/raid1/www/Hosts/bankrupt/TCR_Public/031021.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, October 21, 2003, Vol. 7, No. 208
Headlines
866 3RD NEXT: Employing Brown Raysman as Bankruptcy Attorneys
ACTERNA CORP: Wants to Assume and Assign 12 Itronix Contracts
ADELPHIA BUSINESS: Will Provide Various Services to Web Clients
AHOLD: Files Annual Report 2002 on Form 20-F with SEC
AMERICAN PLUMBING: Seeks Approval to Pay Critical Vendors Claims
AMERICREDIT CORP: Fitch Rates Automobile Receivables Trust Notes
AMPEX CORP: Fails to Comply with AMEX Minimum Listing Criteria
ANC RENTAL: Enters Stipulation Fixing November 24 IRS Bar Date
ARMSTRONG WORLD: Plan Voting Deadline Moved to October 31, 2003
ARISTOCRAT LEISURE: S&P Keeps Negative Watch on BB Credit Rating
BALDWIN CRANE: Wants Nod to Use First Essex's Cash Collateral
BAY VIEW CAPITAL: Q3 Conference Call Rescheduled for October 29
BEVERLY ENTERPRISES: Reports Placement of $15MM of 2.75% Notes
BUDGET GROUP: Exclusive Plan-Filing Period Stretched to Nov. 3
CALYPTE BIOMEDICAL: Presenting at Rodman & Renshaw Conference
CANWEST GLOBAL: Appoints Frank McKenna as Interim Board Chairman
CELERITY SYSTEMS: Reduces Debt by an Additional $1.6 Million
CENTURY AVIATION: Files for Chapter 11 Protection in Honolulu
CENTURY AVIATION: Case Summary & 20 Largest Unsecured Creditors
CMS ENERGY: Sells Southern Union Stock for Nearly $56 Million
CONSECO INC: Court Appoints Committee to Resolve Cure Issues
CONSECO STRATEGIC: Declares Dividend Payable on November 7, 2003
DS WATERS LP: S&P Assigns B+ Corp. Credit and Bank Loan Ratings
EDISON INT'L: Receives $945MM in Cash Dividend from SoCal Unit
ELEC COMMUNICATIONS: Ability to Continue Operations Uncertain
ENRON: Posts Schedule of Duplicate Claims Objection Hearings
EXTENDICARE HEALTH: S&P Ups Ratings over Improving Fin'l Results
FAIRFAX FINANCIAL: Will Host Quarterly Conference Call on Nov. 3
FORMICA CORP: Disclosure Statement Hearing Set for October 29
FRONTLINE CAPITAL: Shareholders May Not Receive Distribution
GAYLORD ENTERTAINMENT: Proposes Sr. Credit Facility Amendments
GAYLORD ENTERTAINMENT: Proposes $225 Mill. Senior Notes Offering
GENCORP: Unit Completes Acquisition of Atlantic Research Assets
GOLDRAY INC: Inks Binding Pact to Sell Assets to Quick Draw
GOODYEAR: Reaches Prelim. Settlement of Radiant Heat Hose Suits
HARVEST NATURAL: Will Present at NYSSA Conference Tomorrow
HOLIDAY RV SUPERSTORES: Case Summary & 20 Unsecured Creditors
IMC GLOBAL: Transfers Partnership Interest in PLP to New Unit
INTEGRATED HEALTH: Seeking Court's HQ Transfer Protective Order
INTERNATIONAL UTILITY: Obtains Creditors Protection Under CCAA
KAISER ALUMINUM: Pushing for Environmental Claims Consent Decree
KMART HOLDING: Hires BDO Seidman to Replace PwC as Accountants
LEAP: Cricket Gets Nod to Expand Deloitte's Engagement Scope
LTV CORP: Claims Treatment & Classification Under Proposed Plan
MALDEN MILLS: Successfully Emerges From Chapter 11 Proceedings
MAXXIM MEDICAL: Wants Plan Exclusivity Stretched Until Nov. 10
MCDERMOTT: S&P Keeps Junk-Level Credit Rating on Watch Positive
MCSI INC: Files Disclosure Statement for Plan of Reorganization
METALDYNE CORP: Names Anne Lockwood VP of New Sale Organization
METATEC INC: Files for Chapter 11 Reorganization in S.D. of Ohio
METATEC INC: Voluntary Chapter 11 Case Summary
MIRANT CORP: Court Okays Deloitte's Engagement on Interim Basis
MOBILE COMPUTING: Closes Significant Restructuring Transactions
NESTOR INC: Secures $2 Million through Convertible Note Issue
NEW CENTURY FIN'L: Files Registration Statement on SEC Form S-3
NEW WORLD: Post-Split Shares Begin Trading on Pink Sheets
NEXTEL: Fitch Assigns BB- Rating to $500MM Senior Notes Offering
NOMURA ASSET SECURITIES: S&P Affirms BB Class B-2 Notes' Rating
NORTHWESTERN: Bankruptcy Won't Affect PPL Montana Credit Quality
NRG ENERGY: Wants Go-Signal to Assume & Assign Contracts to OG&E
OWENS-ILLINOIS: Declares Dividend on $2.375 Conv. Preferreds
PARK PLACE: Will Construct New Parking Garage in Atlantic City
PERLE SYSTEMS: Enters into Debt to Equity Conversion Agreement
PETROLEUM GEO-SERVICES: Plan Confirmation Hearing Set for Today
PG&E: USGen Creditors Develop Website for Certificateholders
READER'S DIGEST: Declares Quarterly Dividend of $0.05 per Share
RESOURCE WASTE SERVICES: Voluntary Chapter 11 Case Summary
ROGERS COMMS: Q3 2003 Operating Results Reflect Strong Growth
ROGERS WIRELESS: Reports Improved 3rd-Quarter Operating Results
SHAW GROUP: Plans Tender Offer for Liquid Yield Option Notes
SHAW GROUP: Receives Commitments to Increase Credit Facility
SHAW GROUP: Proposes to Commence $200 Million Equity Offering
SIEBEL: Reaffirms Support UpShot Customers Following Acquisition
SK GLOBAL AMERICA: SK Network Signs Compromise with Creditors
SPECIAL METALS: Bond Tapped as Congress Transaction Counsel
STARTECH ENVIRONMENTAL: Northshore Buys Additional 560K Shares
SUNPEAK HOLDINGS: Case Summary & 2 Largest Unsecured Creditors
TESORO PETROLEUM: Will Webcast Q3 Conference Call on November 5
TOP-FLITE GOLF: Five-Year Agreement with Union Ratified
TX STUDENT HOUSING: Low Debt Service Coverage Spurs Rating Drop
TYCO INT'L: Commences Tender Offer for Liquid Yield Option Notes
UNITEDGLOBALCOM: Stockholders Send Letter to UGC Special Panel
UNUMPROVIDENT: Will Publish Third-Quarter Results on November 6
UNUMPROVIDENT: Declares $0.075 per Share Quarterly Dividend
US AIRWAYS: Look for Third-Quarter 2003 Results Today
VINTAGE CUSTOM: Case Summary & 20 Largest Unsecured Creditors
WEIRTON STEEL: Provides Financial Projections Under Reorg. Plan
WESTPOINT STEVENS: Board of Directors Elects M. L. Fontenot CEO
WESTPOINT STEVENS: Enters into 3rd Amendment to DIP Credit Pact
WORLDCOM INC: MCI Extends Tender Offer for Class A Digex Shares
WORLDCOM INC: Court Approves Cox Communications Settlement Pact
XOMA: Underwriters Exercise Over-Allotment Option to Buy Shares
* Goldman Sachs Tops Fin'l Advisor Rankings by Global Securities
* Goodwin Procter Has New Name, Look & E-Mail Addresses
* Large Companies with Insolvent Balance Sheets
*********
866 3RD NEXT: Employing Brown Raysman as Bankruptcy Attorneys
-------------------------------------------------------------
866 3rd Next Generation Hotel, L.L.C., is seeking permission from
the U.S. Bankruptcy Court for the Southern District of New York to
employ Brown Raysman Millstein Felder & Steiner LLP as bankruptcy
counsel.
The services of Brown Raysman are necessary to enable the Debtor
to execute faithfully its duties as debtor and debtor-in-
possession. In this regard, the Debtor expects Brown Raysman's
services to include:
a) the protection and preservation of the estate of the
Debtor, including the prosecution of actions on the
Debtor's behalf, the defense of any actions commenced
against the Debtor, the prosecution of and/or
negotiation in respect of all litigation in which the
Debtor is involved, and the preparation of objections to
claims filed against the estate;
b) the preparation on behalf of the Debtor, as debtor in
possession, of all necessary motions, applications,
answers, orders, reports and papers in connection with
the administration of the estate herein;
c) the negotiation and preparation on behalf of the Debtor
of a chapter 11 plan(s), disclosure statement(s) and all
related documents;
d) representing the Debtor in connection with any sales,
leases or other uses of property of the estate and all
other legal issues in connection therewith; and
e) the performance of all other necessary legal services in
connection with this chapter 11 case.
Lawrence P. Gottesman, Esq., a partner of the firm of Brown
Raysman reports that the firm's current customary hourly rates
are:
partners $400 to $525 per hour
associates $220 to $400 per hour
paraprofessionals $155 to $200 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: Wants to Assume and Assign 12 Itronix Contracts
-------------------------------------------------------------
Michael F. Walsh, Esq., at Weil, Gotshal & Manges LLP, in New
York, representing the Acterna Debtors, recalls that on September
18, 2003, the Court approved the sale of the Itronix Business to
Golden Gate and authorized the Debtors to assume and assign the
Purchased Contracts to Rugged Computing, Inc. Rugged Computing is
the entity that Golden Gate created to effectuate the transaction.
Before the Court entered the Itronix Sale Order, the Debtors
filed a notice of their intent to assume and assign certain
executory contacts and unexpired leases. After the approval of
the Itronix Sale, the Debtors and Rugged Computing discovered the
existence of additional executory contracts that should have been
included in the Notice. These contracts are primarily service
agreements between Itronix and its customers, and are unrelated
to the Debtors' remaining core business:
Counterparty Title Agreement Inclusive Dates
------------ --------------- ---------------
Commonwealth Edison Service Agreement 03/31/2000 to
Company 03/30/2005
General Services GSA Schedule Contract 09/24/2001 to
Administration, Federal 09/24/2004
Supply Service
Telos Corporation Business Partner 05/01/2003 to
Agreement 04/30/2004
Missouri Gas Energy Master Service 04/01/2002 to
Agreement 01/31/2004
Continental Graphics Business Partner 10/01/2002 to
Corporation Agreement 11/01/2003
MIAD Systems Ltd. Business Partner 07/01/2002 to
Agreement 07/01/2004
Microvision Technology Business Partner 03/19/2002 to
Corporation Agreement 03/19/2004
Optron PTY Business Partner 05/01/2003 to
Agreement 04/30/2004
M.T.N. Systems, Ltd. Business Partner 05/01/2003 to
Agreement 04/30/2004
Acterna LLC Patent License 02/13/2003 to
Agreement 05/13/2005
Acterna LLC Patent Assignment 02/13/2003 to
05/13/2005
MDSI Software SRL Reseller Product 10/19/1998 to
Purchase and License 10/19/2004
Agreement
According to Mr. Walsh, there are no cure costs relating to the
Assumed Contracts. The Debtors will no longer perform these
Assumed Contracts once the Itronix Sale has closed. Moreover,
these contracts are important to the Itronix Business and would
have been set forth on the Notice had Rugged Computing been aware
of them. Therefore, as an accommodation, Rugged Computing has
asked the Debtors to assume and assign the Assumed Contracts to
it as part of the Itronix Sale.
Absent the assumption and assignment, the Debtors would be forced
to reject the Assumed Contracts pursuant to Section 365(a) of the
Bankruptcy Code and Rules 6006 and 9014 of the Federal Rules of
Bankruptcy Procedure. The rejection would give rise to damages
and allow the parties to the rejected contracts to file proofs of
claim. The rejection damages could have an impact on the
distribution to unsecured creditors who, under the Plan, are
entitled to share pro rata in any savings to the extent that
allowed general unsecured claims are less than $35,000,000.
Accordingly, the Debtors seek the Court's authority to assume and
assign the Assumed Contracts to Rugged Computing effective on the
earlier of:
* the Itronix Sale closing; and
* the effective date of the Debtors' Plan. (Acterna Bankruptcy
News, Issue No. 13; Bankruptcy Creditors' Service, Inc.,
609/392-0900)
ADELPHIA BUSINESS: Will Provide Various Services to Web Clients
---------------------------------------------------------------
TelCove, fka Adelphia Business Solutions, will be providing a full
array of telecommunications services, Internet, Data, and Voice,
to Web Clients, Inc., d/b/a Webclients.net, a web-based
advertising network, at its new headquarters in Harrisburg,
Pennsylvania.
Established in June of 1998, Webclients.net serves traditional and
new economy businesses seeking to expand their online marketing
and bottom-line performance with access to over 16,000 websites
representing 29 different product categories. The very nature of
its business requires a vast compilation of communications
services.
A significant factor in Webclients.net's choice of TelCove is that
as a facilities-based competitive telecommunication provider,
TelCove is able to meet the requirements of communications
intensive customers through its extensive offering of integrated
communications services. The three-year agreement calls for
TelCove to provide local voice, local data, long distance, co-
location, and burstable Internet services for the Pennsylvania-
based company.
"TelCove had both the experience and capacity to fulfill our
needs," said Scott Piotroski, chief operating officer of
Webclients.net. "When we also considered that it could meet all of
our requirements in a timely and cost- effective manner, the
decision to choose TelCove was an easy one."
"TelCove's core service offerings are a perfect fit for
Webclients.net's demand for full burstable Internet, Data, and
Voice products," said Joe Rodriguez, general manager for TelCove.
"Because Webclients.net's business is so dependent upon its
Internet connectivity, TelCove's 100% Service Level Agreement for
Type I Internet customers gives Webclients.net the confidence
needed to provide its customers with uninterrupted service. "
Web Clients, Inc., d/b/a Webclients.net has specialized in
delivering turnkey, performance driven results to hundreds of
leading online marketers since 1998. Utilizing custom tracking
solutions, a proprietary network of 16,000 website publishers and
innovative marketing solutions combined with financial savvy,
Webclients.net produces six billion monthly impressions, over 3.5
million monthly leads and online profits for its clientele. For
more information, please visit http://www.webclients.net
Founded in 1991, TelCove is one of the longest standing
competitive communications providers in the nation offering
integrated Internet, Data, and Voice services to more than 9,000
customers via its advanced, secure fiber optic network. For more
information on TelCove, please visit http://www.telcove.com
AHOLD: Files Annual Report 2002 on Form 20-F with SEC
-----------------------------------------------------
Ahold (NYSE:AHO) (Other OTC:AHODF) has submitted its Annual Report
2002 on Form 20-F on October 16, 2003, to the United States
Securities and Exchange Commission. The document is posted on the
SEC Web site.
- Net loss under U.S. GAAP for 2002 of Euro 4,328 million (Dutch
GAAP: Euro 1,208 million)
- Shareholders' equity under U.S. GAAP of Euro 8,541 million
(Dutch GAAP: Euro 2,609 million)
In addition to the audited consolidated financial statements for
2002 as presented on October 2, 2003, Form 20-F contains
information on the operational performance of Ahold's operating
companies, an outlook for 2003, which is summarized below, and
information with regard to legal and corporate governance issues.
The company also has made editorial improvements to and corrected
inadvertent mistakes in the notes to its financial statements
contained in Item 18 of the Form 20-F, published by the company on
October 2, 2003. These changes have no impact on the reported
results and financial position.
During the presentation of the company's 2002 annual results under
Dutch GAAP on October 2, 2003, Ahold indicated that it expected a
significantly higher net loss under U.S. GAAP for 2002. The net
loss under U.S. GAAP was Euro 4,328 million (Euro 1,208 million
Dutch GAAP). The higher net loss under U.S. GAAP was primarily a
result of additional goodwill impairments of Euro 3,485 million,
of which Euro 2,632 million was related to U.S. Foodservice.
Taking into account the impairment charges, shareholders' equity
under U.S. GAAP as of year-end 2002 was Euro 8,541 million (Dutch
GAAP Euro 2,609 million). A description of the principal
differences between U.S. GAAP and Dutch GAAP relevant to Ahold is
found in Note 32 in Item 18 of the Form 20-F.
Ahold also provided additional information on the terms and
conditions of the ICA AB (formerly ICA Ahold AB) put option, which
clarifies information publicly provided on October 2, 2003. Ahold
owns a 50% interest in ICA AB, with Canica AS (20%) and ICA
Forbundet AB (30%). Under the shareholders' agreement of ICA AB,
Ahold will be able to nominate a majority of the members of the
ICA AB board of directors, only if Ahold acquires more than 70% of
the shares and voting rights of ICA. If Ahold is unable to
nominate a majority of the ICA AB board of directors, Ahold may
not have control over ICA AB.
As disclosed on October 2, 2003, the company indicated that it
would have to pay at least Euro 1.3 billion for all of the shares
held by the ICA partners. Subsequent to that, new information was
provided to Ahold and the ICA partners that enables Ahold to be
more precise in its current estimate of what it would have to pay
for all of the remaining shares of the ICA partners. As a result,
Ahold currently estimates that the amount that it would have to
pay under the existing option would be approximately Euro 1.8
billion. The company points out that this current estimate is by
no means definitive as the valuation procedure for the ICA shares
is not likely to be completed before the second quarter of 2004.
The outcome, therefore, depends on future market conditions and
presently unknown parameters to be applied in the valuation.
Outlook 2003
The distractions caused by the events surrounding the announcement
on February 24, 2003 and the related investigations are expected
to have had a negative impact on our business. We expect that 2003
consolidated net sales will be negatively affected by the weak
global economy and strong competition in the markets where we
operate. Ahold's 2003 net sales will also be reduced by the
divestment of some businesses. Operating expenses, excluding the
impact of currency exchange rates, goodwill impairment charges and
the 2002 exceptional loss related to the Velox default, will be
significantly higher in 2003 than in 2002. Ahold expects that net
financial expenses, excluding the impact of currency exchange
rates, will also be higher than in 2002. Professional fees of
lawyers and accountants, together with refinancing costs, will
have a significant impact on 2003 income.
Additional information on the outlook for 2003 and the 2002
results of certain segments and operating areas is found in Item 5
of the Form 20-F.
Form 20-F is available on Ahold's corporate Web site at
http://www.ahold.com
* * *
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.
AMERICAN PLUMBING: Seeks Approval to Pay Critical Vendors Claims
----------------------------------------------------------------
American Plumbing & Mechanical, Inc., and its debtor-affiliates
are asking permission from the U.S. Bankruptcy Court for the
Western District of Texas to pay the prepetition claims of
critical vendors of certain suppliers of materials, equipment,
goods and services with whom the Debtors continue to do business
and whose materials, equipment, goods, and services are essential
and critical to the Debtors' reorganization.
The Debtors estimate that, as of the Petition Date, they owed a
total of $33,489,663 in trade accounts payable and, of this,
approximately $28,415,279 is owed to Critical Vendors. These
checks will likely be dishonored by the Debtors banks. In order to
prevent the loss of goods and services necessary for the
continuation of the Debtors' business, the Debtors need authority
to reissue checks to Critical Vendors
The Debtors' business is contracting with vendors of goods and
services in the construction industry for the provision of these
goods and services to third party customers. The Debtors'
customers are primarily owners/builders of residential single
family and multi-unit housing. As such, the Debtors are
contractors who have obligations to provide goods and/or services
to third parties.
Unfortunately, because of the very competitive nature of the
construction-related businesses, the Debtors' customers and
vendors do not have the same dependence upon the Debtors. In
short, the Debtors' services can be replaced.
The criteria used to determine which vendor payments will be
critical to avoid business interruption are:
a. Vendors of goods and services involved in ongoing
projects that have the ability to delay the completion
of projects that the Debtors are otherwise contractually
obligated to complete;
b. Vendors of goods and services who the Debtors have
timely paid on consistent basis prior to the filing of
these cases;
c. Vendors of goods and services who are owed payments for
work performed prepetition that are now making their
future performance contingent upon satisfaction of their
prepetition claims;
d. Vendors that supply goods or services to a project under
the terms of an executory contract that requires Vendors
to be paid before the Debtors;
e. Vendors of goods and services who have the right to
impose statutory liens (e.g., mechanic's and
materialman's liens or possessory liens) on the Debtors'
property or their work projects; and
f. Vendors of goods and services that have reclamation
rights.
Headquartered in Round Rock, Texas, 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. The Company filed for chapter 11 protection on October
13, 2003 (Bankr. W.D. Tex. Case No. 03-55789). Demetra L.
Liggins, Esq., at Winstead Sechrest & Minick P.C., represents the
Debtors in their restructuring efforts. When the Company filed
for protection from its creditors, it listed $282,456,000 in total
assets and $256,696,000 in total debts.
AMERICREDIT CORP: Fitch Rates Automobile Receivables Trust Notes
----------------------------------------------------------------
Fitch Ratings has assigned ratings to the receivables-backed notes
issued by AmeriCredit Automobile Receivables Trust 2003-D-M as
listed below:
-- $227,000,000 class A-1 1.12% Asset-Backed Notes, 'F1+';
-- $440,000,000 class A-2 1.44% Asset Backed Notes, 'AAA';
-- $75,000,000 class A-3-A 2.14% Asset Backed Notes, 'AAA';
-- $104,000,000 class A-3-B Floating-Rate Asset Backed Notes,
'AAA';
-- $354,000,000 class A-4 2.84% Asset Backed Notes, 'AAA'.
The securities, which represent the fourth securitization of the
year offered by AmeriCredit Financial Services, Inc., are issued
with a note guaranty insurance policy from MBIA Insurance Corp.
(MBIA), which is rated 'AAA' by Fitch. The note policy ensures
full and timely payment of interest and principal by the legal
final distribution date. The ratings address the likelihood of
full and timely payment of interest and ultimate payment of
principal by the legal final distribution date of each class. The
ratings are based on the terms of the financial guaranty insurance
policy and insurer financial strength rating of MBIA, the
transaction's sound legal and cash flow structures, and the
strength of ACF as originator and servicer of the receivables.
Interest and principal on the notes are distributed monthly on the
sixth day of each month, commencing on Nov. 6, 2003. Principal is
distributed sequentially beginning with the class A-1 notes until
paid in full. Before drawing upon the insurance policy, losses
will be covered by excess spread, overcollateralization, and a
spread account. Excess spread will be available to make
accelerated principal payments on the notes, thereby increasing OC
to its targeted level.
The receivables in the 2003-D-M trust are simple interest
receivables made with respect to new (42.04%) and used (57.96%)
automobiles and light-duty trucks and vans. The pool is well
diversified geographically, with the largest state concentrations
in California (12.17%), Texas (12.93%), Florida (10.17%), and
Pennsylvania (5.37%. No other state represents more than 5% of the
pool. Geographic diversification acts to insulate the transaction
against regional economic downturns.
ACF is a wholly owned operating subsidiary of AmeriCredit Corp.
(rated 'B' by Fitch). AmeriCredit Corp. is a consumer finance
company specializing in purchasing, securitizing, and servicing
automobile loans, with a leading position in the competitive and
sometimes volatile, nonprime automobile finance industry. As of
Aug. 31, 2003, the company's managed automobile receivables are
originated through 90 branch offices in 31 states.
AMPEX CORP: Fails to Comply with AMEX Minimum Listing Criteria
--------------------------------------------------------------
Ampex Corporation (Amex:AXC) has received notice from the American
Stock Exchange that it intends to proceed with removal of the
Company's Common Stock from listing and registration on the
Exchange.
The Amex has permitted the Company's Common Stock to be listed
pursuant to a waiver of certain quantitative listing requirements,
which expired with the filing of its June 30, 2003 financial
statements on Form 10-Q. The Amex determined that the Company was
not in compliance with the requirement that it maintain more than
$4 million of stockholders' equity as it has sustained losses from
continuing operations and/or net losses in three of its four most
recent fiscal years.
Ampex has been afforded an opportunity to appeal the decision and
to present its reasons in support of continued listing, and it is
expected to do so shortly. Pending the resolution of the appeal,
the stock will continue to be listed on the American Stock
Exchange.
In the event that the Company's Common Stock is delisted from the
Amex, the Company expects that its shares will be eligible for
quotation on the OTC Bulletin Board, where they were traded prior
to the Amex listing. The Company believes that this would allow
holders an adequate opportunity to trade their Common Shares in
the future.
Ampex Corporation -- http://www.Ampex.com-- headquartered in
Redwood City, California, is one of the world's leading innovators
and licensors of technologies for the visual information age.
At June 30, 2003, Ampex's balance sheet shows a total
shareholders' equity deficit of about $145 million.
ANC RENTAL: Enters Stipulation Fixing November 24 IRS Bar Date
--------------------------------------------------------------
In a Court-approved stipulation, the ANC Rental Debtors and the
U.S. Internal Revenue Service agree to set November 24, 2003 as
the deadline for the IRS to file any and all proofs of claim. The
IRS's original proof of claim will be received by Debtors' claims
agent:
Donlin, Recano & Company, Inc.
Agent for the United States Bankruptcy Court
Re: ANC Rental Corporation, et al.
P.O. Box 2017, Murray Hill Station
New York, New York 10156
Late-filed Claims will not be treated as claims for voting
purposes on any reorganization plan for the Debtors, will not
receive distributions and will be forever barred against the
Debtors.
The Debtors reserve their rights to object to the IRS claim on
any grounds. (ANC Rental Bankruptcy News, Issue No. 40; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
ARMSTRONG WORLD: Plan Voting Deadline Moved to October 31, 2003
---------------------------------------------------------------
By an order dated October 11, 2003, the U.S. Bankruptcy Court for
the District of Delaware in the Chapter 11 case of Armstrong World
Industries, Inc., the operating subsidiary of Armstrong Holdings,
Inc., approved an extension until 5:00 p.m. (Delaware time) on
Friday, October 31, 2003 of the deadline for creditors of and
claimants against AWI who are entitled to vote on AWI's proposed
plan of reorganization to vote thereon.
The voting deadline was previously October 17, 2003. Creditors and
claimants may vote on AWI's proposed plan of reorganization in the
manner described in AWI's Disclosure Statement dated June 2, 2003,
which has previously been sent to creditors and claimants and the
form of which was filed with the U.S. Securities and Exchange
Commission. As creditors of AWI and shareholders of Holdings were
previously notified, a hearing on confirmation of AWI's proposed
plan of reorganization is scheduled for November 17, 2003 and the
deadline for parties in interest to object to the plan was
September 22, 2003. No other changes in the scheduled process for
consideration of the plan were made.
ARISTOCRAT LEISURE: S&P Keeps Negative Watch on BB Credit Rating
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'BB' corporate
credit rating on Aristocrat Leisure Ltd. on CreditWatch with
negative implications. Sydney, Australia-based Aristocrat is a
developer and marketer of gaming machines and systems.
"The CreditWatch placement reflects the company's reduced
financial flexibility as a result of its recent poor performance,
significant challenges in increasing its foot print in the U.S.
gaming market, and the potential for further earnings pressure as
Aristocrat transitions to a new management team," said Standard &
Poor's credit analyst Andrew Lally. The company also faces a
slowing domestic environment, where regulatory and tax changes are
posing longer-term challenges. Aristocrat maintains a strong
position in Australia's gaming machine market, where it has about
two-thirds of the installed base. However, the prospect of more
moderate growth rates in Australia in the next few years, combined
with its current modest competitive position in the U.S. and the
higher working capital requirements to fund growth in offshore
markets are key concerns.
Standard & Poor's will meet with management in the near term to
clarify progress in turning around the U.S. business, growth
strategies in that and its other offshore markets, and trends in
its liquidity and financial flexibility.
BALDWIN CRANE: Wants Nod to Use First Essex's Cash Collateral
-------------------------------------------------------------
Baldwin Crane & Equipment Corporation asks for authorization to
use cash and non-cash collateral to operate its business from the
U.S. Bankruptcy Court for the District Of Massachusetts
The Debtor reports that its obligation to First Essex Bank, is
secured by a first priority lien and security interest covering
its assets -- including Inventory, accounts receivable, contract
rights, as well as certain machinery and equipment to secure the
Line of Credit loan in the outstanding sum of $741,000.
The Debtor further avers that the claim of First Essex Bank is
secured by accounts receivable in the sum of $2,000,000, which the
Debtor believes are collectible.
In the course of its operations, the Debtor discloses that it
needs to use First Essex's cash collateral to continue its
business operations. The Debtor tells the Court that it has no
other source of income other than the proceeds from the operations
of its business which provides cranes and machine operators to
various construction sites.
If not permitted to use the cash collateral, the Debtor will be
forced to close down its operations without paying its employees
and without replacing its inventory or materials necessary to
operate.
In this regard, the Debtor seeks to utilize cash collateral up to
$525,000 for the next 30 days or up to November 8, 2003.
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.
BAY VIEW CAPITAL: Q3 Conference Call Rescheduled for October 29
---------------------------------------------------------------
Bay View Capital Corporation (NYSE: BVC) has changed the date for
the release of its third quarter 2003 results until after the
close of market on Tuesday, October 28, 2003 to allow for
additional time to finalize results under liquidation accounting.
The Company will host a conference call at 2:00 p.m. PST on
Wednesday, October 29, 2003 to discuss its financial results.
Analysts, media representatives and the public are invited to
listen to this discussion by calling 1-888-793-6954 and
referencing the password "BVC." An audio replay of this
conference call will be available through Friday, November 28,
2003 and can be accessed by dialing 1-800-937-5157.
Bay View Capital Corporation is a financial services company
headquartered in San Mateo, California and is listed on the NYSE:
BVC. For more information, visit http://www.bayviewcapital.com
* * *
As reported in Troubled Company Reporter's October 10, 2003
edition, Fitch Ratings withdrew its 'B-'long-term and 'B' short-
term debt ratings for Bay View Capital Corp and Bay View Bank, NA.
The ratings have been withdrawn based on what Fitch views to be a
fairly successful liquidation process that is expected to continue
until year-end 2005. A complete listing of all withdrawn ratings
is provided below.
Concurrently, Fitch raises its ratings for Bay View Capital Trust
I to 'BB-' from 'CCC', removes the securities from Rating Watch
Evolving and assigns a Stable Outlook, as Fitch believes BVC now
has sufficient means to meet the financial obligations of these
securities. The securities are callable on December 31, 2003, at
which point Fitch expects BVC to exercise its call option and
fully redeem the roughly $85 mln that remains outstanding.
Rating Upgraded and Assigned
Bay View Capital Trust I
-- Trust Preferred, to 'BB-' from 'CCC'.
-- Rating Outlook, 'Stable.'
Ratings Withdrawn
Bay View Capital Corporation and Bay View Bank, NA.
-- Long-term debt, 'B-';
-- Subordinate debt, 'CCC';
-- Individual, 'D.';
-- Support, '5'.
Bay View Bank, NA
-- Long-term deposits, 'B+';
-- Short-term deposits, 'B';
-- Short-term debt, 'B';
-- Support, '5'.
BEVERLY ENTERPRISES: Reports Placement of $15MM of 2.75% Notes
--------------------------------------------------------------
Beverly Enterprises, Inc. (NYSE: BEV) announced that the
underwriters have exercised their option to purchase an additional
$15 million principal amount of 2.75% Convertible Subordinated
Notes due 2033 to cover over-allotments relating to its previously
announced public offering of the Notes, bringing the aggregate
principal amount of Notes that it has agreed to sell, subject to
customary conditions, to $115 million.
As previously announced, the Notes will bear interest at the rate
of 2.75% per annum. The Notes will be general unsecured
obligations subordinated in right of payment to Beverly's existing
and future senior indebtedness. The Notes will be convertible at
the option of the holder under certain circumstances prior to
maturity into shares of Beverly's common stock at an initial
conversion price of $7.45 per share. Beverly anticipates using the
proceeds of the Notes - along with a portion of the previously
announced senior secured credit facility - primarily to pay
existing indebtedness, including but not limited to $180 million
of its 9% Senior Notes due 2006.
The offering is being made through an underwriting syndicate led
by Lehman Brothers Inc. Offerings of the Notes will be made only
by means of a prospectus supplement. Parties may obtain a copy of
the prospectus supplement by contacting Lehman Brothers Inc., c/o
ADP Financial Services, Integrated Distribution Services, 1155
Long Island Avenue, Edgewood, NY 11717, phone: 631-254-7106, fax:
631-254-7268, e-mail: niokioh_wright@adp.com.
Beverly Enterprises Inc. (S&P, BB- Corporate Credit Rating) and
its operating subsidiaries comprise a leading provider of
healthcare services to the elderly in the United States. They
operate 408 skilled nursing facilities, as well as 21 assisted
living centers, and 22 home care and hospice centers. Through
AEGIS Therapies, they also offer rehabilitation services on a
contract basis to nursing facilities operated by other care
providers.
BUDGET GROUP: Exclusive Plan-Filing Period Stretched to Nov. 3
--------------------------------------------------------------
Pursuant to the Court-approved procedures to extend the
Exclusivity Periods, the Budget Group Debtors inform the Court
that they have agreed with the United States Trustee, the Official
Committee of Unsecured Creditors and the U.K. Administrator to
extend their Exclusive Plan-Filing Period for 30 days, to and
including November 3, 2003, and their Exclusive Solicitation
Period to and including January 15, 2004.
On October 2, 2003, the Debtors circulated a notice of the agreed
extension of the Exclusive Periods. Objections to the Agreed
Extension were to be submitted by October 12, 2003 to:
(1) The Debtors' counsel:
(a) Robert S. Brady, Esq.
Young Conaway Stargatt & Taylor LLP
The Brandywine Building
17th Floor, 1000 West Street, P.O. Box 391
Wilmington, Delaware, 19899-0391
Facsimile 302-576-3283
(b) Larry J. Nyhan
Sidley Austin Brown & Wood LLP
Bank One Plaza
10 South Dearborn Street,
Chicago, Illinois 60603
Facsimile 312-853-7036
(2) The Office of the United States Trustee
for the District of Delaware
J Caleb Boggs Federal Building
844 King Street, Room 2313
Wilmington, Delaware 19801
Facsimile 302-573-6497
(3) The Committee's counsel:
Harold Marcus, Esq.
Brown Rudnick Berlack Israels
One Financial Center
745 Avenue
Boston, Massachusetts 0211
Facsimile 617-856-8201
(4) The U.K. Administrator's counsel:
Mark D. Collins, Esq.
Richards, Layton & Finger, P.A.
One Rodney Square P.O. Box 551
Wilmington, Delaware 19899
As of October 12, 2003, no objection was received. Consequently,
the Debtors' Exclusive Plan-filing Period is extended to and
including November 3, 2003 and the Exclusive Solicitation Period,
to and including January 15, 2004. (Budget Group Bankruptcy News,
Issue No. 27; Bankruptcy Creditors' Service, Inc., 609/392-0900)
CALYPTE BIOMEDICAL: Presenting at Rodman & Renshaw Conference
-------------------------------------------------------------
Calypte Biomedical Corporation (OTC Bulletin Board: CYPT), the
developer and marketer of the only two FDA approved HIV-1 antibody
tests for use with urine samples, is participating in the Rodman &
Renshaw Techvest Healthcare Conference, to be held starting today
until October 23, 2003 at the Marriott Longwharf Hotel in Boston.
Tony Cataldo, the Company's Executive Chairman, is scheduled to
speak at 6 p.m. EDT today. He is expected to discuss the Company's
products, pipeline and market opportunities.
Calypte Biomedical Corporation -- whose June 30, 2003 balance
sheet shows a total shareholders' equity deficit of about $11
million -- headquartered in Alameda, California, is a public
healthcare company dedicated to the development and
commercialization of urine-based diagnostic products and services
for Human Immunodeficiency Virus Type 1 (HIV-1), sexually
transmitted diseases and other infectious diseases. Calypte's
tests include the screening EIA and supplemental Western Blot
tests, the only two FDA-approved HIV-1 antibody tests that can be
used on urine samples. The company believes that accurate, non-
invasive urine-based testing methods for HIV and other infectious
diseases may make important contributions to public health by
helping to foster an environment in which testing may be done
safely, economically, and painlessly. Calypte markets its
products in countries worldwide through international distributors
and strategic partners. Current product labeling including
specific product performance claims can be found at
http://www.calypte.com
CANWEST GLOBAL: Appoints Frank McKenna as Interim Board Chairman
----------------------------------------------------------------
CanWest Global Communications Corp., announced the appointment of
The Honourable Frank McKenna, P.C. Q.C. to the position of Interim
Chairman of the Board of the Company.
Mr. McKenna succeeds I.H. Asper, O.C., O.M., Q.C. who passed away
on October 7.
Commenting on the appointment Leonard Asper, CanWest's President
and CEO said, "I am honoured that Frank McKenna will take on the
position of Chairman of the Company on an interim basis, and
grateful to Mr. McKenna that he has agreed to add the heavy
responsibilities of Chairman to his already considerable
contributions to the Company. As a Director since July 1999,
Mr. McKenna is completely familiar with the Company and was a key
participant in all of the decisions that led to the Company's
dynamic growth in recent years."
Mr. McKenna has had a distinguished career as a lawyer, Member of
the Legislative Assembly of New Brunswick, Leader of the Liberal
Party of New Brunswick, and Premier of New Brunswick for the
decade from 1987 to 1997. After retiring from provincial politics
in 1997, Mr. McKenna resumed his career as a lawyer, becoming
Counsel at McInnes Cooper, the largest single law partnership in
Atlantic Canada. Mr McKenna is a Board member of a number of major
Canadian public corporations in addition to CanWest, and has been
awarded honorary degrees by nine Canadian universities as well as
numerous other awards for his many contributions to New Brunswick
and Canada. Mr McKenna is an active volunteer and contributes his
valuable spare time to such organizations as the Business Hall of
Fame, Canadian Millennium Scholarship Foundation, National Adult
Literacy Database and many others.
As Interim Chairman, Mr. McKenna will preside over meetings of the
CanWest Board of Directors, as well as meetings of the Company's
shareholders. He will also have ex-officio membership on all Board
committees. It is anticipated that Mr. McKenna will remain Interim
Chairman until such time as the Board takes a decision on the
appointment of a permanent Chair.
CanWest Global Communications Corp. (S&P, B+ Long-Term Corporate
Credit and Senior Unsecured Ratings, Stable) (NYSE: CWG; TSX:
CGS.S and CGS.A) -- http://www.canwestglobal.com-- is an
international media company. CanWest, Canada's largest publisher
of daily newspapers, owns, operates and/or holds substantial
interests in newspapers, conventional television, out-of-home
advertising, specialty cable channels, radio networks and web
sites in Canada, New Zealand, Australia, Ireland and the United
Kingdom. The Company's program production and distribution
division operates in several countries throughout the world.
CELERITY SYSTEMS: Reduces Debt by an Additional $1.6 Million
------------------------------------------------------------
Celerity Systems, Inc. (OTC Bulletin Board: CESY), a leading
provider of innovative digital video on-demand solutions, has
entered into an additional settlement of certain convertible notes
that it had received from individual investors.
Celerity previously announced on October 8, 2003 that it had
entered into a partial settlement with holders of convertible
debentures. Effective in the third quarter ended September 30,
additional holders of the convertible debentures have agreed to
waive approximately two and a half years of accrued interest and
penalties owed to them by Celerity. These investors further agreed
to convert the principle amount due into equity at a fixed price
similar to the previously announced settlement.
Celerity President and CEO Robert Legnosky, stated, "This partial
settlement significantly reduces our debt owed to debenture
holders by $1.6 million in the third quarter. To-date, Celerity's
actions represent a total reduction in what is owed to debenture
holders and other creditors by $2.14 million. In addition to
strengthening our balance sheet, the forgiveness of interest and
penalties associated with the convertible note will positively
impact our bottom-line. Our outlook for the second half of 2003 is
greatly improving and we look forward to further building
shareholder value in the near future."
Celerity Systems designs, develops and markets advanced digital
set-top-boxes and video servers for interactive television and
high-speed Internet. The Company's products are deployed in six
countries, serving key markets such as schools and
telecommunication companies. Celerity also provides a
comprehensive package of content, including 1,300 titles
available, for entertainment and educational applications. Through
strategic relationships with leading technology companies such as
Cisco, Nortel, Extreme Networks, and Elastic Networks, Celerity
also can deliver fully integrated, end-to-end systems of the
highest quality. Additional information on Company can be found
online at: http://www.celerity.com Investors should visit:
http://www.otcfn.com/cesy
Celerity Systems' June 30, 2003 balance sheet shows a working
capital deficit of about $3 million, and a total shareholders'
equity deficit of about $5 million.
CENTURY AVIATION: Files for Chapter 11 Protection in Honolulu
-------------------------------------------------------------
Century Aviation Inc., founded in the 1970s by former developer
Christopher Hemmeter, filed for creditor protection under Chapter
11 of the U.S. Federal Bankruptcy laws. The Company's chapter 11
petition was filed on October 14, 2003, in the U.S. Bankruptcy
Court for the District of Hawaii in Honolulu.
According to a report by Sean Hao of The Honolulu Advertiser, the
Honolulu-based company, which was sold to a Japanese firm in 1990,
operates airplane refueling facilities in Honolulu, Hilo, Kahului,
Kona, Lanai and Lihue. "The company originally grew out of a need
to service Hemmeter's own aircraft and expanded into an operation
that once refueled such aircraft as the supersonic Concorde," the
report said.
At the time of its filing, Century Aviation listed between 50 and
99 creditors, while assets and debts were loosely estimated at
between $1 million and $10 million.
CENTURY AVIATION: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Century Aviation, Inc.
98 Kapalulu Place
Honolulu, Hawaii 96819
Tel: 808-834-7666
Bankruptcy Case No.: 03-03024
Type of Business: Century Aviation, Inc., operates and conducts
fueling operations in five major Hawaiian Island
cities.
Chapter 11 Petition Date: October 14, 2003
Court: District of Hawaii (Honolulu)
Judge: Robert J. Faris
Debtor's Counsel: Donald L. Spafford, Jr., Esq.
Law Office of Donald L. Spafford, Jr.
1600 Kapiolani Blvd.,
Suite 516
Honolulu, HI 96814
Tel: 808-955-3233
Fax: 808-955-3811
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Kato, Kiyoshi $736,163
c/o Dave Sasaki
915 Ala Kopiko Pl.
Honolulu, HI 96818
Uesugi, Masaya $500,000
P.O. Box 29430
Honolulu, HI 96820
State of Hawaii $314,195
Dept. of Transportation
400 Rodgers Blvd., Ste. 700
Honolulu, HI 96819-1880
State of Hawaii $300,000
Department of Taxation
P.O. Box 259
Honolulu, HI 96809
ATA $162,643
DHL Worldwide Express $136,000
Universal Weather & Aviation $100,000
Air Canada $96,416
Delta Airlines $77,433
Internal Revenue Service $74,846
City & County of Honolulu $61,644
Chevron/Texaco Global Aviation $57,000
First Hawaiian Bank $53,790
Cannanwill Inc. $52,000
State of Hawaii $42,720
Pacific Hi-Lift $25,000
Hisaka Stone Goto Yoshida $15,267
Cyclo Hawaii $13,048
U.S. Dept. of Agriculture APHIS $7,217
CMS ENERGY: Sells Southern Union Stock for Nearly $56 Million
-------------------------------------------------------------
CMS Energy (NYSE: CMS) has sold for nearly $56 million the
Southern Union common stock it received in the $1.8 billion sale
of the CMS Panhandle Companies, the Company announced.
CMS Energy received about $584 million in cash and three million
shares of Southern Union common stock when the Panhandle sale
closed on June 11, 2003. Southern Union also assumed about $1.16
billion of debt outstanding at the Panhandle Companies.
A Southern Union stock dividend added 150,000 shares to CMS
Energy's total. A single investor bought all of the shares for
$17.77 apiece in a negotiated purchase that closed Friday.
The Company will use the proceeds to reduce debt.
CMS Energy (S&P, senior secured rated 'BB-', Rating Outlook
Negative) is an integrated energy company, which has as its
primary business operations an electric and natural gas utility,
natural gas pipeline systems, and independent power generation.
For more information on CMS Energy, visit http://www.cmsenergy.com
CONSECO INC: Court Appoints Committee to Resolve Cure Issues
------------------------------------------------------------
In line with the Court ruling that a committee would be appointed
to assist the participants in the Washington National Insurance
Company "Reinstated Medical Insurance Plan" in resolving the
issues concerning "cure" arising from the Conseco Debtors'
assumption of the Stipulation and Settlement with Washington
National Insurance Company Home Office Group Insurance Plan, Judge
Doyle appoints these individuals as members of the Committee
pursuant to Section 1114 of the Bankruptcy Code:
(1) William DeWaal of Sun City, Florida,
(2) John G. Hyneman of Rolling Meadows, Illinois, and
(3) Beva Olson of Ingleside, Illinois.
(Conseco Bankruptcy News, Issue No. 35; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
CONSECO STRATEGIC: Declares Dividend Payable on November 7, 2003
----------------------------------------------------------------
Conseco Strategic Income Fund (NYSE:CFD) declared a dividend of
$0.0855 per share, payable Nov. 7, 2003 to holders of record at
the close of business on Oct. 31, 2003.
Conseco Strategic Income Fund is a closed-end investment
management company. The Fund's primary investment objective is to
seek high current income. As discussed in the Fund's prospectus,
the Fund intends to distribute substantially all of its net
investment income monthly. All net realized capital gains, if any,
generally will be distributed to the Fund's shareholders at least
annually, although net capital gains (i.e., the excess of net
long-term capital gains over net short-term capital losses) may be
retained by the Fund.
The Fund is managed by 40/86 Advisors, Inc., a wholly owned
subsidiary of Conseco, Inc. (NYSE:CNO). Conseco, Inc.'s insurance
companies help protect working American families and seniors from
financial adversity: Medicare supplement, cancer, heart/stroke and
accident policies protect people against major unplanned expenses;
annuities and life insurance products help people plan for their
financial future.
DS WATERS LP: S&P Assigns B+ Corp. Credit and Bank Loan Ratings
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to DS Waters LP, a newly formed joint venture
operating in the U.S. bottled water industry. At the same time,
Standard & Poor's assigned its 'B+' senior secured bank loan
rating to the company's proposed $550 million, six-year senior
secured credit facilities due 2009. The bank loan is rated the
same as the corporate credit rating, because in a distressed
scenario, Standard & Poor's believes that lenders could expect
meaningful, but less than full, recovery of principal. The ratings
are based on preliminary terms and are subject to review upon
final documentation.
DS Waters is a joint venture forged by two other bottled water
concerns owned by Groupe Danone and Suntory Limited (both of which
are unrated). The venture is being created by $1.385 billion of
equity and preferred stock contributed by both companies, as well
as from the proceeds of the new bank loan facility.
The new joint venture will operate the combined businesses of
Suntory subsidiary Suntory Water Group and the home and office
delivery business of Danone Waters of North America. The borrower
for the proposed facilities is DSW's new, wholly-owned operating
subsidiary, DS Waters Enterprises LP.
The outlook is stable.
Standard & Poor's estimates that DSW will have about $400 million
of total debt and about $325 million of 12% pay-in-kind (PIK)
preferred stock outstanding at closing. The preferred stock will
be issued to Groupe Danone. It will have an eight-year maturity
and will be non-transferable.
"The ratings on the new joint venture reflect its narrow business
focus and its participation in the relatively mature HOD segment
of the U.S. bottled water industry, as well as its leveraged
financial profile and potential integration risk," said Standard &
Poor's credit analyst David Kang. "Somewhat offsetting these
factors are the company's leading market position, national
presence, and relatively strong cash flow."
Through the combination of Suntory Water Group and Danone Waters'
HOD business, DSW will be a leading producer and distributor of
bottled water in the U.S. Within the $7.7 billion U.S. bottled
water industry, DSW will focus primarily on the HOD segment, which
represented about 26.6% of the overall industry in 2002. However,
despite volume increases, the U.S. HOD segment has been gradually
losing share to the faster growing retail single-serve bottled
water segment. While the overall industry grew 10.8% and the
retail single serve category grew 27.5% in 2002, the HOD segment
grew by only 1.7%.
Despite the somewhat narrow business focus, DSW will hold the
leading market position in the relatively mature U.S. HOD market.
DSW will benefit from a national footprint and six of the
company's seven brands are the recognized leaders in their
respective primary geographic regions. The next largest
participant is Nestle Waters North America Inc. Standard & Poor's
believes HOD to be the most mature segment of the U.S. bottled
water industry and expects to see continued erosion of share to
the faster-growing retail single-serve bottled water category.
EDISON INT'L: Receives $945MM in Cash Dividend from SoCal Unit
--------------------------------------------------------------
On October 16, 2003, Edison International received cash dividends
of $945 million from its utility subsidiary, Southern California
Edison Company, and $225 million from its nonutility subsidiary,
Edison Capital.
After receiving the dividends, Edison International has cash on
hand of about $1.3 billion. Edison International expects to make
aggregate payments of approximately $205 million on November 30,
2003, to holders of two series of trust preferred securities
(QUIPS) issued by affiliates: EIX Trust I, 7.875% Cumulative
Quarterly Income Preferred Securities, Series A; and EIX Trust II,
8.60% Cumulative Quarterly Income Preferred Securities, Series B.
The payments on November 30 would cover all previously deferred
distributions on the QUIPS and the distributions becoming due on
November 30.
Edison International then would resume quarterly distributions on
the QUIPS, subject to its rights to begin deferring distributions
again in the future at its election. Edison International also
intends to use $618 million of the dividend proceeds to repay the
remaining principal amount of its 6-7/8% Notes, due in September
2004.
Edison International continues to have as its goal to declare by
year-end 2003 a dividend that would be paid to holders of its
common stock in early 2004. The resumption of dividends from
Southern California Edison and the payment of all deferred amounts
on the QUIPS are necessary conditions for Edison International to
be able to declare a dividend to its shareholders. Any decision
by Edison International's Board of Directors to declare a dividend
also depends on the company's financial condition and liquidity
and other factors considered relevant by the Board.
ELEC COMMUNICATIONS: Ability to Continue Operations Uncertain
-------------------------------------------------------------
eLEC Communications Corp. is a full-service telecommunications
company that focuses on developing integrated telephone service
in the emerging competitive local exchange carrier industry. It
offers small businesses and residential consumers an integrated
set of telecommunications products and services, including local
exchange, local access, domestic and international long distance
telephone, data and a full suite of local features and calling
plans. It utilizes a scalable operating platform that can
provision a local telephone line, provide dial-tone to its
customers, read usage records, rate telephone calls for billing
purposes, prepare monthly invoices to customers, provide real-time
on-line customer support services at its inbound call centers,
capture credit and collection data, calculate gross margins for
each line and perform any moves, adds, changes and repairs that a
customer requests. It uses universal client technology that
enables its employees and agents to access its system from any PC
using any Internet browser.
eLEC's net revenues for the nine months ended August 31, 2003
decreased by approximately $8,029,000, or approximately 68%, to
approximately $3,776,000 as compared to approximately $11,805,000
reported for the nine months ended August 31, 2002. The decrease
in sales was directly attributable to the sale of Essex's customer
base on December 31, 2002. For the nine months ended August 31,
2003, Essex's sales were approximately $893,000, which represented
the sales of this former subsidiary for the period December 1,
2002 to December 31, 2002, the date on which certain of its assets
were sold to EAC. After the sale of the customer base on
December 31, 2002, Essex did not have any additional sales.
Sales of $893,000 represent a decrease in Essex's sales for the
nine months ended August 31, 2003 of approximately $10,708,000,
or 92%, as compared to approximately $11,601,000 reported for the
nine months ended August 31, 2002. The decrease in Essex's sales
was offset, in part, by aggregate sales of approximately
$2,752,000 reported by NRTC and Telecarrier, each of which had no
comparable sales for the nine months ended August 31, 2002. eLEC
anticipates sales for NRTC and Telecarrier to continue to increase
in the fourth quarter of fiscal 2003.
The Company's gross profit for the nine months ended August 31,
2003 decreased by approximately $2,225,000 to approximately
$1,790,000 from approximately $4,015,000 reported for the nine
months ended August 31, 2002, and the gross profit percentage
increased to 47.4% from 34.0% reported in the prior fiscal period.
The decrease in gross profit is directly related to the sale of
the Essex customer base as discussed above. The increase in gross
profit percentage reflects the Company's sales strategy to sell
in only those states in which it believes it will be able to
achieve a margin of at least 40%. In the first nine months of
fiscal 2003, NRTC and Telecarrier sold telephone service in New
York, New Jersey and Pennsylvania. The Company is currently
negotiating for an interconnection agreement to provide NRTC's
service offerings to business and residential consumers in
Michigan.
Selling, general and administrative expenses decreased by
approximately $3,446,000, or approximately 47%, to approximately
$3,841,000 for the nine months ended August 31, 2003 from
approximately $7,287,000 reported in the prior fiscal period.
This decrease in expense was directly related to the curtailment
of the Essex operations and the Company's on-going efforts to
implement various cost-cutting measures, which included, among
other things, a reduction in staffing. SG&A expenses incurred by
Essex represented approximately $650,000 of the $3,841,000 in SG&A
costs for the period ended August 31, 2003. Currently, SG&A
costs, exclusive of Essex, have averaged approximately $350,000
per month for the first nine months of fiscal 2003, approximately
$80,000 of which represented new line acquisition expenses. In the
third quarter of fiscal 2003, the Company curtailed its in-house
billing and telemarketing efforts, and reduced staff and
associated overhead costs, such as rent, salaries and telephone
expense. It has outsourced its billing operation and believes this
is a more effective way to limit costs as the Company only pays a
fee based on the number of its customers that are billed. The
Company will focus on third-party telemarketing firms to generate
new sales, as it believes this is a more efficient means of
generating new sales as it only pays for lines that it accepts.
eLEC continues to evaluate its operations for efficiencies, and is
looking for ways to implement further SG&A reductions in the
remainder of fiscal 2003.
Depreciation and amortization expense decreased by approximately
$100,000, to approximately $81,000 for the nine months ended
August 31, 2003 as compared to approximately $181,000 for the nine
months ended August 31, 2002. The decline in depreciation expense
was partially attributable to the sale of certain assets to EAC on
December 31, 2002.
Interest expense decreased by approximately $280,000, to
approximately $106,000 for the nine months ended August 31, 2003
as compared to approximately $386,000 for the nine months ended
August 31, 2002. The decrease in interest expense resulted from
the termination of its credit facility that was in place in the
prior period.
Interest and other income for the nine months ended August 31,
2003 increased by approximately $110,000 from amounts reported in
the prior fiscal period resulting primarily from commission and
rental income.
Gain on the sale of assets for the nine months ended August 31,
2003 was approximately $3,511,000.
Gain on the sale of investment securities and other investments
for the nine months ended August 31, 2003 was approximately
$122,000, which resulted from the sale of Cordia Corporation and
Talk America Holdings Inc.'s shares, as compared to $1,381,000 for
the nine months ended August 31, 2002, which resulted from the
sale of Talk shares.
At August 31, 2003, eLEC had cash and cash equivalents of
approximately $404,000, including approximately $226,000 in
Telecarrier, and negative working capital of approximately
$8,831,000. Approximately $7,000,000 of the working capital
deficit represents liabilities relating to its former Essex
subsidary. With the sale of this subsidiary on September 11,
2003, these liabilities are no longer recorded on Company books in
the fourth quarter.
The report of the independent auditors on the Company's 2002
financial statements indicates there is substantial doubt about
eLEC's ability to continue as a going concern. Management has
worked during the course of the year to improve the Company's
financial condition and, as discussed previously, the sale of most
of the assets and liabilities of its former wholly-owned
subsidiary, Essex, in December 2002 and the subsequent sale of all
the common stock of Essex on September 11, 2003, has helped
strengthen eLEC's financial condition. The sale of its corporate
headquarters building has further improved the Company's financial
position and has left it with approximately $1,000,000 in cash to
pay past due payables and to spend on marketing efforts to obtain
new customers.
Management believes the use of the remaining cash from the sale of
the building for marketing expenses and the payment of certain
past due payables will leave eLEC with sufficient financial
resources to reach profitability and continue its business
operations. The inability to carry out this plan may result in
the continuance of unprofitable operations, and the eventual
inability to pay its operating expenses, which would adversely
affect eLEC's ability to continue operating as a going concern.
ENRON: Posts Schedule of Duplicate Claims Objection Hearings
------------------------------------------------------------
U.S. Bankruptcy Court Judge Gonzalez rules that:
A. The Enron Debtors' objection to these Claims are deemed
withdrawn:
Claimant Claim No. Amount
-------- --------- ------
Federal Insurance Company 931300 $0
United States Fidelity & Guaranty 1265700 0
B. The hearing on the Debtors' Objection to these Claims is
adjourned to October 23, 2003:
Claimant Claim No. Amount
-------- --------- ------
Credit Lyonnais SA, et al. 2212100 $0
Fletcher Challenge Petroleum Corp. 1962200 0
1962100 0
Galveston Bay Resources, Inc. 1140700 703,222
IB Corporation 117600 2,116,509
915000 2,116,509
938800 2,116,509
938900 2,116,509
KCS Medallion Resources, Inc. 254300 1,552,972
254200 506,407
C. The hearing on the Debtors' Objection to these Claims is
adjourned to November 6, 2003.
Claimant Claim No. Amount
-------- --------- ------
Euell Energy Resources, Inc. 753700 $24,550,000
Boilermaker's National Annuity 1552300 564,977
Upstream Energy Services 250000 2,863,419
(Enron Bankruptcy News, Issue No. 83; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
EXTENDICARE HEALTH: S&P Ups Ratings over Improving Fin'l Results
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on skilled nursing facility operator Extendicare Health
Services Inc. to 'B+' from 'B', and the senior secured bank loan
rating on the company to 'BB' from 'BB-'. The outlook is stable.
Extendicare, based in Milwaukee, Wisconsin, had about $398 million
of debt outstanding as of June 30, 2003.
The ratings upgrade reflects Standard & Poor's belief that the
company will be able to sustain improving financial results at
levels consistent with the higher rating. The company has
demonstrated its ability to manage significant industry risks and
has benefited from the recently improved reimbursement
environment.
The senior secured bank loan rating, which is two notches above
the corporate credit rating, continues to reflect the very strong
likelihood of full recovery of principal and interest in the event
of default or bankruptcy.
"The low, speculative-grade ratings on Extendicare Health Services
Inc. reflect the difficulties the company has faced, and will
continue to face in its industry, including a volatile
reimbursement environment and rapidly escalating insurance costs,"
said Standard & Poor's credit analyst David Peknay. "These
negative factors are offset by the geographical dispersion of its
153 nursing homes and 40 assisted living facilities. The company's
management has also taken proactive steps to address reimbursement
and insurance issues, including its exit from two states since
2000 and its increasing treatment of more profitable Medicare
patients."
The company's primary business of operating a large portfolio of
skilled nursing facilities faces significant challenges from
several industry-related concerns, particularly government
reimbursement. Extendicare derives more than 75% of its revenues
from government sources (28% from Medicare and 48% from Medicaid).
Reimbursement trends have been volatile, with significant cuts in
the late 1990s, and again in late 2003. Despite the company's
geographical presence, it is still vulnerable to the fiscal
difficulties being endured by many states across the nation.
Recently favorable rate increases for Medicare, and better-than-
expected Medicaid increases in Extendicare's key states will be
instrumental if the company's profitability is to continue
improving.
Management's efforts have been key to recent results. The
company's recent performance was aided by its exit from Florida
and Texas, states that have particularly high patient liability
costs. The increase in the company's number of Medicare patients
to more than 15% of its total in 2003, compared with 11% in 2000,
also helps profitability because Medicare per diem rates are
substantially higher than either Medicaid or private pay.
FAIRFAX FINANCIAL: Will Host Quarterly Conference Call on Nov. 3
----------------------------------------------------------------
Fairfax Financial Holdings Limited will hold its quarterly
conference call at 8:30 a.m. Eastern Time on Monday, November 3,
2003 to discuss its third quarter results which will be announced
after the close of markets on October 31. The call, consisting of
a presentation by the company followed by a question period, may
be accessed at (416) 695-6120 or (877) 461-2814.
A replay of the call will be available from shortly after the
termination of the call until 10:00 p.m. Eastern Time on Monday,
November 17, 2003. The replay may be accessed at (416) 695-5275 or
(888) 509-0081.
Fairfax Financial Holdings Limited (S&P, BB Counterparty Credit
Rating, Stable) is a financial services holding company, which,
through its subsidiaries, is engaged in property, casualty and
life insurance and reinsurance, investment management and
insurance claims management.
FORMICA CORP: Disclosure Statement Hearing Set for October 29
-------------------------------------------------------------
On September 23, 2003, Formica Corporation and its debtor-
affiliates filed their Joint Plan of Reorganization along with an
accompanying Disclosure Statement with the U.S. Bankruptcy Court
for the Southern District of New York.
Accordingly, a hearing to consider the adequacy of the Disclosure
Statement in explaining the Debtors' Plan is fixed for
October 29, 2003, at 10:00 a.m. Eastern Time and will be held
before the Honorable Burton R. Lifland.
Objections or proposed amendments to the Disclosure Statement must
be filed with the Court on or before 5:00 p.m. tomorrow. Copies
must also be served to:
1. Counsel for the Debtors
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
Attn: Alan B. Miller, Esq.
Stephen Karotkin, Esq.
2. Counsel for the Debtors' Prepetition
and Postpetition Lenders
Kaye Scholer LLP
425 Park Avenue
New York, NY 10022
Attn: Benjamin Mintz, Esq.
3. Counsel for the Investors
Schulte Roth & Zabel LLP
919 Third Avenue
New York, NY 10022
Attn: Jeffrey Roth, Esq.
4. Counsel for the Investors
O'Melveny & Myers LLP
30 Rockefeller Plaza
New York, NY 10112
Attn: Howard A. Blaustein, Esq.
5. Counsel for the Statutory Committee of
Unsecured Creditors
Strook & Strook & Lavan LLP
180 Maiden Lane
New York, NY 10038
Attn: Michael J. Sage, Esq.
6. Office of the United States Trustee
33 Whitehall Street
21st Floor
New York, NY 10004
Attn: Pamela J. Lustrin, Esq.
Formica Corporation was founded in 1913, and is the preeminent
worldwide manufacturer and marketer of decorative surfacing
materials, including high-pressure laminate, solid surfacing
materials and laminate flooring. The company filed for Chapter 11
relief on March 5, 2002, (Bankr. S.D.N.Y. Case No. 02-10969). Alan
B. Miller, Esq., at Weil, Gotshal & Manges LLP represents the
Debtors in their restructuring efforts.
FRONTLINE CAPITAL: Shareholders May Not Receive Distribution
------------------------------------------------------------
On June 12, 2002, FrontLine Capital Group filed a voluntary
petition for relief under Chapter 11 of the United States
Bankruptcy Code in the United States Bankruptcy Court for the
Southern District of New York. The Company remains in possession
of its assets and properties, and continues to operate its
business and manage its property as a debtor-in-possession under
the jurisdiction of the Bankruptcy Court.
FrontLine's wholly owned subsidiary, RSI Fund Management, LLC is
the Managing Member of RSVP Holdings, LLC,. Holdings is the
Managing Member of Reckson Strategic Venture Partners, LLC, which
in turn invests in operating companies in real estate and real
estate related market sectors. New World Realty Management, LLC,
an entity owned by two individuals, has been retained by Holdings
and acts as asset manager of the assets and investments of RSVP.
Until September 18, 2003, UBS Real Estate Securities, Inc. and
Stratum Realty Fund, L.P. were non-managing members and preferred
equity owners in RSVP who had committed $150 million and $50
million, respectively, in capital. By order dated March 31, 2003,
the Bankruptcy Court, in an attempt to resolve an ongoing dispute
with the preferred equity owners, authorized FrontLine to
restructure RSVP consistent with the transactions detailed in the
term sheets annexed to such order.
On April 29, 2003, the Company, RSVP and certain of its affiliates
entered into agreements regarding the restructuring of RSVP. RSVP
agreed to redeem the preferred equity holders' interests in RSVP
for an aggregate amount of cash and property of approximately
$165.3 million. Upon execution of the April 29, 2003 restructuring
agreement with the RSVP preferred equity holders, RSVP distributed
to such holders an initial cash payment of $41 million and the
assets that comprised its parking facilities investments valued at
approximately $28.5 million, as a payment against the
Restructuring Price. In connection with the March 31, 2003 order
and the Transactions, on August 12, 2003, the Bankruptcy Court
authorized FrontLine to enter into an agreement with GMAC
Commercial Mortgage Corporation, pursuant to which RSVP and others
would obtain a mezzanine loan in an amount up to $60 million to
partially fund the redemption of the preferred equity holders'
interest in RSVP. As of the end of September 2003, the preferred
equity holders were paid $96.9 million in cash to complete the
redemption of their equity interests in RSVP. RSVP's sources of
funds for the redemption were the $60 million three-year 13.75%
interest rate mezzanine loan, working capital and proceeds from
the sale by RSVP of certain assets. The mezzanine loan is secured
by pledges of all the limited liability company membership
interests of the members in each of Holdings, RSVP and Reckson
Asset Partners, LLC (collectively, the "Borrowers"), as well as by
pledges of the Borrower's respective limited liability company
membership interests in certain of their subsidiaries.
RSVP also agreed to restructure its relationship with its former
managing directors. A management company formed by its former
managing directors has been retained to manage RSVP pursuant to a
management agreement, and the employment contracts of the managing
directors with RSVP have been terminated. The management agreement
provides for an annual base management fee and disposition fees
equal to 2% of the net proceeds received by RSVP on asset sales.
(The base fee and disposition fees together over the term of the
agreement may not exceed $7.5 million.) In addition, the managing
directors retained a subordinate residual interest in RSVP's
assets. The management agreement has a three-year term, subject to
early termination in the event of the disposition of all of the
assets of RSVP.
Holdings became the sole member and sole manager of RSVP, and
RSIFM was appointed the sole Managing Member of Holdings. RSIFM,
as Managing Member of Holdings, which is the Managing Member of
RSVP, indirectly manages the business and affairs of RSVP subject
to consents required by New World Realty, LLC in connection with
certain actions.
On September 10, 2003, HQ Global Holdings, Inc., received
permission from the Delaware bankruptcy court to reorganize and
formally emerged from bankruptcy on October 8, 2003. As a result
of this reorganization, FrontLine no longer has an ownership
interest in HQ. Effective with the third quarter of 2003, HQ's
results will no longer be consolidated with FrontLine's financial
statements.
On September 23, 2003, the Bankruptcy Court entered an order
extending the exclusive periods for FrontLine to file a plan in
its bankruptcy case. FrontLine is in the process of formulating
the plan and expects to either restructure and/or liquidate its
assets, as necessary, to attend to the Company's financial
affairs. The total dollar amount of claims scheduled and/or filed
in FrontLine's bankruptcy case is approximately $220 million.
Based on, among other things, the recent consummation of the
Transactions, FrontLine does not currently anticipate that there
will be sufficient funds available to fully pay allowed claims in
the bankruptcy case. Accordingly, it is not likely that
shareholders of FrontLine will receive any distribution in the
bankruptcy.
GAYLORD ENTERTAINMENT: Proposes Sr. Credit Facility Amendments
--------------------------------------------------------------
Gaylord Entertainment Company (NYSE: GET) expects third quarter
revenues to be in a range from $96.0 million to $98.0 million, in
line with previous guidance; third quarter Adjusted EBITDA to be
in a range from $10.9 million to $11.9 million, slightly ahead of
previous guidance reflecting improved cost controls; and third
quarter net income to be in a range from $10.0 million to $11.0
million.
In addition, the Company said that it has requested from its
lenders for its senior secured credit facility certain amendments
in connection with its proposed acquisition of ResortQuest
International, Inc. and proposed prepayments of the Company's
Nashville mezzanine loan and subordinated term loan. The senior
secured credit facility requires that the Company obtain the
lenders' consent to allow the prepayment of the subordinated loan
and the repayment of the Nashville mezzanine loan.
In addition, the Company has requested amendments to the senior
secured credit facility to increase the maximum permitted
borrowings under its revolving credit facility to $50.0 million
(and correspondingly decrease the senior term loan to $125.0
million), to modify agreements relating to the completion reserve
for the Gaylord Opryland Texas hotel (including decreasing the
minimum escrowed cash balance to $15.0 million) and to increase
permitted amounts for certain investments, capital expenditures,
unsecured payables, equipment financing and letters of credit. The
Company has also requested modifications of certain financial
covenants.
Gaylord Entertainment Company, a leading hospitality and
entertainment company based in Nashville, Tenn., owns and operates
Gaylord Hotels branded properties, including the Gaylord Opryland
Resort & Convention Center in Nashville and the Gaylord Palms
Resort & Convention Center in Kissimmee, Fla., and the Radisson
Opryland Hotel in Nashville. The Company's entertainment brands
include the Grand Ole Opry, the Ryman Auditorium, the General
Jackson Showboat, the Springhouse Golf Club, the Wildhorse Saloon
and WSM-AM. Gaylord Entertainment's common stock is traded on the
New York Stock Exchange under the symbol GET. For more information
about the Company, visit http://www.gaylordentertainment.com
* * *
Likely Default Under Loan Agreements
In its Form 10-Q filed with the Securities and Exchange
Commission, Gaylord reported:
"During May of 2003, the Company finalized a $225 million credit
facility with Deutsche Bank Trust Company Americas, Bank of
America, N.A., CIBC Inc. and a syndicate of other lenders. The
2003 Loans consist of a $25 million senior revolving facility, a
$150 million senior term loan and a $50 million subordinated term
loan. The 2003 Loans are due in 2006. The senior loan bears
interest of LIBOR plus 3.5%. The subordinated loan bears interest
of LIBOR plus 8.0%. The 2003 Loans are secured by the Gaylord
Palms assets and the Gaylord Texas Hotel. At the time of closing
the 2003 Loans, the Company engaged LIBOR interest rate swaps
which fixed the LIBOR rates of the 2003 Loans at 1.48% in year one
and 2.09% in year two. The Company is required to pay a commitment
fee equal to 0.5% per year of the average daily unused portion of
the 2003 Loans. At the end of the second quarter, the Company had
100% borrowing capacity of the $25 million revolver. Proceeds of
the 2003 Loans were used to pay off the Term Loan of $60 million
as discussed below and the remaining net proceeds of approximately
$134 million were deposited into an escrow account for the
completion of the construction of the Texas hotel. At June 30,
2003 the unamortized balance of the 2003 Loans deferred financing
costs were $2.6 million in current assets and $4.9 million in
long-term assets. The provisions of the 2003 Loans contain
covenants and restrictions including compliance with certain
financial covenants, restrictions on additional indebtedness,
escrowed cash balances, as well as other customary restrictions.
As of June 30, 2003, the Company was in compliance with all
covenants under the 2003 loans.
"During 2001, the Company entered into a three-year delayed-draw
senior term loan of up to $210.0 million with Deutsche Banc Alex.
Brown Inc., Salomon Smith Barney, Inc. and CIBC World Markets
Corp. During May 2003, the Company used $60 million of the
proceeds from the 2003 Loans to pay off the Term Loan. Concurrent
with the payoff of the Term Loan, the Company expensed the
remaining, unamortized deferred financing costs of $1.5 million
related to the Term Loan. The $1.5 million is recorded as interest
expense in the accompanying condensed consolidated statement of
operations. Proceeds of the Term Loan were used to finance the
construction of Gaylord Palms and the initial construction phases
of the Gaylord hotel in Texas as well as for general operating
purposes. The Term Loan was primarily secured by the Company's
ground lease interest in Gaylord Palms.
"During the first three months of 2002, the Company sold Word's
domestic operations, which required a prepayment on the Term Loan
in the amount of $80.0 million. As required by the Term Loan, the
Company used $15.9 million of the net cash proceeds, as defined
under the Term Loan agreement, received from the 2002 sale of the
Opry Mills investment to reduce the outstanding balance of the
Term Loan. In addition, the Company used $25.0 million of the net
cash proceeds, as defined under the Term Loan agreement, received
from the 2002 sale of Acuff-Rose Music Publishing to further
reduce the outstanding balance of the Term Loan. Excluding the
payoff amount of $60 million discussed above, the Company made
principal payments of approximately $0 and $4.1 million during
2003 and 2002, respectively, under the Term Loan. Net borrowings
under the Term Loan for 2003 and 2002 were $0 and $85.0 million,
respectively. As of June 30, 2003 and December 31, 2002, the
Company had outstanding borrowings of $0 million and $60 million,
respectively, under the Term Loan.
"The terms of the Term Loan required the Company to purchase an
interest rate instrument which capped the interest rate paid by
the Company. This instrument expired in the fourth quarter of
2002. Due to the expiration of the interest rate instrument, the
Company was out of compliance with the terms of the Term Loan.
Subsequent to December 31, 2002, the Company obtained a waiver
from the lenders whereby this event of non-compliance was waived
as of December 31, 2002 and also removed the requirement to
maintain such instruments for the remaining term of the Term Loan.
"In 2001, the Company, through wholly owned subsidiaries, entered
into two loan agreements, a $275.0 million senior loan and a
$100.0 million mezzanine loan with affiliates of Merrill Lynch &
Company acting as principal. The Senior Loan is secured by a first
mortgage lien on the assets of Gaylord Opryland Resort and
Convention Center and is due in March 2004. Amounts outstanding
under the Senior Loan bear interest at one-month LIBOR plus
approximately 1.02%. The Mezzanine Loan, secured by the equity
interest in the wholly-owned subsidiary that owns Gaylord
Opryland, is due in April 2004 and bears interest at one-month
LIBOR plus 6.0%. At the Company's option, the Senior and Mezzanine
Loans may be extended for two additional one-year terms beyond
their scheduled maturities, subject to Gaylord Opryland meeting
certain financial ratios and other criteria. The Company currently
anticipates meeting the financial ratios and other criteria and
exercising the option to extend the Senior Loan. However, based on
the Company's projections and estimates at June 30, 2003, the
Company does not anticipate meeting the financial ratios to extend
the Mezzanine Loan. The Company expects to refinance or replace
the Mezzanine Loan through a future debt instrument. Therefore,
the Company has recorded the outstanding balance of the Mezzanine
Loan of $66 million as current portion of long-term debt in the
accompanying condensed consolidated balance sheet as of June 30,
2003. There can be no assurance that the Company will be
successful in obtaining replacement financing on acceptable terms.
The Nashville Hotel Loans require monthly principal payments of
$0.7 million during their three-year terms in addition to monthly
interest payments. The terms of the Senior Loan and the Mezzanine
Loan required the Company to purchase interest rate hedges in
notional amounts equal to the outstanding balances of the Senior
Loan and the Mezzanine Loan in order to protect against adverse
changes in one-month LIBOR. Pursuant to these agreements, the
Company had purchased instruments that cap its exposure to one-
month LIBOR at 7.5%. The Company used $235.0 million of the
proceeds from the Nashville Hotel Loans to refinance the Interim
Loan discussed below. At closing, the Company was required to
escrow certain amounts, including $20.0 million related to future
renovations and related capital expenditures at Gaylord Opryland.
The net proceeds from the Nashville Hotel Loans after refinancing
of the Interim Loan and paying required escrows and fees were
approximately $97.6 million. At June 30, 2003 and December 31,
2002, the unamortized balance of the deferred financing costs
related to the Nashville Hotel Loans was $4.3 million and $7.3
million, respectively. The weighted average interest rates for the
Senior Loan for the six months ended June 30, 2003 and 2002,
including amortization of deferred financing costs, were 4.3% and
4.5%, respectively. The weighted average interest rates for the
Mezzanine Loan for the six months ended June 30, 2003 and 2002,
including amortization of deferred financing costs, were 10.8% and
10.2%, respectively.
The terms of the Nashville Hotel Loans require that the Company
maintain certain escrowed cash balances and comply with certain
financial covenants, and impose limits on transactions with
affiliates and indebtedness. The financial covenants under the
Nashville Hotel Loans are structured such that noncompliance at
one level triggers certain cash management restrictions and
noncompliance at a second level results in an event of default.
Based upon the financial covenant calculations at December 31,
2002, the cash management restrictions were in effect which
requires that all excess cash flows, as defined, be escrowed and
may be used to repay principal amounts owed on the Senior Loan. As
of June 30, 2003, the noncompliance level which triggered cash
management restrictions was cured and the cash management
restrictions were lifted. During 2002, the Company negotiated
certain revisions to the financial covenants under the Nashville
Hotel Loans and the Term Loan. After these revisions, the Company
was in compliance with the covenants under the Nashville Hotel
Loans in which the failure to comply would result in an event of
default at June 30, 2003 and December 31, 2002. There can be no
assurance that the Company will remain in compliance with the
covenants that would result in an event of default under the
Nashville Hotel Loans. The Company believes it has certain other
possible alternatives to reduce borrowings outstanding under the
Nashville Hotel Loans which would allow the Company to remedy any
event of default. Any event of noncompliance that results in an
event of default under the Nashville Hotel Loans would enable the
lenders to demand payment of all outstanding amounts, which would
have a material adverse effect on the Company's financial
position, results of operations and cash flows."
GAYLORD ENTERTAINMENT: Proposes $225 Mill. Senior Notes Offering
----------------------------------------------------------------
Gaylord Entertainment Company (NYSE: GET) intends to offer,
subject to market and other conditions, $225.0 million in
aggregate principal amount of senior notes due 2013.
The senior notes will be offered to qualified institutional buyers
pursuant to Rule 144A under the Securities Act of 1933, as
amended. The interest rate, offering price, ultimate aggregate
principal amount and other terms of the notes are to be determined
by negotiations between the Company and the initial purchasers of
the notes. The notes will rank equally in right of payment with
the Company's other unsecured unsubordinated debt, but will be
effectively subordinated to all of the Company's secured debt to
the extent of the assets securing such debt. The notes will be
guaranteed on a senior unsecured basis by each of the Company's
subsidiaries that is a borrower or guarantor under the Company's
senior secured credit facility. The Company plans to use the net
proceeds of the offering to repay the Company's subordinated term
loan and mezzanine loan, to repay certain indebtedness of
ResortQuest International, Inc. upon consummation of the Company's
proposed acquisition of ResortQuest, and to pay fees and expenses
related to the ResortQuest acquisition and the notes offering and
the repayment of indebtedness listed above.
The securities will not be registered under the Securities Act or
any state securities laws and, unless so registered, may not be
offered or sold in the United States except pursuant to an
exemption from the registration requirements of the Securities Act
and applicable state laws.
* * *
Likely Default Under Loan Agreements
In its Form 10-Q filed with the Securities and Exchange
Commission, Gaylord reported:
"During May of 2003, the Company finalized a $225 million credit
facility with Deutsche Bank Trust Company Americas, Bank of
America, N.A., CIBC Inc. and a syndicate of other lenders. The
2003 Loans consist of a $25 million senior revolving facility, a
$150 million senior term loan and a $50 million subordinated term
loan. The 2003 Loans are due in 2006. The senior loan bears
interest of LIBOR plus 3.5%. The subordinated loan bears interest
of LIBOR plus 8.0%. The 2003 Loans are secured by the Gaylord
Palms assets and the Gaylord Texas Hotel. At the time of closing
the 2003 Loans, the Company engaged LIBOR interest rate swaps
which fixed the LIBOR rates of the 2003 Loans at 1.48% in year one
and 2.09% in year two. The Company is required to pay a commitment
fee equal to 0.5% per year of the average daily unused portion of
the 2003 Loans. At the end of the second quarter, the Company had
100% borrowing capacity of the $25 million revolver. Proceeds of
the 2003 Loans were used to pay off the Term Loan of $60 million
as discussed below and the remaining net proceeds of approximately
$134 million were deposited into an escrow account for the
completion of the construction of the Texas hotel. At June 30,
2003 the unamortized balance of the 2003 Loans deferred financing
costs were $2.6 million in current assets and $4.9 million in
long-term assets. The provisions of the 2003 Loans contain
covenants and restrictions including compliance with certain
financial covenants, restrictions on additional indebtedness,
escrowed cash balances, as well as other customary restrictions.
As of June 30, 2003, the Company was in compliance with all
covenants under the 2003 loans.
"During 2001, the Company entered into a three-year delayed-draw
senior term loan of up to $210.0 million with Deutsche Banc Alex.
Brown Inc., Salomon Smith Barney, Inc. and CIBC World Markets
Corp. During May 2003, the Company used $60 million of the
proceeds from the 2003 Loans to pay off the Term Loan. Concurrent
with the payoff of the Term Loan, the Company expensed the
remaining, unamortized deferred financing costs of $1.5 million
related to the Term Loan. The $1.5 million is recorded as interest
expense in the accompanying condensed consolidated statement of
operations. Proceeds of the Term Loan were used to finance the
construction of Gaylord Palms and the initial construction phases
of the Gaylord hotel in Texas as well as for general operating
purposes. The Term Loan was primarily secured by the Company's
ground lease interest in Gaylord Palms.
"During the first three months of 2002, the Company sold Word's
domestic operations, which required a prepayment on the Term Loan
in the amount of $80.0 million. As required by the Term Loan, the
Company used $15.9 million of the net cash proceeds, as defined
under the Term Loan agreement, received from the 2002 sale of the
Opry Mills investment to reduce the outstanding balance of the
Term Loan. In addition, the Company used $25.0 million of the net
cash proceeds, as defined under the Term Loan agreement, received
from the 2002 sale of Acuff-Rose Music Publishing to further
reduce the outstanding balance of the Term Loan. Excluding the
payoff amount of $60 million discussed above, the Company made
principal payments of approximately $0 and $4.1 million during
2003 and 2002, respectively, under the Term Loan. Net borrowings
under the Term Loan for 2003 and 2002 were $0 and $85.0 million,
respectively. As of June 30, 2003 and December 31, 2002, the
Company had outstanding borrowings of $0 million and $60 million,
respectively, under the Term Loan.
"The terms of the Term Loan required the Company to purchase an
interest rate instrument which capped the interest rate paid by
the Company. This instrument expired in the fourth quarter of
2002. Due to the expiration of the interest rate instrument, the
Company was out of compliance with the terms of the Term Loan.
Subsequent to December 31, 2002, the Company obtained a waiver
from the lenders whereby this event of non-compliance was waived
as of December 31, 2002 and also removed the requirement to
maintain such instruments for the remaining term of the Term Loan.
"In 2001, the Company, through wholly owned subsidiaries, entered
into two loan agreements, a $275.0 million senior loan and a
$100.0 million mezzanine loan with affiliates of Merrill Lynch &
Company acting as principal. The Senior Loan is secured by a first
mortgage lien on the assets of Gaylord Opryland Resort and
Convention Center and is due in March 2004. Amounts outstanding
under the Senior Loan bear interest at one-month LIBOR plus
approximately 1.02%. The Mezzanine Loan, secured by the equity
interest in the wholly-owned subsidiary that owns Gaylord
Opryland, is due in April 2004 and bears interest at one-month
LIBOR plus 6.0%. At the Company's option, the Senior and Mezzanine
Loans may be extended for two additional one-year terms beyond
their scheduled maturities, subject to Gaylord Opryland meeting
certain financial ratios and other criteria. The Company currently
anticipates meeting the financial ratios and other criteria and
exercising the option to extend the Senior Loan. However, based on
the Company's projections and estimates at June 30, 2003, the
Company does not anticipate meeting the financial ratios to extend
the Mezzanine Loan. The Company expects to refinance or replace
the Mezzanine Loan through a future debt instrument. Therefore,
the Company has recorded the outstanding balance of the Mezzanine
Loan of $66 million as current portion of long-term debt in the
accompanying condensed consolidated balance sheet as of June 30,
2003. There can be no assurance that the Company will be
successful in obtaining replacement financing on acceptable terms.
The Nashville Hotel Loans require monthly principal payments of
$0.7 million during their three-year terms in addition to monthly
interest payments. The terms of the Senior Loan and the Mezzanine
Loan required the Company to purchase interest rate hedges in
notional amounts equal to the outstanding balances of the Senior
Loan and the Mezzanine Loan in order to protect against adverse
changes in one-month LIBOR. Pursuant to these agreements, the
Company had purchased instruments that cap its exposure to one-
month LIBOR at 7.5%. The Company used $235.0 million of the
proceeds from the Nashville Hotel Loans to refinance the Interim
Loan discussed below. At closing, the Company was required to
escrow certain amounts, including $20.0 million related to future
renovations and related capital expenditures at Gaylord Opryland.
The net proceeds from the Nashville Hotel Loans after refinancing
of the Interim Loan and paying required escrows and fees were
approximately $97.6 million. At June 30, 2003 and December 31,
2002, the unamortized balance of the deferred financing costs
related to the Nashville Hotel Loans was $4.3 million and $7.3
million, respectively. The weighted average interest rates for the
Senior Loan for the six months ended June 30, 2003 and 2002,
including amortization of deferred financing costs, were 4.3% and
4.5%, respectively. The weighted average interest rates for the
Mezzanine Loan for the six months ended June 30, 2003 and 2002,
including amortization of deferred financing costs, were 10.8% and
10.2%, respectively.
The terms of the Nashville Hotel Loans require that the Company
maintain certain escrowed cash balances and comply with certain
financial covenants, and impose limits on transactions with
affiliates and indebtedness. The financial covenants under the
Nashville Hotel Loans are structured such that noncompliance at
one level triggers certain cash management restrictions and
noncompliance at a second level results in an event of default.
Based upon the financial covenant calculations at December 31,
2002, the cash management restrictions were in effect which
requires that all excess cash flows, as defined, be escrowed and
may be used to repay principal amounts owed on the Senior Loan. As
of June 30, 2003, the noncompliance level which triggered cash
management restrictions was cured and the cash management
restrictions were lifted. During 2002, the Company negotiated
certain revisions to the financial covenants under the Nashville
Hotel Loans and the Term Loan. After these revisions, the Company
was in compliance with the covenants under the Nashville Hotel
Loans in which the failure to comply would result in an event of
default at June 30, 2003 and December 31, 2002. There can be no
assurance that the Company will remain in compliance with the
covenants that would result in an event of default under the
Nashville Hotel Loans. The Company believes it has certain other
possible alternatives to reduce borrowings outstanding under the
Nashville Hotel Loans which would allow the Company to remedy any
event of default. Any event of noncompliance that results in an
event of default under the Nashville Hotel Loans would enable the
lenders to demand payment of all outstanding amounts, which would
have a material adverse effect on the Company's financial
position, results of operations and cash flows."
GENCORP: Unit Completes Acquisition of Atlantic Research Assets
---------------------------------------------------------------
GenCorp Inc.'s (NYSE: GY) subsidiary, Aerojet-General Corporation,
has completed the acquisition of substantially all of the assets
related to the propulsion business of Atlantic Research
Corporation, a subsidiary of Sequa Corporation (NYSE: SQAA).
GenCorp's agreement to acquire ARC's propulsion business was
announced in a press release on May 5, 2003. Aerojet has also
entered into a long-term agreement to provide propellant to ARC
Automotive, Sequa's airbag inflator operation. The airbag
inflator business is not included in the sale to Aerojet.
ARC is a leading developer and manufacturer of advanced solid
rocket propulsion systems, gas generators and auxiliary rocket
motors for both space and defense applications.
The Federal Trade Commission approved the transaction on
October 16, 2003 under the Hart-Scott-Rodino Antitrust Improvement
Act of 1976, as amended. The $133 million cash purchase was
funded from the proceeds of a senior subordinated notes offering
completed in August 2003.
With the acquisition, Aerojet becomes the second leading provider
in the $1.3 billion domestic solid propulsion marketplace and a
market leader in the tactical missile propulsion segment of that
market.
Headquartered and with operations in Gainesville, Virginia, ARC's
propulsion and defense business also has facilities in Orange
County, Virginia; Camden, Arkansas; Vernon, California;
Clearfield, Utah; Niagara, New York; and the United Kingdom. As a
condition to the FTC's approval of the acquisition, Aerojet will
be divesting the former ARC in-space propulsion business operated
out of the facilities located in New York and the United Kingdom.
The remaining locations, with approximately 900 employees, will
operate as integrated components of Aerojet.
Aerojet, headquartered in Sacramento, California, is a world-
recognized aerospace and defense leader principally serving the
missile and space propulsion, and defense and armaments markets.
GenCorp Inc. is a technology-based manufacturer with operations in
the aerospace and defense, pharmaceutical fine chemicals and
automotive industries. For more information, please visit
http://www.aerojet.comand http://www.GenCorp.com
Sequa Corporation is a diversified manufacturer with eight
discrete business units organized around five operating segments:
aerospace, automotive, metal coating, specialty chemicals, and
other products. For more information, please visit
http://www.sequa.com
GenCorp (S&P, BB Corporate Credit Rating, Stable) is a multi-
national, technology-based manufacturer with operations in the
automotive, aerospace, defense and pharmaceutical fine chemicals
industries. Additional information about GenCorp can be obtained
by visiting the Company's Web site at http://www.GenCorp.com
GOLDRAY INC: Inks Binding Pact to Sell Assets to Quick Draw
-----------------------------------------------------------
Goldray Inc., (trading symbol TSX Venture "GLS") announced the
signing of a binding Purchase and Sale Agreement with Quick Draw
Financial Corp.
Quick Draw intends to preserve the business operations and
goodwill of Goldray in order that the Goldray business may
continue as a going concern. Goldray announced on October 9, 2003
that it had received five conditional offers pursuant to a
bankruptcy proposal. The Quick Draw offer was considered the most
favourable for the benefit of Goldray's creditors.
Quick Draw has offered approximately $1,653,000 for substantially
all of Goldray's assets including equipment, work-in-progress, and
inventory, excluding accounts receivable. Quick Draw will assist
Goldray in collecting receivables over the next 3 months for a
modest fixed fee. There will be other adjustments at closing for
changes in inventory and work-in-progress in the final price.
A creditor meeting is scheduled for October 30, 2003 to vote on
this offer.
Secured and preferred creditors will be paid in full. It is
anticipated that Goldray's unsecured creditors will recover a
portion of their debt. The trustee estimates based on known claims
to date against Goldray, that unsecured creditors can expect a
recovery in excess of $0.60 per dollar of debt. It is anticipated
that there will be no surplus funds or return on investment for
equity stakeholders. Completion of the transaction is subject to
appropriate creditor and court approval in accordance with the
provisions of the Bankruptcy and Insolvency Act (Canada).
GOODYEAR: Reaches Prelim. Settlement of Radiant Heat Hose Suits
---------------------------------------------------------------
A U.S. District Court judge in New Jersey has certified a national
class and conditionally approved a $236 million settlement between
The Goodyear Tire & Rubber Company (NYSE: GT) and owners and
former owners of property where Entran II radiant heating or snow
melting hose was installed.
A fairness hearing will be scheduled to review the terms of the
settlement.
Goodyear has agreed to contribute $76 million to a settlement fund
over the next five years and could add a total of $40 million in
contingency payments, if certain performance goals are met, during
2004 through 2007. The settlement is conditional on the receipt
of certain insurance proceeds and adequate property owner
participation.
Goodyear expects the plaintiffs' attorneys to seek similar
approval of the class settlement in Canadian courts, in the near
future. Property owners in six New England states are not
currently part of the settlement class, pending an Oct. 24
hearing.
The settlement arose out of a mediation conducted by Judge Layn
Phillips, a retired federal judge.
The proposed settlement does not include property owners with jury
verdicts under appeal by Goodyear. The national settlement class
currently includes property owners in Colorado and New Mexico.
However, a Colorado state court judge has prevented the company
from taking any further steps until the end of this month that
would affect the rights of Colorado property owners. A similar
motion, filed in a state court on behalf of New Mexico property
owners, is still pending.
A hearing before the U.S. District Court in New Jersey is also
scheduled for Oct. 24 to review whether the state court activities
are interfering with the national settlement agreement.
Goodyear supplied the hose product from 1989-1993 to Chiles Power
Supply, Inc. (d/b/a Heatway Systems), a designer and seller of
hydronic radiant heating systems. Goodyear believes that the
Entran II hose is not defective and is vigorously defending the
remaining Entran II legal actions.
As previously reported, Fitch Ratings removed the Rating Watch
Negative on the 'B+' for the senior secured debt and 'B' for the
senior unsecured debt ratings of Goodyear Tire & Rubber Company.
The Rating Outlook is Negative. Approximately $5 billion of debt
is affected.
HARVEST NATURAL: Will Present at NYSSA Conference Tomorrow
----------------------------------------------------------
Harvest Natural Resources, Inc. (NYSE: HNR) is participating in
the New York Society of Security Analysts sixth annual Investing
in the Energy Industry Conference to be held at the Harvard Club
in New York City, beginning tomorrow until Thursday.
Dr. Peter J. Hill, President and Chief Executive Officer, is
scheduled to present the Harvest story from 2:00 p.m. to 2:40 p.m.
Eastern Time on Thursday, October 23, 2003.
The Harvest presentation will be webcast live on Thursday,
October 23, 2003, at 2:00 p.m. Eastern Time. In addition, a
replay of this webcast with an accompanying slide presentation
will be available on the Company's website shortly after the
presentation is concluded and remain on the Web site until
November 21, 2003.
To listen to the live (or archived) webcast of Harvest's
presentation at the conference, visit the Company's Web site at
http://www.harvestnr.com
Harvest Natural Resources, Inc. (S&P, B- Corporate Credit Rating,
Stable), headquartered in Houston, Texas, is an independent oil
and gas exploration and development company with principal
operations in Venezuela. For more information visit the Company's
Web site at http://www.harvestnr.com
HOLIDAY RV SUPERSTORES: Case Summary & 20 Unsecured Creditors
-------------------------------------------------------------
Debtor: Holiday RV Superstores, Inc.
200 East Broward Boulevard
Suite 920
Ft. Lauderdale, Florida 33301
Dba Recreation USA
Bankruptcy Case No.: 03-13221
Type of Business: The Debtor owns real property which is leased to
an RV dealership.
Chapter 11 Petition Date: October 20, 2003
Court: District of Delaware
Debtor's Counsel: Mark J. Packel, Esq.
Blank Rome LLP
1201 Market Street
Suite 800
Wilmington, DE 19801
Tel: 302-425-6429
Fax: 302-425-6464
Total Assets: $3,221,137
Total Debts: $15,368,975
Debtor's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Kevin M. Costner Loan $692,488
1643 Mulberry Lane
San Jose, CA 95125
Agent: Rod Lake, Investment
Consultant & Contact
Tel: 408-267-0944
Fax: 408-267-2028
Deorge Capital - Loan $500,000
David George
30 S. Wacker Drive
Suite 2112
Chicago, IL 60606
Tel: 312-906-9600
Fax: 312-906-8563
Century Partners Lease $350,000
Forty-Eight Floor
333 South Hope Street
Los Angeles, CA 90071-1448
Counsel for creditor
Tel: 702-796-5555
Fax: 702-369-2666
Sheppard Mullin Professional Services $243,367
Deere Credit Loan $152,361
Reynolds & Reynolds Professional Services $95,484
Bombardier Capital Loan $84,766
Delaware Secretary of Franchise Fees $76,187
State
Nida & Maloney Professional Services $70,066
FTI Consulting Professional Services $58,077
Coast Distribution Professional $51,348
MCI Worldcom Telecommunication Services $46,313
Communications
Bowne of Atlanta, Inc. Telecommunication Services $37,391
Reyna Capital Corporation Equipment Lease $27,307
Bellsouth Advertising Advertising $15,910
State Tax Auditing & Professional Services $13,100
Research, Inc.
KSL Media, Inc. Advertising $12,150
Lovelace Health Plan Benefit Payments $10,365
Steven Douglas Associates Benefit Payments $10,000
Aetna US Healthcare (PPO) Benefit Payments $9,849
WBBH-TV2 Advertising $9,418
IMC GLOBAL: Transfers Partnership Interest in PLP to New Unit
-------------------------------------------------------------
IMC Global Inc. (NYSE: IGL) transferred its general partnership
interest in Phosphate Resource Partners Limited Partnership (NYSE:
PLP) to a new wholly owned subsidiary of IMC Global, PRP-GP LLC, a
Delaware limited liability company.
The creation of PRP-GP LLC and its Board of Directors and Audit
Committee are expected to provide enhanced PLP corporate
governance practices and independence.
The transfer establishes PRP-GP LLC as the administrative managing
general partner of PLP and 51.58 percent owner of PLP formerly
held by IMC Global since December 1997. PRP-GP LLC, through its
Board of Directors and independent Audit Committee, controls the
ongoing management of PLP.
The new 7-member Board of Directors of PRP-GP LLC consists of J.
Reid Porter, 54, Executive Vice President and Chief Financial
Officer, IMC Global, who serves as Chairman; John F. Chlebowski,
58, President and Chief Executive Officer of Lakeshore Operating
Partners, LLC, Chicago; E. Paul Dunn, Jr., 50, Vice President,
Finance and Treasurer, IMC Global; James W. Goodrich, 64, business
consultant and retired senior partner of McKinsey & Co.; Raymond
M. Neihengen, 59, Director, Altma Group, LLC, Northfield, IL;
William R. Parr, 47, Vice President, Logistics and Distribution,
IMC Global; and Robert M. Qualls, 53, Vice President and
Controller, IMC Global.
The Audit Committee of the PRP-GP LLC Board consists of Messrs.
Chlebowski, Goodrich and Neihengen. The PRP-GP LLC Board has
determined that these individuals are independent and financially
literate as required by New York Stock Exchange regulations.
IMC Global noted that the transfer of its general partnership
interest in PLP to PRP-GP LLC will not affect the accounting
treatment for the IMC Phosphates Company joint venture partnership
in IMC Global's and PLP's financial statements.
Phosphate Resource Partners Limited Partnership is engaged in the
production and sale of phosphate crop nutrients and animal feed
ingredients. For more information, visit the PLP Web site at
http://www.phosplp.com
With 2002 revenues of $2.1 billion, IMC Global (S&P, B+ Corporate
Credit Rating, Stable) is the world's largest producer and
marketer of concentrated phosphates and potash crop nutrients for
the agricultural industry and a leading global provider of feed
ingredients for the animal nutrition industry.
INTEGRATED HEALTH: Seeking Court's HQ Transfer Protective Order
---------------------------------------------------------------
To help implement the Integrated Health Services Debtors' Amended
Joint Plan of Reorganization, IHS Liquidating LLC asks the Court
for a protective order, pursuant to the Plan and Section 1146(c)
of the Bankruptcy Code:
(a) providing that the transfer of the Debtors' Headquarters
Property to IHS Liquidating and from IHS Liquidating to a
third party as well as the issuance of the mortgage lien
for the benefit of Class 2 is exempt from transfer taxes;
(b) directing the recording offices in the State of Maryland
and the County of Baltimore or any municipality or
governmental subdivision to record any transfer documents
relating to the Transfers in their official real estate
records, as may be requested by IHS Liquidating; and
(c) prohibiting all federal, state and local regulatory and
taxing authorities from requiring the payment of transfer
taxes in connection with the transfers.
Prior to the Petition Date, the Debtors acquired and became the
beneficial owners of Integrated Health Services, Inc.'s corporate
headquarters campus in Sparks, Maryland. The Debtors'
acquisition of the Headquarters Property was financed pursuant to
a "synthetic lease" financing arrangement, the terms of which are
set forth in that certain Participation Agreement, dated July 31,
1997, as amended, among IHS, Integrated Health Services at
Highland Park, Inc. and IHS Development-Highlands Park, Inc, as
borrowers, State Street Bank and Trust Company of Connecticut,
N.A., Eric J Donaghey, Citicorp U S.A. Inc., as the certificate
holder, Citicorp U.S.A., Inc., as agent, and the lenders party to
it, and all of the documents and instruments relating to it.
Certain claims arising under the Participation Agreement are
secured by a mortgage on the Headquarters Property. These
secured claims are classified under the Plan as Class 2 Secured
Synthetic Lease Claims.
According to Robert S. Brady, Esq., at Young Conaway Stargatt &
Taylor LLP, in Wilmington, Delaware, the Headquarters Property is
an excluded asset that will be liquidated by IHS Liquidating.
Pursuant to the Plan, the Headquarters Property is to be
transferred to IHS Liquidating, subject to a restructured
mortgage note and lien on the Headquarters Property, for the
benefit of the Secured Synthetic Lease Claims holders. After
that, IHS Liquidating will market and sell the Headquarters
Property and use the Sale's net proceeds to satisfy the Secured
Synthetic Lease Claims in full. Any remaining proceeds from the
Headquarters Property sale will be held in a general account for
future distribution to the Debtors' unsecured creditors, which by
operation of the Plan, are now members of IHS Liquidating.
Mr. Brady notes that the Plan provides for the exemption of
transfers and mortgages contemplated under the Plan from transfer
taxes, mortgage taxes and similar taxes typically applied in
state and municipal jurisdictions.
Pursuant to the terms of the Participation Agreement, an
individual trustee, Eric J. Donaghey, which has no beneficial
interest in the Headquarters Property, currently holds title to
the Headquarters Property in trust. To implement the Plan, all
parties to the Participation Agreement consented to the
termination of the Participation Agreement so that title can be
transferred to IHS Liquidating.
IHS Liquidating was advised by its title insurance company that
the recording offices in the relevant Maryland jurisdictions are
unlikely to record the documents effectuating the Participation
Agreement termination, the transfer of title to the Headquarters
Property from Mr. Donaghey to IHS Liquidating and the issuance of
the restructured mortgage lien in favor of Citibank, N.A., as
Disbursing Agent for Class 2, unless certain Transfer Taxes are
paid. IHS Liquidating anticipates that it will encounter similar
problems when it seeks to record the Headquarters Property's sale
to a third party.
Mr. Brady relates that a Court order specifically enforcing the
Plan will aid IHS Liquidating in its efforts to record these
documents with the appropriate protection against Transfer Taxes
as was intended by the Plan.
Mr. Brady contends that the Court should approve IHS
Liquidating's request because:
(1) The Transfer Taxes are prohibited by operation of the
Plan and as a matter of law; and
(2) Unless an order is entered, which specifically prohibits
the imposition of the Transfer Taxes, IHS Liquidating
could be required to pay up to $1,600,000 in Transfer
Taxes as a result of taking title to the Headquarters
Property and subsequently selling the Headquarters
Property as the Plan required. Payment of these amounts
on account of exempt Transfer Taxes would unnecessarily
reduce the amount of funds ultimately available for
distribution to unsecured creditors. (Integrated Health
Bankruptcy News, Issue No. 65; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
INTERNATIONAL UTILITY: Obtains Creditors Protection Under CCAA
--------------------------------------------------------------
International Utility Structures Inc., has been granted an Order
by the Court of Queen's Bench of Alberta, which provides creditor
protection to IUSI and permits IUSI to develop a financial
restructuring plan to present to its creditors.
The Order was granted under the Companies' Creditors Arrangement
Act. The Court granted a stay of proceedings, which prevents
creditors from taking any legal actions against IUSI or its
assets.
IUSI has also obtained interim financing, which will allow the
initial stages of the restructuring to proceed.
International Utility Structures Inc. is a world leader in the
manufacture and marketing of metal overhead lighting, power line,
traffic and telecommunications support structures for customers in
more than 100 countries. Headquartered in Calgary, Alberta, IUSI
has manufacturing, design and engineering capacity in the United
States, France and Ireland. The Company's common shares trade on
the Toronto Stock Exchange under the symbol IUS.
KAISER ALUMINUM: Pushing for Environmental Claims Consent Decree
----------------------------------------------------------------
Kaiser Aluminum Corporation and its debtor-affiliates seek the
Court's authority to enter into a consent decree with the United
States of America -- on behalf of the U.S. Environmental
Protection Agency, the U.S. Department of Interior and the
National Oceanic and Atmospheric Administration -- the states of
California, Rhode Island and Washington and the Puyallup Tribe of
Indians. The Consent Decree settles numerous environmental claims
of the Settling Parties against the Debtors.
As a result to their extensive operations throughout the United
States, Daniel J. DeFranceschi, Esq., at Richards, Layton &
Finger, explains that the Debtors are subject to regulation under
numerous environmental laws, including the Comprehensive
Environmental Response, Compensation and Liability Act. Pursuant
to the environmental laws, various federal and state regulatory
agencies, over the course of numerous years, initiated multiple
unrelated regulatory actions contending that the Debtors were
jointly and severally liable, along with other private parties,
as potentially responsible parties for past and future costs
incurred by the applicable agencies in the clean-up and
remediation of environmental conditions at various sites.
On behalf of the Nuclear Regulatory Commission and the Settling
Federal Agencies, the United States filed Claim No. 7135 against
the Debtors asserting a general unsecured claim for $467,975,062.
The other Settling Parties filed these Claims:
Settling Party Claim No. Amount
-------------- --------- ------
California 7297 unliquidated
Rhode Island 7111 $30,000,000
Washington 7181 152,219,574
Puyallup Tribe 1727 78,287,373
According to Mr. DeFranceschi, the Consent Decree allows the
Debtors to avoid potential claims for the full cost of
environmental remediation at contaminated sites, which could
total in the hundreds of millions of dollars. The Consent Decree
also provides a procedure for the Debtors to address currently
unknown claims on the same terms that the claims would have been
treated under any reorganization plan if they were currently
known and liquidated, thus permitting the Debtors to avoid costly
estimation proceedings and litigation over whether the claims
constitute dischargeable "claims" in these Chapter 11 cases.
The Debtors entered into the Consent Decree with the Settling
Parties in August 2003. The Consent Decree lists 66 third-party
disposal or treatment sites not owned by the Debtors --
Liquidated Sites -- with respect to which the Debtors have been
alleged by the United States and or one of the States to be a
PRP. Of the Liquidated Sites, there are 38 sites for which the
Settling Parties essentially have no claim -- an allowed general
unsecured claim reflected as zero -- either because the parties
agree that a settlement for no liability is appropriated or
because the Debtors previously made sufficient payments with
respect to the site, in which case the Consent Decree specified
the amounts previously paid.
With respect to the remaining 28 Liquidated Sites, the Consent
Decree specifies the dollar amount that will constitute allowed
general unsecured claims under any confirmed reorganization
plan. The amounts were determined based on the equitable factors
that are typically used to settle PRP liability at multi-party
sites. The Settling Parties will be allowed these general
unsecured claims against the Debtors:
Settling Party Amount
-------------- ------
The United States, $17,828,839
on the EPA's behalf
Washington, the Puyallup Tribe 5,500,000
and the United States, on
behalf of DOI and NOAA
California Department 1,141,364
of Toxic Substances
California Department 15,818
of Fish and Game
Rhode Island is not allowed a monetary claim. However, because
it is a signatory to the Consent Decree, any future claims Rhode
Island makes or future environmental liabilities it alleges
against the Debtors based on prepetition acts with respect to
sites other than Liquidated or Discharged Sites will be governed
and resolved by the process relating to certain Additional Sites.
Aside from the Liquidated Sites, the Consent Decree lists 18
third-party disposal or treatment sites not owned by the Debtors
-- Discharged Sites -- and provides that all prepetition
environmental liabilities and obligations of the Debtors to the
Settling Parties related to the Discharged Sites will be
discharged pursuant to Section 1141 of the Bankruptcy Code upon
the confirmation and effectiveness of a Reorganization Plan.
The Settling Parties have agreed not to sue the Debtors or their
successors with respect to the Liquidated Sites. The Settling
Parties may, however, bring an action based on the Debtors':
(1) postpetition environmental liabilities;
(2) criminal liability; or
(3) failure to meet a requirement of the Consent Decree.
Although the Debtors are not obligated to pursue insurance
recovery for environmental liabilities or property damage, by
virtue of the Consent Decree or otherwise, if after the effective
date of a Plan the Debtors pursue and recover insurance proceeds
for property damage insurance coverage for environmental costs
incurred in respect of one of the Liquidated Sites, the Debtors
will retain 60% of the recovery in excess of the costs of
pursuing the recovery. The remaining 40% will be allocated to
the Settling Parties on a pro rata basis. The Consent Decree
provides a mechanism for equitable allocation of any recovery
between the Liquidated Sites. Additionally, payments of
insurance recoveries to the Settling Parties will not be made in
excess of each party's allowed general unsecured claim.
With respect to environmental liabilities to sites that the
Debtors own after the confirmation of a reorganization Plan --
excluding certain Reserved Sites -- the liabilities will not be
discharged by the Consent Decree or Plan. The Consent Decree
does not address postpetition conduct that may give rise to
environmental liability, and the rights and defenses of all
parties are preserved with respect to any postpetition
liabilities.
The Consent Decree reserves all the parties' rights and defenses
with respect to six named Reserved Sites -- four of which are
Debtor-owned and two of which are third party-owned -- including
any discharge defense under the Bankruptcy Code or Plan. The
claims by the United States and the States relating to the
Debtors' prepetition environmental liabilities at sites referred
to as Additional Sites -- sites, other than the Liquidated,
Debtor-Owned and Reserved Sites, where the Debtors have not yet
been identified as PRPs, or which the Debtors' equitable share
cannot be determined -- will be discharged under Bankruptcy Code
Section 1141 upon Plan confirmation. However, the Settling
Parties may in the future, in the ordinary course of conducting
agency enforcement activities, seek determination of the Debtors'
liability with respect to Additional Sites. Any determined
liability will be treated as an allowed general unsecured claim
under the Plan, satisfied by making a payment equivalent to what
the distribution would have been had the liability been liquidated
during the course of the Chapter 11 proceedings. The government
agencies will not issue a unilateral order or seek an injunction
with respect to the Additional Sites. In any action or
proceeding, the Debtors, the Settling Federal Agencies and the
States reserve all rights, claims and defenses that is customarily
entitled to them during the course of these Chapter 11
proceedings. The Settling Parties also agree to negotiate fair
and equitable terms in settlement of any claims relating to the
Additional Sites.
The Settling Federal Agencies, the States and the Tribe are deemed
to have filed proofs of claim for all matters addressed in the
Consent Decree, which proofs of claim will be deemed fully
satisfied in accordance with the terms of the Consent Decree, but
without any prejudice to any claims filed for the Reserved Sites.
Rhode Island's Claim No. 7111 will be withdrawn.
The Consent Decree provides that with regard to all existing or
future third-party claims against the Debtors with respect to the
Liquidated Sites, including all claims for contribution, the
Debtors are entitled to protection for actions or claims to the
maximum extent provided by Section 113(f)(2) of the CERCLA and
similar state and tribal laws.
Tremont City PRP Group Objects
Tremont City Landfill Site PRP Group is aware of two documents
generated by the owners and operators of the Tremont City
Landfill Site, Barrel Fill Operable Unit, located in Tremont City
in Clark County, Ohio in 1976 that contain information that the
Debtors did in fact arrange for the disposal of hazardous
substances at the Site.
The first document is a "cell report" obtained from the Ohio
Environmental Protection Agency. It appears that the United
States of America -- on behalf of the U.S. Environmental
Protection Agency, the U.S. Department of Interior and the
National Oceanic and Atmospheric Administration -- was unaware of
the existence of this cell report during settlement negotiations
with the Debtors. Cell reports typically provide dates regarding
waste generated and disposed at a particular site.
Miles W. Hughes, Esq., at Dykema Gossett PLLC, in Chicago,
Illinois, notes that the OEPA Cell Report shows that "Kaiser
Aluminum" was the source of "aluminum hydroxide & carbonate sludge
[drums] & bulk" deposited at the Site. In correlation, Mr. Hughes
cites that the second document, a customer list, states that
caustic substances generated by "Kaiser Aluminum" were disposed of
at the Site. Industrial wastes of the types disposed of by the
Debtors contain hazardous substances as defined by the
Comprehensive Environmental Response, Compensation and Liability
Act.
Tremont PRP Group complains that the Consent Decree, if approved,
settles the Debtors' potential liability to the U.S. EPA for the
paltry amount of $2,500 with respect to the Site. In addition,
the Consent Decree would entitle the Debtors to protection
against contribution claims of third parties. The U.S. EPA
negotiated the Consent Decree without considering the Cell
Report, which clearly links the Debtors to hazardous substances
deposited at the Site. Mr. Hughes states that the Cell Report
could prompt the U.S. EPA to dramatically increase the amount of
damages assessed in the Consent Decree for the Debtors'
contributions of hazardous substances at the Site.
Accordingly, the Tremont PRP Group asks the Court not to approve
the Consent Decree until such time as the U.S. EPA has had an
opportunity to reassess the Debtors' liability for contamination
costs at the Site.
Mr. Hughes asserts that the contribution protections to the
Debtors against claims of the members of the Tremont PRP Group
should be eliminated from the Consent Decree. "Providing
contribution protection to a party that clearly is liable for
Site response costs under the CERCLA without allowing the claims
of the Tremont PRP Group would be inequitable and contrary to the
CERCLA and the Bankruptcy Code," Mr. Hughes says. (Kaiser
Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service,
Inc., 609/392-0900)
KMART HOLDING: Hires BDO Seidman to Replace PwC as Accountants
--------------------------------------------------------------
On October 9, 2003, Kmart Holding Corporation notified
PricewaterhouseCoopers LLP of its dismissal as the independent
auditors for the Company.
The most recent reports of PricewaterhouseCoopers LLP for Kmart
Corporation's (Predecessor Company) consolidated financial periods
for each of the two fiscal years ended January 29, 2003 and
January 30, 2002, and for the period from January 30, 2003 to
April 30, 2003 and the report of PricewaterhouseCoopers LLP on the
consolidated balance sheet of Kmart Holding Corporation (Successor
Company) at April 30, 2003, contained no adverse opinion or
disclaimer of opinion and were not modified as to uncertainty,
audit scope or accounting principle except as follows:
(1) For each of the two fiscal years ended January 29, 2003 and
January 30, 2002, the auditor's reports included an
explanatory paragraph with respect to Kmart's ability to
continue as a going concern.
(2) The report on the consolidated balance sheet at April 30, 2003
and the report on the consolidated financial statements for
the period from January 30, 2003 to April 30, 2003 included an
explanatory paragraph disclosing that the United States
Bankruptcy Court for the State of Illinois confirmed the
Company's Amended Joint Plan of Reorganization on April 23,
2003. The plan was substantially consummated on April 23, 2003
and the Company emerged from bankruptcy on May 6, 2003, at
which time the Predecessor Company became a wholly-owned
subsidiary of Kmart Management Corporation, which is a newly-
formed, wholly-owned subsidiary of a newly-created holding
company, Kmart Holding Corporation.
During the two most recent fiscal years ended January 29, 2003 and
January 30, 2002, and through October 9, 2003, there have been no
reportable events (as defined in Regulation S-K, Item
304(a)(1)(v)) except that: In connection with its audit of the
Predecessor Company's financial statements for the year ended
January 29, 2003, PricewaterhouseCoopers LLP communicated to the
Audit Committee the existence of a reportable condition based on
its audit observations in the Company's real estate accounting
area, specifically stating that procedures related to account
reconciliation and monitoring activities should be enhanced. Kmart
had previously identified these items, and financial statement
errors stemming from this discovery were appropriately corrected
in the Predecessor Company's First Amended Form 10K/A for the
fiscal year ended January 30, 2002, which reflected an accounting
restatement for the cumulative impact of certain accounting
errors.
The Successor Company has implemented corrective actions to
eliminate, or reduce to an acceptable level, the financial
reporting risks associated with the condition noted.
PricewaterhouseCoopers LLP is not in a position to comment on the
adequacy of these corrective actions.
The Company has engaged BDO Seidman, LLP as its independent
auditors effective as of October 8, 2003. The change in
accountants was approved by the Company's independent Audit
Committee on October 8, 2003. BDO is expected to audit the
Company's consolidated financial statements for the nine-month
period ending January 28, 2004.
LEAP: Cricket Gets Nod to Expand Deloitte's Engagement Scope
------------------------------------------------------------
Cricket Communications, Inc., employs Deloitte & Touche LLP to
investigate potential tax savings on real and personal property
tax assessments for their properties. Deloitte receives a 30%
contingent fee on any realized savings. The firm is solely
responsible for all of its costs and expenses. Thus, it receives
no payment until a tax savings is received.
Because of the firm's success in its efforts, Cricket wanted
expand Deloitte's services. Cricket estimated that Deloitte's
fees will be $125,000 to $400,000 per month. Cricket further
estimated that Deloitte's services will earn them tax savings of
$420,000 to $1,300,000 per month.
Thus, Cricket sought and obtained the Court's authority to pay
Deloitte for tax services in the ordinary course of business.
Accordingly, the Court amended the OCP Order to supplement the
estimated billing rates for Deloitte. (Leap Wireless Bankruptcy
News, Issue No. 11; Bankruptcy Creditors' Service, Inc., 609/392-
0900)
LTV CORP: Claims Treatment & Classification Under Proposed Plan
---------------------------------------------------------------
Pursuant to Section 1123(a)(1) of the Bankruptcy Code,
Administrative Expense Claims and Priority Tax Claims are not
classified for purposes of voting on or receiving distributions
under the Plan. These Claims are treated separately, according to
David G. Heiman, Esq., Heather Lennox, Esq., and Carl E. Black,
Esq., at Jones Day, in Cleveland, Ohio, representing the
Liquidation LTV Debtors in their bankruptcy proceedings.
A. Administrative Claims
Each holder of an Allowed Administrative Claim will receive, in
full satisfaction of its Administrative Claim, Cash equal to the
Allowed amount of such Administrative Claim from the applicable
Priority Claims Trust Account either:
(a) on the Effective Date of the Plan, or
(b) if the Administrative Claim is not allowed as of the
Effective Date, 30 days after the date on which an
order allowing such Administrative Claim becomes a
Final Order or a Stipulation of Amount and Nature of
Claim is executed by the Distribution Trustee and the
holder of the Administrative Claim.
On or before the Effective Date, Administrative Claims for fees
payable pursuant to Section 1930 of the Judiciary Procedures Code,
as determined by the Bankruptcy Court at the Confirmation Hearing,
will be paid by the applicable Debtor or the Distribution Trust in
Cash equal to the amount of such Administrative Claims. All fees
payable pursuant to Section 1930 will be paid by the Distribution
Trust from the applicable Priority Claims Trust Account until the
closing of the Bankruptcy Cases pursuant to Section 350(a) of the
Bankruptcy Code.
Liquidation Assistance Program Claims will be paid from the
Liquidating Debtors' Priority Claims Trust Account as
Administrative Claims in accordance with the terms of the
Liquidation Assistance Program Order and any related program
agreements. If the Plan is confirmed by December 31, 2003, the
aggregate amount of the Liquidation Assistance Program Claims will
not exceed $813,260, plus related payroll taxes.
The Debtors currently estimate that, as of the Effective Date of
the Plan, the Administrative Claims:
* of the VP Debtors will aggregate approximately
$1,971,260, plus related payroll taxes; and
* of LTV Blanking, LTV Mexico and LTV-Walbridge will
aggregate $0.
These estimates were made under the assumption that the PBGC's
Administrative Claim -- currently asserted for approximately $1.1
million -- will be resolved prior to the Effective Date.
Certain administrative proofs of claim filed against the Debtors
assert liabilities that, if valid, could have an adverse impact on
the consummation of the Plan and the estimated claim amounts
identified in the Disclosure Statement. However, the Debtors
believe that these Claims are improperly asserted against them or
are incorrectly classified and ultimately will be disallowed.
B. Priority Tax Claims
Unless otherwise agreed by the holder of a Priority Tax Claim and
the applicable Debtor or the Distribution Trustee, each holder of
an Allowed Priority Tax Claim will receive, in full satisfaction
of its Allowed Priority Tax Claim, the full amount in Cash,
without postpetition interest or penalty, from the applicable
Priority Claims Trust Account as soon as practicable after the
later of:
(a) the Effective Date; and
(b) the date on which the Priority Tax Claim becomes an
Allowed Claim.
The Debtors estimate that, as of the Effective Date of the Plan,
the Priority Tax Claims:
* of the VP Debtors will aggregate approximately
$1,357,000;
* of LTV Blanking will aggregate approximately $0;
* of LTV Mexico will aggregate approximately $0; and
* of LTV-Walbridge will aggregate approximately $0.
Mr. Heiman says that the holder of an Allowed Priority Tax Claim
will not be entitled to receive any payment on account of any
penalty arising with respect to that claim, or in connection with
the Allowed Priority Tax Claim. Any Claim or demand for any such
penalty:
(a) will be subject to treatment in Class 3 against the
applicable Debtor; and
(b) the holder of an Allowed Priority Tax Claim will not
assess or attempt to collect such penalty from the
Debtors, the Distribution Trustee, their properties or
the Trust Accounts.
C. Allowed Secondary Liability Claims
The classification and treatment of Allowed Claims under the Plan
take into consideration all Allowed Secondary Liability Claims,
and no distributions in respect of any Secondary Liability Claims
will be made. A "Secondary Liability Claim" means a Claim that
arises from a Debtor being jointly, severally or secondarily
liable for any contractual, tort or other obligation of another
Debtor based on:
(a) vicarious liability;
(b) liabilities arising out of piercing the corporate veil,
alter ego liability or similar legal theories; or
(c) other similar legal theories.
Summary of Treatment of Claims
Class Description Treatment
----- ----------- ---------
N/A Administrative Unimpaired. Paid in cash, in full.
Expense Claims
N/A Priority Tax Unimpaired. Paid in cash, in full.
Claims
1 Secured Claims Unimpaired. Paid in cash, in full.
Estimated Aggregate Claims Amount: $0
Estimated Percentage Recovery: 100%
2 Unsecured Unimpaired. Paid in cash, in full.
Priority Claims
Estimated Aggregate Claims Amount:
$1,393,000
Estimated Percentage Recovery: 100%
3-A VP Unsecured Impaired. On the Effective Date, each
Non-priority holder of an Allowed Unsecured Claim
Claims against any Liquidating Debtor will
receive a Pro Rata distribution of the
Cash deposited in the Liquidating Debtors
Unsecured Claims Trust Account.
Estimated Aggregate Claims Amount: $2.066
billion
Estimated Percentage Recovery: 2.7%
3-B LTV Blanking Impaired. On the Effective Date, each
Unsecured holder of an Allowed Unsecured Claim
Non-priority against LTV Blanking will receive a pro
Claims rata distribution of the Cash deposited
in the LTV Blanking Unsecured Claims
Trust Account.
Estimated Aggregate Claims Amount: $2.036
billion
Estimated Percentage Recovery: 0.1%
3-D LTV-Walbridge Impaired. On the Effective Date, each
Unsecured holder of an Allowed Unsecured Claim
Non-priority against LTV-Walbridge will receive a pro
Claims rata distribution of the Cash deposited
into the LTV-Walbridge Unsecured Claims
Trust Account.
Estimated Aggregate Claims Amount: $2.036
billion
Estimated Percentage Recovery: 0.1%
4 Intercompany Impaired. No property will be
Claims distributed to or retained by the holders
of Allowed Claims in Class 4, and such
Claims will be extinguished on the
Effective Date, to the extent not already
extinguished pursuant to the Intercompany
Claims Settlement. Notwithstanding this
treatment of the Class 4 Claims, each of
the holders of an Intercompany Claim will
be deemed to have accepted the Plan.
Estimated Aggregate Claims Amount:
$149,357,000
Estimated Percentage Recovery: 0%
5 Old Common Impaired. No property will be
Stock distributed.
Estimated Percentage Recovery: 0%
Estimate of Allowed Claims With Priority
Over General Unsecured Claims
The Debtors currently estimate the amount of Allowed
Administrative Claims, Priority Tax Claims, Class 1 Secured Claims
and Class 2 Priority Claims to aggregate approximately $4,978,000,
which will be paid from the Priority Claims Trust Accounts. If
necessary, additional amounts may be funded at the expense of
other Trust Accounts to fund any deficiency in these estimates;
likewise, any excess funding of these amounts will become
available to supplement the amounts in the Unsecured Claims Trust
Accounts.
Based on the current estimates, the estimated uses of Cash are:
Funding of Funding of Funding of
Distribution Priority Unsecured
Trust Expenses Claims Trust Claims Trust
Debtor Account Account Accounts Total
------ ------------ ------------ ------------ -----
VP Debtors $910,000 $4,978,000 $54,990,501 $60,878,501
LTV Blanking 40,000 0 2,356,838 2,396,838
LTV Mexico 30,000 0 2,177,608 2,207,605
LTV-Walbridge 20,000 0 1,556,861 1,576,861
------ ------------ ------------ ------------ -----------
Total $1,000,000 $4,978,000 $61,080,808 $67,059,805
The ultimate funding of the Trust Accounts will depend on the
amount of Cash available to the Estates, the amount of
Distribution Trust Expenses, and the amount of Allowed Claims to
be paid from the Priority Trust Accounts.
Distributions of Cash to be made on the Effective Date to holders
of Administrative Claims that are allowed as of the Effective Date
will be deemed made on the Effective Date if made on the Effective
Date or as promptly after that as practicable, but in any event no
later than 45 days after the Effective Date. Distributions of
Cash to be made on the Effective Date to holders of Unsecured
Claims that are allowed as of the Effective Date will be deemed
made on the Effective Date if made on the Effective Date or as
promptly thereafter as practicable, but in any event no later
than:
(a) 75 days after the Effective Date, or
(b) such later date when the applicable conditions of the
Plan regarding undeliverable distributions, or
surrender of canceled instruments and securities are
satisfied. (LTV Bankruptcy News, Issue No. 56;
Bankruptcy Creditors' Service, Inc., 609/392-00900)
MALDEN MILLS: Successfully Emerges From Chapter 11 Proceedings
--------------------------------------------------------------
Malden Mills Industries, Inc., has successfully emerged from
Chapter 11 bankruptcy protection.
The reorganized company is emerging from bankruptcy intact with
1,200 employees based in Lawrence, MA, Methuen MA and Hudson, NH.
Various secured and unsecured creditors have received a majority
of the reorganized company's stock and a seven member Board of
Directors with six new directors has been appointed.
Acting COO and CFO David Orlofsky, from Kroll Zolfo Cooper,
stated, "Malden Mills is emerging from Chapter 11 a transformed
company. Two years ago Malden Mills' sales were declining and
profits were shrinking. Today I am pleased to say that the Company
has successfully turned the corner. Sales are growing and the
Company has diversified the Polartecr business into new markets.
Additionally, the Company has reduced its debt load from more than
$170 million prior to Chapter 11 to less than $80 million. This
puts Malden Mills in a much more financially secure position and
will support the continued growth of the Company."
Orlofsky continued, "The successful restructuring could not have
happened without the hard work of the Company's employees during
the Chapter 11 process and we are grateful for their unwavering
efforts. Malden also received significant support from its senior
lenders, its customers and its vendors. We look forward to
continuing to work with all parties to successfully grow the
business. The new Board of Directors, along with the rest of the
employees, are looking forward to helping build a prosperous
future for the Company."
The Company is in the final stages of selecting a permanent CEO
and hopes to have this process completed before the end of the
calendar year. In the interim, Mr. Orlofsky will continue to
manage the day-to-day operations. He will report to the executive
committee of the Board of Directors, comprised of 3 members of the
new Board.
The Company filed Chapter 11 on November 29th, 2001. The filing
was necessitated by many factors including the cost of servicing
bank debt and competition from low cost Asian suppliers. Malden
Mills is best known as the innovator, manufacturer and marketer of
Polartec(R) brand technical fabrics. During 2003, Malden Mills and
Polartec(R) products have continued to receive strong support from
customers and consumers around the world. Significant financial
and operational improvements have resulted from the restructuring
of the business including more efficient manufacturing, new
product innovation, strengthening of the Polartec(R) brand and
diversification into the military, hunting, and fitness lines.
The new Board of Directors will be comprised of:
Kevin Collins. Mr. Collins has provided consulting and advisory
services to companies, which have undergone or are undergoing
financial restructurings. He has over 23 years of experience in
corporate finance and investment banking. Mr. Collins is currently
Vice Chairman for London Fog and he also sits on the Board of The
Penn Traffic Company. Mr. Collins is a chartered Financial Analyst
and holds B.S. and MBA degrees from the University of Minnesota.
Deborah G. Ellinger. Former Executive Vice President of
CVS/Pharmacy, Senior Vice President of Staples Inc., Partner at
The Boston Consulting Group, and Vice President of Mellon
Financial Corporation. Ms. Ellinger has expertise in strategy,
operations, and finance and currently works with private equity
firms to help improve the performance of their portfolio
companies. Ms. Ellinger is a native of Cambridge, England and has
extensive international experience.
Aaron Feuerstein. Chairman of the Board and President, (a non-
executive role), Malden Mills Industries, Inc. Mr. Feuerstein
represents the third generation of the founding family of the
Company. His accomplishments include leading Malden Mills into the
performance textile market, creation of the Polartecr brand and
spurring the Company towards continuous innovation. He has been
recognized around the world for his high standards of corporate
responsibility exemplified by his decision to rebuild the company
the day after the devastating December 11, 1995 fire -- and paying
his employees during the process.
Alan M. Jacobs, President, AMJ Advisors LLC. Mr. Jacobs is a
senior financial executive with over thirty years experience in
business turnaround and insolvency, corporate restructuring and
reorganization, corporate finance and dispute resolution. Mr.
Jacobs was a founding member and senior partner of the Ernst &
Young LLP restructuring and reorganization practice, which Mr.
Jacobs left in 1999 to form AMJ Advisors LLC. Mr. Jacobs works
with a variety of clients in a broad range of industries,
including textile and apparel, asset based lending, distribution,
financial services, manufacturing, real estate and retail. Mr.
Jacobs has served as a director and chairman of the audit
committee of Singer, Inc., as director of Criimi Mae Inc. and as
co-chairman and co-chief executive officer of West Coast
Entertainment. Mr. Jacobs is currently providing financial
advisory services in numerous matters, including serving as
president, plan administrator and litigation trust trustee of T&W
Financial Services, Chapter 7 trustee of Edison Brothers, Chapter
11 trustee of Island Mortgage Network and AppOnLine.com Inc.,
Chapter 11 trustee of Sharp International Corp and financial
advisor to Tort Claimants of Dow Corning.
Richard K. M. McCaffery. Richard McCaffery is president of
McCaffery & Company, International Management Consultants, based
in San Francisco with a wholly owned Canadian Subsidiary (Ltd.) in
Toronto, Ontario. McCaffery & Company specializes in growth
generation for clients in the branded consumer product segment,
with extensive experience in apparel, textiles, and retailing.
Their services include strategic planning, business development,
product development, market research, advertising, and graphic
design. Prior to forming McCaffery & Company, Mr. McCaffery was
Executive Vice President of Marketing for DFS Group, Ltd., the
world's largest duty free retailer. Richard has a wealth of
marketing experience including providing consulting and advisory
services to companies such as Avon Products, Chesebrough-Ponds,
Crystal Brands, and Fieldcrest Cannon among others. Currently
Richard heads the sales and marketing function for London Fog.
William E. Redmond, Jr. Mr. Redmond was CEO of Garden Way
Incorporated from December 1996 to February 2003 where he
engineered a dramatic turnaround of the company. While at Garden
Way, Mr. Redmond was responsible for a $53 million EBITDA
improvement via strategic alliances and multi-million dollar
licensing agreements, product development and other operational
improvements. Mr. Redmond currently serves on the Board of World
Kitchen Inc., a leader in houseware manufacturing and marketing,
Arch Wireless, a leader in the one and two-way paging industry;
and Gentek, a diversified manufacturing and technology company.
Gregory L. Segall, Chairman and Managing Director of Chrysalis
Management Group, LLC. Mr. Segall has significant experience in
corporate restructuring both as a Board member and in senior
management for substantial businesses (from $10 million to over $1
billion in assets or revenues) in diverse industries including:
general and specialty retailing; real estate; health care;
franchising; technology; and banking/finance. He is also Special
Advisor and Strategic Partner with Lubert Adler Real Estate Funds,
a private investment firm with $2.4 billion of equity capital
under management and a member of the Independence Capital partners
family of private equity investment funds.
MAXXIM MEDICAL: Wants Plan Exclusivity Stretched Until Nov. 10
--------------------------------------------------------------
Maxxim Medical Group, Inc., and its debtor-affiliates wants to
extend their exclusive time period within which they have the only
right to file a plan of reorganization and solicit acceptances of
that plan.
Brendan Linehan Shannon, Esq., at Young Conwaway Stargaat &
Taylor, LLP tells the U.S. Bankruptcy Court for the District of
Delaware that the Debtors need until November 10, 2003 to file a
plan and through January 12, 2004 to solicit acceptances from
their creditors.
The Debtors submit that since the previous extension of their
Exclusive Periods, they have continued to make considerable
progress in these cases. Specifically, they have:
i) brought to a conclusion the process they implemented to
identify prospective purchasers and/or equity investors
by finalizing and seeking approval of the Lightyear
Capital LLC APA;
ii) sought and gained approval of the Sale Procedures Order;
and
iii) scheduled an auction for the Purchased Assets to take
place on October 27, 2003 and a hearing to consider the
approval of the Sale to Lightyear or such other higher
or otherwise better offer to take place on October 28,
2003.
Similarly, an additional exclusivity extension will permit the
Debtors, the Committee and the DIP Lenders to finalize their
agreement and resolve many of the existing significant
intercreditor issues. The resolution of those intercreditor issues
will likely allow the Debtors to proceed with a consensual plan
and bring these cases to a prompt resolution.
Additionally, because the Bar Date has only recently expired, the
extension of the Exclusive Periods will afford the Debtors time to
review and evaluate timely filed proofs of claim in connection
with formulating a chapter 11 plan.
Maxxim Medical Group, Inc., a leading suppliers of custom-
procedure trays, nonlatex examination gloves and other single-use
products, filed for chapter 11 protection on February 11, 2003
(Bankr. Del. Case No. 03-10438). Brendan Linehan Shannon, Esq.,
Edward J. Kosmowski, Esq., Matthew Barry Lunn, Esq., at Young,
Conaway, Stargatt & Taylor and Myron Treppor, Esq., Michael J.
Kelly, Esq., at Wilkie Farr & Gallagher represent the Debtors in
their restructuring efforts. When the Company filed for
protection from its creditors, it listed both debts and assets of
over $100 million.
MCDERMOTT: S&P Keeps Junk-Level Credit Rating on Watch Positive
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'CCC+' corporate
credit ratings on McDermott International Inc. and unit McDermott
Inc. on CreditWatch with positive implications because of the
expectation that the company will successfully replace its current
credit facility with stand-alone financing at its subsidiaries,
improving liquidity and reducing financial stress.
McDermott, with executive headquarters in Houston, Texas, is in
the process of obtaining a $125 million bank facility at BWX
Technologies Inc., which may be increased to $150 million, and is
also obtaining replacement financing for J. Ray McDermott S.A. on
a stand-alone basis.
"Financial flexibility would be improved with such financing,
giving McDermott some time to complete work on several troubled,
cash-draining projects," said Standard & Poor's credit analyst
Daniel DiSenso. "Previous going-concern issues would be mitigated,
resulting in modest upgrade potential."
The company has characterized this as a turnaround year.
Profitability at JRM is improving, although this unit will be cash
flow negative for the next four quarters reflecting working
capital needed to complete work on four troubled projects. The
first of three EPIC spar projects has been completed, and
McDermott expects to complete all work on the other two projects
by mid 2004. JRM is obtaining adjustments in the terms on the
Argentine Carina Aries project that will enable it to complete
this project with an acceptable risk profile.
New JRM management is working to permanently improve profit
prospects for the firm by strengthening project estimating,
bidding, and project management procedures, and developing a more
prudent risk-taking plan.
MCSI INC: Files Disclosure Statement for Plan of Reorganization
---------------------------------------------------------------
MCSi, Inc. announced that the lenders under its pre-petition
secured loan agreement have executed a letter of intent to sell
their prospective equity interests in a reorganized MCSi to an
affiliate of Sun Capital Partners, Inc.
Under the letter of intent, Sun Capital would purchase the
reorganized Company's stock from the lenders. Sun Capital, in
conjunction with the lenders, would arrange exit financing and
working capital through a revolving credit facility upon the
Company's emergence from Chapter 11. Sun Capital is a leading
private investment firm based in Boca Raton, Florida.
Any transaction is subject to completion of satisfactory due
diligence, negotiation and completion of definitive documentation
and other customary conditions. There can be no assurance that the
lenders will reach agreement with Sun Capital or that a
transaction will be completed.
MCSi has filed a proposed disclosure statement relating to its
plan of reorganization previously filed under Chapter 11 of the
Bankruptcy Code. The bankruptcy court must approve the disclosure
statement before the Company can solicit votes on the plan. If the
lenders reach a definitive agreement with Sun Capital, the
disclosure statement will be amended accordingly. However, any
agreement with Sun Capital is not expected to affect materially or
enhance the proposed treatment of the Company's equity holders and
other creditors under the plan. Under the Company's proposed plan,
the currently outstanding MCSi common stock and other equity
securities will be cancelled and new stock will be issued to the
lenders.
The Company expects to emerge from Chapter 11 protection by the
end of 2003. Closing of the lenders' sale of stock to Sun Capital
and the related transactions is contemplated to occur on the
effective date of the plan, which the Company expects to occur
immediately following confirmation of the plan by the bankruptcy
court.
Gordon Strickland, MCSi's President and Chief Executive Officer,
stated: "This is a tremendously important development in the
reorganization of our company. Sun Capital has a demonstrated
track record of identifying, acquiring and nourishing companies
that for one reason or another are currently underperforming. All
of us at the company look forward to emerging from bankruptcy with
the backing and financial support of Sun Capital."
MCSi is a leading provider of state-of-the-art presentation,
broadcast and supporting network technologies for businesses,
churches, government agencies and educational institutions. From
offices located throughout the United States, MCSi draws on its
strategic partnerships with top manufacturers to deliver a
comprehensive array of audio, display and professional video
innovations. MCSi also offers proprietary systems pre-engineered
to meet the need for turnkey integrated solutions.
As a full service provider of enterprise wide technology
solutions, MCSi complements its product offerings with a
design/build approach that includes consultation, design
engineering, product procurement, systems integration, end-user
training and post sales support. MCSi's value-added service
approach, made seamless by the ongoing exchange between customers
and representatives from its strategic support teams, ensures that
customers receive dedicated attention and long-term commitment to
support their investment. Additional information regarding MCSi
can be obtained by visiting http://www.mcsinet.com
Sun Capital Partners, Inc. is a leading private investment firm
focused on investing in market-leading companies that can benefit
from its in-house operating professionals and experience. Sun
Capital has invested in approximately 60 companies since its
inception in 1995 with combined revenues in excess of $7 billion.
For more information, visit http://www.suncappart.com
METALDYNE CORP: Names Anne Lockwood VP of New Sale Organization
---------------------------------------------------------------
Metaldyne has restructured its sales organization to better serve
Metaldyne's global automotive customers.
Anne Lockwood will serve as the vice president of the new sales
organization. Lockwood reports to Metaldyne's newly formed
President's Council which includes George Thanopoulos, Engine
Group president; Bruce Swift, Driveline & Transmission Group
president; and Joe Nowak, Chassis Group president. Thanopoulos
serves as the executive champion of the sales group.
"Previously, Metaldyne's sales force was organized by the
company's three product groups," said Thanopoulos. "This new
organization centralizes the sales function and adds customer-
specific responsibility across all three product groups. Most
importantly, the new structure provides our customers with one
face and one common approach."
Under the new organization, Lockwood has assigned a director of
sales for each of the company's largest customers and business
divisions. The directors include:
* Steve Allor - Diesel engines
* Debra Atwell - DaimlerChrysler
* Dino Costa - General Motors
* Jim Hudak - Honda, Toyota, Nissan, Hyundai
* Scott Johnson - Ford/Visteon
* Matt Roberts - Continental Teves/TRW/American
Axle/Lemforder
* Larry Weis - Magna Steyr/New Venture Gear/Delphi/Borg
Warner
* Simon Harvey - Forgings
* Mac Noguchi - Japan
* Fuping Liu - China
Lockwood also has announced that Scott Ferriman will serve as the
vice president of strategic sales, reporting to her. Ferriman
previously served as vice president of strategic sales for
Metaldyne's Engine Group.
Lockwood most recently served as the vice president of sales for
Metaldyne's Engine Group. Prior to that, Lockwood was vice
president of engineering and sales for the Sintered Products
division of the former MascoTech Corporation.
"I am pleased to have Anne in this position," said Thanopoulos.
"She has been instrumental in the global growth of both the
Sintered Products division and Engine Group, and her experience
and leadership skills will be valuable to the entire organization
as she assumes this new role."
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
METATEC INC: Files for Chapter 11 Reorganization in S.D. of Ohio
----------------------------------------------------------------
Metatec, Inc. (OTCBB:META) has filed a voluntary petition for
reorganization under Chapter 11 of the U.S. Bankruptcy Code in the
United States Bankruptcy Court for the Southern District of Ohio
in Columbus.
The filings include motions seeking an order approving post-
petition financing of up to $5 million and authorizing the company
to proceed with a sale of its assets to MTI Acquisition Corp., a
wholly owned subsidiary of ComVest Investment Partners II LLC, and
an affiliate of Commonwealth Associates Group Holdings LLC.
ComVest II is Metatec's largest secured creditor.
Metatec will continue to operate its business and manage its
properties as a debtor-in-possession during the court supervised
sale process. Metatec anticipates completing the sale process
within the next 60 days.
Chris Munro, Metatec's president and chief executive officer,
stated, "Over the past 24 months we have made great strides in
right-sizing our cost structure, stabilizing operations, building
value-added capabilities for our customers and strengthening our
leadership team. At the same time we have significantly reduced
debt and sold under-performing assets and businesses. We
renegotiated our long-term secured debt facility in February 2002
but recognized the need to seek a better method of long-term
financing that would allow us to accelerate our business strategy.
Our Board of Directors carefully reviewed the company's options
and received input from its financial and legal advisors. This
reorganization option was selected because we believe that a sale
of assets as a going concern is the best way to allow for
continued development of Metatec's business and to serve Metatec's
customers, vendors, and employees."
Metatec intends to promptly seek approval of a number of first day
motions with the Bankruptcy Court to support its employees,
vendors, customers, and other constituencies. These include
motions for authority to continue payments for employee payroll
and benefits, to maintain cash management programs, and to retain
legal, financial, investment banking, and other professionals to
support the company's reorganization actions. Under bankruptcy
law, suppliers and vendors who provided goods or services to the
company before these filings may have pre-petition claims, which
will be frozen pending court authorization for payment or approval
of a plan of reorganization.
Under the terms of its initial bid and subject to a court
supervised sale process, MTI would purchase substantially all of
the assets of Metatec for a purchase price of $10.0 million,
consisting of a $9.0 million credit to ComVest II's secured-party
creditor bankruptcy claim (subject to adjustment based on letter
of credit obligations) and a $1.0 million cash payment to the
bankruptcy estate. The company will conduct an orderly sale of
assets over the coming weeks. Metatec anticipates that the sale
process will be completed within the next 60 days.
If MTI purchases the assets of Metatec under the term of its
initial bid, it is not anticipated that Metatec's shareholders
will realize any cash or other value for their Metatec common
shares.
"We have positive cash flow and, in fact, just finished our
busiest quarter for the last two years," Munro said. "We intend to
fulfill our commitments to our employees, vendors, and customers
while we reorganize, and we remain grateful for their continued
loyalty and cooperation. During these proceedings, we intend to
operate as usual and continue to provide the high level of service
our customers have come to expect. Our goal is to keep this
process transparent to our customers and vendors and to remain in
good standing with them. We will also continue to invest in our
capabilities and technology solutions as well as develop our
employees, which we believe are our most valuable assets."
Metatec enables companies to streamline the process of delivering
products and information to market by providing technology driven
supply chain solutions that increase efficiencies and reduce
costs. Technologies include a full range of supply chain solutions
and CD-ROM and DVD manufacturing services. Extensive real-time
customer-accessible online reporting and tracking systems support
all services. Metatec operations are based in Dublin, Ohio.
More information about Metatec is available by visiting the
company's Web site at http://www.metatec.com
ComVest II is a wholly owned subsidiary of Commonwealth Associates
Group Holdings LP which is an investment-management organization
focused on investing, restructuring, and managing growth
businesses in the information technology, healthcare and
telecommunications industries. ComVest II is an investment
partnership established in July 2003. ComVest II's primary focus
is to provide capital to restructure the balance sheets of quality
small-cap public and private businesses that are over-leveraged or
experiencing other short-term financial constraints.
Founded in 1988, Group Holdings has built a core expertise as an
investment bank to public and private small-cap companies focused
on deploying capital and providing other investment banking
services for high-growth businesses in the information technology,
healthcare and telecommunications sectors. The firm's primary
focus during the last two years has been on turnarounds,
reorganizations and restructurings. Since its inception, the firm
has led or managed equity investments in excess of $1.4 billion in
over 50 different small-cap companies. Group Holdings has also
acted as financial advisor on mergers, acquisitions,
recapitalizations, and similar transactions for its investment
banking clients.
METATEC INC: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: Metatec Inc.
7001 Metatec Blvd
Dublin, OH 43017
aka Metatec International Inc
aka Metatec Corporation
Bankruptcy Case No.: 03-65902
Type of Business: The company offers CD, CD-ROM, and DVD
production services, as well as digital
distribution services.
Chapter 11 Petition Date: October 17, 2003
Court: Southern District of Ohio (Columbus)
Judge: John E. Hoffman Jr.
Debtor's Counsel: Otto Beatty, III, Esq.
65 E State Street
Suite 2100
Columbus, OH 43213
Tel: 614-228-1541
Total Assets: $30,379,486 (as of June 30, 2003)
Total Debts: $40,636,192 (as of June 30, 2003)
MIRANT CORP: Court Okays Deloitte's Engagement on Interim Basis
---------------------------------------------------------------
On an interim basis, the U.S. Bankruptcy Court authorizes the
Mirant Debtors to employ Deloitte & Touche LLP as their Tax
Advisors and Tax Consultants pursuant to the terms of the
Engagement Letter effective July 14, 2003.
At the Debtors' request, Deloitte has been providing the services
since the Petition Date.
A. Bankruptcy Related Tax Consulting Services
The Debtors engaged Deloitte to provide tax services with
respect to financial restructuring services. In connection
with these matters, Deloitte's services to the Debtors are
expected to include, but not be limited to:
1. assisting and advising the Debtors in their restructuring
objectives and post-restructuring operations by helping
the Debtors to determine the most optimal tax manner to
achieve these objectives;
2. providing tax consulting regarding availability of,
limitations on, preserving, and maximizing tax attributes;
3. assisting the Debtors in determining the likely amount of
cancellation of indebtedness income arising from various
restructuring scenarios and the effect of tax attribute
reduction under the bankruptcy exclusion provisions of
Section 108 of the Internal Revenue Code;
4. assisting the Debtors in determining whether an ownership
change, within the meaning of Section 382 of the Internal
Revenue Code, will occur as a result of the proposed plan
of reorganization and whether the Debtors would
potentially qualify for and benefit from the special
bankruptcy exceptions contained in Section 382(l)(5) and
(l)(6) of the Internal Revenue Code;
5. assisting the Debtors in determining the tax basis in
subsidiary stock under applicable consolidated return
regulations and, if there is an excess loss account
with respect to the stock of any subsidiary, providing tax
consulting regarding methods to avoid triggering the
income related thereto;
6. advising as to the proper treatment of postpetition
interest;
7. advising as to the treatment of damages relating to
rejected leases or other contracts;
8. advising as to the proper treatment of prepetition and
postpetition reorganization costs;
9. advising as to other insolvency and bankruptcy tax issues
that may arise;
10. advising as to a tax efficient structure for the client
group of entities and the steps needed to achieve those
objectives; and
11. documenting, as appropriate, the tax analysis, opinions,
recommendations, conclusions, and correspondences for any
proposed restructuring alternative tax issue or other tax
matter described.
B. Tax Compliance Assistance
Deloitte has been engaged by the Debtors to provide
assistance with a number of the Debtors' tax compliance
processes. Deloitte's assistance includes providing a number
of personnel to assist the Debtors with the U.S. federal and
state income tax filing obligations of MAEM, one of the
Debtors in these Chapter 11 cases. Deloitte was also engaged
by the Debtors to assist in the preparation of U.S. tax
information returns for a number of the Debtors' foreign
subsidiaries and to assist in the preparation of Form 1118
and related computations for the foreign tax credit.
C. Income Tax Accounting Assistance
Deloitte was engaged to assist the Debtors with the analysis
of its income tax accounts. This engagement consists of the
performance of requested procedures for the year ended
December 31, 2002 as well as assistance with computing the
effects of the 2000 and 2001 restatements on the tax
accounts. Although the 2002 financial statements have been
released, certain of these procedures still need to be
completed. In connection with these matters, Deloitte will
perform requested procedures with respect to quarterly
reporting. The Debtors expect to request additional similar
services for the year ending December 31, 2003.
D. Sales & Use Tax Systems Implementation
Deloitte was engaged by the Debtors to assist in the
implementation of Sabrix. Sabrix is a software product
designed to automate sales and use tax compliance. On
July 8, 2003, this engagement letter was extended through
August 2003.
E. Income Tax Controversy Assistance
Deloitte was engaged to advise and represent the Debtors
before the IRS in connection with the IRS examination of the
Debtors' federal income tax returns for the December 31, 2000
and April 2, 2001 tax periods, and with ruling requests
submitted to the IRS. Deloitte's work consists of advising
the Debtors on strategy for managing the IRS examination as
well as assisting with the preparation of responses to
information requests by the IRS. In addition to the IRS
examination, Deloitte is assisting the Debtors with
preparation of amended income tax returns for December 31,
1999, December 31, 2000, and April 2, 2001 tax periods,
including a foreign tax credit carryback claim to an earlier
period.
F. Sarbanes-Oxley Act of 2002 Assistance
Deloitte was engaged by the Debtors to consult with respect
to certain tax department internal control processes related
to the Debtors' program to comply with certain provisions of
the Sarbanes-Oxley Act of 2002. Deloitte's work under this
engagement is performed along with KPMG, the Debtors'
external auditor, and E&Y, the Debtors' service provider
responsible for the overall review and documentation of the
Debtors' internal control processes.
G. General Tax Advice and Consultation
Deloitte was engaged by the Debtors to provide general
consultation on a number of tax matters relating to U.S.
federal and state, foreign, expatriate, and other tax issues
as requested by the Debtors and agreed to by Deloitte. The
Debtors anticipate that these consultations may include
consultations related to real and personal property taxes,
assistance in evaluating the tax impact of specific
transactions and other tax matters.
Deloitte's hourly rates are:
Tax Compliance Tax Planning
-------------- ------------
Partner, principal or director $450 $495
Senior Manager 380 450
Manager 320 390
Senor Staff 210 - 220 260
Staff 180 210
Intern 100 100
(Mirant Bankruptcy News, Issue No. 10; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
MOBILE COMPUTING: Closes Significant Restructuring Transactions
---------------------------------------------------------------
Mobile Computing Corporation has, following the approval of its
shareholders at its annual and special meeting on October 10,
2003, completed a significant restructuring of the Company as
previously announced on September 4, 2003.
Under the restructuring, the Company completed a series of
transactions with The VenGrowth Investment Fund Inc. and The
VenGrowth II Investment Fund Inc., and NBC Canada West Capital
Inc., whereby MCC Technologies Corp., an affiliate of VenGrowth,
acquired substantially all of the assets of the Company and
assumed substantially all of the liabilities of the Company in
exchange for the cancellation of principal and accrued and unpaid
interest of $7,000,000 in respect of MCC's outstanding 10%
convertible debentures and NBC West became the holder of
approximately 33% of the common shares of the Company.
In addition, VenGrowth converted a portion of the accrued interest
on the convertible debentures of MCC held by VenGrowth into
2,536,238 common shares of MCC in accordance with the terms of
those debentures. The sale comprised substantially all of MCC's
business, including all of its intellectual property and the
shares of its wholly-owned subsidiary, Mobile Computing
Corporation (USA). VenGrowth also cancelled its outstanding
options to acquire an aggregate of 2 million common shares of MCC.
After giving effect to these transactions and the transactions
with NBC West described below, VenGrowth owns approximately 16% of
the outstanding common shares of MCC and no amount will be owing
by MCC in respect of its outstanding convertible debentures.
Also as part of the restructuring, The VenGrowth II Investment
Fund Inc., sold a portion of MCC's convertible debentures held by
it to NBC West, including accrued and unpaid interest thereon and
related rights of conversion. NBC West converted such debentures
and interest into 23,070,972 common shares of MCC in accordance
with the terms of the debentures. After giving effect to such
conversion and the transactions with VenGrowth described above,
NBC West owns approximately 33% of the outstanding common shares
of MCC. NBC West advanced, at closing, $125,000 to MCC by way of a
demand loan, of which $50,000 formed part of the assets of MCC
acquired by MCC Technologies. As part of the restructuring, the
existing board and management have resigned. The new board
consists of Harry Knutson, Yves Durand and John Proust. New
management consists of Harry Knutson, President and Chief
Executive Officer; Karim Abuani, Chief Financial Officer; and
David Merrick, Corporate Secretary. The Company intends to
implement a new business plan to maximize shareholder value, which
will include raising additional capital and developing a merchant
banking business.
With the restructuring completed, the common shares of MCC will
now be de-listed from the Toronto Stock Exchange and are expected
to be listed on the NEX board of the TSX Venture Exchange. Also as
part of the restructuring, the Company has changed its name to
Canada West Capital Inc. The Company also plans to complete a 27:1
share consolidation prior to its NEX listing.
At June 30, 2003, Mobile Computing's balance sheet shows a total
shareholders' equity deficit of about $10 million.
NESTOR INC: Secures $2 Million through Convertible Note Issue
-------------------------------------------------------------
Nestor, Inc. (OTC: NESO) has received $2 million for a convertible
note issued to Silver Star Partners I, LLC. Nestor and its
subsidiary, Nestor Traffic Systems, Inc. will use the proceeds as
operating capital to continue delivery of the company's core
safety product, CrossingGuard(R).
William B. Danzell, CEO of Nestor stated, "The last several months
represent significant progress for Nestor. Since August, we have
completed installation of fourteen new approaches, continuing to
meet both our Company objectives and our clients' expectations.
This addition of capital strengthens our position and enables us
to maintain our current installation schedule while working to
deliver CrossingGuard to new clients".
CrossingGuard uses patented digital imaging technology to deliver
the most advanced Automated Red-light Enforcement available.
Through the use of multiple videos and 24/7 real-time monitoring,
CrossingGuard ensures system integrity and system reliability.
These features, coupled with the unique Collision Avoidance safety
feature, are helping to make standard intersections intelligent.
* * *
Liquidity and Going Concern Uncertainty
In its Form 10-Q filed with the Securities and Exchange
Commission, Nestor Inc., reported:
"The [Company's] financial statements have been prepared assuming
that Nestor, Inc. will continue as a going concern...[T]he
Company is currently expending cash in excess of cash generated
from operations, as revenues are not yet sufficient to support
future operations. These conditions raise substantial doubt about
the Company's ability to continue as a going concern without
additional financing. The quarterly financial statements do not
include any adjustments to reflect the possible future effects on
the recoverability and classification of assets or the amounts and
classification of liabilities that may result from the outcome of
the Company's ultimate ability to raise additional financing
and/or capital.
"The Company had consolidated cash and cash equivalents of
$706,000 at June 30, 2003, as compared with $309,000 at
December 31, 2002. At June 30, 2003, the Company had a working
capital deficit of $705,000 as compared with a working
capital deficit of $1,572,000 at December 31, 2002.
"The Company's net worth at June 30, 2003 was $5,696,000, as
compared with a net worth of $3,865,000 at December 31, 2002. The
increase in net worth is primarily the result of the Silver Star
equity transactions, offset by the net operating loss reported
for the period.
"Additional capital will be required to enable the Company to
carry out product delivery efforts under current contracts, to
underwrite the costs of future systems delivered under turnkey
agreements with municipalities, for continued development and
upgrading of its products, for customer support, and for other
operating uses. If the Company does not realize additional
equity and/or debt capital and revenues sufficient to maintain its
operations at the current level, management of the Company would
be required to modify certain initiatives including the cessation
of some or all of its operating activities until additional funds
become available through investment or revenues.
"The Company is actively pursuing the raising of additional
equity, debt or lease financing. The possible success of these
efforts, and the effect of any new capital on the current
structure of the Company, cannot be determined as of the
date of this filing."
NEW CENTURY FIN'L: Files Registration Statement on SEC Form S-3
---------------------------------------------------------------
New Century Financial Corporation (Nasdaq: NCEN) has filed a shelf
registration statement on Form S-3 with the U.S. Securities and
Exchange Commission providing for the resale by security holders
of up to $210,000,000 aggregate principal amount of the Company's
issued and outstanding 3.50% Senior Convertible Notes due 2008 and
shares of common stock issuable upon conversion of the notes. The
notes were originally issued in a private offering in July 2003.
The Company will not receive any proceeds from the sale by any
selling security holder of the notes or the common stock issuable
upon conversion of the notes.
When available, a copy of the prospectus contained in the
registration statement may be obtained from Carrie Marrelli, VP -
Investor Relations, 18400 Von Karman Avenue, Suite 1000, Irvine,
California 92612.
A registration statement relating to these securities has been
filed with the Securities and Exchange Commission but has not yet
become effective. These securities may not be sold nor may offers
to buy be accepted prior to the time the registration statement
becomes effective.
New Century Financial Corporation (Nasdaq: NCEN) (S&P, BB- Long-
Term Counterparty Credit and B+ Convertible Senior Notes Ratings)
is one of the nation's largest specialty mortgage companies,
providing first and second mortgage products to borrowers
nationwide through its operating subsidiaries. New Century is
committed to serving the communities in which it operates with
fair and responsible lending practices. To find out more about
New Century, visit http://www.ncen.com
NEW WORLD: Post-Split Shares Begin Trading on Pink Sheets
---------------------------------------------------------
New World Restaurant Group, Inc. (Pink Sheets: NWCI.PK) announced
that beginning on Monday, October 20, its post-split shares of
common stock are trading in the Pink Sheets under a new symbol
"NWRG."
New World anticipated that the share price of its common stock
will reflect the forward and reverse stock splits that were
effected on September 30, 2003 in connection with New World's
equity restructuring.
New World Restaurant Group (S&P, B- Corporate Credit Rating,
Negative) is a leading company in the quick casual sandwich
industry, the fastest-growing restaurant segment. The company
operates locations primarily under the Einstein Bros. and Noah's
New York Bagels brands and primarily franchises locations under
the Manhattan Bagel and Chesapeake Bagel Bakery brands. The
company's retail system currently consists of 455 company-owned
locations and 288 franchised and licensed locations in 32 states.
The company also operates a dough production facility and a coffee
roasting plant.
NEXTEL: Fitch Assigns BB- Rating to $500MM Senior Notes Offering
----------------------------------------------------------------
Fitch Ratings has assigned a 'BB-' rating to Nextel
Communications, Inc.'s proposed $500 million senior redeemable
ten-year notes offering. Nextel Finance Company's senior secured
bank facility is rated 'BB+' and Nextel's preferred stock is rated
'B'. Proceeds of the offering will be used for general corporate
purposes. The Rating Outlook remains Positive.
Nextel's rating reflects the company's excellent progress in
deleveraging its balance sheet using excess cash from operations,
open market purchases, debt refinancing and the issuance of equity
over the last several quarters thereby reducing its interest and
preferred dividend obligations. Moreover, operational trends are
positive, as Nextel has for the second time exceeded financial and
operational targets set for 2003. Fitch believes Nextel's new
financial guidance is achievable and includes positive free cash
flow of at least $1 billion (up from $600 million), operating
income before depreciation and amortization of at least $4.1
billion (up from $3.9 billion) and net additions of at least 2.2
million (up from 1.9 million).
Fitch expects Nextel to continue pursuing further improvements to
its capital structure utilizing its free cash flow, excess
liquidity cushion and opportunistic equity and debt issuances to
refinance Nextel's highest cost debt. Reflecting this strategy,
for the first nine months of 2003, Nextel has retired
approximately $2.1 billion of high yield debt (including bank
amortizations) and $932 million of preferred stock. This total
principal retired is on top of the approximately $3.2 billion of
debt and preferred stock retired in 2002. In addition, Nextel
earlier today announced that it plans to redeem the remainder
($499 million) of its 9.95% senior notes due 2008 and all of its
outstanding ($284 million) 4.75% convertible senior notes due 2007
during the fourth quarter of 2003. These improvements to the
capital structure will extend maturities beyond 2010 while
reducing medium-term maturity levels and lowering the average cost
of debt, which was less than 7% at the end of the third quarter of
2003.
During the third quarter of 2003, Nextel reported continued strong
operating results, reflecting its competitive advantage of its
differentiated push-to-talk offering. Monthly average revenue per
user for the second quarter was $71 (flat from a year ago) and is
considerably higher than the average ARPU of nationwide wireless
operators in the low $50 range. OIBDA margins improved to 43.4% of
service revenues, which is industry leading among the nationwide
operators. Total churn declined to an impressive 1.4% for the
quarter, down from 2.0% a year ago as Nextel's customer
relationship strategies accentuating improved retention, credit
screening and customer service proved effective. Owing to the low
total churn, net additions were a strong 646,000 for the quarter.
With Verizon Wireless indicating higher than expected take-up of
its PTT offering along with Nextel's strong net additions and low
churn, Fitch believes this points toward expansion of subscribers
within the PTT category.
Even though Fitch expects Nextel's positive operating trends to
continue over the near-term, challenges and risks remain which
could moderate the pace of anticipated credit profile improvement.
Shorter-term issues include the decision by the Federal
Communications Commission on the 800 MHz consensus plan and
industry cost impacts associated with wireless number portability.
From an intermediate to longer-term perspective, the concerns
include the competitive threats to Nextel's Direct Connect
offering, fundamentals supporting the wireless industry, potential
funding requirements of the 800 MHz consensus plan and technical
viability of the iDEN platform.
NOMURA ASSET SECURITIES: S&P Affirms BB Class B-2 Notes' Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on four
classes of commercial mortgage pass-through certificates from
Nomura Asset Securities Corp. series 1994-C3.
The affirmed ratings reflect increased subordination levels due to
a 20% paydown in the certificates, since the last rating change in
September 2002, offset by uncertainty surrounding the relatively
large other real estate owned asset and the other specially
serviced loan in the trust. In addition, the weighted average debt
service coverage ratio has declined over the last year. Midland
Loan Services Inc., the master servicer, has collected 72% of the
year-end 2002 financials. Based on those financials, the WADSCR
for the pool has decreased to 1.69x from 1.90x in September 2002
and 1.37x at issuance.
There are a total of six specially serviced assets totaling $10.5
million (32.4% of the pool). The largest is a loan categorized as
REO with a schedule balance of $3.5 million. It is secured by a
144-room vacant nursing home in Fallon, Nevada. Built in 1973 and
renovated in 1979, the property was a 100% private pay congregate
care facility. The March 2003 appraisal valued the property at
$1.6 million, with total exposure of $5.0 million and advances of
$1.5 million. Despite the valuation, Standard & Poor's has
incorporated historical data and observations regarding low
recovery rates for nursing homes into its analysis. Consequently,
Standard & Poor's is concerned that there may not be enough
proceeds to cover the sizeable advances accrued by the nursing
home upon liquidation, which would create interest shortfalls well
into the senior classes.
The other specially serviced assets include a $1.3 million loan
secured by a hotel. CRIIMI MAE Loan Services L.P. continues to
work with the borrower, who has requested a rate reduction and
waiver of yield maintenance. CRIIMI anticipates an expeditious
resolution with limited loss to the trust. The remaining four
nursing home mortgages, totaling $5.7 million (17.5% of the pool),
are cross-collateralized and cross defaulted. In October of 2002,
the mortgages were transferred to the special servicer, because of
an upcoming maturity. The borrower recently obtained a commitment
for $8.7 million for purposes of refinancing the mortgage. No
losses are anticipated. The four properties were valued at $11.5
million in April 2003.
Midland reported a single mortgage on its watchlist. The largest
mortgage in the pool, totaling $3.5 million, is secured by a 264-
unit multifamily. Located in Charlotte, North Carolina, the
property was built in 1966 and renovated in 1986. The mortgage was
placed on the watchlist following a flood in June 2003 that
impacted several of the units. Flood claims to this point have
totaled $ 1.7 million, all of which have been covered by the
insurance. Reported occupancy for the property stood at 65% (May
2003), down from 95% at issuance. The debt service coverage ratio
was at 0.69x as of May 2003, down from 1.25x at issuance, which
excludes units impacted by the June 6, 2003 flood. The borrower
has become less cooperative since the flood, which has made it
difficult to receive updated financial information. In addition,
the Charlotte market is facing a high vacancy rate of 11.5%. The
master servicer anticipates that because most of the damage is
cosmetic and not structural, there should not be any sizeable
loss to the property.
As of September 2003, the loan pool consisted of 16 fixed-rate
mortgages with an outstanding pool balance of $32.4 million,
compared to 55 mortgages with an outstanding pool balance of
$162.9 million at issuance. The pool has experienced $1.2 million
in losses. The pool's property type is concentrated in mobile home
parks (32.9%), healthcare (28.3%), lodging (27.9%), and
multifamily (10.9%). In addition, the pool is now geographically
concentrated in Georgia (28.2%), Oregon (22.5%), Tennessee
(17.5%), North Carolina (10.9%), and Nevada (10.8%), with the
remaining (10.1%) located throughout the U.S.
RATINGS AFFIRMED
Nomura Asset Securities Corp.
Commercial mortgage pass-thru certs series 1994-C3
Class Rating Credit Support
A-3 AAA 96.97%
A-4 AA 76.85%
B-1 A 61.77%
B-2 BB 31.59%
NORTHWESTERN: Bankruptcy Won't Affect PPL Montana Credit Quality
----------------------------------------------------------------
Fitch Ratings does not expect the credit quality of PPL Montana,
LLC to be materially affected by the bankruptcy of NorthWestern
Corporation.
Fitch currently rates PPLM's pass-through trust certificates
'BBB'. NOR, PPLM's largest offtaker by volume, purchases 300 MW of
around-the-clock and 150 MW of on-peak power from PPLM under a
fixed-price, five-year power purchase agreement. The PPA
represents a commitment of approximately 32% of PPLM's capacity
over the next four years. Fitch downgraded NOR's senior unsecured
debt to 'DD' from 'CCC' after NOR filed for relief under Chapter
11 bankruptcy.
On September 26th, NOR submitted a stipulation assuming and
amending certain contracts between NOR and PPLM, including the
PPA. The Bankruptcy Court entered an order approving the
stipulation on October 13th. The Court did not receive any
objections to the stipulation, and the ten-day appeal period for
the stipulation will expire on October 23rd. PPLM and NOR had
jointly sought approval of the amendment, under which PPLM will
receive approximately $1.5 million, representing the balance of
outstanding receivables for pre-petition energy deliveries. NOR
has paid on-time and in full for all energy delivered by PPLM in
the post-petition period, though the amendment allows NOR to pay
for future energy purchases according to a less frequent payment
schedule. The revised payment terms fall well within PPLM's
capacity to manage working capital.
In Fitch's view, the assumption of the PPA will considerably
improve the likelihood that PPLM will continue to receive
contractual energy payments during the course of the bankruptcy.
NOR's post-bankruptcy credit quality remains uncertain. However,
NOR has received regulatory approval for full cost recovery with
respect to the PPA, reducing the probability of future
nonperformance. Fitch believes PPLM would receive market prices
comparable to the rates stipulated in the PPA in the unlikely
event PPLM is forced to sell power currently committed to NOR into
the spot market. Fitch views the PPA as an at-market contract.
Additionally, NOR purchases energy from PPLM in the spot market,
outside of the requirements of the PPA. PPLM's incremental
exposure to NOR through spot transactions is not considered
significant.
PPLM owns, operates and leases a portfolio of 13 hydroelectric and
coal-fired generating facilities with an aggregate net capacity of
approximately 1,157 MW. The portfolio, located entirely within
Montana, includes leased interests in Colstrip, the second-largest
coal-fired facility west of the Mississippi River. PPLM is an
indirect, wholly owned subsidiary of PPL Corporation. The rating
reflects PPLM's credit quality on a stand-alone basis, independent
of the credit quality of its owner. Credit strengths include
PPLM's highly advantageous position on the dispatch curve,
portfolio diversification, stable cost structure and minimal fuel
risk.
NRG ENERGY: Wants Go-Signal to Assume & Assign Contracts to OG&E
----------------------------------------------------------------
In connection with the Asset Purchase Agreement between the NRG
Energy Debtors and Oklahoma Gas & Electric Company, NRG McClain
LLC seeks the Court's authority to:
(a) assume and assign certain agreements, effective as of
the Closing Date, and
(b) execute and deliver to OG&E or the Winning Bidder the
documents or other instruments as may be necessary to
assign and transfer the Assigned Agreements.
NRG McClain believes that it is necessary to establish a process
by which NRG McClain and the counterparties to the Assigned
Agreements can establish the cure obligations, if any, necessary
to be paid under Section 365 of the Bankruptcy Code for the
assumption of the Assigned Agreements.
At the Debtors' request, the Court approves these procedures for
notifying Contract Parties and resolving any potential cure
amount disputes in connection with the Debtors' proposed
assumption of executory contracts and unexpired leases and
assignment of the agreements to OG&E or other Winning Bidder:
A. Notice of Cure Objection Deadline
NRG McClain will serve a copy of the Bidding Procedures order
together with the Notice of Debtor's Intent to Assume and
Assign Executory Contracts and Unexpired Leases by regular
mail to the Contract Parties notifying them of NRG McClain's
intent to assume and assign each agreement listed on Schedule
3.8 to the Asset Purchase Agreement and of the Cure Amount
determined for each Assigned Agreement to be necessary for the
assumption and assignment on the Closing Date.
B. Cure Objections
Any Contract Party seeking to (i) assert a Cure Amount based
on defaults, conditions or pecuniary losses under its Assigned
Agreement different from that set forth on any of the Contract
Assignment Notices, or (ii) object to the potential assumption
and assignment of its Assigned Agreement on any other grounds,
will be required to file and serve an objection in writing,
setting forth with specificity:
(a) any and all Cure Obligations that the Contract Party
asserts must be cured or satisfied respecting the
Assigned Agreement, and
(b) if the objection to the potential assignment of the
Assigned Agreement is based on adequate assurance
issues, what information with respect to OG&E or
another Winning Bidder the Contract Party requires to
satisfy its adequate assurance concerns.
C. Cure Objection Deadline
The Cure Objection must be filed with the Court and a copy
delivered so as to be received no later than 15 days after
service of the Cure Assignment Notice to:
-- Kirkland & Ellis LLP,
-- Andrews & Kurth,
-- Jones Day,
-- Milbank, Tweed, Hadley & McCloy LLP,
-- Bingham McCutchen, and
-- counsel to any subsequently appointed committee.
D. Failure to File Cure Objection
Unless a Clue Objection is timely filed and served by a
Contract Party by the Cure Objection Deadline, the Court will
enter an order authorizing or effecting the assumption and
assignment of the applicable Assigned Agreement at the Sale
Hearing or otherwise without regard to any objection the party
may have or any provisions to the contrary in the applicable
Assigned Agreement.
E. Waiver of Cure Objection
Contract Parties that fail to file and serve Cure Objections
as provided will be deemed to have waived and released any and
all Cure Obligations and will be forever barred and estopped
from asserting or claiming against NRG McClain, OG&E or any
other assignee of the relevant contract or lease that any
additional amounts are due or defaults exist, or prohibitions
or conditions to assignment exist or must be satisfied, under
the Assigned Agreement for the period prior to the Closing
Date.
G. Reservation of Rights
NRG McClain and OG&E each reserve the right to exclude or add
any Assigned Agreement from or to the proposed Sale and to
withdraw the request to assume and assign any Assigned
Agreement pursuant to the terms of the Asset Purchase
Agreement. (NRG Energy Bankruptcy News, Issue No. 11;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
OWENS-ILLINOIS: Declares Dividend on $2.375 Conv. Preferreds
------------------------------------------------------------
Owens-Illinois, Inc., (NYSE: OI) announced that its board of
directors has declared the quarterly dividend of $0.59375 on each
share of the company's $2.375 Convertible Preferred Stock, payable
on November 17 to holders of record as of November 1.
Owens-Illinois (Fitch, BB- Bank Debt and Senior Unsecured Note
Ratings, Stable) is the largest manufacturer of glass containers
in North America, South America, Australia and New Zealand, and
one of the largest in Europe. O-I also is a worldwide
manufacturer of plastics packaging with operations in North
America, South America, Europe, Australia and New Zealand.
Plastics packaging products manufactured by O-I include consumer
products (blow molded containers, injection molded closures and
dispensing systems) and prescription containers.
PARK PLACE: Will Construct New Parking Garage in Atlantic City
--------------------------------------------------------------
Park Place Entertainment Corporation (NYSE: PPE), one of the
world's leading gaming companies, is moving forward with plans to
construct an 11-story, 3,189-space parking garage adjacent to
Caesars Atlantic City.
Designed to help Atlantic City meet the overwhelming demand for
additional parking, the new $75-million facility will be located
on the block bordered by Pacific and Atlantic Avenues and Arkansas
and Michigan Avenues, near the center of the historic Boardwalk.
Construction is scheduled to begin in January 2004, with
completion targeted for the second quarter of 2005.
The announcement was made today at a news conference on the
construction site attended by New Jersey Governor James E.
McGreevey, New Jersey State Sen. Bill Gormley (R-Atlantic) and
other state, local and company officials.
"This new parking structure, to be formally known as the Caesars
Transportation Center, represents another major investment by our
company in the future of Atlantic City," said Park Place President
and Chief Executive Officer Wallace R. Barr. "The garage project
will enable us to make life easier and more convenient not only
for our own guests, but for all the new visitors Atlantic City is
attracting with its new retail developments and superstar events
at Boardwalk Hall," Barr added.
Jeff Vasser, Executive Director of the Atlantic City Convention &
Visitors Authority, said the new parking garage will represent a
major asset as the city aggressively markets its Convention
Center, Boardwalk Hall, shopping venues and casino hotels.
"Once again, Park Place Entertainment is partnering with Atlantic
City to offer our visitors the best possible services and
amenities. Working together, we're transforming the city and the
region into a true destination resort," Vasser said.
The garage is designed to accommodate the parking needs for guests
of Bally's Atlantic City, The Wild Wild West Casino, and Caesars
Atlantic City. It also will provide additional parking for the
Atlantic City Medical Center, the Cordish Retail Development --
known as "The Walk" -- and the future "Pier at Caesars" -- a
retail and entertainment project planned for the historic Million
Dollar Pier behind Caesars Atlantic City. The project also will
support overflow parking needs of the existing Caesars Atlantic
City garage.
When the new garage is complete, Park Place will provide a total
of 11,443 parking spaces in Atlantic City: 3,993 at Bally's; 5,650
at Caesars, and 1,800 at the Atlantic City Hilton.
Guests will enter the new garage from the Atlantic City Expressway
by way of a vehicular ramp and bridge to the third floor. Valet
parking will be available on the third floor level. Two vehicular
bridges will connect the new and existing parking garages for
overflow parking.
The project will feature three pedestrian bridges. The first will
connect directly to the Atlantic City Medical Center at the third
floor of the parking garage; the second will connect to the
existing Caesars Atlantic City walking bridge; and the third will
connect directly to the Wild Wild West casino and Caesars Atlantic
City. The project is being designed by SOSH Architects of Atlantic
City.
According to the South Jersey Transportation Authority, 33.1
million people visited Atlantic City in 2002, with a record number
of 24.6 million arriving by automobile. Since 1995, a minimum of
23 million people have traveled to Atlantic City each year by car.
Park Place Entertainment Corporation (NYSE: PPE) (Fitch, BB+
Senior Unsecured Debt and BB- Senior Subordinated Debt Ratings) is
one of the world's leading gaming companies. Park Place owns,
manages or has an interest in 29 gaming properties operating under
the Caesars, Bally's, Flamingo, Grand Casinos, Hilton and Paris
brand names with a total of approximately two million square feet
of gaming space, 29,000 hotel rooms and 54,000 employees
worldwide. The company plans to change its name to Caesars
Entertainment, Inc. in January 2004, when it will begin trading
under the new ticker symbol (NYSE:CZR).
Additional information on Park Place Entertainment can be accessed
through the company's Web site at http://www.parkplace.com
PERLE SYSTEMS: Enters into Debt to Equity Conversion Agreement
--------------------------------------------------------------
Perle Systems Limited (OTCBB: PERL), a leading provider of
networking products for Internet Protocol and e-business access,
has entered into a debt for equity subscription and share
consolidation agreement with Royal Capital Management Inc., its
senior secured lender.
The Board of Directors of Perle approved the agreement with Royal
after receiving a recommendation in favor of the agreement by a
special committee of independent members of the Board, based on,
among other things, advice from Crosbie & Company (a respected
investment bank) as to the fairness of the transaction and the
current value of Perle's common shares, and after consultation
with its independent legal counsel.
Joseph E. Perle, Chairman, President and CEO of Perle, said,
"Following the recent period of financial constraints, this
transaction will convert all of Perle's long term debt and part of
its current debt to equity, which will allow us to serve our
customers from a position of financial strength, while providing
shareholders with the opportunity to recover some of their
investment." Jean Noelting, Managing Director of Royal, said, "We
are satisfied with the outcome of the debt and equity
restructuring and look forward to supporting Perle as the company
takes advantage of its strong market position to expand in the
improving networking marketplace."
As per the agreement, Royal will subscribe for 500 million common
shares of Perle at C$0.04 per share and will satisfy the
subscription price by releasing Perle from C$20M of its total
outstanding secured long term and current debt of approximately
C$25.7M. Thereafter, subject to shareholder approval, Perle
intends to consolidate its common shares on the basis of 2 million
existing common shares for one new common share. Shareholders who
do not receive at least one full new common share as a result of
this consolidation will be compensated at C$0.04 per share in cash
for the number of common shares held prior to the consolidation.
A special meeting of Perle shareholders has been called for
November 28, 2003 to consider and approve the proposed
consolidation. If the consolidation is approved at this meeting
Perle will amend its articles to implement the proposed
consolidation and will subsequently apply for deregistration as a
Securities Exchange Commission registrant in the United States,
and as a reporting issuer in Canada, reverting to private company
status.
As part of this transaction, Perle's existing forbearance
agreement with Royal will be extended to October 27, 2003 to allow
for the debt conversion to be completed, at which time Royal will
enter into a new credit agreement with Perle whereby the company
will have no long term debt or principal payment obligations.
Details of the fairness opinion and valuation of Perle's shares
and its current financial position will be provided in the
information circular for the special meeting of shareholders and
accordingly Perle will not release or file with Canadian
securities regulators financial statements for the fiscal year
ended May 31, 2003 and the quarter ended August 31, 2003.
Perle Systems is a leading developer, manufacturer and vendor of
high-reliability and richly featured networking products. These
products are used to connect remote users reliably and securely to
central servers for a wide variety of business applications. Perle
specializes in Internet Protocol connectivity applications,
including a focus on mid-size IP routing solutions. Product lines
include routers, remote access servers, serial/console servers,
emulation adapters, multi-port serial cards, multi-modem cards,
print servers and network controllers. Perle distinguishes through
extensive networking technology, depth of experience in major
real-world network environments and long-term distribution and VAR
channel relationships in major world markets. Perle has offices
and representative offices in 12 countries in North America,
Europe and Asia and sells its products through distribution
channels worldwide. Its stock is traded on the OTCBB (symbol
PERL). For more information about Perle and its products, access
the Company's Web site at http://www.perle.com
PETROLEUM GEO-SERVICES: Plan Confirmation Hearing Set for Today
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
ruled on the adequacy of the Disclosure Statement prepared by
Petroleum Geo-Services ASA to explain their First Amended Plan of
Reorganization. The Court found that, pursuant to Sec. 1125 of
the Bankruptcy Court, the Disclosure Statement contains the right
kind and amount of information to enable creditors to make
informed decisions whether to accept or reject the Plan.
The company's Junior Subordinated Creditors, Senior Creditors and
Shareholders have expressed approval to the Plan.
At the Confirmation Hearing for the Plan, scheduled today at 10:00
a.m., the Company will present to the Bankruptcy Court a final
certification of the voting results as part of the Plan
confirmation process. Following confirmation, the Company expects
to consummate the Plan and emerge from Chapter 11 in November.
Petroleum Geo-Services ASA, headquartered in Lysaker, Norway, is a
technology-based service provider that assists oil and gas
companies throughout the world. The Company filed for chapter 11
protection on July 29, 2003 (Bankr. S.D.N.Y. Case No. 03-14786).
Matthew Allen Feldman, Esq., at Willkie Farr & Gallagher
represents the Debtor in its restructuring efforts.
PG&E: USGen Creditors Develop Website for Certificateholders
------------------------------------------------------------
An unofficial committee of certain holders of Bear Swamp Series A
and Series B Pass Through Certificates announced that documents
and information relating to the proposed preliminary settlement
agreement announced previously by USGen New England and relating
to other issues relevant to holders of Certificates have been
posted on Gardner, Carton & Douglas' Web site at
http://www.gcd.com(click on "GCD Extranet Connection" at the
bottom of the page and for USER insert "Bear", and for PASSWORD
insert "Swamp"). Gardner Carton & Douglas serves as co-counsel to
HSBC Bank USA in its capacities as Pass Through Trustee and Lease
Indenture Trustee.
READER'S DIGEST: Declares Quarterly Dividend of $0.05 per Share
---------------------------------------------------------------
The board of directors of The Reader's Digest Association, Inc.
(NYSE: RDA) declared a quarterly dividend of five cents on each
share of the company's common stock.
The dividend is payable November 10, 2003, to stockholders of
record at the close of business October 28, 2003. This is the
55th consecutive quarterly dividend paid by Reader's Digest since
the company's initial public offering in 1990.
The Reader's Digest Association, Inc. (S&P, BB Corporate Credit
Rating, Negative Outlook) is a global publisher and direct
marketer of products that inform, enrich, entertain and inspire
people of all ages and all cultures around the world. Worldwide
revenues were $2.5 billion for the fiscal year ended June 30,
2003. Global headquarters are located at Pleasantville, New York.
RESOURCE WASTE SERVICES: Voluntary Chapter 11 Case Summary
----------------------------------------------------------
Debtor: Resource Waste Services, Inc.
5601 Bridge St., Ste. 250
Fort Worth, Texas 76112
Bankruptcy Case No.: 03-49566
Chapter 11 Petition Date: October 5, 2003
Court: Northern District of Texas (Ft. Worth)
Judge: D. Michael Lynn
Debtor's Counsel: J. Robert Forshey, Esq.
Forshey and Prostok
777 Main St.,
Suite 1290
Ft. Worth, TX 76102
Tel: 817-877-8855
Estimated Assets: $10 Million to $50 Million
Estimated Debts: $1 Million to $10 Million
ROGERS COMMS: Q3 2003 Operating Results Reflect Strong Growth
-------------------------------------------------------------
Rogers Communications Inc. announced its consolidated financial
and operating results for the third quarter and nine months ended
September 30, 2003.
Highlights of the third quarter of 2003 included the following:
- Operating revenue grew 10.8 percent for the quarter, with
all three operating companies contributing year-over-year
growth, including 9.1 percent growth at Cable, 15.3
percent growth at Wireless and 3.9 percent growth at
Media.
- Consolidated quarterly operating profit grew 28.7 percent
year-over-year, with all operating companies contributing
double-digit year-over-year growth, with 19.9 percent
growth at Cable, 38.2 percent growth at Wireless, and 11.7
percent growth at Media.
- Expenditures on property, plant and equipment decreased
19.4 percent for the quarter compared to previous year
levels, with reduced spending at Cable of 25.3 percent and
at Wireless of 7.6 percent.
- Growth in operating profit combined with reduced spending
on PP&E, resulted in a significant improvement in the
Company's cash flow. Operating profit less PP&E
expenditures and interest expense was $36.0 million, an
improvement of $159.4 million in the quarter, compared to
a deficiency of $123.4 million in the third quarter of
2002.
- Cable had positive net basic subscriber growth of 5,900
compared to a loss of basic cable subscribers of 2,200 in
the third quarter of 2002. In addition, Internet
subscribers grew by 39,100 and digital cable households
increased by 35,200 in the quarter.
- Wireless postpaid voice and data subscriber net additions
of 97,000 increased 29.2 percent, compared to the third
quarter of 2002, driven by the combination of an increase
in gross activations and reduced churn levels. Average
monthly postpaid wireless churn for the third quarter
declined to 1.85 percent while average monthly postpaid
voice and data subscriber increased 5.0 percent to $60.78.
- Results at Media were driven by strong results at both
Sportsnet and OMNI, offset partially by weakness in the
Publishing and Radio divisions due to continued softness
in selected advertising markets and the temporary impact
of reformatting initiatives at certain of its radio
stations.
- Two financing transactions were completed during the
quarter:
- RCI redeemed US$205.4 million aggregate principal
amount of its 8-7/8% Senior Notes due 2007 at a
redemption price of 102.958% of the aggregate principal
amount.
- RCI redeemed C$165.0 million aggregate principal amount
of its 8-3/4% Senior Notes due 2007 at a redemption
price of 102.917% of the aggregate principal amount.
"Continued double-digit quarterly operating profit growth and
disciplined capital spending resulted in another strong quarter
for Rogers", said Ted Rogers, President and CEO of Rogers
Communications Inc. "The focus across Rogers on consistent
operating performance and profitable growth is apparent, with each
of Cable, Wireless and Media producing year-over-year double-digit
operating profit growth, which combined with our highly strategic
set of assets, is positioning our business increasingly well for
continued success".
The consolidated revenue increase of 10.8 percent compared to the
third quarter of 2002 was the result of all three operating
segments reporting healthy year-over-year growth. Cable revenue
increased 9.1 percent, driven by growth in its Internet and
digital cable subscriber bases, as well as the impact of cable and
Internet price increases implemented during the past year.
Wireless revenue increased 15.3 percent, driven by a 14.4 percent
increase in the postpaid subscriber base and continued
improvements in both ARPU and customer churn. Revenue growth of
3.9 percent at Media was attributable to solid revenue growth at
its Sportsnet regional sports television network and the success
of its newly-launched OMNI.2 multicultural television station.
The 28.7 percent consolidated year-over-year quarterly operating
profit growth was driven by good revenue growth and expense
control in all operating segments. On a segment basis, Cable
operating profit was up $27.8 million, or 19.9 percent, Wireless
up $61.4 million, or 38.2 percent and Media up $2.2 million, or
11.7 percent.
Depreciation and Amortization
The increase in depreciation and amortization expense is directly
attributable to the increased PP&E asset levels, primarily at
Cable and Wireless, associated with PP&E investments over the past
several years.
Interest on Long-Term Debt
The $11.2 million decrease in interest expense in the third
quarter of 2003, compared to the same period in 2002, is largely
attributable to lower debt levels at September 30, 2003, compared
to the previous year period. Long-term debt was $5.4 billion at
September 30, 2003, and has decreased from approximately $6.1
billion at September 30, 2002, due to debt repayments and the
effects of foreign exchange fluctuations on the unhedged portion
of long-term debt.
Income (Losses) from Investments Accounted
for by the Equity Method
The Company records income and losses from investments that it
does not control, but over which it is able to exercise
significant influence, by the equity method. The equity loss for
the third quarter was $11.5 million, consisting of a $11.9 million
loss at the Toronto Blue Jays partially offset by earnings of $0.4
million from other investments accounted for by the equity method.
The loss for the quarter includes a $11.3 million non-cash charge
for accelerated amortization of intangibles which was not assumed
in the full year estimate of the Blue Jays' equity loss. On a cash
basis, the Company advanced the Blue Jays $22.2 million in the
quarter to finance its cash operating deficiency. Full year 2003
cash funding requirements for the Blue Jays will reflect cash
proceeds back to the Company from the Blue Jays during the fourth
quarter as the team receives revenues from Major League Baseball
related to the 2003 season.
Foreign Exchange
Foreign currency translation gains and losses are recorded as a
period gain or loss. In the third quarter of 2003, the Canadian
dollar strengthened against the U.S. dollar, giving rise to the
$5.4 million foreign exchange gain recorded by the Company
relating primarily to the revaluation of unhedged U.S. dollar-
denominated debt.
Loss on Repayment of Long-Term Debt
During the quarter, the Company redeemed US$205.4 million and
$165.0 million principal amounts of debt. As a result, the Company
recorded a loss on the repayment of debt in the quarter of $17.2
million, consisting of a prepayment premium of $13.0 million and
the write-off of deferred financing costs of $4.2 million.
Gain on Sale of Other Investments
During the quarter, the Company disposed of shares that it held of
certain publicly traded companies, triggering a gain on disposal
of $12.9 million and providing cash proceeds of approximately
$15.7 million.
Income Taxes
Income taxes in the third quarter include a current income tax
expense of $3.0 million related to Federal Large Corporations Tax.
Income taxes in the third quarter of 2002 included a non-cash
future income tax reduction of $13.8 million related to the
recognition of losses.
Non-Controlling Interest
Non-controlling interest, representing 44.2 percent of Wireless'
net income, was an expense of $18.9 million for the quarter,
compared to income of $6.2 million in the third quarter of 2002,
reflecting the corresponding net income (loss) levels at Wireless
in the respective periods.
The Company recorded a quarterly net loss of $17.4 million, or
$0.13 per share, compared to a loss of $99.8 million, or $0.68 per
share, in the third quarter of 2002. Excluding non-recurring items
in both periods, the Company recorded a net loss of $13.1 million,
or $0.11 per share, compared to a loss of $118.0 million, or $0.76
per share, in the third quarter of the previous year.
Distributions on Convertible Preferred Securities and accretions
on Preferred Securities and Collateralized Equity Securities in
2002, net of tax, of $13.3 million and $45.3 million in the third
quarter of 2003 and 2002, respectively, had the impact of
decreasing basic Earnings per Share by $0.05 and $0.22,
respectively. See Note 5 to the Consolidated Financial Statements.
The 6.6 percent year-over-year increase in core cable revenue was
largely driven by price increases introduced during the past year.
Increased rates, combined with increased digital penetration, have
served to increase average monthly revenue per core cable
subscriber to $43.50 in the third quarter from $40.72 in the third
quarter of 2002.
The 29.5 percent increase in Internet revenue was driven by the
27.1 percent year-over-year growth in Internet subscriber levels
combined with rate increases put in place during the past year and
partially offset by the introduction of the lower-priced Internet
Lite service.
Relatively flat year-over-year Video Store revenue reflects a
combination of factors during the quarter including power outages
experienced in Ontario, forest fires that affected much of British
Columbia, and fewer hit movie titles compared to the third quarter
of 2002.
Cable continues to focus heavily on enhancing its marketing and
retention tactics with the aim of increasing subscriber awareness
of the benefits and quality of its advanced digital cable and
Internet offerings in relation to competing offerings. These
efforts were successfully intensified and focused over the past
year to reduce and mitigate basic cable subscriber losses, as is
evidenced by the significantly reduced year-to-date basic net
losses in 2003, compared to 2002, and that the basic subscriber
base at the end of the third quarter of 2003 is flat with the same
period of 2002.
Basic cable subscriber results in the third quarter, as well as
the results in Internet and digital cable, partially reflect third
quarter seasonality associated with the return of university
students, as well as the timing of marketing and sales initiatives
focused on reinstating seasonal customers. In addition, many of
Cable's cable areas are situated in areas of new home development,
allowing Cable to capture new subscribers in these areas, which
serves to offset losses of subscribers to alternate providers in
more mature service areas.
The higher level of digital subscriber additions in the third
quarter of 2002 reflects the initial launch of the Incredible
Rogers Bundles and changes to Cable's VIP Customer Loyalty
program, both of which occurred during that period. Year-over-
year, the digital subscriber household base has grown by 123,097
subscribers or 33.4 percent, to 492,100, resulting in a 21.8
percent penetration of basic cable subscribers.
On a quarterly comparative basis, Internet subscriber net
additions in the third quarter of 2002 were aided by the early
stages of the launch of the Incredible Rogers Bundles. Year-over-
year, the Internet subscriber base has grown by 160,900
subscribers, or 27.1 percent, to 755,100 including scheduled
pending connections, resulting in 23.6 percent penetration as a
percentage of homes passed.
Liquidity and Capital Resources
Cash flow from operating activities before changes in working
capital for the third quarter increased by $104.3 million to
$277.6 million, up from $173.3 million in the third quarter of
2002, reflecting the increase in operating profit. Taking into
account the changes in working capital items, cash flow from
operating activities for the quarter increased by $148.8 million
to $367.9 million, up from $219.1 million in the previous period.
In aggregate, other sources of funds during the third quarter
totaled approximately $45.7 million. The sources of these funds
were: (1) $26.0 million of proceeds received from net advances
under bank credit facilities; (2) $4.0 million from the issue of
Class B Non-Voting shares under employee share purchase plans and
the exercise of employee stock options, and (3) aggregate $15.7
million net proceeds from the sale of publicly traded investments.
The funds used during the third quarter totaled approximately
$742.7 million and were composed of: (1) repayment of debt, as
detailed below in the financing section, aggregating $455.8
million including prepayment premiums; (2) the purchase of $244.7
million of PP&E; (3) $19.9 million in dividends and distributions,
comprised of $11.6 million in dividends on Class A Voting and
Class B Non-Voting shares of the Company and $8.3 million in
distributions on Convertible Preferred Securities; (4) other net
investments of $20.7 million, of which $22.2 million relates to
advances to the Toronto Blue Jays, and (5) the repayment of
obligations under mortgages and capital leases of $1.6 million.
As a result of the above, the Company's cash and cash equivalents
decreased in the third quarter by $329.1 million, which, together
with the opening cash of $350.4 million, resulted in a closing
balance of $21.3 million of cash and cash equivalents.
The Company's available liquidity at September 30, 2003, was over
$1.9 billion, represented primarily by availability under
committed bank credit facilities at Cable, Wireless and Media.
Financing
During the third quarter of 2003 as part of its ongoing de-
leveraging focus, RCI redeemed two debt issues. On July 17, 2003,
RCI redeemed its US$205.357 million 8-7/8% Senior Notes due in
2007 at a redemption price of 102.958% of the aggregate principal
amount. On August 6, 2003, RCI redeemed its $165.0 million 8-3/4%
Senior Notes due in 2007 at a redemption price of 102.917% of the
aggregate principal amount.
Guidance
The Company is revising elements of its 2003 annual guidance for
Wireless.
Wireless network revenue guidance for 2003 is revised upward from
the range of $1,930 million to $1,970 million to a range of $2,000
million to $2,030 million. Wireless operating profit before
management fees guidance is revised upward from the range of $640
million to $660 million to a range of $710 million to $730
million.
Other previously issued guidance ranges for 2003 remain unchanged.
Rogers Communications Inc. (TSX: RCI.A and RCI.B; NYSE: RG)
(S&P/BB+ L-T Corporate Credit Rating/Negative) is Canada's
national communications company, which is engaged in cable
television, Internet access and video retailing through Rogers
Cable Inc.; digital PCS, cellular, and wireless data
communications through Rogers Wireless Communications Inc.; and
radio, television broadcasting, televised shopping, and publishing
businesses through Rogers Media Inc.
ROGERS WIRELESS: Reports Improved 3rd-Quarter Operating Results
---------------------------------------------------------------
Rogers Wireless Communications Inc. announced its financial and
operating results for the third quarter and nine months ended
September 30, 2003.
Highlights of the third quarter of 2003 included the following:
- Network revenue, which excludes equipment sales, increased
16.9 percent and operating profit increased 38.8 percent
compared to the third quarter of 2002. Operating profit
margin, based on network revenue, increased to 40.6
percent from 34.2 percent in the previous year as the
Company continued to gain scale economies as it expands
the business while controlling costs.
- Growth in quarterly operating profit, combined with
reduced spending on property, plant and equipment,
resulted in a significant improvement in the Company's
cash flow. Operating profit less PP&E expenditures and
interest expense was $53.7 million, an improvement
of $71.8 million from the third quarter of 2002.
- Average monthly revenue per postpaid voice and data
subscriber of $60.78 increased from the third quarter of
2002 by $2.92, or 5.0 percent, reflecting the continued
activation and retention of higher valued customers,
increased penetration of enhanced voice services, growth
in wireless data and roaming revenues and continued
stability of industry pricing.
- Quarterly postpaid voice and data subscriber net additions
of 97,000 were higher by 29.2 percent over the 75,100 net
additions in the third quarter of 2002, reflecting both
higher levels of gross activations and reduced churn
levels. Average monthly postpaid churn for the third
quarter declined to 1.85 percent from 2.05 percent in the
third quarter of the previous year.
- Revenues from wireless data services, which grew 127.2
percent year-over-year to $19.1 million from $8.4 million
in the third quarter of the prior year, represented
approximately 3.5 percent of network revenue in the
quarter compared to 1.8 percent in the third quarter
of 2002.
- In conjunction with Canada's other national wireless
carriers, the Company announced an industry agreement to
establish common standards for WiFi roaming and
interoperability.
- Following the end of the third quarter, the Company
introduced 'totalphone', a hybrid wireless service
offering that combines characteristics and benefits of
both postpaid and prepaid wireless offerings.
"The third quarter results reflect our continued disciplined
strategic and operational focus on driving improved and
sustainable profitability at Rogers Wireless", said Nadir Mohamed,
President and CEO of Rogers Wireless Communications Inc. "Our
targeted marketing and retention programs, combined with our
innovative service offerings and well-controlled cost structure,
are again evident this quarter in our strong revenue and operating
profit growth, higher ARPU, reduced churn and expanded margins".
The 16.9 percent increase in network revenue was driven by an 11.0
percent increase in the total number of wireless voice and data
subscribers compared to the third quarter of 2002, combined with a
6.0 percent increase in blended ARPU. The increase in the year-
over-year quarterly ARPU, a trend that has continued for the last
four consecutive quarters, is attributable to improved customer
mix, increased penetration of enhanced voice services, the growth
of wireless data usage and the general stability of industry
pricing. The Company also continues to experience substantial
growth in inbound and outbound customer roaming revenues. The
growth in roaming revenues is largely a result of the deployment
by the Company of its national GSM/GPRS network platform in early
2002, which has provided for seamless roaming to the Company's
subscribers who travel internationally, as well as the increased
ability to capture roaming revenues from international visitors to
Canada.
The 38.7 percent year-over-year increase in quarterly operating
profit was a result of the 16.9 percent network revenue growth,
partially offset by an increase of 5.6 percent in total operating
expenses, including sales and marketing costs, and reflects the
Company's success in scaling the business by leveraging existing
operating costs as revenue grows.
Postpaid voice and data subscriber additions in the quarter
represented 77.5 percent of total gross additions and 84.2 percent
of total net additions. The Company continued its strategy of
targeting higher-value postpaid subscribers in the quarter, adding
a significant number of postpaid subscribers, while at the same
time increasing the number of prepaid subscribers.
The 5.0 percent increase in postpaid voice and data ARPU, compared
to the third quarter of the previous year, reflects the Company's
success in attracting a greater mix of postpaid customers,
increased penetration of enhanced voice services, the impact of
wireless data growth, the general stability of industry pricing
and the growth in roaming revenues. The 127.2 percent increase in
data revenues in the quarter, from $8.4 million in 2002 to $19.1
million, represents approximately 38 percent of the $2.92 increase
in postpaid ARPU. The decline in prepaid ARPU on a year-over-year
basis was primarily a result of the introduction of more
competitive prepaid offers in the quarter, which also helped
increase the number of prepaid subscribers acquired in the
quarter.
The Company remains committed to its strategy of attracting high-
value postpaid subscribers while at the same time recognizing the
significance of the prepaid market segment. As a result, in early
October 2003, the Company introduced 'totalphone', a hybrid
wireless offering with features of both prepaid and postpaid
service offerings.
The continuing trend of improved postpaid voice and data
subscriber churn, as reflected in the 1.85 percent monthly rate in
the current quarter, is related to the Company's enhanced focus on
customer retention and an ongoing focus on longer term contracts
for new and renewing subscribers. The increase in prepaid
subscriber churn to 2.48 percent in the quarter is generally
attributable to aggressive competitive prepaid offers in the
market.
One-way messaging (or paging) subscriber churn declined in the
third quarter to 2.89 percent from 3.21 percent in the same period
of 2002. With 258,400 paging subscribers, the Company continues to
view paging as a profitable but mature business segment and
recognizes that churn will likely continue at relatively high
rates as one-way messaging subscribers increasingly utilize the
benefits of two-way messaging and converged voice and data
devices.
The 3.7% increase in total operating expenses (including customer
retention costs) before sales and marketing costs, compared to the
third quarter of 2002, is attributable to customer retention
spending offset by savings in other operations of the Company.
Average monthly operating expense per subscriber continues to
decline, down 4.2 percent in the quarter compared to the same
quarter of 2002. The decline reflects the success in capturing
operating and scale efficiencies, as the total subscriber base has
continued to increase, compared to the nine months ended
September 30, 2002, while operating expense levels were held
relatively flat.
The modest year-over-year decline in sales and marketing cost per
gross addition reflects higher gross sales volumes, offset by the
impact of slightly higher variable costs per gross addition
related to the cost of acquiring a significant proportion of
higher-value and term-contract postpaid customers. In the quarter,
approximately 89 percent of gross postpaid wireless voice and
data additions were on a term contract of 24 months or greater.
Depreciation and Amortization
The year-over-year increase in depreciation and amortization
expense for the third quarter was primarily due to PP&E
expenditure levels in prior years, and the resulting higher asset
levels and depreciation relating to the GSM/GPRS network overlay.
Interest on Long-Term Debt
The minimal change in interest expense in the third quarter of
2003, compared to the same period in 2002, is attributable to
relatively stable debt levels in both periods. Long-term debt has
declined to $2.199 billion at September 30, 2003, from $2.254
billion at September 30, 2002. The decreased level of debt is the
result of foreign exchange fluctuations on the unhedged portion of
long-term debt, partially offset by increased borrowings.
Foreign Exchange
In the third quarter of 2003, the Canadian dollar continued to
strengthen in value against the U.S. dollar, giving rise to the
$2.0 million foreign exchange gain recorded by the Company
relating primarily to the revaluation of unhedged U.S. dollar
denominated debt.
Income Taxes
Income taxes in the third quarter consisted of a current income
tax expense related to the Federal Large Corporations tax.
The increase in the quarterly earnings per share over the same
quarter of the previous year, excluding non-recurring items, is
primarily driven by the growth in operating profit, combined with
the impact of the recognition of foreign exchange gains compared
to a loss in 2002, offset by the increases in depreciation and
amortization expense and the recognition of a gain on the
repayment of debt in the third quarter of 2002.
PP&E expenditures for the third quarter were $116.4 million, lower
than the third quarter of 2002 by $9.6 million. Network related
PP&E expenditures totalled $94.9 million in the quarter compared
to $92.1 million in the third quarter of 2002. Network spending in
both the third quarter of 2003 and 2002 was related mainly to
capacity expansion. Network spending in 2003 also included the
deployment of GSM/GPRS network functionality in the 850 megahertz
frequency band. In addition, in the third quarter of 2003, the
Company spent $17.2 million on information technology compared to
$11.4 million in the third quarter of 2002. Information technology
spending in both years is primarily related to customer service
projects. Facilities-related and other PP&E expenditures, which
comprises the remainder of PP&E expenditures, declined by $18.0
million year-over-year, primarily attributable to the substantial
completion of the expansion of the corporate head office facility
and the Moncton call centre.
Liquidity and Capital Resources
Cash flow from operating activities before changes in working
capital for the third quarter increased by $62.7 million to $169.5
million from $106.8 million in the third quarter of 2002,
reflecting the increase in operating profit. Taking into account
the changes in working capital, cash flow from operating
activities for the quarter increased by $18.5 million to $214.1
million from $195.6 million in the third quarter in 2002. Details
of the changes in non-cash working capital for the third quarter
of 2003 and 2002 are included in Note 6 of the Consolidated
Financial Statements included herein.
In aggregate, other net sources of funds during the third quarter
totalled approximately $0.9 million from the issue of shares under
the employee share purchase plan and the exercise of employee
stock options.
The net funds used during the third quarter totalled approximately
$224.5 million, and was comprised of: (1) expenditures of $116.4
million of PP&E; (2) a net repayment $106.0 million of bank
advances, and (3) a $2.1 million repayment of mortgages and
capital leases.
As a result of the above, the Company's cash and cash equivalents
balance decreased in the third quarter by $9.5 million, which
together with the opening cash position of $3.7 million, resulted
in a closing cash deficiency of $5.7 million.
The Company's available liquidity at September 30, 2003, under its
committed bank facility, was $600.0 million.
Guidance
The Company is revising upwards its 2003 guidance for full year
network revenue (excluding equipment sales) and operating profit.
Wireless network revenue guidance for 2003 is revised upward from
the range of $1,930 million to $1,970 million to a range of $2,000
million to $2,030 million. Operating profit guidance is revised
upward from the range of $630 million to $650 million to a range
of $700 million to $720 million. Other guidance ranges for 2003
remain unchanged.
Rogers Wireless Communications Inc. (Fitch, BB Subordinated Debt
Rating, Stable Outlook) operates under the co-brand Rogers AT&T
Wireless and has offices in Canadian cities from coast-to-coast.
The Company is one of Canada's leading wireless communications
service providers, offering a complete range of wireless solutions
including Digital PCS, cellular, advanced wireless data services,
two-way messaging and paging to almost 3.9 million customers
across Canada. Rogers Wireless Communications
Inc. (TSX: RCM.B; NYSE: RCN) is 56 percent owned by Rogers
Communications Inc. and 34 percent owned by AT&T Wireless
Services, Inc.
SHAW GROUP: Plans Tender Offer for Liquid Yield Option Notes
------------------------------------------------------------
The Shaw Group Inc. (NYSE:SGR) plans to commence a tender offer on
October 20, 2003, for all of its outstanding Liquid Yield
Option(TM) Notes due 2021 (Zero Coupon - Senior) with a total
principal amount at maturity of $373 million (current accreted
value of $253 million).
The purchase price to be offered in the tender will be $675 per
$1,000 principal amount at maturity of LYONs. Shaw intends to fund
the repurchase with proceeds from a proposed offering of $200
million of common stock together with approximately $53 million of
cash on hand.
The terms and conditions of the Offer will be set forth in Shaw's
Offer to Purchase, which will be distributed to the holders of
LYONs when the Offer is commenced. Subject to applicable law, Shaw
may, at its sole discretion, waive any condition applicable to the
Offer or extend or terminate or otherwise amend the Offer. The
consummation of the Offer for the LYONs is subject to certain
conditions, including the successful completion of Shaw's pending
common stock offering. The conditions will be fully described in
the Offer to Purchase.
Credit Suisse First Boston LLC will act as dealer manager, D.F.
King & Co., Inc. will be the information agent, and The Bank of
New York will serve as the depositary in connection with the
Offer.
The Shaw Group Inc. (S&P, BB Corporate Credit and Senior Unsecured
Bank Loan Ratings, Negative) is a leading global provider of
engineering, procurement, construction, maintenance, fabrication,
manufacturing, consulting, remediation, and facilities management
services for government and private sector clients in the power,
process, environmental, infrastructure and homeland defense
markets. The Company is headquartered in Baton Rouge, Louisiana
and employs approximately 17,000 people at its offices and
operations in North America, South America, Europe, the Middle
East and the Asia-Pacific region. For further information, visit
the Company's Web site at http://www.shawgrp.com
SHAW GROUP: Receives Commitments to Increase Credit Facility
------------------------------------------------------------
The Shaw Group Inc. (NYSE:SGR) has received commitments to
increase its credit facility from $250 million to $300 million to
provide for additional borrowing capacity, including letters of
credit.
The Company further amended its credit facility to reduce
restrictions in various financial covenants. The credit facility
amendment will become effective upon completion of the $200
million common stock offering.
"We are very happy with the expansion of our credit facility and
the amendment to our covenants. This will increase our working
capital resources, providing the Company with greater liquidity
and enhanced flexibility for running our business and executing
our strategic plan," stated Robert L. Belk, Executive Vice
President and Chief Financial Officer. "Combined with the other
actions we have taken to strengthen our balance sheet, we will be
better positioned to capitalize on the improving markets for our
services and ultimately provide the best platform on which to
build long-term shareholder value."
The Shaw Group Inc. (S&P, BB Corporate Credit and Senior Unsecured
Bank Loan Ratings, Negative) is a leading global provider of
engineering, procurement, construction, maintenance, fabrication,
manufacturing, consulting, remediation, and facilities management
services for government and private sector clients in the power,
process, environmental, infrastructure and homeland defense
markets. The Company is headquartered in Baton Rouge, Louisiana
and employs approximately 17,000 people at its offices and
operations in North America, South America, Europe, the Middle
East and the Asia-Pacific region. For further information, visit
the Company's Web site at http://www.shawgrp.com
SHAW GROUP: Proposes to Commence $200 Million Equity Offering
-------------------------------------------------------------
The Shaw Group Inc. (NYSE: SGR) plans to sell up to 20,000,000
shares of its common stock for expected gross proceeds of $200
million. The Company intends to use the net proceeds of the
offering to fund a portion of a tender offer, which Shaw also
announced today, for its outstanding Liquid Yield Option(TM) Notes
due 2021 (Zero Coupon -- Senior).
Credit Suisse First Boston LLC and Merrill Lynch & Co. will act as
joint book-running managers for the offering. When available,
copies of the preliminary prospectus supplement relating to the
offering may be obtained from the offices of Credit Suisse First
Boston LLC, 11 Madison Avenue, New York, NY 10010 and Merrill
Lynch & Co., Prospectus Department, Four World Financial Center,
New York, NY 10080.
The common stock will be sold pursuant to the Company's universal
shelf registration statement.
The Shaw Group Inc. (S&P, BB Corporate Credit and Senior Unsecured
Bank Loan Ratings, Negative) is a leading global provider of
engineering, procurement, construction, maintenance, fabrication,
manufacturing, consulting, remediation, and facilities management
services for government and private sector clients in the power,
process, environmental, infrastructure and homeland defense
markets. The Company is headquartered in Baton Rouge, Louisiana
and employs approximately 17,000 people at its offices and
operations in North America, South America, Europe, the Middle
East and the Asia-Pacific region. For further information, visit
the Company's Web site at http://www.shawgrp.com
SIEBEL: Reaffirms Support UpShot Customers Following Acquisition
----------------------------------------------------------------
Siebel Systems, Inc., the leading provider of customer
relationship management solutions, reaffirmed its commitment to
support UpShot customers after its acquisition of the company,
which is expected to be completed by early November.
On October 15, Siebel Systems announced that it had signed a
definitive agreement to acquire UpShot Corporation, a pioneer in
delivering hosted CRM service over the Internet.
"We will continue to support every UpShot customer indefinitely,"
said Siebel Systems chairman and CEO Thomas M. Siebel in a letter
to UpShot customers. "Siebel Systems is fully committed to the
hosted CRM market. Our objective is to provide the industry's best
hosted CRM solutions -- CRM that is fast, easy, and affordable."
Earlier this month, Siebel Systems and IBM jointly announced
Siebel CRM OnDemand, a hosted offering specifically designed to
meet the growing market demand for fast, easy, and affordable CRM.
Siebel CRM OnDemand is expected to be generally available before
the end of the year. Siebel Systems will offer UpShot's widely
adopted solutions as well as its own Siebel CRM OnDemand solution,
with a roadmap to converge the best of both products into a next
generation hosted solution. When the converged product goes live,
Siebel will provide customers with a seamless transition.
"UpShot customers can count on the continued support from Siebel
Systems following this merger," said UpShot president and CEO
Robert Reid. "By joining forces with Siebel, we will continue to
deliver innovative products and services, and we are committed to
the on-going support and value that our customers have come to
expect from UpShot."
Reid, along with UpShot founder and chairman Keith Raffel and
other executives, will lead the merger of the UpShot workforce
with Siebel's CRM OnDemand group and will play key roles in the
ongoing management of the group. Most of UpShot's approximately
100 employees, including engineers, sales, and service personnel,
also are expected to join the group.
Siebel Systems, Inc. (Nasdaq:SEBL) (S&P, BB Corporate Credit and
B+ Subordinated Ratings), is a leading provider of eBusiness
applications software, enabling corporations to sell to, market
to, and serve customers across multiple channels and
lines of business. With more than 3,500 customer deployments
worldwide, Siebel Systems provides organizations with a proven
set of industry-specific best practices, CRM applications, and
business processes, empowering them to consistently deliver
superior customer experiences and establish more profitable
customer relationships. Siebel Systems' sales and service
facilities are located in more than 28 countries.
Founded in 1996, UpShot Corporation is backed by ABN AMRO Private
Equity, Advanced Technology Ventures, Alloy Ventures, New England
Partners, and ORIX Venture Finance. Individual investors include
Bob Finocchio, former president of 3Com Corporation; and Tom
Proulx, co-founder of Intuit. Headquartered in Mountain View,
California, UpShot has more than 100 employees in nine regional
locations in the U.S. and more than 1,000 customers. Its products
include UpShot for small and midsize businesses, and UpShot XE(TM)
for larger organizations. UpShot's innovative service offering and
market success has earned the company prestigious industry awards,
including Technology Partners Investors' Choice, Microsoft
Industry Solution Award, TMC CRM Excellence Award, Willy Best Web-
Based Subscription CRM Solution, Upside Top 100, Aberdeen Group
What Works, Frost & Sullivan Market Engineering Award, and ASP
News Top 20.
SK GLOBAL AMERICA: SK Network Signs Compromise with Creditors
-------------------------------------------------------------
SK Networks Co. finally signed a compromise with creditors
October 2, 2003, wherein creditors will reorganize debt and swap
some loans into shares of SK Networks, according to Bloomberg
News.
As SK Networks' stock resumed trading, shares surged by their
daily limit. Bloomberg reports that the shares jumped 15% to
1,590 won at 9:15 a.m. in Seoul on October 2. The company "plans
to write off most of its shares by mid-November before creditors
swap debt for equity."
Pursuant to the compromise, the company also promised to sell 1.1
trillion won of assets by 2007. For starters, SK Networks Co.
will sell 10,000,000 shares of parent SK Corp. this October,
according to Maeil Business Newspaper.
Bloomberg reports that the stake held by SK Networks is worth 166
billion won or $144,000,000 based on the October 2, 2003's
closing stock price for SK Corp.
Maeil Business Newspaper further discloses that SK Group may also
sell SK Securities Co. and two other finance units. As part of
the compromise, SK Group reportedly agreed to "focus its
resources on its energy and chemicals and information and
telecommunications businesses."
Maeil Business Newspaper reports that SK Network will continue to
function as a distribution channel of SK Group. (SK Global
Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc.,
609/392-0900)
SPECIAL METALS: Bond Tapped as Congress Transaction Counsel
-----------------------------------------------------------
Special Metals Corporation and its debtor-affiliates sought and
obtained approval from the U.S. Bankruptcy Court for the Eastern
District of Kentucky to tap the services of Bond, Schoeneck &
King, PLLC as Special Counsel.
The Debtors report that Congress Financial Corporation issued a
commitment to them providing a senior secured revolving credit
facility of up to $200 million. The Exit Facility will enable to
the Debtors to satisfy immediate Plan obligations, and provide
working capital to the Reorganized Debtors after they emerge from
bankruptcy.
Consequently, Bond Schoeneck will provide special counsel to the
Debtors regarding the loan transaction with Congress, effective
August 1, 2003.
Bond Schoeneck has represented the Debtors since 1979 in various
areas, including labor and employment law, environmental law,
litigation, real estate, employee benefits, intellectual property,
immigration and corporate matters such as securities,
acquisitions, credit arrangements, and business formation. The
firm has continued to provide services during these bankruptcy
cases, as a Court-approved ordinary course professional.
The professional's hourly rates in this engagement are:
Ronald C. Berger $280 per hour
Steven L. Johnson $280 per hour
Patrick J. Pedro $240 per hour
Danielle M. McCann $135 per hour
Amy Labarge $85 per hour
Therese Vanetti $95 per hour
Special Metals, the world's largest and most diversified producer
of high-performance nickel-based alloys, filed for chapter 11
protection on March 27, 2002 (Bankr. E.D. Ky. Case No. 02-10335).
Gregory R. Schaaf, Esq., at Greenebaum Doll & McDonald PLLC
represents the Debtors in their restructuring efforts. As of
September 30, 2001, the Debtors listed $790,462,000 in total
assets and $774,306,000 in total debts.
STARTECH ENVIRONMENTAL: Northshore Buys Additional 560K Shares
--------------------------------------------------------------
Startech Environmental Corporation announced that in addition to
the $3.0 million already received from Northshore Asset
Management, LLC, Northshore has purchased an additional 558,347
shares of common stock for $500,000.
In addition, Northshore has agreed to invest an additional
$500,000 within the next thirty days at a price per share equal to
a 25% discount to the average closing price of the common stock
during the 30 consecutive trading days prior to the date of such
closing.
Startech is an environmental technology company engaged in the
commercialization of its innovative, proprietary plasma processing
technology known as the Plasma Converter System(TM) that can
achieve closed-loop elemental recycling to safely and irreversibly
destroy hazardous and non-hazardous waste and industrial by-
products while converting them into useful commodity products,
that can include surplus energy and hydrogen, for use and for
sale.
* * *
Liquidity and Going Concern Uncertainty
In its Form 10-Q filed for the quarter ended April 30, 2003, the
Startech reported:
"As of April 30, 2003, we had cash and cash equivalents of
$367,527 and a negative working capital of $289,074. During the
six months ended April 30, 2003, our cash decreased by $141,794.
Our current cash position of approximately $232,000 as of June 20,
2003 will only allow us to continue operations through July 31,
2003 unless further cash is generated during that time period.
Unless we secure investment capital or generate cash from
operations and sales we will be unable to continue as a going
concern beyond that date.
"The Company has taken measures to reduce costs, we have reviewed
all internal and external expenses and have reduced and eliminated
expenses to reduce our burn rate, in addition we are currently
discussing with potential investors an equity private placement to
satisfy our listing requirement with NASDAQ. While there are no
assurances a deal will be executed it must be noted, however, that
if the progress payments are not received in a timely manner or
additional sales of Plasma Converters or funding is not available
we may not have enough working capital to maintain our operations
beyond July 31, 2003. The Company will require immediate
additional financing to fund current operations through the
remainder of 2003. The Company has historically satisfied its
capital needs primarily by issuing equity securities. The Company
will require approximately $1.0 million to finance operations
through fiscal 2003 and intends to seek such financing through
sales of its equity securities.
"Since October 2002 the Company announced that contracts to sell
three Plasma Converters were signed aggregating in excess of $15
million dollars in sales. The contracts include an established
payment schedule coordinated to provide progress payments at
various stages of the manufacturing and delivery cycle. We
believed these progress payments, along with a recently completed
sole source private placement dated March 28, 2003 which raised
$138,757 after commissions that required the issuance of 152,480
shares of our unregistered common stock at $1.00 per share, would
be enough operating capital to sustain company operations at the
current level for more than 1 year. However, the expected down
payments for these sales have been consistently delayed since
December 2002 up until the present time and there can be no
reasonable assurance that they will be received before the end of
July 2003.
"In addition to the internally generated investment opportunities,
the Company is also working with a group of investors led by
Joseph F. Longo, a director and greater than 10% shareholder.
While an agreement with this group would cause a change in board
control and management personnel, we are taking every step
available to secure the capital necessary to protect the long term
interests of the Company.
"Assuming the aforementioned $1.0 million in financing is
obtained, the Company believes that continuing operations for the
longer term will be supported through anticipated growth in
revenues and through additional sales of the Company's securities.
Although longer-term financing requirements may vary depending
upon the Company's sales performance there can no assurance that
management will be able to obtain any additional financing on
terms acceptable to the Company, if at all. We are in discussions
with several potential investors for additional financing, however
at this time the company has no binding commitments.
"Our investing activities have consisted primarily of short-term
high quality liquid investments, with maturities with three months
or less when purchased, which are considered cash equivalents. The
primary investments are high quality commercial paper, U.S.
treasury notes and Treasury-bills."
SUNPEAK HOLDINGS: Case Summary & 2 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Sunpeak Holdings Inc.
PO Box 770
Park City, Utah 84060
Bankruptcy Case No.: 03-36743
Chapter 11 Petition Date: October 1, 2003
Court: District of Utah (Salt Lake City)
Judge: Glen E. Clark
Debtor's Counsel: Gregory J. Adams, Esq.
McKay Burton & Thurman
#10 East South
Temple Street
#600
Salt Lake City, UT 84133
Tel: (801) 521-4135
Total Assets: $1,425,000
Total Debts: $1,218,333
Debtor's 2 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Summit County Assessor Real Property Taxes $9,988
on Home and Lot #25
Browning Ferris Industries Garbage Disposal Services $86
TESORO PETROLEUM: Will Webcast Q3 Conference Call on November 5
---------------------------------------------------------------
Tesoro Petroleum Corporation (NYSE:TSO) has scheduled its third
quarter 2003 earnings conference call for 2 p.m., CST, Wednesday,
November 5, 2003. This call is being webcast by CCBN and
interested parties may listen to the live conference call over the
Internet by logging on to Tesoro's Internet site at
http://www.tesoropetroleum.comat the scheduled time.
This presentation will be archived on Tesoro's Internet site until
its next earnings conference call is held.
The webcast is also being distributed over CCBN's Investor
Distribution Network to both institutional and individual
investors. Individual investors can listen to the call through
CCBN's individual investor center at http://www.fulldisclosure.com
or by visiting any of the investor sites in CCBN's Individual
Investor Network. Institutional investors can access the call via
CCBN's password-protected event management site, StreetEvents at
http://www.streetevents.com
Individuals wishing to listen to Tesoro's conference call from its
Internet site will need Windows Media Player, which can be
downloaded free of charge from http://www.tesoropetroleum.com
Please allow at least fifteen minutes to complete the download.
Tesoro Petroleum Corporation (Fitch, BB- Senior Unsecured and B
Senior Subordinated Ratings, Stable Outlook), a Fortune 500
Company, is an independent refiner and marketer of petroleum
products and provider of marine logistics services. Tesoro
operates six refineries in the western United States with a
combined capacity of nearly 560,000 barrels per day. Tesoro's
retail-marketing system includes approximately 575 branded retail
stations, of which over 200 are company operated under the
Tesoro(R)and Mirastar(R) brands.
TOP-FLITE GOLF: Five-Year Agreement with Union Ratified
-------------------------------------------------------
Callaway Golf Company (NYSE:ELY) announced that a five-year
collective bargaining agreement between its wholly owned
subsidiary, The Top-Flite Golf Company, and the Boilermaker's
Union Local 1851 has been ratified.
The union represents the production and maintenance employees at
Top-Flite's golf ball manufacturing facility in Chicopee,
Massachusetts.
"This agreement provides the foundation to secure and grow our
manufacturing operations in Chicopee and become the world's best
golf ball manufacturer," said Bob Penicka, President and Chief
Operating Officer of Top-Flite.
Callaway Golf acquired the Top-Flite assets in September of 2003
through a bankruptcy court-approved transaction.
Callaway Golf Company makes and sells Big Bertha(R) Metal Woods
and Irons, including ERC(R) Fusion(R) Drivers, Great Big Bertha(R)
II Titanium Drivers and Fairway Woods, Big Bertha Steelhead(R) III
Stainless Steel Drivers and Fairway Woods, Hawk Eye(R) VFT(R)
Tungsten Injected(TM) Titanium Irons, Big Bertha Stainless Steel
Irons, Steelhead X-16(R) and Steelhead X-16 Pro Series Stainless
Steel Irons, and Callaway Golf Forged Wedges. Callaway Golf
Company also makes and sells Odyssey(R) Putters, including White
Hot(R), TriHot(R), DFX(TM) and Dual Force(R) Putters. Callaway
Golf Company makes and sells the Callaway Golf(R) HX(R) Tour
balls, HX Blue and HX Red balls, the CTU 30(R) Blue and CTU 30 Red
balls, the HX 2-Piece Blue and HX 2-Piece Red balls, the CB1(R)
Blue and CB1 Red balls, and the Warbird(TM) golf balls. Callaway
Golf also owns and operates The Top-Flite Golf Company, a wholly
owned subsidiary that includes the Top-Flite(R), Strata(R) and Ben
Hogan(R) brands. For more information about Callaway Golf Company,
please visit the Company's Web sites at
http://www.callawaygolf.com http://www.topflite.comand
http://www.odysseygolf.com
The Top-Flite Golf Company is a wholly owned subsidiary of
Callaway Golf Company and is the world's largest golf ball
manufacturer. It is the first U.S. manufacturer of golf balls,
dimpled golf balls, two-piece golf balls, multi-layer golf balls,
and American-made golf clubs. Under The Top-Flite Golf Company
umbrella is the TOP-FLITE(R), STRATA(R) by TOP-FLITE(R), and BEN
HOGAN(R) brands. To find more information on The Top-Flite Golf
Company, visit its Web site at http://www.topflite.com
TX STUDENT HOUSING: Low Debt Service Coverage Spurs Rating Drop
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on Texas
Student Housing Corp.'s $34.355 million series 2001 bonds to 'BB'
from 'BBB-' due to low debt service coverage (resulting in a
violation of the rate coverage covenant), and ongoing business
risk due to lower-than-expected occupancy and greater-than-
expected competition. The outlook is stable.
"The stable outlook anticipates debt service being paid on time,
without eroding reserves; however, a further decline in occupancy
may trigger an outlook revision or downgrade," said Standard &
Poor's credit analyst Bobbi Gajwani.
The rating reflects the inability of the project to meet the
required debt service coverage of 1.25x in 2002 (the first year of
ownership by TSHC) and the expectation that the project will not
meet the coverage covenant in 2003 or 2004. The rating also
reflects lower-than-anticipated occupancy rates and significant
competition from both private housing providers and new
university-sponsored housing under construction by the University
of North Texas.
TSHC used the series 2001 bonds to fund the acquisition of a
housing project known as Jefferson Commons located near the
University of North Texas in Denton, Texas.
Occupancy declined to 91% by the end of May 2003, and stands at
83% as of mid-October. Audited financial statements for the fiscal
year ended Aug. 31, 2003, are not expected to be ready until
November, which is a concern. Preliminary results indicate that
the project is not expected to meet the coverage covenant in
fiscal 2003. However, according to the trustee, since the
inception of the project in May 2001, all debt service payments
have been made on their due dates, including those due in fiscal
2003. Although the project is not generating enough income to meet
its coverage requirements, it is able to pay annual debt service
and has not dipped into the debt service reserve fund in either
2002 or 2003. The most recent budget for fiscal 2004 estimates net
revenue substantially lower than original projections and
approximates that coverage will again be less than 1x maximum
annual debt service. In order to gain more financial control, TSHC
has assumed asset management responsibilities, but JPI Campus
Quarters Management L.P. will continue as the property manager.
TYCO INT'L: Commences Tender Offer for Liquid Yield Option Notes
----------------------------------------------------------------
Tyco International Ltd. (NYSE: TYC, BSX: TYC, LSE: TYI) announced
that holders of its Liquid Yield Option(TM) Notes due 2020 (Zero
Coupon-Senior) have the right to surrender their LYONs for
purchase during a period that began Friday and ends on Monday,
November 17, 2003.
Pursuant to the indenture under which the LYONs were issued in
November of 2000, each holder of the LYONs has the right to
require Tyco to purchase, until 5:00 p.m. New York time on Monday,
November 17, 2003, such holder's LYONs at a price equal to $775.66
per $1,000 principal amount at maturity of the LYONs.
Under the terms of the LYONs, Tyco shall purchase any tendered
LYONs solely with cash. The aggregate principal amount due at
maturity for all outstanding LYONs is approximately $3.2 billion.
If all outstanding LYONs were surrendered for purchase, the
aggregate cash purchase price would be approximately $2.5 billion.
Tyco intends to use available funds to repurchase the LYONs.
In order to surrender LYONs for purchase, holders must deliver a
purchase notice to U.S. Bank National Association (successor
trustee to State Street Bank and Trust Company, N.A.), the trustee
and paying agent for the LYONs, on or before 5:00 p.m., New York
City time, on Monday, November 17, 2003. Holders may withdraw any
LYONs previously surrendered for purchase at any time prior to
5:00 p.m., New York City time, on Monday, November 17, 2003.
Tyco filed a Tender Offer Statement on Schedule TO with the
Securities and Exchange Commission Friday. Tyco will make
available to LYONs holders, through the Depository Trust Company,
documents specifying the terms, conditions and procedures for
surrendering and withdrawing LYONs for purchase. LYONs holders
are encouraged to read these documents carefully before making any
decision with respect to the surrender of LYONs, because these
documents contain important information regarding the details of
Tyco's obligation to purchase the LYONs.
The LYONs are convertible into 10.3014 Tyco Common Shares per
$1,000 principal amount at maturity of LYONs, subject to certain
conditions set forth in the indenture and in the LYONS, and
subject to adjustment under certain circumstances.
Tyco International Ltd. is a diversified manufacturing and service
company. Tyco is the world's largest manufacturer and servicer of
electrical and electronic components; the world's largest
designer, manufacturer, installer and servicer of undersea
telecommunications systems; the world's largest manufacturer,
installer and provider of fire protection systems and electronic
security services; and the world's largest manufacturer of
specialty valves. Tyco also holds strong leadership positions in
disposable medical products and plastics and adhesives. Tyco
operates in more than 100 countries and had fiscal 2002 revenues
from continuing operations of approximately $34 billion.
* * *
As previously reported, Fitch Ratings affirmed its ratings on the
senior unsecured debt and commercial paper of Tyco International
Ltd., as well as the unconditionally guaranteed debt of its wholly
owned direct subsidiary Tyco International Group S. A., at
'BB'/'B', respectively. The Rating Outlook has been changed to
Stable from Negative. The ratings affect approximately $21 billion
of debt securities.
The change to Outlook Stable reflects Tyco's progress with respect
to reestablishing access to capital, addressing its liability
structure, implementing steps to improve operating performance,
and demonstrating cash generation despite a difficult economic
environment in a number of key end-markets. The impact of
fundamental favorable changes in Tyco's financial policies and
profile since late fiscal 2002 is constrained by economic weakness
in its markets, potential legal liabilities related to shareholder
lawsuits and SEC investigations, and the possibility, although
reduced, of further accounting charges and adjustments. The
ratings could improve over time as Tyco demonstrates more
consistent results and that it has put behind it the accounting
concerns that have obscured the transparency of its financial
reporting in the past.
UNITEDGLOBALCOM: Stockholders Send Letter to UGC Special Panel
--------------------------------------------------------------
On October 17, 2003, several stockholders of UGC Europe, Inc.
(Nasdaq: UGCE) sent the following letter to the Special Committee
of Independent Directors of the Company (printed in full - Ed.):
Committee to Obtain Fair Value for
Minority Stockholders of UGC Europe, Inc.
c/o Cadwalader, Wickersham & Taft LLP
100 Maiden Lane
New York, NY 10038
October 17, 2003
BY FACSIMILE AND U.S. MAIL
Mr. Jacques Manardo
Mr. John Risner
Special Committee of Independent Directors
UGC Europe, Inc.
4643 South Ulster Street, Suite 1300
Denver, CO 80237
Ladies and Gentlemen:
The Committee to Obtain Fair Value for Minority Stockholders
of UGC Europe, Inc., is comprised of the undersigned and a fourth
large stockholder who own for their own account or on behalf of
certain fiduciary clients an aggregate of approximately 7.8% of
the Company's outstanding shares.
The members of the Committee are disappointed by the exchange
ratio and other issues relating to the value that is being offered
by the Company's controlling stockholder, UnitedGlobalCom, Inc.,
to acquire all outstanding shares of the Company that United and
its subsidiaries do not already own. Among other things, the
members of the Committee believe the exchange ratio of 9.0 shares
of United's Class A common stock for each outstanding share of the
Company's common stock is inadequate and below fair value.
Members of the Committee have also been contacted by other
large shareholders who have indicated an interest in joining the
Committee and have expressed the same views as we do in this
letter.
Before determining to reject the exchange offer, members of
the Committee are prepared to meet with you and your
representatives, as well as representatives of the Company, United
and Liberty Media Corporation, to discuss the exchange ratio and
other issues relating to offer.
Please contact our counsel, Dennis J. Block, Esq., at 212-504-
5555 at your earliest convenience to arrange a meeting with
members of the Committee.
Very truly yours,
Committee to Obtain Fair Value for
Minority Stockholders of UGC Europe, Inc.
SALOMON BROTHERS ASSET MANAGEMENT INC.
on behalf of certain fiduciary clients
By: /s/______________________
PERRY CORP. as Managing General Partner of Perry Partners,
L.P.
By: /s/ _____________________
PERRY CORP. as Investment Manager of Perry Partners
International, Inc.
By: /s/______________________
PERRY CORP. as Investment Manager of Auda Classic, PLC
By: /s/______________________
EVEREST Capital Limited, as agent for certain managed
accounts
By: /s/______________________
By: /s/______________________
cc: Board of Directors
UGC Europe, Inc.
4643 South Ulster Street, Suite 1300
Denver, CO 80237
Board of Directors
UnitedGlobalCom, Inc.
4643 South Ulster Street, Suite 1300
Denver, CO 80237
Board of Directors
Liberty Media Corporation
12300 Liberty Boulevard
Englewood, CO 80112
Committee Contact:
Committee to Obtain Fair Value for
Minority Stockholders of UGC Europe, Inc.
c/o Dennis J. Block, Esq.
Cadwalader, Wickersham and Taft LLP
100 Maiden Lane
New York, NY 10038
(212)504-5555
UGC Europe, Inc. through its subsidiary United Pan-Europe
Communications N.V. is one of the leading broadband communications
and entertainment companies in Europe. Through its broadband
networks, UPC provides television, Internet access, telephony and
programming services.
UnitedGlobalCom Inc.'s June 30, 2003 balance sheet shows a total
shareholders' equity deficit of about $2.7 billion.
UNUMPROVIDENT: Will Publish Third-Quarter Results on November 6
---------------------------------------------------------------
UnumProvident Corporation (NYSE: UNM) has scheduled the release of
its third quarter earnings conference call for Thursday, November
6 at 9:00 a.m. (eastern).
UnumProvident Corporation senior management will discuss the
results of operations for the third quarter and may include
forward-looking information, such as guidance on future results or
trends in operations, as well as other material information. The
dial-in number is (913) 981-4900.
Alternatively, a live webcast of the call will be available at
http://www.unumprovident.comin a listen-only mode. About fifteen
minutes prior to the start of the call, you should access the
"Investor and Shareholder Information" section of our website. A
replay of the call will be available by telephone and on our
website through Wednesday, November 12.
3Q-2003 Earnings Conference Call
Thursday, November 6 - 9:00 a.m. (eastern). Dial-in number (913)
981-4900. Webcast is live and can be accessed through our
website, http://www.unumprovident.com
3Q-2003 Earnings Conference Call Replay
Available Thursday, November 6 (1:00 p.m.) through Wednesday,
November 12 (12:00 midnight) by phone or by visiting our website,
http://www.unumprovident.com Dial-in number (888) 203-1112,
passcode 732360.
UnumProvident is the largest provider of group and individual
disability income protection insurance in North America. Through
its subsidiaries, UnumProvident insures more than 25 million
people and paid $4.8 billion in total benefits to customers in
2002. With primary offices in Chattanooga, Tenn., and Portland,
Maine, the company employs more than 13,000 people worldwide. For
more information, visit http://www.unumprovident.com
* * *
As previously reported, Standard & Poor's Ratings Services
affirmed its ratings on various UnumProvident Corp.-related
synthetic transactions and removed them from CreditWatch where
they were placed Feb. 18, 2003.
These rating actions follow the affirmations of the ratings on
the related securities, and their removal from CreditWatch. A
copy of the UnumProvident Corp.-related summary analysis, dated
May 8, 2003, can be found on RatingsDirect, Standard & Poor's
Web-based credit analysis system, at www.ratingsdirect.com.
RATINGS AFFIRMED AND REMOVED FROM CREDITWATCH
CorTS Trust for Provident Financing Trust I
$52 million corporate-backed trust securities certificates
Rating
Class To From
Certs BB BB/Watch Neg
CorTS Trust II for Provident Financing Trust I
$87 million corporate-backed trust securities certificates
Rating
Class To From
Certs BB BB/Watch Neg
CorTS Trust III for Provident Financing Trust I
$26 million corporate-backed trust securities certificates
Rating
Class To From
Certs BB BB/Watch Neg
CorTS Trust for Unum Notes
$25 million corporate-backed trust securities certificates
Rating
Class To From
Certs BBB- BBB-/Watch Neg
PreferredPLUS Trust Series UPC-1
$32 million PreferredPLUS trust series UPC-1 certificates
Rating
Class To From
Certs BBB- BBB-/Watch Neg
UNUMPROVIDENT: Declares $0.075 per Share Quarterly Dividend
-----------------------------------------------------------
On October 13, 2003, the Board of Directors of UnumProvident
Corporation (NYSE: UNM) declared a quarterly dividend of 7.5 cents
per share of its Common Stock, to be paid on November 21, 2003, to
stockholders of record on October 27, 2003.
The subsidiaries of UnumProvident Corporation offer a
comprehensive, integrated portfolio of products and services
backed by industry-leading return-to-work resources and disability
expertise. UnumProvident is the world leader in protecting income
and lifestyles through its comprehensive offering of group,
individual, and voluntary benefits products and services.
UnumProvident has operations in the United States, Canada, the
U.K., Japan, and elsewhere around the world.
US AIRWAYS: Look for Third-Quarter 2003 Results Today
-----------------------------------------------------
In his weekly telephonic message to employees, US Airways Group
President and CEO, David N. Siegel, announced that USAir expects
to report a pre-tax loss for the quarter ending September 30,
2003. USAir also expects to report a net loss for the quarter.
In his message, Mr. Siegel discussed the key factors driving the
loss. Revenue is not coming back at the rate USAir had hoped.
Low cost carriers continue to grow, and US Airways had a
challenging operating environment with disruptions due to summer
storms. Mr. Siegel also noted that challenges still remain for
USAir to successfully hit its targets for introducing regional
jets into service.
USAir will announce its third quarter 2003 results on Tuesday,
October 21, 2003. (US Airways Bankruptcy News, Issue No. 39;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
VINTAGE CUSTOM: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Vintage Custom Homes, Inc.
5555 Fellowship Lane
Spring, Texas 77379
Bankruptcy Case No.: 03-43969
Chapter 11 Petition Date: October 2, 2003
Court: Southern District of Texas (Houston)
Judge: William R. Greendyke
Debtor's Counsel: Richard L. Fuqua, II, Esq.
Fuqua & Keim
2777 Allen Parkway
Suite 480
Houston, Texas 77019
Tel: 713-960-0277
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Robert E. Patterson Lawsuit $550,000
Sherry L. Patterson
10 Dove Manor Ct.
Spring, TX 77379
Lonestar/BMC West Arrearage $60,000
Jon Monroe Landscape Arrearage $60,000
& Nursery
Ormond Drywall Systems, Arrearage $24,000
Inc.
Ferguson Enterprises, Inc. Arrearage $22,000
Wisenbaker Carpet Arrearage $16,000
Gossett Air Conditioning Arrearage $15,000
Trussway Ltd. Lumber Arrearage $12,000
Division
Porter Ready Mix, Inc. Arrearage $12,000
Lighting Gallery Arrearage $11,000
Pat Morgan dba Pat Morgan Arrearage $8,500
Western Brick Co., Inc. Arrearage $8,000
Morgan Mills Sheet Arrearage $8,000
Metal, inc.
Champion Window Arrearage $7,500
Antonio Guevara Arrearage $7,500
Abercrombie, Revia Arrearage $7,500
Degeyter & Assoc.
Daniel Noack Arrearage $7,000
Charles Lyle Arrearage $7,000
Octavio Maldonado Arrearage $6,000
Bayou City Arrearage $6,000
WEIRTON STEEL: Provides Financial Projections Under Reorg. Plan
---------------------------------------------------------------
Weirton Steel Corporation estimated results of operation and cash
flows for the next five years based on projected revenues and
costs. These estimates are subject to a variety of risk factors,
including the underlying market demand for Weirton's products,
variability in certain costs like energy and raw materials, and
the projected maintenance needs of Weirton's machinery and
equipment.
The Business Plan assumes confirmation of the Plan and that all
transactions contemplated by the Plan will be consummated by the
Effective Date. The Projections also assume that:
* the New Term Loan for $175,000,000 is obtained in connection
with the Emergency Steel Loan Guaranty Program and the
associated fees and expenses are paid on the Effective Date;
* the New Revolving Loan Agreement with advance rates and
reserves similar to the DIP Agreement is obtained with an
increase in the general reserve amount of $10,000,000;
* $25,000,000 is paid to retire the DIP Term Loan;
* all other creditors are treated as described in the Plan;
and
* Weirton will pay assumed administrative liabilities,
including postpetition trade and employee claims, estate and
other professional fees in the ordinary course of business.
(Weirton Bankruptcy News, Issue No. 11; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
WESTPOINT STEVENS: Board of Directors Elects M. L. Fontenot CEO
---------------------------------------------------------------
WestPoint Stevens Inc. (OTC Bulletin Board: WSPTE) --
http://www.westpointstevens.com-- announced that its Board of
Directors has elected M. L. (Chip) Fontenot as the Company's
Chief Executive Officer.
He has been serving as "acting" chief executive officer since
August 14, 2003. Mr. Fontenot will retain his current positions
as President and Chief Operating Officer.
Mr. Fontenot came to WestPoint Stevens in January of 2001 with
more than 30 years' experience in the home fashions industry,
including more than 20 years at Springs Industries, where he was
President of Springs' Consumer Products Division, and more
recently, assignments as Chairman, President and Chief Executive
Officer of Perfect Fit Industries and as President and Chief
Operating Officer for Dyersburg Corporation.
In addition, the Company has determined not to implement the
previously announced agreement in principle with certain holders
of its outstanding unsecured debt. Instead, the Company will
negotiate new terms for a chapter 11 plan of reorganization with
all its major creditor constituencies. Notice of this
determination will be included in a Form 8-K filed with the SEC
and can subsequently be accessed at the Company's
Web site -- http://www.westpointstevens.com-- under the "For
Investors" tab.
WestPoint Stevens Inc. is the nation's premier home fashions
consumer products marketing company, with a wide range of bed
linens, towels, blankets, comforters and accessories marketed
under the well-known brand names GRAND PATRICIAN, PATRICIAN,
MARTEX, ATELIER MARTEX, BABY MARTEX, UTICA, STEVENS, LADY
PEPPERELL, SEDUCTION, VELLUX and CHATHAM -- all registered
trademarks owned by WestPoint Stevens Inc. and its subsidiaries --
and under licensed brands including RALPH LAUREN HOME, DISNEY
HOME, GLYNDA TURLEY and SIMMONS BEAUTYREST. WestPoint Stevens is
also a manufacturer of the MARTHA STEWART and JOE BOXER bed and
bath lines. WestPoint Stevens can be found on the World Wide Web
at http://www.westpointstevens.com
WESTPOINT STEVENS: Enters into 3rd Amendment to DIP Credit Pact
---------------------------------------------------------------
WestPoint Stevens' DIP Credit Agreement was first amended on
July 24, 2003 and was further amended on September 30, 2003.
Because of the non-material nature of the First and Second
Amendments, the Debtors did not seek the Court's approval.
By this motion, the Debtors ask the Court to approve the Third
Amendment to the DIP Credit Agreement with Bank of America, N.A.,
Wachovia Bank, National Association and a consortium of other
lenders.
1. Applicable Margins
The DIP Credit Agreement currently defines Applicable Margins as
0.625% for Base Rate Revolving Loans and all other Obligations
and 0.50% with respect to the Unused Line Fee. Because of a
scrivener's error, the existing definition of Applicable Margins
with respect to Base Rate Revolving Loans and the Unused Line Fee
is incorrect and does not reflect the actual agreement reached by
the parties to the DIP Credit Agreement. Accordingly, the Third
Amendment contemplates the modification of the definition by
changing the percentage rate -- retroactive to June 2, 2003 --
for the Base Rate Revolving Loans and Other Obligations to 0.75%
and the Unused Line Fee to 0.625%, subject to adjustment on
November 1, 2003, in accordance with the terms of the DIP Credit
Agreement.
2. Banker's Acceptances
The Debtors use banker's acceptances in conjunction with
documentary or commercial letters of credit to pay for the
purchases made from certain overseas suppliers of goods necessary
for the Debtors' businesses. Currently, because the DIP Credit
Agreement is silent on the Debtors' use of banker's acceptances,
availability may be overstated in the Debtors' letter of credit
subfacility during the interim period between issuance and
payment of any individual banker's acceptance. The Third
Amendment expressly provides for the inclusion of banker's
acceptances in the letter of credit subfacility, and addresses
the possible overstatement of availability by adding certain
provisions and definitions to the DIP Credit Agreement, which
will account for the dollar amount outstanding obligations
related to banker's acceptances in the calculation of the
availability.
3. EBITDA Covenants
The DIP Credit Agreement contains certain EBITDA covenants, which
the Debtors are obligated to meet. The Debtors want to amend the
dollar amounts of the existing EBITDA covenants. Without the
amendment, the Debtors believe that they will be in breach of the
covenant amounts.
This chart represents the original and amended EBITDA covenant
thresholds under the DIP Credit Agreement:
Current Amended
Period EBITDA EBITDA
------ ------- -------
4 consecutive Fiscal Months $58,000,000 $40,000,000
ending on the last day of the
Fiscal Month of September 2003
7 consecutive Fiscal Months 102,000,000 65,000,000
ending on the last day of the
Fiscal Month of December 2003
10 consecutive Fiscal Months 133,000,000 88,000,000
ending on the last day of the
Fiscal Month of March 2004
4 consecutive Fiscal Quarters 148,000,000 101,000,000
ending on the last day of the
Fiscal Month of June 2004
4 consecutive Fiscal Quarters 158,000,000 106,000,000
ending on the last day of the
Fiscal Month of September 2004
Each period of 4 consecutive 160,000,000 104,000,000
Fiscal Quarters ending on or
after the last day of the
Fiscal Month of December 2004
The DIP Credit Agreement currently provides that in the event
availability for any month falls below $75,000,000, then EBITDA
for the period will not fall below certain dollar amounts set
forth in the Agreement. As a condition for relaxing the existing
EBITDA covenants, this provision will be deleted and an
additional EBITDA test affecting availability under the DIP
Credit Agreement will be substituted in its place.
The alternative test provides for periodic EBITDA minimums that,
if unmet, would obligate the Debtors to maintain certain
availability minimums during the Next Availability Test Period.
These availability minimums would be no less than (i)
$75,000,000, if the Next Availability Test Period commences on or
before December 31, 2003, or (ii) $100,000,000, if the Next
Availability Test Period commences after December 31, 2003. This
summarizes the minimum EDBITDA amounts under the modified test:
Period EBITDA
------ ------
4 consecutive Fiscal Months ending on $42,000,000
the last day of the Fiscal Month
of September 2003
5 consecutive Fiscal Months ending on 53,000,000
the last day of the Fiscal Month
of October 2003
6 consecutive Fiscal Months ending on 64,000,000
the last day of the Fiscal Month
of November 2003
7 consecutive Fiscal Months ending on 74,000,000
the last day of the Fiscal Month
of December 2003
8 consecutive Fiscal Months ending on 83,000,000
the last day of the Fiscal Month
of January 2004
9 consecutive Fiscal Months ending on 92,000,000
the last day of the Fiscal Month
of February 2004
10 consecutive Fiscal Months ending on 100,000,000
the last day of the Fiscal Month
of March 2004
11 consecutive Fiscal Months ending on 107,000,000
the last day of the Fiscal Month
of April 2004
12 consecutive Fiscal Months ending on 115,000,000
the last day of each of the Fiscal Months
of May and June 2004
12 consecutive Fiscal Months ending on 119,000,000
the last day of each of the Fiscal Months
of July and August 2004
12 consecutive Fiscal Months ending on 120,000,000
or after the last day of the Fiscal Month
of September 2004
4. Plant Shut Down Costs
The Third Amendment modifies the DIP Credit Agreement by adding
an obligation, which requires the Debtors not to exceed closing
costs, in cash, in the aggregate amount equal to $28,737,000 for
the shutdown of certain plants, as set forth in the Debtors'
business plan which was presented to the Lenders on September 16,
2003.
5. Amendment Fee
In consideration of the Lenders' agreement to modify the existing
DIP Credit Agreement, the Debtors will pay a $450,000 amendment
fee.
The Debtors believe that it is critical to the viability of their
businesses, as well as their reorganization efforts, to maintain
their ability to obtain loans, letters of credit and other
extensions of credit under the DIP Credit Agreement. The Debtors
contend that the terms and conditions of the Third Amendment are
fair and reasonable, were negotiated by the parties in good faith
and at arm's-length and represent the sound exercise of the
Debtors' business judgment. (WestPoint Bankruptcy News, Issue No.
10; Bankruptcy Creditors' Service, Inc., 609/392-0900)
WORLDCOM INC: MCI Extends Tender Offer for Class A Digex Shares
---------------------------------------------------------------
MCI (WCOEQ, MCWEQ) has extended the deadline for its tender offer
for all of the outstanding shares of Class A Common Stock of
Digex, Incorporated (OTC Bulletin Board: DIGX) for $0.80 per share
net to the seller in cash.
The tender offer, as extended, will now expire at 5:00 p.m., New
York City time, on October 31, 2003. The tender offer was
scheduled to expire at 5:00 p.m., New York City time, on October
17, 2003. As of the date hereof, approximately 9,590,119 shares
of Class A Common Stock have been validly tendered (and not
properly withdrawn).
MCI's tender offer remains subject to further extension. Any such
extension will be followed as promptly as practicable by public
announcement thereof, and such announcement will be made no later
than 9:00 a.m., New York City time, on the next business day after
the previously scheduled expiration date. Stockholders of Digex
have the right to withdraw shares of Class A Common Stock that
have been tendered until the expiration date of the tender offer,
as extended. MCI may retain the shares of Class A Common Stock
that have been tendered and not withdrawn until the expiration of
the tender offer as extended.
Georgeson Shareholder Communications Inc. is acting as the
Information Agent in connection with the tender offer and can be
contacted at (212) 440-9800 (for banks and brokers) or (866) 295-
8105 (toll free for all others).
Documentation relating to the offer, may be obtained free of
charge at the SEC's web site -- http://www.sec.gov-- or by
contacting Georgeson Shareholder Communications. Digex
stockholders and other interested parties are urged to read the
documentation relating to the offer because it contains important
information.
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 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
Digex is a leading provider of enterprise hosting services. Digex
customers, from Fortune 1000 companies to leading Internet-based
businesses, leverage Digex's trusted infrastructure and advanced
services to successfully deploy business-critical and mission-
critical Web sites, enterprise applications and Web Services on
the Internet. Additional information on Digex is available at
http://www.digex.com.
WORLDCOM INC: Court Approves Cox Communications Settlement Pact
---------------------------------------------------------------
Worldcom Inc., and its debtor-affiliates obtained the Court's
approval of a Settlement Agreement with Cox Communications, Inc.
Backgrounder
As previously reported, MCI WorldCom Network Services, Inc. and
Cox Communications, Inc. were parties to various prepetition
contracts wherein each purchases certain telecommunications
services from the other. As part of the business relationship,
MCI alleged that Cox owed $2,339,044 in outstanding balance for
services MCI provided prepetition.
Cox countered that MCI owed $4,280,354 in outstanding balance for
services Cox rendered prepetition. Cox filed proofs of claim for
the amounts. Cox also asserted a right to offset a portion of the
Cox Prepetition Debt against a portion of the MCI Prepetition
Debt.
MCI, however, disputed that Cox had a right to set off its
prepetition debt. MCI also denied owing a portion of the MCI
Prepetition Debt.
To resolve the disputes, Cox and MCI entered into a settlement
agreement. In summary, the Settlement Agreement provides that:
(a) the parties will set off $1,923,059 against their debts,
which will reduce the MCI Prepetition Debt to
$2,357,295 and the Cox Prepetition Debt to $415,985;
(b) Cox will pay MCI the $415,985 remaining balance of the Cox
Prepetition Debt within 20 days of the Set-off;
(c) Upon completion of the Set-off, all payments due to Cox
under the parties' agreements and all payments due to Cox
under any agreements between UUNET Technologies, Inc. and
Cox through July 21, 2002 will be deemed satisfied. Cox
will not assert any claims for prepetition cure amounts
for MCI's assumption of the UUNET agreements;
(e) After completion of the Set-off, Cox will file an amended
proof of claim against MCI Network Services, Inc. for
$2,357,295 to reflect MCI's post-set-off debt. MCI will
not object to the Amended Proof of Claim and the claim
will be an allowed general unsecured claim; and
(f) The parties will exchange mutual releases. (Worldcom
Bankruptcy News, Issue No. 39; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
XOMA: Underwriters Exercise Over-Allotment Option to Buy Shares
---------------------------------------------------------------
XOMA Ltd. (Nasdaq:XOMA) reported the exercise of the underwriters
option to purchase 1,350,000 additional common shares to cover
over-allotments for additional gross proceeds of $10.8 million or
$8.00 per share. The exercise of the underwriters' over-allotment
option increases the total gross proceeds from the public offering
from $72 million to $82.8 million.
UBS Securities LLC acted as the sole book running manager in the
offering, and CIBC World Markets Corp., U.S. Bancorp Piper
Jaffray, Adams, Harkness & Hill, Inc., Jefferies & Company, Inc.
and ThinkEquity Partners acted as co-managers.
XOMA intends to use the net proceeds from the offering (including
the issuance of the additional shares) for general corporate
purposes, including research and development projects, the
development or acquisition of new products or technologies,
equipment acquisitions, general working capital and operating
expenses. The Company may also use a portion of the net proceeds
to repay some or all of the outstanding notes payable to
Genentech, Inc. and Millennium Pharmaceuticals, Inc. according to
existing collaboration arrangements.
XOMA -- which has a net capital deficit of about $11 million --
develops and manufactures antibody and other protein-based
biopharmaceuticals for disease targets that include immunological
and inflammatory disorders, cancer and infectious diseases. XOMA's
programs include collaborations: with Genentech, Inc. on the
Raptiva(TM) antibody for psoriasis (BLA submission), psoriatic
arthritis (Phase II) and other indications; and with Millennium
Pharmaceuticals, Inc. on a recombinant protein, CAB-2, for
vascular inflammation (preclinical). Earlier-stage development
programs focus on antibodies and other compounds developed by XOMA
for the treatment of acne (Phase I), cancer and retinopathies.
* Goldman Sachs Tops Fin'l Advisor Rankings by Global Securities
----------------------------------------------------------------
Global Securities Information, Inc. announced the following
financial advisors finished the third-quarter of 2003 with the
highest total transaction value of mergers and acquisitions.
According to the rankings, Goldman Sachs & Co's 55 third-quarter
deals totaled over $148 billion, enough to top Lazard, Freres &
Co, LLC, whose 37 deals totaled over $120 billion.
Financial Advisor Rankings for Merger
and Acquisition Transactions Completed
in the Third-Quarter of 2003
Ranked By Total Transactional Value
Rank Name of Financial Advisor No. of Deals Transaction Value
1 Goldman Sachs & Co 55 $148,003,239,466
2 Lazard Freres & Co LLC 37 $120,570,950,881
3 Bear Stearns & Co Inc 25 $72,687,043,660
4 J P Morgan Securities Inc 37 $58,324,901,171
5 Morgan Stanley 35 $56,551,051,570
6 Credit Suisse First Boston 51 $51,025,807,359
7 Merrill Lynch & Co 32 $44,621,232,931
8 Lehman Brothers Inc 36 $34,893,520,267
9 Keefe Bruyette & Woods Inc 16 $21,019,966,653
10 UBS Investment Bank 20 $18,444,357,589
11 HSBC Investment Bank 2 $15,358,184,757
12 Rohatyn Associates LLC 1 $15,342,000,000
13 Salomon Smith Barney Inc 18 $12,843,082,540
14 Deutsche Bank Securities Inc 16 $11,610,024,196
15 BMO Nesbitt Burns Inc 6 $10,278,460,567
16 Citigroup Global Markets Inc 13 $8,995,875,670
17 Allen & Co 7 $8,419,025,113
18 Banc of America Securities LLC 29 $6,140,365,389
19 W Y Campbell & Company 2 $4,871,983,170
20 Stephens Financial Group 1 $4,725,000,000
21 Schroder Salomon Smith Barney 1 $4,500,000,000
22 CIBC World Markets Corp 19 $3,299,372,398
23 Dresdner Kleinwort
Wasserstein Inc 5 $2,898,757,323
24 AIB Corporate Finance 1 $2,880,056,000
25 Nomura Securities 3 $2,620,904,528
View these and other rankings on LIVEDGAR's Mergers & Acquisitions
Database. In addition to providing these rankings, Global
Securities Information's premier SEC research platform, LIVEDGAR,
provides the actual source documents upon which the rankings are
based.
Founded in 1988, Global Securities Information is the leading
provider of online securities information and research. By
specializing within the securities information sector, GSI offers
unmatched breadth, accuracy and currency of relevant information,
as well as personal support services and research assistance.
Superior understanding of the underlying information has allowed
GSI to develop award-winning search, alert, and retrieval
technology, delivering our expertise to clients on their desktops.
GSI's clients (attorneys, investment bankers, analysts,
librarians, paralegals, reporters and executives) use GSI products
and services to obtain business, financial and competitive
information about public companies, public offerings, M&A
transactions, private offerings, individuals and material
contracts. Customers include all of the top 100 law firms, over 30
investment banks, each of the "big five" accounting firms, and the
financial and legal media. The GSI website is www.gsionline.com
The set of transactions consists of all deals registered with the
Securities and Exchange Commission that have completion dates that
fall within the specified time period for this report and result
in a change in control. The dollar amounts consist of estimated
transaction values as disclosed by the filing party. All deals
that have been registered with the SEC have been included,
including international transactions. Only the lead advisor or
counsel to the acquiring and target party is credited with the
dollar value and count of each transaction, and each transaction
is credited only once. While Global Securities Information has
obtained the information from sources it believes to be reliable,
we do not guarantee its accuracy, and such information may be
incomplete or condensed.
* Goodwin Procter Has New Name, Look & E-Mail Addresses
-------------------------------------------------------
Goowdin, Procter & Hoar LLP has shortened its name to:
Goodwin Procter LLP
The Firm's new Web site address is:
http://www.goodwinprocter.com/
E-Mail addresses have changed to:
_________@goodwinprocter.com
Telephone numbers, fax numbers and addresses are unchanged
Boston
Exchange Place
53 State Street
Boston, MA 02109
617.570.1000
617.523.1231 (fax)
New York
599 Lexington Avenue
New York, NY 10022
212.813.8800
212.355.3333 (fax)
New Jersey
103 Eisenhower Parkway
Roseland, NJ 07068
973.992.1990
973.992.4643 (fax)
Washington, D.C.
1717 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
202.974.1000
202.331.9330 (fax)
* Large Companies with Insolvent Balance Sheets
-----------------------------------------------
Total
Shareholders Total Working
Equity Assets Capital
Company Ticker ($MM) ($MM) ($MM)
------- ------ ------------ ------- --------
Alliance Imaging AIQ (39) 683 43
Akamai Technologies AKAM (168) 230 60
Alaris Medical AMI (32) 586 173
Amazon.com AMZN (1,353) 1,990 550
Aphton Corp APHT (11) 16 (5)
Arbitron Inc. ARB (100) 156 (2)
Alliance Resource ARLP (46) 288 (16)
Atari Inc. ATAR (97) 232 (92)
Actuant Corp ATU (44) 295 18
Avon Products AVP (91) 3,327 73
Saul Centers Inc. BFS (13) 389 N.A.
Blount International BLT (369) 428 91
Cincinnati Bell CBB (2,104) 1,467 (327)
Cubist Pharmaceuticals CBST (7) 221 131
Choice Hotels CHH (114) 314 (37)
Columbia Laboratories COB (8) 13 5
Campbell Soup Co. CPB (114) 5,721 (1,479)
Caraco Pharm Labs CPD (20) 20 (2)
Centennial Comm CYCL (579) 1,447 (98)
Echostar Comm DISH (1,206) 6,210 1,674
D&B Corp DNB (19) 1,528 (104)
WR Grace & Co. GRA (222) 2,687 587
Graftech International GTI (351) 859 108
Hexcel Corp HXL (127) 708 (531)
Integrated Alarm IASG (11) 46 (8)
Imax Corporation IMAX (104) 243 31
Imclone Systems IMCL (186) 484 139
Inkine Pharm INKP (6) 14 5
Gartner Inc. IT (29) 827 1
Journal Register JRC (4) 702 (20)
KCS Energy KCS (30) 268 (16)
Kos Pharmaceuticals KOSP (75) 69 (55)
Lodgenet Entertainment LNET (101) 298 (5)
Level 3 Comm Inc. LVLT (240) 8,963 581
Memberworks Inc. MBRS (21) 281 (100)
Moody's Corp. MCO (327) 631 (190)
McDermott International MDR (417) 1,278 154
McMoRan Exploration MMR (31) 72 5
Maguire Properti MPG (159) 622 N.A.
MicroStrategy MSTR (34) 80 7
Northwest Airlines NWAC (1,483) 13,289 (762)
ON Semiconductor ONNN (525) 1,243 195
Petco Animal PETC (11) 555 113
Primus Telecomm PRTL (168) 724 65
Per-Se Tech Inc. PSTI (39) 209 32
Qwest Communications Q (1,094) 31,228 (1,167)
Rite Aid Corp RAD (93) 6,133 1,676
Ribapharm Inc RNA (363) 199 92
Sepracor Inc SEPR (392) 727 413
Sigmatel Inc. SGTL (4) 18 (1)
St. John Knits Int'l SJKI (76) 236 86
Solutia Inc. SOI (249) 3,342 (231)
I-Stat Corporation STAT 0 64 33
Syntroleum Corp. SYNM (1) 47 14
Town and Country Trust TCT (2) 504 N.A.
Tenneco Automotive TEN (75) 2,504 (50)
TiVo Inc. TIVO (25) 82 1
Triton PCS Holdings TPC (60) 1,618 173
UnitedGlobalCom UCOMA (3,040) 5,931 (6,287)
United Defense I UDI (30) 1,454 (27)
Ultimate Software ULTI (7) 31 (10)
UST Inc. UST (47) 2,765 829
Valassis Comm. VCI (33) 386 80
Valence Tech VLNC (17) 36 4
Ventas Inc. VTR (54) 895 N.A.
Warnaco Group WRNC (1,856) 948 471
Western Wireless WWCA (464) 2,399 (120)
Xoma Ltd. XOMA (11) 72 30
*********
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.
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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., Fairless Hills, Pennsylvania,
USA, and Beard Group, Inc., Frederick, Maryland 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
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*** End of Transmission ***