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/raid1/www/Hosts/bankrupt/TCR_Public/031016.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, October 16, 2003, Vol. 7, No. 205 Headlines 866 3RD NEXT: Seeks Permission to Tap Rubin Katz as Accountants ACTERNA CORP: Emerges from Chapter 11 Reorganization Proceedings AEROGEN INC: Promotes Angela Strand to Vice President-Marketing AHOLD: Names Lawrence Benjamin as New U.S. Foodservice CEO AIR CANADA: Pionairs & ASPBA Represent Inactive Retirees' Panel ALLIANCE PHARMACEUTICAL: Records $20.3 Mil. Net Loss for FY 2003 AMERICAN COMMERCE: Completes Chariot Manufacturing Acquisition AMERICAN PLUMBING: Case Summary & Largest Unsecured Creditor AMERICAN PLUMBING: Chap. 11 Filing Spurs S&P Rating Cut to D AMERICA WEST: Q3 Conference Call to Be Webcast on October 21 ANC RENTAL: Court Clears Assignment of Liberty Pacts to Vanguard ANKER COAL: Emerges From Chapter 11 Bankruptcy APPLIED EXTRUSION: S&P Cuts $275M Sr. Unsec. Debt Rating to B- ATLANTIC COAST: Board Still to Meet and Decide on Mesa Offer AURORA FOODS: Effecting Pinnacle Merger Under Bankruptcy BALDWIN CANE: Section 341(a) Meeting to Convene on November 4 BEAR STEARNS: Fitch Takes Rating Actions on 2003-TOP12 Notes BE INC: Performance Capital Discloses 10.42% Equity Stake BOOTS & COOTS: Pollock to Lead Newly Formed Canadian Unit CABLE SATISFACTION: Junks CDP Pact & Supports Catalyst Group Plan CEDARA SOFTWARE: Inks Distribution Pact with Shanghai Medical CENTRAL EUROPEAN MEDIA: Commences Two-for-One Stock Split CHANNEL MASTER: Looks to FTI Consulting for Financial Advice CHESAPEAKE CROSSING: Look for Schedules & Statements on Oct. 28 COLUMBUS MCKINNON: Will Announce Q2 2004 Results on October 21 COMM 2000-C1: Fitch Affirms Ratings on Series 2000-C1 Notes COMM 2000-FL2: Fitch Affirms Low-B Ratings on Six Note Classes DATAWORLD SOLUTIONS: Reports Favorable Strategic Restructuring DELTA AIR LINES: Third Quarter Net Loss Pegged at $164 Million DJ ORTHOPEDICS: Will Release 3rd Quarter 2003 Results on Oct. 28 EAGLEPICHER: Reports Decreasing Net Sales in Third Quarter 2003 ENRON CORP: ENA Seeks to Conduct Rule 2004 Exam of Giant Eagle EXIDE: Committee Wants to Disclose Confidential Info to Bidders FMC CORP: Solutia Files Suit Regarding Astaris LLC Joint Venture GLOBAL CROSSING: Obtains Nod for Alcatel Deferred Payment Pact HUGHES ELECTRONICS: Third Quarter Net Loss Balloons to $23 Mil. IMAGING TECHNOLOGIES: Delays Form 10-K Filing By One Week IMAX CORP: S&P Ups Corp. Credit Rating to CCC+ & Outlook Positive IMMUNE RESPONSE: Commences Private Offering to Raise $12 Mil. IMPATH INC: Retains Asante Partners as Investment Advisors INSITE VISION: AMEX Accepts Continued Listing Plan INTEGRATED HEALTH: IHS Liquidating Asks for Lease Time Extension INTERDENT: Equity Extinguished & SEC Reporting Terminates INTERNET CAPITAL: Nasdaq Grants Continued Listing Status I-STAT CORPORATION: 3rd Quarter Conference Call Set for Oct. 23 KAISER: Seeks to Further Extend Removal Period to May 12, 2004 LEAP WIRELESS: Panel Assigns U.S. Bank as Leap Creditor Trustee LNR PROPERTY: Offering $275+ Million of New Senior Sub. Debt MCI/WORLDCOM: Issues August 2003 Monthly Operating Results MCI/WORLDCOM: Names Nancy Higgins as Chief Ethics Officer MERCURY AIR: Needs More Time to Complete Annual Report METALDYNE CORP: Offering $100 Million of Senior Notes Due 2013 MIRANT: FERC & Potomac Want District Court to Hear Arguments MITEC: Completes Sale/Leaseback Agreement for Montreal Facility MORGAN STANLEY: Fitch Ups Ratings on Ser. 1999-WF1 Note Classes NALCO CO.: S&P Assigns BB- Corporate Credit Rating NAT'L CENTURY: Poulsen, et al., Want $17 Million Sequestered NATIONAL EQUIPMENT: Prepetition Claims Bar Date Set for Oct. 20 NEW CENTURY: Long-Term Counterparty Credit Gets S&P's BB- Rating NEXTERA: Shareholders to Convene in Massachusetts in November NORTHWESTERN CORP: Engages Browning Kaleczy as Montana Counsel NRG ENERGY: Selling McClain Facility to Oklahoma Gas for $159.9M OMNOVA SOLUTIONS: Initiates Company-wide Restructuring PAC-WEST TELECOMM: Will Publish Q3 2003 Results on October 29 POLAROID CORP: Court Okays Kelley's Retention as Special Counsel PREMIER CONCEPTS: Files for Chapter 11 Protection in California PREMIER CONCEPTS: Case Summary & 20 Largest Unsecured Creditors QUALITY DISTRIBUTION: On Watch Pos. over Recapitalization Plans REPUBLIC ENGINEERED: Brings-In McDonald Hopkins as Attorneys ROWE INT'L: Wants to Tap Sheehey Furlong as Special Counsel SAFETY-KLEEN: Seeks Clearance of Myers, et al., Settlement Pact SILICON GRAPHICS: Q1 Financial Release Webcast Scheduled Oct. 20 SK GLOBAL: Court Okays Uniform Interim Compensation Protocol SPANISH BROADCASTING: S&P Junks Proposed $75MM Preferred Stock US AIRWAYS: Inks Stipulation Reducing Wachovia-Related Claim STORAGENETWORKS: Stockholders Endorse Liquidation Plan TERAYON COMM: Look for Third Quarter 2003 Results on October 22 TITAN CORP: Awarded $74 Million U.S. Air Forces Europe Contract TRIMAS CORP: Hosting Q3 2003 Earnings Conference on November 3 UAL CORP: Releasing Third Quarter Financial Results on Oct. 30 VENTURE CATALYST: Annual Shareholders' Meeting Set for Dec. 5 WEIRTON STEEL: Overview of Capital Structure Under the Plan WESTERN INTEGRATED: Plan Confirmation Hearing Set for Nov. 10 WILLIAMS: Fitch Affirms B+ Rating on Senior Notes & Debentures WORLDCOM INC: Resolves Claim Dispute with Wiltel Communications W.R. GRACE: Seeks Court Approval to Name President and COO * 10th Aircraft Fin. Conference to Address New Capital Sources * Marshack Shulman Hodges & Bastian Open Riverside Office * DebtTraders' Real-Time Bond Pricing ********* 866 3RD NEXT: Seeks Permission to Tap Rubin Katz as Accountants --------------------------------------------------------------- 866 3rd Next Generation Hotel, LLC is seeking permission from the U.S. Bankruptcy Court for the Southern District of New York to employ Rubin & Katz, LLP as its Accountants. In this engagement, Rubin & Katz is expected to: a) review of the Debtor's books and records to complete and file the schedules and statement of financial affairs required to be filed with the Bankruptcy Court pursuant to Bankruptcy Rule 1007; b) prepare the monthly operating reports required to be filed during the pendency of the Debtor's bankruptcy case; c) analyze the books and records maintained by Marriott International, Inc., and its various subsidiaries and affiliated companies regarding the operation of the Hotel; and d) perform all other necessary accounting services in connection with this chapter 11 case. Arthur Adams, a partner of Rubin & Katz, asserts that the firm is a "disinterested person" as that term is defined in the Bankruptcy Code. Mr. Adams further assures the Court that they are well capable of providing the Debtor with the required services. Rubin & Katz's standard hourly rates range from: Staff Accountants $125 to $185 per hour Managers $200 to $250 per hour Partners $250 to $375 per hour Headquartered in New York, New York, 866 3rd Next Generation Hotel, LLC, owns a commercial condominium unit located at 866 Third Avenue, New York, New York, which premises are maintained as a hotel and operated under the name "Midtown Courtyard by Marriott." The Company filed for chapter 11 protection on October 09, 2003 (Bankr. S.D.N.Y. Case No. 03-16375). Gerard Sylvester Catalanello, Esq., and Lawrence P. Gottesman, Esq., at Brown Raysman Millstein Felder & Steiner LLP represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed over $50 million in both assets and debts. ACTERNA CORP: Emerges from Chapter 11 Reorganization Proceedings ---------------------------------------------------------------- Only five months after initiating its case, Acterna emerged from chapter 11 protection ready to build on its global communications test leadership with a stronger balance sheet. As previously announced, Acterna's Plan of Reorganization received overwhelming support from all classes of creditors and was confirmed by the U.S. Bankruptcy Court for the Southern District of New York on September 25. Acterna subsidiary, da Vinci, the leading manufacturer of color image enhancement and automatic film and video restoration technology, has also emerged from chapter 11 protection. "Acterna has continued to serve its customers and deliver new innovations throughout the debt restructuring process," said John Peeler, president and chief executive officer. "We emerge today with a bright future and as a stronger company more committed than ever to the employees, customers, suppliers and other business partners that have been so instrumental to our continued success." Undaunted Focus on Product Innovation and Reliably Serving Customers Acterna's strategic focus is to deliver communications test solutions that help its customers deploy new communications services, reduce operating expenses and improve quality. Its customers include leading communications service providers -- such as Alltel, AT&T, Bell South, BT, Comcast, Deutsche Telekom, France Telecom, Telefonica, SBC, Time Warner Cable and Verizon - as well as equipment manufacturers including Alcatel, Cisco, Lucent, Nortel and others. During the last five months, Acterna has introduced more than 10 new products and enhancements. The company will launch 12 more new products and major enhancements before the end of the year. "Acterna's sales and support team has truly exhibited the extra- mile effort to support our network engineering and operations staff," said Bill Wyatt of Alltel, a communications service provider with 12 million customers and nearly $8 billion in annual revenue. "As Alltel continues to evolve its network technologies and service offerings, we look to Acterna as a partner in our future success." "Acterna has a long, proven track record as one of the leading providers of communications test solutions for optical, access and cable networks," said Dana Cooperson, group and program director for RHK, Inc., a global telecom research and advisory services firm. "The company's health has improved through their recent reorganization, and they are aligning their business to meet the growing need among communications service providers to launch new services and lower network expenses through improvements in business processes." New Board of Directors Acterna also announced a new, five -member Board of Directors, effective October 15, 2003. The new Board is made up of the following members: -- Todd Arden, director, Angelo, Gordon & Co., an investment management firm with approximately $10 billion under management. Previously served as portfolio manager and senior analyst within AIG/SunAmerica's High Yield Group. -- Alain Couder, president and CEO of Confluent Software. Former chief operating officer of Agilent Technologies and former chairman and CEO of Packard Bell NEC. -- James Gaffney, director for several companies -- including Hexcel Inc., Imperial Sugar Company (chairman), SCP Pool Inc.- with strong turnaround expertise. Former CEO of General Aquatics/KDI Corporation, International Tropic-Cal, Ayers/Chairmakers, Inc., Brown Jordan Company and Washington Industries. -- Edward Horowitz, founder and chairman of EdsLink LLC, a financial and technology consulting service, and former chairman of e-Citi, a Citigroup unit created to pioneer Citigroup's e-commerce initiatives. Previously served as senior vice president, technology and operations, for Viacom Inc. -- John Peeler, president and CEO, Acterna. More than 25 years of communications industry experience, including 23 years with Acterna, and a depth of expertise in engineering and operations. "Acterna has assembled a world-class Board of Directors made up of strong leaders with a depth of business and technology expertise," said Peeler. "Our management team looks forward to working with these incoming directors as Acterna builds momentum and embarks on a successful new era." Plan of Reorganization Terms Under the terms of Acterna's Plan of Reorganization, which becomes effective today, Acterna's senior secured debt holders receive 100 percent of the company's equity through a debt-for-equity swap. Acterna emerges as a privately held company with long-term debt of approximately $190 million and quarterly cash interest expense of less than $2 million. Holders of Acterna's current convertible and subordinated notes will receive warrants having diminimus value. Unsecured creditors receive a cash distribution of approximately 10 percent of their claims. Current equity holders will receive no distribution under the terms of the plan. Acterna is the world's largest provider of communications test solutions for telecommunications and cable network operators. A trusted communications test partner for more than eight decades, Acterna offers an unmatched portfolio of award-winning instruments, systems, software and services that help its customers reduce network costs while improving performance and reliability. Headquartered in Germantown, Maryland, USA - with European and Asia-Pacific operations based in Eningen, Germany and Hong Kong - Acterna serves nearly every major communications service provider and equipment manufacturer around the world through a skilled sales and support organization in 31 countries. AEROGEN INC: Promotes Angela Strand to Vice President-Marketing --------------------------------------------------------------- Aerogen, Inc. (Nasdaq: AEGN) announced the promotion of Angela Strand to the position of Vice President, Marketing for the Company. Ms. Strand joined Aerogen in November 2000 as Director of Marketing, and has been responsible for establishing the Company's marketing capabilities, including activities associated with the launch of Aerogen's nebulizer products. Introduced in June 2002, the Aeroneb(R) Professional Nebulizer System, Aerogen's flagship hospital product, is now available in over 35 countries worldwide. Most recently, Ms. Strand has played a significant role in negotiating the agreement with Medical Industries America, Inc. ("MIA"), announced October 7, 2003, under which MIA will distribute, market and sell Aerogen's next-generation home nebulizer product, the Aeroneb(R) Go, in the U.S. and selected other countries. This product, for which U.S. regulatory clearance is pending, is targeted for worldwide introduction later this year. Prior to joining Aerogen, Ms. Strand held senior-level positions with Novacept, a women's healthcare company, and eCliniq, an internet-based healthcare software concern. She also served in leadership positions with Baxter Healthcare and FemRx, a women's healthcare company acquired by Johnson & Johnson. She received a B. S. with high honors in Communications and an M.B.A. in marketing and finance, both from the University of Tennessee. "I am pleased to announce this promotion which recognizes both Angela's capabilities and her impact on Aerogen's presence in the marketplace. I look forward to her continued contributions to our corporate success," said Jane E Shaw, Aerogen's Chairman and Chief Executive Officer. Aerogen, a specialty pharmaceutical company, develops inhaler and nebulizer products based on its OnQ(TM) Aerosol Generator technology to improve the treatment of respiratory disorders. Aerogen also has development collaborations with pharmaceutical and biotechnology companies for delivery of novel compounds that treat respiratory and other disorders. Aerogen currently markets products that include the Aeroneb(R) Professional Nebulizer System, for use in the hospital, and the Aeroneb(R) Portable Nebulizer System, for home use. Aerogen's first drug product in the acute care setting, inhaled amikacin for pulmonary infections, is currently in Phase 2 clinical trials. Additional products are in the feasibility and pre-clinical stages of development and in test marketing. Aerogen is headquartered in Mountain View, California, with a campus in Galway, Ireland. For more information, visit http://www.aerogen.com. * * * Liquidity and Going Concern Uncertainty Aerogen, Inc.'s June 30, 2003 balance sheet shows an accumulated deficit of about $100 million that eroded its total shareholders' equity to about $8 million from about $16 million recorded six months ago. In its SEC Form 10-Q for the quarter ended March 31, 2003, the Company stated: "The Company's recurring net losses from operations and negative cash flows from operations, in light of the Company's current liquidity and capital resources, raise substantial doubt regarding the Company's ability to continue as a going concern for a reasonable period of time. Since inception, we have financed our operations primarily through equity financings, product revenues, research and development revenues, and the interest earned on related proceeds. The process of developing our products will continue to require significant research and development, clinical trials and regulatory approvals. These activities, together with manufacturing, selling, general and administrative expenses, are expected to result in substantial operating losses for the next several years. "[The Company's] condensed consolidated financial statements contemplate the realization of assets and the satisfaction of liabilities in the normal course of business. The continued operation of the Company is dependent on our ability to obtain adequate funding and eventually establish profitable operations. As of March 31, 2003, we had $4.5 million in cash and cash equivalents. During the first three months of 2003, our expenditures have been approximately $1.6 million per month. We need to raise additional funds through public or private financings, collaborative relationships or other arrangements by early June 2003 in order to continue as a going concern. We cannot be certain that such additional funding will be available on terms attractive to us, or at all. Furthermore, additional equity or debt financing may involve substantial dilution to our existing stockholders, restrictive covenants or high interest rates. Collaborative arrangements, if necessary to raise additional funds, may require us to relinquish rights to either certain of our products or technologies or desirable marketing territories, or all of these. We will also explore other potential options, such as a merger or sale. If our efforts are unsuccessful, the Company will have to significantly curtail operations even further, or cease operations altogether and explore liquidation alternatives." AHOLD: Names Lawrence Benjamin as New U.S. Foodservice CEO ---------------------------------------------------------- The Ahold (NYSE:AHO)(Other OTC:AHODF) Corporate Executive Board has appointed Lawrence S. Benjamin as Chief Executive Officer at U.S. Foodservice, effective November 1, 2003. Interim CEO Robert Tobin will work with Benjamin during the transition, ensuring continuity in the operations and governance of the company until Benjamin outlines his strategic plan for the company and addresses any changes in other senior leadership positions at the company. Benjamin joins U.S. Foodservice from the NutraSweet Company in Chicago, Illinois, where he currently serves as Chief Executive Officer. He has held various executive positions in the food industry, including consecutively serving as President & CEO at Stella Foods (1994 -- 1997) and Specialty Foods Corporation (1997 -- 2001), both holdings of Oak Hill Capital Management. Prior to working with Oak Hill, he held several executive positions at different divisions of Kraft Foods. An advisory board will be installed at U.S. Foodservice to oversee the required changes in controls systems and to ensure the implementation of solid corporate governance principles throughout the entire company. This advisory board -- comprised of Ahold President & CEO Anders Moberg, Ahold CFO Hannu Ryopponen, Chief Corporate Governance Counsel Peter Wakkie, Corporate Executive Board member William Grize and Supervisory Board member Robert Tobin -- will work closely with the Ahold Corporate Executive Board. Additionally, two external members with extensive industry and business experience will be identified in due course. Commenting on the appointment, Anders Moberg said: "We are extremely pleased that Larry has decided to join the company. He has an excellent reputation for turning around and rebuilding companies in crisis and has successfully directed important recovery processes. Recently the focus of U.S. Foodservice has necessarily been on cleaning up the business. Larry's leadership and background perfectly complement our strategy for U.S. Foodservice. With the active support of the advisory board, Larry will play a key role in rebuilding and maximizing the value of the company." * * * Fitch Ratings, the international rating agency, is maintaining its Rating Watch Negative status on both the 'BB-' Senior Unsecured debt and 'B' Short-term ratings of Koninklijke Ahold N.V., the Netherlands-based international food retailer. Fitch's 'BB-' rating for Ahold reflects the view that the company remains a viable operating entity. However, many of the reasons for Fitch's Rating Watch Negative remain, particularly the amount of recent interim secured funding within the group, together with the control and structural subordination mechanisms this may afford, the reliance on continued support from core banks for available credit facilities, and near-term (including 2005's bulk) debt maturities. It is questionable if the US Foodservice profit margin can increase from FY02's 1.7% level. The company has to maximise cash, either from operational cashflow, sale of activities, or a rights issue. The company does not expect to report on these issues, or H103's results, until mid-October. AIR CANADA: Pionairs & ASPBA Represent Inactive Retirees' Panel --------------------------------------------------------------- Mr. Justice Farley appoints the Airline Supplementary Pension and Benefits Association and the Air Canada Pionairs to represent inactive non-union employees that retired as of April 1, 2003 as well as all retired, terminee, surviving spouse and other beneficiaries of the pension and benefits plans and programs which have been created or administered by the Applicants for the members of Air Canada Pilots Association. Mr. Justice Farley also allows the ACPA to select at least one representative as a constituent member of the governing committee of the Non-Union and ACPA Retiree Representatives. Raymond Lindsay represents the ASPBA and W.J. (Bill) Rowe represents the Air Canada Pionairs. Mr. Justice Farley appoints the law firm of Pallet Valo, LLP and Pallet Valo's John R. Varley, Esq., as solicitors for the Non- Union and ACPA Retiree Representatives. The Non-Union and ACPA Retiree Representatives' solicitor will have access to the Air Canada data room. The Applicants will bear all reasonable disbursements and reasonable legal fees incurred by the Non-Union and ACPA Retiree Representatives and their solicitors from April 1, 2003 relating to the registered and supplementary pension plans. The Applicants will pay the expenses on a substantial indemnity basis, billed at no more than $20,000 per calendar month. The Applicants may, on notice to the Non-Union and ACPA Retiree Representatives' solicitor, apply to the Court to amend or rescind the Order. (Air Canada Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service, Inc., 609/392-0900) ALLIANCE PHARMACEUTICAL: Records $20.3 Mil. Net Loss for FY 2003 ---------------------------------------------------------------- Alliance Pharmaceutical Corp. (OTC Bulletin Board: ALLP) reported a net loss of $20.3 million, or $1.04 per share, for the year ended June 30, 2003. This compared to a net loss of $34.2 million, or $2.37 per share, for the year ended June 30, 2002. Operating expenses for the year ended June 30, 2003 decreased to $27.0 million, as compared to $43.1 million in the previous year. As of June 30, 2003, the Company reported cash and short-term investments of $763,000 and restricted cash of $532,000. In June 2003, Alliance sold all of its assets related to its FDA- approved Imagent(R) product (the "Imagent Business") and transferred certain liabilities to Photogen Technologies, Inc. ("Photogen") for approximately $1.1 million in cash and $3.5 million in Photogen common stock that was issued directly to certain Alliance creditors. During the next 12 months, Photogen is obligated to pay up to an additional $3 million and deliver up to an additional aggregate of approximately 2 million shares of Photogen common stock to certain creditors. In addition, through 2010, Photogen is obligated to pay Alliance further consideration in the form of an earn out based on Imagent revenue. If Photogen meets its obligation in funding the cash payments, Alliance's Short-Term Debt as recorded at June 30, 2003, will be decreased by $12.6 million, along with reductions in Accounts Payable and Accrued Expenses. Alliance Pharmaceutical, whose June 30, 2003 balance sheet shows a stockholders' equity deficit of $19,780,000, is developing a synthetic therapeutic oxygen carrier, Oxygent(TM), (red blood cell substitute) based on its perfluorochemical and surfactant technologies. Alliance's products are intended primarily for use during acute care situations, including elective surgery where blood transfusion is common. AMERICAN COMMERCE: Completes Chariot Manufacturing Acquisition -------------------------------------------------------------- American Commerce Solutions, Inc. (OTC Bulletin Board: AACS) announced that the company completed the acquisition of Chariot Manufacturing Company, Inc. on Saturday, October 11, 2003. President and Chief Executive Officer Daniel L. Hefner reported that Chariot Manufacturing Company, Inc. was acquired over the weekend for an undisclosed amount of cash and Preferred stock. "We are ecstatic to finally be able to say that it is officially ours. Although delayed on several occasions, primarily due to scheduling conflicts, the closing was smooth and easy. Now the work begins! We have great expectations for Chariot Trailers as we seek to expand the products' market exposure and increase the production capability of the company. We will spend the next several months continuing the process of upgrading the tooling, marketing materials and the production facility. These plans have been in place for some time, but were put on hold pending closing," Hefner stated. Continuing, Hefner said, "Chariot has carved out a niche in the trailer industry that will provide good revenue and margins. However, we believe that there is a wider market that will cause revenue to be more consistent and maximize profitability. Our analysis indicates that with more aggressive purchasing and inventory control systems, we will be able to reduce material cost by 6%-8% in the first year. Additionally, we believe that we will be able to increase the dealer network substantially in the next twelve months. We have acquired 100% of this 29 year old company, its trademarked logo and its stellar reputation in the national marketplace. This one was worth the wait." "Details of the acquisition will be filed in an 8-K with the SEC in the next couple of days. Over the last six (6) years the company has had revenues averaging $786,780.00 per annum. Profits have been minimized since this was a tightly held, (two stockholders) private corporation. We are very fortunate to have the originator of the company and product, as well as its marketer, remaining with the firm on a consulting basis for at least the next three (3) months with an option for up to three years by mutual agreement. This will cause the transition to be much smoother with vendors, subcontractors, dealers and customers. Currently there is a backlog of over fifty trailer requests waiting for follow up from individuals as well as potential new dealerships. Follow-up began immediately upon closing," Hefner said. Chariot Trailers are known for their aerodynamically designed, light-weight, easy-pull motorcycle trailers that have become a favorite of Harley-Davidson and other high end motorcycle enthusiasts. The product line includes both open and enclosed trailers. Some are so versatile as to include sleeping accommodations, sinks and cabinets. Testimonials tout the security afforded expensive show bikes due to the quality of the tie-down system employed by Chariot. Mr. Hefner said that he knew that the stockholders have been anxiously awaiting the news that Chariot had been acquired. He apologized for his forced silence during the last two weeks and encouraged the stockholders to checkout the website at http://www.chariot-trailer.com * * * As reported in the Troubled Company Reporter's January 22, 2003 edition, American Commerce has incurred substantial operating losses since inception; however, it has recorded income from operations of $125,753 for the nine-month period ended November 30, 2002. Current liabilities exceed current assets by approximately $1.9 million at November 30, 2002, and the Company has used approximately $225,000 of cash in operations for the nine months ended November 30, 2002. Additionally, the Company has been unable to meet obligations to its creditors as they have become due. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management has revised its business strategy to include expansion into other lines of business through the acquisition of other companies in exchange for the Company's stock. Management negotiated new debt financing, of which, the proceeds of $875,000 were used to settle outstanding debts at more favorable terms, and to finance operations. A gain of $812,014 has been recognized as a result of the forgiveness of debt. However, there can be no assurance that the Company will be able to raise capital, obtain debt financing, or improve operating results sufficiently to continue as a going concern. American Commerce Solutions, Inc., was incorporated in Rhode Island in 1991 under the name Jaque Dubois, Inc., and was re- incorporated in Delaware in 1994. In July 1995, Jaque Dubois, Inc. changed its name to J.D. American Workwear, Inc. In December 2000, the shareholders voted at the annual shareholders' meeting to change the name of J.D. American Workwear, Inc. to American Commerce Solutions, Inc. The Company is primarily a holding company whose wholly owned subsidiary is engaged in the machining and fabrication of parts used in industry, and parts sales and service for heavy construction equipment. AMERICAN PLUMBING: Case Summary & Largest Unsecured Creditor ------------------------------------------------------------ Lead Debtor: American Plumbing & Mechanical, Inc. 1950 Louis Henna Blvd. Round Rock, Texas 78664 Bankruptcy Case No.: 03-55789 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- AMPAM Atlas Plumbing, LLC 03-55790 AMPAM Christianson, L.P. 03-55791 AMPAM Colorado, Inc. 03-55792 AMPAM Commercial Northwest, Inc. 03-55793 AMPAM Commercial Sherwood Mechanical, Inc. 03-55794 AMPAM Commercial Southeast, Inc. 03-55795 AMPAM Corporate Services, L.P. 03-55796 AMPAM Dallas, L.P. 03-55797 AMPAM Holdings, LLC 03-55798 AMPAM Home, L.P. 03-55799 AMPAM J.A. Croson Company 03-55800 AMPAM LDI Mechanical, Inc. 03-55801 AMPAM Management Company, Inc. 03-55802 AMPAM Miller Mechanical, Inc. 03-55803 AMPAM North Carolina, Inc. 03-55804 AMPAM Parks Mechanical, Inc. 03-55805 AMPAM Partners, LLC 03-55806 AMPAM Power Plumbing, L.P. 03-55807 AMPAM RCR Companies 03-55808 AMPAM Riggs Plumbing, Inc. 03-55809 AMPAM Sacramento, Inc. 03-55810 AMPAM Services, Inc. 03-55811 Franklin Fire Sprinkler Company 03-55812 J.A. Croson Company 03-55813 Teepe's River City Mechanical, Inc. 03-55814 Type of Business: American Plumbing & Mechanical, Inc. and its affiliates provide plumbing, heating, ventilation and air conditioning contracting services to commercial industries and single family and multifamily housing markets. Chapter 11 Petition Date: October 13, 2003 Court: Western District of Texas (San Antonio) Judge: Leif M. Clark Debtors' Counsel: Demetra L. Liggins, Esq. Winstead Sechrest & Minick P.C. 2400 Bank One Center 910 Travis Street Houston, TX 77002 Tel: 713-650-2667 Fax: 713-650-2400 Total Assets: $282,456,000 Total Debts: $256,696,000 A. American Plumbing's Largest Unsecured Creditor: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Senior Subordinated Senior Sub. Notes Noteholders pursuant to that Indenture, dated May 19, 1999, as modified thereafter AMERICAN PLUMBING: Chap. 11 Filing Spurs S&P Rating Cut to D ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on American Plumbing & Mechanical Inc. to 'D', following the company's announcement that it has filed petitions under Chapter 11 of the Bankruptcy Code. At June 30, 2003, the Round Rock, Texas-based provider of mechanical contracting services had about $172 million of debt outstanding on its balance sheet. For the past few quarters, AMPAM has suffered from nominal liquidity, including no bank borrowing capacity and very tight financial covenants. "The company's bank facility was to mature in March 2004, which would have been very difficult to refinance," said Standard & Poor's credit analyst Joel Levington. Furthermore, operational issues at the company's commercial construction unit and intense pricing pressures have also significantly weakened profitability over the past couple of years. AMERICA WEST: Q3 Conference Call to Be Webcast on October 21 ------------------------------------------------------------ America West Holdings Corporation (NYSE: AWA) will conduct a live audio webcast of its third quarter 2003 financial results conference call with the financial community on Tuesday, Oct. 21, 2003 at 1:00 p.m. EDT (10:00 a.m. PDT). The webcast will be available to the public on a listen-only basis at the company's web site, http://www.americawest.com. An archive of the webcast will be available on the site through Oct. 27, 2003. Listeners to the webcast will need a current version of Windows MediaPlayer software and at least a 28.8 kbps connection to the Internet. America West Holdings Corporation is an aviation and travel services company. Wholly owned subsidiary America West Airlines is the nation's eighth-largest carrier serving 90 destinations in the U.S., Canada and Mexico. The Leisure Company, also a wholly owned subsidiary, is one of the nation's largest tour packagers. * * * As reported in Troubled Company Reporter's July 30, 2003 edition, Standard & Poor's Ratings Services assigned its 'CCC' rating to America West Airlines Inc.'s $75 million 7.25% senior exchangeable notes due 2023, offered under Rule 144A with registration rights. The notes are guaranteed by America West Airlines' parent, America West Holdings Corp. (both rated B-/Negative/-). America West Holdings' major subsidiary is America West Airlines Inc., the eighth-largest airline in the U.S, with hubs located at Phoenix and Las Vegas. America West benefits from a low cost structure, among the lowest in the industry. However, it competes at Phoenix and Las Vegas against Southwest Airlines Co., the other major low-cost, low-fare, operator in the industry and financially the strongest. As a result, due to the competition from Southwest, as well as America West's reliance on lower-fare leisure travelers, its revenues per available seat mile also tend to be among the lowest in the industry. In addition, America West Holdings owns the Leisure Co., one of the nation's largest tour packagers. ANC RENTAL: Court Clears Assignment of Liberty Pacts to Vanguard ---------------------------------------------------------------- On July 16, 2003, the ANC Rental Debtors notified Liberty Mutual Insurance Company of their intent to assume and assign certain executory contracts and unexpired leases concurrent with the sale of their assets to Cerberus Capital Management LP. The Debtors want to assign the Liberty Insurance Contracts to Vanguard Car Rental USA Inc., Cerberus' designee. On July 30, 2003, Liberty objected. Consequently, the Debtors determined to assume, in their entirety, the Liberty Insurance Policies and related agreements: (1) Policies relating to the provision of property insurance: (a) Policy MQCZ91427196-013, covering the periods from June 30, 2003 to June 30, 2004; and (b) Liberty Syndicates, Excess Property, Policy WB0301920, WB0301927 and WB0301923, effective June 30, 2003 to June 30, 2004; (2) Policies relating to workers compensation insurance: (a) WA7-C5D-002367-010; (b) WC7-C51-002367-020; (c) WA7-C5D-002367-01; and (d) WC7-C51-002367-021; (3) An Indemnification Agreement between the Debtors and Liberty, dated May 11, 2000; (4) An Agreement for Guarantee of Deductible Reimbursement and Premium Payment, between the Debtors and Liberty, dated March 24, 2000; and (5) The First General Amendment to Agreement for Guarantee of Deductible Reimbursement and Premium Payment, between the Debtors and Liberty, dated January 11, 2001. Janice Mac Avoy, Esq., at Fried, Frank, Harris, Shriver & Jacobson, in New York, relates that the representatives of the Debtors, Cerberus and Liberty have reached an agreement in principle setting the terms and conditions pursuant to which Liberty will agree to the assumption and assignment of the Agreements to Vanguard. Liberty agrees to allow the Debtors to assume and assign to Vanguard the Workers' Compensation Policies and related agreements including: (1) the Indemnification Agreement, (2) the Guarantee Agreement, and (3) the First Amendment to Guarantee. In return, Vanguard will perform, and be bound by, without limitation, all economic and non-economic duties and obligations under the Workers Compensation Policies, the Indemnification Agreement, the Guarantee Agreement and the First Amendment to Guarantee. Vanguard agrees, before or at the Closing, unless otherwise agreed to by Liberty, to execute and deliver any documentation reasonably requested by Liberty to effect the contemplated transactions, including, but not limited to, appropriate name change endorsements and an amendment to the Guarantee Agreement. At the Closing, the Debtors will cause Travelers Surety and Casualty Company of America to provide Liberty with competent written proof satisfactory to Liberty that the surety bond issued by Travelers in the face amount of $8,986,900, as required under the Guarantee Agreement and the First Amendment to Guarantee has been issued a name change rider in Cerberus' name, and that the surety bond will remain in full force and effect. At the Closing, unless otherwise agreed by Liberty, the Debtors will cause Congress Financial Corporation to provide Liberty with competent written proof: (1) that Congress has been, or will be at the Closing, fully reimbursed for any claims under a letter of credit required pursuant to the Guarantee Agreement and the First Amendment to Guarantee, and drawn down upon by Liberty; and (2) that Congress has no claims, direct or through assignment, against Liberty relating to the letter of credit. In lieu of the Letter of Credit required under the Guarantee Agreement and the First Amendment to Guarantee, the Debtors and Cerberus agree that Liberty will be entitled to retain all cash collateral currently in its control and possession, subject to the terms and conditions of the Guarantee Agreement and the First Amendment to Guarantee. In connection with the assumption and assignment of the Workers Compensation Policies, Liberty agrees to reduce its bonding requirements under the Guarantee Agreement and the First Amendment to Guarantee by $1,500,000 on the date on which the Debtors and Cerberus discharge all conditions precedent to the assignment of the Workers' Compensation Policies and the Property Policies -- Effective Date -- unless expressly waived in writing by Liberty. Liberty also agrees to allow the Debtors to assume and assign to Vanguard the Property Policies and related agreements. In exchange, before or at the Closing, unless otherwise agreed by Liberty, the Debtors and Cerberus will execute a writing, in a form and substance satisfactory to Liberty, acknowledging the truth and accuracy of certain representations concerning the underwriting risk associated with the proposed assignment. Cerberus will also perform, and be bound by, without limitation, all economic and non-economic duties and obligations under the Property Policies and related agreements. By this motion, the Debtors seek the Court's authority, pursuant to Sections 105 (a) and 365(a) of the Bankruptcy Code, to assume and assign the Liberty Agreements to Vanguard. The assumption and assignment of the Liberty Agreements is conditioned on the closing of the Cerberus Sale. The Debtors have determined at this time that the assumption and assignment of the Liberty Agreements to Vanguard is appropriate. The insurance policies provide insurance coverage that is vital to the continued operation of their businesses. Ms. Avoy assures the Court that nothing will adversely affect, limit, or diminish in any manner any rights of, or protections granted to, Liberty under prior Court orders. Congress Responds While it supports the sale of the Debtors' assets to Vanguard, Congress Financial Corporation objects to the proposed assignment of all Liberty Contracts to the extent that the Debtors' request: (1) creates or can be construed to create any obligation, liability or responsibility on its part to comply with or perform in any respect the requirements stipulated in the Debtors' arrangement with Liberty. Congress denies any obligation to perform or comply with the Requirements; and (2) seeks Court approval of a condition to the assumption and assignment of the Liberty Agreements that the Debtors simply cannot satisfy given Congress' objection to the Requirements. Marc T. Foster, Esq., at Richards Layton & Finger, P.A., in Wilmington, Delaware, argues that the relative rights, liens, interests, claims and priorities of Congress and Liberty vis a vis the Debtors and the assets and properties of the Debtors' estates are subject to extensively negotiated prepetition agreements and certain postpetition consent orders and other Court-approved documents. Nothing contained in any of the agreements, documents or orders obligates Congress to provide Liberty with the information specified under the Requirements. Congress is the administrative agent for itself and certain other financial institutions or entities under an Amended and Restated Credit Agreement dated June 30, 2000 with the Debtors. Congress is unwilling to consent to providing Liberty with the "competent written proof satisfactory to Liberty". "If the Court is inclined to grant the Motion, and if Liberty is unwilling to waive or alter the Congress Requirements in a fashion that Congress deems acceptable in its sole discretion, then the Debtors are destined to breach the terms of the Assignment Term Sheet," Mr. Foster says. "While Congress is hopeful that it can reach a resolution with Liberty and the Debtors concerning the form and manner in which Congress can confirm that all obligations owing by Debtors to Congress have been indefeasibly paid and satisfied in full at Closing on terms and conditions acceptable to Congress, Congress objects to the request to the extent that it imposes on the Debtors a condition that is virtually incapable of being satisfied. Placing the Debtors in this no win situation is not a prudent exercise of the Debtors' business judgment," Mr. Foster says. * * * Judge Walrath grants the Debtors' request in all respects. Judge Walrath authorizes the Debtors, unless otherwise agreed by Liberty, to cause Congress to provide Liberty with the Requirements. (ANC Rental Bankruptcy News, Issue No. 40; Bankruptcy Creditors' Service, Inc., 609/392-0900) ANKER COAL: Emerges From Chapter 11 Bankruptcy ---------------------------------------------- Anker Coal Group, Inc. announced that it has emerged from Chapter 11 bankruptcy on October 10, 2003. In accordance with the Company's Plan of Reorganization, the Company finalized its exit financing facility with Wells Fargo Foothill, Inc. George R. Desko, President of the Company, stated "we are very pleased Anker was able to exit bankruptcy in such a short time period. We are excited to continue our working relationship with Foothill." The exit facility will enable Anker to implement its business plan and work toward improving its financial performance. Through the cooperative support of Anker's employees, vendors and customers Anker will continue to be a key supplier of coal to a number of electric utilities and independent power plants. With operations primarily in West Virginia and facilities in Maryland and Pennsylvania, Anker services the mid-Atlantic region. APPLIED EXTRUSION: S&P Cuts $275M Sr. Unsec. Debt Rating to B- -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its senior unsecured rating on New Castle, Delaware-based Applied Extrusion Technologies Inc.'s $275 million 10.75% notes due 2011 to 'B-' from 'B'. At the same time, Standard & Poor's affirmed its 'B' corporate credit rating on Applied Extrusion. The outlook is negative. Applied Extrusion has total debt outstanding of approximately $340 million. "The ratings reflect Applied Extrusion's very aggressive debt leverage, weak liquidity position, and negative cash flows, which more than outweigh its position as the largest oriented polypropylene films producer in North America. With annual revenues of about $250 million, the company holds an estimated 25% share of the OPP market," said Standard & Poor's credit analyst Paul Blake. The rating action follows Applied Extrusion's completion of a $100 million, five-year secured credit facility with GE Commercial Finance. The facility consists of a $50 million revolving facility and a $50 million term loan. Proceeds were used to repurchase equipment leases, retire industrial revenue bonds, and pay down the existing revolving credit facilities. The lower rating reflects the firm's increased use of secured debt financing, which will diminish the unsecured note holders' recovery prospects in a default scenario. The OPP market is highly competitive and subject to swings in raw material prices, namely polypropylene resins. Applied Extrusion benefits from its position as a low-cost supplier to converters (packaging companies that print and laminate films for further sale to end users) and end users of OPP film. Although end markets usually include relatively recession-resistant applications such as labels for beverage bottles and containers, and food packaging, the major consumer products companies have recently experienced reduced volumes. The company's narrow product mix is also a revenue-limiting factor. Customer concentration is high with the largest converter customer accounting for about 16% of revenues. ATLANTIC COAST: Board Still to Meet and Decide on Mesa Offer ------------------------------------------------------------ Atlantic Coast Airlines Holdings, Inc. ("ACA") (Nasdaq: ACAI), advised its stockholders to take no action at this time in response to Mesa Air Group, Inc.'s (Nasdaq: MESA) announcement that it intends to commence an unsolicited exchange offer for all the outstanding shares of ACA and a consent solicitation to ACA's stockholders. ACA's Board of Directors, consistent with its fiduciary duties and in consultation with its financial advisor and legal counsel, will meet in due course to review and discuss Mesa's exchange offer and thereafter will advise stockholders of its position regarding the offer. ACA currently operates as United Express and Delta Connection in the Eastern and Midwestern United States as well as Canada. The company also operates charter flights as ACA Private Shuttle. ACA has a fleet of 146 aircraft-including 118 jets-and offers over 830 daily departures, serving 84 destinations. On July 28, 2003, ACA announced it anticipates that its longstanding relationship with United Airlines will end, and that it will establish a new, independent low-fare airline to be based at Washington Dulles International Airport. Atlantic Coast Airlines employs over 4,800 aviation professionals. The common stock of Atlantic Coast Airlines Holdings, Inc. is traded on the Nasdaq National Market under the symbol ACAI. For more information about ACA, visit http://www.atlanticcoast.com. * * * As reported in the Troubled Company Reporter's October 8, 2003 edition, Standard & Poor's Ratings Services placed its ratings on Atlantic Coast Airlines Holdings Inc., including the 'B-' corporate credit rating, on CreditWatch with developing implications. The rating action follows the announcement by Mesa Air Group Inc., another regional airline holding company, of an unsolicited, all-stock offer to buy Atlantic Coast Airlines Holdings. AURORA FOODS: Effecting Pinnacle Merger Under Bankruptcy -------------------------------------------------------- Aurora Foods Inc. (OTC Bulletin Board: AURF), a producer and marketer of leading food brands, announced that it has revised its previously announced financial restructuring and entered into a Letter of Intent with J.P. Morgan Partners LLC (JPMP), J.W. Childs Equity Partners III, L.P. (JWC), an informal committee of bondholders representing approximately 50% of the Company's outstanding senior subordinated notes and C. Dean Metropoulos and Co. (CDM) pursuant to which Aurora's previous agreement with JWC will be amended to provide for a comprehensive restructuring transaction in which Aurora will be combined with Pinnacle Foods Corporation. Upon the completion of the combination, C. Dean Metropoulos, CEO of Pinnacle Foods Corporation, will serve as Chairman and CEO of the Pinnacle/Aurora business. Aurora also announced that the revised restructuring transaction has received the support of its senior lenders. On August 8, 2003, JPMP and CDM entered into an agreement to purchase Pinnacle from Hicks, Muse, Tate & Furst Inc. JPMP and CDM have subsequently agreed to permit JWC to invest in the entity that will acquire Pinnacle. Under the terms of the Letter of Intent, the transactions will include the following elements: -- Aurora's senior lenders will be paid in full in cash in respect of principal and interest under the Company's existing credit facility and will receive $15 million in cash in respect of certain leverage and asset sale fees under the credit facility, provided the credit facility is paid in full by March 31, 2004. -- Holders of Aurora's 12% senior unsecured notes due 2005 will be paid in full in cash, in respect of principal and interest, but will not receive $1.9 million of original issue discount. -- Holders of Aurora's outstanding 8.75% and 9.875% senior subordinated notes due 2008 and 2007, respectively, will receive an aggregate of approximately 41.9% of the combined company's common stock, subject to adjustment. Bondholders will have the right to elect to receive cash in lieu of common stock. -- Existing common and preferred stockholders will not receive any distributions and the existing common and preferred shares will be cancelled. -- Subject to adjustment, JPMP and JWC will contribute $83.75 million and CDM will be deemed to contribute $1.25 million to the Company, together with the equity in Pinnacle, in exchange for approximately 49.3% and 8.8%, respectively, of the combined company's common stock. -- The transactions will be effected through a prearranged bankruptcy reorganization case. -- As previously announced, all trade creditors will be paid in full. The transaction is subject to a number of conditions, including consummation of the acquisition of Pinnacle by the investment entity to be owned by JPMP, JWC and CDM, completion of due diligence, negotiation and execution of definitive agreements, receipt of financing, bankruptcy court approvals, and regulatory approvals. No assurance can be given that definitive agreements will be reached, the conditions to closing the transactions will be satisfied, or that the transactions ultimately will be consummated. "The revised transaction represents a major step forward in Aurora's restructuring efforts," said Dale F. Morrison, Aurora's Chairman and interim Chief Executive Officer. "It achieves our objectives of significantly reducing balance sheet leverage, enabling the Company to attain meaningful cost reductions and maximizing value for stakeholders. The combined company will be financially strong and well positioned for future growth." "I am extremely excited at the challenge and opportunity of combining two currently independent packaged food businesses in Pinnacle and Aurora," said C. Dean Metropoulos, CEO of Pinnacle Foods Corporation. "Each brings with it a strong set of brands and personnel that together will be combined to create a solid platform for growth." Mr. Metropoulos has over 15 years of entrepreneurial food industry experience having founded and run Stella Foods, Inc., one of the largest producers of specialty cheeses in the U.S., and subsequently successfully acquired and sold The Morningstar Group, International Home Foods, Ghirardelli Chocolates, Bumble Bee Tuna, Mumm and Perrier Jouet Champagnes, Hillsdown Holdings, and, most recently, Pinnacle Foods Corporation. Also upon closing of the transaction Mr. Morrison, who had been serving as interim Chief Executive Officer of Aurora, will return to his role as an operating partner of Fenway Partners, a New York-based private equity firm. On October 13, 2003, in connection with the execution of the Letter of Intent, Aurora entered into an Amendment and Forbearance with its existing bank lenders that, among other things, provided for (i) a reduction in the leverage and asset sale fees under Aurora's existing credit facility to an aggregate of $15 million in the event that certain conditions are satisfied, including the payment in full of Aurora's obligations under its existing credit facility by March 31, 2004, (ii) an increase in the leverage and asset sale fees under the credit facility to 5.25% of the aggregate amount outstanding in the event that the credit facility is not paid in full by March 31, 2004, and (iii) the forbearance by the existing bank lenders from exercising remedies under the existing credit facility arising from Aurora's failure to make interest payments on its senior subordinated notes or failure to make principal payments under its existing credit facility. About Aurora Foods Inc. Aurora Foods Inc., based in St. Louis, Missouri, is a producer and marketer of leading food brands, including Duncan Hines(R) baking mixes; Log Cabin(R), Mrs. Butterworth's(R) and Country Kitchen(R) syrups; Lender's(R) bagels; Van de Kamp's(R) and Mrs. Paul's(R) frozen seafood; Aunt Jemima(R) frozen breakfast products; Celeste(R) frozen pizza and Chef's Choice(R) skillet meals. More information about Aurora may be found on the Company's Web site at http://www.aurorafoods.com BALDWIN CANE: Section 341(a) Meeting to Convene on November 4 ------------------------------------------------------------- The United States Trustee will convene a meeting of Baldwin cane and Equipment Corp.'s creditors on November 4, 2003, 12:30 p.m., at Room 1190, US Trustee Office, Thomas P. O'Neill Federal Building, 10 Causeway Street, Boston, Massachusetts 02222. 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 Wilmington, Massachusetts, Baldwin Crane and Equipment Corp., a crane-operating business, filed for chapter 11 protection on October 3, 2003 (Bankr. Mass. Case No. 03-18303). Nina M. Parker, Esq., at Parker & Associates represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed estimated debts and assets of over $10 million each. BEAR STEARNS: Fitch Takes Rating Actions on 2003-TOP12 Notes ------------------------------------------------------------ Bear Stearns Commercial Mortgage Securities Inc., series 2003- TOP12, commercial mortgage pass-through certificates are rated by Fitch Ratings as follows: -- $198,000,000 class A-1 'AAA'; -- $150,600,000 class A-2 'AAA'; -- $185,900,000 class A-3 'AAA'; -- $487,288,000 class A-4 'AAA'; -- $1,161,122,793 class X-1* 'AAA'; -- $1,097,720,000 class X-2* 'AAA'; -- $30,479,000 class B 'AA'; -- $31,931,000 class C 'A'; -- $13,063,000 class D 'A-'; -- $14,514,000 class E 'BBB+'; -- $7,257,000 class F 'BBB'; -- $7,257,000 class G 'BBB-'; -- $5,805,000 class H 'BB+'; -- $5,806,000 class J 'BB'; -- $2,903,000 class K 'BB-'; -- $2,902,000 class L 'B+'; -- $2,903,000 class M 'B'; -- $2,903,000 class N 'B-'; -- $11,611,793 class O 'NR'. * Interest-Only Classes A-1, A-2, A-3, A-4, B, C, and D are offered publicly, while classes X-1, X-2, E, F, G, H, J, K, L, M, N and O are privately placed pursuant to rule 144A of the Securities Act of 1933. The certificates represent beneficial ownership interest in the trust, primary assets of which are 152 fixed-rate loans having an aggregate principal balance of approximately $1,161,122,793, as of the cutoff date. BE INC: Performance Capital Discloses 10.42% Equity Stake --------------------------------------------------------- Performance Capital Group, LLC, beneficially owns 4,005,723 shares of the common stock of BE Incorporated, with sole voting and dispositive powers. Performance Capital Group, LLC, is a broker, or dealer, registered under Section 15 of the Exchange Act. The holding, 4,005,723 shares, represents 10.42% of the outstanding common stock of BE Inc. Be Inc., was founded in 1990 and prior to the cessation of its business operations offered software solutions designed for Internet appliances and digital media applications. On August 16, 2001, it entered into an asset purchase agreement with Palm, Inc., to sell substantially all of its intellectual property and other technology assets. This transaction was approved by its stockholders on November 12, 2001 and was completed on November 13, 2001. On March 15, 2002, the Company filed a Certificate of Dissolution with the Secretary of State of Delaware pursuant to Section 275 of the Delaware General Corporation Law, closed its transfer books and voluntarily delisted its common stock from the Nasdaq National Market System. Liquidity and Capital Resources Since inception, Be traditionally financed operations primarily through the sale of equity securities and through borrowing arrangements. Cash and cash equivalents and short-term investments decreased approximately $600,000 to $4.8 million at March 15, 2002 from $5.4 million at December 31, 2001. This decrease is primarily attributable to the amounts used to fund the winding down of the Company's operations. Since November 2001, Be has been winding down business operations and has substantially reduced its working capital requirements. Its working capital requirements are now minimal and the Company believes that existing cash and cash equivalents will be sufficient to meet the remaining operating and capital requirements for at least the next twelve months or until a final liquidation occurs. The Company has stated that, as part of the winding down process, it intends to distribute part of its remaining cash to its shareholders as soon as practicable under Delaware law and dissolution procedures. After that time, Be intends to retain only a nominal amount of cash to complete the winding down process. BOOTS & COOTS: Pollock to Lead Newly Formed Canadian Unit --------------------------------------------------------- Boots & Coots International Well Control, Inc. (Amex: WEL) announced the incorporation of Boots & Coots Canada Ltd, headquartered in Calgary, Alberta. This initiative demonstrates Boots and Coots' commitment to the Canadian oil and gas industry by providing efficient access to the industry leader in well control, prevention and engineering services. This move supports WELLSURE(R) Canada, which was introduced earlier this year to the Canadian market. WELLSURE(R) Canada combines Boots & Coots risk management, prevention and response services with control of well insurance underwritten by Lloyd's of London and managed by Global Special Risks, a managing general agent. In addition, Boots & Coots is pleased to announce that Bob Pollock, P.E. will be joining the company in Calgary and lead business development for the Canadian operation. Mr. Pollock brings more than 40 years of international oil and gas service industry experience and was President of Halliburton Services (Canada) from 1982 to 1989. Rick Burns, Vice President of Global Special Risks, Inc., said, "We are extremely excited about introducing WELLSURE(R) to our Canadian clients. The program delivers solutions that bring true value to the exploration and production community." Jerry Winchester, Chief Executive Officer of Boots & Coots, said, "We are pleased to be expanding our service capabilities into the Canadian market. WELLSURE(R) Canada represents the achievement of significant milestones in both the continued growth of our prevention segment and the expansion of our response capabilities." About Boots & Coots Boots & Coots International Well Control, Inc., Houston, Texas, is a global emergency response company that specializes, through its Well Control unit, as an integrated, full-service, emergency- response company with the in- house ability to provide its expanded full-service prevention and response capabilities to the global needs of the oil and gas and petrochemical industries, including, but not limited to, oil and gas well blowouts and well fires as well as providing a complete menu of non-critical well control services. Additionally, Boots & Coots WELLSURE(R) program offers oil and gas exploration and production companies, through retail insurance brokers, a combination of traditional well control and blowout insurance with post-event response as well as preventative services. * * * As reported in Troubled Company Reporter's July 4, 2003 edition, Boots & Coots International concluded negotiations with Prudential Insurance Company of America to restructure its obligations that will cure its current loan defaults. As previously disclosed, the Company has been in default under its subordinated note agreement with Prudential since March 31, 2002. As part of the agreement, Boots & Coots agreed to issue approximately $2.4 million of new subordinated notes to Prudential representing past due interest, with the option through December 31, 2003, to pay in kind the interest on the subordinated notes accruing through that period. The Company further agreed to accelerate the optional conversion date for approximately 33% of the Company's outstanding Series E Preferred Stock, all of which are held by Prudential, to January 1, 2004, from the original optional conversion date of December 27, 2005. In exchange, Prudential agreed to waive the Company's past covenant defaults that required it to maintain certain debt to earnings ratios, and to waive compliance with all such covenants through December 31, 2003. Prudential also agreed to defer the requirement that the Company pay cash dividends on its Series E and G preferred stock until March 31, 2004. As a result of this debt restructuring initiative, the Company is now current in its debt obligations to Prudential and is in full compliance with all loan covenants related to Prudential. CABLE SATISFACTION: Junks CDP Pact & Supports Catalyst Group Plan ----------------------------------------------------------------- Cable Satisfaction International Inc. (TSX: CSQ.A) announced that it has terminated its agreement with Capital Communications CDPQ Inc. Csii has also completed negotiations with Catalyst Fund Limited Partnership I, the holder of approximately 34% of its US$155 million Senior Notes, in connection with the terms of an alternate Plan. Under the terms of the Csii/CDP agreement, either party was entitled to terminate its obligations if it determined that specific conditions were not likely to be satisfied on or before October 31, 2003, with neither party having liability to the other. Under the new Plan, which will be filed in Quebec Superior Court by October 20, 2003, (euro)45 million (approximately CA $69 million) of new common equity will be injected into Csii upon the effective date of the Catalyst Restructuring Plan, including a minimum investment of (euro)27 million by Catalyst and any co- investors designated by Catalyst. The balance will be raised by providing holders of its outstanding US$155 million Senior Notes and other affected creditors rights to subscribe for up to (euro)18 million in new equity. Catalyst has agreed to subscribe for any equity not subscribed for by the noteholders and other affected creditors under the (euro)18 million rights offering (the "Backstop Commitment"). The ownership structure of Csii following implementation of the Catalyst Restructuring Plan will be as follows (before the exercise of any warrants or stock options): - 70% of the equity of the recapitalized Csii, represented by the (euro)45 million investment; - 28% of the equity owned by noteholders and other affected creditors in exchange for the complete equitization of the Senior Notes and other affected claims; - subject to reduction in certain circumstances, 2% of the equity owned by Csii's shareholders in exchange for the shares held by them, plus 3-year warrants to subscribe for 2% of Csii's common equity on a fully-diluted basis, 1% of which will be at an exercise price of 120%, and the other 1% at 130%, of the price at which Catalyst's investment will be made. Assuming a successful closing, the recapitalized Csii would have bank debt of approximately (euro)141 million on a consolidated basis and no Senior Notes. Catalyst has committed to provide a senior ranking interim liquidity facility of approximately (euro)10 million to the Company's Portuguese subsidiary to maintain operations in Portugal while the process relating to the proposed recapitalization and restructuring is carried out. Failure to obtain such liquidity line would have a negative impact on the Company's operations in Portugal and on its recapitalization and restructuring efforts. The CDP interim liquidity facility would in effect be replaced by such facility. During this continuing process, Csii and its Portuguese subsidiary will continue to provide service to customers under usual conditions. Catalyst may terminate its obligations, without any liability to Csii, if, among other things, it determines acting reasonably that the Catalyst Restructuring Plan is not likely to be sanctioned by the Court on or before January 23, 2004, or any of the conditions to the Catalyst Restructuring Plan is not likely to be satisfied on or before February 23, 2004. Csii is also entitled to terminate its obligations under the Catalyst Restructuring Plan in order to enter into a definitive written agreement with respect to a Superior Proposal provided that in the event that Csii so terminates its obligations, or in the event the Superior Court of the Province of Quebec approves and sanctions recapitalization transactions in respect of Csii other than the Catalyst Restructuring Plan, Csii and its Portuguese subsidiary Cabovisao - Televisao por Cabo, S.A. will be jointly and severally liable to pay to Catalyst, at the time such definitive agreement is entered into or within two business days following Court approval and sanctioning of such other recapitalization transactions, as the case may be, a fee in the amount of (euro)2.55 million in immediately available funds and to reimburse Catalyst for all legitimate out-of-pocket fees and expenses incurred by it or on its behalf in connection with the recapitalization of Csii. The expression "Superior Proposal" means any bona fide written proposal by a third party to enter into transactions in connection with the recapitalization of Csii that the board of directors of Csii has determined, acting in good faith and upon the advice of its legal and financial advisors, would, if consummated in accordance with its terms, increase the value of the estate of Csii by not less than (euro)3.55 million (if the Break Fee is to be paid by Csii or Cabovisao to Catalyst) or (euro)1 million (if the Break Fee is to be paid to Catalyst by the third party making the Superior Proposal), as applicable, more than the transactions contemplated by the Catalyst Restructuring Plan. The Plan also provides for certain other matters including the payment of certain fees to Catalyst and operating arrangements to apply while the Company is operating under the Companies' Creditors Arrangement Act, as well as governance arrangements after the Plan's consummation. The Catalyst commitment is subject to certain conditions, including the negotiation of definitive documentation satisfactory to the parties, equitization of all of the outstanding Senior Notes, obtaining all necessary consents and approvals (including creditor approval pursuant to a court-supervised process) and the renegotiation of banking and trade creditor arrangements. There can be no assurance that the Plan proposed by Catalyst will be successfully completed or completed on the terms described above. Finally, the Company has requested from the Quebec Superior Court that the CCAA stay applicable to it be further extended and will announce any developments in that connection in due course. CEDARA SOFTWARE: Inks Distribution Pact with Shanghai Medical ------------------------------------------------------------- Cedara Software Corp. (TSX:CDE/OTCBB:CDSWF), a leading independent developer of medical software technologies for the global healthcare market, announced a distribution agreement with Shanghai Medical Equipment Works (SMEW), one of the largest medical equipment companies in China. This agreement allows Cedara to broaden distribution of its popular I-Acquire/DR(TM) acquisition console software, I- SoftView(TM) diagnostic review workstation, and I-Store(TM) image and distribution archive into SMEW's network of more than 5,000 hospitals. Cedara's I-Acquire universal X-ray acquisition console application offers the easiest and fastest way for OEMs (Original Equipment Manufacturers) and system integrators to interface with multiple X-ray related acquisition devices. I-Acquire can quickly be integrated with digital flat panel detectors, DR (Digital Radiography) and CR (Computed Radiography) scanners/readers for general purpose multi-modality viewing. By unifying multiple modalities under a single intuitive console application, Cedara I- Acquire lowers operator learning curve and enables OEMs and system integrators to create competitive DR systems with powerful workflow and image processing capabilities. The product's ready- to-integrate approach significantly reduces manufacturers' time to market and cost of productization. The Cedara I-SoftView diagnostic review workstation, and Cedara I- Store image distribution and archive analyze, store and distribute medical images and allow clients to offer a robust, flexible, and fully-scalable image management solution in a low maintenance environment. "In order to accelerate our transition from a traditional X-ray equipment vendor to a digital solutions provider, Shanghai Medical Equipment Works evaluated solutions from several local vendors but ultimately chose Cedara for its rich portfolio of solutions for Radiology practices," said Mr. Chen Yao Kang, Director for Shanghai Medical Equipment Works. "SMEW was very attracted to Cedara solutions for their scalability and ability to meet the needs of small, medium, and large hospital enterprises." "Partnering with Shanghai Medical Equipment Works who has one third market share in X-Rays in China is a huge step forward in our strategy to increase coverage and reach more users in the Chinese marketplace," said Abe Schwartz, Cedara's President and Chief Executive Officer. "Our relationship with SMEW will ensure broad distribution of our products and enable customers to easily purchase solutions from the supplier of their choice." About Shanghai Medical Equipment Works: Established in 1946, Shanghai Medical Equipment Works (SMEW) is one of the largest medical equipment enterprises in China. Registered under the trade mark "SANYE", X-rays are our main product line. Our systems are used by some of the worlds leading medical equipment companies, such as Siemens, GMM, Villa, Edison and Thales. SMEW has reassembled X-ray units of 800mA, 150kV for Toshiba Japan since the 1980's and also founded Shanghai Siemens Medical Equipment Co. Ltd. to produce Artificial Kidneys in 1993 in cooperation with Siemens. SMEW has developed many special and small sized of X-ray units, including the XK10 Dental X-ray unit, PX-100CK mobile X-ray unit, XC species mobile C-arm unit, and XG5/125 remote controlled Fluoscopy X-ray unit. We develop not only single table-single tube X-ray units, and double table double tube X-ray units, but also over tube remote controlled X-ray units. SMEW is an ISO9001 Quality system and 3C Attestation company. Cedara Software Corp., whose June 30, 2003, balance sheet shows a working capital deficit of about CDN$12 million while net capital deficit tops CDN$1.8 million, is a leading independent provider of medical technologies for many of the world's leading medical device and healthcare information technology companies. Cedara's software is deployed in hospitals and clinics worldwide - approximately 20,000 medical imaging systems and 4,600 Picture Archiving and Communications System workstations have been licensed to date. Cedara is enabling the future of the healthcare industry with new innovative approaches to workflow, data and image management, integration, the web, software components and professional services. The company's medical imaging solutions are used in all aspects of clinical workflow including the capture of patient digital images; the sharing and archiving of images; sophisticated tools to analyze and manipulate images; and even the use of imaging in surgery. Cedara is unique in that it has expertise and technologies that span all the major digital imaging modalities including angiography, computed tomography, echo- cardiology, digital X-ray, fluoroscopy, mammography, magnetic resonance imaging, nuclear medicine, positron emission tomography and ultrasound. CENTRAL EUROPEAN MEDIA: Commences Two-for-One Stock Split --------------------------------------------------------- Central European Media Enterprises Ltd. (CME) (Nasdaq: CETV) announced that it will split its stock two for one by way of the issue of one bonus share in respect of each share of Class A or Class B Common Stock. The additional share will be distributed on or about November 4, 2003, to holders of record of the company's common stock on October 27, 2003. Commenting on the stock split, Fred T. Klinkhammer, Vice-Chairman and Chief Executive Officer of CME, said, "This split marks the recent growth in our stock price following the end of our Czech litigation, the retirement of all corporate debt and our excellent station performance. This move should permit CME shares to be more broadly held and improve liquidity for all shareholders." Central European Media Enterprises Ltd., with a total shareholders' equity deficit of about $96 million as of December 31, 2002, is a TV broadcasting company with leading stations in four countries reaching an aggregate of approximately 71 million people. The Company's television stations are located in Romania (PRO TV, Acasa), Slovenia (POP TV, Kanal A), Slovakia (Markiza TV) and Ukraine (Studio 1+1). CME is traded on the NASDAQ under the ticker symbol "CETV". For additional information on CME visit http://www.cetv-net.com CHANNEL MASTER: Looks to FTI Consulting for Financial Advice ------------------------------------------------------------ Channel Master Holdings, Inc., and its debtor-affiliates are asking permission from the U.S. Bankruptcy Court for the District of Delaware to employ and retain FTI Consulting, Inc., as Financial Advisors. The Debtors tell the Court that they are familiar with the professional standing and reputation of FTI. The Debtors understand that FTI has a wealth of experience in providing financial advisory services in restructuring and reorganizations and enjoys an excellent reputation for services it has rendered in large and complex chapter 11 cases on behalf of debtors and creditors throughout the United States. David B. Stratton, Esq., at Peeper Hamilton LLP asserts that it is necessary for the Debtors to employ FTI to: a. evaluate strategic alternatives currently available to the Debtors; b. assist the Debtors in finalizing cash flow projections required for DIP financing; c. assist in negotiations with lenders as requested; d. assist Debtors in reviewing and finalizing potential liquidation alternatives and analysis; e. advise and assist management in organizing the Debtors' resources and activities to effectively and efficiently plan, coordinate and manage any chapter 11 process and communicate with customers, lenders, suppliers, employees, shareholders and other parties in interest; f. if requested, advise as to the formulation of a retention incentive program for key employees; f. assist the Debtors in preparing their Schedule of Assets and Liabilities and Statement of Financial Affairs; g. assist the Debtors in interfacing with their statutory committee; h. assist the Debtors in the implementation of any asset sales or other extraordinary transactions; and i. other matters as may be mutually agreed upon. Christopher J. Kearns asserts that FTI is a "disinterested person" as that term is defined in the Bankruptcy Code. The current hourly rates for FTI professionals are: Senior Managing Directors $500 - $595 Directors/Managing Directors $350 - $440 Consultants $165 - $325 Support Staff $75 - $150 Headquartered in Smithfield, North Carolina, Channel Master Holdings, Inc., with the Debtor-affiliates, are leading designer and manufacturer of high-volume, superior quality antenna products for the satellite communications industry both in the U.S. and internationally. The Company filed for chapter 11 protection on October 2, 2003 (Bankr. Del. Case No. 03-13004). David B. Stratton, Esq., at Pepper Hamilton LLP represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed estimated debts and assets of over $50 million each. CHESAPEAKE CROSSING: Look for Schedules & Statements on Oct. 28 --------------------------------------------------------------- As previously reported in the Troubled Company Reporter's October 14, 2003 issue, the United States Trustee will convene a Section 341(a) Meeting for Chesapeake Crossing Associates, LLC's Creditors on November 3, 2003. The Debtor now asks the U.S. Bankruptcy Court for the Eastern District of Virginia to extend the time within which it must file its required Schedules of Assets and Liabilities and Statement of Financial Affairs through October 28, 2003. Karen M. Crowley, Esq., at Marcus, Santoro & Kozak, P.C., says there's no reason why the Debtor's schedules filing deadline cannot be extended as requested. Headquartered in Norfolk, Virginia, Chesapeake Crossing Associates, LLC, owns and operates a shopping center located at 1951 South Military Highway, Chesapeake. The Company filed for chapter 11 protection on October 1, 2003 (Bankr. E.D. Va., Case No. 03-76908). Frank J. Santoro, Esq., and Karen M. Crowley, Esq., at Marcus, Santoro & Kozak, P.C. represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed estimated assets of over $1 million and debts of over $10 million. COLUMBUS MCKINNON: Will Announce Q2 2004 Results on October 21 -------------------------------------------------------------- Columbus McKinnon Corporation (Nasdaq: CMCO), announced that it will issue its earnings release for the fiscal 2004 second quarter on Tuesday, October 21, 2003 before the market opens. Additionally, a teleconference/webcast has been scheduled for October 21, 2003 at 10:00 AM Eastern Time at which the management of Columbus McKinnon will discuss the company's financial results and strategy. The webcast will be accessible at Columbus McKinnon's web site: http://www.cmworks.com.It will also be broadcast over First Call Events, a service of the Thomson Financial Network at: http://www.firstcallevents.com/service/ajwz390914387gf12.html You must have Windows Media Player or RealPlayer's audio software on your computer to listen to the call. Both are available for downloading at the Columbus McKinnon web site and the First Call Events web site at no charge. An audio recording of the call will be available two hours after its completion and until December 19, 2003 by dialing 1-800-925- 0870. Alternatively, you may access an archive of the call until December 19, 2003 on Columbus McKinnon's web site at: http://www.cmworks.com/webcast/archive.asp.The call will also be archived on the First Call Events web site until December 19, 2003 at: http://www.firstcallevents.com/service/ajwz390914387gf12.html Columbus McKinnon is a leading designer and manufacturer of material handling products, systems and services which efficiently and ergonomically move, lift, position or secure material. Key products include hoists, cranes, chain and forged attachments. The Company is focused on commercial and industrial applications that require the safety and quality provided by its superior design and engineering know-how. Comprehensive information on Columbus McKinnon is available on its web site at http://www.cmworks.com. As previously reported, Standard & Poor's Ratings Services assigned its 'B-' rating to Columbus McKinnon Corp.'s $100 million senior secured note offering due 2010. At the same time Standard & Poor's affirmed its 'B' corporate credit and 'CCC+' subordinated debt ratings on the company. The outlook remains negative. At the March 31, 2003 fiscal year-end, Amherst, N.Y.-based Columbus McKinnon had approximately $323 million of debt outstanding. The company holds leading (No. 1 or No. 2) niche market positions within the material handling, lifting, and positioning products industry. COMM 2000-C1: Fitch Affirms Ratings on Series 2000-C1 Notes ----------------------------------------------------------- COMM's commercial mortgage pass-through certificates, series 2000- C1, are affirmed by Fitch Ratings as follows: -- $116.8 million class A-1 'AAA'; -- $542.9 million class A-2 'AAA'; -- Interest-only class X 'AAA'; -- $38.2 million class B 'AA'; -- $39.3 million class C 'A'; -- $13.5 million class D 'A-'; -- $25.8 million class E 'BBB'; -- $11.2 million class F 'BBB-'; -- $26.9 million class G 'BB'; -- $6.7 million class H 'BB-'; -- $6.7 million class J 'B+'; -- $10.1 million class K 'B'; -- $7.9 million class L 'B-'; -- $6.7 million class M 'CCC'; -- $4.5 million class N 'CCC'. Fitch does not rate the $6.8 million class O certificates. The affirmations reflect consistent loan performance and minimal reduction of the pool collateral balance since issuance. ORIX Real Estate Capital Markets, LLC, the master servicer, collected year-end 2002 financials for 80% of the pool balance. For those loans the weighted average debt service coverage ratio is 1.33x, versus 1.36x at issuance. Currently, there are five loans (5.3%) in special servicing. The largest loan in special servicing is the Radisson Mart Plaza Hotel (3.6%) in Miami, Florida. The loan transferred to special servicing February 2002 for missing a payment. The loan is current and the special servicer is evaluating workout options. Fitch reviewed the credit assessments of the Crowne Plaza hotel (10%) and the Crystal Park One (4.7%) loans. The DSCR for each loan is calculated using borrower provided net operating income less required reserves and a stressed debt service constant. The Crowne Plaza remains below investment grade, while the Crystal Park loan maintains an investment grade credit assessment. The Crowne Plaza loan is the largest loan in the pool. It is secured by a 46 story, 770-room hotel located in the Times Square area of Manhattan. The trailing twelve month (TTM) June 30, 2003 DSCR is 0.96x, compared to a TTM Sept. 30, 2002 DSCR of 0.76x and 1.73x at issuance. The Crystal Park loan is secured by an 11-story office building in Arlington, VA. The TTM March 31, 2003 DSCR is 1.94x, compared to 2.01x at YE 2001 and 1.95x at issuance. Fitch will continue to monitor this transaction, as surveillance is ongoing. COMM 2000-FL2: Fitch Affirms Low-B Ratings on Six Note Classes -------------------------------------------------------------- COMM 2000-FL2's commercial mortgage pass-through certificates are upgraded by Fitch Ratings as follows: -- $36 million class B to 'AAA' from 'AA'; -- $43.9 million class C to 'AA' from 'A'. Fitch also affirms the following classes: -- $205 million class A 'AAA'; -- Interest-only $388.1 million class X 'AAA'; -- $35.6 million class D 'BBB+'; -- $1 million class G-WH 'B+'; -- $1.4 million class H-WH 'B'; -- $1.5 million class J-WH 'B-'. -- Class G-CO 'BB+'; -- Class H-CO 'BB'; -- Class J-CO 'BB-'. Fitch does not rate the $34.6 million class E, $33 million class F, $7.1 million class G-NS, $8.8 million class H-NS, $8.8 million class J-NS, $1.1 million class G-LP, $1.3 million class H-LP, or $1.9 million class J-LP. Classes G-FS, H-FS, and J-FS; G-NW and H- NW; G-CH, H-CH, and J-CH; G-HM, H-HM, and J-HM; and G-EA have been paid in full. The upgrades are due to the anticipated repayment of the Colonnade loan. The performance of the remaining loans in the pool, the Northstar loan, 86.4% of the pool, and the Whitehall loan, 13.6%, has declined since issuance. Despite the poor performance, the senior pooled classes' credit enhancement levels that will result after accounting for the repayment of the Colonnade loan are sufficient to warrant the upgrades. The Northstar loan is collateralized by four boutique hotel properties located in New York City, Los Angeles, and Miami. Northstar had an adjusted net cash flow for the trailing twelve months ended June 30, 2003, which decreased 19.9% compared to underwritten numbers at issuance. The corresponding debt service coverage ratio, based on a 10.48% Fitch stressed constant, is at 1.32 times, compared to 1.64x at issuance. The all-in current DSCR was 0.95x. This loan is currently in special servicing, and the servicer is finalizing documents for a two year extension. The Whitehall loan properties are four garden-style apartment buildings, of which 88% by allocated loan balance are located in the Atlanta suburbs. The overall occupancy as of June 30, 2003 was 87.2% up from 85.3% at last review. The Fitch adjusted NCF for TTM June 30, 2003 has dropped only 1.9% since TTM June 30, 2002, but has dropped 25.9% since issuance. The corresponding DSCR, based on a 10.35% Fitch stressed constant, was 1.05x compared to 1.41x. The all-in current DSCR was 0.79x. The loan matures in April 2003. Fitch will continue to actively monitor this transaction. DATAWORLD SOLUTIONS: Reports Favorable Strategic Restructuring -------------------------------------------------------------- DataWorld Solutions, Inc. (Pink Sheets: DWLD) announced it has successfully completed three transactions that will positively impact the balance sheet by reducing the liabilities owed by the Company, improve the capital base and bring in new investors. The first transaction is with one of its principal secured creditors. The agreement reduces the debt on the balance sheet by over $1 million dollars without any impact on the capital structure. Secondly, the Company is also pleased to announce the retirement of its $6 dollar senior cumulative convertible preferred stock, valued at about $760,000 dollars, in exchange for 500,000 shares of Rule 144K common stock. Finally, the Company facilitated the sale by a former officer and major shareholder of substantially all of his interest to a group of private investors who have expressed a willingness to work with the Company as it continues its turnaround efforts. Daniel McPhee, Chairman & CEO of DataWorld Solutions Inc., states, "We are pleased to announce that our aggressive restructuring plan is proceeding as envisioned. We will continue to focus our efforts on strengthening our capital base, increasing shareholder value and repositioning ourselves as a leader in the telecom industry. The Company continues to pursue new business venues to help further achieve its goals and objectives" About DataWorld Solutions: DataWorld Solutions is a multi-regional manufacturer of electronic cable assemblies used in providing connectivity solutions, which includes systems integration, for customers operating a wide range of data systems. This includes linking or connecting standard or proprietary electronic devices and peripheral components from different vendors to provide solutions for various customer requirements. DataWorld adds value by providing connectivity solutions, which may include distributed sales for passive components such as electronic connectors, electronic wire and cable, cabinets and racks and patch panels, and active components, including hubs, bridges, routers, gateways and modem. DELTA AIR LINES: Third Quarter Net Loss Pegged at $164 Million -------------------------------------------------------------- Delta Air Lines (NYSE: DAL) reported results for the quarter ending Sept. 30, 2003, and other significant news. The key points are, Delta: * Reports a third quarter net loss of $164 million, or $1.36 loss per common share. * Excluding unusual items described below, reports a third quarter net loss of $172 million, or $1.43 loss per common share. * Ends quarter with $2.9 billion in cash, of which $2.7 billion is unrestricted cash. * Announces further changes to its fleet plan to ensure long-term stability, including the sale of 11 aircraft scheduled for delivery to Delta in 2005. Delta Air Lines reported a net loss of $164 million and a loss per share of $1.36 for the September 2003 quarter. In the September 2002 quarter, Delta reported a net loss of $326 million and a loss per share of $2.67. Excluding the unusual items described below, the September 2003 quarter net loss and loss per share were $172 million and $1.43, respectively, compared to a net loss of $212 million and loss per share of $1.75 in the September 2002 quarter. The First Call consensus estimate for the September 2003 quarter was a loss per share of $1.46, excluding unusual items. Positive cash flow from operating activities was $201 million for the September 2003 quarter. Earnings Performance "Over the past two years, our industry has undergone dramatic, permanent changes. Today's results, while somewhat better than we expected, show that Delta's challenges are not yet over," said Leo F. Mullin, Delta's chairman and chief executive officer. "To meet these challenges, Delta people have in place programs across the company intended to rebalance our revenue to cost relationship. At the same time, we are making prudent and strategic investments in technology, regional jet aircraft, our new low-fare operation, as well as in other areas. Taken together, these steps will strengthen the company over the long term by enhancing our cost competitiveness and positioning us for sustained success." Third quarter operating revenues increased 0.7 percent and passenger unit revenues increased 8.0 percent, compared to the September 2002 quarter. Delta has continued to outperform the industry in year-over-year unit revenue comparisons for each of the last 16 months through August 2003. Operating expenses for the September 2003 quarter decreased 7.4 percent and unit costs decreased 1.2 percent as a result of charges taken during the September 2002 quarter. Excluding unusual items, unit costs increased 4.1 percent and fuel price neutralized(1) unit costs increased 2.8 percent. The increase in fuel price neutralized unit costs was entirely driven by capacity reductions related to the Iraqi War. Comparing the September 2003 quarter to the June 2003 quarter illustrates Delta's progress on its company-wide profit improvement initiatives. Despite an 8 percent increase in capacity, operating expenses, excluding unusual items, for the September 2003 quarter were flat with the June 2003 quarter. Delta's increased productivity and efficiencies allowed for significant capacity growth during the quarter at the same operating costs. "Delta continues to make progress on its profit improvement initiatives to reduce costs and enhance revenue," said M. Michele Burns, executive vice president and chief financial officer. "Moreover, while the full impact is not immediate, our strategic plan will deliver sustainable savings for the long- term, particularly as the industry recovers and grows." In the September 2003 quarter, Delta's fuel hedging program reduced costs by $26 million, pretax. Delta hedged 53 percent of its jet fuel requirements in the quarter at an average price of $0.79 per gallon, excluding fuel taxes. Delta's total fuel price for the September 2003 quarter was $0.79 per gallon. The load factor for the September 2003 quarter was 76.9 percent, a 2.6 point increase as compared to the September 2002 quarter. System capacity was down 6.3 percent and mainline capacity was down 9.4 percent on a year- over-year basis. While Delta continues to see some growth in passenger demand, traffic has not fully returned to pre-war levels; therefore, some capacity reductions remain in place. Guidance on fuel hedging, capacity and unit costs is provided in Table 2 below. Liquidity and Financing Transactions As of Sept. 30, 2003, Delta had $2.9 billion in cash, of which $2.7 billion is unrestricted. Delta also had unencumbered aircraft with an estimated base value of $2.3 billion, of which approximately $400 million is eligible under Section 1110 of the U.S. Bankruptcy Code. Delta had positive cash flow from operations for the September 2003 quarter of $201 million and generated an operating profit for two out of the three months. In September 2003, Delta completed a debt exchange offer for $300 million principal amount of its 6.65 percent senior notes due 2004, of which $64.1 million was tendered by holders for cash and new 10.0 percent senior notes due 2008. Delta also completed a debt exchange offer for $500 million principal amount of its 7.7 percent senior notes due 2005, of which $197.8 million was tendered by holders for new 10.0 percent senior notes due 2008. In total, Delta paid $47 million in cash; issued an aggregate of $248 million principal amount of the new 10.0 percent senior notes; and deferred until 2008 net debt maturities totaling $220 million. Fleet Transactions Subsequent to September 2003 Quarter Delta announced that it has entered into a definitive agreement with a third party to sell 11 Boeing 737-800 aircraft scheduled for delivery to Delta in 2005. This transaction is expected to reduce Delta's capital expenditures by approximately $500 million through 2005. Delta will recognize a charge of $26 million, net of tax, in the December 2003 quarter as a result of its agreement to sell the 11 B737-800 aircraft. This transaction also includes an option for the third party to purchase up to 10 additional aircraft scheduled for delivery to Delta in 2006 and 2007, subject to mutual agreement on terms and conditions. In addition to the sale of the 11 B737-800 aircraft, Delta will defer until 2008 delivery of eight additional B737-800 aircraft also scheduled for delivery in 2005. Delta currently intends to accept delivery of two B777-200 aircraft in 2005 as scheduled. "Providing Delta's customers with an unmatched network of service remains a priority for Delta as we continue to explore every available option to reduce costs and enhance liquidity," said Burns. "Taking this step to reduce capital expenditures is the prudent thing to do at this time and will not reduce our ability to serve our customers." Explanation of Unusual Items September 2003 Quarter In the September 2003 quarter, Delta recorded a $9 million gain, net of tax, on the extinguishment of debt related to the debt exchange previously discussed and a $1 million charge, net of tax, related to derivative and hedging activities accounted for under Statement of Financial Accounting Standard (SFAS) No. 133. The attached Consolidated Statement of Operations for the September 2003 quarter shows Delta's net loss as reported under GAAP, as well as net loss excluding these items. Delta believes this information is helpful to investors to evaluate recurring operational performance because (1) the extinguishment of debt is not representative of core operations; and (2) the SFAS 133 charge reflects volatility in earnings driven by changes in the market, which are beyond the company's control. September 2002 Quarter In the September 2002 quarter, Delta recorded charges related to (1) the writedown of certain MD-11 and B727-200 aircraft and MD-11 spare parts inventory and (2) the temporary carrying costs of surplus pilots and grounded aircraft, as well as gains related to (1) compensation received under the Air Transportation Safety and System Stabilization Act, (2) the adjustment to actual requirements of certain restructuring reserves, and (3) SFAS 133 derivatives. These items totaled a net charge of $114 million, net of tax. In addition to the net loss as reported under GAAP, Delta also discloses net loss excluding these items because it believes this information is helpful to investors to evaluate recurring operational performance. Delta Air Lines, the world's second largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offers 6,130 flights each day to 453 destinations in 82 countries on Delta, Song, 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, please go to http://www.delta.com. DJ ORTHOPEDICS: Will Release 3rd Quarter 2003 Results on Oct. 28 ---------------------------------------------------------------- dj Orthopedics, Inc., (NYSE: DJO), a designer, manufacturer and marketer of products and services for the orthopedic sports medicine market, announced the following information for the release of its third quarter 2003 financial results and a conference call to discuss those results. Date: Tuesday, October 28, 2003 Time: Financial Results: 1:05 PM Pacific Time, 4:05 PM Eastern Time Conference Call: 2:00 PM Pacific Time, 5:00 PM Eastern Time Dial In: (706) 634-0177 using the reservation code 3143794. The Company recommends dialing in 5 to 10 minutes prior to scheduled start time. Replay: (706) 645-9291 for all callers. Enter Reservation code 3143794. Replay ends 48 hours after call. Live Internet: http://www.djortho.com, accessed through the Investor Relations portion of the Company's website. The webcast will be archived following the completion of the call. dj Orthopedics is a global orthopedic sports medicine company specializing in the design, manufacture and marketing of products and services that rehabilitate soft tissue and bone, help protect against injury, and treat osteoarthritis of the knee. Its broad range of more than 600 existing products, many of which are based on proprietary technologies includes rigid knee braces, soft goods, specialty and other complementary orthopedic products. These products provide solutions for patients and orthopedic sports medicine professionals throughout the patient's continuum of care. * * * As reported in the Troubled Company Reporter's October 13, 2003 edition, Standard & Poor's Ratings Services assigned its 'B+' senior secured debt rating to dj Orthopedics Inc.'s proposed $130 million credit facility, consisting of a $105 million term loan and a $25 million revolving credit facility maturing in 2008 and 2009, respectively. Standard & Poor's also affirmed its 'B+' corporate credit and 'B-' subordinated debt ratings on the company. At the same time, Moody's Investors Service placed these ratings of dj Orthopedics, LLC on review for possible downgrade: - Senior implied rating of B1; - Issuer rating of B2; - B1 rating on the $15.5 million guaranteed senior secured term loan due 06/30/2005; - B1 rating on the $25 million guaranteed senior secured revolving credit loan due 06/30/2005; and - B3 rating on the $75 million 12.625% guaranteed senior subordinated global notes due 06/15/2009. Moody's cites that the review is prompted by the increase in debt associated with the company's acquisition of the bone growth stimulator assets of OrthoLogic Corporation. Dj Orthopedics plans to finance the acquisition with senior bank debt. EAGLEPICHER: Reports Decreasing Net Sales in Third Quarter 2003 --------------------------------------------------------------- EaglePicher Holdings, Inc. announces its third quarter 2003 financial results and the filing of its Quarterly Report on Form 10-Q with the Securities and Exchange Commission (SEC): Sales Our Net Sales decreased $1.5 million, or 0.9%, from $167.4 million in the third quarter of 2002 to $165.8 million in the third quarter of 2003, and increased $5.2 million, or 1.0%, from $499.7 million in the first nine months of 2002 to $504.9 million in the first nine months of 2003. Excluding sales from our Precision Products business within our Technologies Segment, which we divested in July 2002, our net sales decreased $0.7 million, or 0.4%, in the third quarter of 2003, and increased $8.6 million, or 1.7%, in the first nine months of 2003. In the third quarter of 2003, the decrease was due to sales decreases of 9.3% in our Automotive Segment's Hillsdale business and 8.9% in our Filtration and Minerals Segment, partially offset by strong increases of 37.0% in our Technologies Segment's Power Group and 8.3% in our Automotive Segment's Wolverine business. In the first nine months of 2003, the increase was due to strong increases of 37.9% in our Technologies Segment's Power Group and 14.2% in our Automotive Segment's Wolverine business, partially offset by decreases of 6.8% in our Automotive Segment's Hillsdale business and 5.3% in our Filtration and Minerals Segment. Hillsdale's sales decrease was due to the loss of three programs that are phasing out in 2003 and the approximate 4% decline in North American light vehicle production levels during the third quarter and first nine months of 2003 compared to 2002. The substantial increase in our Power Group sales is primarily due to new defense contracts, improved pricing and increased defense spending. Earnings Our Income (Loss) from Continuing Operations Before Taxes increased $1.9 million from $1.0 million in the third quarter of 2002 to $2.9 million in the third quarter of 2003. In the first nine months of 2003, the Income (Loss) from Continuing Operations Before Taxes improved $38.8 million from a loss of $26.4 million in 2002 to income of $12.4 million in 2003. Cash Flows and the Third Quarter Capital Structure Refinancing We refinanced our capital structure during the third quarter of 2003 by completing a new credit agreement consisting of a $150 million Term Loan, due in August 2009, and a $125 million Revolving Credit Facility, due in August 2008, subject to certain early termination clauses. In addition, we issued $250 million of 9-3/4% Senior Unsecured Notes, due 2013, at 99.2% to yield 9-7/8%. These replaced our former credit agreement, which would have matured in February 2004, and 95% of our Senior Subordinated Notes, due 2008, which were redeemed at par through a tender offer. This provided us with increased liquidity and a longer term capital structure. During the third quarter, the increased liquidity was used to reduce the obligations of our accounts receivable asset-backed securitization and fund increases in working capital. Full Year 2003 Outlook Projected sales for 2003 are estimated to be in the range of $665.0 million to $675.0 million compared to $668.1 million in 2002, which is restated to exclude our Hillsdale U.K. Automotive operation and certain operations of our Germanium-based business in our Technologies Segment, which have been divested and accounted for as discontinued operations during 2003. The sales estimate for 2003 reflects the current and continued decrease in Hillsdale revenues primarily related to program phase-outs, and reduced automotive builds in 2003 compared to 2002, partially offset by growth in our Power Group, primarily related to new contracts, improved pricing, and increased defense spending. We are projecting 2003 Operating Income to be in the range of $59.0 million to $61.0 million, which includes insurance gains of $8.5 million and expenses for environmental and legal matters of $2.1 million in the first nine months of 2003. This amount also includes $45.0 million of depreciation and amortization. The decreases in sales and operating income from our second quarter of 2003 outlook (excluding the income from insurance gains and incremental expenses associated with environmental and legal matters provided for in the third quarter of 2003) was primarily due to the sale of certain assets in our Germanium-based business in July 2003. The outlook has been restated to exclude the results of this divested business. Excluding this divestiture, the insurance gains, and the environmental and legal matter costs, our earnings outlook is consistent with our prior outlook. On the basis of these projections, we believe we will be in compliance with all covenants under our various credit facilities during 2003. We are currently evaluating our assumptions regarding discount rates and rates of investment return to be used to determine the funded status of our pension plans as of November 30, 2003 and the related pension expense for 2004. Based on the significant decline in interest rates since November 2002, our discount rate, used to calculate the present value of pension liabilities, will decrease from 6.95% at November 30, 2002 to a currently estimated range of 6.00% to 6.25% as of November 30, 2003. This decrease in discount rates will increase our pension benefit obligation amounts as of November 30, 2003 and may result in the plan being underfunded, as opposed to our overfunded position as of November 30, 2002. If the plan is determined to be underfunded by any amount, we will be required to write-off approximately 95% of our intangible prepaid pension asset of $55.6 million as of August 31, 2003 by a non-cash charge to other comprehensive income ("OCI"), resulting in an increased deficit in our stockholders' equity. There is also a potential that we may need to record a non-cash charge to OCI to establish a pension liability for the underfunded amount. In addition, at the recommendation of our actuary, we are considering whether to adopt a more recently issued actuarial mortality table, which would also have the impact of increasing our unfunded liability by approximately $13.0 million. The write-off to OCI of the prepaid pension asset, the accrual for the unfunded liability, and the accrual for the potential additional liability relating to the new mortality table are all non-cash items that are required under United States generally accepted accounting principles ("GAAP"). The accounting treatment under GAAP is different from the funding requirements mandated by the Employee Retirement Income Security Act of 1974 ("ERISA"). Accordingly, we do not expect these non-cash charges to OCI to impact the need for potential cash contributions to our pension plans for the next several years. Under the pension funding assumptions currently being evaluated, we do not anticipate a requirement for any cash contributions during the next several years. However, at our discretion, we may make voluntary contributions from time to time, based on our cash position and overall financial status, and the potential to further strengthen the funded status of the plans over the long term. Granaria Holdings B.V., our controlling common shareholder, has informed us that they, or entities controlled by them, may purchase the 9-3/8% Senior Subordinated Notes, due 2008, issued by our subsidiary, EaglePicher Incorporated, or may trade in shares of our Series B 11-3/4% Cumulative Redeemable Exchangeable Preferred Stock from time to time. In addition, EPI may purchase Subordinated Notes from time to time. EaglePicher Incorporated, founded in 1843 and headquartered in Phoenix, Arizona, is a diversified manufacturer and marketer of innovative, advanced technology and industrial products and services for space, defense, environmental, automotive, medical, filtration, pharmaceutical, nuclear power, semiconductor and commercial applications worldwide. The company has 4,000 employees and operates more than 30 plants in the United States, Canada, Mexico, the U.K. and Germany. Additional information on the company is available on the Internet at http://www.eaglepicher.com As reported in the Troubled Company Reporter's September 9, 2003 edition, Standard & Poor's Ratings Services lowered its rating on EaglePicher Holdings, Inc.'s $146 million 11.75% cumulative redeemable exchangeable preferred stock due 2008 to 'D' from 'CCC+'. All other outstanding ratings on EPH and EaglePicher Inc., a wholly owned subsidiary of EPH, were affirmed. "The rating action on the preferred stock is the result of the company's failure to make the dividend payment of $8.3 million due on Sept. 2, 2003," said Standard & Poor's credit analyst Linli Chee. EPI's senior secured credit facility prohibits the company from paying cash dividends unless total debt to EBITDA is less than 3x on a pro forma basis. If the company does not pay cash dividends, holders of the preferred stock are entitled to elect the majority of the company's board of directors. Granaria Holdings B.V., the majority owner of the company, also controls about 78% of the preferred stock. ENRON CORP: ENA Seeks to Conduct Rule 2004 Exam of Giant Eagle -------------------------------------------------------------- On October 1, 2001, Enron North America Corporation and Giant Eagle, Inc. entered into a Purchase and Sale Agreement -- the Trash Removal Contract. Pursuant to the Trash Removal Contract, ENA purchases from Giant Eagle a mix of trash referred to as "Enron #11." Barry J. Dichter, Esq., at Cadwalader, Wickersham & Taft, in New York, relates that by letter dated December 7, 2002, Giant Eagle purported to terminate the Trash Removal Contract. Giant Eagle purported to exercise its right to declare an early termination date of December 2, 2001. ENA believes that the Trash Removal Contract may possess significant value for its estate and creditors. Indeed, ENA has engaged in favorable, albeit preliminary, discussions with potential assignees of the Trash Removal Contract. To fully assess the value that would inure to the estate's benefit from assuming and assigning the Trash Removal Contract, ENA must produce to potential bidders Giant Eagle's audited financial statements for its last fiscal year as well as its unaudited statement for the most recent quarter of its current fiscal year -- the Financial Information. However, Mr. Dichter informs Judge Gonzalez that Giant Eagle refused to release the Financial Information to ENA, despite ENA's offer to execute an appropriate confidential agreement with all potential purchases before they are provided with the Financial Information. Accordingly, ENA seeks the Court's authority to obtain the production of Financial Information from Giant Eagle for it to shop the Trash Removal Contract to potential bidders. Mr. Dichter asserts that, pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure, ENA's request is warranted because the information being sought is needed to enable ENA to determine whether it is advisable for it to assume and assign the Trash Removal Contract, an issue which clearly relates to a "matter which may affect the administration of the debtor's estate." The potential bidders with whom ENA has been in contact with regarding the assumption of the Trash Removal Contract understandably require that they be given an opportunity to review the Financial Information before proceeding with the process. Moreover, Mr. Dichter points out that producing the Financial Information will present no burden given that the information is readily available to Giant Eagle. (Enron Bankruptcy News, Issue No. 83; Bankruptcy Creditors' Service, Inc., 609/392- 0900) EXIDE: Committee Wants to Disclose Confidential Info to Bidders --------------------------------------------------------------- While the Exide Debtors' Chapter 11 cases are quickly moving towards confirmation hearings, the Official Committee of Unsecured Creditors feels that it is urgently important and critical to provide prompt and proactive responses to formal inquiries from parties who have expressed an interest in acquiring all or part or the Debtors' assets or stocks. The Creditors' Committee believes that it is undoubtedly prudent to pursue negotiations with certain bidders, as a back-up plan to a stand-alone reorganization plan, especially since the Committee is highly confident that the Debtors' Plan is patently unconfirmable. As the Debtors' Chief Executive Officer, Craig H. Muhlhauser, had indicated, the Committee believes that the expiration of the DIP Agreement and the Standstill Agreement before the Debtors are ready to exit Chapter 11 will cause significant harm to the estates. The Creditors' Committee repeatedly asked the Debtors to pursue negotiations with potential bidders. However, the Committee observes that the Debtors are not pursuing these negotiation opportunities meaningfully. Given the timetable established by the Debtors and the potential impending harm to their estates if a reorganization plan is not confirmed before the year ends, the Committee wants the Debtors to discuss with the Bidders now to prepare for the eventuality that the Debtors' Plan is not confirmed. The Creditors' Committee relates that one of the Bidders, EnerSys Inc., has already submitted a formal letter and filed motions with the Court expressing its strong interest in purchasing one segment of the Debtors' assets for $950,000,000, which approximates the value that the Debtors' Plan placed on the Debtors' entire enterprise. The EnerSys offer implies a valuation that is hundreds of millions of dollars more for the Debtors' entire estate, thereby permitting recoveries for unsecured creditors. The Debtors also received indications of interests for their other business segments. Assuming the Debtors' own projections, the Creditors' Committee notes that the aggregate value of the Debtors' business units is far in excess of the valuation expressed in the Disclosure Statement. Based on developments in the market and other information, the value of the entire enterprise might substantially exceed $1,500,000,000. Should EnerSys or another Bidder make a timely bid for all or part of the Debtors' assets or stock, and if the bid indicates value greater than the value asserted by the Debtors' Plan, the Creditors' Committee plans to seek further relief from the Court, including termination of the Debtors' exclusive right so it may file a reorganization plan. In view of the recent circumstances, the Creditors' Committee seeks the Court's authority to disclose confidential information regarding the Debtors to the Bidders. The Committee wants to disclose confidential information to entities who: (a) are potential buyers of all or part of the Debtors' asset or stock; and (b) have each signed a confidentiality agreement. The Committee also asks the Court to compel the Debtors to: (a) grant access to the Bidders with respect to all of the Debtors' data located at the online data room; and (b) pursuant to Rule 9001(5) of the Federal Rules of Bankruptcy Procedure, make certain of their executives reasonably available in person at their headquarters to the Bidders for the purpose of answering questions. The Creditors' Committee wants to explore the viability of a Bidder's offer. The Committee has received overtures from potential Bidders for some or all of the Debtors' businesses. The Committee also needs to evaluate other alternatives to provide for the possibility that the Debtors' Plan will not be confirmed. Should the Debtors fail to confirm their Plan, which the Committee believes is likely, the Committee must be ready to file promptly an alternative Plan. The Creditors' Committee contends that denial of their request could be a death sentence for the voice of the unsecured creditors. The Committee asserts that disclosing the information will not unduly burden the Debtors. To the extent that the Debtors are overburdened, the Committee offers to facilitate the process with any of the Bidders. (Exide Bankruptcy News, Issue No. 31; Bankruptcy Creditors' Service, Inc., 609/392-0900) FMC CORP: Solutia Files Suit Regarding Astaris LLC Joint Venture ---------------------------------------------------------------- Solutia Inc. (NYSE: SOI) announced that it has filed suit in St. Louis County Circuit Court against FMC Corporation over the failure of purified phosphoric acid technology provided by FMC to Astaris LLC, which is jointly owned by Solutia and FMC. Solutia ( http://www.Solutia.com) uses world-class skills in applied chemistry to create value-added solutions for customers, whose products improve the lives of consumers every day. Solutia is a world leader in performance films for laminated safety glass and after-market applications; process development and scale-up services for pharmaceutical fine chemicals; specialties such as water treatment chemicals, heat transfer fluids and aviation hydraulic fluid and an integrated family of nylon products including high-performance polymers and fibers. FMC Corporation (S&P, BB+ $300 Million Senior Secured Notes Rating, Negative) is a diversified chemical company serving agricultural, industrial and consumer markets globally for more than a century with innovative solutions, applications and quality products. The company employs approximately 5,500 people throughout the world. FMC Corporation divides its businesses into three segments: Agricultural Products, Specialty Chemicals and Industrial Chemicals. GLOBAL CROSSING: Obtains Nod for Alcatel Deferred Payment Pact -------------------------------------------------------------- The Global Crossing Debtors are a party to a MAC Project Development and Construction Contract, dated June 2, 1998, with Alcatel Submarine Networks, and Alcatel Submarine Networks, Inc. The Debtors and Alcatel agreed to the deferment of payments due under the MAC Contract. Pursuant to the MAC Contract, Alcatel agreed to develop and construct a subsea ring configuration system for the Debtors that contains three of the Debtors' landing and cable stations at various locations on the United States and the United States Virgin Islands and is connected by submersible fiber optic cables. The MAC Contract was amended to provide for upgrades to the MAC System not originally contemplated under the contract. The purchase price of the Upgrades is $21,700,000 and the final payment for the Upgrades is due December 1, 2003. Due to the prolonged time they have spent in Chapter 11 and their available liquidity, the Debtors commenced negotiations with Alcatel to defer a portion of the payment due under the MAC Contract. After extensive arm's-length negotiations, Alcatel agreed, pursuant to certain conditions, to allow the Debtors to defer a portion of the Final Payment. The salient conditions are: (1) Written notice by the Debtors to Alcatel seven days before the Final Payment Date of their intent to defer a portion of the amount, subject to a $2,500,000 cap; (2) Payment in full of all invoices issued under the MAC Contract, including that portion of the Final Payment not being deferred, that are due on or before the Final Payment Date; (3) Court approval of the Deferral Agreement prior to the Final Payment Date; (4) Effectiveness, on or before the Final Payment Date, of a GX Chapter 11 plan of reorganization, which Plan will be either the Plan or another plan of reorganization with respect to the Debtors, the terms and conditions of which are not less favorable to Alcatel than those of the Plan; and (5) Delivery to Alcatel, on the Final Payment Date, of a promissory note substantially in the form and substance of the Deferral Agreement, the salient terms of which are: (a) The Deferred Amount and all other outstanding amounts under the Note will be due and payable in full on September 1, 2004; (b) The unpaid principal balance will bear interest at one-year LIBOR from the date of execution of the Note, except that, from and after an Event of Default, the unpaid principal balance will bear interest at LIBOR plus 2%; (c) Interest will be calculated daily on the unpaid daily principal balance outstanding from time to time, on the basis of a 360-day year; and (d) Upon the occurrence of any of these events, which will constitute an Event of Default, all liabilities of the Debtors, including the entire unpaid principal of the Note and accrued interest, will immediately become due and payable, at Alcatel's option: -- failure of the Debtors to perform any obligation, liability, or claim to Alcatel, or to pay principal or interest when due; -- the dissolution, merger, or consolidation of the Debtors or any guarantor; -- the filing of a petition in bankruptcy or similar proceeding by or against the Debtors; -- the issuing of any attachment or the filing of any lien against any property of the Debtors or any guarantor; -- the taking of possession of any substantial part of the property of the Debtors or any guarantor at the instance of governmental authority; or -- the breach of any representation or warranty of the Debtors in connection with the Note. Accordingly, The Debtors sought and obtained the Court's approval for their Deferred Payment Agreement with Alcatel. (Global Crossing Bankruptcy News, Issue No. 48; Bankruptcy Creditors' Service, Inc., 609/392-0900) HUGHES ELECTRONICS: Third Quarter Net Loss Balloons to $23 Mil. --------------------------------------------------------------- Hughes Electronics Corporation, a world-leading provider of digital television entertainment, broadband satellite networks and services, and global video and data broadcasting, reported that third quarter 2003 revenues increased 17% to $2.57 billion compared with $2.19 billion in the third quarter of 2002. Operating profit before depreciation and amortization for the quarter increased 33% to $359 million compared with $270 million in the same period last year. Operating profit increased to $77 million compared with operating profit of $16 million in the third quarter of 2002. In addition, HUGHES reported a third quarter 2003 net loss of $23 million compared to a net loss of $14 million in the same period of 2002. "This quarter's results are yet another indication of the rather significant changes we have made across our company to continuously improve operational performance. Compared to last year, each of our businesses generated higher revenues and operating profit before depreciation and amortization in the quarter," said Jack A. Shaw, HUGHES' president and chief executive officer. "Importantly, DIRECTV U.S. had its second best quarter ever in terms of gross owned and operated subscriber additions, and the 326,000 net new subscribers added in the quarter represented a 58% increase over last year's third quarter. I believe that this sharp increase in DIRECTV's subscriber growth reflects consumers' desire for DIRECTV's superior, all digital television programming as well as their continued dissatisfaction with their cable television service." Shaw continued: "At the top line, DIRECTV U.S. once again was the major contributor to our growth in the quarter with a nearly 20% increase in revenues driven by continued strong subscriber growth and a $4.50 increase in average monthly revenue per subscriber to $63.70. Hughes Network Systems -- or HNS -- also contributed to HUGHES' growth with a 17% increase in revenues principally due to strong sales in its enterprise and residential DIRECWAY broadband businesses, as well as in its set-top box business. Driven by the gross profit on this revenue growth, DIRECTV U.S. and HNS were also the primary contributors to HUGHES' 33% growth in operating profit before depreciation and amortization." Shaw finished: "We're also demonstrating significant improvement in our cash flow -- which we define as cash flows from operating activities plus cash flows from investing activities -- where, for the third quarter in a row, HUGHES generated positive cash flow. Also for the third consecutive quarter, HUGHES is increasing its full-year guidance for revenues, operating profit and cash flow primarily due to the strong DIRECTV U.S. and HNS results in the third quarter as well as the continued solid results expected for the remainder of the year." HUGHES' operating profit increased to $77 million in the third quarter of 2003 from $16 million in the same period of last year. The improvement was due to the higher operating profit before depreciation and amortization partially offset by higher depreciation and amortization, primarily at DIRECTV U.S. due to the reinstatement of amortization expense during the fourth quarter of 2002 related to certain intangible assets in accordance with Emerging Issues Task Force ("EITF") Issue No. 02-17, as well as additional infrastructure expenditures during the last year. HUGHES recorded a third quarter 2003 net loss of $23 million compared to a net loss of $14 million in the same period of 2002. The higher net loss was primarily due to a $159 million pre-tax gain in 2002 resulting from the sale of 8.8 million shares of Thomson Multimedia common stock and a third quarter 2003 non-cash charge of $65 million recorded as "Cumulative effect of accounting change, net of taxes" related to the adoption of FASB Interpretation No. 46. These changes were partially offset by the higher 2003 operating profit discussed above, the favorable resolution of certain tax refund claims for $48 million in the quarter, a $32 million write- down of two equity investments and a pre-tax loss of $25 million related to the sale of SkyPerfecTV! common stock in the third quarter of 2002, and the absence of net losses in 2003 at DIRECTV Broadband due to its shutdown on February 28, 2003. NINE-MONTH FINANCIAL REVIEW For the first nine months of 2003, revenues increased 12% to $7.17 billion, compared to $6.41 billion in the first nine months of 2002. The increase was primarily due to continued subscriber growth and higher average monthly revenue per subscriber ("ARPU") at DIRECTV U.S. as well as increased sales in the residential DIRECWAY(R) broadband business at HNS, partially offset by lower DIRECTV Latin America revenues related to the World Cup programming services in 2002 as well as a smaller subscriber base and further devaluations to several Latin American currencies in 2003. Operating profit before depreciation and amortization for the first nine months of 2003 was $1.07 billion compared with $586 million in the same period of 2002. Operating profit before depreciation and amortization margin was 15% compared to 9% in the first nine months of 2002. The 82% increase in operating profit before depreciation and amortization and the corresponding increase in margin were primarily attributable to the additional gross profit gained from the DIRECTV U.S. revenue growth, reduced losses from the 2002 World Cup programming at DIRECTV Latin America and improved efficiencies associated with HNS' larger residential DIRECWAY subscriber base. Also impacting the 2002 operating profit before depreciation and amortization results was a charge of $48 million related to a settlement with GECC and a $95 million one-time gain due to the favorable resolution of a lawsuit filed against the U.S. government on March 22, 1991. HUGHES' operating profit for the first nine months of 2003 was $258 million compared with an operating loss of $170 million in the same period of 2002. The improvement was due to the higher operating profit before depreciation and amortization discussed above partially offset by higher depreciation and amortization expense, particularly at DIRECTV U.S. resulting from the reinstatement of amortization expense related to certain intangible assets in accordance with EITF Issue No. 02-17 during the fourth quarter of 2002, as well as additional infrastructure expenditures during the last year. For the first nine months of 2003, HUGHES had a net loss of $52 million compared to a net loss of $1.01 billion in the same period of 2002. The improvement was primarily due to a first quarter 2002 charge associated with HUGHES' adoption of Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets" of $681 million, recorded as "Cumulative effect of accounting change, net of taxes." Also contributing to the change was the improved 2003 operating profit discussed above, a 2002 net interest expense charge of $74 million related to the GECC settlement and higher losses in 2002 at DIRECTV Broadband. These improvements were partially offset by the $159 million pre- tax gain on the sale of Thomson shares in 2002, a higher income tax benefit generated in 2002 resulting from the larger pre- tax loss and the $65 million charge related to the adoption of FIN 46 in 2003. SEGMENT FINANCIAL REVIEW: THIRD QUARTER 2003 Direct-To-Home Broadcast Third quarter 2003 revenues for the segment increased 18% to $2.09 billion from $1.76 billion in the third quarter of 2002. The segment had operating profit before depreciation and amortization of $222 million compared with $177 million in the third quarter of 2002. Operating profit for the segment was $42 million in the third quarter of 2003 compared to $21 million in the same period of 2002. On February 28, 2003, HUGHES completed the shutdown of the DIRECTV DSLT service. As a result, DIRECTV Broadband is accounted for as a discontinued operation in the consolidated financial statements and its revenues, operating costs and expenses, and non-operating results are no longer included in the Direct-To-Home Broadcast segment for the periods presented. United States: Excluding subscribers in the National Rural Telecommunications Cooperative ("NRTC") territories, DIRECTV U.S. added 811,000 gross subscribers and after accounting for churn, 326,000 net subscribers in the quarter. DIRECTV U.S. owned and operated subscribers totaled 10.28 million as of September 30, 2003, 12% more than the 9.20 million subscribers as of September 30, 2002. For the third quarter of 2003, the total number of subscribers in NRTC territories fell by 32,000, reducing the total number of NRTC subscribers as of September 30, 2003, to 1.57 million. As a result, the DIRECTV U.S. platform ended the quarter with 11.85 million total subscribers. DIRECTV U.S. reported quarterly revenues of $1.93 billion, an increase of 20% over last year's third quarter revenues of $1.62 billion. The increase was primarily due to continued strong subscriber growth as well as higher ARPU. ARPU increased approximately $4.50, or 8%, to $63.70 in the quarter primarily due to the March 2003 price increase, additional fees from the increased number of customers that have multiple set-top receivers, the adoption of EITF Issue No. 00-21 that relates to the recognition of certain customer-related revenues, increased revenues from the NFL SUNDAY TICKET(R) package and increased customer purchases of local channels. Operating profit before depreciation and amortization for the third quarter of 2003 increased 15% to $235 million compared to $205 million in last year's third quarter. The increase was due to the additional gross profit gained from the increased revenues, an improved mix of higher-margin revenues primarily related to fees from customers that have multiple set-top receivers and increased sales of local channel packages, and the favorable impact from a continued emphasis on cost management. These were partially offset by increased marketing expenses associated with the larger gross subscriber additions and higher acquisition costs per subscriber ("SAC") in the quarter. Operating profit in the quarter increased to $112 million compared to $102 million in the third quarter of 2002. The improved operating profit was primarily due to the reasons discussed above for the change in operating profit before depreciation and amortization partially offset by the reinstatement of amortization expense related to certain intangible assets in accordance with EITF Issue No. 02-17 during the fourth quarter of 2002, as well as increased depreciation expense due to additional infrastructure expenditures during the last year. Latin America: On March 18, 2003, DIRECTV Latin America, LLC announced that in order to aggressively address the company's financial and operational challenges, it had filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code. The filing applies only to DIRECTV Latin America, LLC, a U.S. company, and does not include any of its operating companies in Latin America and the Caribbean. DIRECTV Latin America, LLC and its operating companies are continuing regular operations. The DIRECTV(R) service in Latin America lost 44,000 net subscribers in the third quarter of 2003 mostly due to significantly higher involuntary churn in Mexico resulting from changes in disconnection processes associated with past-due subscribers. The total number of DIRECTV subscribers in Latin America as of September 30, 2003, was 1.45 million compared to 1.60 million as of September 30, 2002, representing a decline of 10%. Revenues for DIRECTV Latin America increased to $155 million in the quarter from $146 million in the third quarter of 2002 primarily due to the consolidation of the local operating companies in Puerto Rico and Venezuela in accordance with HUGHES' adoption of FIN 46, partially offset by lower revenues from the smaller subscriber base. DIRECTV Latin America recorded an operating loss before depreciation and amortization of $17 million in the quarter compared to an operating loss before depreciation and amortization of $29 million in the same period of 2002. The operating loss in the quarter was $74 million compared to an operating loss of $84 million in the third quarter of 2002. These improvements were primarily due to aggressive cost cutting over the past year including programming cost reductions resulting from the rejection of certain contracts in connection with the Chapter 11 reorganization, partially offset by reduced revenues associated with the smaller subscriber base. Satellite Services PanAmSat Corporation, which is approximately 81%-owned by HUGHES, generated third quarter 2003 revenues of $210 million compared with $199 million in the same period of the prior year. The increase was primarily due to additional government revenues related to PanAmSat's new G2 Satellite SolutionsT division, which was formed after the acquisition of Hughes Global Services on March 7, 2003, and an increase in network service revenues. PanAmSat's operating profit before depreciation and amortization for the quarter was $152 million compared with $145 million in the third quarter 2002. Operating profit remained relatively unchanged at $67 million in the third quarter of 2003. The increase in operating profit before depreciation and amortization was primarily due to lower bad debt expense and improved operational efficiencies. The operating profit was also impacted by higher depreciation expense primarily related to the shorter estimated useful lives of two satellites that experienced anomalies in 2003. As of September 30, 2003, PanAmSat's contracts for satellite services representing future payments (backlog) declined to approximately $4.8 billion compared to approximately $5.3 billion at the end of the second quarter of 2003 primarily due to reduced contract values related to a satellite anomaly. Network Systems HNS generated third quarter 2003 revenues of $353 million compared with $300 million in the third quarter of 2002. The 17% increase was principally due to higher revenues in the enterprise and residential DIRECWAY(R) broadband businesses, and increased sales of DIRECTV(R) receiver systems. HNS shipped 946,000 DIRECTV receiver systems in the third quarter of 2003 compared to 737,000 units in the same period last year. Additionally, as of September 30, 2003, the DIRECWAY service had approximately 178,000 residential subscribers in North America compared to 138,000 one year ago, representing an increase of approximately 29%. HNS reported operating profit before depreciation and amortization of $9 million compared to an operating loss before depreciation and amortization of $23 million in the third quarter of 2002. The operating loss in the quarter was $10 million compared to an operating loss of $43 million in the third quarter of 2002. These improvements were primarily attributable to a smaller loss in the residential DIRECWAY business due to improved efficiencies associated with the larger subscriber base, increased revenues and profit margins in the set-top box and DIRECWAY enterprise businesses, as well as a $9 million charge taken in the third quarter of 2002 related to severance costs and an inventory provision. BALANCE SHEET From December 31, 2002, to September 30, 2003, HUGHES' consolidated cash balance increased $1.50 billion to $2.63 billion and total debt increased $1.58 billion to $4.70 billion. In the third quarter, HUGHES' consolidated cash balance decreased by $558 million and debt decreased by $311 million compared to the June 30, 2003, balances. During the quarter, HUGHES generated over $100 million of cash flow (cash flows from operating activities plus cash flows from investing activities) bringing the total cash flow generated by HUGHES to approximately $400 million through September 30, 2003. Also in the quarter, HUGHES and The Boeing Company reached an agreement whereby HUGHES paid Boeing $360 million to settle the outstanding purchase price adjustment disputes arising from Boeing's October 2000 acquisition of HUGHES' satellite manufacturing operations. This payment will be reported as "Net cash used in discontinued operations" in the Condensed Consolidated Statements of Cash Flows. Additionally, PanAmSat made an optional prepayment of $350 million in the quarter under its $1.25 billion bank facility from available cash on hand. The prepayment was applied pro rata against PanAmSat's Term Loan A and Term Loan B. During 2003, DIRECTV U.S. completed several financing transactions, which included $1.40 billion of borrowings under a senior notes offering and approximately $1.23 billion of borrowings under a $1.68 billion credit facility. Approximately $2.56 billion of the proceeds from the financings were distributed to HUGHES to repay $506 million of outstanding short-term debt and to fund HUGHES' business plan through projected cash flow breakeven. Hughes Electronics Corporation is a unit of General Motors Corporation. The earnings of HUGHES are used to calculate the earnings attributable to the General Motors Class H common stock (NYSE: GMH). * * * As reported in Troubled Company Reporter's April 11, 2003 edition, Standard & Poor's Ratings Services revised its CreditWatch listing on Hughes Electronics Corp. and related entities to positive from developing following the company's announcement that News Corp. Ltd., (BBB-/Stable/--) will acquire 34% of the company. The ratings had been on CreditWatch developing, reflecting uncertainty regarding Hughes' future ownership. Following a review of Hughes' operating and financial prospects under its new ownership structure, a ratings upgrade could occur once the deal is completed. However, the magnitude of a potential upgrade may be constrained in light of News Corp.'s minority stake. Ratings List: To From Hughes Electronics Corp. Corporate credit B+/Watch Pos/-- B+/Watch Dev/-- DirecTV Holdings LLC Senior secured debt BB-/Watch Pos/-- Senior unsecured debt B/Watch Pos/-- PanAmSat Corp. Corporate credit B+/Watch Pos/-- B+/Watch Dev/-- Senior secured debt BB-/Watch Pos/-- BB-/Watch Dev/-- Senior unsecured debt B-/Watch Pos/-- B-/Watch Dev- IMAGING TECHNOLOGIES: Delays Form 10-K Filing By One Week --------------------------------------------------------- Imaging Technologies Corporation (OTC Bulletin Board: IMTO) announced that will file its Form 10-K for the year ended June 30, 2003 during the week of October 20, 2003 -- approximately one week late. Investors and shareholders are advised that it is likely that the Company's trading symbol on the NASD Electronic Bulletin Board will have an "e" designation due to the late filing. "The delay in issuing our Annual Report on Form 10-K is due to recent changes in our independent accountants," said Brian Bonar, ITEC Chairman and CEO. "ITEC's current independent accountants, appointed in September, expect to complete their work within the next week. However, the Company's prior auditors must also review the document, prior to its filing with the SEC," he explained. SEC requirements require the Form 10-K to be reviewed by independent accountants for three years (current plus two prior years). ITEC's 10-K will undergo review from the three independent accounting firms that have served ITEC over the past several years. As reported in ITEC's filing for the extension to file this Form 10-K, the Company anticipates that it will report lower gross revenues for the year ended June 30, 2003 as compared with the prior year because of lower product sales related to changes in business strategy. Revenues are estimated to be $4 million, most of which was realized in the 4th quarter. The Company also anticipates a substantial reduction in its net loss as compared to the prior year period. The Company expects to report a net loss of less than $5 million compared to a prior year loss of $13.7 million. About Imaging Technologies Corp. 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. ITEC's SourceOne and EnStructure subsidiaries are professional employer organizations that provide a variety of personnel and human resources services to small- to medium-sized businesses. The Company owns controlling interest in Quik Pix, Inc. (Pink Sheets: QPIX), a leading visual marketing support firm located in Buena Park, California. The company's patented PhotoMotion(TM) is a unique color medium of multi-image transparencies. The process uses existing originals to create the illusion of movement, and allows for three to five distinct images to be displayed with an existing lightbox. ITEC's imaging products include its proprietary suite of software applications -- ColorBlind(R) -- which is devoted to color management for desktop and commercial printing and graphic arts. The Company owns a controlling interest in Greenland Corporation. Greenland's ExpertHR subsidiary provides professional employer services (PEO) to niche markets. Greenland's Check Central subsidiary is an information technology company that has developed the Check Central Solutions' transaction processing system software and related MAXcash(TM) Automated Banking Machine(TM) (ABM(TM)) kiosk designed to provide self-service check cashing and ATM-banking functionality. Greenland's common stock trades on the OTC Bulletin Board under the symbol GRLC. Information on the Company and its subsidiaries is available at the ITEC Web site at http://www.itec.net * * * As reported in the Troubled Company Reporter's September 17, 2003 edition, 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. IMAX CORP: S&P Ups Corp. Credit Rating to CCC+ & Outlook Positive ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on IMAX Corp. to 'CCC+' from 'CCC' and removed the rating from CreditWatch due to IMAX's stabilizing operating results and reduced risk of near-term default. The outlook is positive. The New York, New York-headquartered firm has about $170 million in debt. "The ratings reflect the limited size and uncertain long-term growth potential of IMAX's niche market, and the company's still high debt leverage, weak operating results, and thin liquidity," said Standard & Poor's credit analyst Steve Wilkinson. He added, "The ratings also consider IMAX's position as the dominant provider of giant screen projection, camera, and sound systems; the recurring revenue provided by the installed base of about 237 leased IMAX theater systems; and a measure of near-term earnings visibility provided by the company's backlog of pending system installations." IMAX's operating results improved in 2002 and appear to have stabilized due to: restructuring actions to reduce its costs; a modest rebound in lease signings and system installations; the disposal of its unprofitable and cash consuming DPI subsidiary in 2001; and the relative success of certain films on its circuit, including some mainstream offerings. System signings and installations are expected to increase somewhat in 2003, but remain well below the levels achieved in 1999. IMAX's risk of near-term default has been significantly reduced, largely because it was able to repurchase about 90% of its April 2003 debt maturities at a substantial discount in privately negotiated transactions. The company has since retired $30 million debt by exchanging these notes, at approximately par value, for common stock. In total, IMAX has reduced its debt by 43% during the past two years. IMAX's continued focus on debt reduction is important because leverage remains high at almost 7x and discretionary cash flow is only narrowly positive. IMAX does not have any debt maturities until Dec. 1, 2005. IMMUNE RESPONSE: Commences Private Offering to Raise $12 Mil. ------------------------------------------------------------- The Immune Response Corporation (Nasdaq: IMNR) announced that it has entered into agreements to sell through a private placement approximately 6.0 million shares of common stock at $2.02 per share to a number of unaffiliated institutional investors, for approximately $12 million in gross proceeds. Investors will also receive five-year warrants to purchase an aggregate of approximately 3 million shares of common stock at $3.32 per share. Proceeds from the financing are expected to be used to fund the Company's ongoing activities with REMUNE(R), an immune-based therapeutic vaccine being evaluated in Phase II clinical studies for treatment of HIV, the virus that causes AIDS, as well as the Company's program to develop a new HIV vaccine candidate with broader therapeutic and prophylactic properties. Rodman & Renshaw, Inc. served as the exclusive placement agents for the transaction. The offering was made to accredited investors only. About The Immune Response Corporation and REMUNE(R) The Immune Response Corporation is a biopharmaceutical company dedicated to treating and preventing HIV and AIDS through the development of immune-based therapeutic vaccines such as REMUNE, its lead product candidate. The Company was co-founded by medical pioneer Dr. Jonas Salk, who was instrumental in the formulation of REMUNE, which is currently in Phase II clinical development. HIV, the human immunodeficiency virus, is the virus that causes AIDS, a condition that slowly destroys the body's immune system, making it vulnerable to infections. REMUNE is designed to induce a specific immune response to the HIV virus. It is comprised of HIV-1 virus that has been chemically killed and inactivated so that it is non-infectious, plus an adjuvant that helps enhance the body's immune response to the virus. More than 60 million people have been infected with HIV since it was first recognized in 1981, and approximately 40 million people around the world are living with HIV today. * * * Liquidity and Going Concern In its Form 10-Q filed with the Securities and Exchange Commission, the Company reported: "The consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has operating and liquidity concerns due to historically reporting significant net losses and negative cash flows from operations. As of March 31, 2003 and December 31, 2002, the Company had a working capital deficiency of $2.4 million and working capital of $1.0 million, respectivley, and an accumulated deficit of $263.0 million and $257.8 million, respectively. "On March 28, 2003, we issued to Cheshire Associates, an affiliate of one of our directors and principal stockholder, Mr. Kevin Kimberlin, a short-term convertible promissory note in the amount of $2.0 million, bearing interest at the rate of 8% per annum. We anticipate that the proceeds from the issuance of the March Note will be sufficient to fund our planned operations, excluding capital improvements and new clinical trial costs, only through May 2003. The March Note is convertible into either 1,626,016 shares of our common stock at a price of $1.23 per share (which was the closing price of our common stock on March 27, 2003) or an equal amount of such other securities that the Company may offer in the future by means of a private placement to 'accredited investors.' On May 15, 2003, we issued to Cheshire Associates, an affiliate of one of our directors and principal stockholder, Mr. Kevin Kimberlin, a short-term convertible promissory note in the amount of $1.0 million, bearing interest at the rate of 8% per annum. We anticipate that the proceeds from the issuance of the May Note will be sufficient to fund our planned operations, excluding capital improvements and new clinical trial costs, only into early June 2003. The May Note has a convertible feature still to be determined in good faith negotiation prior to the 120-day maturity. "Notwithstanding the issuances of the March and May Notes, we will continue to have limited cash resources. Although our management recognizes the imminent need to secure additional financing and currently is negotiating with certain third parties the terms and conditions of potential financing transactions, including the private placement transaction described in the immediately preceding paragraph, there can be no assurance that we will be successful in consummating any such transaction or, if we do consummate such a transaction, that the terms and conditions of such financing will not be unfavorable to us. The failure by us to obtain additional financing before early June 2003, will have a material adverse effect on us and likely result in our inability to continue as a going concern. As a result, our independent auditors have concluded that there is substantial doubt as to our ability to continue as a going concern for a reasonable period of time, and have modified their report in the form of an explanatory paragraph describing the events that have given rise to this uncertainty regarding our 2002 annual consolidated financial statements. "These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern." IMPATH INC: Retains Asante Partners as Investment Advisors ---------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York gave its stamp of approval to retain Asante Partners LLC as investment advisors of Impath Inc., and its debtor-affiliates. The Debtors have selected Asante Partners as their investment advisors because of Asante Partner's vast experience in providing investment banking and strategic advisory services to leading companies throughout the healthcare industry, with particular expertise in mergers and private equity financings. Asante Partners is engaged in virtually all sectors of the healthcare industry and possesses expertise in multiple niche markets relevant to the Debtors' businesses, including pharmaceuticals, medical technology, devices, biotechnology, drug delivery systems, services, information technology and diagnostics. Asante Partner's focus on healthcare has enabled it to develop significant industry relationships, which will enable Asante Partner's professionals to better calibrate transaction strategies for the Debtors. In this retention, Asante Partners will: i) advice and services related to market positioning; ii) identification and analysis of the optimal buyer universe, process and timing of a transaction; iii) preparation of an information memorandum; iv) development of management presentations; v) general market and industry analyses; and vi) preparation and analyses of other related materials. In return of the services rendered, Asante Partners will be compensated with: a) a Strategic Evaluation Fee of $25,000; b) a Transaction Fee of $600,000, plus 2% of any consideration above $25 million received or to be received in connection with the Transaction. S. Jennifer Lloyd, managing member and Managing Director of Asant, Partners adds that the Debtors also agree to reimburse them of the necessary out-of-pocket expenses they have incurred while undertaking their tasks as investment advisors. Headquartered in New York, New York, Impath Inc., together with its subsidiaries, is in the business of improving outcomes for cancer patients by providing patient-specific diagnostic and prognostic services to pathologists and oncologists, providing products and services to biotechnology and pharmaceutical companies, and licensing software to hospitals, laboratories, and academic medical centers. The Company filed for chapter 11 protection on September 28, 2003 (Bankr. S.D.N.Y. Case No. 03- 16113). George A. Davis, Esq., at Weil, Gotshal & Manges, LLP represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $192,883,742 in total assets and $127,335,423 in total debts. INSITE VISION: AMEX Accepts Continued Listing Plan -------------------------------------------------- InSite Vision Incorporated (Amex: ISV) -- an ophthalmic therapeutics, diagnostics and drug- delivery company -- announced that as of October 7, 2003 the American Stock Exchange (AMEX) accepted the Company's plan to regain compliance with the AMEX's continued listing standards, and subject to certain conditions, will continue InSite Vision's listing until December 19, 2004. On June 19, 2003, InSite Vision received notice from the AMEX staff indicating that the Company was below certain of the Exchange's continued listing standards. Specifically, the Company does not meet Section 1003(a)(i) as it has shareholders' equity of less than $2,000,000 and losses from continuing operations in two of its three most recent fiscal years; Section 1003 (a)(ii) as it has shareholders' equity of less than $4,000,000 and losses from continuing operations in three of its four most recent fiscal years; and Section 1003(a)(iv) of the AMEX "Company Guide." The Company was afforded the opportunity to submit a plan of compliance to the AMEX. InSite Vision submitted a plan to the Exchange on July 21, 2003 and a subsequent amendment on September 19, 2003. InSite Vision will be subject to periodic review by AMEX staff during the extension period. Failure to make progress consistent with the plan or to regain compliance with the continued listing standards by the end of the extension period could result in the Company being delisted from the AMEX. InSite Vision, whose March 31, 2003 balance sheet shows a total shareholders' equity deficit of about $700,000, is an ophthalmic products company focused on glaucoma, ocular infections and retinal diseases. In the area of glaucoma, the Company conducts genomic research using TIGR and other genes. A portion of this research has been incorporated into the Company's OcuGene(R) glaucoma genetic test for disease management, as well as ISV-205, its novel glaucoma therapeutic. ISV-205 uses InSite Vision's proprietary DuraSite(R) drug- delivery technology, which also is incorporated into the ocular infection products ISV-401 and ISV- 403, and InSite Vision's retinal disease program. Additional information can be found at http://www.insitevision.com INTEGRATED HEALTH: IHS Liquidating Asks for Lease Time Extension ---------------------------------------------------------------- Over the course of these Chapter 11 cases, Integrated Health Services, Inc., and its debtor-affiliates obtained Court orders rejecting certain Unexpired Leases, assuming certain Unexpired Leases and assuming and assigning certain other Unexpired Leases to third parties. In connection with the Plan, the Debtors sought and obtained the Court's authority to assume certain Unexpired Leases, subject to and conditioned upon the occurrence of the Effective Date under the Plan. With respect to all Unexpired Leases which were not previously assumed or rejected or are not the subject of a motion to assume or reject pending on the Effective Date, the Plan provides for the "deemed" rejection of those Unexpired Leases upon the occurrence of the Effective Date. As there are still certain pending motions related to the assumption of certain Unexpired Leases, IHS Liquidating LLC asks the Court to extend the lease decision period to December 1, 2003 to ensure that the pending motions may be prosecuted to completion. The primary purposes of the Liquidating LLC are to liquidate the Excluded Assets and Excluded Liabilities and make distributions to creditors pursuant to the Plan. According to Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, the requested extension will promote the Debtors' ability to orderly and effectively finalize the lease assumption process. The Court will convene a hearing on November 4, 2003 to consider the IHS Liquidating's request. By application of Del.Bankr.LR 9006-2, the lease decision period is automatically extended through the conclusion of that hearing. (Integrated Health Bankruptcy News, Issue No. 65; Bankruptcy Creditors' Service, Inc., 609/392-0900) INTERDENT: Equity Extinguished & SEC Reporting Terminates --------------------------------------------------------- On the Effective Date of the reorganization of Interdent, Inc., all of the Company's existing equity was extinguished and, as a result, the Company experienced a reduction in the number of shareholders of the Company's common stock to below 300. The Company has made the appropriate filings with the Securities and Exchange Commission to terminate its filing obligations under the Securities Exchange Act of 1934, as amended. INTERNET CAPITAL: Nasdaq Grants Continued Listing Status -------------------------------------------------------- Internet Capital Group, Inc. (Nasdaq: ICGE) announced its receipt of notice from the Nasdaq Stock Market regarding the continuation of its listing status on the Nasdaq SmallCap Market. Based upon the Company's compliance with all SmallCap Market initial listing standards (other than the minimum bid price requirement), the Nasdaq Listing Qualifications Panel has granted ICG an exception to the bid price requirement through December 1, 2003, to allow for further developments in the SEC rulemaking process. Pursuant to the terms of the amended rule change proposal described below, the Panel also indicated its potential willingness to further extend the Company's exception to no later than April 24, 2004, if the Company has not regained compliance by December 1, 2003. Nonetheless, the Panel has indicated that it will revisit ICG's exception upon the SEC's adoption, amendment, or rejection of the rule change proposal. This decision by the Panel reflects the amended rule change proposal submitted by the Nasdaq to the SEC on September 25, 2003. Under the new rule change, SmallCap Market issuers may be afforded two 180-day "grace periods" to remedy a minimum bid price deficiency. Upon expiration of the two 180-day "grace periods," a SmallCap issuer would then be eligible for a third compliance period, up to its next annual meeting (but no later than two years from the initial notice of bid price deficiency), provided it met all of the SmallCap Market's initial listing requirements, other than bid price, and provided the issuer "commits to seek shareholder approval for a reverse stock split to address the bid price deficiency at or before its next annual meeting, and to promptly thereafter effect the reverse stock split; and the shareholder meeting to seek such approval is scheduled to occur no later than two years from the original notification of bid price deficiency." At June 30, 2003, the Company's balance sheet shows a total shareholders' equity deficit of about $93 million, as compared to a deficit of about $52 million six months ago. Internet Capital Group, Inc. -- http://www.internetcapital.com-- is an information technology company actively engaged in delivering software solutions and services designed to enhance business operations by increasing efficiency, reducing costs and improving sales results. ICG operates through a network of partner companies that deliver these solutions to customers. To help drive partner company progress, ICG provides operational assistance, capital support, industry expertise, access to operational best practices, and a strategic network of business relationships. Internet Capital Group is headquartered in Wayne, Pa. I-STAT CORPORATION: 3rd Quarter Conference Call Set for Oct. 23 --------------------------------------------------------------- i-STAT Corporation (Nasdaq: STAT) announces the following Webcast: What: i-STAT Corporation 3rd Quarter Conference Call When: October 23, 2003 @ 10:30 a.m. Eastern Where: http://www.firstcallevents.com/service/ajwz390986118gf12.html How: Live over the Internet -- Simply log on to the web at the address above. Contact: Jeff Randall, Chief Financial Officer, (609) 469-0205, jeff.randall@i-stat.com, Fax: (609) 443-9310 If you are unable to participate during the live webcast, the call will be archived at http://www.i-stat.com i-STAT Corporation, whose June 30, 2003 balance sheet shows a total shareholders' equity deficit of about $33 million, develops, manufactures and markets diagnostic products for blood analysis that provide health care professionals critical diagnostic information accurately and immediately at the point of patient care. Through the use of advanced semiconductor manufacturing technology, established principles of electrochemistry and state- of-the-art computer electronics, i-STAT developed the world's first hand-held automated blood analyzer capable of performing a panel of commonly ordered blood tests on two or three drops of blood, generally in just two to three minutes at the patient's side. As of June 30, 2003, i-STAT had approximately $29.2 million in cash, cash equivalents and total marketable securities, an increase of $2.1 million over the balance on December 31, 2002. During the first half of 2003, the Company recorded net cash provided by operating activities of $3.2 million, $2.0 million of which can be attributed to a marketing support payment received from the Company's Japanese marketing partner, FUSO Pharmaceuticals, Ltd. KAISER: Seeks to Further Extend Removal Period to May 12, 2004 -------------------------------------------------------------- The Kaiser Aluminum Debtors ask the Court to further extend their deadline to remove pending actions pursuant to Section 1452 of the Judiciary Procedures Code and Rule 9027 of the Federal Rules of Bankruptcy Procedure to the later of: -- May 12, 2004, or -- 30 days after an order is entered terminating the automatic stay with respect to a particular action sought to be removed. Kaiser Aluminum & Chemical Corporation has been named as a defendant in a significant number of product liability lawsuits relating to asbestos. As of the Petition Date, the other Debtors were also parties to other non-asbestos related civil actions pending in multiple courts and tribunals. Due to the number of Actions involved and the complex nature of the Actions, the Debtors assert that they require more time to determine which, if any, of the Actions should be removed and, if appropriate, transferred to the District Court. The Debtors maintain that the requested extension will protect their valuable right to economically adjudicate the lawsuits if the circumstances warrant removal. Absent an extension of the Removal Deadline, Kimberly D. Newmarch, Esq., at Richards, Layton & Finger, in Wilmington, Delaware, explains that the potential consolidation of the Debtors' affairs into one court may be frustrated and the Debtors may be forced to address these claims and proceedings in a piecemeal fashion to the detriment of their creditors. Ms. Newmarch assures the Court that the affected plaintiffs will not be prejudiced with the requested extension because the plaintiffs may not prosecute the Actions absent the lifting of the automatic stay. Judge Fitzgerald will convene a hearing on November 17, 2003 at 3:00 p.m. to consider the Debtors' request. By application of Del.Bankr.LR 9006-2, the removal period is automatically extended through the conclusion of that hearing. (Kaiser Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service, Inc., 609/392-0900) LEAP WIRELESS: Panel Assigns U.S. Bank as Leap Creditor Trustee --------------------------------------------------------------- Pursuant to the Leap Wireless Debtors' Fifth Amended Joint Plan, the Official Committee of Unsecured Creditors designates U.S. Bank National Association in Las Vegas, Nevada as the Leap Creditor Trust Trustee. The Committee reserves its right to supplement and amend the Designation as appropriate in accordance with the Federal Rules of Bankruptcy Procedure and the Plan. (Leap Wireless Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., 609/392-0900) LNR PROPERTY: Offering $275+ Million of New Senior Sub. Debt ------------------------------------------------------------ LNR Property Corporation (NYSE: LNR) announced that it expects to offer at least $275 million of new ten year Senior subordinated Notes to qualified institutional buyers in transactions that are exempt from the registration requirements of the Securities Act of 1933 under SEC Rule 144A, or outside the United States in accordance with SEC Regulation S. LNR also announced that it expects to launch a tender offer for all of its outstanding 10 1/2% Senior Subordinated Notes due 2009, and to use at least a portion of the proceeds from the sale of the new Senior Subordinated Notes to pay for the tendered 10 1/2% Notes. The terms and conditions of the tender offer will be announced at a later time and will be contained in an offer to purchase. The tender offer will be conditioned upon completion of the new Note offering. LNR's 10 1/2% Notes first become redeemable on January 15, 2004. LNR expects to redeem on that day all of the 10 1/2% Notes that remain outstanding. However, LNR is seeking to acquire as many as possible of the 10 1/2% Notes before then, in order to minimize interest costs. LNR will use a portion of the proceeds from the sale of the new Notes to pay the redemption price of the 10 1/2% Notes that are still outstanding on January 15, 2004. Because the new Notes will not be registered under the Securities Act of 1933, they may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of that Act. However, LNR anticipates that at a future date it will register substantially identical Notes under the Securities Act, and will offer to exchange registered Notes for the Notes it offers under Rule 144A and Regulation S. LNR Property Corporation (S&P, BB+ and BB- Debt Ratings, Stable Outlook) is a real estate investment, finance and management company. MCI/WORLDCOM: Issues August 2003 Monthly Operating Results ---------------------------------------------------------- MCI (WCOEQ, MCWEQ) filed its August 2003 monthly operating report with the U.S. Bankruptcy Court for the Southern District of New York. During the month of August, MCI recorded $2.010 billion in revenue versus $2.116 billion in July 2003. Revenue results were driven by fewer billed business days, declines in long- distance volume and by the effect of termination settlement gains recognized in July. Operating income in August was $138 million versus $197 million in July. The decrease in operating income was due primarily to fewer billed business days in August, and by an increase in SG&A expenses associated with outside services for the restatement and audit efforts. The Company had net income in August of $132 million compared to net income of $207 million in July. This decrease was due to the decrease in operating income and an increase in reorganization expenses associated with contract rejections and creditor settlements. August reorganization items were $143 million versus $30 million in July. 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 August, MCI recorded capital expenditures of $52 million. MCI ended August with $5.3 billion in cash on hand, an increase of approximately $600 million from the beginning of the month. "August demonstrated another month of strong network performance levels and customer service support," said Bob Blakely, MCI chief financial officer. "Our cash balances continued to grow and we continued to make substantial progress on our financial audit and restatements projects." The financial results discussed in the August 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. About WorldCom, Inc. 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. MCI/WORLDCOM: Names Nancy Higgins as Chief Ethics Officer --------------------------------------------------------- MCI (WCOEQ, MCWEQ) announced the appointment of Nancy Higgins as executive vice president of Ethics and Business Conduct and Chief Ethics Officer reporting to Chairman and CEO Michael Capellas. Higgins most recently served as vice president, Ethics and Business Conduct for Lockheed Martin. She will oversee MCI's global ethics program and will be based in the company's corporate headquarters in Ashburn, Va. "Nancy brings a rare combination of direct experience in developing and overseeing large-scale ethics programs, a proven 10-year track record for creating best practices and, most importantly, an absolute passion for the job," said Capellas. "MCI strives to be a model of good corporate governance with best-in- class ethics compliance. We are thrilled to welcome Nancy as the latest addition to MCI's new executive leadership team." MCI has taken significant steps to build a culture centered on ethics and integrity, including: * Ethics Training for MCI's 55,000 U.S.-based employees and contractors conducted in conjunction with New York University and the University of Virginia * The Company's Code of Ethics & Business Conduct, enhanced and distributed to all employees * A "Zero-Tolerance Policy" dictating that any suspected violation of MCI's Code of Ethics and Business Conduct will be fully investigated and dealt with immediately * A confidential Ethics Hotline that allows employees to raise ethics or business conduct concerns * An Ethics Pledge signed by the company's top 100 executives committing to uphold the highest standards of ethics and integrity, as well as transparency in financial reporting * A new set of 10 "Guiding Principles" designed to serve as the foundation for MCI's environment of ethical conduct and corporate transparency "I'm proud to have the opportunity to play a key role in the development and implementation of MCI's ethics and corporate governance initiatives," said Higgins. "I have spent a significant portion of my professional career designing and implementing ethics programs and I look forward to building on the solid foundation already put in place by MCI's new management team." During her tenure at Lockheed Martin, Higgins was credited with revitalizing an established business ethics program, including enhancements to meet new requirements of Sarbanes-Oxley and SEC rules. Prior to that, Higgins was a senior corporate attorney with The Boeing Company, where she managed complex litigation, conducted major internal investigations, counseled the Board of Directors on special litigation matters, provided legal support to the company ethics and self-governance functions, and served as director of Corporate Ethics Policy. She headed Boeing's first company-wide Ethics and Business Conduct organization, which had a charter to develop a values-based ethics and compliance oversight program. Higgins also designed the ethics program for the new company formed from Boeing's acquisition of McDonnell Douglas in 1997. Higgins received her bachelors degree from Western Washington State University, graduating with honors in 1973. She earned her law degree in 1976 from the University of Washington School of Law. Higgins also successfully completed an Advanced Management Programme in 1998 from INSEAD, the international business school in Fontainebleau, France. About WorldCom, Inc. 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. MERCURY AIR: Needs More Time to Complete Annual Report ------------------------------------------------------ Mercury Air Group, Inc. (Amex: MAX; PCX) announced that it has informed the American Stock Exchange that the Company will delay the filing of its Annual Report on Form 10-K for its fiscal year ended June 30, 2003. The Company and its new auditors, PricewaterhouseCoopers, LLP, (PWC) have not yet completed the audit and preparation of the Company's financial statements for the fiscal year. The Company does not believe that the continuing audit indicates any underlying weaknesses in the Company's financial condition or prospects. On September 30, 2003, the Company filed with the Securities and Exchange Commission (SEC) a Notification of Late Filing on Form 12B-25 in which the Company said it would file its Annual Report on Form 10-K for fiscal year 2003 by October 14, 2003 after completion of a review related to a proposed retroactive rent increase for one of the Company's warehouse facilities located at the Los Angeles International Airport and the related accounting and disclosures surrounding that increase. Although the review of that issue has been satisfactorily resolved, PWC and the Company require additional time to review other financial reporting issues. The Company is reviewing its accounting related to the December 31, 2001 sale-leaseback transaction for its Los Angeles corporate headquarters building with CFK Realty Partners, LLC (CFK Realty), a wholly owned subsidiary of CFK Partners, the Company's largest shareholder. If the accounting treatment is revised, the Company may be required to consolidate CFK Realty's financial statements with its own, resulting in reporting the Company's original net book value of the land and building as an asset of the Company and the mortgage on the property being treated as debt of the Company. The Company and PWC have not completed their review of the issue. As a result of not filing audited financial statements with the SEC, the Company will be in default under its credit arrangements. The Company has informed its lenders of the default. The Company does not believe the default will have any immediate impact on its liquidity or capital resources. On October 15, 2003, the Company plans to file with the SEC a Form 8-K, providing additional financial information l regarding the effects of the possible change in the accounting treatment for the 2001 sale-leaseback transaction. About Mercury Air Group Los Angeles-based Mercury Air Group (Amex: MAX; PCX) provides aviation petroleum products, air cargo services and transportation, and support services for international and domestic commercial airlines, general and government aircraft and specialized contract services for the United States government. Mercury Air Group operates four business segments worldwide: Mercury Air Centers, Inc., MercFuel, Inc., Maytag Aircraft Corporation and Mercury Air Cargo, Inc. For more information, please visit http://www.mercuryairgroup.com METALDYNE CORP: Offering $100 Million of Senior Notes Due 2013 -------------------------------------------------------------- Metaldyne Corporation announced that it intends to offer $100 million of senior notes due 2013. The senior notes will be guaranteed on a senior basis by each of Metaldyne Corporation's domestic subsidiaries that is a guarantor or direct borrower under their credit facility. The net proceeds from the senior notes offering are anticipated to be used, along with additional cash on hand, to repay the balance of $98.5 million aggregate principal amount of Metaldyne's outstanding 4.5% subordinated debentures due 2003. The senior notes will be offered in a private offering to qualified institutional buyers under Rule 144A and to persons outside the United States under Regulation S. The senior notes will not be registered under the Securities Act of 1933, as amended, and unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. Metaldyne is a leading global designer and supplier of metal-based components, assemblies and modules for transportation-related powertrain and chassis applications including engine, transmission/transfer case, wheel-end and suspension, axle and driveline, and noise and vibration control products to the motor vehicle industry. The company serves the automotive segment through its Chassis, Driveline & Transmission, and Engine Group. Headquartered in Plymouth, Mich., Metaldyne (S&P, BB- Corporate Credit Rating) has annual revenues of $1.5 billion. The company employs over 7,250 employees at over 50 facilities in 11 countries. For more information, please visit http://www.metaldyne.com MIRANT: FERC & Potomac Want District Court to Hear Arguments ------------------------------------------------------------ The Federal Energy Regulatory Commission and Potomac Electric Power Company ask the United States District Court for the Northern District of Texas to: (a) withdraw the reference to the Bankruptcy Court of the Adversary Proceeding the Mirant Corp. Debtors filed against them in the Bankruptcy Court; and (b) withdraw the reference to the Bankruptcy Court of the Motion to Reject the "Back-to-Back" Agreement with PEPCO. Andrea L. Niedermeyer, Esq., at Stutzman Bromberg Esserman & Plifka PC, in Dallas, Texas, notes that the Adversary Proceeding and the Rejection Motion require consideration of both the Bankruptcy Code and of the Federal Energy Regulatory Commission's jurisdiction under the Federal Power Act. As a result, the reference must be withdrawn. The U.S. District Court for the Northern District of Texas has previously established that standards for consideration of a motion to withdraw. In United States Gypsum Co. v. National Gypsum Co. (In re National Gypsum Co.), 145 B.R. 539, 541-42 (N.D. Tex. 1992), "the Court held that withdrawal of the reference is mandatory under the second sentence of Section 157(d) [of the Judiciary Procedures Code] when (1) the proceeding involves a substantial and material consideration of both the Bankruptcy Code and non-Bankruptcy Code federal law; (2) the non- Bankruptcy Code federal law has more than a de minimis effect on interstate commerce; and (3) the motion for withdrawal of the reference is timely filed. Ms. Niedermeyer contends that the three criteria for withdrawal are satisfied: (1) Resolution of both the Adversary Proceeding and the Rejection Motion involves consideration of both the Debtors' request for authority to reject an executory contract, a question under Section 365 of the Bankruptcy Code, and FERC's jurisdiction over agreements for the sale of electric energy at wholesale in interstate commerce, a question arising under the Federal Power Act; (2) The Federal Power Act and FERC's jurisdiction necessarily will have more than a de minimis effect on interstate commerce in this case. The Debtors already contend that the arrangements at issue are substantial, and can hardly be said to have a de minimis impact on the affected parties, including the Debtors, PEPCO, which serves the electric customers in Maryland and the District of Columbia, and FERC; and (3) The request to withdraw the reference is timely; it was filed within eight days after the Adversary Proceeding and the Rejection Motion were filed. (Mirant Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc., 609/392- 0900) MITEC: Completes Sale/Leaseback Agreement for Montreal Facility --------------------------------------------------------------- Mitec Telecom Inc. (TSX: MTM) announced that it has concluded the sale/leaseback agreement for its real estate asset located at 9000 Trans Canada Highway in Montreal. The facility, which houses the Company's primary manufacturing center, was purchased by 2946- 8980 Quebec Inc., a subsidiary of Hydro-Quebec's pension fund for gross proceeds of $6.9 million. Of that total, $3.3 million was paid in cash. The balance will be realized in the form of free rent for a period of five years. "This agreement marks another significant step in our drive to dramatically reduce Mitec's debt obligations. The proceeds of the sale/leaseback will allow us to pay our Sun Life Financial (Clarica) debt in its entirety, and the balance will be used to accelerate the reduction of our term debt with CIBC," said Keith Findlay, Mitec's Executive Vice President, Finance and Chief Financial Officer. Mitec Telecom, whose July 31, 2003 balance sheet shows a working capital deficit of about CDN$1.6 million, is a leading designer and provider of products for the telecommunications sector as well as a variety of other industries. The Company sells its products worldwide to network providers for incorporation into high- performing wireless networks used in voice and data/Internet communications. Additionally, the Company provides value-added services from design to final assembly and maintains test facilities covering a range from DC to 60 GHz. Headquartered in Montreal, Canada, the Company also operates facilities in the United States, the United Kingdom and China. Mitec Telecom Inc. is listed on the Toronto Stock Exchange under the symbol MTM. On-line information about Mitec is available at mitectelecom.com . MORGAN STANLEY: Fitch Ups Ratings on Ser. 1999-WF1 Note Classes --------------------------------------------------------------- Fitch Ratings upgrades Morgan Stanley Capital I Inc.'s commercial mortgage backed securities, series 1999-WF1, as follows: -- $48.4 million class B to 'AAA' from 'AA'; -- $43.6 million class C to 'AA' from 'A'; -- $9.7 million class D 'A+' from 'A-'; -- $29.1 million class E to 'A' from 'BBB'; -- $16.9 million class F to 'BBB+' from 'BBB-'; -- $9.7 million class G to 'BBB' from 'BB+'; -- $19.4 million class H to 'BB+' from 'BB'; -- $7.3 million class J to 'BB' from 'BB-'. In addition, Fitch affirms the following classes: -- $164.7 million class A-1 'AAA'; -- $476.8 million class A-2 'AAA'; -- Interest only class X 'AAA'. Fitch does not rate classes K through O. The upgrades reflect the continued strong performance of the pool and the 11% reduction in collateral balance since issuance. Wells Fargo, as master servicer, collected year-end 2002 operating statements for 82% of the pool by balance. For those loans the weighted average DSCR is 1.91 times, an increase from 1.63x at issuance. One loan (0.11%) is 90 days delinquent and in special servicing. The loan transferred to special servicing due to monetary default and is expected to be resolved through a note sale. Fitch will continue to monitor this transaction, as surveillance is ongoing. NALCO CO.: S&P Assigns BB- Corporate Credit Rating -------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' corporate credit rating to Naperville, Illinois-based Nalco Co. At the same time, Standard & Poor's assigned its 'B' rating to both the company's proposed $900 million of senior notes due 2011 and $900 million of senior subordinated notes due 2013. In addition, a 'BB' rating is assigned to a planned $1.65 billion of senior secured credit facilities. The outlook is stable. The overall creditworthiness of Nalco Co. reflects a strong competitive position in water treatment and process chemicals, solid operating margins, and stable cash flows, overshadowed by very aggressive debt leverage. "During the next several years, management is expected to use virtually all discretionary cash generation for debt reduction, thus aiding the necessary strengthening of key financial ratios to appropriate levels for the initial ratings," said Standard & Poor's credit analyst Wesley E. Chinn. Nalco's credit quality reflects its position as a global leader in providing water treatment and process improvement services, chemicals and equipment programs for industrial and institutional applications. It is focused on value-added offerings that are technology- and service-intensive, and a well-established, defensible business position underpins a solid track record of revenues and operating profitability. Even when key end markets experience cyclical downturns, overall operating margins do not falter significantly, indicating the resilience of this specialty chemicals business. On the other hand, revenue and earnings prospects are tempered by the maturity of certain markets, such as the water management services and paper industry in North America, and energy services in North America and Western Europe. NAT'L CENTURY: Poulsen, et al., Want $17 Million Sequestered ------------------------------------------------------------ Phillip J. Jones, Esq., at Wilkins, Frohlich, Jones, Hevia, Russell & Sutter, in Port Charlotte, Florida, recounts that Lance Poulsen had an employment contract with the National Century Debtors where he was employed to be Chairman and President of National Century Financial Enterprises, Inc. In 1995, to induce Mr. Poulsen, as well as other key employees, to remain as their employees, the Debtors created a separate and distinct fund for the payment of certain incentives and obligations to Mr. Poulsen and the other key employees. In July 2002, to fund the payment of the incentives and obligations, the Debtors sold 1,325 shares of Series B Preferred Stock raising $17,000,000. The funds were placed in a segregated account with Huntington National Bank to be maintained by the Debtors solely for the benefit of Mr. Poulsen and other key employees. However, since the Petition Date, the Debtors claimed these funds to be assets of the corporation. Accordingly, Mr. Poulsen asks the Court to enter a declaratory judgment declaring that the funds are not assets of the Debtors but merely being held by the Debtors for the benefit of Mr. Poulsen and others. (National Century Bankruptcy News, Issue No. 24; Bankruptcy Creditors' Service, Inc., 609/392-0900) NATIONAL EQUIPMENT: Prepetition Claims Bar Date Set for Oct. 20 --------------------------------------------------------------- Creditors holding prepetition claims against National Equipment Services, Inc., and its debtor-affiliates are directed by the U.S. Bankruptcy Court for the Northern District of Illinois to file their proofs of claim against the Debtors on or before October 20, 2003, or be forever barred from asserting their claims. All proof of claim forms should be filed with the Debtors' Claims Agent, Kurtzman Carson Consultants LLC, before 5:00 p.m. (Central Time) on Oct. 20. Claim forms must be delivered to: NES Claims Processing c/o Kurtzman Carson Consultants LLC 5301 Beethoven Street, Suite 102 Los Angeles, CA 90066 National Equipment Services, headquartered in Evanston, Illinois, rents specialty and general equipment to industrial and construction end users. The Company filed for chapter 11 protection on June 27, 2003 (Bankr. N.D. Ill. Case No. 03-27626). James A. Stempel, Esq., at Kirkland & Ellis, represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed debts and assets of over $100 million each. NEW CENTURY: Long-Term Counterparty Credit Gets S&P's BB- Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its long-term counterparty credit rating of 'BB-' to Irvine, California-based New Century Financial Corp. Concurrently, a 'B+' senior unsecured debt rating was assigned to New Century's $210 million convertible senior notes due 2008, issued pursuant to Rule 144A under the Securities Act of 1933, as amended. "The ratings reflect New Century's improved cash flows and income, adequate liquidity, and reasonable leverage," said Standard & Poor's credit analyst Steven Picarillo. Additional factors include the company's position in the nonprime residential mortgage market and minimal interest rate risk. Offsetting these factors are New Century's limited history of stable earnings, the company's dependency on wholesale funding, rapid growth in the business, the transactional nature of revenue, the company's monoline business profile, and the high level of residual assets on its balance sheet. New Century, through its subsidiaries, originates, sells, and services nonprime residential mortgages. As one of the country's top five originators of residential nonprime loans, New Century is well positioned within its marketplace. "Profitability measures have improved significantly over the past two years as the result of strong loan volume, good execution, and low cost of funds. Nonetheless, the company has a limited history of stable operating performance and profitability," Mr. Picarillo said. The stable outlook is based on continued favorable financial performance, maintaining appropriate leverage, and New Century's focus on reducing the residual assets on its balance sheet. The outlook also incorporates the expectation that the company will be able to adjust its business to adapt to any changes in originations activity. NEXTERA: Shareholders to Convene in Massachusetts in November ------------------------------------------------------------- A Special Meeting of Stockholders of Nextera Enterprises, Inc., a Delaware corporation, will be held at the Charles Hotel & Harvard Square, 1 Bennett Street, Cambridge, MA 01238 on a date in November yet to be announced. The Special Meeting is being called for the following purposes: 1. To consider and vote upon the approval of an Asset Purchase Agreement, dated September 25, 2003, between FTI Consulting, Inc., LI Acquisition Company, LLC, Nextera Enterprises, Inc., Lexecon Inc., CE Acquisition Corp. and ERG Acquisition Corp., pursuant to which Lexecon, CE Acquisition and ERG Acquisition, will sell substantially all of their assets used in their business to LI Acquisition Company, LLC. 2. To transact such other business as may properly come before the Special Meeting or any continuation, adjournment or postponement thereof, including, if submitted to a vote of stockholders, a motion to adjourn or postpone the meeting to another time and/or place for the purpose of soliciting additional proxies. Nextera's Board of Directors has determined that the Asset Sale Proposal is advisable and in the best interest of the Company and the best interest of its stockholders and has directed that it be submitted to the stockholders for their approval. Nextera's Board of Directors unanimously recommends a vote FOR the Asset Sale Proposal. The Board of Directors has yet to fix a close of business date as the record date for the determination of stockholders entitled to notice of, and to vote at, this Special Meeting and at any continuation, adjournment or postponement thereof. * * * Liquidity and Capital Resources In its SEC Form 10-Q for the quarter ended March 31, 2003, Nextera Enterprises reported: "Consolidated working capital was $6.1 million on March 31, 2003, compared to a working capital of $5.2 million on December 31, 2002. Included in working capital were cash and cash equivalents of $0.6 million and $1.6 million on March 31, 2003 and December 31, 2002, respectively. "Net cash used in operating activities was $8.4 million for the three months ended March 31, 2003. The primary components of net cash used in operating activities was an increase of $5.0 million of prepaid and other assets (relating to Messrs. Fischel and Carlton's non-compete agreements), an increase of $4.4 million of accounts receivable, a $1.6 million decrease of accounts payables and accrued expenses (primarily bonus payments), and a net loss of $3.1 million. These cash outflows were offset in part by $5.2 million of non-cash items relating to depreciation, provision for doubtful accounts, amortization of non-compete agreements, non- cash compensation charges, and interest paid-in-kind. "Net cash provided by investing activities was $2.6 million for the three months ended March 31, 2003, almost entirely representing decreases in restricted cash. "Net cash provided by financing activities was $4.8 million for the three months ended March 31, 2003. The primary component of net cash provided by financing activities was $5.0 million of borrowings under the Company's Senior Credit Facility. The Company's primary sources of liquidity are cash on hand, restricted cash (for bonus payments only) and cash flow from operations. The Company believes that if it is successful in reducing its current days sales outstanding level and achieving its forecasted profitability, it will have sufficient cash to meet its operating and capital requirements for the next twelve months. However, there can be no assurances that the Company's actual cash needs will not exceed anticipated levels, that the Company will generate sufficient operating cash flows, by reducing its current days sales outstanding level and achieving its forecasted profitability, to fund its operations in the absence of other sources or that acquisition opportunities will not arise requiring resources in excess of those currently available. In particular, the Company has the option of extending the employment and non- compete agreements with Messrs. Fischel and Carlton from their current expiration of July 16, 2003 to January 15, 2004. In order to exercise such option, the Company must pay Messrs. Fischel and Carlton an aggregate amount of approximately $3.5 million, including interest, on or before July 15, 2003 and an aggregate amount of approximately $1.6 million, plus interest at 3.5% per annum from January 15, 2003 through the date paid, within five days of collection of a specified receivable but in no case later than December 31, 2003, whether or not the receivable is collected by that date. The Company hopes to exercise such option from cash flows from operations, however, such funding from operations is dependent upon reducing current days sales outstanding and achieving forecasted profitability. To the extent that cash flows from operations are not sufficient, the Company will need to obtain alternative financing sources. In order for the Company to further extend these agreements from January 16, 2004 through December 31, 2008, the Company will need to make aggregate payments to Messrs. Fischel and Carlton of $20.0 million by January 15, 2004. We will require additional financing in amounts that we cannot determine at this time in order to make all of the payments required to extend these agreements to December 31, 2008. We expect that we will need to raise funds through one or more public or private financing transactions. "Effective December 31, 2002, the Company entered into a Second Amended and Restated Credit Agreement, which amended the Prior Credit Agreement. As part of the Senior Credit Facility, Knowledge Universe, Inc. purchased a $5.0 million junior participation in the Senior Credit Facility. On January 7, 2003, the Company borrowed $5.0 million under the Senior Credit Facility to fund the first payment required under the employment and non-compete agreements entered into with Messrs. Fischel and Carlton. The Company's outstanding liability under the Senior Credit Facility after the borrowing of the above mentioned $5.0 million was $32.2 million. The Senior Credit Facility requires that $4.7 million of outstanding borrowings be permanently reduced in each of 2003 and 2004. The maturity of the Senior Credit Facility was extended to January 1, 2005. Borrowings bear interest at the lender's base rate plus 1.5%. The Company will continue to pay annual administrative fees of $0.3 million, payable monthly, and the $0.9 million in aggregate back-end fees will continue to be payable upon the maturity of the Senior Credit Facility. The back-end fees can be waived if the Company repays the Senior Credit Facility prior to maturity. All administrative fees paid to the senior lenders are recorded by the Company as interest expense. An affiliate of Knowledge Universe has agreed to continue to guarantee $2.5 million of the Company's obligations under the Senior Credit Facility. The Senior Credit Facility contains covenants related to the maintenance of financial ratios, operating restrictions, restrictions on the payment of dividends and disposition of assets. The covenants are measured quarterly and have been set at varying rates, the most restrictive at approximately 15% below the Company's projected operating results. If the results of operations significantly decline below projected results and we are unable to obtain a waiver from the Company's senior lenders, the Company's debt would be in default and callable by the senior lenders. If our projections of future operating results are not achieved and our debt is placed in default, we would experience a material adverse impact on our reported financial position and results of operations." NORTHWESTERN CORP: Engages Browning Kaleczy as Montana Counsel -------------------------------------------------------------- Northwestern Corporation desires to retain the services of Browning, Kaleczy, Berry & Hoven, PC as Special Counsel in connection with utility, litigation, general corporate and Montana law matters effective as of the Petition Date. The Debtor seeks to retain Browning Kaleczy as its attorneys because it is a preeminent Montana law firm which has extensive experience and knowledge in utility litigation and Montana law matters. Additionally, Browning Kaleczy has extensive experience representing the Debtor before the Petition Date and, as a result of its prior representations of the Debtor, it has become familiar with utility, litigation and Montana law matters affecting the Debtor and the Debtor's businesses and affairs and many of the potential legal issues that may arise with respect in the context of this Chapter 11 case. Specifically, Browning Kaleczy will: a. advise and represent the Debtor with respect to the utility law issues, including proceedings before the Montana Public Service Commission; b. advise and represent the Debtor with respect to litigation pending in state and federal courts in Montana; and c. advise and represent the Debtor in connection with matters involving Montana law, including commercial and corporate law matters. Leo Berry, Vice-President of Browning Kaleczy reports that his firm will bill the Debtor its current hourly rates in exchange for its services: partners $125 to $175 per hour associates $100 to $130 per hour law clerks $60 to $80 per hour Headquartered in Sioux Falls, South Dakota, NorthWestern Corporation is one of the largest providers of electricity and natural gas in the Upper Midwest and Northwest. The Company filed for Chapter 11 protection on September 14, 2003 (Bankr. Del. Case No. 03-12872). Scott D. Cousins, Esq., Victoria Watson Counihan, Esq., and William E. Chipman, Jr., Esq., at Greenberg Traurig LLP represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $2,624,886,000 in total assets and $2,758,578,000 in total debts. NRG ENERGY: Selling McClain Facility to Oklahoma Gas for $159.9M ---------------------------------------------------------------- NRG McClain LLC, a direct and wholly owned subsidiary of NRG Energy, Inc., owns a 77% undivided ownership interest -- with Oklahoma Municipal Power Authority, a governmental agency of the State of Oklahoma, owning the remaining 23% -- as a tenant-in- common in an approximately 520 MW gas-fired electric generating facility primarily located in McClain County, Oklahoma and is engaged in the business of generating and selling electric power. Available financial projections show that, based on current market conditions for electric power in the region, the McClain Facility, if operated on a purely merchant power basis, will not be able to meet scheduled debt service. Indeed, projections indicate that substantial additional cash infusions will be required during such period to operate the McClain Facility. Neither NRG nor the NRG McClain's lenders are prepared to provide additional funds to NRG McClain to operate its facility at a loss during such period. As a result, and after evaluating its options to sell the McClain Facility, NRG McClain extensively negotiated and subsequently entered into an asset purchase agreement, dated as of August 18, 2003 with Oklahoma Gas and Electric Company pursuant to which NRG McClain has agreed to sell to OG&E -- subject to a higher or better offer -- substantially all of its assets, including NRG McClain's ownership interest in the McClain Facility. Marketing Efforts In April 2002, the Debtors consulted their financial advisors in an effort to evaluate NRG McClain LLC's investment in the McClain Facility and related assets, and to identify various potential strategic and financial buyers selected on the basis of a variety of factors, including perceived interest in the Sale Assets, familiarity with NRG McClain's industry and financial ability to consummate a sale transaction with NRG McClain. According to Matthew A. Cantor, Esq., at Kirkland & Ellis, in New York, as of the NRG McClain Petition Date -- August 19, 2003 -- no viable third party offer had been identified other OG&E. In February 2003, NRG McClain began detailed negotiations with OG&E. On February 20, 2003, NRG McClain received a letter of interest from OG&E specifying the terms and conditions of a possible transaction. On May 2, 2003, NRG McClain received a draft asset purchase agreement from OG&E. NRG McClain evaluated the terms and benefits of OG&E's proposal, as well as the benefits of other alternatives. Subsequently, NRG McClain concluded that OG&E's proposal, which formed the basis of the Asset Purchase Agreement offered the most advantageous terms and greatest economic benefit to NRG McClain and its creditors. On August 18, 2003, NRG McClain and OG&E executed the Asset Purchase Agreement, which requires that the Sale Assets be sold pursuant to Section 363 of the Bankruptcy Code free and clear of all liens, claims and encumbrances. Pursuant to the Asset Purchase Agreement, the Sale is subject to higher or better offers, and OG&E is treated as a stalking horse purchaser. OG&E's agreement to serve as a stalking horse purchaser was conditioned on receiving certain bidding protections. The Purchase Agreement Accordingly, NRG McClain asks the Court to approve the sale of the Sale Assets, free and clear of all liens claims and encumbrances and certain transfer taxes to the successful bidder. The salient terms of the Asset Purchase Agreement includes: A. Sale Assets The Sale Assets consist of all of NRG McClain's right, title and interest in and to all assets owned by or leased or licensed to NRG McClain and used or held by NRG McClain whether real, personal or mixed, tangible or intangible, excepting only the Retained Assets. B. Purchase Price OG&E will pay $159,950,000 in immediately available funds, subject to certain adjustments. C. Executory Contracts and Unexpired Leases NRG McClain will assume and assign to OG&E certain executory contracts and unexpired leases and will pay any and all cure amounts pursuant to Section 365 of the Bankruptcy Code necessary for the assumption of the Assigned Agreements. D. Closing Conditions OG&E's consummation of the Asset Purchase Agreement by OG&E is subject to these conditions: (1) All of NRG McClain's representations and warranties will be true on and as of the Closing Date with the same effect as though they were made on the Closing Date; (2) OG&E will have obtained all necessary regulatory consents; (3) The Court will have approved the sale of the Sale Assets to OG&E, and the order will have become a Final Order; and (4) No materially adverse effect to the ability of the McClain Facility to operate will have occurred. Use of Sale Proceeds Furthermore, NRG McClain seeks the Court's authority to direct OG&E or the Winning Bidder to disburse the Purchase Price payable at the closing, on the Closing Date, as: (a) To OG&E, the $5,000,000 Break-Up Fee or the $1,500,000 Expense Reimbursement; (b) To NRG, the portion of the NRG Support Payment Amount mutually agreed to by the Agent and NRG at least five business days prior to the Closing Date, reflecting the Undisputed NRG Support Payment. The Undisputed NRG Support Payment consists of: -- amounts set forth in the NRG Support Calculations provided to the Agent in accordance with the Omnibus Restructuring and Consent Agreement, dated as of August 18, 2003, among the Debtor, the Prepetition Secured Lenders and the Agent, prior to such date; and -- related expenses anticipated to be incurred through the Closing Date; (c) To the Escrow Agent designated pursuant to an escrow agreement, the sum of: -- the excess, if any, of the amount requested by NRG as constituting the NRG Support Payment Amount and the Undisputed NRG Support Payment Amount, and -- an additional contingency amount, if any, mutually agreed to by NRG and the Agent at least five business days prior to the Closing Date in respect of the NRG Support Payment Amount not otherwise included in the amount referred to in the immediately preceding clause; and (d) To the Agent, the balance of the Purchase Price for repayment of all outstanding loans, interest and fees, expenses and other obligations incurred in connection with the Prepetition Credit Agreement and to be otherwise applied in accordance with the ORCA. Notice of Sale, Auction and Bidding Procedures Moreover, with the Court's consent, McClain will send two forms of notice to creditors: (a) The Detailed Notice -- a detailed notice that provides the time and place of the Auction, a summary of the terms and conditions of the proposed Sale and the time set for any objection deadlines; and (b) The General Notice -- a notice that will alert creditors of the time and place of the proposed auction, the time and place of the Sale Hearing and the time for filing an objection, and will direct them to contact Kirkland & Ellis, the Debtors' counsel, for more information. In addition, Mr. Cantor notes, NRG McClain will publish the General Notice in the national edition of The Wall Street Journal and The Daily Oklahoman. (NRG Energy Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., 609/392-0900) OMNOVA SOLUTIONS: Initiates Company-wide Restructuring ------------------------------------------------------ OMNOVA Solutions (NYSE: OMN) announced a company-wide restructuring that will result in the reduction of approximately 100 salary and hourly positions, or 4.4% of its workforce worldwide. While some of these positions were eliminated in September, most notifications will be made to affected employees this week. "This difficult decision is necessary due to the continued weakness in certain of our served markets, and historically high raw material costs," said OMNOVA Solutions' Chairman and CEO Kevin McMullen. "While we were encouraged by an increase in demand for our chemical and commercial roofing products in the recently completed third quarter, the commercial office and hospitality refurbishment and new construction markets served by our decorative products business continues to experience very deep and prolonged recessionary conditions. We believe this restructuring will help position us for improved profitability while retaining our ability to respond quickly when our markets rebound." OMNOVA Solutions expects to save about $6.2 million in 2004 as a result of this action. This savings is in addition to the $16 million of cost reductions the Company has taken in cost of goods sold and sales, general and administrative areas through the third quarter of 2003. The Company will incur a restructuring charge for this action of approximately $1.3 million in its 2003 fourth quarter. OMNOVA Solutions is a technology-based company with 2002 sales of $681 million and 2,250 employees worldwide. OMNOVA is an innovator of decorative and functional surfaces, emulsion polymers and specialty chemicals. * * * As reported in the Troubled Company Reporter's October 7, 2003 edition, Standard & Poor's Ratings Services has lowered its corporate credit rating on OMNOVA Solutions Inc., to 'BB-' from 'BB', citing lower than expected operating and financial performance. The current outlook is negative. Fairlawn, Ohio-based OMNOVA Solutions, with about $679 million of annual sales and approximately $212 million of outstanding debt, manufactures emulsion polymers, decorative and functional surfaces, such as commercial wallcovering, and specialty chemicals. "The downgrade reflects concerns that lower than expected operating results are likely to further delay an improvement in the company's financial profile," said Standard & Poor's credit analyst Franco DiMartino. Profitability and cash flow have been negatively affected by elevated raw material costs and continued weakness in key end markets due to lackluster economic conditions. The shortfall in cash flow has increased leverage and further weakened the financial profile. PAC-WEST TELECOMM: Will Publish Q3 2003 Results on October 29 ------------------------------------------------------------- Pac-West Telecomm, Inc. (Nasdaq: PACW), a provider of integrated communications services to service providers and business customers in the western U.S., announced the date for its third quarter 2003 earnings release and conference call. Pac-West plans to announce its financial and operating results for the third quarter 2003 on Wednesday, October 29, 2003, after market close. An investor conference call will be held on Thursday, October 30, 2003 at 8:30 a.m. Pacific Time/11:30 a.m. Eastern Time. Investors are invited to participate by dialing 1- 888-291-0829 or 706-679-7923. The call will be simultaneously webcast on Pac-West's web site at http://www.pacwest.com/investor An audio replay will be available through November 13, 2003 by dialing 1-800-642-1687 or 706-645-9291 (passcode #3368881). About Pac-West Telecomm, Inc. Founded in 1980, Pac-West Telecomm, Inc. is one of the largest competitive local exchange carriers headquartered in California. Pac-West's network carries over 100 million minutes of voice and data traffic per day, and an estimated 20% of the dial-up Internet traffic in California. In addition to California, Pac-West has operations in Nevada, Washington, Arizona, and Oregon. For more information, please visit Pac-West's web site at http://www.pacwest.com. * * * As reported in Troubled Company Reporter's May 1, 2003 edition, Standard & Poor's Ratings Services lowered its corporate credit rating on Pac-West Telecomm Inc. to 'D' from 'CC'. The rating on the 13.5% senior notes due 2009 has been lowered to 'D' from 'C'. S&P explained, "Given the company's significant dependence on reciprocal compensation (the rates of which the company expects to further decline in 2003) and its limited liquidity, Pac-West will likely find the implementation of its business plan continue to be challenging." POLAROID CORP: Court Okays Kelley's Retention as Special Counsel ---------------------------------------------------------------- The Official Committee of Unsecured Creditors of the Polaroid Debtors sought and obtained the Court's authority to retain Kelley Drye & Warren as it special litigation counsel, nunc pro tunc to August 29, 2003. As special litigation counsel, Kelley Drye will: (a) investigate, file and prosecute avoidance litigation on the Committee's behalf; (b) represent the Committee at hearings and other proceedings regarding the litigation; (c) assist the Committee in preparing pleadings and applications as may be necessary in furtherance of the Committee's interests and objectives regarding the litigation; and (d) perform other legal services as may be required and are deemed to be in the interests of the Committee in accordance with the Committee's powers and duties as set forth in the Bankruptcy Code Mark R. Somerstein, Esq., a member of Kelley Drye, informs the Court that Kelley Drye's standard hourly rates are: Partners $300 - 590 Counsel 395 - 450 Associates 155 - 340 Legal Assistants 110 - 160 Kelley Drye will be compensated with these fees and expenses: (a) The Debtors or the Plan Administrator will provide Kelly Drye with a $10,000 retainer to be used to pay Kelley Drye's fees and expenses either: (1) within 10 days after the Bankruptcy Court approves Kelley Drye's retention as counsel to either the Committee or the Plan Administrator -- the Polaroid Client, or (2) upon execution of an engagement letter memorializing Kelley Drye's engagement by the Polaroid Client. (b) The Polaroid Client would pay Kelley Drye's fees at its standard hourly rates, up to $50,000 -- the Contingent Fee Threshold Amount -- for legal services rendered by Kelley Drye to the Polaroid Client. Prior to incurring the Contingent Fee Threshold Amount, Kelley Drye would obtain payment of its fees and expenses from the Retainer by debiting the Retainer seven days after presentation to the Polaroid Client of an invoice for the services or, if the Retainer were exhausted, by wire transfer. Currently, Kelley Drye's hourly rates range from $140 to $450 for persons who would be working on the engagement. (c) The Polaroid Client is responsible for all costs incurred on behalf of the Polaroid Client. In order to allocate these expenses fairly and to keep hourly rates as low as possible for those matters which do not involve these expenditures, these items are separately itemized on Kelley Drye's statements as "costs advanced" or "disbursements." Major out-of-pocket expenses, including outside fees and expenses will not be advanced by Kelley Drye. However, to the extent that Kelley Drye pays any of these expenses, the Polaroid Client will reimburse Kelley Drye currently. (d) After Kelley Drye has incurred the Contingent Fee Threshold Amount, the Polaroid Client would pay Kelley Drye for its services on a contingent fee basis. If there is a recovery by settlement or judgment, the Polaroid Client's obligation to pay Kelley Drye amounts in excess of the Contingent Fee Threshold Amount would be limited to these contingency arrangements: -- Kelley Drye would receive 30% of the aggregate recovery up to $2,000,000, plus 35% of any aggregate recovery which exceeds $2,000,000, -- The Polaroid Client will pay to Kelley Drye, on a current basis, all disbursements and expenses incurred by Kelley Drye either from the Retainer or upon presentation of an invoice, and -- Kelley Drye will credit the Contingent Fee Threshold Amount against the first recoveries obtained from the Avoidance Action Litigation; provided however, that Kelley Drye will not be required to credit against these recoveries any of its disbursements or other costs paid by the Polaroid Client. (Polaroid Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Service, Inc., 609/392-0900) PREMIER CONCEPTS: Files for Chapter 11 Protection in California --------------------------------------------------------------- Premier Concepts, Inc. (OTC Bulletin Board: FAUXE), has filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Central District of California. Chapter 11 allows a company to continue operating in the ordinary course of business and to maximize recovery for the company's stakeholders. The filing will enable the company to continue to conduct business as usual while it develops a reorganization plan. Premier Concepts, Inc. specializes in the marketing and retailing of high- end reproduction jewelry. The Company's national chain of 25 retail stores, which operate under the names Imposters, Elegant Pretenders and Joli-Joli, sell jewelry that emulates classic fine jewelry, as well as pieces designed by famous jewelers. The product line also includes replicas of jewelry owned by celebrities. Premier's stores are located in California, Colorado, Nevada, Florida, Pennsylvania, New Jersey and Arizona. PREMIER CONCEPTS: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Premier Concepts Inc 2029 Century Park East #1750 Century City, California 90067 Bankruptcy Case No.: 03-36445 Type of Business: Sale of costume fashion jewelry in retail outlets. Chapter 11 Petition Date: October 10, 2003 Court: Central District of California (Los Angeles Division) Judge: Ellen Carroll Debtor's Counsel: Lawrence A. Diamant, Esq. Robinson, Diamant, & Wolkowitz 1888 Century Park East, #1500 Los Angeles, CA 90067-1702 Tel: 310-277-7400 Total Assets: $2,378,629 Total Debts: $2,148,897 Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ HMS $117,139 Harlen Jewelry Company, Inc. $87,014 Union Square Building/Brett Company $62,313 Tuck Tsai & Co., Inc. $57,313 Reeves Park, Inc. $51,016 Pace Enterprise $37,749 Fitzpatrick, Calla, Harper & Scinto $24,044 A1 Credit Corporation $23,267 Jackson Lewis LLP $22,650 Westfield - Valley Fair $19,238 G. David Gordon & Associates, PC $19,137 Aladdin Bazaar, LLC $18,704 Taubman/Stoneridge Properties $18,357 Simon Property Group - Menlo Park $17,751 BJB Services, Inc. $17,363 Rouse - Park Meadows, LLC $17,211 Rio Hotel & Casino, Inc. $15,868 Lerner Corporation - White Flint $15,534 Macerich Carmel LP $13,973 Catalog Service Group $13,723 QUALITY DISTRIBUTION: On Watch Pos. over Recapitalization Plans --------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B-' corporate credit rating on tank truck carrier Quality Distribution Inc. on CreditWatch with positive implications. "The CreditWatch placement is based on the company's plans to restructure its balance sheet by issuing $115 million of common equity, converting its preferred stock into common shares, issuing $125 million of senior subordinated notes, and entering into a new $215 million bank facility," said Standard & Poor's credit analyst Kenneth L. Farer. The intent of the recapitalization is to reduce the company's overall debt levels, extend its debt maturities, and increase revolver availability. Upon completion of the deal, Standard & Poor's expects to raise the corporate credit rating to 'B+' from 'B-'. In addition, wholly owned subsidiary Quality Distribution LLC's proposed $215 million secured bank facility will be assigned a 'B+' rating, and its proposed $125 million senior subordinated notes will be assigned a 'B-' rating. The outlook will be stable. The bank loan ratings are based on preliminary information and are subject to review upon final documentation. Ratings on Tampa, Florida-based Quality Distribution reflect its participation in a low-margin, fragmented industry, combined with a weak financial profile. Quality Distribution is the largest bulk tank truck carrier in North America. Through a network of over 110 terminals, Quality Distribution LLC, a wholly owned subsidiary of Quality Distribution Inc., transports a broad range of chemical products (Quality Carriers Inc.; 83% of 2002 revenues), plastics (TransPlastics; 7%), and flat glass (Levy Transport; 2%), in addition to providing customers and affiliates with supplemental services such as tank wash (Quala Systems; 6%) and insurance (Power Purchasing Inc.; 2%). Although the company benefits from a strong market share in an industry with high barriers to entry, its customers have some transportation alternatives (rail, barge) depending on the nature of the shipment. The revolving credit facility and term loan will be rated the same as the anticipated 'B+' corporate credit rating, upon successful completion of the recapitalization. The bank facilities are secured by substantially all of Quality Distribution LLC's assets. Subsidiaries of Quality Distribution LLC and Quality Distribution Inc. provide guarantees of the loans. In evaluating the underlying collateral, Standard & Poor's reviewed a discrete asset valuation approach and an enterprise valuation, as the business could be either liquidated or reorganized. The bank facilities' collateral coverage should provide for a strong likelihood of substantial recovery of principal in the event of default or bankruptcy, with minimal loss expected. REPUBLIC ENGINEERED: Brings-In McDonald Hopkins as Attorneys ------------------------------------------------------------ Republic Engineered Products Holdings, LLC and its debtor- affiliates want to employ McDonald Hopkins Co., LPA as their co- counsel in their on-going chapter 11 restructuring. The Debtors ask the U.S. Bankruptcy Court for the Northern District of Ohio to approve the engagement. In their capacity as Counsel, McDonald Hopkins will: a) file and monitor the Debtors' chapter 11 cases and legal activities, and advising the Debtors on the legal ramifications of certain actions; b) provide the Debtors advice on their obligations and duties; c) execute the Debtors' decisions by filing with the Court motions, objections, and other relevant documents; d) appear before the Court on all matters in these cases relevant to the interests of the Debtors; e) assist the Debtors in the administration of these chapter 11 cases; and f) take such other actions as are necessary to protect the rights of the Debtors' estates. Shawn M. Riley, Esq., shareholder of McDonald Hopkins discloses that his firm's current hourly rates for professionals and paraprofessionals are: Shareholders $295 to $410 per hour Associates $173 to $240 per hour Legal Assistants $115 to $155 per hour Law Clerks $40 to $75 per hour Headquartered in Fairlawn, Ohio, the Debtors are leading suppliers of special bar quality (SBQ) steel, a highly engineered product used in axles, drive trains, suspensions and other critical components of automobiles, off-highway vehicles and industrial equipment. The Company filed for chapter 11 protection on October 6, 2003 (Bankr. N.D. Ohio Case No. 03-55118). Shawn M Riley, Esq., at McDonald, Hopkins, Burke & Haber Co LPA and Martin J. Bienenstock, Esq., at Weil, Gotshal & Manges LLP represent the Debtors in their restructuring efforts. As of June 30, 2003, the Debtors listed $481,000,000 total assets and $467,939,000 total debts. ROWE INT'L: Wants to Tap Sheehey Furlong as Special Counsel ----------------------------------------------------------- Rowe International, Inc., asks the U.S. Bankruptcy Court for the Western District of Michigan for permission to employ Sheehey Furlong & Behm, PC as its Special Purpose Counsel. Currently, Sheehey Furlong represents the Debtor on corporate matters. Sheehey Furlong's knowledge of the history of the Debtor and its general corporate legal matters will be crucial to the success of the Debtor's attempt to reorganize. Accordingly, the Debtor asks the Court's authority for the continued retention of Sheehey Furlong in this chapter 11 case. The persons who are primarily expected to perform professional or paraprofessional services for the Firm on behalf of the Debtor are: Christopher R. Gannon $185 per hour Paralegals $65 per hour Headquartered in Grand Rapids, Michigan, Rowe International, Inc., manufactures commercial and home CD jukeboxes. The Company filed for chapter 11 protection on August 29, 2003 (Bankr. W.D. Mich. Case No. 03-10537). The Debtor listed estimated assets of more than $10 million and estimated debts of more than $100 million in its petition. SAFETY-KLEEN: Seeks Clearance of Myers, et al., Settlement Pact --------------------------------------------------------------- Michael W. Yurkewicz, Esq., at Skadden Arps Slate Meagher & Flom LLP, in Wilmington, Delaware, informs the Court that a settlement has been reached among each of S. D. Myers, Inc., Dana Stanley Myers, Scott David Myers, Seth James Myers, and David Paul Myers, and the Safety-Kleen Debtors. The Debtors ask Judge Walsh to approve the settlement agreement with S.D. Myers, et al., which resolves the amount of all claims filed by S.D. Myers, the treatment of such claims under the Plan, and the Debtors' adversary proceeding against S.D. Myers. Prior to March 1999, S.D. Myers operated a business relating to polychlorinated biphenyl waste management. On February 19, 1999 the Debtors entered into an agreement to purchase the PCB waste management business from S.D. Myers. On the Petition Date, the Debtors had possession of the assets that were the subject of the Contract and, pursuant to the Contract, had paid some but not all of the purchase price for the assets. On May 31, 2002, the Debtors filed an adversary proceeding captioned "Safety-Kleen Systems, Inc. v. SD Myers, Inc.," seeking to avoid and recover preferential transfers under Sections 547 and 550 of the Bankruptcy Code, or in the alternative, fraudulent transfers under the Bankruptcy Code. On December 12, 2002, S.D. Myers sought to compel the Debtors to assume or reject the Contract or, in the alternative, sought payment of an administrative claim relating to the Contract. The Debtors elected to reject the Contract, and S.D. Myers filed a proof of claim for $1,450,000 relating to the rejection of the Contract, asserting that the claim was entitled to administrative priority treatment. Why Settle? The Debtors and S.D. Myers have engaged in extensive discussions and negotiations in an effort to resolve the amount of and priority of the Claim, and the Avoidance Action. During the course of these negotiations, the Debtors evaluated: (a) the relative strengths of the parties' legal positions; (b) the likelihood that the Claim would be allowed; (c) the potential treatment of the Claim if allowed; (d) the likelihood that the Debtors would be successful in the Adversary Proceeding, taking into consideration S.D. Myers' defenses; and (e) the costs and risks associated with the litigations. As a result of these negotiations, the Debtors concluded that a consensual resolution of their disputes with S.D. Myers was in their best interests because it enables them to avoid a potential allowed administrative claim for $1,450,000 against these estates. The Settlement The most significant terms and conditions of the Settlement are: (1) Allowed Claim. S.D. Myers will have an Allowed Class 7 Subsidiary General Unsecured Claim in the case of Safety-Kleen (PPM), Inc., for $1,250,000; (2) Payment. S.D. Myers will seek payment of the Allowed Claim only through the Plan; (3) Claims Expunged. All claims, other than the Allowed Claim, will be expunged; (4) Dismissal Of Adversary Proceeding. The Adversary Proceeding will be dismissed with prejudice; (5) Payment to S.D. Myers. The Debtors will pay $200,000 to S.D. Myers; and (6) Mutual Releases. Other than the obligations in the Settlement, the parties exchange mutual releases. The Settlement resolves actual disputes and controversies that, if permitted to continue, could involve additional time-consuming and expensive legal proceedings, expose the Debtors to significant litigation costs and the risk that the Debtors would be liable for the a $1,450,000 administrative claim. The Stipulation also permits the Debtors' estates to avoid incurring additional administrative expenses, including attorneys' fees and other costs of the proceedings and avoids the risks and uncertainties inherent in litigation generally and the possibility of a large adverse judgment. (Safety-Kleen Bankruptcy News, Issue No. 66; Bankruptcy Creditors' Service, Inc., 609/392-0900) SILICON GRAPHICS: Q1 Financial Release Webcast Scheduled Oct. 20 ---------------------------------------------------------------- Silicon Graphics Inc. (NYSE: SGI) announces the following Webcast: What: SGI 1st Quarter Financial Release When: 10/20/03 @ 5:00 p.m. Eastern Where: http://www.firstcallevents.com/service/ajwz389994926gf12.html How: Live over the Internet -- Simply log on to the web at the address above. Contact: Dwight McCarty, Manager of IR, +1-650-933-6102 If you are unable to participate during the live webcast, the call will be archived at http://www.sgi.com. SGI, also known as Silicon Graphics, Inc. -- whose June 28, 2003 balance sheet shows a total shareholders' equity deficit of about $178 million -- is the world's leader in high-performance computing, visualization and storage. SGI's vision is to provide technology that enables the most significant scientific and creative breakthroughs of the 21st century. Whether it's sharing images to aid in brain surgery, finding oil more efficiently, studying global climate or enabling the transition from analog to digital broadcasting, SGI is dedicated to addressing the next class of challenges for scientific, engineering and creative users. SGI was named on FORTUNE magazine's 2003 list of "Top 100 Companies to Work For." With offices worldwide, the company is headquartered in Mountain View, Calif., and can be found on the Web at http://www.sgi.com SK GLOBAL: Court Okays Uniform Interim Compensation Protocol ------------------------------------------------------------ The Bankruptcy Court approved SK Global America Inc.'s proposed uniform procedures for compensating and reimbursing Court-approved professionals on a monthly basis. The proposed compensation procedures will enable all parties to closely monitor administration costs and assist the Debtor in implementing efficient cash management procedures. The monthly and quarterly compensation and reimbursement of expenses of the professionals to be structured as: A. Monthly Professional Fee Statements (a) No later than the 25th day of each month after the month for which compensation is sought, each professional will file with the Court, a monthly fee statement, and provide notice of the Statement to: -- SK Global America, Inc. 100 Parker Plaza 400 Kelby Street Fort Lee, New Jersey 07024 Attn: Mr. Richard Kim; -- Togut, Segal & Segal LLP One Penn Plaza Suite 3335 New York, New York 10119 Attn: Scott E. Ratner, Esq.; -- Counsel for the official statutory committee unsecured creditors appointed in the Debtor's Chapter 11 case and in the event the Committee has not been appointed, the Debtor's 20 largest unsecured creditors; -- McDermott, Will & Emery 50 Rockefeller Plaza New York, New York 10020-1605 Counsel for Cho Hung Bank Attn: Stephen Selbst, Esq.; -- Nixon Peabody LLP 101 Federal Street Boston, Massachusetts 02110 Counsel for Korea Exchange Bank Attn: Mark Berman, Esq.; -- White & Case 1155 Avenue Of The Americas New York, New York 10036-2700 Counsel for the Foreign Bank Steering Committee Attn: Evan Hollander, Esq.; and -- The United States Trustee 33 Whitehall Street, 21st Floor New York, New York 10004 Attn: Greg Zipes, Esq.; (b) Each Monthly Statement must contain a list of the individuals, and their titles, who provided services during the period covered by the Monthly Statement, their billing rates, the aggregate hours spent by each individual, a reasonably detailed breakdown of the disbursements incurred, and contemporaneously maintained time entries for each individual in increments of tenths of an hour. No professional should seek reimbursement of an expense that would otherwise not be allowed pursuant to the Court's Administrative Orders dated June 24, 1991 and April 21, 1995, or the United States Trustee Guidelines for Reviewing Applications for Compensation and Reimbursement of Expenses Filed under Section 330 of the Bankruptcy Code dated January 30, 1996; (c) Each Monthly Fee Statement and any notice of it will clearly and conspicuously display the deadline to timely file an objection, set 20 days after the Monthly Fee Statement is filed; (d) If any party objects to the Monthly Fee Statement, the objecting party must timely and properly file with the Court, on or before the monthly objection deadline, a written statement of its objection that sets forth the precise nature of the objection and the specific amount of objectionable fees or expenses at issue, and serve the Objection on the affected professional and the Notice Parties; (e) If an Objection is filed, the Affected Professional may file a reply to the Objection. The Objecting Party and the Affected Professional will then proceed to make good faith attempts to resolve the Objection on a consensual basis. If the parties are unable to resolve the Objection in good faith within 15 days after the Objection is filed with the Court, the Affected Professional may request for the Court to set a hearing to consider the Objection; (f) If no Objection to a Monthly Fee Statement has been filed prior to the relevant Objection Deadline, the Debtor will be authorized to pay each Professional an amount equal to 80% of the fees and 100% of the expenses requested in the Monthly Fee Statement. To the extent that there is an Objection to a portion of the Monthly Fee Statement, the Affected Professional will file with the Court and serve on the Debtor and its counsel, a certification indicating that there has been an Objection only to a portion of the Application and stating the total fees and expenses in the Statement not subject to an Objection. After the filing, the Debtor will be authorized to pay the Affected Professional an amount equal to 80% of the fees and 100% of the expenses not subject to an Objection; and (g) A pending objection to a Monthly Fee Statement will not disqualify a Professional from the future payment of compensation or reimbursement of expenses that are requested in accordance with the Compensation Procedures. B. Quarterly Professional Fee Applications (a) Beginning with the Petition Date through October 31, 2003, and every 120 days thereafter, each Professional will file with the Court, within 45 days of the end of the Quarterly Fee Period, a quarterly fee application for interim court approval and allowance of 100% of the compensation and expense reimbursement sought in the Monthly Fee Statements filed during the Quarterly Fee Period. Each Professional will contemporaneously provide notice of the Quarterly Fee Application to the Notice Parties; (b) Any Professional that fails to file a Quarterly Fee Application when due will be ineligible to receive payments of any fees or expenses under these Compensation Procedures until the Professional has complied; (c) Each Professional is required to serve a copy of each interim or final fee application only on: -- the Debtor; -- the Debtor's counsel; -- counsel to the Committee and the Debtor's 20 largest unsecured creditors, to the extent a Committee is not appointed; -- the United States Trustee; and -- those parties having filed a notice of appearance in this case and request for service of pleadings; and (d) A pending objection to a Quarterly Fee Application will not disqualify a Professional from the future payment of compensation or reimbursement of expenses that are requested in accordance with the Compensation Procedures. C. Reimbursement of Committee Members' Expenses Each member, excluding ex officio members, of any Official Committee will submit statements of expenses and supporting vouchers to the Committee's counsel. Counsel to each Committee will then separately identify their Committee members' request for reimbursement in the Committee's Monthly Fee Statements and Quarterly Fee Applications to be filed in accordance with these Compensation Procedures. The expenses of the Committee members will be approved in accordance with the Compensation Procedures. D. Monthly Operating Reports The Debtor will list and itemize all payments to Professionals and members of any Committee in their monthly operating reports. In addition, the Debtor sought and obtained the Court's permission to limit the notice of hearings to consider interim applications to: (a) their counsel; (b) counsel to the Committee and, in the event a Committee is not appointed, the Debtor's 20 largest unsecured creditors; (c) the United States Trustee; and (d) all parties who have filed a notice of appearance with the Clerk of the Court and requested the notice. (SK Global Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 609/392-0900) SPANISH BROADCASTING: S&P Junks Proposed $75MM Preferred Stock -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' rating to Spanish Broadcasting System Inc.'s proposed $135 million senior secured credit facilities. A 'CCC' rating was also assigned to the company's proposed $75 million exchangeable redeemable preferred stock issue. At the same time, Standard & Poor's lowered its long-term corporate credit rating on Spanish Broadcasting to 'B' from 'B+' due to a sizeable debt-financed acquisition that increases financial risk. Proceeds from both the credit facility and preferred stock offering will be used to finance the remaining $190 million radio station purchase price. The outlook is negative. The Coconut Grove, Florida-based Spanish-language radio broadcaster had approximately $428.2 million in total debt outstanding at June 30, 2003, pro forma for the proposed transactions. The downgrade reflects the significant spike in leverage from Spanish Broadcasting's reliance on debt and debt-like securities to fund its $250 million acquisition of Los Angeles-based radio station KXOL-FM. "The transaction strains interest coverage and drives up total debt plus debt-like preferred stock to EBITDA to a steep 12x, leaving the company vulnerable to a downturn in advertising, intensifying competition, or rising interest rates," said Standard & Poor's credit analyst Alyse Michaelson. Such weak credit measures may not incorporate much of a cushion relative to the financial covenants included in the company's proposed credit agreement, the specific terms of which have not yet been finalized. Furthermore, Spanish Broadcasting targets a niche audience that is highly concentrated in a few large markets, exposing the company to those markets' regional economies. Still, the KXOL acquisition helps to solidify the company's strong competitive position in Los Angeles, the number-one Spanish- language radio market. Moderate cash balances provide a couple years of financial cushion as Spanish Broadcasting strives to increase cash flow at acquired stations and generate meaningful discretionary cash flow. The negative outlook reflects concerns about near-term pressure on the company's EBITDA margin and free cash flow conversion. Currently high leverage cannot accommodate further debt-financed transactions at the 'B' rating level. Revenue gains at acquired stations and building meaningful cash flow that can be used to pay down debt will be important in considering a stable outlook. US AIRWAYS: Inks Stipulation Reducing Wachovia-Related Claim ------------------------------------------------------------ Wachovia Bank, N.A., formerly Meridian Trust Company, in its capacity as Owner Trustee, filed Claim No. 3092, asserting a partially secured and partially unsecured claim in an unliquidated amount relating to leases of Aircraft bearing registration Tails Nos. N808US, N809US & N810US. The Reorganized US Airways Debtors objected to the claim. Consequently, the Parties signed a stipulation outlining a resolution to their dispute. Claim No. 3092 is reduced and allowed as a general unsecured Class USAI-7 claim for $9,315,657. Any and all other Wachovia Claims relating to Tails Nos. N808US, N809US & N810US are disallowed. (US Airways Bankruptcy News, Issue No. 39; Bankruptcy Creditors' Service, Inc., 609/392-0900) STORAGENETWORKS: Stockholders Endorse Liquidation Plan ------------------------------------------------------ StorageNetworks, Inc. announced that its stockholders have approved and adopted a plan of complete liquidation and dissolution at today's 2003 annual meeting of stockholders. StorageNetworks also announced that its Board of Directors has fixed October 28, 2003 as the record date for determining stockholders entitled to receive any future distributions of available assets and as the final date for the recording of stock transfers. The initial liquidating distribution to stockholders is expected to be made on or about November 3, 2003. StorageNetworks expects the amount of the initial distribution to be approximately $1.65 per share in cash. StorageNetworks intends to file a certificate of dissolution on October 28, 2003 with the Delaware Secretary of State in accordance with its plan of liquidation. At the close of business on October 28, 2003, StorageNetworks will close its stock transfer books and cease recording transfers of shares of its common stock. After the filing of the certificate of dissolution, StorageNetworks will also petition the Securities and Exchange Commission for relief from its obligation to file periodic and other reports under the Securities Exchange Act of 1934. Future liquidating distributions will be made only to stockholders of record at the close of business on October 28, 2003. The timing and amounts of any distributions will be determined by StorageNetworks' Board of Directors in accordance with the plan of liquidation. The stockholders also voted at today's annual meeting to re-elect Peter W. Bell as a Director and to ratify the selection of Ernst & Young LLP as StorageNetworks' auditors for 2003. TERAYON COMM: Look for Third Quarter 2003 Results on October 22 --------------------------------------------------------------- Terayon Communication Systems, Inc. (Nasdaq: TERN), a leading provider of broadband solutions, confirmed that it will release financial results for its third quarter ended September 30, 2003 on Wednesday, October 22, at approximately 1 p.m. Pacific Time. Terayon will host a conference call to discuss its financial results at 2 p.m. Pacific Time that day. A live audio webcast of the call will be available to the public from Terayon's website at http://www.terayon.com. A replay of the conference call will be available via telephone beginning October 22 at approximately 4 p.m. Pacific Time, and will be available through the close of business on November 21, 2003. Participants can access the replay by dialing 877-213-9653 (U.S.) or 630-652-3041 (international). The access code for the replay is 7875743. A replay of the audio webcast will also be available online at http://www.terayon.com. Terayon Communication Systems, Inc. (S&P, B- Corporate Credit and CCC Subordinated Debt Ratings, Negative) provides innovative broadband systems and solutions for the delivery of advanced, carrier-class voice, data and video services that are deployed by the world's leading cable television operators. Terayon, headquartered in Santa Clara, California, has sales and support offices worldwide, and is traded on the NASDAQ under the symbol TERN. Terayon is on the Web at http://www.terayon.com TITAN CORP: Awarded $74 Million U.S. Air Forces Europe Contract --------------------------------------------------------------- The Titan Corporation (NYSE: TTN) announced that the U.S. Air Forces Europe has awarded the company a $74 million five-year contract. Under this award, Titan will provide assistance and advisory services to five major organizations of the armed forces: the European Command, the Joint Analysis Center, the Warrior Preparation Center, U.S. Air Forces Europe, and U.S. Army Europe. "This new single-source contract extends Titan's solid relationship with our armed forces in Europe, and places Titan at the center of intelligence and operational support activities throughout the European Theater," said Gene Ray, Titan's chairman, president and CEO. Under the contract, Titan will provide an extensive array of services, including counter-terrorism analyses; engineering and technical services; management and professional support; studies, analyses and evaluation services to maintain and enhance government owned computer hardware as well as provide intelligence analysis support. Headquartered in San Diego, The Titan Corporation (S&P, BB- Corporate Credit and Senior Secured Debt Ratings, Positive) is a leading provider of comprehensive information and communications systems solutions and services to the Department of Defense, intelligence agencies, and other federal government customers. As a provider of National Security Solutions, the company has approximately 11,000 employees and current annualized sales of approximately $1.7 billion. TRIMAS CORP: Hosting Q3 2003 Earnings Conference on November 3 -------------------------------------------------------------- TriMas Corporation will hold a conference call with investors on Monday, Nov. 3 at 3:30 p.m. (EST) to discuss its third quarter results, provide a general business update and respond to investor questions. TriMas Corporation President and CEO Grant H. Beard and Chief Financial Officer Benson K. Woo will co-host the call. To participate by phone, please dial: 800-621-5175. Callers should ask to be connected to the TriMas third quarter conference call. Participants can download a corresponding presentation from the TriMas web site at http://www.trimascorp.combeginning Nov. 3. If you are unable to participate during the live teleconference, a replay of the conference call will be available beginning Nov. 3 at 6:30 p.m. (EST) through Nov. 10 at 6:30 p.m. (EST). To access the replay, please dial: 800- 633-8284 and use reservation number 21163335. Headquartered in Bloomfield Hills, Mich., TriMas is a diversified growth company of high-end, specialty niche businesses manufacturing a variety of products for commercial, industrial and consumer markets worldwide. TriMas is organized into four strategic business groups: Cequent Transportation Accessories, Rieke Packaging Systems, Fastening Systems and Industrial Specialties. TriMas has nearly 5,000 employees at 80 different facilities in 10 countries. For more information, visit http://www.trimascorp.com * * * As reported in the Troubled Company Reporter's May 29, 2003 edition, Moody's Investors Service took several rating actions on TriMas Corporation. Outlook is now negative from stable. Assigned Rating * B1 - Proposed $90 million increase to the Tranche B term loan facility Confirmed Ratings * B1 - Senior implied rating * B2 - Senior unsecured issuer rating * B1 - $150 million senior secured revolving credit facility, due November 15, 2007, * B1 - $350 million term loan B, due November 15, 2009, * B3 - $438 million 9.875% senior subordinated notes, due 2012 Moody's ratings mirror the company's high leverage, weak results and constrained liquidity. UAL CORP: Releasing Third Quarter Financial Results on Oct. 30 -------------------------------------------------------------- UAL Corporation (OTC Bulletin Board: UALAQ), the holding company whose primary subsidiary is United Airlines, announced that it will release its third quarter financial results and its September monthly operating report on Thursday, October 30, 2003. News releases and other information about United Airlines can be found at the company's web site, http://www.united.com. VENTURE CATALYST: Annual Shareholders' Meeting Set for Dec. 5 ------------------------------------------------------------- The annual meeting of shareholders of Venture Catalyst Incorporated, a Utah corporation will be held at 10:00 a.m., California time, on Friday, December 5, 2003, in the Events Center at the Barona Valley Ranch Resort & Casino, located at 1932 Wildcat Canyon Road, Lakeside, California 92040, for the following purposes: 1. To elect five directors to the Board of Directors to hold office for a term of one year, or until their respective successors are elected and qualified. 2. To act upon a proposal to approve an Option Exchange Program pursuant to which the Company's officers, directors and employees who hold options issued under the Company's 1995 Stock Option Plan, as amended, may elect to surrender such options for cancellation in exchange for new options to purchase a lesser number of shares of common stock that will be granted at least six months and one day from the date of cancellation of the surrendered options with an exercise price per share equal to the average of the closing bid and ask prices of Venture Catalyst's common stock on the OTC Bulletin Board on the date of grant. 3. To transact such other business as may properly come before the annual meeting or any adjournment thereof. The Company's Board of Directors has nominated John Farrington, Jana McKeag, Greg Shay, Cornelius E. ("Neil") Smyth and L. Donald Speer, II as the nominees for election to the Board of Directors. The Board of Directors has fixed the close of business on Friday, October 17, 2003, as the record date for the determination of shareholders entitled to notice of, and to vote at, the annual meeting. The Company's June 30, 2003, balance sheet discloses a total shareholders' equity deficit of about $7.2 million. WEIRTON STEEL: Overview of Capital Structure Under the Plan ----------------------------------------------------------- The Plan of Reorganization provides that the capital structure of Reorganized Weirton will be comprised of: -- the New Weirton Common Stock, -- Senior Redeemable Preferred Stock, and -- the loans under the Exit Facility. A. New Weirton Common Stock The authorized capital stock of Reorganized Weirton will consist of [__________] shares of Senior Redeemable Preferred Stock and shares of New Weirton Common Stock, par value $0.01 per share. Weirton expects that an aggregate of [________] shares of Senior Redeemable Preferred Stock, 100% of which shares will be held by Class 5, and [_______] shares of New Weirton Common Stock will be issued on the Effective Date pursuant to the provisions of the Plan, with 49% of the shares issued to be provided to active represented employees and current retirees of Weirton, with the balance of shares issued on the Effective Date to be distributed to other creditors of Weirton's bankruptcy estate in accordance with terms negotiated among Weirton and the parties-in-interest. B. Exit Facility Fleet Capital Corporation is the sponsor of an application with the Emergency Steel Loan Guaranty Board, which will provide for federally guaranteed term debt financing -- Exit Term Debt -- in addition to an asset-based revolving credit facility that is not subject to any federal guaranty or other guaranty of any nature -- Exit Revolver. Weirton does not have approval from the ESLGB for guaranteed Exit Term Debt, but Weirton expects the ESLGB to make a determination on the application no later than mid-October 2003. It is anticipated that ESLGB approval, if the approval occurs, will be provisional, contingent upon Weirton's satisfaction of certain conditions precedent established by the ESLGB. Pursuant to Section 1841 of the Commerce and Trade Code, a closing on the Exit Term Debt must occur on or before December 31, 2003. Notwithstanding this, Weirton expects emergence financing to consist of the Exit Revolver and Exit Term Debt generally consisting of these terms and conditions: * Exit Revolver in the maximum principal amount of $200,000,000, secured by a first priority lien and security interest in working capital assets; * Exit Revolver will be for a term of three years; * Exit Revolver will bear interest at rate of LIBOR plus several percentage points per annum paid monthly in arrears; * Exit Term Debt in maximum principal amount of $175,000,000, secured by a first priority lien and security interest in property, plant and equipment and a wrap around second lien and security interest in working capital assets; * Exit Term Debt guaranteed in tranches; * Exit Term Debt has maturity of five years, however, with ten-year amortization schedule and balloon at maturity, and no principal amortization payments in the first six months; * Exit Term Debt will bear interest at rate of 5% per annum paid monthly; and * Exit Facility will contain other terms and conditions customary for an exit facility of similar size under similar circumstances. If Weirton does not obtain the Exit Facility, it is not likely that it would be able to consummate the Plan in its current form. The assumptions relating to projections and the recoveries with respect to Claims used throughout the Disclosure Statement are based on the assumption that the Exit Facility will be obtained. However, there are no assurances at this time that the terms of the Exit Facility will be consistent with the assumptions described. The Projected Available Cash from the Exit Facility will be used by Reorganized Weirton to fund the Cash portion of the distribution to be made to the Postpetition Lenders under the Plan. The Projected Available Cash is the amount on the Effective Date able to be drawn by Reorganized Weirton under the Exit Facility, less amounts necessary to fund: (1) the Allowed Administrative Expense Claims payable on the Effective Date, (2) the Professional Fee Claims, (3) the Priority Claims, (4) the DIP Revolving Credit Facility Claims, (5) the DIP Term Debt Facility Claims, (6) other required Cash payments on the Effective Date, and (7) amounts necessary to be retained by Reorganized Weirton for post Effective Date operations. (Weirton Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., 609/392-0900) WESTERN INTEGRATED: Plan Confirmation Hearing Set for Nov. 10 ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Colorado approved the Disclosure Statement filed by Western Integrated Networks, LLC, its debtor-affiliates, and the duly-appointed Committee of Unsecured Creditors in the company's on-going chapter 11 restructuring. The Disclosure Statement was approved as containing adequate information within the meaning of Section 1125 of the Bankruptcy Code, allowing creditors for adequate information to decide whether to accept or reject the Plan. The hearing to consider confirmation of the plan is scheduled on November 10, 2003 at 9 a.m. Mountain Standard Time. All written objections to the confirmation of the Plan must be received on or before November 4, 2003 at 5:00 p.m. by: a) Counsel to Debtors and Debtors in Possession Douglas W. Jessop, Esq. Alice A. White, Esq. Jessop & Company, P.C. 303 East 17th Avenue, Suite 930 Denver, Colorado 80203 Telephone: (303) 860-7700 Facsimile: (303) 860-7233 b) Counsel to the Official Committee of Unsecured Creditors John Fiero Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C. Three Embarcadero, Suite 1020 San Francisco, CA 94111 Telephone: (415) 263-7000 Facsimile: (415) 263-7010 c) Local Counsel to the Official Committee of Unsecured Creditors Joseph Rosania Connolly, Rosania & Lofstedt, P.C. 390 Interlocken Crescent, Suite 490 Broomfield, Colorado 80021 Telephone: (303) 661-9292 Facsimile: (303) 661- 9555 Western Integrated Networks, LLC, a single source facilities based provider of broadband services to residential and small business customers in certain targeted markets, filed for chapter 11 protection on March 11, 2002 (Bankr. Colo. Case No. 02-13043). Douglas W. Jessop, Esq., at Jessop & Company, P.C. represents the Debtors in their restructuring efforts. WILLIAMS: Fitch Affirms B+ Rating on Senior Notes & Debentures -------------------------------------------------------------- Fitch Ratings has affirmed The Williams Companies, Inc.'s outstanding senior unsecured notes and debentures at 'B+'. Also affirmed are outstanding credit ratings for WMB's wholly-owned subsidiaries Northwest Pipeline Corp., Transcontinental Gas Pipe Line Corp., and Williams Production RMT Co. The Rating Outlook for each entity has been revised to Positive from Stable. Details of the securities affected are listed below. The Positive Rating Outlook reflects WMB's strengthened liquidity position and reduced debt refinancing risk, the solid financial performance of WMB's core natural gas businesses, and good prospects for continued de-leveraging and gradual credit quality improvement in the coming months. In addition, the revised Outlook reflects Fitch's expectation that WMB's Power segment (f/k/a/ Energy Marketing & Trading), notwithstanding the longer term risks associated with its contractual portfolio, will not adversely impact near-term consolidated cash flows. WMB's ongoing corporate restructuring has narrowed the scale and scope of the company. With planned asset sales nearing completion, WMB has emerged as a smaller integrated natural gas company with core operations encompassing FERC regulated interstate pipelines (TGPL and NWP), exploration and production, and midstream gas and liquids services. These businesses should continue to generate a relatively predictable earnings and cash flow stream going forward with potential commodity prices volatility in the E&P segment offset by the cash flow stability of TGPL and NWP and WMB's growing portfolio of fee based midstream gas gathering assets. Commodity price risk at E&P is further mitigated by WMB's hedging strategy and focus on developing lower risk Rocky Mountain based tight sands and coalbed methane gas reserves. Although WMB has been successful in winding down speculative trading positions, there is a high degree of uncertainty concerning the future of Power's sizable tolling contract portfolio. WMB currently has long-term tolling agreements for approximately 7,500 megawatts of generating capacity under which it is obligated to make fixed payments averaging $400 million over the next several years with total gross payments of $6.7 billion through 2022. Importantly, WMB has sold forward a significant portion of its tolling exposure at above market spark spreads thus minimizing the near-term cash flow strain at Power. Fitch estimates that existing physical power sales contracts combined with other financial hedges covers roughly 75% of Power's fixed costs structure, including overhead, through 2006. Current consolidated credit protection measures are weak primarily due to higher interest costs, working capital requirements at Power, and the assumption of several financial obligations related to WMB's former communications subsidiary. For the 12 month period ended June 30, 2003 EBITDA/Interest and FFO/Interest approximated 1.4 times (x) and 1.9x, respectively. However, WMB's recently announced tender offer for approximately $1.6 billion of notes and debentures, including $1.4 billion of 9.25% notes due March 2004, provides a jump start to the company's debt reduction plan and should ultimately accelerate an expected recovery in key consolidated credit protection measures. Fitch estimates that WMB currently has unrestricted cash in excess of $3 billion which could ultimately be utilized to fund the tender offer. The following is a summary of outstanding ratings affected by the action: The Williams Companies, Inc. -- Senior unsecured notes and debentures 'B+'; -- Feline PACs 'B+'; -- Senior secured debt 'BB'; -- Junior subordinated convertible debentures. 'B-'. Williams Production RMT Co. -- Senior secured term loan B 'BB+'. Northwest Pipeline Corp. -- Senior unsecured notes and debentures 'BB'. Transcontinental Gas Pipe Line Corp. -- Senior unsecured notes and debentures 'BB'. WORLDCOM INC: Resolves Claim Dispute with Wiltel Communications --------------------------------------------------------------- Worldcom Inc., and its debtor-affiliates ask the Court to approve a settlement agreement with WilTel Communications LLC, formerly known as Williams Communications, LLC, to resolve a dispute arising from their business relationship. The Debtors allege that Williams owes $12,000,000 for prepetition services that they provided pursuant to certain service agreements. Williams disputes owing a portion of the obligation. Williams, on the other hand, alleges that the Debtors owe $6,000,000 in outstanding balance for the prepetition services it rendered. Similarly, the Debtors dispute owing a portion of the alleged debt. Pursuant to a Compromise Agreement, the Debtors and WilTel agree: (a) that WilTel will be allowed these Claims: Claim Amount Debtor ------------ ------ $3,022,273 Intermedia Communications, Inc. 7,187 WorldCom, Inc. 5,800 MCI International Telecommunications Corp. 2,900 MCI International Telecommunications Corp. (b) that WilTel will pay the Debtors $9,471,844; (c) that, upon receipt of payment, the Debtors will issue a credit for $2,634,897 to WilTel; (d) to effectuate mutual releases; and (e) that the automatic stay in the Debtors' cases will be modified to the extent necessary to implement and give effect to the Settlement Agreement. Lori R. Fife, Esq., at Weil, Gotshal & Manges LLP, in New York, asserts that the Settlement is fair and reasonable. Absent the Settlement, the Parties might require extensive judicial intervention to resolve their many disputes. Litigation would be costly, time-consuming, and distracting to management and employees alike. (Worldcom Bankruptcy News, Issue No. 39; Bankruptcy Creditors' Service, Inc., 609/392-0900) W.R. GRACE: Seeks Court Approval to Name President and COO ---------------------------------------------------------- W. R. Grace & Co. (NYSE:GRA) announced that it had filed a motion before the U.S. Bankruptcy Court in Delaware seeking permission to hire a President and Chief Operating Officer. Paul J. Norris currently serves as Chairman, President and Chief Executive Officer of W. R. Grace & Co. and will continue to serve as Chairman and Chief Executive Officer. The decision to create this new position was made after Mr. Norris informed the Board of Directors his current intention to remain with the company until its emergence from Chapter 11, depending on the timing of that emergence, and the need to address succession planning with regard to the CEO position. The Board concluded that Grace would benefit by adding a highly qualified and experienced individual who could focus solely on improving the financial performance of Grace's core businesses and provide an additional internal candidate for succession planning. Mr. Norris will dedicate a greater portion of his time to manage corporate-wide issues. Subsequently, a candidate to become President and Chief Operating Officer has been selected and a compensation package with this person has been negotiated. Appointment of this person to be President is contingent upon the bankruptcy court's approval, which will be on the agenda at the hearing scheduled for November 17, 2003. Grace is a leading global supplier of catalysts and silica products, specialty construction chemicals and building materials, and sealants and coatings. With annual sales of approximately $1.8 billion, Grace has over 6,000 employees and operations in nearly 40 countries. Visit the Grace Web site at http://www.grace.com * 10th Aircraft Fin. Conference to Address New Capital Sources -------------------------------------------------------------- What financing and leasing options are available for the aviation industry today? Where will sources of financing for new aircraft demand be found? And how can investors capitalize on these demands? To provide today's airline investors, company management, and advisors with the right tools to benefit from these new opportunities, Strategic Research Institute is pleased to announce the 10th Annual Aircraft Finance Transactions Conference. This annual event provides key information and contacts for investors, advisors, and financial executives in the airline industry. To celebrate our 10th Annual event, we will be offering this year's program at the Aladdin Resort & Casino in Las Vegas, NV on October 27 - 28, 2003. For the first time in ten years, Strategic Research Institute has structured the two-day conference agenda to be presented in half- day segments. Through compelling discussions, analytical presentations, and informative sessions, four major financial themes facing the commercial aviation industry will be addressed: New challenges and opportunities; Securing capital in a volatile market; Bankruptcy, restructuring, and turnaround management; and International updates. Among these segments, topics will include: new sources for raising capital, such as hedge funds and private equity; access to public markets for aircraft finance; airline restructuring and turnaround management; trading in distressed EETC debt and bankruptcy claims; trends in ECAs, operating leasing and innovative structures; opportunities in China and the Middle East: Post-SARS and Post-war; how manufacturers are financing the capital requirements of airlines; and a Capetown update on contract drafting practices and transaction procedures. During the exclusive networking events, including luncheons and a cocktail party at the Aladdin Resort, attendees will have the opportunity to meet with decision-makers from: Aero Records & Title Company; Airlogic S.A.; Alston & Bird LLP; America West Airlines; Aviation Capital Group Corp.; Avitas; Brigard & Urrutia; Brown Rudnick Berlack Israels LLP; CIT Aerospace; Citigroup Global Markets; Credit Suisse First Boston; Daugherty, Fowler, Peregrin & Haught; DeBee Gilchrist & Lidia; debis AirFinance; Delta Airlines; Ernst & Young Corporate Finance LLC; Eureka Capital Markets; Evergreen International Aviation; Export - Import Bank of the U.S.; FINOVA Capital Corporation; First American Transportation Title Insurance Company; Fulbirght & Jaworski; GE Capital Aviation Services; Greenberg Traurig; Junyi Law Office; Kaye Scholer LLP; Kirkland & Ellis; Lewis and Roca, LLP; Mannheimer Swartling Lawfirm; McAfee & Taft, P.C.; McKenna Long & Aldridge, LLP; Mesa Air Group; Moody's Investors Service; Morton Beyer & Agnew; Novus Management & Consulting S.A.; Oasis International Leasing, Inc.; Pegasus Aviation, Inc.; PPM America; Residco; Rothschild, Inc.; Seabury Group; Standard & Poor's Rating Services; TACA; Tekharbor, Ltd; TIMCO Aviation Services; Tombo Aviation, Inc.; Transamerica Aircraft Finance; UBS Investment Bank; US Bancorp Piper Jaffray; Wachovia Bank; Whittall-Scherfee Law Offices; Willis Lease Finance Corporation; Xavier, Bernardes, Braganca, Sociedade de Advogados; and many more. For information or to register: http://www.srinstitute.com/AIRor contact: info@srinstitute.com or 1-888-666-8514 (Phone). Please mention keycode DPR000774 when registering * Marshack Shulman Hodges & Bastian Open Riverside Office --------------------------------------------------------- The law firm of Marshack Shulman Hodges & Bastian LLP (MSHB) announced the opening of its Riverside, Calif. office. Managing Partner, Leonard M. Shulman will lead the firm's new office and its expansion into the Inland Empire market. MSHB is renowned throughout Southern California as a leader in bankruptcy law and related bankruptcy litigation matters. "The firm's addition of an office in Riverside County is evidence of our desire to meet the demands and needs of the growing business community and our existing clients in the area," stated Mr. Shulman. "Riverside is a great and historic city, and we are delighted to be opening this new office and look forward to working with our colleagues offering our firm's unmatched bankruptcy law services to all of our clients in that region," Mr. Shulman added. About Marshack Shulman Hodges & Bastian LLP The firm was founded in the early 1990s by Richard Marshack, now of counsel to the organization. By the mid to late 1990s, the firm had evolved into a full-service bankruptcy law firm whose growth rate outpaced that of the local economy. Leonard M. Shulman joined the firm in the mid 1990s to expand the firm's bankruptcy trustee and litigation practice. Ronald S. Hodges joined the firm in 1995 and immediately contributed a depth and breadth to the firm's emerging bankruptcy litigation department, which continues to expand today. As the firm matured through the 1990s, new clients and partners were added, including James C. Bastian, who was named partner in 1999. Mr. Bastian specializes in a variety of insolvency and bankruptcy related matters, and successfully led trade vendors through the unprecedented County of Orange bankruptcy proceedings, in fact, recovering 100 cents on the dollar for this constituency. Throughout the firm's expansion, Marshack Shulman Hodges & Bastian has earned its reputation as one of the finest law firms of its kind, not only in Southern California, but throughout the region. The business community has recognized that the firm's team is bright, vibrant, quick-thinking and able to devise solutions to severe and complex problems. Practice areas currently handled by the firm include: committee representations, trustee representation, bankruptcy litigation, including prosecution of D&O claims, business reorganizations, employment and labor law, complex personal injury, bad faith (representing the plaintiff), all in the context of a bankruptcy proceeding. For more information regarding Marshack Shulman Hodges & Bastian LLP, please call 949-340-3400 or visit http://www.mshblaw.com. * DebtTraders' Real-Time Bond Pricing ------------------------------------- Issuer Coupon Maturity Bid - Ask Weekly change ------ ------ -------- --------- ------------- Federal-Mogul 7.5% due 2004 14.5 - 16.5 0.0 Finova Group 7.5% due 2009 43.5 - 44.5 +0.5 Freeport-McMoran 7.5% due 2006 102.5 - 103.5 0.0 Global Crossing Hldgs 9.5% due 2009 4.5 - 5.0 +0.25 Globalstar 11.375% due 2004 3.0 - 3.5 -0.5 Lucent Technologies 6.45% due 2029 68.25 - 69.25 -0.75 Polaroid Corporation 6.75% due 2002 11.0 - 12.0 0.0 Westpoint Stevens 7.875% due 2005 20.0 - 22.0 0.0 Xerox Corporation 8.0% due 2027 84.0 - 86.0 -1.5 Bond pricing, appearing in each Thursday's edition of the TCR, is provided by DebtTraders in New York. DebtTraders is a specialist in global high yield securities, providing clients unparalleled services in the identification, assessment, and sourcing of attractive high yield debt investments. For more information on institutional services, contact Scott Johnson at 1-212-247-5300. To view our research and find out about private client accounts, contact Peter Fitzpatrick at 1-212-247-3800. Real-time pricing available at http://www.debttraders.com ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. 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 ***