charges incurred before the NRG McClain Petition Date that remain unpaid will be paid by NRG McClain within three business days after the date of entry of the Interim Stipulation and Consent Order and any subsequent invoices will be paid by NRG McClain within three business days of receipt. D. Access to McClain NRG McClain will give the Prepetition Agent and its professionals reasonable access to all its documentation, places of business, officers, consultants and employees for purposes of monitoring NRG McClain's businesses and the value of the Prepetition Collateral and the Adequate Protection Collateral. E. Limitation on Charging Expenses Against Collateral NRG McClain will not charge any expenses of administration of the Chapter 11 Case or any future proceeding that may result, including liquidation in bankruptcy or other proceedings under the Bankruptcy Code, against, or recover from, the Collateral pursuant to Section 506(c) of the Bankruptcy Code or any similar principle of law without the prior written consent of the Prepetition Agent, and no consent will be implied from any other action, inaction, or acquiescence by the Prepetition Agent or any Prepetition Secured Lender. Accordingly, at the September 10, 2003 final hearing, the Court allows NRG McClain to use the Cash Collateral. (NRG Energy Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc., 609/392-0900) NUCENTRIX BROADBAND: Has Until October 6 to File Schedules ---------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas gave Nucentrix Broadband Networks, Inc., and its debtor-affiliates an extension to file their schedules of assets and liabilities, statements of financial affairs and lists of executory contracts and unexpired leases required under 11 U.S.C. Sec. 521(1). The Debtors have until October 6, 2003 to file these required documents. Headquartered in Carrollton, Texas, Nucentrix Broadband Networks, Inc., provides broadband wireless Internet and subscription television services using radio spectrum. The Company, together with its 18 affiliates, filed for chapter 11 protection on September 5, 2003 (Bankr. N.D. Tex. Case No. 03-39123). John E. Mitchell, Esq., Josiah M. Daniel, III, Esq., and Todd C. Crosby, Esq., at Vinson and Elkins, LLP represent the Debtors in their restructuring efforts. As of March 31, 2003, the Debtors, listed $69,452,000 in total assets and $31,676,000 in total debts. ORBITAL IMAGING: Enters Settlement Pact with MacDonald Dettwiler ---------------------------------------------------------------- Orbital Imaging Corporation has reached a settlement agreement with MacDonald Dettwiler & Associates, Ltd., of Vancouver, Canada concerning its remaining marketing rights in the long-delayed Canadian Radarsat-2 satellite program. In exchange for payments totaling $12 million over the next 2 years, ORBIMAGE agreed to end its dispute and return its limited licenses in Radarsat-2 back to MDA, the prime contractor for the program. Furthermore, resolution of its dispute concerning Radarsat-2 now enables ORBIMAGE to finalize its plan of reorganization and emerge from its Chapter 11 bankruptcy case. "Our decision to sell our limited marketing rights in the Radarsat-2 program and return them back to MDA serves both organizations well. With the cash proceeds from the settlement, ORBIMAGE will now focus its efforts solely on our core business of expanding the worldwide markets for high-resolution data from our new OrbView-3 satellite, while MDA works to resolve the continued delays in the Radarsat-2 program," said Matthew O'Connell, ORBIMAGE's Chief Executive Officer. Under the terms of the settlement agreement, ORBIMAGE will immediately receive $10 million from MDA, and another $2 million over the next two years. "Proceeds from this settlement further strengthens ORBIMAGE's financial position and allows us to concentrate on bringing our OrbView-3 satellite into service as soon as possible," said Armand D. Mancini, ORBIMAGE's Executive Vice President and CFO. "This transaction enhances our balance sheet and long-term viability so we can quickly exit from Chapter 11. We hope to obtain confirmation of our plan by the end of October, 2003." "Progress on the check out and calibration of OrbView-3 continues to go exceptionally well," said Timothy J. Puckorius, ORBIMAGE's Senior Vice President for Worldwide Marketing and Sales. "We are already mid-way through Phase-2 of the check out plan, and the early results on image quality look great. At this rate of progress, we hope to complete all check-out phases by the end of November and we may start delivering imagery to our key customers before that date." ORBIMAGE is a leading global provider of Earth imagery products and services, with a constellation of digital remote sensing satellites and a worldwide integrated image receiving, processing and distribution network. The company currently operates the OrbView-1 atmospheric imaging satellite launched in 1995, the OrbView-2 ocean and land multispectral imaging satellite launched in 1997, and the new OrbView-3 high-resolution satellite launched on June 26, 2003 which will soon offer one-meter panchromatic and four-meter multispectral digital imagery on a global basis. More information about ORBIMAGE and the status of the OrbView-3 check out, see its Web site at http://www.orbimage.com PG&E NATIONAL: Court Approves Willkie Farr as Lead Counsel ---------------------------------------------------------- The PG&E National Energy Group Debtors obtained permission from the Court to employ Willkie Farr & Gallagher as their lead counsel under a general retainer. Specifically, WF&G will: (a) perform all necessary services as the Debtors' counsel, including, providing the Debtors with advice, representing the Debtors, and preparing all necessary documents on behalf of the Debtors, in the areas of real estate, business and commercial litigation, tax, debt restructuring, bankruptcy, and asset dispositions; (b) take all necessary actions to protect and preserve the Debtors' estates during the pendency of their Chapter 11 cases, including the prosecution of actions by the Debtors, the defense of any actions commenced against the Debtors, negotiations concerning all litigation in which the Debtors are involved, objecting to claims filed against the estates, and seeking to have the Court estimate certain claims; (c) prepare on behalf of the Debtors, as debtors-in- possession, all necessary motions, applications, answers, orders, reports and papers in connection with the administration of these Chapter 11 cases; (d) counsel the Debtors with regard to their rights and obligations as debtors-in-possession; and (e) perform all other necessary legal services. The NEG Debtors intend to compensate WF&G on an hourly basis, plus reimbursement of actual and necessary expenses incurred. The WF&G attorneys who are likely to represent the Debtors in these cases have current standard hourly rates ranging between $205 and $695. The paralegals likely to assist the attorneys have current standard hourly rates ranging between $105 and $145. These rates are subject to periodic adjustments. (PG&E National Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., 609/392-0900) PRIDE INT'L: Fitch Assigns B+ Senior Unsecured Debt Rating ---------------------------------------------------------- Fitch Ratings has assigned Pride International Inc. a senior unsecured debt rating of 'B+'. Fitch has also assigned a 'BB' rating to the U.S. senior secured credit facility and a 'BB-' rating to the non-U.S. senior secured credit facility. The Rating Outlook is Stable. The ratings reflect Pride's relatively weak credit profile, the regions where Pride operates and the company's competitive position in the oil and gas drilling market. These ratings were initiated by Fitch as a service to users of its ratings. The ratings are based on public information. Debt-funded capital expenditures to finance newbuilds and upgrades to its fleet in the past five years has resulted in a levered balance sheet. Pride's latest twelve months (LTM) EBITDA was $367 million, providing adjusted interest coverage of 2.3x and adjusted debt to EBITDA of 5.6x. Development of its drillships, several Amethyst-class semisubmersibles and refurbishments on nearly all of its other semisubmersible fleet have been funded primarily with debt. Additionally, it has operated primarily in the shallow waters of the Gulf of Mexico and onshore Argentina and Venezuela, markets that have been particularly weak recently. These factors have led Pride to generate negative free cash flow in each of the past five years. However, its credit profile should improve during the remainder of 2003 and 2004 as it benefits from the completion of its newbuild/refurbishment program, increased demand for its rigs by PEMEX and the return of drilling activity in Argentina and Venezuela. Additionally, management intends to reduce debt by $400 million within 12 months. As part of that goal, Pride recently redeemed $150 million of 9 3/8% senior notes. Approximately $175 million of the 9 3/8% senior notes remains outstanding. Subsequent to the $150 million redemption, total debt outstanding is approximately $1.8 billion. Also, management has stated that proceeds from $50 million to $100 million in potential asset divestitures would be applied towards debt reduction. Fitch has concerns with two regions where Pride has significant operations. Fitch is unenthusiastic in the intermediate term for the prospects of shallow water domestic drillers, given the fact that demand in the shallow water Gulf of Mexico has been limited despite strong cash flows from the upstream. This is evident by the weakness in the number of active jackups and second tier semisubmersibles in the Gulf of Mexico. The focus of operators domestically has shifted to the deep Gulf where Pride does not have much of a presence. Additionally, Fitch has a cautious view of businesses operating in Argentina or Venezuela due to the political uncertainty in each country. Fitch currently has a soveriegn rating of 'DDD' for Argentina and 'B-' for Venezuela. Pride competes in the offshore drilling market and is a market leader in the South American land drilling and service segment. Pride's commodity fleet of 35 jackup rigs includes 25 that are currently based in the Gulf of Mexico (14 in Mexico/ 11 in the U.S.) and 10 in international waters. Its jackup fleet is best suited for shallow waters with 80% of its fleet designed to drill in less than 300 feet of water. Nearly all of its jackups are equipped to drill up to 20,000 feet. Its fleet of floating deepwater units consists of 10 semisubmersibles and two dynamically positioned drillships; of these 12 vessels, only six are capable of drilling in water depths greater than 5,000 feet. Pride also operates 21 platform rigs, 5 tender assisted rigs and 3 barge rigs. Pride's onshore fleet consists of 261 land rigs, 177 of which are workover rigs and 84 of which are drilling rigs. The majority of these rigs are located in Argentina and Venezuela. Pride also provides a variety of oilfield services to customers in Argentina, Venezuela, Bolivia and Peru. Services provided include integrated project management, directional and horizontal drilling, environmental drilling, cementing and stimulation. A fourth business line for Pride is its Technical Services group, which provides design, engineering and construction services for operators. It currently is constructing four platform drilling rigs. Two are being developed for BP for use in the Gulf of Mexico and two are being developed for ExxonMobil's Kizomba project off Angola. This business line has been problematic for Pride recently and the company is uncertain whether or not it will remain committed to this segment. PRIMUS TELECOMMS: Closes $132MM of 3.75% Conv. Senior Notes Sale ---------------------------------------------------------------- PRIMUS Telecommunications Group, Incorporated (Nasdaq:PRTL), a global telecommunications services provider offering an integrated portfolio of voice, Internet, data and hosting services, has closed the sale of $132 million aggregate principal amount of its 3.75% convertible senior notes due September 15, 2010, to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The $132 million aggregate principal amount of Notes includes the exercise by the initial purchasers of their over allotment option to purchase an additional $22 million amount of Notes. The Notes will bear interest at the rate of 3.75% per year and will be payable in cash semi-annually in arrears on March 15 and September 15 of each year, with the first payment due on March 15, 2004. Holders of outstanding Notes may convert their Notes into PRIMUS's common stock at any time prior to maturity at an initial conversion price of $9.3234 per share, which is equivalent to an initial conversion rate of 107.257 shares per $1,000 principal amount of Notes, subject to adjustment in certain circumstances. Thus, the Notes are convertible in the aggregate into 14,157,925 shares of PRIMUS common stock. The initial conversion price represents a 23% premium to the last reported price for PRIMUS common stock on the NASDAQ National Market on September 9, 2003. The Company intends to use a portion of the net proceeds of approximately $127 million from this sale of Notes to repay fully its remaining 11 3/4% senior notes due August 2004 ("2004 Notes"), and to use a substantial portion of the remaining net proceeds to reduce other long-term debt. As a result of redemption of $10 million principal amount of the 2004 Notes, effective September 15, 2003, $33.6 million principal amount of the 2004 Notes remain outstanding. This press release does not constitute an offer to sell or the solicitation of an offer to buy any of these securities. The securities offered and sold have not been registered under the Securities Act, or any state securities laws, and are only being offered and sold to qualified institutional buyers in reliance on the exemption from registration provided by Rule 144A. Unless so registered, the Notes and any common stock issued upon conversion of the Notes may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act and applicable state securities laws. PRIMUS Telecommunications Group, Incorporated (NASDAQ:PRTL) -- whose June 30, 2003 balance sheet shows a total shareholders' equity deficit of about $127 million -- is a global facilities- based telecommunications services provider offering international and domestic voice, Internet, data and hosting services to business and residential retail customers and other carriers located primarily in the United States, Canada, Australia, the United Kingdom and western Europe. PRIMUS provides services over its global network of owned and leased transmission facilities, including approximately 250 points-of-presence throughout the world, ownership interests in over 23 undersea fiber optic cable systems, 19 carrier-grade international gateway and domestic switches, and a variety of operating relationships that allow it to deliver traffic worldwide. PRIMUS also has deployed a global state-of-the-art broadband fiber optic ATM+IP network and data centers to offer customers Internet, data, hosting and e-commerce services. Founded in 1994, Primus is based in McLean, VA. RAMSEY STEEL: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Ramsey Steel 4137 Rosa El Paso, Texas 79923 Bankruptcy Case No.: 03-32426 Type of Business: The Debtor specializes in steel fabrication, structural engineering and service. Chapter 11 Petition Date: September 15, 2003 Court: Western District of Texas (El Paso) Debtor's Counsel: E. P. Bud Kirk, Esq. 6006 N. Mesa, #806 El Paso, TX 79912 Tel: 915-584-3773 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Delta Steel $160,494 Steel Specialties $151,083 R & S Steel $109,594 Modern Iron Works $95,229 Consolidated Systems, Inc. $82,975 Garcia's Welding $75,225 Doug Ramsey, Jr. $59,338 F.T. James $46,274 D'Ambra Construction $45,971 Platinum Plus for Business $36,789 D.G. Ramsey $33,789 Nucor-Yamato Steel $33,269 Lake Steel $32,666 G.W. Ramsey $30,991 Border Steel $28,328 Tulsa Tube Bending $30,991 Border Steel $30,835 Tulsa Tube Bending $28,328 Brown Strauss Steel $23,825 Sherwin Williams $18,146 Kessler Collins $17,170 Office Depot $10,950 RECOTON CORP: Court Fixes September 30, 2003 as Claims Bar Date --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York directs creditors of Recoton Corp., and it debtor-affiliates to file their proofs of claim against the Debtors on or before 5:00 p.m. (Eastern Time) on September 30, 2003, or be forever barred from asserting their claims. Governmental Claim Holders have until October 6, 2003, to file their proof of claim forms. If sent by mail, proof of claim forms must be filed with: United States Bankruptcy Court Southern District of New York Recoton Corporation Claims Processing Bowling Green Station PO Box Processing New York, NY 10274-5109 If by hand or overnight courier, to: United States Bankruptcy Court Southern District of New York Recoton Corporation Claims Processing Room 534 New York, NY 1004-1408 Creditors need not file their proofs of claim at this time if they are on account of: 1. Claims already previously filed with the Clerk of the Bankruptcy Court; 2. Claims not listed as disputed, unliquidated or contingent; 3. Claims previously allowed by order of the Court; 4. Claims already paid in full by the Debtors; 5. Claims to which a specific deadline has been fixed by the Court; 6. Claims of one Debtor to another Debtor or affiliate; or 7. Administration expense claims. Recoton Corporation, together with its subsidiaries, is engaged in the development, manufacturing and marketing of consumer electronics accessories and home and mobile audio products. Recoton Corporation filed for Chapter 11 protection on April 8, 2003, (Bankr. S.D.N.Y. Case No. 03-12180). RELIANT RESOURCES: Will Present at Merrill Lynch Conf. Tomorrow --------------------------------------------------------------- Reliant Resources Executive Vice President and CFO Mark Jacobs will speak at the Merrill Lynch Power & Gas Leaders Conference tomorrow, as part of a panel that is scheduled to begin at 11:00 a.m. eastern time. A live audio Webcast can be accessed at http://www.reliantresources.com. A replay will be available within 24 hours and will be archived for seven days after the event. Reliant Resources, Inc. (NYSE: RRI) (Fitch, B+ Senior Secured Debt Ratings), based in Houston, Texas, provides electricity and energy services to retail and wholesale customers in the U.S. and Europe, marketing those services under the Reliant Energy brand name. The company provides a complete suite of energy products and services to approximately 1.7 million electricity customers in Texas ranging from residences and small businesses to large commercial, industrial and institutional customers. Reliant also serves large commercial and industrial clients in the PJM (Pennsylvania, New Jersey, Maryland) Interconnection. The company has approximately 22,000 megawatts of power generation capacity in operation, under construction or under contract in the U.S. and nearly 3,500 megawatts of power generation in operation in Western Europe. For more information, visit http://www.reliantresources.com ROHN INDUSTRIES: Files for Chapter 11 Protection in Indiana ----------------------------------------------------------- ROHN Industries, Inc., (OTC Bulletin Board: ROHN), a provider of infrastructure equipment to the telecommunications industry, and five of its direct and indirect subsidiaries have filed voluntary petitions for Chapter 11 relief in the United States Bankruptcy Court for the Southern District of Indiana. The Company also announced that, concurrent with the Chapter 11 filing, it has entered into a $9.5 million debtor-in-possession line of credit with the lenders that are party to the Company's Amended and Restated Credit Agreement, subject to the approval of the Bankruptcy Court, which will include funds that will be rolled forward from the Company's current credit facility. Subject to the provisions of the Bankruptcy Code, the Company remains in possession of its assets and properties, and continues to operate its business. The Company said that the objective of the Chapter 11 proceeding is to maximize recovery to creditors by facilitating an orderly sale of assets. The Company is currently in discussions with an unrelated third party regarding a proposed sale of the assets of the Company. Upon the filing of the bankruptcy petition of the Company, but following the approval by the Board of Directors of the Chapter 11 filing, Stephen Gorman and Jordan Roderick each have resigned from the Board of Directors of the Company. Currently, Horace Ward, the Chief Executive Officer of the Company, is the only remaining director of the Company. Commenting on today's announcement, Mr. Ward said, "Our immediate goal is to stabilize the Company's financial situation and utilize the Chapter 11 process to enable the Company to conduct normal business operations as the Company works to complete a sale transaction." The Company has retained the Indianapolis law firm of Ice Miller to act as its legal counsel in the bankruptcy proceedings. The Company has also retained Silverman Consulting, a national turnaround consulting firm. The Company is a manufacturer and installer of telecommunications infrastructure equipment for the wireless industry. Its products are used in cellular, PCS, radio and television broadcast markets. The Company's products include towers, poles, related accessories and antennae mounts. The Company also provides design and construction services. The Company has a manufacturing location in Frankfort, IN along with offices in Peoria, IL and Mexico City, Mexico. ROYAL & SUN: S&P Takes Rating Actions on Related Transactions ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on three synthetic securities related to Royal & Sun Alliance Insurance PLC and removed them from CreditWatch with negative implications, where they were placed Sept. 9, 2003. At the same time, the ratings on four other synthetic securities related to Royal Indemnity Co., a subsidiary of Royal & Sun, are affirmed and removed from CreditWatch where they were also placed Sept. 9, 2003. The lowered ratings and CreditWatch removals reflect the reliance of the NS Repack Ltd., FSL Funding 3 Ltd., and FSL Funding Ltd. transactions on Royal Indemnity Co. and Royal & Sun, which serve as reinsurance providers, providing additional credit enhancement. Royal & Sun's subordinated guaranteed bonds are the underlying collateral held by the Corporate Backed Trust Certificates transactions, whose ratings are being affirmed and removed from CreditWatch. The lowered ratings and CreditWatch removals follow the lowering of the rating on Royal Indemnity Co. and its removal from CreditWatch, while the affirmed ratings and their corresponding CreditWatch removals reflect the affirmed rating on Royal & Sun and its removal from CreditWatch. RATINGS LOWERED AND REMOVED FROM CREDITWATCH NEGATIVE NS Repack Ltd. $94 million notes Rating Class To From Notes BB+ BBB-/Watch Neg FSL Funding 3 Ltd. $40 million floating-rate secured notes series 1 Rating Class To From Series 1 notes BB+ BBB-/Watch Neg FSL Funding 3 Ltd. $60.5 million floating-rate secured notes series 2 Rating Class To From Series 2 notes BB+ BBB-/Watch Neg RATINGS AFFIRMED AND REMOVED FROM CREDITWATCH FSL Funding Ltd. $74 million notes Rating Class To From Notes A- A-/Watch Neg Corporate Backed Trust Certificates Series 2001-12 Trust $48 million corporate-backed certs Rating Class To From A-1 BBB BBB/Watch Neg Corporate Backed Trust Certificates Royal & Sun Alliance Bond Backed Series 2002-2 Trust $49.5 million corporate-backed certs Rating Class To From A-1 BBB BBB/Watch Neg Corporate Backed Trust Certificates Royal & Sun Alliance Bond Backed Series 2002-11 Trust $66.816 million corporate-backed certs Rating Class To From A-1 BBB BBB/Watch Neg S&S GRAPHICS: Case Summary & 21 Largest Unsecured Creditors ----------------------------------------------------------- Lead Debtor: S&S Graphics, Inc. 521 East Third Street Mount Vernon, New York 10553 Bankruptcy Case No.: 03-23559 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- S&S Digital, Inc. 03-23560 Type of Business: The Debtor operates a graphic printing company. Chapter 11 Petition Date: September 15, 2003 Court: Southern District of New York (White Plains) Debtors' Counsel: Arlene Gordon Oliver, Esq. Rattet, Pasternak & Gordon Oliver, LLP 550 Mamaroneck Avenue Suite 510 Harrison, NY 10528 Tel: (914) 381-7400 Fax: (914) 381-7406 Total Assets: Total Debts: ------------- ------------ S&S Graphics, Inc. $1,523,531 $1,526,281 S&S Digital, Inc. $73,100 $180,833 A. S&S Graphics' 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Sylvan Paper Corporation $90,012 Charette Corp $65,231 Nazdar Company Inc. $53,854 Case Paper Company $47,629 Citrin Cooperman & Company $16,771 Justin Pate $13,000 Frawley & Associates $10,500 OCE Display Graphics System $7,945 Pitman Company $7,292 American Display & Die Company $6,150 Central Lewmar $5,443 The Color Wheel $5,000 Graf Air Freight, Inc. $4,050 Superior Printing Ink $3,549 Ricoh Business $3,501 Bottcher America $3,500 Printers Service $3,008 Kelstar International $2,918 Advantage Graphic Supply $2,856 Pertech $2,683 B. S&S Digital's Largest Unsecured Creditor: Entity Claim Amount ------ ------------ Nazdar Company Inc. $53,854 SAFETY-KLEEN: Sues NationsBanc Montgomery to Recover Transfers -------------------------------------------------------------- The Reorganized Safety-Kleen Debtors seek to recover certain fraudulent and preferential transfers made to NationsBanc Montgomery Securities, LLC now known as Banc of America Securities, LLC. The transfers relate to fees and expenses the Debtors paid to NationsBanc for financial advisory and underwriting services provided in connection with two bond offerings occurring in the years 1998 and 1999. The Reorganized Debtors are represented by John H. Genovese, Esq., David C. Cimo, Esq., and Brett M. Amron, Esq., at Genovese Joblove & Battista, P.A., as lead counsel, and by Jeffrey C. Wisler, Esq., at Connolly Bove Lodge & Hutz LLP, in Wilmington, Delaware, as local counsel. Safety-Kleen Corp, through its affiliated debtors, provides industrial waste services designed to collect, process, recycle and dispose of hazardous and industrial waste streams. SKC provides these services from approximately 280 collection and processing locations in 45 states and seven Canadian provinces. In that connection, SKC was the issuer of the 1999 bond offering that is the subject of the claims asserted in this suit. LES, Inc. now known as Safety-Kleen Services, Inc., a wholly owned subsidiary of SKC, is the principal operating subsidiary of SKC. LES was the issuer of the 1998 bond offering that is the subject of the claims. NationsBanc Montgomery Securities LLC is an investment bank incorporated under the laws of the State of Delaware that provided financial advisory and underwriting services to SKC and LES. NationsBanc was a wholly owned subsidiary of NationsBank Corporation until September 1998, when NationsBank Corporation merged with BankAmerica Corporation to form Bank of America Corporation. NationsBanc is now a wholly owned subsidiary of Bank of America Corporation. NationsBanc was an underwriter for both the 1998 Bonds and the 1999 Bonds. In addition, NationsBank, N.A., an affiliate of NationsBanc, was a lender under two credit facilities entered into by the Debtors. NationsBanc, or one of its affiliates, was also a counterparty to SKC on numerous derivative transactions during 1998 and 1999. The Formation of Safety-Kleen The Safety-Kleen family of companies that filed for bankruptcy protection on June 9, 2000, was created via two leveraged buy-out transactions occurring about one year apart in 1997 and 1998. Both the 1997 and 1998 LBOs involved the controlling shareholder of the Debtors, Laidlaw, Inc. The first transaction, the "Rollins LBO," occurred in May 1997 and was structured as a "reverse acquisition" involving the sale of Laidlaw's hazardous waste service operations to Rollins Environmental Services, Inc. Upon consummation of the Rollins LBO, Rollins changed its name to Laidlaw Environmental Services, Inc. now known as Safety-Kleen Corp. (SKC). The second transaction, the "Safety-Kleen LBO," involved the hostile takeover by LESI of Wisconsin corporation Safety-Kleen Corp. now known as Safety-Kleen Systems, Inc. and its subsidiaries, a leading supplier of environmental services. Financing for both transactions was provided by a consortium of United States and Canadian financial institutions administratively organized by Toronto Dominion (Texas), Inc., which Lenders changed from time to time, and included NationsBank, N.A., an affiliate of NationsBanc. Pursuant to the Safety-Kleen LBO, LESI borrowed over $2 billion -- the proceeds of which were used, in part, to refinance the debt undertaken in the Rollins LBO. The Safety- Kleen LBO debt was guaranteed by the remaining Debtors and was secured by liens on substantially all of the Debtors' assets. The Rollins LBO Approximately $650 million in financing relating to the Rollins LBO was provided to Laidlaw by the Lenders in accordance with the terms of a credit agreement dated May 17, 1997, between the Lenders, LESI, and Laidlaw Environmental Services (Canada) Ltd., a wholly owned Canadian subsidiary of Laidlaw. In connection the Rollins LBO, Laidlaw received value in excess of $750 million, including: (i) 120 million shares of Rollins Common Stock, (ii) the issuance of a $350 million 5% subordinated convertible pay-in-kind debenture, and (iii) $349.1 million in cash. To raise additional cash sufficient to complete the transaction, LES issued a $60 million promissory note to one of the Lenders, which was guaranteed by Laidlaw. The debt to the Lenders arising from the Rollins LBO was guaranteed by LESI and its subsidiaries and was secured by liens in the Lenders' favor upon substantially all of the assets of such entities pursuant to a Guaranty and Collateral Agreement between the Lenders and those subsidiaries dated May 15, 1997. The Safety-Kleen LBO The second transaction, the "Safety-Kleen LBO," involved the hostile takeover by LESI of Wisconsin corporation Safety-Kleen Corp. and its subsidiaries, a leading supplier of environmental services. This acquisition of Old Safety-Kleen by LESI resulted in the merger of LESI with a newly formed parent company, which retained the name of Safety-Kleen Corp. (SKC). The "old" Safety- Kleen Corp. and its subsidiaries continued to conduct operations as an indirect subsidiary of SKC under the name of Safety-Kleen Systems, Inc. As a result of the Safety-Kleen LBO, Laidlaw owned 35% of the stock of SKC, finally reducing its ownership in hazardous waste operations to a level below 50%, and allowing Laidlaw to de-consolidate its hazardous waste holdings and remove the associated debt from its books. Financing for the Safety-Kleen LBO, approximately $2.1 billion, was provided by the Lenders and involved, in part, a refinancing of the debt remaining from the Rollins LBO. The 1997 Credit Agreement was amended as of April 3, 1998, to reflect the terms of Safety-Kleen LBO financing. The debt obligation to the Lenders arising from the Safety-Kleen LBO is guaranteed by SKC and various affiliates and subsidiaries, including Old Safety-Kleen, and is secured by liens established upon substantially all of the assets of the Safety-Kleen Guarantors. The 1997 Guaranty and Collateral Agreement was amended as of April 3, 1998, to reflect the terms of the guarantees provided and security interests granted by the Safety- Kleen Guarantors. On May 18, 1998, Old Safety-Kleen's shareholders formally approved the merger between LESI and Old Safety-Kleen. The 1998 Bonds Almost immediately after the Safety-Kleen LBO, LESI and the Lenders initiated steps to finance the cash portion of the Safety- Kleen LBO and replace some of the LBO secured debt with high-yield unsecured debt provided by third parties. On May 13, 1998, LES announced in a press release that it was planning to offer $300 million of Senior Subordinated Guaranteed Notes and would use the net proceeds from the sale of the notes to reduce its obligations under the Amended and Restated Credit Agreement. Eager to earn additional income and foster an increasing business relationship with LES and SKC -- NationsBanc's affiliate, NationsBank, N.A., acted as one of the agents for the 1997 Guaranty and Collateral Agreement and the Amended and Restated Credit Agreement -- NationsBanc acted as co-manager and one of two underwriters for the 1998 Bonds. The other underwriter was TD Securities (USA), Inc. On May 29, 1998, LES issued $325 million of 9-1/4% Senior Subordinated Notes due June 1, 2008 in a Rule 144A Offering -- subsequently replaced with substantially identical notes in an offering registered with the SEC. NationsBanc purchased $65 million of the $325 million offering. The 1998 Bonds were fully and unconditionally guaranteed on an unsecured, senior subordinated basis by LESI, and LES and its subsidiaries. The sale of the 1998 Bonds produced approximately $316 million in net proceeds, which were used to repay a portion of the indebtedness owed to the Lenders, including an affiliate of NationsBanc, from the Safety-Kleen LBO. The 1998 Bonds were issued in the same manner as most high yield debt. The issuance involved two steps, constituting a single plan of financing. The general purpose of both steps was to obtain rapid access to the public capital markets in order to obtain funds at a cost of capital corresponding to registered, freely tradeable securities. The first step, pursuant to which the issuer actually obtains the funds, was to issue the 1998 Bonds through underwriters, which included NationsBanc, pursuant to an Offering Memorandum. The second step, mandated by the Offering Memorandum and the underwriting contracts, was to exchange the bonds issued in the first step for identical bonds issued pursuant to a registration statement. Because the second step was merely an exchange of bonds issued without prior registration for identical bonds issued pursuant to a registration statement, and because the issuer received the funds in the first step, no new funds flowed to the issuer in the second step. The entire two-step process constituted a public offering of the 1998 Bonds. NationsBanc was compensated for its underwriting services by, among other things, a discount between the price at which it initially purchased the 1998 Bonds from the issuer and the offering price. NationsBanc also obtained an indemnification agreement from LES with respect to certain liabilities, including those arising under the Securities Act. As part of the underwriting services it was to perform, NationsBanc was required to conduct appropriate due diligence of LES' financial condition -- along with that of its affiliates and subsidiaries -- and the impact of the Safety-Kleen LBO. In lieu of fulfilling its obligations, NationsBanc instead relied on present and future financial information provided by SKC, LES, the auditors of SKC and LES, and Laidlaw -- financial information which later proved to be inaccurate and misleading, eventually resulting in the Debtors' filing for bankruptcy. As an underwriter, NationsBanc initially purchased certain of the 1998 Bonds from LES with a view toward immediately reselling them in the first step of the transaction, and promptly exchanging registered, freely tradeable bonds, identical in all material respects, in the second step exchange pursuant to the terms of the underwriting contracts and the 1998 Offering Memorandum. The proceeds of the sale of the 1998 Bonds were to be used to repay a portion of the LBO debt created by the Amended and Restated Credit Agreement in connection with the Safety-Kleen LBO. Essentially, the Lenders, including an affiliate of NationsBanc, would reap the benefits of the proceeds generated by the 1998 Bonds. As a result, the 1998 Offering Memorandum highlighted the benefits of the Safety-Kleen LBO in order to induce purchasers of the 1998 Bonds. The 1999 Bonds On April 19, 1999, SKC issued a press release announcing that it "intends to offer up to $225 million of senior notes due 2009." That same day, SKC entered into an agreement with Laidlaw to repurchase the payment-in-kind debenture for $200 million in cash and 11,320,755 shares of common stock of SKC. On May 17, 1999, SKC issued $225 million of 9-1/4% senior notes due May 15, 2009 -- subsequently exchanged for substantially identical notes in an offering registered with the SEC in September 1999. SKC also issued 376,858 additional shares of common stock to Laidlaw in satisfaction of accrued and unpaid interest on the PIK Debenture up to the date of the repurchase. The 1999 Bonds were issued in the same manner as the 1998 Bonds. Like with the 1998 Bonds, NationsBanc was also an underwriter for the 1999 Bonds. TD Securities (USA), Inc. and Raymond James & Associates, Inc. were also underwriters for the 1999 Bonds. At or about the time of the issuance of the 1999 Bonds, NationsBank, N.A., an affiliate of NationsBanc, still held $67.3 million of the $2.2 billion acquisition financing for Services. NationsBanc was aware that the sole purpose for the issuance of the 1999 Bonds was to fund the $200 million cash portion of the repurchase of the PIK Debenture, i.e., to allow Laidlaw to further divest itself of its hazardous waste holdings, and not for SKC's operating expenses or additional capital. The remaining $25 million was used for fees and expenses related to the offering, including those paid to NationsBanc, and general corporate purposes. NationsBanc was compensated for its underwriting services by, among other things, a discount between the price at which it initially purchased the 1999 Bonds from the issuer and the offering price. NationsBanc also obtained an indemnification agreement from SKC with respect to certain liabilities, including those arising under the Securities Act. As part of the underwriting services it was to perform, NationsBanc was required to conduct appropriate due diligence of SKC's financial condition. As was the case with the 1998 Bonds, instead of properly performing its own due diligence, NationsBanc relied on information provided by SKC and its auditors of the purported success of the Safety-Kleen LBO and financial strength of SKC. This financial information later proved to be inaccurate, eventually resulting in the Debtors' filing for bankruptcy protection. As an underwriter, NationsBanc initially purchased certain of the 1999 Bonds from SKC with a view toward immediately reselling them in the first step of the transaction, and promptly exchanging registered, freely tradeable bonds, identical in all material respects, in the second step exchange pursuant to the terms of the underwriting contracts and the 1999 Offering Memorandum. The 1999 Offering Memorandum highlighted the success of SKC and the Safety-Kleen LBO in order to induce purchasers of the1999 Bonds to make an investment in SKC that would end up in the hands of Laidlaw and not SKC. Contemporaneous with the registration of the 1999 Bonds used to fund the repurchase of the PIK Debenture, Laidlaw announced that it was actively seeking a buyer for its 44% interest in SKC. In response, SKC's board appointed a special committee of non-Laidlaw directors to consider the implications of Laidlaw's announcement. The Avoidance Action The Safety-Kleen LES transferred an interest in property of the Debtors to NationsBanc by making payments to NationsBanc for fees and expenses incurred in connection with the financial advisory and underwriting services performed in relation to the 1998 and the 1999 Bonds. The Debtors want to recover the funds because it was a fraudulent or preferential transfer. The Debtors demand "a trial by jury on all issues so triable." (Safety-Kleen Bankruptcy News, Issue No. 64; Bankruptcy Creditors' Service, Inc., 609/392-0900) SK GLOBAL AMERICA: Obtains Court Injunction against Utility Cos. ---------------------------------------------------------------- SK Global America Inc. obtained Judge Blackshear's approval to: -- enjoin the Utility Companies from altering, refusing or discontinuing service because of non-payment of prepetition balances; and -- find that the company's history of prompt payment, ample postpetition liquidity, the statutory administrative priority and the debtor's promise to pay constitute adequate assurance under Section 366. SK Global America, has the ability and will continue to pay all undisputed postpetition obligations for the Utility Companies in accordance with the parties' prepetition practices. The Debtor estimates its average monthly utility costs at about $50,000. SK Global has a good payment history with the Utility Companies and it will have ample cash resources to adequately assure the Utility Companies of timely future payment. (SK Global Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service, Inc., 609/392-0900) SKM LIBERTYVIEW: S&P Puts BB Class B Note Ratings on Watch Neg. --------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on the class A-2, class B floating-rate, and class B fixed-rate notes issued by SKM LibertyView CBO I Ltd., an arbitrage CBO transaction managed by LibertyView Capital Management Inc., on CreditWatch with negative implications. At the same time, the 'AAA' rating assigned to the class A-1 notes is affirmed based on a financial guarantee insurance policy issued by Financial Security Assurance Inc. The CreditWatch placements reflect factors that have negatively affected the credit enhancement available to support the notes since previous rating action June 6, 2003. These factors include par erosion of the collateral pool securing the rated notes and a decline in the weighted average coupon generated by the performing assets within the pool. According to Standard & Poor's current ratings and the collateral included in the Aug. 15, 2003 trustee report, approximately $62.63 million (23.42% of the total collateral) come from obligors rated 'CC', 'SD', or 'D' by Standard & Poor's, up from $56.80 million (18.56% of the total collateral) at the time of the previous rating action. Also, Standard & Poor's noted that the transaction is out of compliance with its Trading Model test, a measure of the amount of credit quality in the current portfolio to support the ratings assigned to the liabilities. In addition, the weighted average coupon generated by the performing assets in the portfolio has declined slightly. Currently, the calculated weighted average coupon generated by the fixed performing assets in the portfolio is at 9.101%, versus a value of 9.215% at the time of the previous rating action. However, the coupon still remains below the required minimum of 9.60%. Standard & Poor's will review the results of current cash flow runs generated for SKM LibertyView CBO I Ltd. to determine the level of future defaults the rated tranches can withstand under various stressed default timing and interest rate scenarios while still paying all of the rated interest and principal due on the notes. The results of these cash flow runs will be compared to the projected default performance of the performing assets in the collateral pool to determine whether the ratings currently assigned to the notes remain consistent with the amount of credit enhancement available. RATINGS PLACED ON CREDITWATCH NEGATIVE SKM LibertyView CBO I Ltd. Rating Class To From Balance (mil. $) A-2 AA/Watch Neg AA 134.641 B Floating BB/Watch Neg BB 10.000 B Fixed BB/Watch Neg BB 25.000 RATING AFFIRMED SKM LibertyView CBO I Ltd. Class Rating Balance (mil. $) A-1 AAA 85.272 SMART WORLD: Consent Unnecessary to Settle Juno Litigation ---------------------------------------------------------- J. Alex Kress, Esq., at Riker, Danzig, Scherer, Hyland & Perretti LLP, serving as Special Litigation Counsel to Smart World Technologies, LLC, Freewwweb, LLC, and Smart World Communications, Inc., told the U.S. Bankruptcy Court that a settlement pact among the Company's Official Committee of Unsecured Creditors, Juno Online Services, Inc., MCI WorldCom Network Services, Inc., and UUNet Technologies, Inc., stinks and shouldn't be approved without Smart World's consent. Too bad, Judge Blackshear ruled last week. "Continuation" of a lawsuit pressing the Debtors' claims against Juno, "without the intervention of the Committee and WorldCom may as a practical matter impair or impede the ability of the Committee and WorldCom to protect their respective interests in the subject matter of the Action, inasmuch as continuation of the Action by the Debtors will result in substantial delay and poses a material risk that the recoveries by unsecured creditors represented by the Committee and by WorldCom would be substantially less than would be available under the Stipulation," Judge Blackshear finds. Bad Settlement The settlement of an estate claim without the estate's consent, the Debtors argue, undermines their effort to recover sufficient funds not only to pay priority and unsecured creditors in full, but probably enough to achieve a recovery for the Debtors' equity security holders! The Debtors say the Joint Motion brought by the non-debtor parties to the Bankruptcy Court provides no basis for the Court to conclude that the proposed settlement is reasonable and lacks sufficient information to support the factual findings necessary to approve the settlement. The Debtors say the settlement falls outside the range of reasonableness and contains numerous infirmities: * First, the proposed settlement does not even require Juno to pay the minimum amount Juno owes to the Debtors based on the admitted facts and fails to recognize the Debtors' substantial arguments for a significantly greater recovery. * Second, the proposed settlement improperly recognizes and overstates the liens and claims of WorldCom and subverts the Bankruptcy Code in the process. Given the substantial upside potential for the Debtors' bankruptcy estate, not to mention the lack of any reasonable opportunity for the Debtors to investigate the bona fides of the their claims against Juno, the Bankruptcy Court cannot approve the settlement. * Furthermore, in even bringing the settlement before the Court, the Committee improperly relies on doctrines only applicable to the situation where a debtor is refusing to pursue claims which a committee wishes to pursue; these are not applicable to permit the Committee to settle claims over the Debtors' objection when the Debtors are willing and able to and are actively litigating the claims. On June 29, 2000, the Debtors each filed voluntary chapter 11 petitions in the United States Bankruptcy Court for the Southern District of New York (Bankr. Case Nos. 00-41645 (CB) through 00- 41647 (CB)). A principal purpose of the Debtors' bankruptcy filings was to consummate the sale of the Debtors' assets to Juno. It's that transaction that gives rise to the Debtors' claims against Juco. Prior to the Petition Date, one of the Debtor's product was an internet service provider called "Freewwweb.com" which provided internet access to subscribers free of charge and relied upon advertising revenues to cover its cost. Prior to the Petition Date, the Debtors also developed a distribution system designed to channel subscribers to Freewwweb. Eventually, the Debtors grew into an operation which employed more than 140 people and acquired more than 1,700,000 registered subscribers, approximately 750,000 of whom were active users as of the Petition Date. Furthermore, the Debtors relate, as of the Petition Date, it was clear that the Debtors' distribution system was remarkably effective. It included, among other things, master distributors and approximately 3,000 dealers who actively solicited subscribers in exchange for contractual payments for each subscriber provided. This system was generating approximately 350,000 new subscribers per month as of the Petition Date and, over the nine to ten months prior to the Petition Date, had been increasing each month. After retaining Jeffries & Co. as its investment banker, the Debtors made several presentations in an effort to solicit bids for the purchase of its stock assets. Ultimately, these efforts resulted in the Debtors agreeing to a sale of its subscriber base and distribution system to Juno pursuant to a "Summary of Terms" dated June 29, 2000, with appended confirmation letter. Despite the lack of definitive documents, Juno insisted on the Debtors' immediately filing a bankruptcy petition and moving immediately to consummate the Term Sheet in a bankruptcy sale. The Term Sheet required Juno to compensate the Debtors in a combination of cash and Juno stock for FW Subscribers who became Juno subscribers at a rate starting at $40 per subscriber and growing to $50 per subscriber after the first 250,000 subscribers. The Term Sheet included lots of adjustments for this, that and the next thing. Smart World says Juno breached the Term Sheet in many ways, failed to provide adequate records and accountings, failed at customer service, and ultimately caused the business to fail and deliver inadequate value to the Estates. "Even on the most conservative basis, Juno owes the Debtors at least $6,900,000, probably $16,000,000, and potentially $32,000,000. Juno, of course, disputes these claims. WorldCom, UUNet and the Committee want to wrap-up Smart World's bankruptcy cases and move on. Juno has agreed to settle for $5,500,000 and everybody but the Debtor asks Judge Blackshear to approve this compromise. Smart World says the settlement motion is extraordinary because the Debtors are willing and able to pursue and are actively pursuing the Claims. Mr. Kress reminds the Court that he and his firm are working on a contingency fee basis. Mr. Kress smells smoke, thinks he can convince a jury there's fire, and wants the opportunity to pursue the estates' claims against Juno to maximize value for all stakeholders. Injunction Further, Judge Blackshear rules, all persons, including but not limited to the Debtors and the Debtors' creditors, equity holders, employees, officers and directors, shall be, and hereby are, permanently enjoined and retrained from commencing, or otherwise taking any action to collect or pursue, any and all actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, extents, executions, claims and demands whatsoever, whether known or unknown, contingent or not contingent, against Juno, Net Zero, United and each of their direct and indirect respective members, constituents, subsidiaries, affiliates, estates, employees, officers, directors, shareholders, employees, agents, representatives, attorneys, heirs, successors and assigns, arising from, relating to or otherwise in connection with (a) the Cases; (b) the Action, including but not limited to any claims asserted in the Complaint and the Counterclaims; (c) the Term Sheet; and (d) the Coverage Dispute. The Debtors and the Debtors' creditors, equity holders, employees, officers and directors, shall be, and hereby are, permanently enjoined and retrained from commencing, or otherwise taking any action to collect or pursue, any and all actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, extents, executions, claims and demands whatsoever, whether known or unknown, contingent or not contingent, against counsel for the Committee, Angel & Frankel, P.C. and counsel for WorldCom, Piper Rudnick, LLP and each of their direct and indirect respective members, constituents, subsidiaries, affiliates, estates, employees, officers, directors, shareholders, employees, agents, representatives, attorneys, heirs, successors and assigns, arising from, relating to or otherwise in connection with (a) the Action, including but not limited to any claims asserted in the Complaint and the Counterclaims; (b) the Term Sheet; and (c) the Coverage Dispute. Appeal to the District Court J. Alex Kress, Esq., at Riker, Danzig, Scherer, Hyland & Perretti LLP, serving as Special Litigation Counsel to, Smart World Technologies, LLC, et al., has already delivered the Debtor's Notice of Appeal to the Bankruptcy Court advising that it will seek review of Judge Balckshear's decision by the U.S. District Court for the Southern District of New York. SNYDERS DRUG: Seeks OK to Continue Hiring Ordinary Course Profs. ---------------------------------------------------------------- Snyders Drug Stores, Inc., along with its debtor-affiliates, is asking the U.S. Bankruptcy Court for the Northern District of Ohio's to approve the continued retention of professionals utilized in the ordinary course of the Debtors' business. The Debtors report that they customarily retain the services of various attorneys, accountants and other professionals to represent them in matters arising in the ordinary course of business and not in connection with these bankruptcy proceedings. These services include: a) tax preparation and other tax advice; b) employee relations and compensation; c) legal advice pertaining to various corporate matters; d) legal representation for litigation matters; and e) other matters requiring the expertise and assistance of professionals. The number of Ordinary Course Professionals involved renders it costly and inefficient for the Debtors to submit individual applications and proposed retention orders to the Court for each such professional. The Debtors submit that the retention of the Ordinary Course Professionals and the payment of interim compensation are in the best interest of the Debtors and their estates. While generally the Ordinary Course Professionals that previously rendered services to the Debtors wish to represent the Debtors on an ongoing basis, many might be unwilling to do so if they may be paid only through a formal application process. Moreover, if the expertise and background knowledge of certain of these Ordinary Course Professionals with respect to the particular areas and matters for which they were responsible before the Petition Date are lost, the Debtors' estates undoubtedly will incur additional and unnecessary expenses associated with the retention of other professionals that will lack such expertise and background knowledge. Consequently, the Debtors propose that they be permitted to pay, without formal application to the Court by any Ordinary Course Professional, 100% of the interim fees and disbursements to each Ordinary Course Professional upon the submission to the Debtors an appropriate invoice setting forth in reasonable detail the nature of the services rendered after the Petition Date. Provided however that such interim fees and disbursements, per Ordinary Course Professional do not exceed a total of $50,000 per month throughout these Chapter 11 cases. A Drugstore chain headquartered in Minnetonka, Minnesota, Snyders Drug Stores, Inc., filed for chapter 11 protection on September 11, 2003 (Bankr. N.D. Ohio Case No. 03-44577). Jordan A. Kroop, Esq., at Squire Sanders & Dempsey LLP represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed estimated debts and assets of more than $100 million each. STATION CASINOS: S&P Affirms Ratings over Good Operating Results ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook for Station Casinos Inc. to stable from negative. At the same time, Standard & Poor's affirmed its ratings on the company, including its 'BB' corporate credit rating. Total debt outstanding at June 30, 2003, was approximately $1.2 billion. Las Vegas, Nevada-based Station is the largest owner of off-Strip casino properties that cater to locals in Las Vegas. "The outlook revision reflects Station's steady operating performance during the past few quarters and the expectation that this trend will continue over the intermediate term," said Standard & Poor's credit analyst Michael Scerbo. Also, the company's management fee generated from Thunder Valley is likely to exceed previous expectations and enhance Station's ability to generate discretionary cash flow, which will be available to pursue growth opportunities, alleviating the need to increase debt materially above current levels. (Station manages Thunder Valley casino for the United Auburn Indian Community.) For the 12 months ended June 30, 2003, Station reported EBITDA (excluding equity in earnings from Green Valley Ranch) of $235 million due to stable performance in Las Vegas and increased management fees. However, debt increased due to several land purchases. As a result, when calculated on a trailing 12-month basis, credit measures remain weak for the rating. Still, with the added contribution from Thunder Valley, EBITDA is expected to increase significantly in the next 12 months (by more than 20%). UNITED AIRLINES: Committee Wins Nod to Expand KPMG Engagement ------------------------------------------------------------- The Official Committee of Unsecured Creditors of United Airlines Debtors, obtained permission from the Court to revise the scope of KPMG's retention as accountants and restructuring advisors. KPMG will provide additional services in connection with these two projects: 1) The Illinois Project a) review and analyze intercompany transactions and activities in the Debtors' non-transportation services Illinois unitary group; b) review approaches recommended by the Debtors' Professionals in the computation of gross receipts and apportionment factor for Illinois income tax purposes for United's non- transportation services Illinois unitary group; c) assist and review the analysis of potential refunds associated with any revised computation of the Illinois apportionment factor and gross receipts; d) assist in preparation of technical documentation on the revised approach to computations; e) assist the Debtors' Professionals in compilation of a report that quantifies the amount of potential Illinois income tax refund opportunities; f) discuss with the Debtors' Professionals which items will be included in a "claim for refund" to be filed with the Illinois Department of Revenue; g) assist the Debtors' Professionals in meeting with the Legal Services Bureau of the Illinois Department of Revenue to review United's state tax apportionment position and refund opportunities; h) assist the Debtors' Professionals in meeting with the Legal Services Bureau of the Illinois Department of Revenue if positions are not accepted and in petitioning for alternative allocation under Illinois Income Tax Act Section 304(f); i) assist in obtaining a Private Letter Ruling, if appropriate; j) assist in preparing one or more "claim for refund" package(s); k) assist in communicating with the Illinois Department of Revenue while considering the refund claim; and l) assist in matters before state taxing authority during review of United's claims for refund. 2) The California Project a) discuss the jurisdictions the Company may seek property tax refunds and/or abatements as a result of the value of computer software on Company aircraft; b) assist in determining the value of improperly assessed software in flight and ground property and develop state specific strategies for eliminating it from United's assessments; c) provide proactive consulting to the Debtors Professionals to help eliminate business personal property tax assessments on application software; and d) if requested, KPMG will attend informal meetings and administrative hearings before state and local authorities and jurisdictions, according to established local requirements and procedures. KPMG's compensation will be similar to that approved in the initial engagement. (United Airlines Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service, Inc., 609/392-0900) US UNWIRED: Selling PCS Spectrum and Cellular Ops. to Cingular -------------------------------------------------------------- Cingular Wireless will acquire additional spectrum and operations in Texas, Arkansas and Louisiana through a $27.6 million agreement it has reached with US Unwired Inc. (S&P, CCC- Corporate Credit Rating, Negative). Under terms of the all-cash deal, Cingular would take over US Unwired's cellular network in Lake Charles, LA as well as 10 MHz of its PCS spectrum in Alexandria and Shreveport, LA; Longview, and Paris, Texas; and Texarkana, Texas/Arkansas. Cingular currently provides service in all the markets except for Texarkana. "This is another opportunity for Cingular to expand our coverage area and add spectrum at a fair price," said Mark Feidler, chief operating officer of Cingular Wireless. "We're also bringing Cingular service to Texarkana, and we're looking forward to serving the people there." The agreement is expected to close in the fourth quarter of 2003. It is subject to the consent of the Federal Communications Commission, consents and releases from US Unwired's senior credit lenders and other customary approvals and consents. Cingular Wireless, a joint venture between SBC Communications (NYSE: SBC) and BellSouth (NYSE: BLS), serves more than 23 million voice and data customers across the United States. A leader in mobile voice and data communications, Cingular is the only U.S. wireless carrier to offer Rollover(SM), the wireless plan that lets customers keep their unused monthly minutes. Cingular has launched the world's first commercial deployment of wireless services using Enhanced Data for Global Evolution (EDGE) technology. Cingular provides cellular/PCS service in 43 of the top 50 markets nationwide, and provides corporate e-mail and other advanced data services through its GPRS, EDGE and Mobitex packet data networks. Details of the company are available at http://www.cingular.com VINTAGE PETROLEUM: Declares Cash Dividend Payable on October 7 -------------------------------------------------------------- Vintage Petroleum, Inc. (NYSE: VPI) announced its board of directors has authorized a cash dividend of four and one-half cents per share. The company said the dividend will be paid October 7, 2003, to stockholders of record on September 23, 2003. Vintage Petroleum, Inc. (S&P, BB- Debt Rating, Negative) is an independent energy company engaged in the acquisition, exploitation, exploration and development of oil and gas properties and the gathering and marketing of natural gas and crude oil. Company headquarters are in Tulsa, Oklahoma, and its common shares are traded on the New York Stock Exchange under the symbol VPI. WCI STEEL: Files for Chapter 11 Protection in Youngstown, Ohio -------------------------------------------------------------- WCI Steel, Inc., filed a voluntary petition for protection under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Northern District of Ohio, Eastern Division, in Youngstown. Edward R. Caine, president and chief executive officer of WCI, said, "Although we very much had hoped to accomplish the restructuring of the company outside of bankruptcy, industry conditions and our cash position forced us to take this step in order to protect the future of the company. The restructuring will continue under court protection, and WCI will maintain normal operations during the process." Caine continued, "We intend to fulfill our commitments to our employees, retirees and customers without interruption while we reorganize under court protection. We remain committed to providing our customers with high-quality products delivered on time and supported by superior customer and technical service. We deeply appreciate our customers' loyalty, and I assure them that meeting their needs remains our highest priority." WCI also announced that it is seeking immediate bankruptcy court approval of $110 million in debtor-in-possession credit facilities consisting of a $100 million secured DIP financing from Congress Financial Corporation, Bank of America, N.A., and other lenders under its existing $100 million working capital facility (which includes a $15 million junior participation by The Renco Group, Inc., WCI's ultimate parent) and an additional $10 million subordinated secured DIP facility to be provided by Renco. These facilities are expected to provide the liquidity necessary to enable WCI to meet its obligations to its suppliers, customers and employees during the restructuring process and to emerge from Chapter 11 reorganization proceedings with its desired competitive financial and operating structure. "Renco's commitments in the aforementioned DIP financings demonstrate its continued commitment to the long-term viability of WCI," said Caine. WCI to Continue Turnaround Strategy Within Chapter 11 Process Caine said the company would continue to pursue the previously announced strategic restructuring plan within the Chapter 11 process. The key elements of the plan are: -- Restructuring the company's work systems. The new structure would create self-directed work teams that are expected to dramatically improve productivity through a reduction in employment levels and by providing more autonomy to the workforce. Plans for such work teams have been the subject of positive discussions between WCI and the United Steelworkers of America. -- Reducing the debt burden. A new capital structure is needed that reduces the burden associated with the company's long-term debt. Discussions have been under way since July with bondholders to improve the debt structure. These discussions will continue within the Chapter 11 processes. The company has retained Jefferies and Company as its financial advisor in this regard. -- Obtaining a capital infusion. As part of its endorsement of the strategic plan, Renco has indicated that it is receptive to making a substantial capital infusion to WCI. Caine said, "Our goal is to arrive at a consensual plan of reorganization and emerge as a newly capitalized, cost-competitive company positioned to operate profitably in a highly competitive marketplace." WCI Steel is an integrated steelmaker producing more than 185 grades of custom and commodity flat-rolled steels at its Warren, Ohio facility. WCI products are used by steel service centers, convertors, electrical equipment manufacturers and the automotive and construction markets. The company has approximately 1,800 employees. WCI STEEL INC: Case Summary & 40 Largest Unsecured Creditors ------------------------------------------------------------ Lead Debtor: WCI Steel, Inc. 1040 Pine Avenue SE Warren, Ohio 44483-6528 Bankruptcy Case No.: 03-44662 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- WCI Steel Production Control Services, Inc. 03-44663 WCI Steel Metallurgical Services, Inc. 03-44665 WCI Steel Sales L.P. 03-44666 Youngstown Sinter Company 03-44667 Niles Properties, Inc. 03-44668 Type of Business: WCI Steel is an integrated steelmaker producing more than 185 grades of custom and commodity flat-rolled steels at its Warren, Ohio facility. Chapter 11 Petition Date: September 16, 2003 Court: Northern District of Ohio (Youngstown) Judge: William T. Bodoh Debtors' Counsel: Christine M Pierpont, Esq. G. Christopher Meyer, Esq. Squire, Sanders & Dempsey, L.L.P. 127 Public Square #4900 Cleveland, OH 44114 Tel: 216-479-8500 Fax: 216-479-8776 Total Assets: $356,286,000 (as of April 30, 2003) Total Debts: $620,610,000 (as of April 30, 2003) Debtors' 40 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ USX Corporation Trade Debt $6,244,053 600 Grant Street Pittsburgh PA 15219-2749 Richard Eskeman Director, Raw Materials Tel: 412-433-3620 Fax: 412-433-3624 Northshore Mining Co. Trade Debt $4,212,226 1100 Superior Avenue 15th Floor Cleveland OH 44114-2589 Don Gallagher, CFO Tel: 216-694-5498 Fax: 216-694-5385 Dominion Field Services, Trade Debt $1,829,761 Inc. 140 West Main Street Clarksburg WV 26302-1570 Charles E. Roberts Vice President & Gen. Manager Dominion Field Services, Inc. Tel: 304-627-3167 Fax: 304-627-3973 First Energy (Ohio Edison) Trade Debt $1,451,778 730 South Avenue Youngstown OH 44502 Thomas A. Clark Regional President Tel: 330-740-7711 Fax: 330-740-7569 Oglebay Norton Marine Trade Debt $773,577 Service Co. 1301 East Ninth Street #3737 Cleveland OH 44114-1800 Michael J. Siragusa, Vice President & Gen. Mgr. Tel: 216-861-8741 Fax: 216-861-8708 Norfolk Southern Corp. Trade Debt $692,875 110 Franklin Road Roanoke VA 24042-0026 Anthony Wade, Director Domestic Metallurgical Coal Mktg. Tel: 540-985-6708 Fax: 540-985-6398 BOC Gases Trade Debt $652,515 575 Mountain Avenue Murray Hill NJ 07974 Jeffrey Johns, Director of Administration Tel: 908-771-6039 Fax: 908-771-1903 ISG Warren, Inc. Trade Debt $569,718 2234 Main Avenue, SW Warren OH 44481-9602 Jeff Foster, Controller Tel: 330-841-2803 Fax: 330-841-2889 Vesuvius USA Trade Debt $562,983 27 Nobletown Road Carnegie PA 15106 Louis J. Sebastian, VP- Corporate Sales Tel: 412-276-1750, X292 Fax: 412-276-7313 Performix Technologies Trade Debt $548,872 101 Tidewater Road, NE Warren OH 44483-2434 Sid Galloway, President Tel: 330-372-1781 Fax: 330-372-4280 Affival, Inc. Trade Debt $500,620 University Corporate Center 300 Corporate Parkway-216N Amherst NY 14226-1207 Gregory P. Marzec, President, U.S. Operations Tel: 716-446-8866 Fax: 716-446-8868 Carmeuse North America Trade Debt $430,041 11 Stanwix Street 10th Floor Pittsburgh PA 15222 Bruce D. Routhieaux, Vice President Sales Tel: 412-995-5585 Fax: 412-995-5515 City of Warren Trade Debt $388,792 391 Mahoning Avenue Warren OH 44483 Henry J. Angelo, Mayor City of Warren Tel: 330-841-2601 Fax: 330-841-2676 Harsco Track Technology Trade Debt $352,789 612 N. Main Street Butler PA 16003 Jim Fiore, Gen. Manager U.S. East c/o Heckett Multiserv Harsco Tel: 724-283-6909 Fax: 724-283-3578 Lafarge Construction Trade Debt $294,448 555 Frost Street, Suite 100 Streetsboro OH 44241 Stanley J. Virgalitte P.E. Manager, Sales & Marketing Lafarge Construction Tel: 330-463-1211 Fax: 330-463-1210 United Foundries, Inc. Trade Debt $269,664 1400 Grace Street, NE Canton OH 44705 Edward Bauer, COO Tel: 330-456-2761 Fax: 330-456-2085 Resco Products, Inc. Trade Debt $264,811 4 Penn Center Blvd. S-200 Pittsburgh PA 15276 Walter D. Meloy, Gen. Sales Mgr. Iron & Steel Tel: 412-494-4491, x1018 Fax: 412-494-4571 Ferrous Metal Processing Trade Debt $262,088 Co. 11103 Memphis Avenue Cleveland OH 44114 Ed Gonzalez, President Tel: 216-671-6161 Fax: 216-671-6165 Paul Wurth, Inc. Trade Debt $255,719 Stealth Tech Center 333 Technology Dr., Suite 116 Canonsburg PA 15317-9581 Kevin Moore, Manager Product & Customer Services Tel: 724-873-7200, x116 Fax: 724-873-7299 Kinder Morgan Bulk Trade Debt $239,074 Terminals, Inc. Minteq International, Inc. Trade Debt $232,555 Seaway Marine Transport Trade Debt $221,869 Warren Fabricating & Trade Debt $220,670 Machining Lafarge Construction Trade Debt $209,562 Henkel Surface Trade Debt $206,160 Millersville Lime Inc. Trade Debt $197,041 Keystone Metals Trading, Trade Debt $183,302 Inc. Lyden Oil Company Trade Debt $176,728 Bearing Service Company Trade Debt $176,138 Duke's Sanitary & Trade Debt $168,814 Industrial Services The New Keibler Thompson Trade Debt $140,237 Co. Millcraft-SMS Services LLC Trade Debt $137,502 CCPI Inc., Comat Trade Debt $131,156 Pinney Dock & Transport Trade Debt $119,299 Diamond Steel Construction Trade Debt $117,546 Co. Rossborough-Remacore LLC Trade Debt $104,956 World Class Processing Trade Debt $102,812 Ondeo Nalco Company Trade Debt $100,819 East Fairfield Coal Co. Trade Debt $100,592 Daniel A. Terreri & Sons, Trade Debt $95,000 Inc. WEIRTON STEEL: Seeks Clearance for Weirton City Settlement Pact --------------------------------------------------------------- Mark E. Freedlander, Esq., at McGuireWoods, in Pittsburgh, Pennsylvania, relates that Weirton Steel Corporation and the City of Weirton entered into a Pilot Agreement dated February 14, 2003. Pursuant to the Pilot Agreement, the Debtor would pay the City $1,454,317 for fiscal year ending June 30, 2003, in lieu of any additional tax, levies, fees or assessments. As of the Petition Date, the Debtor was current on its obligations under the Pilot Agreement. However, since the Petition Date, $303,978 became due and owing for the fiscal year 2002 to 2003. A $100,000 payment in lieu of building fee permits also came due under the Pilot Agreement on June 30, 2003. Mr. Freedlander also relates that Police and Fire Service Fee Ordinance No. 1354 was enacted on September 9, 2002. Pursuant to the Fee Ordinance, each property owner is assessed charges and expenses that reflect the cost to the City of providing police and fire services. The Police and Fire Service Fee is assessed in an amount equal to the total number of square feet contained in a building owned by a taxpayer multiplied by $0.15 and is to be paid in one installment that is due on September 30th of each year. If the Police and Fire Service Fee is not paid on or before October 1st of each year, a penalty of 2% of the service charge is added and an additional 1% is added for each succeeding 30 days elapsing before payment is made. In that regard, for the fiscal year 2002-2003, the Debtor owed a $1,145,000 Police and Fire Service Fee under the Fee Ordinance, due in full on September 30, 2002. The Debtor's practice was to pay the Police and Fire Service Fee, including penalties, in equal monthly installments throughout the year, notwithstanding the fact that penalties were assessed as a result of late payments under the Fee Ordinance. As of the Petition Date, the Debtor had remaining obligations under the Fee Ordinance for the fiscal year 2002-2003 for $134,331. The Outstanding Obligations total $538,309 and consist of: (a) $303,978, due and owing pursuant to the Pilot Agreement; (b) $100,000 in lieu of building permit fees, due and owing pursuant to the Pilot Agreement; and (c) $134,331, due and owing pursuant to the Fee Ordinance. The Debtor is the largest taxpayer in the City, and its failure to pay a portion of the Outstanding Obligations as and when due could have a substantial detrimental impact on the City's ability to provide critical police and fire protection, as well as education to its citizens. After extensive negotiations, the Debtor and the City reached a settlement and compromise of the Outstanding Obligations. Pursuant to the Settlement Agreement, the Debtor agrees to pay $260,000 to the City and the City agrees to accept $260,000 from the Debtor as full and complete payment in compromise and settlement of the Outstanding Obligations. Accordingly, the Debtor asks the Court to approve its Settlement Agreement with the City of Weirton. By reaching a settlement with the City, the Debtor was able to quantify and resolve outstanding payment in lieu of tax obligations and police and fire service fee obligations to a local taxing authority for an amount that is less than 50% of the Outstanding Obligations. This amount is significantly less than the City would be entitled to under a plan of reorganization. Mr. Freedlander relates that the proposed settlement reflects savings to the estate and its creditors of approximately $278,000, or $238,000 excluding penalties. (Weirton Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc., 609/392- 0900) WORKFLOW MANAGEMENT: First Quarter FY 2004 Net Loss Drops 77% ------------------------------------------------------------- Workflow Management, Inc. (Nasdaq:WORK), reported results for the three months ended July 31, 2003. The Company reported a GAAP net loss for its first quarter ended July 31, 2003 of $562,000, down from a GAAP net loss of $2.4 million in the comparable period a year ago. The net loss during the first quarter consisted of $697,000 income from continuing operations, and a $1.3 million loss from discontinued operations. Revenues for the three months ended July 31, 2003 decreased 4.8% to $142.9 million versus $150.1 million in the prior year. Operating income was $5.8 million, or 4.1% of revenues, in the first quarter versus operating income of $6.4 million, or 4.3% of revenues, last year. Adjusted EBITDA was $6.9 million before certain items discussed below compared to Adjusted EBITDA of $9.1 million in the comparable period a year ago. Income from continuing operations for the three months ended July 31, 2003, excluding the after-tax impact of the items listed below and the tax impact of pledging Canadian assets against U.S. debt, was $254,000 or $0.02 per diluted share versus income from continuing operations of $1.5 million or $0.12 per diluted share a year ago on a comparable basis. "While our markets continue to be challenged with lower unit demand, pricing pressures and customers re-evaluating their printing programs, we are already experiencing signs of recovery in most of our businesses," stated Gary W. Ampulski, President and Chief Executive Officer. "Given the distractions from the earn-out deferrals, the negotiation of our new credit facility amendment and other economic factors that influenced our first quarter performance, we are very excited to refocus our efforts on improving the business going forward." During the three months ended July 31, 2003, Workflow recorded certain gains totaling approximately $1.2 million. The pre-tax effected items recorded in the results from continuing operations included: (i) $1.0 million in restructuring costs, (ii) $2.2 million reversal of accrued severance and other employment costs and (iii) a $18,000 loss from an interest rate hedge. During the three months ended July 31, 2002, Workflow recorded certain costs totaling approximately $6.3 million. The pre-tax effected items recorded in the results from continuing operations included: (i) $221,000 million in restructuring costs, (ii) a $4.3 million loss from an interest rate hedge and (iii) $1.7 million in fees for an unexecuted debt offering. Please refer to the Company's Form 10-Q for the quarter ended July 31, 2003 filed with the Securities and Exchange Commission for additional information. Workflow Management, Inc. is a leading provider of end-to-end print outsourcing solutions. Workflow services, from production of logo-imprinted promotional items to multi-color annual reports, have a reputation for reliability and innovation. Workflow's complete set of solutions includes document design and production consulting; full-service print manufacturing; warehousing and fulfillment; and one the industry's most comprehensive e- procurement, management and logistics systems. Through custom combinations of these services, the Company delivers substantial savings to its customers - eliminating much of the hidden cost in the print supply chain. By outsourcing print-related business processes to Workflow, customers streamline their operations and focus on their core business objectives. For more information, go to http://www.workflowmanagement.com * * * Credit Facility Amendment Workflow Management has entered into a definitive agreement with its senior lenders that amends the Company's credit facility. Under the terms of the amendment, the $50 million term loan originally due on December 31, 2003 now matures on May 1, 2004. The $16.8 million term loan and the approximately $100 million in availability asset-based revolver, both of which were originally due on June 30, 2005, now mature on August 1, 2004. In addition to modifying the maturity dates of the Company's senior debt, the credit facility amendment also provides the Company with improved advance rates under the asset-based revolver on eligible accounts receivable and inventory. As previously announced, at April 30, 2003, the Company had exceeded certain covenants in the credit facility that limited capital expenditures and the incurrence of restructuring costs. As part of the credit facility amendment, the Company's senior lenders have waived these defaults. The amendment also modifies the calculation of EBITDA for credit facility covenant purposes to exclude the impact of the goodwill impairment and the results of discontinued operations and amends certain financial covenants for future periods in a manner consistent with the Company's current business plan and forecasts. As part of the credit facility amendment, the Company also changed the conditions under which its lenders may exercise warrants to purchase the Company's common stock and agreed to modify the exercise schedule of the warrants. In addition, the Company agreed to increase the number of shares of its common stock potentially issuable upon exercise of these warrants. Sale of Discontinued Operations The Company also reported the successful divestiture of certain non-core print manufacturing operations. The assets and liabilities of the divested businesses, which have been excluded from the Company's historical operating results and classified as discontinued operations, were sold to a financial buyer for $5.0 million in gross proceeds. After payment of expenses, the transaction generated net cash proceeds of approximately $4.9 million. Under the terms of the credit facility amendment discussed above, the Company will use these net proceeds to make certain earn-out payments that were due in May 2003 under purchase agreements for prior acquisitions and to reduce outstanding indebtedness under the credit facility. WORLDCOM: Reports Slight Improvement in July Operating Results -------------------------------------------------------------- MCI (WCOEQ, MCWEQ) filed its July 2003 monthly operating report with the U.S. Bankruptcy Court for the Southern District of New York. During the month of July, MCI recorded $2.116 billion in revenue versus $2.075 billion in June 2003. Revenue gains were driven primarily by an increase in long distance volume, an additional business day, the inclusion of revenue from wireless messaging services that had previously been included in discontinued operations and certain non- recurring items. Operating income in July was $197 million versus $146 million in June. The increase in operating income was due primarily to the revenue gains described above as well as a decrease in selling, general and administrative expenses, offset by an increase in depreciation and amortization expenses which resulted primarily from the inclusion of the wireless messaging services business. The Company had net income in July of $207 million compared to net income of $84 million in June. This increase was due to the increase in operating income and an increase in miscellaneous income, including $43 million in one- time gains and adjustments. July reorganization items were $30 million versus $46 million in June. During the restructuring process, certain business activities will drive one- time costs that will be recognized in the month in which they were incurred. These expenses are expected to fluctuate from month-to-month as the Company implements its cost reduction plans. In July, MCI recorded capital expenditures of $60 million. MCI ended July with $4.7 billion in cash on hand, an increase of approximately $100 million from the beginning of the month. "We are encouraged by the steady progress we made in July," said Bob Blakely, MCI chief financial officer. "By recently gaining the support of the overwhelming majority of our creditors for our Plan of Reorganization, we remain on track to emerge from Chapter 11." The financial results discussed in the July 2003 Monthly Operating Report exclude the results of Embratel. Until MCI completes a thorough balance sheet evaluation, the Company will not issue a balance sheet or cash flow statement as part of its Monthly Operating Report. The Monthly Operating Reports are available on MCI's Restructuring Information Desk at: http://global.mci.com/news/infodesk/ Based on current information and a preliminary analysis of its ability to satisfy outstanding liabilities, MCI believes that when it emerges from bankruptcy proceedings, its existing WorldCom and Intermedia preferred stock and WorldCom group and MCI group tracking stock issues will have no value. WorldCom, Inc. (WCOEQ, MCWEQ), which currently conducts business under the MCI brand name, is a leading global communications provider, delivering innovative, cost-effective, advanced communications connectivity to businesses, governments and consumers. With the industry's most expansive global IP backbone, based on the number of company-owned POPs, and wholly- owned data networks, WorldCom develops the converged communications products and services that are the foundation for commerce and communications in today's market. For more information, go to http://www.mci.com WORLDCOM: Agrees to Toll Time Periods Under 7-1/8% Debentures ------------------------------------------------------------- On June 24, 1996, MCI Communications Corporation issued $500,000,000 in principal amount of 7-1/8% Debentures due June 15, 2027 pursuant to an indenture dated February 17, 1995, as amended, between MCI and Citibank, N.A., as trustee. Law Debenture Trust Company of New York succeeded Citibank as indenture trustee. The Notes are subject to redemption on June 15, 2003 by the holders of Notes that have exercised the option to redeem by delivering, no earlier than April 16, 2003 -- Notice Period Commencement -- and no later than May 15, 2003 -- Notice Period Deadline -- the Notes to be redeemed and a notice of the exercise of such redemption option in accordance with applicable provisions of the Notes. MCI contends that the exercise of the redemption option, including the delivery of Redemption Notices, during the pendency of its Chapter 11 case would constitute a violation of the automatic stay. But the Ad Hoc Committee of MCI Noteholders contends that such actions would not violate the automatic stay. If the automatic stay were implicated, the MCI Noteholders Committee argues that any implication would be technical and good cause would exist for modification of the automatic stay to permit the exercise of the redemption option. Consequently, MCI, the MCI Noteholders Committee, and Law Debentures believe that the issue of the applicability of the automatic stay to the exercise of the redemption option and delivery of Redemption Notices need not be adjudicated at this time. By subsequent stipulations, the parties agree to toll the Notice Period Commencement to August 15, 2003, the Notice Period Deadline to September 15, 2003, and the Redemption Date to the earlier of: (i) October 15, 2003, and (ii) the date that is 10 days before the scheduled date of commencement of a hearing to consider confirmation of a reorganization plan in the Debtors' cases that provides for the reinstatement of the Notes. In view of so many issues that arise in the Debtors' cases, the parties have decided to postpone adjudication of the applicability of the automatic stay once again. MCI, the MCI Noteholders Committee, and Law Debentures stipulate and agree to toll the Notice Period Commencement to October 15, 2003 and the Notice Period Deadline to November 17, 2003. The parties also agree to toll the Redemption Date to the earlier of: (a) December 17, 2003, and (b) the date that is 10 days before the scheduled date of commencement of a hearing to consider confirmation of a reorganization plan in the Debtors' cases that provides for the reinstatement of the Notes. (Worldcom Bankruptcy News, Issue No. 37; Bankruptcy Creditors' Service, Inc., 609/392-0900) W.R. GRACE: Committees Balk At Proposed State Street Engagement --------------------------------------------------------------- Michael R. Lastowski, Esq., at Duane Morris LLP, tells Judge Fitzgerald that the W.R. Grace Debtors are seeking to burden their estates and creditors with the fees and expenses of State Street while it is acting only on behalf of a certain block of equity holders. State Street's fees and expenses should be borne by the Plan as a whole, or alternatively from the stock accounts in the Plan. Denial of the Debtors' request would not preclude the Debtors from retaining State Street for the purposes proposed, but would ensure that the proper party pays the costs. The Plan referred to is a 401(k) plan with an employer-matching contribution, which provides for participant direction for the investment of employee contributions from among several investment choices. Until the summer of 2003, one of the investment options that Plan participants had was to invest in Grace's stock. The Committee understands that, prior to 2001, Grace's matching contribution under the Plan was always made in the form of its own stock. The pre-2001 employer matching contributions in the form of Grace stock, as well as voluntary employee investments in Grace stock made prior to the mid-2003 Plan amendment, continue to be held as shares of Grace in accordance with the terms of the Plan. The Committee is informed that no new money may be invested in the form of Grace's stock, and there can be no transfers of money from other investment options under the Plan into Grace stock. The Committee is also informed that there are currently 10,000,000 shares of Grace stock held under the Plan, which represents approximately 16% of the aggregate amount of Grace stock outstanding. State Street is to make a determination of whether any or all of the Grace stock in the Plan should be retained by the trust or sold, and then directly the Trust to act accordingly. When shares of Grace stock are sold, that stock will be withdrawn pro rata from the stock accounts of Plan participants. State Street's services could include action on behalf of the Grace stock in plan reorganization discussions, if it believes that in the exercise of its fiduciary duties that action is warranted. In light of securities laws restrictions on how much of the Grace stock could be sold by State Street in the market, it might very well be that State Street, if retained, would be involved in reorganization discussions on behalf of the Plan as a significant, if not the single largest, holder of an equity interest. State Street's real purpose is to act on behalf of, and protect the equity value of, the 16% of the outstanding Grace stock held in the Trust. The Committee argues that it is not proper to have the Debtors' estates bear the fees and expenses of what is, in essence, a particular equity holder representing a large percentage of the outstanding Grace stock. In addition to the annual fee of $530,000 a year, the proposed retention obligates the Debtors to reimburse State Street for the costs of its legal and financial advisors. During the first year alone, the proposed engagement contemplates that those professional costs to be reimbursed might reach another approximately $450,000, bringing the total first year cost close to $1,000,000. The Committee notes that he Plan contains millions of dollars of assets and generates income, which can and should be used to compensate State Street. Equity Committee The Official Committee of Equity Security Holders agrees with the Creditors' Committee. Teresa K. D. Currier, Esq., at Klett Rooney Lieber & Schorling, in Wilmington, Delaware, says that the Debtors have not explained precisely why they need to employ State Street as investment advisor and fiduciary to the trust funding the W. R. Grace & Co. Savings & Investment Plan. Presumably, this function is already being performed for the Trust, either internally at Grace or through another third party. At a minimum, the Debtors must explain how the function is being performed now, by whom and at what cost, and why there is any need for a switch. Even if the appointment of State Street were warranted, the Debtors fail to provide sufficient information to determine whether the proposed annual fee of $530,000, plus expenses, is a reasonable expenditure of the estate's money for the services to be provided. Information regarding the current and historical cost of these services, as well as the normal market rates for such services, should be provided so that parties-in-interest and the Court may make this determination. While the Application includes the conclusory assertion that it is necessary to "maximize the value of the estates and to reorganize successfully," there is no explanation as to how the appointment of State Street and the attendant payment of at least $530,000 a year will accomplish that maximization. Simply substituting one provider of these services for another, without obtaining either cost savings or some other benefit, is an unnecessary waste of the Court's time and the estate's money. * * * As previously reported, W.R. Grace & Co., and debtor-affiliates sought the Court's authority to employ State Street Bank & Trust in Boston as investment manager and fiduciary for the stock of W. R. Grace & Co. held by the trust funding the W. R. Grace & Co. Savings & Investment Plan. Duties In general, State Street Bank will determine the appropriateness of the Trust's retention or sale of Grace Stock, all within the context of, and subject to, the Bank's Investment Guidelines, and as directed by ERISA. State Street Bank will not have any authority, responsibility or obligation to vote any of the shares of Grace Stock held in the Trust, it being understood that all shares will be voted by the Trustee of the Trust as directed by the participants in the Savings Plan. However, in the event that a vote relates to a proposed merger or other transaction, the approval of which would have substantially the same effect as a sale or other disposition of substantially all of the assets of Grace or of the shares of Grace Stock held in the Trust, State Street Bank will have discretionary authority to direct the Trustee to vote all shares of the Grace Stock in the Trust in favor of a merger or other transaction, but only if that direction is consistent with the Investment Guidelines and ERISA. The Debtors will cause the Savings Plan and Trust documents to be amended to provide for this discretionary authority and will notify Plan participants of the amendments. In addition, State Street Bank will take other actions as it deems necessary or appropriate in connection with its engagement and to satisfy its fiduciary obligations in a timely fashion consistent with the scope of its duties and responsibilities as investment manager. In particular, the engagement letter authorizes State Street Bank to independently engage legal counsel and a financial advisor to represent it in the performance of its obligations under the engagement letter. Compensation The Debtors will pay State Street an annual fee equal to $530,000, which will be paid monthly in arrears, and will reimburse State Street Bank's expenses. However, the fees, but not the expenses, of the Bank's legal counsel and financial advisor are subject to these limits: 1) State Street Legal Fees (i) Start-up period (to 10-31-03): No greater than $125,000 (ii) Next 9 months of engagement: No greater than $25,000 per month; 2) State Street Financial Advisor Fees (i) First month of engagement: No greater than $50,000 (ii) Second and third months of engagement: No greater than $25,000 per month Indemnification As part of the Retention Agreement, the Debtors are required to provide State Street with a "limited indemnification." The Indemnification Agreement provides in relevant part: A. The Indemnity. As a material part of the consideration for the agreement of State Street to perform services under the Engagement Agreement, the Debtors agree to indemnify, defend, reimburse and hold harmless State Street and each past, present and future officer, director, employee, and controlling person of State Street within the meaning of either Section 15 of the Securities Act of 1933, as amended or Section 20 of the Securities Exchange Act of 1934, as amended, to the fullest extent lawful from and against any and all losses, claims, damages, liabilities, costs and expenses (or actions in respect thereof) joint or several, arising out of any actions taken or omitted to be taken by an Indemnified Party in connection with services performed under the Engagement Agreement, subject to the limitations provisions of Paragraph D. B. Indemnity Costs. The Debtors agree to pay any legal or other expenses incurred by the Indemnified Parties in respect to Covered Losses, including but not limited to reasonable costs of investigation and preparation and reasonable attorneys' fees, disbursements and other charges, and the aggregate amount paid in connection with, incident to, or in settlement or compromise of any actions, suits, or other legal proceedings, or governmental investigation, or claims to which an Indemnified Person may become subject under any statute or common law or otherwise ... ; provided, however, that the Debtors shall not be liable for any amounts paid in settlement or compromise which have not been previously authorized and approved in writing by the Debtors (which authorization and approval shall not be unreasonably withheld). C. No Liability to Debtors. The Debtors further agree that State Street shall have no liability to the Debtors, or any other person, for any losses, claims, damages, liabilities, costs or expenses relating to the engagement, except as provided in Paragraph D. D. Limitation on Indemnity. The Debtors shall not be liable under the Indemnification Agreement or any other agreement or arrangement for any losses, claims, damages, liabilities, costs or expenses which are finally judicially determined to have resulted primarily from the negligence, gross negligence, recklessness or willful misconduct of any Indemnified Party or any agent or advisor of State Street. For the purposes of this Indemnification Agreement, the term "negligence' means a departure from standards of ordinary care applicable to a person with demonstrated expertise in rendering professional services similar to the services to be performed by State Street as set forth in the Engagement Agreement or by its agent or advisor, whichever is applicable. In regard to determining whether the losses, claims, damages, liabilities, costs or expenses were caused by the negligence, gross negligence, recklessness or willful misconduct of the Indemnified Party, the expenses related thereto (including related attorneys' fees) will be borne by the losing party. (W.R. Grace Bankruptcy News, Issue No. 46; Bankruptcy Creditors' Service, Inc., 609/392-0900) * Philip Kirstein Joins Kirkpatrick & Lockhart's New York Office ---------------------------------------------------------------- The national law firm of Kirkpatrick & Lockhart LLP is pleased to announce that Philip L. Kirstein, will join K&L's New York office as Of Counsel on October 1, 2003. Kirstein was most recently General Counsel of Merrill Lynch Investment Managers. "Having spent more than 20 years in-house at Merrill Lynch, I'm excited to be re-entering private practice at K&L. The firm's well-regarded financial services and asset management practices will be an excellent platform for developing my practice and assisting my clients," said Kirstein. A 1973 graduate of Syracuse University School of Law, Kirstein began his distinguished career at Merrill Lynch in 1980 after six years in private practice. He served as Vice President and subsequently General Counsel and Senior Vice President of Merrill Lynch Asset Management (renamed in 1998 as Merrill Lynch Investment Managers) from 1984 until his retirement in March 2003. Kirstein, age 58, is also a former Director and Member of the Executive Committee of ICI Mutual Insurance Company. Commenting on Kirstein's arrival, Robert J. Zutz, a leader of K&L's Investment Management practice, said, "Phil is an outstanding addition to our investment management practice. We are thrilled that our fund and investment adviser clients will have access to his insight and extensive knowledge of the industry." K&L is a national law firm with more than 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. The firm's practice embraces three major areas -- litigation, corporate and regulatory -- and related fields. For information about K&L, visit http://www.kl.com * Jefferies Hires Ted Cook as Investment Banking Managing Direc. ---------------------------------------------------------------- Jefferies & Company, Inc., the principal operating subsidiary of Jefferies Group, Inc. (NYSE: JEF), announced that Ted Cook has joined as a Managing Director in investment banking. He will head the firm's General Industrial Group. While the industrial sector has long been an area of focus for Jefferies, the hiring of Mr. Cook formalizes the firm's efforts in the space. The group will concentrate on diversified industrial companies, including electrical, multi-industry, flow control, electronic manufacturing services, and power suppliers, as well as the machinery and engineering construction, security, packaging and printing industries. "Ted Cook is an exceptional professional whose outstanding experience and relationships significantly extend Jefferies' position in the industrial space," commented Richard B. Handler, Chairman and CEO of Jefferies. "As our business continues to diversify and expand, we remain focused on hiring professionals with established relationships who are motivated by our entrepreneurial platform." "I'm excited to be part of Jefferies' thriving investment banking practice and entrepreneurial culture," said Mr. Cook. "Jefferies' leading capabilities in all aspects of the capital markets position the firm for continued success, especially given the opportunity to work with middle market companies." Prior to Jefferies, Mr. Cook spent approximately twenty years providing investment banking services to clients in the industrial sector while at Schroders PLC, J.P. Morgan and, most recently, Banc of America Securities, LLC, where he was Head of the General Industrial Group for nearly three years. Mr. Cook will be based in the firm's NY headquarters. Jefferies & Company, Inc., the principal operating subsidiary of Jefferies Group, Inc. (NYSE: JEF), is a full-service investment bank and institutional securities firm focused on the middle market. Jefferies offers financial advisory, capital raising, mergers and acquisitions, and restructuring services to small and mid-cap companies. The firm provides outstanding trade execution in equity, high yield, convertible and international securities, as well as fundamental research and asset management capabilities, to institutional investors. Additional services include correspondent clearing, prime brokerage, private client services and securities lending. The firm's leadership in equity trading is recognized by numerous consulting and survey organizations, and Jefferies' affiliate, Helfant Group, Inc., executes approximately eleven percent of the daily reported volume on the NYSE. Through its subsidiaries, Jefferies Group, Inc. employs more than 1,350 people in 20 offices worldwide, including Atlanta, Boston, Chicago, Dallas, London, Los Angeles, New York, Paris, San Francisco, Tokyo, Washington and Zurich. Further information about Jefferies, including a description of investment banking, trading, research and asset management services, can be found at http://www.jefco.com * Meetings, Conferences and Seminars ------------------------------------ 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 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 October 2-3, 2003 EUROFORUM INTERNATIONAL European Securitisation Hilton London Green Park Contact: http://www.euro-legal.co.uk October 8-11, 2003 TURNAROUND MANAGEMENT ASSOCIATION 15th Anniversary Convention Hyatt Regency, San Francisco, CA Contact: 312-578-6900 or www.turnaround.org 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 15-16, 2003 EUROLEGAL Commercial Loan Workouts Contact: +44-20-7878-6897 or liu@ef-international.co.uk October 16-17, 2003 EUROFORUM INTERNATIONAL Russian Corporate Bonds Renaissance Hotel, Moscow Contact: http://www.ef-international.co.uk November 4-5, 2003 EUROFORUM INTERNATIONAL The Art and Science of Russian M&A Ararat Park Hyatt Hotel, Moscow Contact: +44-20-7878-6897 or liu@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 ***