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/raid1/www/Hosts/bankrupt/TCR_Public/031022.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, October 22, 2003, Vol. 7, No. 209 Headlines ADVANCED GLASSFIBER: All Voting Ballots Due by October 30, 2003 ALDERWOODS GROUP: Completes Sale of United Kingdom Assets ALESTRA: Extends Exchange & Cash Tender Offers & Solicitation AMKOR TECHNOLOGY: Amends Certain Covenants Under Credit Facility ANC RENTAL: Court Extends Lease Decision Period Until January 6 ARCH COAL: Reports Improved Third-Quarter 2003 Financial Results ATLANTIC COAST: Names Lillian A. Dukes Vice-Pres. of Maintenance BIRMINGHAM STEEL: Delaware Court Closes Chapter 11 Cases BRIDGE INFO.: Court Clears Stipulation Settling Barclay's Claims BUCKEYE TECH.: Reports $2.4MM After-Tax Loss for Sept. Quarter BUDGET GROUP: Court Fixes November 10, 2003 as BRACII Bar Date CABLE SATISFACTION: Will File Amended CCAA Plan of Arrangement COGENTRIX ENERGY: S&P Begins Watch After Sale Announcement CONSOL ENERGY: Reports Improved Coal & Gas Production for Sept. COVANTA ENERGY: Files First Amended Joint Plan of Reorganization DEDE CONSTRUCTION: Case Summary & 20 Largest Unsecured Creditors DELPHI CORP: S&P Rates Unit's $100MM Preferreds Offering at BB DESA HOLDING: Wants Plan-Filing Exclusivity Stretched to Dec. 27 DI GIORGIO CORP: S&P Revises Low-B Ratings Outlook to Negative EL PASO CORP: Will Publish Third-Quarter Results on November 10 ELAN CORP: Will Webcast Third Quarter Results on November 12 ELDERTRUST: Board Approves Payment of $0.16 Per Share Dividend ENRON CORP: Takes Actions to Challenge Various Employee Claims ENRON CORP: Oswego Cogen's Voluntary Chapter 11 Case Summary EXTREME NETWORKS: Look for First Quarter 2004 Results on Friday FAO INC: Denies Negative New York Post Report re Cash Position FLEETWOOD ENTERPRISES: Completes $25MM Offering of 2.7M Shares FLEMING COS.: Wants Clearance to Reduce Fixed Component Reserve FORKLIFT LP: Court Sets Plan Confirmation Hearing for Today FRONTLINE CAPITAL: Keeps Plan-Filing Exclusivity Until Nov. 28 GLOBAL CROSSING: Obtains Stay Relief to Advance Defense Costs GOLF TRUST: Secures Updated Innisbrook Resort Cash Flow Forecast GREAT AMERICAN FIN'L: Proposes $100MM Debt Securities Offering HARRAH'S ENTERTAINMENT: Don Marradino to Head North Nevada Ops. HASBRO INC: Third-Quarter 2003 Results Reflect Strong Growth HAUSER INC: Auctioning-Off Policosanol Assets Today HAYES LEMMERZ: Senior Lenders Agree to Cut Interest Rate by 1% HEXCEL CORP: Sept. 30 Net Capital Deficit Widens to $95 Million INFOUSA: Appoints Ray Butkus President, Large Business Group INTEGRATED HEALTH: THCI Pressing for $41MM Admin. Claim Payment INTERNACIONAL DE CERAMICA: Violates Covenant Under US Loan Pact KAISER ALUMINUM: Retirees' Panel Hires Orrick as Bankr. Counsel LEAP WIRELESS: Claim Validity Objection Deadline Moved to Nov 30 LNR PROPERTY: Fitch Assigns BB- Rating to $300M Senior Sub Notes LORAL SPACE: Intelsat Pitches Winning Bid for N. American Assets LORAL SPACE: Accepts Intelsat Bid for Sale of N. American Assets LTV: Creation of Distribution Trust and Appointment of Trustee M.D.C. HOLDINGS: Board Declares Third-Quarter Cash Dividend MERITAGE CORP: Third Quarter Results Show Year-Over-Year Growth METALS USA: Terry Freeman Acquires 1,845 Metals USA Shares MIRANT: Wrightsville Debtors Want More Time to File Schedules NATIONAL BENEVOLENT: Fitch Keeps B- Rating on Fixed-Rate Debts NOVA CHEMICALS: Will Shut Down High-Cost Polyethylene Prod. Line NRG ENERGY: Secures Go-Signal to Assume Five McClain Agreements OMEGA HEALTHCARE: Hosting Third-Quarter Conference Call Friday PAC-WEST TELECOMM: Enters into Deutsche Bank $40M Financing Pact PACIFIC GAS: Wins Nod to Amend L/C-Backed PC Bonds Term Sheet PILLOWTEX CORP: Provides Statement of Financial Affairs QWEST COMMS: Inks New $1-Million Agreement with PromoVantage R & S TRUCK: Seeking to Voluntarily Dismiss Kylan and CPS Cases RANOR: Wants to Voluntarily Dismiss Chapter 11 Bankruptcy Case RENT-WAY INC: Fourth-Quarter Operating Results Show Improvement RESMED INC: Will Publish First-Quarter Results on October 28 ROBOTIC VISION: Fails to Comply with Nasdaq Listing Requirements SEA CONTAINERS: Declares Cash Dividends on Class A and B Shares SILICON GRAPHICS: Sept. 26 Net Capital Deficit Widens to $211MM SK GLOBAL: Units Fined $25 Million for Unfair Trading Practices SMITHFIELD FOODS: Extends Exchange Offer for $350MM Senior Notes SMTC CORP: Schedules 3rd-Quarter Teleconference for November 10 STARBAND COMMS: Plan-Filing Exclusivity Intact through Oct. 27 TCW LEVERAGED: Fitch Affirms Low-B Ratings on Class D & E Notes THAXTON GROUP: CEO Says Bankruptcy Filing a Temporary Setback THAXTON GROUP: Seeks Court OK to Pay Critical Vendors' Claims TRITEAL: Mails Notice of Intended Distribution to Shareholders TURNSTONE SYSTEMS: Reports $1.4 Million in Net Loss for Q3 2003 UNITED AIRLINES: Enters into Morgan Stanley Jet Fuel Supply Pact UNITEDGLOBALCOM: UGC Europe Shareholders Urged to Nix Offer USG CORP: L&W Wants to Purchase Secret Building Supply Business WEIRTON STEEL: Provides Overview of Emergence Business Plan WESTPOINT STEVENS: Asks Court to Fix Key Employee Retention Plan WINN-DIXIE STORES: Board Declares $0.05 Per Share Cash Dividend WINSTAR COMMS: Court Orders Ch. 7 Trustee to Pay General Motors WORLDCOM INC: Reaches Pact to Settle 21st Century Claims Dispute WORLDSPAN: Ninan Chacko Appointed as SVP for Product Planning * Conner & Associates Gains Strength via CPAConnect Membership * Deloitte Admits 24 Partners, Principals & Directors in Chicago * Eight Specialists Join Fasken Martineau's Quebec City Office * Jefferies Hires Gilbertson as Equity Research Assoc. Director * Meetings, Conferences and Seminars ********* ADVANCED GLASSFIBER: All Voting Ballots Due by October 30, 2003 --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has previously ruled on the adequacy of the Disclosure Statement prepared by Advanced Glassfiber Yarns LLC and AGY Capital Corp. to explain their First Amended Joint Plan of Reorganization. The Plan is now in creditors' hands and the Debtors are soliciting creditors' votes to accept that plan. All creditors' ballots are due on Oct. 30, and must be delivered to the Debtors' Balloting Agent, Trumbull Services, LLC. For all Classes except Class 5, ballots must be sent to: Advanced Glassfiber Yarns, et al. c/o Trumbull Services LLC 4 Griffin Road North, P.O. Box 721 Windsor, CT 06095-0721 Tel: 860-687-7598 Attn: Mr. William R. Gruber Class 5 ballots must be returned to: Advanced Glassfiber Yarns, et al. c/o Innisfree M&A Incorporated 501 Madison Avenue 20th Floor New York, NY 10022 Tel: 877-750-2689 Attn: Advanced Glassfiber Yarns Tabulations A hearing to consider confirmation of the Debtors' Plan is scheduled for November 17, 2003, at 1:30 p.m., before the Honorable Judith K. Fitzgerald. Advanced Glassfiber Yarns, LLC and its debtor-affiliate, AGY Capital Corp., are affiliates of Owens Corning. They are one of the largest manufacturers and global suppliers of glass yarns. The Company field for chapter 11 protection on December 10, 2002, (Bankr. Del. Case No. 02-13615). Alan B. Hyman, Esq., and Scott K. Rutsky, Esq., at Proskauer Rose LLP, represent the Debtors in their restructuring efforts. When the Company filed for chapter 11 protection, it listed $194.1 million in total assets and $409 million in total debts. ALDERWOODS GROUP: Completes Sale of United Kingdom Assets --------------------------------------------------------- Alderwoods Group, Inc. (NASDAQ:AWGI) announced that the sale of its assets in the United Kingdom has been completed. A U.K. management led consortium under the leadership of Mr. Jan Hubrecht, the current Chairman of Alderwoods' U.K. operations, has purchased all 39 funeral homes. This will now divest Alderwoods Group of all of its holdings outside of North America. The Company received proceeds of approximately $18 million USD, and will record a gain on the sale of approximately $2 million USD in the fourth quarter. Paul Houston, President and Chief Executive Officer said, "At the end of the second quarter, our U.K. assets were designated as held for sale as they were not strategic to the Company's long-term objective to focus its capital and management resources in North America. "We are very pleased with the progress that has been made over the last three years in the development of our U.K. business under the leadership of Jan Hubrecht and his management team. As a result, we are happy that they expressed an interest in purchasing the U.K. assets, and that we have been able to conclude a transaction with them and their financial partners. "I would like to take this opportunity to thank all of the employees in the United Kingdom for their support of the Company and their dedication to their communities and the families they serve." Launched on January 2, 2002, the Company is the second largest operator of funeral homes and cemeteries in North America. As of June 14, 2003, the Company operated 792 funeral homes, 167 cemeteries and 61 combination funeral home and cemetery locations in the United States, Canada and the United Kingdom. Of the Company's total locations, 143 funeral homes, 89 cemeteries and five combination funeral home and cemetery locations are either held for sale as at June 14, 2003, or identified for sale subsequently. The Company provides funeral and cemetery services and products on both an at-need and pre-need basis. In support of the pre-need business, it operates insurance subsidiaries that provide customers with a funding mechanism for the pre-arrangement of funerals. ALESTRA: Extends Exchange & Cash Tender Offers & Solicitation ------------------------------------------------------------- Alestra, S. de R.L. de C.V., extends its pending cash tender offers, exchange offers and consent solicitation for all of its outstanding principal amount of its 12-1/8% Senior Notes due 2006 and 12-5/8% Senior Notes due 2009 and its solicitation of acceptances to a U.S. prepackaged plan of reorganization. Alestra is extending the expiration date for the offers and the solicitation of acceptances to the U.S. prepackaged bankruptcy to 11:59 p.m. on November 3, 2003, eleven business days from, and including, the date of this press release, unless further extended by Alestra. Through and including November 3, 2003, the Company is granting withdrawal rights to holders of our existing senior notes who previously tendered their existing senior notes in the offers and to those holders of our existing senior notes who on or subsequent to the date of this press release tender their existing senior notes in the offers. Holders of our existing senior notes already have the right to withdraw or modify their ballot for the U.S. prepackaged plan at any point prior to the commencement of the U.S. bankruptcy case. As of the date of this press release, approximately $238 million principal amount of our outstanding 12-1/8% Senior Notes due 2006 have been tendered in the offers and approximately $253 million principal amount of our outstanding 12-5/8% Senior Notes due 2009 have been tendered in the offers. These amounts represent approximately 86% of the existing senior notes. In the near future, Alestra expects to distribute a prospectus supplement to its prospectus dated August 21, 2003, as supplemented, that provides, among other things, additional disclosure and an update regarding a legal action brought against it, its equity holders and the indenture trustee on September 22, 2003 in the United States District Court for the Southern District of New York by W.R.H. Global Securities Pooled Trust. The complaint sought damages and to enjoin Alestra from consummating its exchange offers and consent solicitations. On October 15, 16 and 17, 2003, a hearing was held before the United States District Court for the Southern District of New York (Wood, J.) on Huff's motion for an order preliminarily enjoining the offers. During that hearing Alestra agreed to make certain additional disclosures, which will be set forth in the prospectus supplement referred to above, and are acceptable to Huff on the points addressed. Because of this, the court denied the motion as moot, and the remaining relief sought by Huff was denied, including Huff's request for an injunction pending appeal. You may obtain copies of Alestra's prospectus, prospectus supplements and transmittal documents for the offers and the solicitations from the Information Agent: D.F. King & Co., Inc., 48 Wall Street, New York, New York, 10005. Banks and brokers call collect: (212) 269-5550. All others call toll free: (800) 549- 6697. Alestra is a leading provider of competitive telecommunications services in Mexico that it markets under the AT&T brand name and carries on its own network. Alestra offers domestic and international long distance services, data and internet services and local services. Any questions regarding the cash tender offers, exchange offers, the consent solicitations and the solicitation of acceptances to a U.S. prepackaged plan of reorganization may be addressed to Morgan Stanley as dealer manager for this transaction at the following number: Simon Morgan 1-212-761-2219 Heather Hammond 1-212-761-1893 AMKOR TECHNOLOGY: Amends Certain Covenants Under Credit Facility ---------------------------------------------------------------- Amkor Technology, Inc. (Nasdaq: AMKR) has amended certain covenants under its $200 million senior secured credit facility consisting of a $170 million term loan maturing January 31, 2006 and a $30 million revolving line of credit that is available through October 31, 2005. Key modifications are summarized below: * Maximum annual capital expenditures have been increased to the greater of (i) $250 million or (ii) 50% of EBITDA (as defined), not to exceed $350 million. * The Company is permitted to repurchase or redeem any Senior Notes, Senior Subordinated Notes or Convertible Notes with the net cash proceeds of equity offerings. * The basket for permitted investments has been increased from $25 million to $50 million. There has been no change to the minimum EBITDA and minimum daily liquidity covenants. "This amendment provides Amkor with added flexibility to make investments in leading-edge assembly and test equipment to support growing customer demand for advanced package and test solutions," said Ken Joyce, Amkor's Chief Financial Officer. Amkor Technology, Inc. (S&P, B Corporate Credit and Senior Debt Ratings, Stable) is the world's largest provider of contract semiconductor assembly and test services. The company offers semiconductor companies and electronics OEMs a complete set of microelectronic design and manufacturing services. More information on Amkor is available from the company's SEC filings and on Amkor's Web site: http://www.amkor.com ANC RENTAL: Court Extends Lease Decision Period Until January 6 --------------------------------------------------------------- ANC Rental Corporation and its debtor affiliates obtained an extension of time within which they must determine whether to assume, assume and assign, or reject their Unexpired Leases until January 6, 2004. (ANC Rental Bankruptcy News, Issue No. 40; Bankruptcy Creditors' Service, Inc., 609/392-0900) ARCH COAL: Reports Improved Third-Quarter 2003 Financial Results ---------------------------------------------------------------- Arch Coal, Inc. (NYSE: ACI) reported that for its third quarter ended September 30, 2003, the company had income available to common shareholders of $9.3 million, or $.18 per share. Included in these results was a net gain of $8.4 million, or $.16 per share, related to mark-to-market adjustments and charges stemming from the recent termination of hedge accounting for certain interest rate swap agreements. In the third quarter of 2002, Arch had income of $1.6 million, or $.03 per share. "During the quarter, Arch's mining operations managed costs well despite reduced sales volumes stemming from a relatively mild summer, normally scheduled mine vacation shutdowns and three longwall moves," said Steven F. Leer, Arch Coal's president and chief executive officer. "Meanwhile, U.S. coal markets began a long-awaited rally, with coal prices moving up markedly and contract activity heating up as well." For the nine months ended September 30, 2003, Arch Coal had a loss available to common shareholders of $10.2 million, or $.19 per share, excluding severance costs of $2.6 million, a $3.7 million non-cash charge related to the cumulative effect of an accounting change resulting from the adoption of FAS 143, charges of $6.9 million related to the early extinguishment of debt and termination of hedge accounting, and an $11.3 million gain related to mark-to-market adjustments. That compares to a loss of $3.6 million, or $.07 per share, during the same period of 2002. Total revenues for the nine months were $1,122.9 million and coal sales totaled 73.6 million tons, vs. $1,143.7 million and 78.3 million tons in the comparable period of 2002. Adjusted EBITDA totaled $144.4 million for the first nine months of 2003, compared to $171.1 million in the same period of 2002. Cost Control Efforts During the quarter, Arch's eastern operations recorded all-in costs of approximately $31.40 per ton, maintaining the improvements achieved in the second quarter despite an 11% decline in sales volumes. Arch's western operations effectively held the line on costs as well, after a more than 4% reduction in costs in the second quarter. "We continue to make good progress in our efforts to manage costs at all of our operations," Leer said. "Arch's mining operations already rank No. 1 in productivity among major producers in both the Powder River Basin and Central Appalachia for the most recent four quarters for which data is available. However, we expect to enhance our competitive position still further through additional cost reductions in coming quarters." Arch continues to pursue a very deliberate approach to cost-reduction efforts across the corporation. U.S. Coal Markets U.S. coal prices moved up strongly during the quarter, spurred by increased coal consumption at U.S. power plants, declining utility stockpile levels, and the continuing rationalization in eastern coal supply. "We continue to see many positive signs that point to a sustained rebound in U.S. coal markets," Leer said. "During the first half of 2003, coal consumption at U.S. power plants increased 3.7%, as utilities sought to maximize output from coal-fired units in the face of sharply higher natural gas prices and reduced nuclear availability." As a result of this increased consumption, Arch projects that coal stockpiles at U.S. power plants declined to approximately 120 million tons at the end of September, nearly 15% lower than at the same time last year. While the long-term outlook for increased U.S. coal production is positive, output from eastern coalfields has declined, as producers struggle with degraded reserve bases, high costs and a host of other pressures. Last year, U.S. coal production declined by an estimated 3.0%, driven principally by reduced eastern output. In 2003, that trend has continued, with total U.S. coal production down an estimated 2.2% year to date. "During the past 18 months, many traditional eastern coal producers have closed mines, filed for bankruptcy protection or even exited the business," Leer said. "We believe that this rationalization process will continue, which should translate into a stronger pricing environment for our productive and cost- competitive eastern operations." Market Activity While Arch has signed commitments for a small percentage of its uncommitted 2004 and 2005 tonnage in recent weeks, the company should benefit substantially from further movements in the market. At present, approximately 25% of Arch's expected 2004 production and 45% of its 2005 production is open to market-based pricing. "We are currently in the midst of negotiations with several large coal- burning utilities concerning tonnage for delivery in 2004 and beyond," Leer said. "However, we feel no sense of urgency about committing the remainder of our tonnage, and we would be very comfortable entering 2004 with a significant open position." With eastern low-sulfur coal production struggling, the market is likely to need every available ton of coal in 2004, according to Leer. "After an extended utility stockpile correction, we believe supply and demand are close to equilibrium," Leer said. Safety and Environmental Stewardship During the quarter, several Arch Coal subsidiaries received honors for safety and reclamation excellence. Coal-Mac's Phoenix mine was named one of the five safest surface coal mines in 2002 by the Mine Safety and Health Administration for working more than 300,000 employee-hours without a lost time injury. (In 2002, Thunder Basin's Black Thunder mine won the award as the nation's safest surface mine the previous year.) In addition, two Arch Coal subsidiaries -- Catenary Coal and Coal-Mac - received national honors for environmental stewardship and community outreach by the National Association of State Land Reclamationists. "We regard safety and environmental stewardship as cornerstones of our future success, and we take great pride in the accomplishments of our operating subsidiaries in these crucial areas of performance," Leer said. Looking Ahead "With the economy showing signs of renewed vigor, the prospects for increased demand for low-cost electricity from coal appear bright," Leer said. "We believe Arch Coal is well positioned to capitalize on this improving market environment." Arch currently expects earnings of between $.05 and $.15 per share in the fourth quarter of 2003, excluding charges related to the termination of hedge accounting and future mark-to-market adjustments. The pending Triton acquisition should further strengthen Arch's competitive position, Leer said. "We look forward to integrating the Triton assets into our existing operations," he added. "We are confident that this acquisition will enable us to take a dramatic step forward in our ability to serve our customers and capture new cost-saving opportunities." The Triton acquisition is in the midst of the regulatory review process. Arch Coal (S&P, BB+ Corporate Credit Ratying, Negative) is the nation's second largest coal producer, with subsidiary operations in West Virginia, Kentucky, Virginia, Wyoming, Colorado and Utah. Through these operations, Arch Coal provides the fuel for approximately 6% of the electricity generated in the United States. ATLANTIC COAST: Names Lillian A. Dukes Vice-Pres. of Maintenance ---------------------------------------------------------------- Atlantic Coast Airlines (Nasdaq: ACAI) has appointed Lillian A. Dukes to the position of Vice President of Maintenance. She will be responsible for all elements of hangar and line maintenance for the company's entire operation. Ms. Dukes comes to ACA after more than two decades in the airline industry. She was most recently employed by Midwest Airlines as Director of Aircraft Technical Support, a position she held for the past two years. Prior to that she was with American Airlines for a total of 11 years in various engineering management positions. Ms. Dukes began her career as an engineer with General Electric Aerospace. She earned a masters degree in electrical engineering at Villanova University. In making the announcement ACA Senior Vice President of Maintenance and Operations Bill Brown said, "We are proud to welcome Lillian to our team. She is a true professional in every sense, and has earned a reputation as a skillful leader who can motivate and influence people in a very positive way." He added, "As we continue to align our company toward the goal of offering even greater service to customers, we believe she is a perfect fit." On July 28, 2003, ACA announced it anticipates that its longstanding relationship with United Airlines will end, and that it will establish a new, independent low-fare airline to be based at Washington Dulles International Airport. ACA currently operates as United Express and Delta Connection in the Eastern and Midwestern United States as well as Canada. The company has a fleet of 146 aircraft -- including a total of 118 regional jets -- and offers over 840 daily departures, serving 84 destinations. Atlantic Coast Airlines (S&P, B- Corporate Credit Rating, Developing) employs over 4,800 aviation professionals. The common stock of parent company Atlantic Coast Airlines Holdings, Inc. is traded on the Nasdaq National Market under the symbol ACAI. For more information about ACA, visit the Web site at http://www.atlanticcoast.com BIRMINGHAM STEEL: Delaware Court Closes Chapter 11 Cases -------------------------------------------------------- The Honorable Judge Lloyd King inked the final decree order closing Birmingham Steel Corporation and its debtor-affiliates' chapter 11 cases. Judge King finds that the estate has been fully administered as required by Bankruptcy Code Section 350(a) and Bankruptcy Rule 3022, making no further administration necessary. Along with the closing of these cases, the services of Bankruptcy Services LLC are terminated as claims and docket agents of the Court. BSI is ordered to file its summary report and forward all proofs of claim and any related documents to the Clerk of the Bankruptcy Court for the District of Delaware. Birmingham Steel Corporation manufactures and distributes steel for construction industry and merchant steel products for fabricators and distributors across North America. The Company filed for chapter 11 protection on June 3, 2002. James L. Patton, Esq., Michael R. Nestor, Esq., Sharon M Zieg, Esq., at Young Conaway Stargatt & Taylor, LLP and John Whittington, Esq., Patrick Darby, Esq., Lloyd C. Peeples III, Esq., at Bradley Arant Rose & White LLP represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $487,485,834 in assets and $681,860,489 in total debts. BRIDGE INFO.: Court Clears Stipulation Settling Barclay's Claims ---------------------------------------------------------------- Barclays Wall Street Corporation filed Proof of Claim No. 1022 for $3,149,329 to which Bridge Information's Plan Administrator objected. After arm's-length negotiations, Barclays and the Plan Administrator agreed that: (a) as settlement amount, Barclays will have an allowed, unsecured, prepetition, non-priority claim for $114,135; and (b) Barclay will withdraw any and all additional claims against the Debtors. The Court approved the parties' stipulation. (Bridge Bankruptcy News, Issue No. 51; Bankruptcy Creditors' Service, Inc., 609/392- 0900) BUCKEYE TECH.: Reports $2.4MM After-Tax Loss for Sept. Quarter -------------------------------------------------------------- Buckeye Technologies Inc. (NYSE:BKI) incurred a loss of $2.4 million after-tax (seven cents per share) in the quarter ended September 30, 2003. The loss was due to a $2.1 million after-tax expense (six cents per share) for the early extinguishment of debt related to the refinancing of $150 million of 8.5% senior subordinated notes due 2005 and previously announced restructuring charges of $0.6 million after-tax (two cents per share). Excluding the expenses related to the early extinguishment of debt and restructuring noted above, the Company earned a profit of one cent per share ($0.3 million after-tax) in the quarter ended September 30, 2003. This compares to a loss of one cent per share ($0.5 million after-tax) in the same period a year ago. Net sales for the July-September quarter were $155.8 million, slightly below the $156.4 million in the same quarter of the prior year. Buckeye Chairman David B. Ferraro commented, "Sales during the just completed quarter, which is always our seasonally slowest quarter, were restrained by our need to maintain adequate inventories during our major Foley plant maintenance shutdown which was conducted during the first eight days of October. The shutdown was completed in an exemplary fashion with all major projects being accomplished as planned and, importantly, with no serious injuries or safety incidents. The Foley plant is now back to operating at its full productive capacity." Mr. Ferraro further stated, "The major accomplishment of the July- September quarter was our successful placement of $200 million of senior notes which have a maturity date of October 2013 and a coupon of 8.5%. This debt placement, combined with the refinancing of our bank credit facility, which is currently in progress, ensures that the Company will have sufficient liquidity and financial flexibility for the next five years." Buckeye (S&P, BB- Corporate Credit Rating, Stable Outlook), a leading manufacturer and marketer of specialty cellulose and absorbent products, is headquartered in Memphis, Tennessee, USA. The Company currently operates facilities in the United States, Germany, Canada, Ireland and Brazil. Its products are sold worldwide to makers of consumer and industrial goods. BUDGET GROUP: Court Fixes November 10, 2003 as BRACII Bar Date -------------------------------------------------------------- At the Budget Group Debtors' request, the Court established November 10, 2003 at 4:00 p.m. EST as the last day and time to file requests for the allowance of certain administrative expense claims against BRAC Rent-A-Car International Inc. The Court's original order establishing April 30, 2003 as the deadline for filing proofs of claim specifically excluded administrative expense claims pursuant to Section 503(6) of the Bankruptcy Code. Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, explains that the circumstances of the Debtors' cases justify establishing the BRACII Administrative Expense Bar Date. The Debtors, the Official Committee of Unsecured Creditors and the U.K. Administrator have structured an agreement in principle regarding the proper allocation of the sale proceeds of the Debtors' assets in North America, Europe, Middle East and Africa among the non-BRACII Debtors and BRACII. The Allocation Agreement is a necessary predicate for the filing of a reorganization plan by the Debtors. The Allocation Agreement is contingent on the amount of administrative expenses attributable to BRACII, excluding professional fees, not exceeding $2,900,000. According to Mr. Brady, the BRACII Administrative Expense Bar Date will enable the Debtors to obtain complete and accurate information regarding the nature, validity and scope of all BRACII Administrative Expense Claims, thus providing the Debtors, the Committee and the U.K. Administrator with the information to satisfy a key condition of the Allocation Agreement. The BRACII Administrative Expense Bar Date will apply to all claims against BRACII entitled to priority under Sections 503(b) and 507(a) of the Bankruptcy Code, except for: (1) claims for compensation or reimbursement of costs and expenses by a professional retained by the Debtors, the Committee, or the U.K. Administrator; and (2) administrative expense claims against other Debtors. Pursuant to Rule 3003(c)(3) of the Federal Rules of Bankruptcy Procedure, any creditor that is required to file a BRACII Administrative Expense Request for the allowance of a BRACII Administrative Expense Claim and that fails to do so by the BRACII Administrative Expense Bar Date will be forever barred, estopped and enjoined from asserting the claim against BRACII. That creditor will not be entitled to receive any distribution of property from the Debtors. The Debtors will provide a notice of the BRACII Administrative Expense Bar Date by mailing notices by United States mail, first class, postage prepaid to: (1) the Office of the United States Trustee; (2) the Creditors Committee's counsel; (3) the U.K. Administrator's counsel; (4) all known holders of potential administrative expense claims against BRACII and their counsel; (5) all persons and entities with whom BRACII has conducted business since the Petition Date; and (6) all persons and entities who have requested notice pursuant to Rule 2002 of the Federal Rules of Bankruptcy Procedure. In light of the size, complexity, geographic diversity and extensive history of the Debtors' businesses, potential holders of BRACII Administrative Expense Claims may exist that the Debtors are unable to identify. To remedy this, the Debtors will publish notices of the BRACII Administrative Expense Bar Date in the national and global editions of The Wall Street Journal and in the national editions of The New York Times and USA Today. The BRACII Administrative Expense Bar Date Notice will: (1) set forth the BRACII Administrative Expense Bar Date; (2) advise creditors under what circumstances they may file a BRACII Administrative Expenses Request for the allowance of a BRACII Administrative Expense Claim under Sections 503(b) and 507(a) of the Bankruptcy Code, Rules 3002(a) and 3003(c)(2) of the Federal Rules of Bankruptcy Procedure or a Court order, as applicable; (3) alert creditors to the consequences of failing to timely file a BRACII Administrative Expense Request for the allowance of a BRACII Administrative Expense Claim, as set forth in Bankruptcy Rule 3003(c)(2) or a Court order, as applicable; (4) set forth the addresses of Trumbull Services, LLC; and (5) notify creditors that: (a) BRACII Administrative Expense Requests must be filed with the original signatures; and (b) facsimile or e-mail BRACII Administrative Expense Requests are not acceptable and are not valid for any purpose. (Budget Group Bankruptcy News, Issue No. 27; Bankruptcy Creditors' Service, Inc., 609/392-0900) CABLE SATISFACTION: Will File Amended CCAA Plan of Arrangement -------------------------------------------------------------- Cable Satisfaction International Inc. (TSX: CSQ.A), will file in Quebec Superior Court an amended plan of arrangement and reorganization under the Companies' Creditors Arrangement Act. The amended plan will be similar in all material respects to the agreement with Catalyst Fund Limited Partnership I announced by the Company on October 14, 2003. The amended plan in its final form and related materials are expected to be mailed to creditors on or before December 15, 2003, in anticipation of a creditors' meeting on or before January 16, 2004. There can be no assurance that the amended plan of arrangement and reorganization will be completed successfully or on the terms announced. Csii builds and operates large bandwidth (750 Mhz) hybrid fibre coaxial networks and, through its subsidiary Cabovisao - Televisao por Cabo, S.A. provides cable television services, high-speed Internet access, telephony and high-speed data transmission services to homes and businesses in Portugal through a single network connection. The subordinate voting shares of Csii are listed on the Toronto Stock Exchange (TSX) under the trading symbol "CSQ.A". COGENTRIX ENERGY: S&P Begins Watch After Sale Announcement ---------------------------------------------------------- Standard & Poor's Ratings Services said that its 'BB' corporate credit and senior unsecured debt ratings on independent power producer Cogentrix Energy Inc., remain on CreditWatch with negative implications following the announcement that The Goldman Sachs Group Inc., reached an agreement to acquire 100% of the stock of Cogentrix for $115 million in equity and $2.3 billion in nonrecourse debt. Charlotte, N.C.-based Cogentrix has about $502 million of debt outstanding. Through its direct and indirect subsidiaries, Cogentrix develops, owns, and operates 26 electric generating plants. "The CreditWatch listing is based on uncertainty about the company's resulting credit profile after the transaction is completed and its weak credit measures," said Standard & Poor's credit analyst Tobias Hsieh. "The resolution of the CreditWatch listing will be determined after meeting with management and determining the likely financial profile and operating strategy over the foreseeable future," added Mr. Hsieh. Standard & Poor's said that the downturn in the power markets and credit deterioration of Cogentrix's offtakers have significantly weakened the company's credit profile over the past year. Furthermore, adverse developments for a number of its projects have led to a material reduction in cash flows to Cogentrix. Cash flow to parent interest coverage fell to below 2.5x in the 12 months ended June 30, 2003 from above 3.0x in previous years. CONSOL ENERGY: Reports Improved Coal & Gas Production for Sept. --------------------------------------------------------------- CONSOL Energy Inc. (NYSE: CNX) reports the following production results for the month of September 2003: COAL September 2003 September 2002 (Millions of Tons) Continuing Long-Term Depleted/ Operations Idle Sold Northern Appalachia 4.1 3.3 0.0 0.5 Central Appalachia 1.2 1.1 0.0 0.0 Midwest/West 0.1 0.1 0.0 0.2 Sub-Total 5.3 4.5 0.0 0.7 Total 5.3 5.2 *Totals may not add due to rounding. September 2003 September 2002 GAS (Billion cubic feet) 4.2 4.0 ELECTRICITY Megawatt Hours 0 2,643 Note: All production figures include production from equity affiliates. Gas production represents gross sales volumes. Coal production from ongoing operations improved period-to-period because of improvements at mines in Northern Appalachia, primarily Robinson Run, Bailey, Enlow Fork and Mine 84. Total coal production improved slightly in the period-to-period comparison because some mines that produced coal in September 2002 were subject to depletion or sales later in 2002 or 2003. The aggregate impact on coal production from these events was approximately 0.7 million tons. For the quarter, total coal production improved 4.7 percent in the period-to-period comparison and production from ongoing operations improved 19.7 percent. Total production for the quarter of 14.4 million tons fell below the company's earlier forecast of 15 million to 16 million tons of coal production for the third quarter of 2003. The earlier production forecast was based on an aggressive work schedule that limited the number of additional days of work that could be scheduled to make up for ordinary disruptions in production. The company expects the situation to be alleviated in 2004 as additional production capacity, primarily at Loveridge and McElroy mines, is added to the system. Gas production improved period-to-period because of additional producing wells were drilled. Gas production for the quarter improved 10.0 percent in the period-to-period comparison. Electricity production declined period-to-period because of lower demand for peak power. The company will take an additional charge to expense of approximately $0.16 per diluted share (pre-tax) for unanticipated expenditures to correct the ventilation system at the Loveridge Mine as a result of a fire at the mine that occurred in February 2003. The cost of extinguishing the fire originally was estimated to be $0.10 per diluted share (pre-tax), net of expected insurance recovery. Consequently, third quarter 2003 is expected to be a loss of $0.07 per diluted share compared with a loss of $0.09 per diluted share in the third quarter of 2002, and compared with the company's earlier forecast for the quarter just ended of $0.01 to $0.06 per diluted share. The company will report earnings on October 28, 2003. Northern Appalachia includes production from the following mines: Bailey, Blacksville #2, Enlow Fork, Mahoning Valley, McElroy, Mine 84, Robinson Run, and Shoemaker. Central Appalachia includes production from the following mines: Amonate, Buchanan, Jones Fork, Mill Creek, and VP #8. Midwest/West includes production from the Emery Mine in Utah and CONSOL Energy's portion of the Glennies Creek Mine in Australia. The Rend Lake Mine was idled in July 2002. Some equipment has been removed, and the mine remains on idle status. On February 28, 2003, the Cardinal River and Line Creek mines in Canada, which were included in June 2002 production, were sold. CONSOL Energy Inc. (S&P, BB+/B Corporate Credit Rating, Stable) is the largest producer of high-Btu bituminous coal in the United States, and the largest exporter of U.S. coal. CONSOL Energy has 20 bituminous coal mining complexes in seven states and in Australia. In addition, the company is one of the largest U.S. producers of coalbed methane, with daily gas production of approximately 135 million cubic feet. The company also produces electricity from coalbed methane at a joint-venture generating facility in Virginia. CONSOL Energy has annual revenues of $2.2 billion. It received a U.S. Environmental Protection Agency 2002 Climate Protection Award, and received the U.S. Department of the Interior's Office of Surface Mining 2002 National Award for Excellence in Surface Mining for the company's innovative reclamation practices in southern Illinois. Additional information about the company can be found at its Web site: http://www.consolenergy.com COVANTA ENERGY: Files First Amended Joint Plan of Reorganization ---------------------------------------------------------------- Covanta Energy Corporation and 81 of its debtor affiliates and the Official Committee of Unsecured Creditors delivered to the Court their First Amended Joint Plan of Reorganization on September 28, 2003. A full-text copy of Covanta's First Amended Reorganization Plan is available for free at: http://bankrupt.com/misc/covanta_1st_amended_plan_of_reorg.pdf A full-text copy of Covanta's First Amended Disclosure Statement is available for free at: http://bankrupt.com/misc/covanta_1st_amended_disclosure_statement.pdf Deborah M. Buell, Esq., at Clearly, Gottlieb, Steen & Hamilton, in New York, relates that Covanta's First Amended Plan of Reorganization includes these modifications: A. Confirmation of Heber Reorganization Plan The implementation of the Reorganization Plan is predicated upon: (a) the Court approval of the Geothermal Sale; and (b) closing of the Geothermal Sale either pursuant to confirmation of the Heber Reorganization Plan or a sale under Section 363 of the Bankruptcy Code. B. Authorization of Reorganization Plan Equity Securities and Warrants and Reorganization Plan Notes On the Effective Date, Reorganized Covanta is authorized to and will issue the Reorganized Covanta Common Stock, the Reorganization Plan Warrants and the Reorganization Plan Notes and Reorganized CPIH is authorized to and will issue the Reorganized CPIH Preferred Stock and the New CPIH Funded Debt as provided under the Reorganization Plan without the need for any further corporate action. C. Formation of the Employee Stock Ownership Plan The ESOP will be subject to dilution in accordance with the terms of the Reorganization Plan Warrants and the Covanta Management Incentive Plan. D. Cancellation of Existing Securities and Agreements The indentures and all other documents or agreements with respect to Class 2 Claims will not be cancelled. E. Board of Directors and Executive Officers (a) The identity of each of the nominees to serve on the Board of Directors of Reorganized Covanta and CPIH will be announced 15 days prior to the Confirmation Hearing; and (b) The officers of the Reorganizing Debtors and the directors of the Reorganizing Debtors other than Covanta and CPIH, that are in office immediately before the Effective Date will continue to serve immediately after the Effective Date in their own capacities. F. Funding the Operating Reserve On the Effective Date, the Reorganizing Debtors will fund Operating Reserve to the extent of the Operating Reserve Deficiency Amount, if any, by transferring the Operating Reserve Deficiency Amount to the Operating Reserve or the Administrative Expense Claims Reserve. G. Management Incentive Payment On the Effective Date, management of the Reorganizing Debtors will be entitled to receive an incentive bonus equal to 2% of the Post-Closing Cash, if any, in excess of Distributable Cash. On or shortly after the Effective Date, Reorganized Covanta will establish the Covanta Management Incentive Plan, subject to the terms of the Exit Financing Agreements. (Covanta Bankruptcy News, Issue No. 38; Bankruptcy Creditors' Service, Inc., 609/392-0900) DEDE CONSTRUCTION: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: DeDe Construction Corp. 733 Yonkers Avenue 4th Floor Yonkers, New York 10704 Bankruptcy Case No.: 03-23762 Chapter 11 Petition Date: October 20, 2003 Court: Southern District of New York (White Plains) Debtor's Counsel: Marilyn Simon, Esq. Marilyn Simon & Associates 280 Madison Avenue 5th Floor New York, NY 10016 Tel: (212) 751-7600 Fax: (212) 686-1544 Total Assets: $1,259,171 Total Debts: $2,141,238 Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Monica Grant $150,000 Vince Damato $150,000 Boris Grzic $121,000 Richard Griglik $92,786 George Zecca $65,000 Jake Dragnotiv $50,478 Nancy Deluca $49,000 Santo Lanzafame $48,966 Christopher & Keith Totaro $29,666 Alexander Pavur $25,000 Tom Bellini $23,507 Peter O'Farrell $20,700 Alan Ober $18,433 Barbara Lamparter $18,377 Shai Salem $17,600 Jeff Capece $12,162 Peter Viennas $9,500 Sigifredo Gomez $9,500 Rebecca Deutscher $9,114 John MacGuire $9,000 DELPHI CORP: S&P Rates Unit's $100MM Preferreds Offering at BB -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' rating to the proposed $100 million cumulative trust preferred securities offering of Delphi Trust I. The securities will be guaranteed on a limited basis by Delphi Corp. At the same time, Standard & Poor's affirmed its 'BBB-' corporate credit rating on Troy, Mich.-based Delphi, which has total debt of about $3.6 billion, including securitized accounts receivable and capitalized operating leases. The rating outlook is negative. Proceeds from the sale of the preferred securities will be used to pre-fund Delphi's pension requirements, which will modestly improve the company's liquidity and financial flexibility. Following the completion of the proposed financing, Delphi will have contributed $700 million to its pension plans during 2003, with an additional combined $1.6 billion required during 2004 and 2005. The preferred securities, which Standard & Poor's gives about 40% equity credit, also modestly strengthen the company's capital structure. Dividends will be paid quarterly but can be deferred for up to 20 consecutive quarters. Delphi's guarantee covers payment of the dividends to the extent Delphi has made related payments on junior subordinated notes issued to the trust. Delphi is the world's largest independent supplier of automotive parts, with about $27 billion in annual revenues. These factors are partially offset by significant customer concentration, constant price pressures, high labor costs in North America, sizable underfunded employee benefit obligations, and cyclical and competitive end-markets. "Because of heavy pension funding requirements, Delphi's financial flexibility will be constrained for the next few years, restricting its ability to diversify its customer base through strategic acquisitions or to absorb the effects of a possible cyclical downturn," said Standard & Poor's credit analyst Martin King. "Additional debt capacity at the current rating is limited. Further deterioration of the company's pension and OPEB funding status, weaker market conditions, or a significant debt-financed acquisition could result in a downgrade." DESA HOLDING: Wants Plan-Filing Exclusivity Stretched to Dec. 27 ---------------------------------------------------------------- DESA Holding Corporation and its debtor-affiliates are asking the U.S. Bankruptcy Court for the District of Delaware to further extend their exclusive time to file a chapter 11 plan and to solicit acceptances of that plan from their creditors. The Debtors submit that cause exists in these cases for the extension of the Exclusive Periods. Particularly, the Debtors' professionals have been, and continue to be, dedicated to the resolution of: i) the Final Working Capital; and ii) the Post-Petition Interest Claim. "These issues must be resolved before any party in these Chapter 11 Cases can realistically propose a viable plan for confirmation," Curtis A. Hehn, Esq., at Pachulski, Stang, Zhiel, Young, Jones & Weintraub, PC adds. As previously reported, the Court approved the sale of substantially all assets of the Debtors to HIG DESA Acquisition LLC, which closing took place on December 24, 2002. The Debtors are currently engaged in the finalization of certain postclosing issues relating to the asset purchase agreement with HIG. Accordingly, the Debtors have not been afforded with the time necessary to develop a consensual plan. Mr. Hehn argues that resolution of the Final Working Capital and the PostPetition Interest Claim will influence negotiations of any proposed plan to distribute the Sale proceeds. The Final Working Capital will directly affect the final amount of the Sale proceeds recovered by the Debtors' estate. Similarly, resolution of the Post-Petition Interest Claim will affect the ultimate distribution to be received by the Lenders in these Chapter 11 Cases. In light of these circumstances, the Debtors ask the Court to afford them until December 27, 2003 to file a chapter 11 plan exclusively and through February 24, 2004 to solicit acceptances of that plan from their creditors. DESA, a leading manufacturer, distributor and marketer of vent- free heating appliances, outdoor heaters, motion sensor lighting, wireless doorbells, lawn and garden electrical products and consumer fastening systems in the United States, filed for chapter 11 protection on June 8, 2002 (Bankr. Del. Case No. 02-11672). Laura Davis Jones, Esq. at Pachulski, Stang, Ziehl Young Jones & Weintraub PC represents the Debtors in their restructuring efforts. DI GIORGIO CORP: S&P Revises Low-B Ratings Outlook to Negative -------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Di Giorgio Corp., to negative from stable. The ratings on the company, including the 'B+' corporate credit rating, were affirmed. The revised outlook is based on the uncertain impact on the company's operations from the termination of its supply agreement with the Great Atlantic & Pacific Tea Company, which represented about 25% of 2002 sales. While Di Giorgio intends to reduce expenses to help compensate for reduced sales, the loss of business will have a negative impact on earnings. The company will have to replace this significant lost sales volume in order to maintain operating stability. Di Giorgio currently maintains very solid credit protection measures and liquidity for the existing rating, which could absorb some anticipated operating pressure before a downgrade would be necessary. "The ratings on Di Giorgio Corp. reflect the risks associated with the company's high customer and geographic concentration in a highly competitive food wholesaling industry and a heavy debt burden," explained Standard & Poor's credit analyst Patrick Jeffrey. "These factors are somewhat offset by the company's dominant position in the New York metropolitan food wholesaling market and the strength of its White Rose brand." Liquidity is provided by a $90 million bank credit facility that matures in June 2004. Di Giorgio had $84 million of availability and about $7 million of cash as of June 28, 2003. The company's $148 million senior unsecured notes mature in 2007. Di Giorgio's revolver and free cash flow generation are expected to help fund minimal debt maturities and operational needs. The company is expected to remain in compliance with bank covenants despite the planned lost sales volume from A&P. The $148 million of senior notes due in 2007 most likely will need to be refinanced. EL PASO CORP: Will Publish Third-Quarter Results on November 10 --------------------------------------------------------------- El Paso Corporation (NYSE: EP) plans to release its third quarter 2003 earnings results before the market opens on November 10, 2003. The company has scheduled a live webcast at 10:00 a.m. Eastern Time that morning to discuss earnings results. The webcast may be accessed online through the company's Web site at http://www.elpaso.comin the Investors section. A limited number of telephone lines will also be available to participants by dialing (303) 262-0075 ten minutes prior to the start of the webcast. A replay of the webcast will be available online through the Web site in the Investors section. A telephone audio replay will be also available through November 17, 2003, by dialing (303) 590- 3000 (access code 556326#). If you have any questions regarding this procedure, please contact Margie Fox at (713) 420-2903. El Paso Corporation (S&P, B+ L-T Corporate Credit Rating, Negative) is the leading provider of natural gas services and the largest pipeline company in North America. The company has core businesses in pipelines, production, and midstream services. Rich in assets, El Paso is committed to developing and delivering new energy supplies and to meeting the growing demand for new energy infrastructure. For more information, visit http://www.elpaso.com ELAN CORP: Will Webcast Third Quarter Results on November 12 ------------------------------------------------------------ Elan Corporation, plc (NYSE: ELN) will host a conference call on Wednesday, November 12, 2003 at 8:30 a.m. Eastern Standard Time (EST), 1:30 p.m. Greenwich Mean Time (GMT) with the investment community to discuss Elan's third quarter 2003 financial results, which will be released before the U.S. and European financial markets open. Live audio of the conference call will be simultaneously broadcast over the Internet and will be available to investors, members of the news media and the general public. This event can be accessed by visiting Elan's Web site at http://www.elan.comand clicking on the Investor Relations section, then on the event icon. The event will be archived and available for replay for 24 hours. The replay telephone number is 800-633-8284 or 402-977-9140, reservation number 21163951. Elan (S&P, CCC+ Corporate Credit Rating, Developing) is focused on the discovery, development, manufacturing, selling and marketing of novel therapeutic products in neurology, pain management and autoimmune diseases. Elan shares trade on the New York, London and Dublin Stock Exchanges. ELDERTRUST: Board Approves Payment of $0.16 Per Share Dividend -------------------------------------------------------------- ElderTrust (NYSE:ETT), an equity healthcare REIT, announced that its Board of Trustees had authorized the payment on November 14, 2003, to shareholders of record on October 30, 2003, of a quarterly distribution, covering the third quarter ended September 30, 2003, of $0.16 per share. ElderTrust -- whose June 30, 2003 balance sheet shows a working capital deficit of about $12 million -- is a real estate investment trust that invests in real estate properties used in the healthcare services industry, principally along the East Coast of the United States. The Company currently owns or has interests in 31 properties. For more information on ElderTrust visit ElderTrust's Web site at http://www.eldertrust.com ENRON CORP: Takes Actions to Challenge Various Employee Claims -------------------------------------------------------------- Melanie Gray, Esq., at Weil, Gotshal & Manges LLP, in New York, relates that of the proofs of claim filed against the Enron Debtors, 7,000 proofs of claim were filed by current and former Enron employees. Upon further review of the 7,000 Claims, the Debtors object to 544 Claims because the employee claimant either signed a waiver pursuant to: * the Key Employee Retention Plan, * the Severance Settlement, or * individual negotiations. Accordingly, the Debtors ask the Court to expunge the 544 Released Claims totaling $59,484,662, among them are: Claimant Claim No. Amount -------- --------- ------ Beth W. Apollo 1572801 $660,600 James A. Armogida 1490901 803,504 Edward D. Baughman 1478900 854,025 Derryl W. Cleaveland 1240001 937,815 Kenneth W. Cline 1846801 1,000,000 Kenneth Wade Cline 2297501 1,050,000 James Coffey, Jr. 1400900 797,234 Anthony B. Dayao 1834300 569,150 Ranabir Dutt 1479301 1,664,036 Kenton L. Erwin 1958701 1,033,339 Donald F. Hammond 1800300 608,633 Robert J. Hermann 533100 1,255,000 Andrew J. Kelemen 2017701 509,150 James E. Keller 1459601 805,525 John Lamb 1488601 775,000 Drew C. Lynch 2034500 2,785,819 Daniel C. Reck 134100 1,299,999 Gregory L. Sharp 1762500 1,000,000 Michael F. Terraso 1691801 2,205,000 Jovita Zepeda 1400401 1,177,886 Ms. Gray points out that the Claims have all been released and the Debtors are entitled to have Released Claims expunged. Moreover, elimination of the redundant and released claims will enable the Debtors to maintain a claims register that more accurately reflects the claims that have been asserted against them. The Debtors also object certain amounts of the 446 Claims totaling $17,450,368 that relate to bonuses, expenses, vacation time, severance pay and holiday pay -- the Compensation and Expense Claims. Some of the largest Compensation and Expense Claims are: Claimant Claim No. Amount -------- --------- ------ Harpreet S. Arora 849700 $737,500 Greg S. Curran 1785900 754,127 Wanda C. Curry 905800 328,000 James E. Durbin 391301 496,125 Douglas S. Friedman 1389602 1,005,625 Kimberly A. Godfrey 787402 566,106 Marc Hensel 75702 300,000 Lee Hodges 1475900 2,140,000 Richard B. Jones 109603 320,000 Sanjeev K. Khanna 34502 310,000 Eric S. Ketke 218100 840,000 According to Ms. Gray, the Debtors' books and records show that no amounts are due to the employee claimants for the Compensation and Expense Claims. In addition, a number of the Compensation and Expense Claimholders filed claims for bonuses. Many of these claims are for annual incentive bonuses that were discretionary and the bonus pool funding was based on company performance. In each of these cases, the employee was not granted an annual incentive bonus for 2001, thus they do not hold valid claims against the Debtors for bonuses. With regard to other bonus claims, no company documentation has been found to exist that support the existence of the claimed bonus plan or award or the claimant was not actively employed on the scheduled payment date for future retention bonus. Ms. Gray further notes that some of the holders of Compensation and Expense Claims seek claims for minimum bonuses under the Enron Corporate Annual Incentive Plan pursuant to various memoranda. However, under the Incentive Plan, bonuses were to be paid if there was any after-tax income. As Enron did not have any after-tax income for 2001, the Compensation Committee of the Board of Directors did not award any bonuses. Therefore, the Claims should be disallowed. Other Compensation and Expense Claims that should be disallowed include those where the expenses and other items claimed were: (i) paid after the proof of claim was filed, or (ii) not payable under the Debtors' plans and policies. Moreover, Ms. Gray tells the Court that a number of employees filed claims for merit increases. However, the Debtors' files show that compensation increases were discretionary and the subject employees were not granted merit increases. Several other Compensation and Expense Claims are for vacation, severance and unpaid holiday claims. These Claims: (i) have been paid, (ii) are not on the Debtors' books and records, or (iii) are not owed under the Debtors' employee plans and policies. Accordingly, the Debtors ask the Court to disallow and expunge the 446 Compensation and Expense Claims. Moreover, Ms. Gray reports that 89 Claims are based solely on the claimants' purported status as owner of shares of Enron stock. The ownership of Enron stock constitutes an equity interest in Enron but does not constitute a "claim" against the Debtors' estate. In fact, Enron stockholders are not required to file proofs of interest in these Chapter 11 cases. Thus, the Debtors object to the 89 Employee Common Equity Claims totaling $13,904,434 and ask Judge Gonzalez to disallow and expunge them. Among the Employee Common Equity Claims are: Claimant Claim No. Amount -------- --------- ------ Johnny D. Berns 1493100 $677,430 Richard A. Blandford 1790700 900,000 Lowell Carpenter 2078900 759,925 J.E. Hager 2064600 688,619 N.D. Huebner 460800 723,360 Jack Thomason 423600 1,593,000 Mary Ann Watchorn 1770200 2,246,560 According to Ms. Gray, 66 proofs of claim were filed by people that are not employees of any of the Debtors. Most of the claimants that filed the "Non-Debtor Employee Claims" assert that they are or were employees of companies related to these non- debtor companies: (i) Dabhol Power Company, (ii) Enron Power Operation Ltd., and (iii) ProGasCo. The Debtors reviewed these 66 Non-Debtor Employee Claims totaling $2,503727 and have determined that either: (a) the amount recorded in their Claims are not reflected in any of the Debtors' books and records as none of the claimants were or are employees of any of the Debtors; (b) the Claims fail to state a basis upon which the creditor has a claim against the Debtors; or (c) the claimants provide no documentation to support a claim against the Debtors. Thus, the Debtors ask the Court to disallow the Non-Debtor Employee Claims and expunge the objected amounts. Some of the Non-Debtor Employee Claims are: Claimant Claim No. Amount -------- --------- ------ Cecile Diane Colette Barthelemy 1148002 $48,286 Frederick Haizlip 1213901 83,654 John A. Lane 368802 100,000 Derek Lee 84800 1,000,000 Magdalena Matheson 1543801 49,797 Norma L. Nusz Chandler 698500 82,500 William E. Rome 677000 550,961 Scott Salmon 1518600 42,245 Robert W. Thurber 788201 90,000 In addition, the Debtors object to 56 Unsubstantiated Claims because the claimants failed to: (a) include any proof for the basis of their claim, and (b) fill in a claim amount. The Debtors' books and records also reflect that no amount is due to any of the claimants. The Debtors contacted the claimants of the Unsubstantiated Claims for them to provide the necessary documentation. However, none of the claimants provided any supporting documentation. Accordingly, the Debtors ask the Court to disallow and expunge the 56 Unsubstantiated Claims totaling $4,224,918. Among the Unsubstantiated Claims are: Claimant Claim No. Objected Amount -------- --------- --------------- Ruth M. Ash 1894600 $351,153 Robert H. Barnes 1177500 240,000 Carol A. Craft 787101 234,800 John R. Ehlers 2078700 360,800 Charles W. Gray II 1805500 217,923 Glenn Hollands 1667300 224,000 Douglas B. Kuns 737300 292,360 Gregory P. Lyvinsov 1684000 200,000 Kathlyn L. Pierce 1212000 200,000 Donald L. Solomon 117400 414,656 Wesley W. Waldron 886800 215,280 The Debtors also object to these Claims and ask the Court to expunge them in their entirety: Claimant Claim No. Amount -------- --------- ------ Milton K. Brown 2227900 $0 George A. Fox 275600 0 Ida H. Gabel 461600 0 Walter Gabel 461700 0 Joseph Guinta 2194300 0 Gary W. Kaplan 1995500 0 Sheryl J. Kaplan 1995900 0 Betty Webb 2204100 0 Ms. Gray explains that the eight Claims should be disallowed because: -- the claimant has not indicated a claim amount in the proof of claim, and -- the Debtors' books and records reflect that no amount is due to the claimant. Moreover, there are 11 claims that were filed by claimants who elected to participate in the opt-out settlement estimation hearing and were awarded allowed administrative expense claims on October 4, 2002. Each of the checks issued to these claimants as payment for their administrative expense claims has been cashed. The Debtors should not be required to pay the same obligation twice. Accordingly, the Debtors ask Judge Gonzalez to disallow and expunge these Opt-Out Claims in their entirety: Claimant Claim No. Objected Amount -------- --------- --------------- Michael Bellini 39100 $43,954 Michael J. Beyer 1862800 165,091 Dennis Boylan 262102 93,750 Daryl Flaming 1209001 262,997 Mary Jo Johnson 1143901 196,731 Richard B. Jones 109602 385,400 Sandeep Kohli 2009301 113,961 Christopher Kravas 1366300 300,000 David G. Mally 242002 133,467 Maurice Kyle Nunas 219501 85,673 Barbara J. Paige 25302 105,000 (Enron Bankruptcy News, Issue No. 83; Bankruptcy Creditors' Service, Inc., 609/392-0900) ENRON CORP: Oswego Cogen's Voluntary Chapter 11 Case Summary ------------------------------------------------------------ Debtor: Oswego Cogen Company, LLC 1400 Smith Street Houston, TX 77002 Bankruptcy Case No.: 03-16566 Type of Business: The Debtor is an affiliate of Enron Corp. Chapter 11 Petition Date: October 20, 2003 Court: Southern District of New York (Manhattan) Judge: Arthur J. Gonzalez Debtors' Counsel: Brian S. Rosen, Esq. Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, NY 10153 Tel: 212-310-8602 Fax: 212-310-8007 Estimated Assets: $10 Million to $50 Million Estimated Debts: More than $100 Million EXTREME NETWORKS: Look for First Quarter 2004 Results on Friday --------------------------------------------------------------- Extreme Networks, Inc. (Nasdaq: EXTR), a leader in Ethernet networking, plans to release the financial results of its fiscal first quarter ended Sept. 30, 2003 on Fri., Oct. 24, 2003. A conference call will follow at 8:30 a.m. Eastern Time (5:30 a.m. Pacific Time). A live webcast and replay of the call will be available at http://www.extremenetworks.com/aboutus/investor Financial and statistical information to be discussed during the conference call are posted on the Investor Relations section of the Company's Web site at http://www.extremenetworks.com Extreme Networks (S&P, B Corporate Credit & CCC+ Conv. Sub. Note Ratings, Stable) delivers the most effective applications and services infrastructure by creating networks that are faster, simpler and more cost-effective. Headquartered in Santa Clara, Calif., Extreme Networks markets its network switching solutions in more than 50 countries. For more information, visit http://www.extremenetworks.com FAO INC: Denies Negative New York Post Report re Cash Position -------------------------------------------------------------- FAO, Inc. (Nasdaq: FAOO), a leader in children's specialty retailing, responded to a negative press report last Friday in the New York Post about the Company's cash position. The Company stated that: -- It is not experiencing a cash crunch and is paying its bills and funding operations in the normal course of business; -- Its suppliers had not been tightening merchandise credit limits and, in fact, credit limits have been expanding; -- Inventory has been flowing from the Company's suppliers as planned and was, predictably, at the highest levels of the year; and -- It has not been trying to value its FAO Schwarz flagship store lease and has no intention of moving from that location. The Company reaffirmed its earlier assessment of its liquidity provided in its quarterly report for the second quarter of the year, stating that it currently expects to generate sufficient operating income in the fourth quarter to offset losses typically experienced in the first three quarters of the year. The Company reported that it had supplemented availability under its senior secured loan agreement with letters of credit that were cash collateralized by certain holders of its Class I Convertible Preferred Stock, including an increase of $4.0 million as of October 7, 2003, which was made in order to accelerate inventory purchases and bolster the Company's liquidity. These letters of credit increase the Company's availability by $15.0 million through November 30, 2003 reducing to $10.0 million in additional availability thereafter until January 9, 2004, unless extended or utilized. The Company stated that, although amounts fluctuate daily, as of October 17, 2003, it had $5.2 million of availability in excess of the minimum requirements under its loan agreement. The Company stated that in line with its previous disclosure in its quarterly report, it may need to raise additional capital in an amount to be determined following the holiday season and noted that sales trend figures disclosed to vendors in August had moderated somewhat. The Company stated that this interim announcement was made in response to misleading reports which threatened to impact operations, that it was necessarily incomplete in nature and that the Company did not expect to update information again in advance of its normal reporting schedule. The Company directed interested parties to its SEC filings for additional information. FAO, Inc. owns a family of high quality, developmental, educational and care brands for infants, toddlers and children and is a leader in children's specialty retailing. FAO, Inc. owns and operates the renowned children's toy retailer FAO Schwarz(R); The Right Start(R), the leading specialty retailer of developmental, educational and care products for infants and toddlers; and Zany Brainy(R), the leading retailer of development toys and educational products for kids. For additional information on FAO, Inc. or its family of brands, visit the Company on line at http://www.irconnect.com/faoo/ * * * On January 13, 2003, the toy retailer filed for protection under Chapter 11 of the United States Bankruptcy Code. The Company's First Amended Joint Plan of Reorganization was confirmed by the Bankruptcy Court on April 4, 2003, and became effective when the Company emerged from bankruptcy on April 23, 2003. The Company significantly restructured its operations during the period the Company operated under bankruptcy protection and extending into the thirteen weeks ended August 2, 2003. As part of this restructuring the Company closed 111 stores, liquidated discontinued inventories, closed a distribution center, reduced administrative staff, relocated administrative offices in New York and Los Angeles and compromised bankruptcy claims which the Company is currently in the process of resolving with claimants. The bankruptcy process required that the Company pay significant costs and expenses including professional fees. Because of this activity the results of operations for the Company's second quarter and first half ended August 2, 2003 are not comparable to results for the prior year periods nor, because of this activity and the seasonal nature of the Company's businesses, indicative of future results. FLEETWOOD ENTERPRISES: Completes $25MM Offering of 2.7M Shares -------------------------------------------------------------- Fleetwood Enterprises, Inc. (NYSE: FLE), the nation's largest manufacturer of recreational vehicles and a leading producer and retailer of manufactured housing, has completed a $25 million equity offering for 2,673,797 shares of Fleetwood common stock at $9.35 per share. The shares were issued Monday to institutional investors through Fleetwood's existing $40 million shelf registration on file with the Securities and Exchange Commission. The proceeds will be used for general corporate purposes. Fleetwood had approximately 35.9 million shares outstanding as of September 2, 2003. As reported in Troubled Company Reporter's March 28, 2003 edition, Fleetwood Enterprises' lenders in its syndicated revolving line of credit agreed to restate the financial covenant relating to earnings before interest, taxes, depreciation and amortization (EBITDA). The Company had previously indicated that it did not expect to meet that covenant following its fourth fiscal quarter ending April 27, 2003. Fleetwood now anticipates that it will meet the revised covenant through the remaining term of the credit facility, which is scheduled to expire in July 2004. Fleetwood also amended its inventory financing agreement with Textron Financial, which incorporated the same covenant. FLEMING COS.: Wants Clearance to Reduce Fixed Component Reserve --------------------------------------------------------------- To recall, on August 15, 2003, the Court allowed the Fleming Companies Debtors to sell all their assets relating to their wholesale distribution business to C&S Wholesale Grocers Inc. A portion of the Court Order provides that: "Upon the Initial Closing Date, Acquired Assets [will] be sold free and clear of any Offset Right, if any. * * * Based on the rights of the holders of such Offset Rights, if any, (i) in and to the Fixed Component of the Purchase Price and (ii) against the Debtors' accounts receivable, the Offset Rights shall be deemed adequately protected, to the extent necessary. No portion of the Fixed Component of the Purchase Price [will] be distributed absent further order of this Court." The Fixed Component of the Purchase Price, as provided in the Asset Purchase Agreement with C&S Acquisition LLC and C&S Wholesale Grocers, Inc., is $75,000,000. The Debtors' lenders required the Debtors to reserve $75,000,000 against their use of cash collateral pending further Court order to satisfy the Debtors' obligations if the Offset Rights are determined to exist and are recoverable from the sale proceeds. However, Christopher J. Lhulier, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub P.C., in Wilmington, Delaware, reports that the amount of the Fixed Component Reserve exceeds the Maximum Dollar Value of the Offset Rights by $40,000,000 causing Fixed Component Reserve to be over-funded. Mr. Lhulier relates that the maximum amount of any Offset Rights is slightly less than $35,000,000. Reducing the Fixed Component Reserve by $40,000,000 will provide benefit the Debtors' estates by increasing the Debtors' borrowing base and use of the cash collateral under their DIP facility without reducing any protection afforded to the creditors. Mr. Lhulier maintains that there is no adequate-protection-based need to include the additional $40,000,000 in the Fixed Component Reserve. A continued requirement to hold such funds in the Fixed Component Reserve will provide no additional benefit to the creditors. Accordingly, the Debtors ask the Court to reduce the Fixed Component Reserve by $40,000,000. (Fleming Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service, Inc., 609/392-0900) FORKLIFT LP: Court Sets Plan Confirmation Hearing for Today ----------------------------------------------------------- On September 5, 2003, the U.S. Bankruptcy Court for the District of Delaware found the Second Amended Disclosure Statement prepared by Forklift LP Corporation and its debtor-affiliates was adequate within the meaning of Sec. 1125 of the Bankruptcy Code. The Court ruled that the Disclosure Statement contained the right kind of information to enable creditors to make informed decisions whether to accept or reject the Debtors' Proposed Liquidating Plan. Creditors have voted on the plan and more than 2/3 of the dollar amount of claims and 50% of the number of creditors in each class have voted to accept the plan. The Honorable Jerry W. Venters will convene a hearing today at 9:30 a.m. (Eastern Time) to consider the confirmation of the Debtors' Liquidating Plan. Forklift LP Corporation filed for Chapter 11 protection on April 17, 2000, (Bankr. Del. Case No. 00-1730). Teresa K.D. Currier, Esq., Mary F. Caloway, Esq., and Eric Lopez Schnabel, Esq., at Klett Rooney Lieber & Schorling represent the Debtors in their Liquidating efforts. FRONTLINE CAPITAL: Keeps Plan-Filing Exclusivity Until Nov. 28 -------------------------------------------------------------- By order of the U.S. Bankruptcy Court for the Southern District of New York, Frontline Capital Group obtained an extension of its exclusive periods. The Court gives the Debtor, until November 28, 2003, the exclusive right to file its plan of reorganization, and until January 30, 2004, to solicit acceptances of that Plan. FrontLine Capital Group, a holding company that manages its interests in a group of companies that provide a range of office related services, filed for chapter 11 protection on June 12, 2002 (Bankr. S.D.N.Y. Case No. 02-12909). Mickee M. Hennessy, Esq., at Westerman Ball Ederer & Miller, LLP represents the Debtor in its restructuring efforts. As of March 31, 2002, the Company listed $264,374,000 in assets and $781,374,000 in debts. GLOBAL CROSSING: Obtains Stay Relief to Advance Defense Costs ------------------------------------------------------------- Beginning in February 2002, over 70 actions were commenced in various federal and state courts alleging violations of federal and state securities laws, common law and asserting other claims, against certain current and former directors and officers of Global Crossing Ltd. Most of the pending Securities Actions have been centralized in the United States District Court for the Southern District of New York under the caption, In re: Global Crossing Ltd. Securities Litigation. The Securities and Exchange Commission and other governmental entities have commenced investigations into, inter alia, Global Crossing's accounting treatment of certain reciprocal transactions involving the purchase and sale of capacity on its fiber optic network. Certain of the Debtors' present and former directors and officers -- the Individual Defendants -- have been named as defendants in an action arising out of certain public securities offerings by the Debtors, consolidating over 300 similar actions against other issuers of securities and their underwriters. These are all currently pending before the U.S. District Court for the Southern District of New York under the caption, In re: Public Securities Offering Litigation. Gulf Insurance Company issued a directors' and officers' liability policy no. GA0490941 providing certain coverage to, among others, Global Crossing and its directors and officers. The Liability Policy provides $10,000,000 of coverage in excess to the $10,000,000 primary policy no. 8159-75-02 issued by Federal Insurance Company and the $10,000,000 excess policy no. 859-82-83 issued by National Union Fire Insurance Company of Pittsburgh, Pennsylvania. By Order dated June 20, 2002, the Court authorized the payment of defense costs under the Primary Policy in connection with, inter alia, Income Securities Actions and the SEC Investigations. The Primary Policy has been exhausted by the payment of defense costs in connection with the Income Securities Actions and the SEC Investigations. In March 28, 2003, the Court authorized the payment of defense costs under the National Union Policy in connection with the Income Securities Actions and the SEC Investigations. The National Union Policy will soon be exhausted by the payment of defense costs in connection with the Income Securities Actions and SEC Investigations. The Debtors and Individual Defendants have asked Gulf Insurance to pay defense costs incurred in connection with the Income Securities Actions and the SEC Investigations pursuant to the terms and conditions of the Liability Policy. Through a Court-approved Stipulation, the Debtors and Gulf Insurance agree that the automatic stay is modified to permit the payment of reasonable defense costs pursuant to the terms and conditions of the Policy in connection with the defense of the Individual Defendants and the Debtors in the Securities Actions and the Investigations, up to and including the full limits of liability of the Policy. (Global Crossing Bankruptcy News, Issue No. 48; Bankruptcy Creditors' Service, Inc., 609/392-0900) GOLF TRUST: Secures Updated Innisbrook Resort Cash Flow Forecast ---------------------------------------------------------------- Golf Trust of America, Inc. (AMEX: GTA) has received an updated forecast of the net cash flow expected to be generated by the Innisbrook Resort in the fourth quarter 2003 and for the year 2004. The updated forecast is materially less favorable than earlier forecasts for the same periods, which were among the factors considered in the computation of Golf Trust's projected range of liquidating distributions to common stock holders. The decline in the forecast results primarily from fewer than anticipated group bookings in the fourth quarter and the assumption that this trend may continue into 2004. The Innisbrook Resort serves as collateral under a mortgage loan funded by Golf Trust, as the lender, in 1997. The borrower has been in payment default on the loan since October 2001 and Golf Trust has been negotiating to take possession of the Resort in lieu of foreclosure. As a lender, Golf Trust currently has no legal right to manage the Innisbrook Resort. The revised projections were prepared by the Westin Hotel Company, which operates the hotel and conference facilities at the Resort under a management contract with the resort's owner, Golf Host Resorts, Inc. Westin Hotel Company is owned by Starwood Hotels & Resorts Worldwide, Inc. Golf Trust has requested a complete 2004 Innisbrook Resort budget from Westin, which is expected to be delivered in the near term. At the present time, Golf Trust cannot predict whether the decline in expected cash flow results from short- or long-term issues, application of more conservative budget methodologies and policies, or underlying economic trends. Although Golf Trust has not yet acquired ownership of the Innisbrook Resort, as previously disclosed, Golf Trust has based its calculation of the mortgage's liquidation value on an estimate of the future going-concern value of the Resort's operations on the assumption that Golf Trust will take possession of the Resort (subject to an amended management contract with Westin) and hold the property until operating revenues realize a modest recovery. Once Golf Trust's receives and reviews the necessary information supporting the 2004 budget and forecast, Golf Trust's board of directors will again review the strategic alternatives available to the company. It is possible that the board of directors may conclude that the revised forecast suggests a permanent impairment to the value of the Innisbrook Resort asset. Such a conclusion could lead Golf Trust to write-down the value of the Innisbrook Resort mortgage on its balance sheet and/or result in a reduction to Golf Trust's projected range of liquidating distributions to common stockholders. Golf Trust cannot currently predict which, if any, of these or other results might occur as a result of the new forecast. Golf Trust of America, Inc. was formerly a real estate investment trust but is now engaged in the liquidation of its interests in golf courses in the United States pursuant to a plan of liquidation approved by its stockholders. The Company currently owns an interest in five properties (9.0 eighteen-hole equivalent golf courses). Additional information, including an archive of all corporate press releases, is available on the Company's Web site at http://www.golftrust.com * * * Liquidity and Capital Resources In its most recent Form 10-Q, Golf Trust of America reported: "As previously discussed, our ability to meet our obligations in the near term is contingent upon our ability to pay our outstanding debt under our credit agreement by its maturity on June 30, 2003 or to refinance any outstanding balance at maturity. We have initiated discussions with our lenders in furtherance of seeking to obtain an extension of the maturity date under our credit agreement. We can provide no assurances that we will obtain an extension. "Our Series A preferred stock dividends accrue at a rate of $462,500 per quarter and as of the date of this report we have accrued and unpaid seven quarters of Series A preferred stock dividends (including the dividend otherwise payable in respect of the quarter ended March 31, 2003). Under our Series A charter document, if and when we have at least six quarters of accrued and unpaid Series A preferred stock dividends, the holder of the Series A preferred stock, AEW Targeted Securities Fund, L.P. (or its transferee), will have the right to elect two additional directors to our board of directors whose terms as directors will continue until we fully pay all accrued but unpaid Series A preferred stock dividends. "Moreover, under our voting agreement with AEW, if we have not fully redeemed the Series A preferred stock by May 22, 2003 (which is the second anniversary of our shareholders' adoption of the plan of liquidation), AEW Targeted Securities Fund (or its transferee) will have the right to require us to redeem the Series A preferred stock in full within 60 days, and if we default on that obligation, the stated dividend rate of the Series A preferred stock will increase from 9.25% to 12.50% per annum (equivalent to a quarterly dividend of $625,000) until the Series A preferred stock is redeemed. Although we would be permitted to continue to accrue such dividends without paying them on a current basis, they must be paid in full prior to any distribution to our common stockholders, which would reduce our cash available for liquidating distributions to common stockholders. * * * "Our expectations about the amount of liquidating distributions we will make and when we will make them are based on many estimates and assumptions, one or more of which might prove to be less favorable than assumed, and substantially so. As a result, the actual amount of liquidating distributions we pay to our common stockholders might be below our Updated 2003 Range. In addition, the liquidating distributions might be paid later than we predict. Although we have attempted to account for these risks in our projected range of liquidating distributions, we might have underestimated their effects, and perhaps substantially so, and the projections which we prepared in March 2003 with input from our financial advisors might exceed actual results. "We are seeking our lenders' consent to further extend the term of our credit agreement before it matures on June 30, 2003. If the extension becomes necessary and we are unable to obtain any further extension to the maturity date from our lender, our liquidating distributions might be substantially reduced or delayed. "As of May 7, 2003, we owed approximately $25.1 million (after deducting the balance of $1.5 million in our restricted-cash escrow account which is reserved for future payment of interest if necessary) under our credit agreement, which matures on June 30, 2003. We are seeking to obtain our lenders' consent to further extend the term of our credit agreement before it matures. If our lenders do not consent to our request for a further extension, we might be compelled to sell, or seek to sell, assets at substantially reduced prices in order to seek to repay our debt by the maturity date. If we fail to pay the debt by the maturity date, our lenders could initiate foreclosure proceedings against us, among other remedies available to them. In that event, we may be forced to file a bankruptcy petition in order to complete our liquidation. Even if we succeed in obtaining our lenders' consent to any further maturity date extension, if needed, the amendment of our credit agreement might be on terms less favorable to us than the terms of our current credit agreement." GREAT AMERICAN FIN'L: Proposes $100MM Debt Securities Offering -------------------------------------------------------------- Great American Financial Resources, Inc., (NYSE: GFR) (S&P, BB+ Preferred Stock Rating) plans to make a public offering of $100 million principal amount of its debt securities. The offering will be made under the Company's effective shelf registration statement filed with the Securities and Exchange Commission covering the issuance from time to time of up to $250 million of various securities of the Company. The net proceeds from this offering will be used primarily to repay indebtedness outstanding under the Company's revolving bank credit agreement. Merrill Lynch & Co. is the bookrunning lead manager of the offering. A shelf registration statement relating to the securities that the Company intends to sell has previously been filed with, and declared effective by, the Securities and Exchange Commission. Any offer, if at all, will be made only by means of a prospectus, including a prospectus supplement, forming a part of the effective registration statement. Copies of a prospectus with respect to this offering may be obtained from Merrill Lynch & Co., 4 World Financial Center, New York, NY 10080. GAFRI's subsidiaries include Great American Life Insurance Company, Annuity Investors Life Insurance Company, United Teacher Associates Insurance Company, Loyal American Life Insurance Company and Great American Life Assurance Company of Puerto Rico. Through these companies, GAFRI markets traditional fixed, equity- indexed and variable annuities and a variety of life, long-term care and supplemental health insurance. HARRAH'S ENTERTAINMENT: Don Marradino to Head North Nevada Ops. --------------------------------------------------------------- Harrah's Entertainment, Inc. (NYSE: HET) announced that Don Marrandino has been named to head its operations for Northern Nevada. Effective immediately, Marrandino will serve as General Manager of Harrah's Lake Tahoe and Harveys. Upon regulatory approval, Marrandino will be named Senior Vice President of Harrah's Northern Nevada, with oversight of Harrah's properties in Reno and Lake Tahoe; Michael Silberling, General Manager of Harrah's Reno, will report to him. Marrandino will report to Anthony Sanfilippo, Harrah's Western Division President. "Don is an exceptionally talented casino operator, and we are fortunate to have him join our team," said Tim Wilmott, Harrah's Chief Operating Officer. "Throughout his many years as a gaming executive, Don has consistently infused excitement and energy into the casino properties he's led. His experience and skill will help our Reno and Lake Tahoe properties remain the clear leaders of the Northern Nevada market." Marrandino most recently served as Executive Vice President and General Manager of Wynn Las Vegas. Previously he served as President and Chief Operating Officer of the Hard Rock Hotel & Casino; President of East Side Operations for Station Casinos, Inc.; and Senior Vice President and General Manager of the Rio All-Suite Hotel & Casino prior to its acquisition by Harrah's. Founded 65 years ago, Harrah's Entertainment, Inc. (Fitch, BB+ Senior Subordinated Rating, Stable Outlook) operates 26 casinos in the United States, primarily under the Harrah's brand name. Harrah's Entertainment is focused on building loyalty and value with its target customers through a unique combination of great service, excellent products, unsurpassed distribution, operational excellence and technology leadership. HASBRO INC: Third-Quarter 2003 Results Reflect Strong Growth ------------------------------------------------------------ Hasbro, Inc. (NYSE: HAS) reported strong third quarter results. Worldwide net revenues were $971.1 million, up 18% from $820.5 million a year ago. Earnings for the quarter, before cumulative effect of accounting change, were $85.8 million, compared to net earnings of $55.8 million last year. Third quarter earnings, before cumulative effect of accounting change, were $0.48 per diluted share, an increase of 50%, compared to net earnings of $0.32 per diluted share in 2002. Including the effect of accounting change the Company recorded net earnings of $68.5 million or $0.38 per diluted share. The Company reported third quarter Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) of $170.3 million for the quarter, compared to $142.7 million in 2002. The attached schedules provide a reconciliation of EBITDA to net earnings for the third quarter and year to date. "I am very pleased that our strategy of focusing on Hasbro's core brands and product innovation continues to deliver strong results," said Alfred J. Verrecchia, President and Chief Executive Officer. "Our third quarter performance and progress year to date reflects growth in many of our core brands, such as TRANSFORMERS, PLAYSKOOL and TRIVIAL PURSUIT, as well as innovative products such as BEYBLADE, FURREAL FRIENDS and VIDEONOW, leading to substantial gains in shelf space." For the nine months, worldwide net revenues were $2.0 billion, compared to $1.8 billion a year ago. Earnings before the cumulative effect of accounting change for the nine months, were $98.4 million or $0.55 per diluted share, compared to earnings of $12.9 million or $0.07 per diluted share a year ago before the effect of the accounting change related to the adoption of FASB Statement No. 142 "Goodwill and Other Intangibles". Including the impact of accounting changes in both years, the Company recorded net earnings of $81.1 million, compared to a net loss of $232.8 million for the year-ago nine-month period. For the nine months EBITDA was $284.5 million, compared to $207.0 million last year. Effective as of the beginning of the third quarter 2003, Hasbro adopted FASB Statement No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity." As a result of adopting this statement, Hasbro recorded a one-time non-cash charge from the cumulative effect of this accounting change totaling $17.4 million, or $0.10 per diluted share, in the consolidated statement of operations for the quarter related to certain instruments that were previously classified as equity that are now required to be recorded as a liability at fair value. Revenues in the U.S. Toys segment increased in the quarter to $377.3 million, up 23% compared to $307.2 million a year ago. The segment reported improved operating profit of $45.8 million compared to $25.5 million last year. The segment experienced strength in many brands, including BEYBLADE, TRANSFORMERS, PLAYSKOOL and VIDEONOW, as well as continuing strong sales of FURREAL FRIENDS, including GO GO MY WALKIN' PUP. Revenues in the Games segment were $250.2 million for the quarter, up 11% compared to $225.9 million a year ago. The segment experienced strength in many brands and products, including MONOPOLY, TRIVIAL PURSUIT 20TH ANNIVERSARY EDITION, BULLS-EYE BALL and MAGIC: THE GATHERING trading card games. The Games segment reported improved operating profit of $58.3 million compared to $48.4 million last year. International segment revenues were $328.1 million for the quarter, up 22% compared to $268.5 million a year ago. This increase includes the positive impact of foreign exchange of approximately $26 million. Absent this impact, revenues increased 13% to $302.3 million. The segment experienced strength in BEYBLADE, MAGIC: THE GATHERING trading card games, TRANSFORMERS and PLAYSKOOL. The International segment reported significant improvement in operating profit, increasing to $38.5 million compared to $9.9 million a year ago. "We are pleased that all major segments are performing well, with International delivering the anticipated improvement associated with revenue growth and cost reductions," said David Hargreaves, Chief Financial Officer. "However, with much of our business yet to ship, absent the impact of exchange rates, we have not significantly changed our expectations for our full year 2003 performance." "Our cash and balance sheet position continue to improve, with days sales outstanding down six days and inventories also down, excluding the impact of foreign exchange - - this, along with many other indicators of strength in our business are now being recognized by the credit markets," Hargreaves concluded. Hasbro (Fitch, BB+ Secured Bank Facility and BB Senior Unsecured Debt Ratings, Stable) is a worldwide leader in children's and family leisure time entertainment products and services, including the design, manufacture and marketing of games and toys ranging from traditional to high-tech. Both internationally and in the U.S., its PLAYSKOOL, TONKA, MILTON BRADLEY, PARKER BROTHERS, TIGER, and WIZARDS OF THE COAST brands and products provide the highest quality and most recognizable play experiences in the world. HAUSER INC: Auctioning-Off Policosanol Assets Today --------------------------------------------------- Hauser, Inc., and its debtor-affiliates are seeking to sell substantially all of its assets related to the development, manufacture, and commercialization of products containing Policosanol to Wyeth Consumer Healthcare. The Asset Purchase Agreement entered into by both parties provides for a $500,000 payment at closing, contingent payments of up to an additional $150,000 and payments based on a percentage of future sales. This sale however, is subject to higher and better bids. Accordingly, an auction for the Policosanol Assets will convene today, at 2:00 p.m., and will be conducted by the Honorable Sheri Bluebond at Courtroom 1475 located at 255 East Temple Street, Los Angeles, California. Hauser, headquartered in El Segundo, California and Longmont, Colorado, is a leading supplier of herbal extracts and nutritional supplements. Hauser also provides chemical engineering services and contract research and development. Hauser's products and services are principally marketed to the pharmaceutical, dietary supplement and food ingredient businesses. The Debtors filed for Chapter 11 relief on April 1, 2003, (Bankr. C.D. Calif. Case No. 03-18788-BB). Jeffrey A. Rester, Esq., Theodore B. Stolman, Esq., and Christine M. Pajak, Esq., at Stutman, Treister & Glatt serve as the Debtors' Reorganization Counsels. HAYES LEMMERZ: Senior Lenders Agree to Cut Interest Rate by 1% -------------------------------------------------------------- Hayes Lemmerz International, Inc.'s (OTC Bulletin Board: HAYZ) lenders have reduced the interest rate by 100 basis points on the Company's $450 million six-year amortizing term loan, due in 2009. The reduced interest rate will save the Company approximately $4.5 million annually. "This interest rate reduction reflects our lenders' recognition that Hayes Lemmerz' business prospects are good, and our credit is sound," said James Yost, Vice President of Finance and Chief Financial Officer of Hayes Lemmerz International. "The reduced interest cost contributes to our ever-increasing competitiveness, and helps us toward our goal of being one of the best suppliers to the global automotive industry." For the second quarter ended July 31, 2003, Hayes Lemmerz' average interest rate on the term loan was 5.9%. Hayes Lemmerz obtained the $450 million term loan, as well as a $100 million line of credit, as exit financing when it emerged from Chapter 11 reorganization on June 3, 2003. Hayes Lemmerz International, Inc. is a leading global supplier of automotive and commercial highway wheels, brakes, powertrain, suspension, structural and other lightweight components. The Company has 43 plants, 3 joint venture facilities and over 11,000 employees worldwide. HEXCEL CORP: Sept. 30 Net Capital Deficit Widens to $95 Million --------------------------------------------------------------- Hexcel Corporation (NYSE/PCX: HXL) reported net sales for the third quarter, 2003 of $212.8 million as compared to $201.0 million for the 2002 third quarter. Had the same U.S. dollar, British pound and Euro exchange rates applied in the third quarter of 2003 as in the third quarter of 2002, revenues for the third quarter of 2003 would have been $6.7 million lower at $206.1 million. Gross margin for the third quarter of 2003 was $39.6 million compared with $37.3 million for the same period last year. In both periods, gross margin as a percentage of sales was 18.6%. Operating income for the third quarter of 2003 was $11.1 million as compared to $15.1 million for the same quarter last year. SG&A expenses of $22.9 million for the quarter were $0.9 million lower than the $23.8 million reported in each of the last three quarters, but $4.4 million higher ($3.6 million on a constant currency basis) than the abnormally low third quarter, 2002. Included in SG&A were $0.5 million in incremental expenses related to a work stoppage at our Kent, Washington facility during the quarter. R&T spending was $0.8 million higher in support of new products and new commercial aircraft qualification activities. Business consolidation and restructuring expenses for the quarter were $1.0 million compared to a net reversal of $0.1 million in the third quarter of 2002. Depreciation expense for the quarter at $12.3 million was $0.7 million higher than the third quarter of 2002 expense of $11.6 million, due to the changes in exchange rates and increased depreciation associated with certain of the Company's restructuring actions. During the 2003 third quarter, the Company recognized a $0.4 million gain on a real estate sale. In the third quarter 2002, reported results included a $0.5 million gain on early retirement of debt. These items are reported as other income (see Table D). Excluding these nonrecurring items and business consolidation and restructuring expenses, the Company's pretax loss for the third quarter of 2003 was $1.4 million, compared to a pretax loss of $0.5 million in the comparable 2002 quarter. The provision for income taxes was $0.7 million in the quarter compared to $3.2 million in the third quarter of 2002. Net loss for the quarter was $3.0 million compared to a net loss of $3.6 million for the same quarter of 2002. After reflecting deemed preferred dividends and accretion associated with our issuance in March 2003 of mandatorily redeemable convertible preferred stock, net loss attributable to common shareholders for the third quarter of 2003 was $6.1 million, or $0.16 per diluted common share, compared to a net loss of $3.6 million, or $0.09 per diluted common share, for the third quarter of 2002. At September 30, 2003, the company's balance sheet shows a total shareholders' equity deficit of about $95 million. Chief Executive Officer Comments Commenting on Hexcel's third quarter results, Mr. David E. Berges, Chairman, President and Chief Executive Officer, said, "In the quarter, we continued our success in generating cash and reducing debt. Total debt, net of cash, is down $38.5 million for the quarter to $458.4 million. We generated cash during the quarter through $25.7 million of asset sales and by delivering $16.8 million from operations. With this cash generated, we were able to retire $37.3 million of our term debt." Mr. Berges continued, "After adjusting for changes in foreign exchange rates, our revenues this quarter were approximately $5 million higher than last year which contributed to a $2.3 million increase in gross margin. While SG&A expenses and R&T spending are higher than the lows of the third quarter last year, they are in good control after considering the impact of the strengthening Euro, some increased spending in support of growth opportunities, and non-recurring costs associated with the work stoppage at our Kent facility. The Kent operation is now back in full operation with a new three year contract that provides significant productivity improvements. Our headcount as of September 30, 2003 is down to 4,095 employees, 2% lower than June 30, 2003 and 7.9% lower than a year ago helping to offset the cost pressures we have seen all year in such areas as energy, insurance and pension expense." Mr. Berges concluded, "We have now seen a number of quarters of relative stability in our commercial aerospace business and are pleased at the public indications from both Boeing and Airbus that suggest build rates in 2004 will be at a comparable level to this year. Hexcel's focus is now on building our positions on the next generation of commercial and military aircraft while seeking to exploit the growing applications for our products. While the fourth quarter can often reflect a period of customer inventory balancing, we are encouraged by the numerous external indications of an economic recovery, even in the electronics market." Revenue Trends The third quarter showed the usual seasonal reduction in revenues compared to the second quarter due to the European summer vacation period, which makes sequential trend comparisons less informative. Consolidated revenues for the quarter were 5.9% higher than the third quarter of 2002. Commercial aerospace and Industrial revenues were approximately the same as last year at equivalent foreign exchange rates. Space and Defense revenues increased $8.7 million year-on-year, reflecting higher aircraft production as well as non-recurring revenues associated with aircraft in development. Revenues from the Electronics market remained depressed. Debt and Convertible Preferred Stock Total debt, net of cash, decreased in the quarter by $38.5 million to $458.4 million as of September 30, 2003 (see Table E for details of the components of net debt). The cash inflow in the quarter resulted from exercising our previously disclosed option to sell the remaining interest in our Japanese electronics joint venture for $23.0 million, selling real estate for $2.7 million, and delivering $16.8 million from operations. Inventories at the end of the quarter were $5.0 million lower than June 30, 2003 and $5.9 million lower ($14.3 million lower at constant exchange rates) than September 30, 2002. Accounts receivable measured as days sales outstanding as of September 30, 2003 were comparable to the same quarter last year. The cash generated was used to repurchase $10.0 million principal amount of the Company's 9-3/4% Senior Subordinated Notes, due 2009, through open market transactions and $1.7 million principal amount of the Company's 7% Convertible Subordinated Notes, due 2011, meeting an annual sinking fund requirement. In addition, the Company retired a $25.6 million capital lease obligation. No material net gain or loss was recognized from these transactions. The retirement of the capital lease obligation reduces Hexcel's scheduled principal amortization of debt to about $2 million annually until 2008. Interest expense during the quarter was $13.5 million compared to $15.5 million in the third quarter of 2002, reflecting lower debt balances resulting from refinancing the Company's capital structure, asset sales, cash flow from operations and lower interest rates. Deemed preferred dividends and accretion relating to the mandatorily redeemable convertible preferred stock were $3.1 million in the third quarter of 2003. A description of the accounting for these securities can be found in the Company's Form 8-K filed on April 7, 2003. Hexcel Corporation is the leading advanced structural materials company. It develops, manufactures and markets lightweight, high- performance reinforcement products, composite materials and composite structures for use in commercial aerospace, space and defense, electronics, and industrial applications. INFOUSA: Appoints Ray Butkus President, Large Business Group ------------------------------------------------------------ infoUSA, (Nasdaq:IUSA) the leading provider of proprietary business and consumer databases and sales and marketing solutions, has appointed Ray Butkus as President of its Large Business Group, effective January 1, 2004. Mr. Butkus served as President of infoUSA's Donnelley Marketing division for one year prior to this appointment. The Large Business Group has annualized revenue of $160 million and is comprised of four infoUSA divisions: Donnelley Marketing, Catalog Vision, Walter Karl and Yesmail/ClickAction. Alan Kuritsky, Donnelley's Senior Vice President, Sales, will replace Mr. Butkus as President of Donnelley Marketing. Vin Gupta, Chairman and CEO, infoUSA, said, "Mr. Butkus has had an outstanding tenure at Donnelley, having successfully implemented an innovative team selling approach, which has strengthened customer relationships and increased our client base. He has also substantially improved profitability at this division. We look forward to him achieving similar results with the entire Large Business Group, which is on track to achieve double-digit revenue growth for this year." infoUSA -- http://www.infoUSA.com-- (S&P, BB Corporate Credit Rating, Stable), founded in 1972, is the leading provider of business and consumer information products, database marketing services, data processing services and sales and marketing solutions. Content is the essential ingredient in every marketing program, and infoUSA has the most comprehensive data in the industry, and is the only company to own a proprietary database of 250 million consumers and 14 million businesses under one roof. The infoUSA database powers the directory services of the top Internet traffic-generating sites, including Yahoo! (Nasdaq:YHOO) and America Online (NYSE:AOL). Nearly 3 million customers use infoUSA's products and services to find new customers, grow their sales, and for other direct marketing, telemarketing, customer analysis and credit reference purposes. infoUSA headquarters are located at 5711 S. 86th Circle, Omaha, NE 68127 and can be contacted at (402) 593-4500. INTEGRATED HEALTH: THCI Pressing for $41MM Admin. Claim Payment --------------------------------------------------------------- THCI Company, LLC, as successor-in-interest to Meditrust Corporation, Meditrust of Alabama, Inc., Meditrust of Missouri, Inc., Meditrust of Michigan, Inc., Meditrust of Alpine, Inc., Meditrust of Mountainview, Inc., and Meditrust of Ohio, Inc., asks the Court to: (a) allow and direct the Integrated Health Services Debtors to immediately pay certain administrative claims in its favor for: -- over $41,677,000 in damages arising from the Debtors' failure to perform their obligation under certain THCI Assumed Leases; and -- $876,324 in legal fees and expenses for which the Debtors agreed to reimburse THCI in a March 2002 Stipulation; or (b) to the extent the claims are disputed, establish a disputed administrative claims reserve for those portions of THCI's claims that are not allowed and paid. Scott D. Cousins, Esq., at Greenberg Traurig LLP, in Wilmington, Delaware, recounts that on March 18, 2002, the Debtors and THCI entered into a stipulation, which the Court approved. The March 2002 Stipulation resolved an ongoing dispute between THCI and the Debtors over its then-pending motion, to which THCI objected, which sought to assume five and reject five of the 10 leases for healthcare facilities the Debtors leased from THCI. Integrated Health Services Inc. guaranteed all the 10 Leases. The Stipulation, among other things, obligated the Debtors to assume nine of those Leases, allowed the Debtors to reject the tenth lease, waived certain rights and claims of THCI, and provided that THCI would be entitled to assert an administrative claim for its legal fees, expenses, and other amounts incurred in connection with these proceedings. By the end of 2002, Abe Briarwood Corporation emerged as the successful bidder to purchase the stock in most of the Debtors. However, Briarwood did not wish to acquire the Debtors who were the lessees of the THCI facilities. As a result, in April 2003, the Debtors moved to reject the very same leases they had previously agreed to assume pursuant to the March 2002 Stipulation, alleging they were not obligated to assume them. On the contrary, the Court determined that the Debtors were obligated to assume the THCI Assumed Leases. Mr. Cousins notes that although the Debtors were ordered to perform under the THCI Assumed Leases, they have not done so: -- Financial covenants have not been satisfied; -- Rent remains unpaid; -- TransHealth Management, Inc. the professional, qualified manager identified at the confirmation hearing as the party who would manage "all" of the facilities, is not managing THCI's facilities; and -- The facilities have significant regulatory deficiencies, but the information THCI requested regarding who is responsible for operating and managing its facilities, whether the proper licenses and insurance are in place, and the financial condition of the responsible parties, has not been provided. Moreover, the Debtors even attempted to strip away assets from parties liable on the THCI Assumed Leases without notice to THCI. The Debtors had and have no intention of complying with the Court's Orders, Mr. Cousins contends. The THCI Assumed Leases have remained in default at all times prior to and since the Effective Date of the Plan. Similarly, IHS has been in default under the guarantees. Those defaults have directly affected the quality of care provided at, and value of, THCI's facilities. Accordingly, pursuant to Section 365 of the Bankruptcy Code, Mr. Cousins asserts that THCI is entitled to an administrative claim for damages arising from the breach and effective repudiation of its leases, constituting postpetition obligations of these Debtors, IHS's related guarantees, and for legal fees under the terms of the March 2002 Stipulation. Rent is due under the terms of the THCI Assumed Leases on the first day of each month. The September rent was due prior to the Effective Date of the Plan, but no part of the September rent has been paid. According to Mr. Cousins, a check representing the September rent was belatedly delivered to THCI on September 12, 2003. It has subsequently been returned for insufficient funds. "Briarwood, the purchaser of the stock in these subsidiaries, also does not satisfy the financial covenant criteria," Mr. Cousins remarks. Contrary to representations made during the Confirmation Hearing, THCI was later advised that TransHealth will not be managing the THCI facilities. At the time that the disclosure was made in early September, no information was available regarding who would be managing or operating the THCI facilities. The change in management is a material breach of the THCI Assumed Leases as well. THCI was not asked to, and did not, consent to the substitution of a new manager for TransHealth. THCI has since learned that an operator in Florida with no demonstrated experience operating healthcare facilities in any of the jurisdictions in which the THCI facilities are located "may" have this responsibility. "The use of an unqualified manager will only exacerbate the regulatory deficiencies at the THCI facilities," Mr. Cousins says. (Integrated Health Bankruptcy News, Issue No. 65; Bankruptcy Creditors' Service, Inc., 609/392-0900) INTERNACIONAL DE CERAMICA: Violates Covenant Under US Loan Pact --------------------------------------------------------------- Interncaional de Ceramica, S.A. de C.V. (NYSE: ICM) posted solid sales growth for the third quarter of 2003, resulting in record sales for any quarter in the Company's history. The following report is attributed to Oscar E. Almeida and Victor D. Almeida, Interceramica's Chairman of the Board and Chief Executive Officer, respectively: The quarter was marked by continuing stiff competition in the industry, particularly with European producers, directing increasing amounts of products to the United States and Mexico due to weak conditions in their usual export markets. Regardless, we have been able to increase market penetration, particularly in Mexico. Consolidated sales of US $83.5 million for the third quarter of 2003 were 6.25 percent greater than second quarter sales of US $78.6 million in 2002. As was the case in the preceding quarter, a lower gross margin for the period resulted in gross income for the quarter virtually identical to the same quarter in 2002, at US $28.7 million and US $28.9 million, respectively. Sales in Mexico for the third quarter increased by 8.30 percent from the third quarter of 2002, and at US $48.2 million -- our highest ever level of sales in Mexico -- grew by 27.23 percent over sales of US $37.9 million in the preceding quarter of this year. We sold significantly more product in Mexico during the third quarter of 2003 over the same period last year, increasing by 25.09 percent. This volume -- another Company record -- was driven by healthy sales growth in both channels of distribution in Mexico: our Company-owned stores as well as the extensive independent franchise network. Much of the sales growth is attributable to sales of private-label products imported since late last year to round out our product lines in the middle-to- lower-end of the market segment. As we have freed up capacity at our plants for higher- margin products, our challenge remains to grow sales of these more expensive products and to keep improving pricing levels. We have introduced a number of innovative products over recent months and, together with our recent launch of the highly sought porcelain products, these products are helping to attract consumers to Interceramic stores across the country. In the international markets, sales in the third quarter of 2003 increased by 3.58 percent over sales in the third quarter of 2002, at US $35.3 million compared to sales of US $34.1 million for the period last year. The amount of product sold in the International markets in the third quarter declined, however, over 2002, by 7.74 percent. Independent distribution remains important in the United States, but we are focused on the expansion of our network of Company-owned stores, which routinely provide higher-margin returns on sales. At US $6.3 million, consolidated operating income for the third quarter of 2003 was 18.02 percent behind operating income of US $7.7 million posted in the same period of last year, although recovering by 34.43 percent over the low of US $4.7 million recorded in the second quarter of this year. Some of the dip in operating income is the result of increased operating expenses, which were up for the period by almost US $1.0 million over the same quarter last year, as we ramped up our sales infrastructure and new stores to allow for the increased amount of products moving through our distribution channels. As might be expected, EBITDA for the third quarter of this year lagged behind that of the third quarter of 2002, down 10.66 percent to US $10.2 million from last year's US $11.4 million. While an improvement over EBITDA of just US $8.6 million last quarter, the level of earnings compared to our sales growth highlights our need to improve our product mix and capture the higher margins available on sales of our top-of-the-line products. Over the course of the third quarter, Interceramic determined that the Company was not in compliance with a financial ratio contained in a covenant in the Credit Agreement applicable to our US $100.0 million syndicated loan facility. With uncertainty over how quickly and to what extent our operating income will improve in the short term, we commenced discussions with our lenders over a waiver of the non-compliance or an amendment to the Credit Agreement more in line with our expectations. By September 30, 2003, we had reached agreement with the lenders on a series of amendments to the Credit Agreement that we believe will provide the Company with sufficient flexibility going forward, and are currently in the process of documenting these amendments. Although we face continued tough competition and a number of other challenges, our fundamentals remain strong, our products are getting more and more innovative and exciting, and the Company continues to be well-positioned in our industry. We look forward to better performance in the upcoming quarters. KAISER ALUMINUM: Retirees' Panel Hires Orrick as Bankr. Counsel --------------------------------------------------------------- The Official Committee of Retired Employees of the Kaiser Aluminum Debtors seeks the Court's authority to retain Orrick, Herrington & Sutcliffe LLP as its bankruptcy counsel. Orrick Herrington will replace Brobeck, Phleger & Harrison LLP -- the Retirees Committee's original bankruptcy counsel. Brobeck dissolved in February 2003 and Frederick D. Holden, the Brobeck partner responsible for representing the Retirees' Committee in the Debtors' cases, became a partner with Orrick Herrington. Barbara P. Pletcher, the other Brobeck attorney, who extensively represented the Retirees' Committee in these cases, also became a partner with Orrick Herrington in September 2003. Orrick Herrington will prosecute the interest of salaried retirees in the Debtors' bankruptcy cases. The Retirees' Committee selected Orrick Herrington because: (a) Orrick Herrington partners Mr. Holden and Ms. Pletcher are knowledgeable about and familiar with the matters within the scope of the Retirees Committee's appointment; (b) Orrick Herrington has considerable experience and expertise in bankruptcy in general and in representing retirees' committees in bankruptcy cases in particular; (c) Orrick Herrington has considerable experience and expertise in matters relating specifically to retirement benefits; and (d) Mr. Holden, Ms. Pletcher and their team work out of Orrick Herrington's San Francisco, California office, and every member of the Retirees' Committee resides in or near -- and the Committee plans to hold all of its meetings in -- the San Francisco Bay area. Orrick Herrington will be compensated in accordance with its current standard hourly rates: Frederick D. Holden, Jr., bankruptcy partner $520 Barbara P. Pletcher, employee benefits partner 525 Eric M. Frater, associate 305 Linda Sigler, bankruptcy paralegal 235 Orrick Herrington will also be reimbursed for its actual and necessary expenses incurred in the duration of the cases. Mr. Holden ascertains that Orrick Herrington has no connection with the Debtors or with their major creditors and with other parties-in-interest to these cases. Orrick Herrington represents no adverse interest to the Retirees' Committee in the matters in which it is to be engaged. The Retirees' Committee will continue to retain Jaspan Schlesinger Hoffman LLP as its Delaware counsel. Jaspan served the previous Salaried Retirees' Committee. Orrick Herrington, as primary counsel, will work closely with Jaspan to ensure that there is no unnecessary duplication of services. (Kaiser Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service, Inc., 609/392-0900) LEAP WIRELESS: Claim Validity Objection Deadline Moved to Nov 30 ---------------------------------------------------------------- Robert T. Schmidt, Esq., at Kramer Levin Naftalis & Frankel LLP, in New York, tells the Court that the Leap Wireless Debtors were authorized to use Cricket Communications, Inc.'s cash collateral on an interim basis pursuant to an Interim Stipulation Order entered on April 14, 2003. According to the Interim Stipulation Order, any person or entity can only assert Claims and Defenses in an action or other appropriate proceeding on or before June 28, 2003 -- Objection Deadline -- subject to the right to seek an extension as may be agreed by the Informal Vendor Debt Committee. On July 10, 2003, the Court entered an order extending the deadline to challenge the validity, enforceability or priority of claims and liens asserted by Cricket's vendor debt holders. The Order extended the Objection Deadline to the earlier of September 26, 2003. Now, the Official Committee of Unsecured Creditors and the Informal Vendor Debt Committee agree to further extend the Claim Validity Objection Deadline to the earlier of the date of Plan consummation or November 30, 2003. (Leap Wireless Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., 609/392-0900) LNR PROPERTY: Fitch Assigns BB- Rating to $300M Senior Sub Notes ---------------------------------------------------------------- Fitch Ratings has assigned a 'BB-' rating to LNR Property Corp's $300 million ten-year 7.25% senior subordinated notes. The notes have a final maturity in 2013 and are pari passu with LNR's existing senior subordinated debt. The Rating Outlook is Stable. Proceeds from the transaction will principally be used to refinance LNR's $250 million of 10.50% senior subordinated notes due in 2009 through a tender offer, and to pay an approximately $17 million early redemption penalty. The transaction is expected to close on Oct. 29, 2003. Fitch views the issuance constructively as it will provide a modest increase to LNR's unsecured capital base, lengthen the company's debt maturity schedule to approximately 6.6 years, and lower funding costs. The new transaction is priced 325 basis points lower than the securities being refinanced. As a result of LNR's three unsecured debt offerings in 2003, Fitch estimates that the unsecured debt to total debt ratio will improve to 60.16% based on Aug. 31, 2003 financials from 36.10% at Nov. 30, 2002. However, it is not clear if the quality of LNR's unencumbered asset pool will improve as a result of the issuance. Additional proceeds may be used in LNR's and Lennar Corp.'s joint acquisition of Newhall Land and Farming Company. Following the transaction, LNR will have issued $650 million of 10-year senior subordinated unsecured debt and $235 million of convertible senior subordinated debt in 2003. Net of repayments, LNR's total new unsecured debt issuance for 2003 will be approximately $435 million. LNR's ratings reflect its good asset performance and consistent profitability. Fitch believes that the fundamental driver of LNR's success has been its risk management, due diligence and commercial mortgage-backed securities special servicing operations. The rating also takes into account the risks inherent in LNR's repositioning property, partnership equity, land, and unrated CMBS investments. Fitch also continues to monitor legal risks associated with the acquisition and development of Newhall. Based in Miami, FL with roots dating to 1969, LNR underwrites, purchases, and manages real estate and real estate-driven investments. LNR is one of the leading CMBS special servicers in the U.S. LNR primarily seeks investment opportunities where it can purchase assets at a discount and utilize its due diligence, repositioning, asset management, and workout expertise to improve cash flows and profitability. Specifically, activities include the development or purchase of office buildings, apartment buildings, affordable housing communities, retail space, investments in subordinated CMBS, and mortgage and real estate-backed loans. LORAL SPACE: Intelsat Pitches Winning Bid for N. American Assets ---------------------------------------------------------------- Intelsat, Ltd., has advanced to the next phase in its effort to acquire the North American satellite assets of Loral Space & Communications Corporation. Intelsat was notified Monday that it was the winner of the auction conducted by Loral under a bankruptcy court-supervised auction process. Intelsat was named the stalking horse bidder for the sale of the assets under section 363(b) of the U.S. Bankruptcy Code in connection with Loral's 15 July 2003 filing for bankruptcy protection. The sale process is scheduled to conclude this week, when the U.S. Bankruptcy Court for the Southern District of New York is expected to approve the sale of the assets to Intelsat. Intelsat chief executive officer Conny Kullman stated, "We now await the judge's approval of the sale of the assets. If successful, we will move to complete the regulatory process quickly and close the transaction as soon as possible, providing a smooth and efficient transition for the customers on these satellites." Intelsat, Ltd. offers telephony, corporate network, video and Internet solutions around the globe via capacity on 25 geosynchronous satellites in prime orbital locations. Customers in approximately 200 countries rely on Intelsat satellites and ground resources for quality connections, global reach and reliability. For more information, visit http://www.intelsat.com LORAL SPACE: Accepts Intelsat Bid for Sale of N. American Assets ---------------------------------------------------------------- Loral Space & Communications (OTC Bulletin Board: LRLSQ) announced that Intelsat, Ltd., was the highest bidder in an auction held Monday for Loral's North American telecommunications satellites. The winning bid was $1.1 billion. The other bidder at the auction was EchoStar Communications Corporation. Intelsat's bid is subject to approval by the U.S. Bankruptcy Court for the Southern District of New York. The court will consider Loral's motion to approve the sale to Intelsat at a hearing scheduled for today. On July 15, 2003, Loral announced that it had reached a definitive agreement to sell its North American telecommunications satellites to Intelsat. The agreement provided for the sale of the in-orbit Telstars 4, 5, 6, 7 and 13, as well as Telstar 8, which is scheduled to be launched in the first half of next year. Subsequent to that announcement, Telstar 4 failed and was deemed a total loss; it is fully insured. Loral intends to reorganize around its remaining fleet of five satellites and its satellite manufacturing operations, allowing the company to go forward as a viable enterprise with opportunities for future growth. Loral Space & Communications is a satellite communications company. It owns and operates a global fleet of telecommunications satellites used by television and cable networks to broadcast video entertainment programming, and by communication service providers, resellers, corporate and government customers for broadband data transmission, Internet services and other value- added communications services. Loral also is a world-class leader in the design and manufacture of satellites and satellite systems for commercial and government applications including direct-to- home television, broadband communications, wireless telephony, weather monitoring and air traffic management. For more information, visit Loral's Web site at http://www.loral.com LTV: Creation of Distribution Trust and Appointment of Trustee -------------------------------------------------------------- On or before the Effective Date of the Liquidating LTV Debtors' Plan, a Distribution Trust will be established under the terms of a Distribution Trust Agreement for the purpose of resolving all Disputed Claims, making all distributions to holders of Allowed Claims in accordance with the terms of the Plan, pursuing any Recovery Actions and otherwise implementing the Plan and finally administering the Estates. On the Effective Date, the Distribution Trust Assets will be transferred to and vest in the Distribution Trust. The Distribution Trustee will be empowered to: (a) effect all actions and execute all agreements, instruments and other documents necessary to implement the Plan; (b) invest or distribute the Distribution Trust Assets -- directly or through Third Party Disbursing Agents; (c) make distributions to holders of Allowed Claims as contemplated by the Plan; (d) take steps as are necessary and appropriate to coordinate with representatives of the estates of the other LTV Debtors; (e) establish, if necessary, and administer the Trust Accounts; (f) comply with the Plan and exercise its rights and fulfill its obligations under the Plan; (g) object to Claims and resolve objections; (h) pursue any Recovery Actions or other available causes of action -- including any actions previously initiated by the Debtors and pending as of the Effective Date -- and raise any defenses in any adverse actions or counterclaims; (i) employ professionals to represent it with respect to its responsibilities; (j) exercise other powers as may be vested in it or as deemed by it to be necessary and proper to implement the provisions of the Plan and the Distribution Trust Agreement; (k) take such actions as are necessary or appropriate to close or dismiss any or all of the Bankruptcy Cases; and (l) dissolve the Distribution Trust in accordance with the terms of the Distribution Trust Agreement. The Distribution Trust will be funded by the proceeds of the Intercompany Claims Settlement and any Recovery Actions held, or to be held, in the Trust Accounts for the benefit of the beneficiaries of such Trust Accounts, which will be funded consistent with the Plan. The Liquidating Debtors promise to disclose the identity of the Distribution Trustee at least ten days prior to the Confirmation Hearing. The Trustee is to be selected by the Debtors in consultation with the Noteholders' Committee and will be the exclusive trustee of the assets of the Distribution Trust, as well as the representative of the consolidated Estate of the VP Debtors. Indemnification The Distribution Trust Agreement may include reasonable and customary indemnification provisions, but these terms are to be disclosed at a later date. Any indemnification will be the sole responsibility of the Distribution Trust and payable solely from the Distribution Trust Expenses Account. Compensation for Third Party Disbursing Agents Each Third Party Disbursing Agent, including the Old Senior Note Indenture Trustees, providing services related to distributions pursuant to the Plan will receive from the Distribution Trust Expenses Account, without further Bankruptcy Court approval, reasonable compensation for such services and reimbursement of reasonable out-of-pocket expenses incurred in connection with those services. These payments will be made on terms agreed to with the Distribution Trustee and will not be deducted from distributions -- including any distributions of Cash Investment Yield -- to be made pursuant to the Plan to holders of Allowed Claims receiving distributions from a Third Party Disbursing Agent. To assist in making distributions under the Plan the applicable Trust Accounts may be held in the name of one or more Third Party Disbursing Agents for the benefit of holders of Allowed Claims under the Plan. The Third Party Disbursing Agents will invest the Cash in the Trust Accounts as directed by the Distribution Trustee in accordance with the Debtors' investment and deposit guidelines; provided, however, that should the Distribution Trustee determine, in his sole discretion, that the administrative costs associated with such investment will exceed the return on such investment, he may direct the Third Party Disbursing Agent not to invest such Cash. Distributions of Cash from accounts held by Third Party Disbursing Agents will include a pro rata share of the Cash Investment Yield, if any, from any investment of Cash. Termination of Trust The Distribution Trust Agreement will provide that termination of the trust will occur no later than two years after the Effective Date, unless the Bankruptcy Court approves an extension based on a finding that an extension is necessary for the Distribution Trust to complete its claims resolution and liquidating purpose. Annual Distributions The Distribution Trust is required to distribute at least annually to the beneficiary-creditors-claimants its net income --net of any taxes paid -- except for amounts retained as reasonably necessary to maintain the value of the Distribution Trust Assets or to meet claims and contingent liabilities, including Disputed Claims. On or before the Effective Date, Trust Accounts will be established and maintained in federally insured domestic banks in the name of the Distribution Trustee and, if applicable, the Third Party Disbursing Agent for each such Trust Account. On the Effective Date, each of the Trust Accounts and the contents thereof will be transferred to and irrevocably vest in the Distribution Trust. Priority Claims Trust Accounts On or before the Effective Date, separate Priority Claims Trust Accounts will be established for each of the Debtors' Estates as of the Effective Date. In particular, all amounts of Cash for each Debtor not used to fund the Distribution Trust Expenses Account will be deposited by the Debtors in each of the Priority Claims Trust Accounts to be used to satisfy Allowed Secured Claims, Allowed Administrative Claims, Allowed Priority Claims and Allowed Priority Tax Claims against the applicable Debtor's Estate in accordance with the terms of the Plan. If the balance of any Estate's Priority Claim Trust Account is insufficient to satisfy all Allowed Secured Claims, Administrative Claims, Priority Claims and Priority Tax Claims payable out of such Priority Claims Trust Account, additional funds maybe transferred by the Distribution Trustee from such Estate's Unsecured Claims Trust Account to such Estate's Priority Claims Trust Account. To the fullest extent possible, any transfer will be accomplished to minimize any adverse impact on the ability to make pro rata distributions to unsecured creditors. Upon obtaining a Bankruptcy Court order authorizing final distribution and closure of the Bankruptcy Cases, any funds remaining in any Priority Claims Trust Account and not earmarked by the Distribution Trustee for payment of Allowed Secured Claims, Allowed Administrative Claims, Allowed Priority Claims and Allowed Priority Tax Claims, will be transferred to the applicable Unsecured Claims Trust Account for distribution to holders of Allowed Unsecured Claims. Unsecured Claims Trust Accounts On or before the Effective Date, the Unsecured Claims Trust Accounts will be established. Each Estate's Unsecured Claims Trust Account will be funded no later than 60 days after the Effective Date by the transfer of any funds in an Estate's Priority Claims Trust Account in excess of the Debtors' or the Distribution Trustee's reasonable estimate, in consultation with the Noteholders' Committee, of the amount of all Secured Claims, Administrative Claims, Priority Claims and Priority Tax Claims outstanding against each Estate. In addition, the Liquidating Debtors' Unsecured Claims Trust Account also may be funded by any Conditional Settlement Proceeds paid to the Liquidating Debtors or the Distribution Trustee, as successor-in-interest to the Liquidating Debtors, in accordance with the Intercompany Claims Settlement. The Cash deposited in each Estate's Unsecured Claims Trust Account will be used to satisfy Allowed Unsecured Claims against the applicable Debtor in accordance with the terms of the Plan. Special Provisions for Holders of Old 8.20% Senior Note Claims or Old 11.75% Senior Note Claims All distributions to holders of Allowed Old 8.20% Senior Note Claims will be made by the applicable Disbursing Agent to the Old 8.20% Senior Note Indenture Trustee on behalf of such Claim holders, and the Old 8.20% Senior Note Indenture Trustee, in turn, will act as the Third Party Disbursing Agent with respect of the holder of Old 8.20% Senior Note Claims. All distributions to holders of Allowed Old 11.75% Senior Note Claims will be made by the applicable Disbursing Agent to the Old 11.75% Senior Note indenture Trustee on behalf of such Claim holders, and the Old 11.75% Senior Note Indenture Trustee, in turn, will act as the Third Party Disbursing Agent in respect of holders of Old 11.75% Senior Note Claims. Compensation to Indenture Trustees The Old 8.20% Senior Note Indenture Trustee will retain the right to collect its reasonable fees and expenses incurred prior to the Effective Date from any distributions to the holders of Allowed 8.20% Senior Note Claims pursuant to its lien and priority rights under the Old 8.20% Senior Note Indenture, and will be solely responsible for making distributions to holders of Allowed Old 8.20% Senior Note Claims. The same rights are given to the Old 11.75% Senior Note Indenture Trustee. All distributions to holders of Allowed Old Senior Note Claims will be deemed to apply first to the principal amount of such Old Senior Note Claims until such principal amount is paid in full and then to any accrued prepetition interest included in such Old Senior Note Claims. Distribution Record Date Except with respect to holders of Old Senior Note Claims in accordance with the Plan or as otherwise provided in a Final Order of the Bankruptcy Court, the transferees of any Unsecured Claims that are transferred pursuant to Rule 3001 of the Federal Rules of Bankruptcy Procedure on or prior to the Distribution Record Date will be treated as the holders of such Claims for all purposes, notwithstanding that any period provided by Bankruptcy Rule 3001 for objecting to such transfer has not expired by the Distribution Record Date. The applicable Disbursing Agent will have no obligation to recognize the transfer or sale of any Unsecured Claim that occurs after the close of business on the Distribution Record Date and will be entitled for all purposes to recognize and make distributions only to those holders who are holders of such Claims as of the close of business on the Distribution Record Date. (LTV Bankruptcy News, Issue No. 56; Bankruptcy Creditors' Service, Inc., 609/392-00900) M.D.C. HOLDINGS: Board Declares Third-Quarter Cash Dividend ----------------------------------------------------------- M.D.C. Holdings, Inc. (NYSE: MDC; PCX) -- http://www.RichmondAmerican.com-- announced that its board of directors has declared a cash dividend of twelve and one-half cents ($.125) per share for the quarter ended September 30, 2003. The dividend is payable on November 19, 2003 to shareowners of record on November 5, 2003. MDC (S&P/BB+/Stable), whose subsidiaries build homes under the name "Richmond American Homes," is one of the largest homebuilders in the United States. The Company also provides mortgage financing, primarily for MDC's homebuyers, through its wholly owned subsidiary HomeAmerican Mortgage Corporation. MDC is a major regional homebuilder with a significant presence in some of the country's best housing markets. The Company is the largest homebuilder in Colorado; among the top five homebuilders in Northern Virginia, suburban Maryland, Phoenix, Tucson and Las Vegas; and among the top ten homebuilders in Northern California, Southern California and Salt Lake City. MDC also has a growing presence in Dallas/Fort Worth and has recently entered the Houston, San Antonio, Philadelphia/Delaware Valley, West Florida, Jacksonville and Chicago markets. Please visit http://www.richmondamerican.comfor more information on the Company. MERITAGE CORP: Third Quarter Results Show Year-Over-Year Growth --------------------------------------------------------------- Meritage Corporation (NYSE:MTH) announced net earnings of $25.8 million, or $1.86 per diluted share, for the third quarter ended September 30, 2003, representing year-over-year increases of 15% and 18%, respectively. Net earnings for the first nine months of 2003 were $62.8 million, or $4.57 per diluted share, for year- over-year increases of 37% and 28%, respectively. "Meritage is continuing to successfully execute its long-term growth strategy, resulting in record operating results for the third quarter and first nine months of 2003," said Steve Hilton, Meritage Co-Chairman and Co-CEO. "The Company has diversified its operations into four of the fastest growing states in the nation. We are expanding within our existing markets in Texas, Arizona and California, while our results have also benefited from the October 2002 acquisition of Perma-Bilt Homes in Las Vegas, Nevada. In addition, our start-up operation in San Antonio, Texas, produced its first closings during September 2003. We expect San Antonio to be profitable in 2003, its first year of operation. This has all translated into record home sales revenue during the first nine months of 2003 of $990 million and generated net earnings of $62.8 million, an increase of 33% in revenue and 37% in net earnings over the same period a year ago." The Company's gross margin increased by 59 basis points to 20.2% in the third quarter of 2003, compared to the same quarter last year. This margin level was generally consistent with the levels of the first half of 2003 and reflects a continued strong housing market, supporting pricing power in most markets. This improvement in gross margin was more than offset by an increase in SG&A expenses from 8.9% to 9.9% of revenue resulting in a pretax margin of 10.7%, down 47 basis points from 11.2% in the same quarter last year. The increase in SG&A expense was caused mainly by start-up marketing costs relating to communities in the Phoenix metropolitan area, increased sales commissions and a general increase in marketing and other sales costs. "We anticipate that increases in revenue should help leverage our SG&A expenses in the fourth quarter of this year and into next year," added Hilton. "The dollar value of new home orders was up 44% to $1.3 billion in the first nine months of 2003 and the value of homes in backlog was up 40% over the prior year, to $840 million," said John Landon, Meritage Co-Chairman and Co-CEO. "Based on our strong third quarter orders and backlog, we anticipate closing approximately 5,600 homes and generating approximately $1.4 billion in revenue for the full year 2003. We expect this top line revenue to produce record 2003 diluted earnings per share in the range of $6.45 to $6.65, representing an increase of 21% to 25% for the full year, and is a $0.25 increase from our prior quarter's earnings guidance of $6.20 to $6.40." Meritage received 1,546 orders for new homes valued at $416 million in the three months ended September 30, 2003, increases of 37% and 36%, respectively, from the same period a year ago. The number of actively selling communities at quarter end was 151, up 10% from June 30, 2003 and 29% from the same quarter a year ago. "We anticipate beginning 2004 with approximately 155 communities, 20% higher than at the beginning of 2003," added Landon. Meritage maintains operating objectives which are intended to reduce operating risk, such as minimizing unsold inventory. At the end of the third quarter Meritage had 192 completed unsold homes, or about 1.3 per community. The Company also reduces risk by controlling a significant majority of lots through option agreements which minimizes the investment in inventory, decreases the risk of holding large amounts of land and increases returns. Meritage's goal is to maintain a four to five year supply of lots with approximately 80-85% controlled through options. The number of lots controlled at September 30, 2003 increased 30% to 28,798 from the same time last year. Of this number approximately 85% are controlled through options. Meritage's balance sheet remains prudently leveraged with a net debt to capital ratio of 50% at September, 30 2003. EBITDA in the third quarter was $48.4 million, up 9% from the same period last year, resulting in a trailing four quarter interest coverage ratio of about 7.0 times and a trailing four quarter debt to EBITDA ratio of about 2.3 times. (EBITDA represents a non-GAAP financial measure. A table reconciling this measure to the appropriate GAAP measure is included with the operating results part of this press release). In addition, at the end of the quarter, Meritage had approximately $93.8 million outstanding under our revolving credit facility and $21.2 million in letters of credit, leaving an unused commitment of $135.0 million, all of which was available to borrow. During the third quarter Meritage enhanced its liquidity by completing an add-on offering of $75 million in aggregate principal amount of its 9.75% Senior Notes due 2011. The notes were priced at 109.0% of their face amount implying a yield-to- worst of 7.642%. The net proceeds from the offering were used to pay down a portion of the Company's senior credit facility. Meritage Corp. (Fitch, BB Senior Unsecured Debt Rating, Stable) designs, builds and sells distinctive single-family homes ranging from entry-level to semi-custom luxury. Meritage operates in the Phoenix and Tucson, Ariz., markets under the Monterey Homes, Hancock Communities and Meritage Homes brand names; in the Dallas/Ft. Worth, Austin and Houston, Texas, markets as Legacy Homes and Hammonds Homes; in the East San Francisco Bay and Sacramento, Calif., markets as Meritage Homes; and in the Las Vegas, market as Perma-Bilt Homes. METALS USA: Terry Freeman Acquires 1,845 Metals USA Shares ---------------------------------------------------------- Terry Freeman, Metals USA's Senior Vice President and Chief Financial Officer, reports to the Securities and Exchange Commission, that he now has direct beneficial ownership of 26,475 shares of Metals USA Common Stock after acquiring 1,845 more shares on October 8, 2003. Mr. Freeman acquired the new shares pursuant to Metals USA's confirmed Plan of Reorganization, which provides that a final distribution of New Common Stock will be made to the holders of Allowed General Unsecured Claims. Mr. Freeman disclaims purchasing these securities for the purposes of Section 16(b) of the Securities Exchange Act of 1934. (Metals USA Bankruptcy News, Issue No. 37; Bankruptcy Creditors' Service, Inc., 609/392-0900) MIRANT: Wrightsville Debtors Want More Time to File Schedules ------------------------------------------------------------- Mirant Corp.'s Wrightsville Debtors were formed as part of a transaction associated with the development and construction of the Wrightsville Power Facility located in Wrightsville, Arkansas, which began commercial operation in July 2002. The Wrightsville Plant is a joint development venture between Mirant Wrightsville Management, Inc., Mirant Wrightsville Investments, Inc., and Kinder Morgan Power Company. Together, Mirant Wrightsville Management, Inc. and Mirant Wrightsville Investments, Inc. own a 51% interest in the Wrightsville Plant, and Kinder Morgan Power Company owns a 49% interest. The Wrightsville Plant produces electricity for use throughout the southeastern United States. The only assets of the Wrightsville Debtors are the Wrightsville Plant and the assets associated with the Wrightsville Plant. When the Initial Debtors' bankruptcy cases were commenced on July 14, 2003 and July 15, 2003, Ian Peck, Esq., at Haynes and Boone LLP, in Dallas, Texas, relates that the Wrightsville Debtors were excluded from the filing because it was believed that the Wrightsville Plant would be able to produce and sell power that would generate revenue sufficient to pay the costs associated with operating the Wrightsville Plant. Contrary to these expectations, current market conditions have made it impossible to generate electricity profitably, resulting in a significant cash crisis that has made it impossible for the Wrightsville Debtors to fund their daily operations. No funding to the Wrightsville Debtors has been provided by the Mirant Debtors since the Initial Debtors' Petition Date. Concurrent with their bankruptcy filing, the Wrightsville Debtors filed a list of creditors holding the 50 largest unsecured claims on a consolidated basis. The Wrightsville Debtors have not yet completed their Schedules of Assets and Liabilities and Statements of Financial Affairs. Accordingly, the Wrightsville Debtors ask the Court to extend their deadline to file the Schedules and Statements to December 1, 2003. Mr. Peck asserts that cause exists to warrant the extension because: (a) the size and scope of Wrightsville Debtors' businesses are large; (b) the Wrightsville Debtors' financial affairs are complex; (c) there is limited staff available to perform the required internal review of their accounts and affairs; and (d) the Wrightsville Debtors were unable to assemble, prior to the Petition Date, all of the information necessary due to the Mirant Debtors' focus on the numerous complex and pressing matters in the Chapter 11 cases as a whole. (Mirant Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 609/392-0900) NATIONAL BENEVOLENT: Fitch Keeps B- Rating on Fixed-Rate Debts -------------------------------------------------------------- Fitch Ratings maintains the 'B-' rating National Benevolent Association, Inc., MO approximately $149 million in outstanding fixed-rate debt. NBA's total outstanding debt is approximately $216 million of which approximately $63 million are variable-rate demand bonds (Fitch does not rate this debt). The bonds remain on Rating Watch Negative. In an informational press release dated Oct. 15, 2003, NBA reported that there has been no further extension from KBC Bank of the letters of credit supporting NBA's outstanding $63 million variable-rate bonds (which expired at 5 p.m. EDT on Oct. 15). The president of NBA stated that discussions with banks and fixed-rate bondholders are still ongoing; however, a restructuring plan to repay all debt obligations has yet to be finalized. To date, all scheduled debt payments have been made and the organization does not expect the LOC expiration to disrupt current operations. KBC Bank and other bondholders still retain the right to accelerate the payment schedule, as they have since NBA originally triggered a technical default. KBC's and other bondholder's intentions are still unknown, but as stated in prior releases, any acceleration by NBA's creditors will result in further downgrades of NBA's rating. Fitch will continue to monitor this situation. NOVA CHEMICALS: Will Shut Down High-Cost Polyethylene Prod. Line ---------------------------------------------------------------- NOVA Chemicals Corporation (NYSE:NCX)(TSX:NCX) announced the shutdown of a 275 million pound linear low-density polyethylene line at its St. Clair River Site, in Corunna, Ontario. This shutdown will occur during the second quarter of 2004. Built in 1960, A-Line was the world's first linear low-density polyethylene production line. The shutdown of the company's smallest, highest-cost polyethylene line removes 8% of NOVA Chemicals' capacity, which is 0.6% of total North American polyethylene capacity. The company expects the shutdown to impact roughly 60 positions. Approximately 80% of the most profitable sales from A-Line will be moved to other facilities. Thirty percent will move to the new Advanced SCLAIRTECH(TM) technology line in Joffre, Alberta. This will result in higher operating rates for the new plant and significantly lower production costs for the retained products. "Our objective is to have the lowest-cost assets with the highest- return product portfolio in the industry," said Jeffrey M. Lipton, President and CEO of NOVA Chemicals. "While we do see business improving, we believe it always makes good sense to increase the operating rates of our lowest-cost facilities and reduce our fixed costs by $5 to $10 million per year." NOVA Chemicals (S&P, BB+ Long-Term Corporate Credit Rating, Positive) is a focused, commodity chemical company producing olefins/polyolefins and styrenics at 18 locations in the United States, Canada, France, the Netherlands and the United Kingdom. NOVA Chemicals Corporation shares trade on the Toronto and New York exchanges under the trading symbol NCX. Visit NOVA Chemicals on the Internet at http://www.novachemicals.com NRG ENERGY: Secures Go-Signal to Assume Five McClain Agreements --------------------------------------------------------------- NRG McClain LLC entered into a credit agreement, dated as of November 28, 2001 among NRG McClain, the Prepetition Secured Lenders and West LB AG, New York branch, as administrative agent and collateral agent for the Prepetition Secured Lenders. Pursuant to the Prepetition Credit Agreement and related documentation, NRG McClain pledged substantially all of its assets in favor of West LB for its benefit and the ratable benefit of the Prepetition Secured Lenders. In addition, NRG pledged all of its membership interests in NRG McClain, and issued a guarantee to the Prepetition Secured Lenders in respect of certain obligations of NRG McClain under the Existing Agreements. Robin L. Itkin, Esq., at Kirkland & Ellis, in New York, reports that as of the NRG McClain Petition Date -- August 19, 2003 -- NRG McClain was in default under the Existing Agreements. NRG McClain missed two scheduled payments of principal -- an $8,000,000 payment due on December 31, 2002, with respect to working capital loans, and an approximately $778,000 payment due on June 30, 2003, with respect to a term loan -- and defaulted on several covenants of the Prepetition Credit Agreement. Accordingly, the Debtors sought and obtained the Court's authority to assume five agreements entered into by NRG McClain before the NRG McClain Petition Date or NRG and Power Marketing, Inc. before the NRG Petition Date, as the case may be: (1) the Omnibus Restructuring and Consent Agreement, dated as of August 18, 2003, among the NRG McClain, the Prepetition Secured Lenders and the Agent; (2) the Energy Management Services Agreement Guarantee, dated November 28, 2001, between NRG and NRG McClain; (3) the Energy Management Services Agreement, dated November 28, 2001, between PMI and NRG McClain; (4) the EMSA Amendment No. 1, dated July 24, 2003, between PMI and NRG McClain; and (5) the Master Power Purchase and Sale Agreement, dated July 24, 2003, between Oklahoma Gas & Electric Company and NRG McClain. Furthermore, the Court authorizes NRG and PMI to enter into the ORCA, an Agreement executed after the NRG Petition Date. Omnibus Restructuring and Consent Agreement Mr. Itkin relates that the ORCA provides primarily for: (a) the deferral of principal and interest owed by NRG McClain under the Prepetition Credit Agreement; (b) the temporary forbearance by the Prepetition Secured Lenders from enforcing their rights and remedies under the Existing Documents; and (c) the consent of the Prepetition Secured Lenders to the Sale Transaction. The ORCA also provides for: (a) NRG's funding of NRG McClain's operating expenses and certain professional fees payable by NRG McClain; (b) the payment and settlement of amounts owing in respect of power sales, including, without limitation, the PMI's payment of amounts owed to NRG McClain under the EMSA; and (c) the priority of application of proceeds received in respect of the Sale Transaction. Master Power Purchase and Sale Agreement The Power Agreement was executed on July 24, 2003. The transaction was negotiated at arm's length between the parties and entered into pursuant to the terms of an industry-standard master power purchase and sale agreement. The Power Agreement provides that: (a) NRG McClain sells all energy associated with NRG McClain's interest in the McClain Facility to OG&E, with OG&E obligated to meet specified minimum monthly purchase requirements; (b) NRG McClain retains the right to sell to third parties any energy that OG&E does not purchase; (c) The energy is sold on a "unit contingent" basis, which excuses NRG McClain's performance in the event of forced outages at the McClain Facility, up to certain levels of forced outage rates; and (d) The term of the transaction is from July 26, 2003 through June 1, 2004, subject to early termination rights by both parties. Ultimately, Mr. Itkin says, the purpose of the PPA is to provide OG&E access to the McClain Facility's generating capacity, while at the same time providing guaranteed revenue streams to the Project. Energy Management Services Agreement The EMSA and the EMSA Amendment: (a) contain parameters under which PMI will procure fuel for the power sales and permits the Prepetition Secured Lenders to effectively terminate the EMSA if certain conditions are not met; (b) obligate PMI to procure fuel for and schedule dispatch of power generated by NRG McClain pursuant to the terms of the PPA; and (c) permit PMI to sell excess power that NRG McClain does not otherwise sell pursuant to the Power Agreement, and thus benefit the Debtors' estates. Under the EMSA Guarantee, NRG agreed to guarantee to NRG McClain the payment, performance and observance by PMI of the EMSA. NRG's liability under the EMSA Guarantee is limited to $500,000. As permitted by the EMSA Guarantee, NRG McClain has assigned its rights to the Agent as security for the loans under the Prepetition Credit Agreement. Mr. Itkin asserts that the EMSA Guarantee is favorable to the Debtors' interests because: -- it provides payment and performance support by NRG of the obligations of PMI under the EMSA; and -- serves as a critical condition to the Prepetition Secured Lenders' agreement to permit NRG McClain to continue to use their cash collateral during its pending bankruptcy case. Mr. Itkin says that the consummation of the Sale Transaction likely will result in a significant pay-down of the Prepetition Debt and will concurrently reduce NRG's exposure as a guarantor of NRG McClain's obligations pursuant to the Debt Service Reserve Guaranty contained in the Prepetition Credit Agreement. Towards that end, NRG entered into the ORCA to provide the means by which NRG will receive priority repayment for providing the necessary "back-stop" funding that is required for NRG McClain to consummate the Sale Transaction. In addition, the ORCA benefits PMI as it provides consideration to the Prepetition Secured Lenders for their consent to PMI's continued provision of services to NRG McClain and OG&E pursuant to the EMSA. Indeed, these continued services provide additional revenue to PMI that PMI would not receive if the Prepetition Secured Lenders did not agree to continue the relationship. The Court further orders that no cure amounts are owed under any of the McClain Agreements other than certain amounts owed by PMI to NRG McClain under the EMSA, as provided in the ORCA. The payment by PMI to NRG McClain of the amounts in accordance with the ORCA will be deemed by NRG McClain and the Agent to constitute "cure" payments as required by Section 365 of the Bankruptcy Code for purposes of the assumption of the EMSA. To the extent required by Section 365(b)(1)(C), the Debtors have provided adequate assurance of their future performance of the McClain Agreements. (NRG Energy Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., 609/392-0900) OMEGA HEALTHCARE: Hosting Third-Quarter Conference Call Friday -------------------------------------------------------------- Omega Healthcare Investors, Inc. (NYSE:OHI) is scheduled to release its earnings results for the quarter ended September 30, 2003, on Friday, October 24, 2003. In conjunction with its release, the Company will be conducting a conference call on October 24, 2003 at 10 a.m. EDT to review its 2003 third quarter results and current developments. To listen to the conference call via webcast, log on to http://www.omegahealthcare.comand click the "earnings call" icon on the Company's homepage. Listening via webcast will require you to have Microsoft Media Player installed on your computer, which can be downloaded at no charge from the Company's website. Please allow up to 30 minutes prior to the call to download this software. Webcast replays of the call will be available on the Company's website for at least two weeks following the call. Additionally, a copy of the earnings release will be available on the "news releases" section of the Company's website. Omega (S&P, B+ Corporate Credit Rating, Stable) is a Real Estate Investment Trust investing in and providing financing to the long- term care industry. At June 30, 2003, the Company owned or held mortgages on 221 skilled nursing and assisted living facilities with approximately 21,900 beds located in 28 states and operated by 34 third-party healthcare operating companies. PAC-WEST TELECOMM: Enters into Deutsche Bank $40M Financing Pact ---------------------------------------------------------------- Pac-West Telecomm, Inc. (Nasdaq: PACW), a provider of integrated communications services to service providers and small and medium- sized enterprises in the western U.S., has entered into a $40.0 million debt and equity private placement financing with Deutsche Bank, the completion of which is subject to certain conditions. The financing, which is currently expected to close before year- end, involves the purchase by Deutsche Bank of a floating rate, pay-in-kind senior secured note in the principal amount of $40.0 million, which will mature in 2006 but is extendable for up to an additional 18 months at the option of Deutsche Bank. The note, which will be secured by Pac-West's assets, will accrue interest at a rate equal to LIBOR plus 50 basis points. In addition, in connection with the financing, Pac-West has agreed to grant Deutsche Bank 3-year warrants to purchase 26,666,667 million shares of Pac-West's common stock at an exercise price of $1.50 per share. If Deutsche Bank extends the maturity date of the senior secured note, the term of the warrant will be extended to the same date. It is expected that the net proceeds from the financing will be used, along with a portion of Pac-West's existing cash, to repurchase and retire, via a cash tender offer at a discount to par, a portion of Pac-West's 13-1/2% senior notes due 2009. In addition, Pac-West anticipates soliciting consents from holders of its 13-1/2% senior notes to the amendment or waiver of certain provisions of the related indenture. It is a condition to closing the financing that at least a majority of the 13-1/2% senior notes are tendered. Although Pac-West's expectation as to the amount of senior notes offered for and the offer price made at the time the offer is commenced is preliminary in nature and subject to change, Pac-West currently believes that it will offer approximately $900 plus an early tender premium of $20 for each $1,000 in principal amount of the 13-1/2% senior notes tendered in addition to paying all accrued and unpaid interest on tendered notes. Closing of the financing is contingent upon, among other things, the receipt by Pac-West of shareholder approval of the issuance of the warrants and the common stock issuable upon exercise of the warrants. In addition, closing of the financing is also contingent upon receipt by Pac-West of the consent of the holders of at least a majority of the outstanding principal amount of the 13-1/2% senior notes to an amendment or waiver of certain provisions of the related indenture to permit the completion of the financing. Hank Carabelli, Pac-West's President and CEO, commented, "We are pleased to have attracted the caliber of investor and business partner we have found in Deutsche Bank. We believe that Deutsche Bank recognizes Pac-West's potential and shares our vision of the future. Furthermore, by agreeing to provide the financing for purposes of purchasing our 13-1/2% senior notes, we believe Deutsche Bank is validating our view that a reduction in the amount of outstanding senior notes will foster our ability to achieve profitability and position us to pursue strategic growth opportunities." Pac-West currently anticipates distributing a tender offer document and commencing the offer to purchase its 13-1/2% senior notes later this month. In addition, Pac-West expects to file with the Securities and Exchange Commission before the end of the month a preliminary proxy statement in connection with a special meeting of its shareholders to be held for the purpose of obtaining shareholder approval of the issuance of the warrants and the common stock issuable upon exercise of the warrants. None of Pac-West, its board of directors, Deutsche Bank, or UBS Securities LLC, Pac-West's financial advisor, makes any recommendation as to whether holders of the 13-1/2% senior notes should tender or refrain from tendering their notes. This press release does not constitute an offer to purchase any securities. The offer to purchase the 13-1/2% senior notes shall be made only by the tender offer document described above. The securities offered to Deutsche Bank have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or on applicable exemption from registration requirements. In addition to the financing, as previously announced, both Verizon California and SBC California have attempted to adopt the Federal Communications Commission's Intercarrier ISP Compensation Order. The FCC Order introduced a series of declining pricing tiers for compensable minutes of reciprocal compensation, at rates starting below those negotiated in Pac-West's interconnection agreements with both carriers. The lowest pricing tier specified by the order was reached on June 15, 2003, which will remain in effect until such time that a replacement FCC Order may be introduced. Pac-West has experienced line and minutes of use growth partially offsetting competitive and regulatory pricing pressures. Additionally, the FCC Order introduced artificial growth limits on annual compensable minutes subject to reciprocal compensation based on the composition and balance of traffic between carriers. Pac-West has challenged the legality of this concept, and is currently pursuing an action to have growth limits removed from the FCC Order. Based on Verizon's interpretation of the growth cap formula, Verizon commenced withholding reciprocal compensation payments to Pac-West during July 2003, and has indicated their intention to withhold any further reciprocal compensation payments for the remainder of 2003. Pac-West believes this is in violation of Pac-West's interconnection agreement with Verizon. The impact of lower reciprocal compensation rates and withheld revenues contributed to a 23.9% reduction in the average recognized rate per minute of use in the third quarter of 2003 from the previous quarter, excluding settlement payments. Pac-West is disputing these withheld revenues. Founded in 1980, Pac-West Telecomm, Inc. (Nasdaq: PACW) is one of the largest competitive local exchange carriers headquartered in California. Pac-West's network carries over 100 million minutes of voice and data traffic per day, and an estimated 20% of the dial- up Internet traffic in California. In addition to California, Pac- West has operations in Nevada, Washington, Arizona, and Oregon. For more information, visit Pac-West's Web site at http://www.pacwest.com With roughly Euro 851 billion in assets and approximately 69,300 employees, Deutsche Bank offers its 13 million clients unparalleled financial services in 76 countries throughout the world. Deutsche Bank competes to be the leading global provider of financial solutions for demanding clients creating exceptional value for its shareholders and people. Deutsche Bank ranks among the global leaders in corporate banking and securities, transaction banking, asset management, and private wealth management, and has a significant private & business banking franchise in Germany and other selected countries in Continental Europe. Deutsche Bank's Web site is located at http://www.deutsche-bank.com * * * As reported in Troubled Company Reporter's May 1, 2003 edition, Standard & Poor's Ratings Services lowered its corporate credit rating on Pac-West Telecomm Inc. to 'D' from 'CC'. The rating on the 13.5% senior notes due 2009 was lowered to 'D' from 'C'. S&P explained, "Given the company's significant dependence on reciprocal compensation (the rates of which the company expects to further decline in 2003) and its limited liquidity, Pac-West will likely find the implementation of its business plan continue to be challenging." PACIFIC GAS: Wins Nod to Amend L/C-Backed PC Bonds Term Sheet ------------------------------------------------------------- Pacific Gas and Electric Company tells the Court that it is currently benefiting from certain below-market-rate loans made by the California Pollution Control Financing Authority with the proceeds from the sale of certain tax-exempt and low-interest revenue bonds. The bonds are secured by certain letters of credit, and PG&E is obligated to repay the loans by reimbursing the Letter of Credit issuing banks for all draws made on the letters of credit by the bond trustee that are used to pay the bonds. PG&E derives substantial benefit, in the form of reduced borrowing costs, by maintaining the bonds and the resulting loans outstanding. Pursuant to their terms, the bonds cannot remain outstanding unless they continue to be secured by letters of credit or certain other forms of credit enhancement. Background and Mechanics of Subject Bond Issuances Pursuant to the terms of various separate trust indentures each between the CPCFA, a public instrumentality and political subdivision of the State of California, and Deutsche Bank Trust Company Americas, as trustee, and various corresponding loan agreements between the CPCFA and PG&E, as of the Petition Date, the CPCFA had issued and outstanding [sic.] 15 series of its revenue bonds in the aggregate principal amount of $1,690,000,000. Currently, 11 series of the revenue bonds aggregating $1,240,000,000 in the principal amount remain outstanding. The CPCFA loaned the proceeds from the sale of four series of credit-enhanced revenue bonds aggregating $613,550,000 to PG&E to finance PG&E's acquisition and construction of certain pollution control, sewage disposal and solid waste disposal facilities within California. The Bond Loans were made pursuant to the terms of various loan agreements between the CPCFA and PG&E. PG&E agreed to repay the Bond Loans at the times and in the amount necessary to enable the CPCFA to make full and timely payment of the principal of, premium, and interest on each series of Letter of Credit Backed PC Bonds when due and to pay the purchase price of any Letter of Credit Backed PC Bonds that PG&E tendered for purchase in accordance with the terms of the applicable Indenture. With respect to the terms of each of the Indentures, the CPCFA assigned certain of its rights under the various Loan Agreements, including the right to receive payments from PG&E to Deutsche Bank, for the benefit of the Letter of Credit Backed PC Bondholders. In this manner, the CPCFA acted solely as a conduit. Letter of Credit Backed PC Bonds The Letter of Credit Backed PC Bonds are special limited obligations of the CPCFA payable exclusively out of the trust estates under each of the Indentures. None of the Letter of Credit Backed PC Bonds constitute a debt or liability, or a pledge of the faith, credit or taxing power of the CPCFA, the State of California or any of its instrumentalities or political subdivisions. Rather, each series of Letter of Credit Backed PC Bonds is a limited obligation of the CPCFA payable solely from the revenues derived from PG&E under the terms of the related Loan Agreement to the extent pledged by the CPCFA to Deutsche Bank under the terms of the applicable Indenture and from other funds pledged and assigned as part of the trust estates under the applicable Indentures. With respect to each series of Letter of Credit Backed PC Bonds, PG&E entered into a "reimbursement agreement" with a letter of credit issuing bank and certain banking or other financial institutions. Pursuant to each Reimbursement Agreement, the Letter of Credit Issuing Bank issued a irrevocable letter of credit to Deutsche Bank, for PG&E's account, to provide for the payment of the principal of and interest on the related series of Letter of Credit Backed PC Bonds and to support the payment of the purchase price of any Letter of Credit Backed PC Bonds tendered for purchase in accordance with the terms of the applicable Indenture. Under each Reimbursement Agreement, PG&E is obligated to reimburse the Letter of Credit Issuing Bank for all amounts drawn on the related Letter of Credit. The Letter of Credit Issuing Banks are: * Bank of America, N.A., * Deutsche Bank AG, New York Branch, * BNP Paribas, and * Morgan Guaranty Trust Company of New York. Tax-Exempt Status of Letter of Credit Backed PC Bonds All Letter of Credit Backed PC Bonds were sold in the capital markets on the basis that -- assuming PG&E continued to comply with certain covenants contained in the PC Bond Documents and with certain exceptions -- the interest on the Letter of Credit Backed PC Bonds would not be included in the gross income of the bondholders for federal income tax purposes and that the interest is also exempt from California personal income tax. The tax- exempt status of the Letter of Credit Backed PC Bonds allowed the bonds to be issued at favorable interest rates, therefore, allowing PG&E to finance certain of its capital improvements and other qualified costs at rates substantially below comparable conventional taxable financing alternatives available to it. Based on the tax-exempt status of the Letter of Credit Backed PC Bonds, their credit enhancement and their commensurate credit rating, the Letter of Credit Backed PC Bonds currently accrue interest at the 0.83% average blended interest rate per annum. In the event that any of the Letter of Credit Backed PC Bonds were to be redeemed in accordance with the Indentures, it may not be possible under current law to reissue the Bonds on a tax- exempt basis. In view of this, PG&E determined that the continued existence of the favorable tax-exempt financing is a valuable asset. It is necessary for PG&E's estate to keep the Letter of Credit Backed PC Bonds outstanding to preserve the substantial benefits of the tax-exempt financing. Post-Chapter 11 Filing Status of Letter of Credit Backed PC Bonds Since the Petition Date, all Letter of Credit Backed PC Bonds remained outstanding, and all of the scheduled interest payments on the Letter of Credit Backed PC Bonds have been fully and timely paid, when due, through periodic draws by Deutsche Bank on the Letters of Credit issued by the Letter of Credit Issuing Banks. Since the Petition Date, each Letter of Credit Issuing Bank allowed the Interest Portion of its Letter of Credit to automatically reinstate after each drawing in accordance with the Letter of Credit terms. In accordance with the provisions of the Letters of Credit Term Sheets and previous Court orders, PG&E reimbursed the Letter of Credit Issuing Banks as required by the Reimbursement Agreements. Subject to the Term Sheet provisions, on an "Event of Default", a Letter of Credit Issuing Bank may declare a default under its Reimbursement Agreement with PG&E and cause Deutsche Bank to declare a series of Letter of Credit Backed PC Bonds immediately due and payable. In such event Deutsche Bank would draw on the Letter of Credit and apply the drawn funds to the full payment and cancellation of the related outstanding Letter of Credit Backed PC Bonds -- with the end result that the tax-preferred financing would no longer be outstanding. Pursuant to the Indentures, unless 35 days before a Letter of Credit expires Deutsche Bank will receive either (a) renewal or extension of the existing Letter of Credit for a period of at least one year or (b) a substitute letter of credit or other credit facility meeting the Loan Agreement and the Indenture requirements, Deutsche Bank is also required to call the series of Letter of Credit Backed PC Bonds for redemption and cancellation five days before the Letter of Credit expires. In such event Deutsche Bank would again draw on the Letter of Credit and apply the drawn funds to the full payment and cancellation of the related outstanding Letter of Credit Backed PC Bonds -- with the end result that the tax-preferred financing would no longer be outstanding. However, pursuant to the Term Sheet, the Letter of Credit Issuing Banks agreed to forbear from the exercise their remedies without PG&E's prior written consent until the earlier of: -- the last interest payment date on the relevant series of Letter of Credit Backed PC Bonds immediately before the expiration of the Letter of Credit; or -- the occurrence of any "Termination Event", which includes the failure of a reorganization plan to become effective by June 1, 2003. Pursuant to the Term Sheet, the Letter of Credit Issuing Banks agreed to extend the Letter of Credit terms to a date not earlier than the first business day subsequent to the one-year anniversary of its prior expiry date. But since PG&E's reorganization plan did not become effective by June 1, 2003, each Letter of Credit has since been terminated. Fortunately, certain Letter of Credit Issuing Banks have volunteered to extend their forbearance period under the Reimbursement Agreements and related Indentures to give PG&E more time to confirm and effectuate a reorganization plan. After good faith, arm's-length negotiations, PG&E and these Letter of Credit Issuing Banks agreed to amend the Term Sheet governing the Letters of Credit. Summary of Term Sheet Amendments A. Agreements by the Letter of Credit Issuing Banks (1) Extension of Forbearance The Letter of Credit Issuing Banks agree to maintain their Letters of Credit outstanding in the current stated amount. They will not provide Deutsche Bank with any Default Notice under the Reimbursement Agreement or non- reinstatement of the Letters of Credit or take any other action which would result in the mandatory tender or redemption of any of the outstanding Letter of Credit Backed PC Bonds without PG&E's prior written consent, until the earlier of: (a) the last interest payment date on the related series of Letter of Credit Backed PC Bonds immediately before that Letter of Credit expires. The expiration date will be extended in accordance with the terms of the Term Sheet; and (b) the occurrence of a "Termination Event". A Termination Event will occur -- and the Letter of Credit Issuing Banks will no longer be obligated to continue to forbear from exercising their remedies under the Reimbursement Agreements and the related Indentures -- if: -- PG&E fails to timely remit to the Letter of Credit Issuing Banks any of the payments set forth in the Term Sheet; -- a Chapter 11 Plan which provides for the treatment of Allowed Letter of Credit Bank Claims, as defined in the Settlement Plan, in the manner described in the Term Sheet or for alternative treatment of Allowed Letter of Credit Bank Claims which is acceptable to the Letter of Credit Issuing Banks does not become effective by May 18, 2004; -- a Plan is confirmed in PG&E's Chapter 11 case which does not provide for the treatment of Allowed Letter of Credit Bank Claims in the manner described in the Term Sheet or for alternative treatment of Allowed Letter of Credit Bank Claims which is acceptable to the Letter of Credit Issuing Banks; -- the "Effective Date" as defined in the Settlement Plan occurs; or -- PG&E's Chapter 11 case is dismissed or converted to a case under Chapter 7 of the Bankruptcy Code. (2) Extension of Letter of Credit Expiration The Letter of Credit Issuing Banks agree to extend the term of their Letters of Credit for an additional term of not less than one year from the Letters of Credit's then existing expiration date. The extension of the Letter of Credit terms for an additional year provides PG&E with more time to confirm and effectuate a reorganization plan while maintaining the benefits of the tax-exempt financing provided by the Letter of Credit Backed PC Bonds for its bankruptcy estate as well as the opportunity to secure the continuing benefits of the tax-exempt financing for Reorganized PG&E. B. Agreements by the Debtor. (1) Reimbursement of Interest Draws The Term Sheet provides that PG&E will currently reimburse the Letter of Credit Issuing Banks for all amounts drawn under their Letters of Credit for the payment of interest on the Letter of Credit Backed PC Bonds. PG&E will pay the amounts when due pursuant to the terms of the applicable Reimbursement Agreements. (2) Additional Fees PG&E will continue to make current payments of the Letter of Credit fees due under the terms of the Reimbursement Agreements, plus an additional fee necessary to bring the total annual fee payable to each Letter of Credit Issuing Bank up to an aggregate amount per annum equal to 3% of the stated amount of each Letter of Credit for the period that the Letter of Credit remains outstanding in the Stated Amount through the Effective Date. In addition, PG&E will pay to each of the Letter of Credit Issuing Banks with respect to its Letter of Credit, a Forbearance Extension Fee equal to 0.50% of the Stated Amount of the Letter of Credit Issuing Bank's Letter of Credit. (3) Professional Fees The Original Term Sheet provides that PG&E will pay the reasonable fees and expenses of unrelated third party professionals retained by the Letter of Credit Issuing Banks, to the extent incurred subsequent to April 6, 2001 in connection with PG&E's Chapter 11 case no later than 30 days subsequent to each date of a reimbursement request is made in writing by the Letter of Credit Issuing Bank to PG&E. These provisions are not changed by the Amendment. (4) Purchase in Lieu of Redemption PG&E and the Letter of Credit Issuing Banks agree to cooperate in a mutual attempt to amend the related bond documents to permit the Letter of Credit Issuing Banks to purchase the Letter of Credit Backed PC Bonds under certain circumstances in which the Bonds would otherwise be subject to redemption and cancellation. The amendments to the Loan Agreements and Indentures would not be adverse to the interests of the Letter of Credit Backed PC Bondholders and would enhance PG&E's ability to maintain the benefits of the tax-exempt financing provided by the Letter of Credit Backed PC Bonds by facilitating the orderly purchase of outstanding Letter of Credit Backed PC Bonds in certain circumstances. If certain Termination Events occur, PG&E will not, without the prior written consent of the Letter of Credit Issuing Bank, have the right to convert a mandatory redemption of Letter of Credit Backed PC Bonds into a purchase in lieu of redemption in accordance with the proposed amended Loan Agreement or Indenture. The amendments to the bond documents would also grant the Letter of Credit Issuing Banks the right, but not the obligation, to cause a purchase of Letter of Credit Backed PC Bonds by May 18, 2004, if a reorganization plan -- which provides for the treatment of Allowed Letter of Credit Bank Claims in the manner described in the Term Sheet or for alternative treatment of Allowed Letter of Credit Bank Claims, which is acceptable to the Letter of Credit Issuing Banks -- does not become effective. (5) Additional Default Right The Letter of Credit Issuing Banks have agreed to extend the term of their Letters of Credit for at least one year from the prior expiration date. However, because of differences in the original expiration dates of each of the Letters of Credit, each Letter of Credit will expire on a different date. After giving effect to the extensions of the terms of each of the Letters of Credit as provided in the Amendment, the first of the Letters of Credit to expire will be the Letter of Credit Bank of America issued, which will expire on May 23, 2004. Unless each of the Letters of Credit is renewed or replaced in accordance with the terms of the Indentures at least 35 days prior to its expiration date, Deutsche Bank is required to call the related series of Letter of Credit Backed PC Bonds for redemption and cancellation on the last business day at least five days before the Letter of Credit expires. Accordingly, unless Bank of America voluntarily agrees to further extend the term of its Letter of Credit, the series of Letter of Credit Backed PC Bonds may be subject to redemption on May 18, 2004. To give each of the other three Letter of Credit Issuing Banks the same economic right that Bank of America has to cause a drawing on its Letter of Credit and the purchase or redemption of the related series of Letter of Credit Backed PC Bonds by May 18, 2004, the Amended Term Sheet provides that, with respect to each of the Letter of Credit Issuing Banks and their Letters of Credit, subject to certain conditions, on any date on or after May 18, 2004, the Letter of Credit Issuing Bank will have the right, but not the obligation, to give notice to Deutsche Bank of the occurrence of an event of default under the terms of the Reimbursement Agreement and to direct Deutsche Bank to declare an event of default under the Indenture as a result thereof to the extent provided under the terms of the related bond documents. C. Treatment of Allowed Letter of Credit Bank Claims The Term Sheet provides that any reorganization plan propounded by PG&E will provide for the treatment of Allowed Letter of Credit Bank Claims in substantially the manner provided in the Original PG&E Plan. The same treatment of Allowed Letter of Credit Bank Claims has been incorporated into the Settlement Plan. The Amendment does not change any of PG&E's obligations with respect to the proposed treatment of Letter of Credit Bank Claims. The proposed treatment of the Allowed Letter of Credit Bank Claims as set forth in the Original PG&E Plan and incorporated into the Settlement Plan are intended to, among other things, allow PG&E and Reorganized PG&E the ability to maintain the benefits of the tax-exempt financing provided by the Letter of Credit Backed PC Bonds both through and after the Effective Date. Jeffrey L. Schaffer, Esq., at Howard, Rice, Nemerovski, Canady, Falk & Rabkin, tells the Court that the tax-exempt financing provided by the Letter of Credit Backed PC Bonds provides a substantial interest cost savings to PG&E over the cost of alternative conventional taxable financing. Mr. Schaffer asserts that the tax-exempt bond financing is an asset of PG&E's estate and is best preserved through the transactions contemplated in the Amended Term Sheet. At PG&E's request, the Court approves the Term Sheet amendments. (Pacific Gas Bankruptcy News, Issue No. 64; Bankruptcy Creditors' Service, Inc., 609/392-0900) PILLOWTEX CORP: Provides Statement of Financial Affairs ------------------------------------------------------- Michael R. Harmon, President and Chief Financial Officer of Pillowtex Corporation, reports that Pillowtex generated no income for the past two years. Within 90 days prior to the Petition Date, Pillowtex paid $2,571,758 to its creditors for loans and other debts: Creditor Amount -------- ------ Cope & Cope $13,042 Debevoise & Plimpton 1,831,450 Delaware Secretary of State 37,973 Dietz, Bradley 13,250 E&Y Corporate Finance 105,000 Hansen Government Relations 13,523 Kilpatrick Stockton LLP 15,066 Morris Nichols Arsht & Tunnel 76,935 Shumaker Loop & Kendrick LLP 64,446 Vedder Price Kaufman & Kammholz 58,592 Winstead Sechrest & Minick 305,695 Others 36,786 Insiders received payments totaling $3,399,839 within the one- year period prior to the Petition Date, including: Creditor Amount -------- ------ Dietz, Bradley $76,199 Fogarty, James P. 38,000 Graves, Scott 3,818 Keenan, Jeffrey J. 5,431 Liang, Kenneth 1,555 Oaktree Capital Management LLC 3,252,258 Poole, Deborah Lynn 143 Sterling, John F. 22,435 Mr. Harmon discloses that Pillowtex Corp. is a party to seven lawsuits, which are either dismissed or pending in the courts where they were filed. The nature of the pending lawsuits includes product liability claim, preference claim, patent infringement or breach of contract. For debt counseling, Pillowtex Corp. paid $5,649,491 to: Creditor Amount -------- ------ Credit Suisse First Boston Corp. $1,540,656 Debevoise & Plimpton 2,800,367 Loughlin Meghji Co., Inc. 1,308,468 Pillowtex Corp. lists properties owned by another, which they hold or control: Owner Property Value ----- -------- ----- CIBA Specialty Chemicals Dyes and Chemicals $532,542 PAXAR Corp. Shipping Supplies 41,026 Seydel-Wooley Co., Inc. Size 16,436 The list of current partners, officers, directors and shareholders of Pillowtex Corp. who directly or indirectly owns, controls or holds 5% or more of the voting or equity securities are: Name % Ownership ---- ----------- Bank of America Strategic Solutions, Inc. 7.8% Blough, Eric J. N/A Dietz, Bradley I. N/A Fogarty, James P. N/A Gannaway, Michael T. N/A Gotham Partners, L.P. 6.5% Graves, Scott L. N/A Grissinger, Richard A N/A Harmon, Michael R. N/A Liang, Kenneth N/A Mallo, Donald N/A Oakley, Allen A . N/A Oaktree Capital Management, LLC 20.1% (Pillowtex Bankruptcy News, Issue No. 53; Bankruptcy Creditors' Service, Inc., 609/392-0900) QWEST COMMS: Inks New $1-Million Agreement with PromoVantage ------------------------------------------------------------ Qwest Communications International Inc. (NYSE: Q) announced that PromoVantage(TM), a division of Oncall Interactive LLC, has signed a new contract worth more than $1 million for Qwest Web Contact Center(SM). QWCC will help PromoVantage deliver marketing, sweepstakes and promotional campaigns for companies in a variety of industries including consumer goods, financial services and entertainment. QWCC is an interactive voice response and voice recognition solution for both inbound and outbound calls. It works as a stand- alone application or integrates with the Web, computer telephony integration platforms and database information. With QWCC, customers can reduce operating costs, increase customer satisfaction and minimize capital investment. PromoVantage is a unified digital promotions system that simplifies the creation, deployment and administration of promotional initiatives. It gives clients the freedom to choose any combination of Web, phone, text messaging or mail-in based entry for sweepstakes, contests, registration and incentives programs, all while providing real-time-monitoring and data capture, as well as in-depth demographic market analysis and reporting. QWCC will enable PromoVantage to drastically reduce its startup times, have limitless call volume and give it the flexibility to scale for any size promotion. PromoVantage is developing a promotional campaign for one of 2003's biggest holiday films and plans to use QWCC to handle the anticipated high call volume associated with the promotion. "It is very common for our system to have multiple national promotions running simultaneously," said Matthew Maday, founding partner, PromoVantage. "With QWCC, we can scale more reliably to meet any amount of call volume. We no longer have to worry about running additional lines and configuring additional hardware when exceeding capacity is anticipated." "We're pleased to form this new agreement with PromoVantage because it underscores our efforts in the toll-free and contact center arena," said Cliff Holtz, executive vice president, Qwest business markets group. "By combining quality long-distance and toll-free solutions with this unique value-added service, Qwest will delight customers like PromoVantage." Qwest Communications International Inc. (NYSE: Q) -- whose December 31, 2002 balance sheet shows a total shareholders' equity deficit of about $1 billion -- is a leading provider of voice, video and data services to more than 25 million customers. The company's 49,000 employees are committed to the "Spirit of Service" and providing world-class services that exceed customers' expectations for quality, value and reliability. For more information, please visit the Qwest Web site at http://www.qwest.com R & S TRUCK: Seeking to Voluntarily Dismiss Kylan and CPS Cases --------------------------------------------------------------- Kylan Industries, Inc. (Case No. 12723) and CPS Trailer Company (Case No. 12724), debtor-affiliates of R&S Truck Body Company, Inc., ask the U.S. Bankruptcy Court for the Southern District of New York for an authority for the voluntary dismissal of their cases. Substantially all of the assets of Kylan were sold in accordance with the terms of the Court-approved Asset Purchase and Sale Agreement. Under the Kylan Asset Purchase Agreement, the company was paid $990,000 during the closing on September 17, 2002. All of the net sale proceeds have been disbursed to the Agent, on behalf of the Secured Lenders. Currently, there are no monies in the Kylan estate and no other assets are left of Kylan. CPS's assets were also sold pursuant to the Court-approved APA to Manac Trailers USA, Inc. Under the CPS Asset Purchase Agreement, the purchaser paid the sum of $4,350,000 and assumed certain trade, employee and other contractual obligations of CPS Trailer and CPS Enterprises. The closing occurred on August 8, 2002 and all of the net sale proceeds have been disbursed to the Agent, on behalf of the Secured Lenders. There are also no mor monies and assets left in the CPS Trailer estate. As Kylan and CPS will not be able to: (i) effectuate a plan; (ii) make any further distributions to its creditors, or (iii) obtain access to additional funds to continue the administration of its chapter 11 case, and has no remaining assets, under the circumstances, the Debtors submit there is no reason to continue Kylan and CPS's cases under Chapter 11 of the Bankruptcy Code. Likewise, there is also no reason to consider conversion of the cases to chapter 7. R&S is a wholly-owned subsidiary of Barclay Investments, Inc., which is a wholly owned subsidiary of Standard Automotive Corporation, both of which filed for Chapter 11 relief on March 19, 2002. R&S designs, manufactures and sells customized, high end, steel and aluminum dump truck bodies, platform bodies, custom large dump trailers, specialized truck suspension systems and related products and parts. The Company filed for chapter 11 protection on June 3, 2002. J. Andrew Rahl Jr., Esq. at Anderson Kill & Olick, P.C. represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $27,093,513 in assets and $6,999,464 in debts. RANOR: Wants to Voluntarily Dismiss Chapter 11 Bankruptcy Case -------------------------------------------------------------- Ranor, Inc., now known as OCRI, Inc., is asking for permission from the U.S. Bankruptcy Court for the Southern District of New York for a voluntary dismissal in its chapter 11 cases. The Debtor points out that as they will not be able to: i) effectuate a plan; ii) make any further distributions to its creditors, or iii) obtain access to additional funds to continue the administration of its chapter 11 case, and has no remaining assets, under the circumstances, there is no reason to continue the chapter 11 case before this Court. For the same reasons, there is also no reason to consider conversion of the case to chapter 7. Larry D. Henin, Esq., at Anderson Kill & Olick, P.C., avers that dismissal is appropriate where the court determines that the debtor is unable to effectuate any confirmable plan. Here there is no longer any prospect for reorganization for the Debtor or the proposal of a chapter 11 plan for the Debtor because it has no assets. Additionally, the Debtor's creditors, if any, would not be prejudiced by the dismissal of the Debtor's case because the Debtor has no assets from which to make a distribution. Notably, conversion of the Debtor's chapter 11 case to one under chapter 7 is not warranted. As there are no assets, the administrative costs of a chapter 7 trustee would be unnecessary. Moreover, if any assets were located, such assets would be subject to the lien of the Secured Lenders. Ranor Inc. specializes in the fabrication and precision machining of large metal components that exceed one hundred tons for the aerospace, nuclear, military, shipbuilding and power generation markets as well as national laboratories. The Company filed for chapter 11 protection on June 25, 2002. J. Andrew Rahl Jr., Esq. at Anderson Kill & Olick, P.C. represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $18,211,284 in assets and $7,655,775 in debts. RENT-WAY INC: Fourth-Quarter Operating Results Show Improvement --------------------------------------------------------------- Rent-Way Inc. (NYSE: RWY) reported unaudited fiscal 2003 full year and fourth quarter consolidated revenues of $491.4 million and $119.0, respectively. Unaudited fiscal 2003 full year and fourth quarter core rental business revenues were $457.3 million and $112.0 million, respectively. Same store core rental business revenues increased approximately 2.5% in the fiscal 2003 fourth quarter versus the same quarter in fiscal 2002. "We are encouraged by these results, especially our positive comp sales growth in the fourth quarter. We are seeing the benefits of our investments in marketing and advertising and we expect to continue these investments in order to drive top-line growth in future quarters," stated William E. Morgenstern, Chairman and CEO of Rent-Way. "As I stated on our last earnings conference call, our investments in growth will contribute to a net loss in the 2003 fourth quarter. However, we believe the strategic investments we are making in the near term will result in much improved bottom line performance for fiscal year 2004 and create a solid platform for growth through new store openings. We expect to release complete results for fourth quarter and full year fiscal 2003 in mid-to-late November. We will provide additional guidance on our expected fiscal 2004 performance at that time." Rent-Way (S&P, B+ Corporate Credit Rating, Stable) is one of the nation's largest operators of rental-purchase stores. Rent-Way rents quality name brand merchandise such as home entertainment equipment, computers, furniture and appliances from 753 stores in 33 states. RESMED INC: Will Publish First-Quarter Results on October 28 ------------------------------------------------------------ RESMED Inc. (NYSE: RMD), announced that on Tuesday, October 28, 2003, it will release its first quarter earnings results for the period ended September 30, 2003. ResMed will issue an earnings press release at approximately 1:15 p.m. Pacific Time, which will be available via Business Wire or other news services. In conjunction with the release, ResMed will host a conference call to review its quarterly results, market trends, and future outlook. The conference call will be Webcast over the Internet. Individuals can access the Webcast, to be held at 1:30 p.m. Pacific Time on Tuesday, October 28, 2003, via ResMed's Web site at http://www.resmed.com Please allow extra time before the call to download the streaming media (Windows Media Player) required to listen to the Internet broadcast. The online archive of the broadcast will be available approximately 60 minutes after the live call and will continue to be available for two weeks. International conference call times will be: 10:30 p.m. Germany 8:30 a.m. Sydney, Australia (October 29, 2003) TO PARTICIPATE in the Conference Call, please call one of the below numbers at least 10 minutes before the call begins and identify yourself to the operator: Domestic: 800-901-5259 International: 617-786-4514 Conference Name: ResMed Inc. Conference ID: 71627408 In addition, ResMed is offering a telephone replay of the conference call. It will be available approximately 60 minutes after the call and will be accessible for two weeks. To access the replay, please dial: Domestic: 888-286-8010 International: 617-801-6888 Conference ID: 32226786 ResMed (S&P, BB- Corporate Credit Rating, Stable Outlook) is a leading developer, manufacturer, and marketer of medical equipment for the diagnosis and treatment of sleep-disordered breathing. Further information can be obtained by visiting the Company's Web site at http://www.resmed.com ROBOTIC VISION: Fails to Comply with Nasdaq Listing Requirements ---------------------------------------------------------------- Robotic Vision Systems, Inc. (RVSI) (NasdaqSC: RBVEC) received a Nasdaq Staff Determination letter dated October 13, 2003 indicating that RVSI had failed to comply with Nasdaq's shareholder approval and listing of additional forms requirements, as set forth in Marketplace Rules 4350(i)(1)(D)(ii) and 4310(c)(17). RVSI believes that subsequent to the receipt of the Nasdaq letter it complied with these requirements. Robotic Vision Systems, Inc. (NasdaqSC: ROBVE) -- whose June 30, 2003 balance sheet shows a total shareholders' equity deficit of about $13 million -- has the most comprehensive line of machine vision systems available today. Headquartered in Nashua, New Hampshire, with offices worldwide, RVSI is the world leader in vision-based semiconductor inspection and Data Matrix-based unit- level traceability. Using leading-edge technology, RVSI joins vision-enabled process equipment, high- performance optics, lighting, and advanced hardware and software to assure product quality, identify and track parts, control manufacturing processes, and ultimately enhance profits for companies worldwide. Serving the semiconductor, electronics, aerospace, automotive, pharmaceutical and packaging industries, RVSI holds approximately 100 patents in a broad range of technologies. For more information visit http://www.rvsi.com SEA CONTAINERS: Declares Cash Dividends on Class A and B Shares --------------------------------------------------------------- The Board of Directors of Sea Containers Ltd., declared quarterly cash dividends on the Company's Class A and Class B common shares. The dividend will be $0.025 per share on the Class A common shares and $0.0225 per share on the Class B common shares. Class B common shares are convertible at any time into Class A common shares. The dividends will be payable November 20, 2003 to shareholders of record November 5, 2003. The Class A and B common shares of Sea Containers Ltd. are listed on the New York Stock Exchange under the symbols SCRA and SCRB, respectively. * * * As reported in Troubled Company Reporter's July 17, 2003 edition, Moody's Investors Service downgraded the ratings of Sea Containers Ltd. Ratings outlook is negative. Downgraded Ratings To From * $115 million 10.75% Sr. Notes due 2006 B3 B1 * $150 million 7.875% Sr. Notes due 2008 B3 B1 * $98 million 12.5% Sr. Sub. Notes due 2004 Caa1 B2 * Senior implied B2 B1 * Issuer rating B3 B1 The downgrades conclude the ratings review Moody's started on December 2002. The actions reflect the company's high debt levels, weak cash flow and weak operating performance. These are however offset by the company's fixed asset base, its position in certain markets and improving financial performance. Moody's is also concerned that "near-term debt maturities will not be covered by the company's current level of operating cash flows, and that additional asset sales or refinancing may be required to meet debt obligations." SILICON GRAPHICS: Sept. 26 Net Capital Deficit Widens to $211MM --------------------------------------------------------------- Silicon Graphics, Inc. (NYSE: SGI) announced results for its first fiscal quarter, which ended September 26, 2003. Revenue for the quarter was $218.0 million, compared with $240.2 million for the fourth quarter ended June 27, 2003. Gross margin increased to 43.4% in the first quarter from 40.3% in the fourth quarter. On a GAAP basis, operating expenses for the first quarter were $138.2 million, compared with $131.3 million for the fourth quarter. SGI's first-quarter operating loss was $43.6 million, compared to $34.5 million in the fourth quarter. The first-quarter net loss was $47.9 million or $0.23 per share, compared with $36.6 million or $0.18 per share in the fourth quarter. The first- quarter results include $24.2 million in other operating expenses, consisting primarily of severance and non-cash charges relating to the previously announced headquarters consolidation compared with a charge of $12.6 million in the prior quarter. On a non-GAAP basis, excluding the $24.2 million in other operating expenses, first-quarter operating expenses were $113.9 million and the operating loss was $19.4 million, compared to operating expenses of $118.7 million and an operating loss of $21.9 million in the fourth quarter. The Company's first quarter results are consistent with the preliminary results announced on October 6, 2003. At September 26, 2003, the Company's balance sheet shows a working capital deficit of about $260 million and a total shareholders equity deficit of about $211 million. "We made significant progress in Q1," said Bob Bishop, Chairman and CEO of Silicon Graphics. "Projections for revenue, gross margin and unrestricted cash were exceeded; operating expense levels were lowered, and major new storage and visualization products were launched. We hope to continue to improve in Q2 based on the strength of these new products and on increased customer confidence in SGI." As of September 26, 2003, unrestricted cash, cash equivalents, and marketable investments were $115.5 million, compared with $141.3 million at June 27, 2003. SGI: The Source of Innovation and Discovery(TM) SGI, also known as Silicon Graphics, Inc., is the world's leader in high-performance computing, visualization and storage. SGI's vision is to provide technology that enables the most significant scientific and creative breakthroughs of the 21st century. Whether it's sharing images to aid in brain surgery, finding oil more efficiently, studying global climate or enabling the transition from analog to digital broadcasting SGI is dedicated to addressing the next class of challenges for scientific, engineering and creative users. SGI was named on FORTUNE magazine's 2003 list of "Top 100 Companies to Work For." With offices worldwide, the company is headquartered in Mountain View, Calif., and can be found on the Web at http://www.sgi.com SK GLOBAL: Units Fined $25 Million for Unfair Trading Practices --------------------------------------------------------------- The Fair Trade Commission ordered SK Group affiliates to pay 29 billion won or $25,000,000 for unfair trading practices. According to Bloomberg News, the Commission was investigating six industrial groups for unfair trading practices like "propping up loss-making units with the profits of successful arms, fraudulent bookkeeping, corruption, and share-price manipulation." Approximately 32 billion won in fines were imposed on five of the six industrial groups. SK Group affiliates garnered the lion share of the fines. They plan to appeal the Commission's ruling. (SK Global Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., 609/392-0900) SMITHFIELD FOODS: Extends Exchange Offer for $350MM Senior Notes ---------------------------------------------------------------- Smithfield Foods, Inc. (NYSE: SFD) announced an extension of its pending exchange offer for its $350,000,000 7-3/4% Senior Notes, Series A, due 2013 for freely tradable notes with substantially identical terms. The expiration date for the Exchange Offer has been extended from 5:00 p.m., New York City time, on October 20, 2003 to 5:00 p.m., New York City time, on October 23, 2003, unless further extended. As of 5:00 p.m. October 20, 2003, Smithfield had received tenders from holders of approximately $317 million principal amount of the outstanding Series A notes. With annualized sales of $8 billion, Smithfield Foods (S&P, BB+ Corporate Credit Rating, Negative) is a leading processor and marketer of fresh pork and processed meats in the United States, as well as the largest producer of hogs. For more information, visit http://www.smithfieldfoods.com SMTC CORP: Schedules 3rd-Quarter Teleconference for November 10 --------------------------------------------------------------- SMTC Corporation (Nasdaq: SMTX) (TSX: SMX), a global electronics manufacturing services provider, has scheduled its third quarter results teleconference. The teleconference will be held on November 10, 2003 at 5:00 PM EST. Those wishing to listen to the teleconference should access the webcast at the investor relations section of SMTC's Web site http://www.smtc.com A rebroadcast of the webcast will be available on SMTC's Web site following the teleconference. Participants should assure that they have a current version of Microsoft Windows Media Player before accessing the webcast. Members of the investment community wishing to ask questions during the teleconference may access the teleconference by dialing 416-640-4127 or 1-800-814-4859 ten minutes prior to the scheduled start time. A rebroadcast will be available following the teleconference by dialing 416-640-1917 or 1-877-289-8525, pass code 21022863 followed by the pound key. SMTC Corporation (S&P, B Long-Term Corporate Credit Rating, Negative Outlook) is a global provider of advanced electronic manufacturing services to the technology industry. SMTC offers technology companies and electronics OEMs a full range of value- added services including product design, procurement, prototyping, printed circuit assembly, advanced cable and harness interconnect, high precision enclosures, system integration and test, comprehensive supply chain management, packaging, global distribution and after-sales support. SMTC is a public company incorporated in Delaware with its shares traded on the Nasdaq National Market System under the symbol SMTX and on The Toronto Stock Exchange under the symbol SMX. Visit SMTC's Web site at http://www.smtc.comfor more information about the Company. STARBAND COMMS: Plan-Filing Exclusivity Intact through Oct. 27 -------------------------------------------------------------- By order of the U.S. Bankruptcy Court for the District of Delaware, Starband Communications, Inc., obtained an extension of its exclusive periods. Until October 27, 2003, the Debtor has the exclusive right to file a plan of reorganization, and until December 29, 2003, to solicit acceptances of that Plan. StarBand Communications Inc., provides two-way, always-on, high- speed Internet access via satellite to residential and small office customers nationwide. The Company filed for chapter 11 protection on May 31, 2002 (Bankr. Del. Case No. 02-11572). Thomas G. Macauley, Esq., at Zuckerman and Spaeder LLP represents the Debtor in its restructuring efforts. When the Company filed for protection form its creditors, it listed $58,072,000 in assets and $229,537,000 in debts. TCW LEVERAGED: Fitch Affirms Low-B Ratings on Class D & E Notes --------------------------------------------------------------- Fitch Ratings affirms all of the rated notes issued by TCW Leveraged Income Trust IV, L.P. (TCW LINC IV). At this time, the senior secured credit facility, class A first senior secured and class B second senior secured notes have been paid in full. The following rating actions are effective immediately: -- $61,000,000 class C senior subordinated secured notes due May 2007 'BBB'; -- $28,500,000 class D subordinated secured notes due May 2007 'BB'; -- $22,500,000 class E junior subordinated participating notes due May 2007 'B'. TCW LINC IV, a market value collateralized debt obligation that closed on May 16, 2000, is managed by TCW Investment Management Company. On May 16, 2003, TCW LINC IV was out of compliance with its class E overcollateralization test. TCW was unable to cure the OC test in the 10-day cure period, which resulted in an event of default on June 3, 2003 as per the TCW LINC IV governing documents. Prior to the OC failure, the issuer had redeemed 100% of its senior secured credit facility and class A notes. Subsequent to the OC failure, the issuer further reduced its debt outstanding by $89.7 million, paying down the class B notes in their entirety and the class C notes to a current balance of approximately $16.3 million. As the controlling class, the class C notes have executed a limited waiver that waives the event of default as it relates to the class E OC failure. The terms of the limited waiver outline the fund's ability to sell assets, substitute collateral, pay management fees and redeem outstanding debt. Under the limited waiver the total balance of class C notes is due by October 31, 2003. The manager has been working through the portfolio to meet the Oct. 31, 2003 redemption deadline for the class C notes and has identified all of the positions they will liquidate in order to pay down the remaining $16.3 million. As the fund has de-levered, the manager has liquidated investments across all asset categories in order to realize the best value possible for the remaining notes. This is important as it will mean a less concentrated portfolio for the remaining note-holders. As of the Sept. 12, 2003 valuation report, semi-liquid and illiquid investments dropped by approximately 25% from the year ago valuation date to roughly 29% of the current market value of the fund. The OC coverage levels of the class C, D and E notes were 318.7%, 136%, and 97.4%, respectively. Although the class E notes continue to be under collateralized with respect to the discounted collateral value of the portfolio, they are well covered by the market value of the assets at a ratio of 112.6%. This market value coverage has improved by approximately 4.5% over the last year - even as the fund has liquidated in order to redeem the senior notes. This trend implies that the market value of the portfolio investments has appreciated over this time and that the manager has been successful at liquidating positions at or above their marks. Fitch will continue to monitor and review this transaction for future rating adjustments. THAXTON GROUP: CEO Says Bankruptcy Filing a Temporary Setback ------------------------------------------------------------- The Thaxton Group, a Lancaster based consumer financial services company, filed for Chapter 11 protection Monday. A worsening economy resulting in customers defaulting on their loans due to unemployment and bankruptcy and a spate of law suits forced the company to seek legal protection while it re-structures its obligations. CEO James Thaxton sees this as a temporary setback saying, "Unlike some previous institutions, The Thaxton Group has money in the bank to conduct our day-to-day business. Re-structuring means planning for the future; a future where we can serve our customers." Chapter 11 allows the company to maintain control of its assets and operate as normal. During Chapter 11 individual lawsuits are stayed, and investors are given a collective voice (through a committee) in how the company is re-structured. Customers should not be affected. The Thaxton Group has been serving the Carolinas for more than 50 years, specializing in consumer loans and health/life insurance. It serves 11 states, including the Carolinas, and has been family owned since its inception. The Thaxton Group employs nearly 1,000 people in more than 200 hundred offices. THAXTON GROUP: Seeks Court OK to Pay Critical Vendors' Claims ------------------------------------------------------------- The Thaxton Group, Inc., and its debtor-affiliates are seeking for the U.S. Bankruptcy Court for the District of Delaware's approval to pay the prepetition claims of certain critical vendors, with whom the Debtors continue to do business and whose services are essential to the Debtors' operations. The Debtors report that the services provided by the Critical Vendors are unique information technology services and integrated credit reporting services that are instrumental in the Debtors' consumer finance business. The Debtors believe that the payment of the Critical Vendor Claims is necessary to continue the Debtors' consumer finance operations, preserve the Debtors' enterprise value and allow the Debtors to reorganize in a manner that will maximize value for the Debtors' estate, creditors and other stakeholders. The Debtors submit that the maximum aggregate value of Critical Vendor Claims that may be paid pursuant to this Motion will not exceed $50,000. The Debtors assure the Court that they do not wish to pay all Critical Vendor Claims. While the Debtors believe that they must continue to receive the services provided by all of the Critical Vendors in order to avoid disruption to the Debtors' operations, preserve the enterprise value of the Debtors' business and achieve the successful reorganization of the Debtors' businesses, they recognize that in many cases payment of a Critical Vendor's prepetition claims will not be necessary to facilitate the continued delivery of such services. Rather, the Debtors' believe that many of its Critical Vendors will continue to do business with the Debtors postpetition because doing so simply makes good business sense - even without the payment of prepetition claims. In some cases, however, the Debtors anticipate that, among other things, Critical Vendors: a) may refuse to deliver services without payment of their prepetition claims; b) may refuse to deliver services on reasonable credit terms absent payment of prepetition claims, thereby effectively refusing to do business with the Debtors; or c) may suffer significant financial hardship, such that the Debtors' non-payment of prepetition claims would destroy a Critical Vendor's business and therefore its ability to supply the Debtors services. It is in cases like these - where non-payment of Critical Vendors' claims would lead to the interruption of the delivery of necessary services - that the Debtors seek to exercise their discretion to pay Critical Vendor Claims. Headquartered in Lancaster, South Carolina, The Thaxton Group, Inc., is a diversified consumer financial services company. The Company filed for chapter 11 protection on October 17, 2003 (Bankr. Del. Case No. 03-13183). Michael G. Busenkell, Esq., and Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell represent the Debtor in their restructuring efforts. When the Company filed for protection from it creditors, it listed $206,000,000 in total assets and $242,000,000 in total debts. TRITEAL: Mails Notice of Intended Distribution to Shareholders -------------------------------------------------------------- TriTeal Corporation (PK:TEAL) announced that notice of its intended distribution to all holders of the Company's Common Stock as of October 15, 2003 was sent via first class mail on October 16, 2003. Pursuant to the Company's Plan of Liquidation, which was approved by the Court on December 7, 1999, holders of the Company's Common Stock as of the Record Date are entitled to receive a pro-rata distribution of remaining cash after all claims and expenses have been resolved and paid in accordance with the Plan of Liquidation. The Company's transfer agent, American Stock Transfer and Trust Company, will act as paying agent for the Distribution. In order to receive such Distribution, each owner of the Company's Common Stock is required to surrender his/her stock certificates evidencing such ownership of the Company's Common Stock within 60 days following mailing of notice of the intended Distribution (the "60-Day Notice Period"), or December 15, 2003. Pursuant to the Company's Plan of Liquidation, after expiration of the 60-Day Notice Period any shares of the Company's Common Stock which have not been surrendered will be rendered void and of no value. The Company previously announced that trading in its stock would halt effective with the close of the stock market on the Record Date; however, the Company has been notified by NASDAQ that trading will continue over-the-counter under the symbol TEAL.PK until expiration of the 60-Day Notice Period, or December 15, 2003. The Company estimates that the Distribution will range from $0.41 to $0.46 per share of Common Stock; however, at this time, the exact amount of such Distribution remains undetermined. As reported in Troubled Company Reporter's October 14, 2003 edition, the United States Bankruptcy Court for the Southern District of California approved a record date of October 15, 2003 for a pro-rata cash distribution to holders of TriTeal's Common Stock. TURNSTONE SYSTEMS: Reports $1.4 Million in Net Loss for Q3 2003 --------------------------------------------------------------- Turnstone Systems, Inc. (Nasdaq: TSTN) reported financial results for the fiscal quarter ended September 30, 2003. Net revenues for the quarter were $52,000. Net loss for the quarter was $1.4 million. At September 30, 2003, the company had cash and cash equivalents of $188.0 million. The company also announced that on October 9, 2003, the U.S. District Court for the Northern District of California granted final approval of the $7.0 million settlement of a class action suit that was brought against the company, certain of its officers and directors and its underwriters on behalf of persons who purchased common stock issued pursuant to the company's secondary stock offering in September 2000. The final settlement terms are consistent with those previously announced by the company in July 2003, with insurance for the company's directors and officers having paid approximately $6.1 million and the company having contributed approximately $0.9 million in cash in September 2003. The settlement successfully resolves and dismisses all claims against all defendants in the suit, without any admission of liability by any party. Turnstone is based in Santa Clara, California. For more information about Turnstone, visit http://www.turnstone.com * * * In its later Form 10-Q filed with the Securities and Exchange Commission, Turnstone Systems reported: "If our stockholders vote against the plan of dissolution of Turnstone Systems, it would be very difficult for us to continue our business operations. "If our stockholders do not approve the plan of dissolution and liquidation of Turnstone Systems, Inc. at our 2003 annual meeting of stockholders, we would have to continue our business operations from a difficult position, in light of our announced intent to liquidate and dissolve. We are not actively marketing or selling any of our products, and have generally ceased normal business operations, terminated substantially all of our employees and severed all of our supplier and customer relationships. Prospective employees, suppliers, customers and other third parties may refuse to form relationships or conduct business with us if they do not believe we will continue to operate as a going concern." UNITED AIRLINES: Enters into Morgan Stanley Jet Fuel Supply Pact ---------------------------------------------------------------- As part of their restructuring, United Air Lines, Inc., and United Aviation Fuels Corporation undertook a major initiative to review their jet fuel procurement strategy. They solicited proposals from third parties for jet fuel supply, with the goal of lowering the total cost of ownership associated with jet fuel procurement. Through this process, the Debtors devised a method for reducing the working capital demands of their current fuel supply arrangement while maintaining access to a low cost fuel supply. In 2002, United purchased $2,800,000,000 in fuel. However, United's fuel supply strategy requires over $250,000,000 in working capital to prepay fuel purchases, maintain fuel inventory and manage accounts receivables from third party fuel sales. James H.M. Sprayregen, Esq., at Kirkland & Ellis, warns that this strategy carries risks: -- United's working capital needs require low cost of capital; -- United faces credit risk from third party sales; and -- the trading environment for fuel can be volatile. Several months ago, United invited over 20 parties, including oil companies, fuel resellers and fuel traders, to submit partnership proposals. United reviewed the proposals and began negotiations. United determined that Morgan Stanley Capital Group presented the most advantageous partnership arrangement for the supply of jet fuel. Consequently, United and Morgan Stanley negotiated a Supply Agreement. In general, under the Supply Agreement, Morgan Stanley will: (a) supply 100% of United's fuel requirements at 35 selected airport locations in the U.S.; (b) at certain airports, perform all pipeline supply requirements at cost, assume United's local supply contracts and resell the fuel at cost, and carry all United's inventories; (c) perform and finance third party fuel sales; and (d) perform all fuel trading. United and Morgan Stanley will share the profits from Morgan Stanley's sale of jet fuel to other airlines from the fuel inventories that Morgan Stanley maintains to supply United. Additionally, the Parties will share profits from trading transactions between Morgan Stanley and non-airline third parties. However, United will not bear any risk of loss from these transactions. Pursuant to the Supply Agreement, United will: (a) purchase fuel from Morgan Stanley; (b) negotiate selected local supply contracts and third party sales on Morgan Stanley's behalf; (c) sublease certain United infrastructure agreements to Morgan Stanley; (d) assume and assign selected third party sale agreements, bulk supply agreements and local supply agreements to Morgan Stanley; (e) prepay Morgan Stanley daily for its projected fuel purchases, with a monthly true-up; and (f) provide Morgan Stanley with the Deposit. The Supply Agreement has a three-year term with a two-year renewal period and early termination provisions. At the end, all fuel contracts, histories and infrastructure will revert to United. In short, the Supply Agreements will ensure a ready supply of jet fuel at a competitive cost to United. United has the right to share the profits generated by Morgan Stanley's sales and trading activity. The Supply Agreement will reduce United's working capital requirements and market risks and will result in an estimated savings of $5,000,000 per year. Mr. Sprayregen tells the Court that the Supply Agreement, including details on the Deposit, contains confidential information. Accordingly, it is filed in redacted form. The Official Committee of Unsecured Creditors, the DIP Lenders and any party having a direct interest in the Supply Agreement will be provided with the unredacted version, subject to signed confidentiality agreements. Judge Wedoff grants the Debtors' request to enter into the Fuel Supply Arrangement with Morgan Stanley. (United Airlines Bankruptcy News, Issue No. 29; Bankruptcy Creditors' Service, Inc., 609/392-0900) UNITEDGLOBALCOM: UGC Europe Shareholders Urged to Nix Offer ----------------------------------------------------------- UGC Europe, Inc., (Nasdaq: UGCE) announced that, after careful consideration, including a thorough review with independent financial and legal advisors, the Special Committee of the Board of Directors of UGC Europe has determined that UnitedGlobalCom, Inc.'s (Nasdaq: UCOMA) offer to exchange 9.0 shares of UnitedGlobalCom's Class A common stock for each of the outstanding shares of common stock of UGC Europe that it does not already own is not in the best interests of UGC Europe's stockholders, other than UnitedGlobalCom and its affiliates. Accordingly, the Special Committee recommends that UGC Europe's stockholders reject UnitedGlobalCom's offer and not tender their shares in the exchange offer. The Special Committee also noted that it is in the process of arranging for the receipt of additional information from UnitedGlobalCom. The Special Committee was advised by Goldman, Sachs & Co. and legal counsel, Cleary, Gottlieb, Steen and Hamilton. If stockholders have previously tendered shares and wish to withdraw their shares, they should contact their broker or the exchange agent, Mellon Investor Services LLC. In connection with the exchange offer, UGC Europe will be filing certain materials with the Securities and Exchange Commission, including a Solicitation/Recommendation Statement on Schedule 14D-9, which is expected to be filed on October 20, 2003. Stockholders are urged to read the Solicitation/Recommendation Statement on Schedule 14D-9 and any amendments thereto when they become available because they will contain important information. Investors can obtain a free copy of the Solicitation/Recommendation Statement on Schedule 14D-9 and any amendments thereto when they come available and all other filings by UGC Europe with the SEC at the SEC's Web site at http://www.sec.gov In addition, these materials may be obtained free from UGC Europe by directing a request to UGC Europe, Inc., 4643 South Ulster Street, Suite 1300, Denver, Colorado 80237, 303-220-4204, Attention: Investor Relations. 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. USG CORP: L&W Wants to Purchase Secret Building Supply Business --------------------------------------------------------------- Pursuant to Section 363 of the Bankruptcy Code, the USG Corp. Debtors ask the Court to approve a proposed acquisition by Debtor L&W Supply Corporation of substantially all of the assets of an existing building materials distribution business and the related Asset Purchase Agreement. Furthermore, the Debtors seek the Court's authority to: (a) file the Acquisition Motion under seal so that the Motion is disclosed only to the Court; and (b) fix certain procedures with respect to the Acquisition Motion. Paul N. Heath, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, asserts that filing the Acquisition Motion under seal is warranted due to the nature of its contents and the impact the information it contains could have on the Debtors and on the Seller should the Acquisition Motion become public. Mr. Heath says that the Acquisition Motion contains detailed information regarding the existing business. The Acquisition Motion identifies: -- the name of the Seller, -- the location of the target business, -- a detailed description of the assets being purchased, -- the proposed purchase price, and -- the financial performance of the business. The Debtors, particularly L&W, have historically engaged in acquisitions of existing distribution businesses to establish themselves in a new market or to fortify their position in an existing market. Mr. Heath informs the Court that it is the Debtors' experience that a seller will not agree to enter into a sale transaction if the seller's identity and the proposed transaction are made known publicly prior to consummation of the transaction. The Seller of the Proposed Acquisition is no different, Mr. Heath notes. Apart from public relations, employment and other issues, potential sellers have expressed extreme concern that if the proposed acquisition were publicly disclosed before consummation, the Seller's current suppliers of gypsum wallboard would immediately refuse to supply products to the seller because of either: * the likelihood that the Debtors would become the sole suppliers to the businesses to be operated by L&W upon completion of the transaction; or * policies of major wallboard producers against supply of gypsum wallboard to L&W or to businesses selling assets or stock to L&W. A termination of supply would be disastrous for the seller, as it would be for any distributor. Mr. Heath contends that if the proposed acquisition were not consummated, the seller's business could be financially devastated. Yet, even if the acquisition ultimately was completed, the potential damage to the seller's business pending completion of the sale resulting from the withdrawal of suppliers -- and the potential corresponding loss of customers -- could negatively impact both the seller and the Debtors. Thus, Mr. Heath emphasizes, disclosure of information contained in the Acquisition Motion will make the consummation of the Proposed Acquisition exceedingly difficult, if not impossible. In fact, it is highly unlikely that the transaction will be completed without the protections requested. In addition, the Debtors believe that disclosing key financial information, like the purchase price, would reveal confidential commercial information and business strategies of the Debtors. Mr. Heath points out that L&W negotiated in five transactions that have closed in the past 12 months under the Court-approved acquisition procedures for smaller transactions, which do not require public disclosure of the transaction terms. Thus, Mr. Heath maintains, not permitting the Debtors to file the Acquisition Motion under seal would cause material future prejudice to the Debtors and their estates with respect to future acquisitions by the Debtors. In light of confidentiality concerns, the Debtors previously asked the Court to establish procedures where the Debtors may acquire existing businesses of a limited size without court approval but upon notice to the U.S. Trustee, the Committees and the Futures Representative. In February 2002, the Court approved these procedures with respect to transactions involving $7,500,000 or less, and the procedures subsequently were modified with a May 2003 Order. The Debtors have successfully utilized the Acquisition Procedures over the course of their Chapter 11 cases, resulting in their expeditious and cost-effective review of economically beneficial transactions. Mr. Heath relates that the purchase price with respect to the Proposed Acquisition exceeds the $7,500,000 cap established by the Acquisition Procedures. However, the same confidentiality concerns that supported approval of the Acquisition Procedures are present. Accordingly, the Debtors seek to file the Acquisition Motion under seal subject to these procedures: (a) The Debtors may file the Acquisition Motion with the Court under seal; (b) The Debtors will not be required to serve the Acquisition Motion on any party-in-interest other than: * the U.S. Trustee, * the counsel to the Committees, * the counsel to the Futures Representative, and * the counsel to the seller; (c) The hearing, if any, with respect to the Acquisition Motion will be held in camera and may only be attended by those parties who have received the Acquisition Motion; (d) All parties who receive a copy of the Acquisition Motion are directed to maintain the strict confidentiality of the Acquisition Motion and the information contained pursuant to the same terms established by the Acquisition Procedures Order; and (e) Any recipient of the Acquisition Motion that wishes to file any objection or response is required to: * omit any information that cannot be disclosed pursuant to the Acquisition Procedures Order; or * file the objection or response under seal. Ultimately, the Debtors believe that the Seal Procedures are necessary to ensure the confidentiality of the sensitive commercial information contained in the Acquisition Motion so as to permit the Proposed Acquisition to occur and to not prejudice the Debtors in potential future negotiations with other acquisition targets. By providing the Acquisition Motion to the notice party, the Debtors believe that all principal stakeholders in these cases will have an opportunity to fully review and assess the Proposed Acquisition. (USG Bankruptcy News, Issue No. 54; Bankruptcy Creditors' Service, Inc., 609/392-0900) WEIRTON STEEL: Provides Overview of Emergence Business Plan ----------------------------------------------------------- Weirton Steel Corporation's emergence business plan is predicated first on making its sheet steel productions a viable economic asset. The emergence business plan is premised on Weirton's belief that a two blast furnace operating configuration under the reconstituted cost structure results in the highest economic value by maximizing cash flow and minimizing operating risks. The combination of Weirton's emergence business plan and bankruptcy initiatives are designed to result in a profitable integrated steel producer with a packaging materials emphasis. D. Leonard Wise, Chief Executive Officer of Weirton Steel Corporation, relates that Weirton's emergence business plan is founded on five key business initiatives: A. Immediate Cost Savings Plan Beginning in early 2003, Weirton began a comprehensive campaign to eliminate at least $146,000,000 of annual costs. The major cost categories and the status of completion are: Forecasted Byrd Bill Annualized Business Savings at Plan 12/31/03 --------- ---------- Estimated savings implemented: Vendor Contracts $10.0 $9.4 Pension Freeze 17.2 17.2 Wage Freeze and 5% Reduction 21.6 21.6 Two Tier Wage System 4.8 2.9 Operational Initiatives 9.0 18.5 Active Medical -- Salaried Employees 2.0 2.0 Mill Overhead, SG&A and Exempt Layoffs 6.0 6.0 --------- ---------- $70.6 $77.6 Additional savings not yet implemented: Vendor Contracts $7.0 $9.2 OPEB Modifications 26.2 26.2 Resolution of Pension Funding Issues 33.0 33.0 Active Medical -- Represented Employees 8.0 8.0 Mill Overhead, SG&A and Exempt Layoffs 2.0 2.0 --------- ---------- 76.2 78.4 TOTAL MODELED SAVINGS $146.8 $156.0 ========= ========== In February 2003, Weirton obtained the approval of the Independent Steelworkers' Union to reduce hourly wages, freeze the pension plan and allow for a "two-tier" wage system that pays new employees at 75% of the contract rate. The February 5, 2003, Settlement Agreement to the Collective Bargaining Agreement provided more than $40,000,000 of annual cost savings. In addition, as a result of its bankruptcy filing, Weirton has not been obligated to make estimated payments of more than $70,000,000 per year to fully fund the Pension Plan. With respect to operations and overhead savings, in calendar year 2003, Weirton experienced a 12% reduction of its non-represented workforce and implemented other efficiency programs to realize its $17,000,000 of budgeted annual savings. Subsequent to its bankruptcy filing, Weirton engaged in extensive negotiations with suppliers on new contracts that provide a high degree of confidence that Weirton will actually exceed the budgeted $17,000,000 savings. Accordingly, the principal open item of projected savings pertains to eliminating annual retiree healthcare obligations for $26,000,000 per year. Weirton has aggressively sought to form a Section 1114 Committee and previously set a target of November 2003 to either consensually or unilaterally obtain the projected OPEB cost savings. It is expected that Weirton would sponsor for the benefit of affected retirees a variable plan based on its profitability after debt service obligations. B. Additional Labor Savings to Achieve "ISG Model" Cost Structure Weirton has thoroughly examined its existing work rule requirements and discovered significant inefficiencies that, if eliminated, are estimated to provide more than $40,000,000 of additional annual cost savings. Weirton began discussing these items with the ISU in April 2003. Weirton continues to aggressively negotiate for the long-term collective bargaining agreement that will be necessary in connection with its emergence strategy. C. Focus on Expanding High Margin, Value-Added Tin Shipments The emergence business plan reflects a continuation of Weirton's long-time strategy as a tin producer recognizing that Weirton was founded 95 years ago as a tin company and then backward integrated to producing steel. Weirton is the second largest tin producer in the United States and in certain cases, the sole supplier of tin to major can company facilities. In addition, Weirton has been aggressively improving on-time delivery and other customer service attributes to increase its market share. In particular, Weirton is targeting to expand its market share with the largest can maker in the United States. During the first six months of calendar year 2003, Weirton's market share in the tin market has increased from 24% to 27%. The emergence business plan reflects a continuation of Weirton's success in the tin market, resulting in projections for 75,000 to 100,000 tons of additional tin shipments per year from historical levels. The positive shift in product mix provides an important incremental cash contribution of approximately $12,000,000. Furthermore, Weirton developed a new coating technology to extrude a thin layer of polymer on to a steel strip, allowing for lower raw material costs and higher application speeds for any painted or lacquered steel product. Weirton protected its technology, with pending patents, and secured an exclusive supply agreement for the raw materials necessary for the polymer coatings. Weirton's polymer coating expects to be effective for the most aggressive pack media and should reduce can manufacturing costs through fewer line switches and lower inventory requirements by using the same coating for all cans produced. Moreover, increasingly stringent environmental standards related to solvent-based lacquers should further increase demand for polymer. D. Promptly Consummate a Responsible Plan of Reorganization Weirton filed for Chapter 11 protection in order to target specific areas of its business model in a timely manner and emerge as a financially strengthened enterprise situated to capitalize on the consolidating steel industry. The projected debt levels associated with emergence financing are projected to result in a significantly improved balance sheet, thereby allowing Weirton to maximize financial flexibility in its capital structure. E. Opportunistically Pursue Selective "Add On" Acquisitions The emergence business plan reflects Weirton's expectation that it will internally generate significant capital from operations, which will be retained to provide a conservative cushion to service debt in potentially volatile steel markets. Likewise, Weirton's emergence strategy focuses on an ability to capitalize on acquisition opportunities that add scale to its steel-making operations and expand its specialty metals presence. During the last three years, Weirton has evaluated a number of acquisition targets to facilitate consolidation of the steel industry. Although no acquisitions are assumed in Weirton's emergence business plan, the strategies listed are designed to result in Weirton becoming a financially strong and logical consolidator in the specialty metals market. (Weirton Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., 609/392-0900) WESTPOINT STEVENS: Asks Court to Fix Key Employee Retention Plan ---------------------------------------------------------------- WestPoint Stevens Inc., and its debtor-affiliates relate that their ability to maintain business operations and preserve value for their estates is dependent on the continued employment, active participation, loyalty and dedication of key employees who possess the knowledge, experience and skills necessary to bring optimum support to the Debtors' business operations. The Debtors believe that the ability to stabilize and preserve their business operations and assets will be substantially hindered if they are unable to retain the services of these employees. Michael F. Walsh, Esq., at Weil, Gotshal & Manges LLP, in New York, tells the Court that as a result of the general downturn in the Debtors' industry, the Debtors' began closing certain of their plants and warehouses before the Petition Date. Additional closures and plant rationalizations are anticipated under the Debtors' business plan. These circumstances have had a significant negative impact on employee morale and have heightened anxiety. Mr. Walsh explains that an environment in which employees fear for the security of their jobs and of their future, and the future stability of their employer is destabilizing and not conducive to optimal work productivity. In this kind of environment, it is difficult for employees to focus adequately on their daily responsibilities, let alone long-term strategies and objectives. It is also a challenge for the Debtors' senior management to retain talented and dedicated personnel. To combat these uncertainties, reward employees for shouldering the additional burdens imposed by the commencement of these Chapter 11 cases, as well as maintain employee morale and dedication, the Debtors decided to implement a retention and severance program. The Debtors retained KPMG LLP's compensation advisory services to review existing policies, provide market information, and make recommendations towards the establishment of a key employee retention and severance program. KPMG undertook an extensive analysis of the Debtors' existing bonus and severance plans and conducted interviews with the Debtors' employees. KPMG also examined numerous retention and severance plans established by other companies in bankruptcy proceedings, and produced a detailed comparison of the 15 plans adopted by those companies operating in Chapter 11 that are most comparable to the Debtors in terms of size, operations and financial condition. Based on the results of its analysis, KPMG recommended that the Debtors adopt a key employee retention plan consisting of a combination of stay bonuses, performance incentives, emergence bonuses, and severance protections. However, after careful consideration and consultation with their advisors, the Debtors determined that adopting a more narrowly tailored program containing only a performance incentive and severance program would best align their employees' and creditors' interests, and at the same time provide the necessary incentive to retain key employees. The Performance Incentive Program Mr. Walsh relates that the Performance Incentive Program proposed under the KERP is substantially similar to the Debtors' existing Senior Management Incentive Plan except that it has been modified to match the covenants set forth in the Debtors' DIP Facility and business plan. Under the Management Incentive Plan, bonuses are earned upon the achievement by an employee's individual division of certain performance targets. The targets were specific to the individual division and related to predetermined levels of return on invested capital. In furtherance of aligning employee and creditor or lender interests, the performance targets under the Performance Incentive Program have been modified to reflect achievements of wide levels of EBITDA and cash availability, which are metrics more commonly associated with creditor or lender interests. These targets were fully negotiated and implemented pursuant to an amendment to the Debtors' DIP Facility and have been incorporated into the Debtors' five-year business plan. There are 245 employees eligible for bonuses under the Performance Incentive Program. These eligible employees are divided into five groups that are based on the level of seniority and responsibility. Provided that the maximum performance targets are reached, $4,484,076 will be paid per quarter. For each performance target, each eligible employee will be paid a percentage of the base salary as a bonus. Base Salary is defined as salary earnings, plus any tax deferred earnings that are deducted from gross salary to arrive at W-2 salary earnings -- that is, Section 401k savings -- and exclusive of any incentive payments and any non-financial recurring adjustments, like relocation expenses. The participants will receive a quarterly incentive payment equal to a percentage of their quarterly salary, based on achieving 80% to 120% of the EBITDA, as projected in the Debtors' business plan. The participants will also receive a quarterly incentive payment equal to a percentage of their quarterly salary, based on achieving 80% to 120% of cash availability. The bonus pool for the Performance Incentive Program will be funded when the established goals are met, and the payments will be paid in quarterly lump sums after a determination of actual performance and the calculation of each individual's incentive awards. For each quarterly target date, the Debtors set two separate predetermined target levels. One target level is based on the EBITDA and the second target level is based on cash availability goals. Each target level must be achieved before each applicable period ending date. Achievement of each of the Target Levels will account for 50% of a potential individual's bonus. If one of the Target Levels is achieved while the other is not, the eligible employee will still be entitled to receive the corresponding bonus payout associated with the Target Level achieved. The payouts under the Performance Incentive Program are calculated using the targets for the EBITDA and Cash Availability. Each period ending date has a corresponding minimum, target, and maximum goals. The minimum goal represents the base level necessary to achieve any bonus payout. The target goal represents the level at which the Debtors expect to perform while the maximum goal represents the level needed to be achieved for the maximum bonus payout: EBITDA Target Levels/Goals Period Ending Minimum Target Maximum ------------- ------- ------ ------- 09/30/2003 $31,721,600 $39,652,000 $47,582,400 12/31/2003 32,920,000 41,150,000 49,380,000 03/31/2004 26,684,800 33,356,000 40,027,200 Cash Availability Target Levels/Goals Period Ending Minimum Target Maximum ------------- ------- ------ ------- 09/30/2003 $77,182,400 $96,478,000 $115,773,600 12/31/2003 110,614,400 138,268,000 165,921,600 03/31/2004 93,376,800 116,721,000 140,065,200 Aside from modifying the Target Levels for the achievement calculation of the performance goals, the Performance Incentive Program also modifies the proposed layouts for certain groups of eligible employees. The increase in bonus levels will be limited to the most senior officers and employees of the Debtors. Under the new KERP, the employees in Groups 3 and 4 will be able to achieve partial bonuses through achievement of performance levels of one of the Target Levels. A comparison between the percentage payouts under the Management Incentive Plan and the payouts proposed under the Performance Incentive Program is summarized: ______________________________________________________________ | | | Payouts as % of Base Salary in | | Old Management Incentive Plan and in | | New Performance Incentive Program | |______________________________________________________________| | | | | | | Category of | Minimum | Target | Maximum | | Eligible |_______________|_______________|_______________| | Employee | | | | | | | | | Old | New | Old | New | Old | New | |______________|_______|_______|_______|_______|_______|_______| | | | | | | | | | Group 1A | 30% | 50% | 60% | 100% | 120% | 200% | | Group 1 | 25 | 7.5 | 50 | 75 | 100 | 150 | | Group 2 | 15 | 25 | 30 | 50 | 60 | 100 | | Group 3 | 10 | 10 | 20 | 20 | 40 | 40 | | Group 4 | 7.5 | 7.5 | 15 | 15 | 30 | 30 | |______________|_______|_______|_______|_______|_______|_______| If on the period ending September 30, 2003, the Debtors achieved the Target Levels, the $39,652,000 EBITDA and the $96,478,000 Cash Availability, a Group 2 employee will be entitled to a bonus payout equal to 50% of the Base Salary. Under the Management Incentive Plan, a Group 2 employee would have been entitled to a bonus payout of only 30% of Base Salary. If, however, on September 30, 2003 the Debtors achieved the $39,652,000 EBITDA but only achieved the $77,182,400 minimum Cash Availability, a Group 2 employee would be entitled to receive a bonus equal to half of the 50% of the employee's Base Salary -- corresponding to the achievement of the target EBITA level -- and 25% of 50% of the employee's Base Salary, corresponding to the achievement of the minimum Cash Availability level. Under the Management Incentive Plan, the entire bonus was based on the achievement of a single goal and not achieving that goal would mean no bonus, unlike in the Performance Incentive Program. The Severance Plan As part of the KERP, the Debtors also intend to introduce a new severance plan for their top 22 key executives. The Debtors identified these 22 executives as vital to their ability to continue operating effectively. Included in the Severance Plan are the Debtors' Chief Executive Officer and Chief Financial Officer and other senior management employees. Group 1A executives will be entitled to a lump-sum payment, on termination without "cause," equal to three times their base salary. Group 1 executives will be entitled to a lump-sum payment, on termination without "cause," equal to one-and-a-half times their base salary. No employee will be eligible for payment under the Severance Plan if his or her employment is terminated for "cause" or if the employee terminates his or her employment at will. The Severance Plan will replace any current contractual severance agreements that exist between these employees and the Debtors. The Debtors estimate that the aggregate additional cost of the Severance Plan over and above the current amount for salaried employees will not exceed $3,700,000. All other salaried employees will be entitled to the severance they have earned under the Debtors' existing Separation Plan for Salaried Employees. Under the Separation Plan, the employees are entitled to two weeks base salary, not including bonus, overtime pay, or incentive pay, for each year of service with the Debtors up to a maximum of one year's pay. The Debtors contend that the implementation of the Performance Incentive Program and the Severance Plan under the proposed KERP will aid the rehabilitative efforts by increasing the likelihood of retaining the services of valuable, key employees. The Debtors have consulted with the advisors to the Official Committee of Unsecured Creditors and the bank steering committee and presented the details of the KPMG plan. The Debtors will continue to discuss the KERP with these constituencies and seek to obtain their support of the KERP in its entirety. By this motion, the Debtors ask the Court to approve their Key Employee Retention Plan. (WestPoint Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 609/392-0900) WINN-DIXIE STORES: Board Declares $0.05 Per Share Cash Dividend --------------------------------------------------------------- The Board of Directors of Winn-Dixie Stores, Inc. (NYSE: WIN) announced the declaration of a cash dividend of 5 cents per share on the Company's common stock for the quarter ended September 17, 2003. The dividend is payable on November 17, 2003, to shareholders of record at the close of business November 3, 2003. "On October 8, 2003, we reported relatively flat earnings of $0.01 per share," Winn-Dixie President and Chief Executive Officer, Frank Lazaran stated. "Increased sales and earnings have to come from the execution of our sales and marketing plan, but are dependent on customer acceptance. Dividends are paid out of current results. The Board of Directors will closely monitor the payout ratio throughout the remainder of the fiscal year. The declaration of the dividend by the Board shows confidence in the Company." Winn-Dixie Stores, Inc. (NYSE: WIN) is one of the largest food retailers in the nation and ranks 149 on the FORTUNE 500(R) list. Founded in 1925, the Company is headquartered in Jacksonville, FL, and operates 1,078 stores in 12 states and the Bahamas. Frank Lazaran serves as President and Chief Executive Officer. For more information, visit http://www.winn-dixie.com * * * As reported in Troubled Company Reporter's October 13, 2003 edition, Moody's Investors Service placed all ratings of Jacksonville, Florida-based supermarkets operator Winn-Dixie Stores, Inc. under review for downgrade. These were: - $300 million 8.875% senior notes (2008) of Ba2, - $1.0 billion senior unsecured shelf of (P)Ba2, - Senior implied rating of Ba1, and - Long-term issuer rating of Ba2. Moody's did not rate the current $300 million secured revolving credit facility. Approximately $300 million of debt securities were affected. According to Moody's, the review was prompted by: (1) increasing concern that the company's financial flexibility has started to deteriorate after two quarters of poor operating performance, (2) the challenges in winning back customers through narrowing the price gap with efficient competitors such as Publix (not rated) and the Wal-Mart (senior unsecured rating of Aa2) supercenter format, and (3) revenue pressures that have confronted the traditional supermarkets since alternative grocery retailers started becoming prominent. WINSTAR COMMS: Court Orders Ch. 7 Trustee to Pay General Motors --------------------------------------------------------------- On behalf of General Motors Acceptance Corporation, Mark Minuti, Esq., at Saul Ewing LLP, in Wilmington, Delaware, argues that the Winstar Communications' Chapter 7 Trustee's Complaint: (a) fails to state a claim upon which relief can be granted; (b) should be dismissed under the doctrine of unjust enrichment; and (c) is barred by the doctrines of estoppel and waiver. Parties' Stipulation of Facts General Motors and the Debtors' Chapter 7 Trustee agree to establish certain information as facts for the purpose of the proceedings: (1) Prior to the Petition Date, General Motors and one or more of the Debtors were parties to a number of certain retail installment sales contracts, pursuant to which General Motors financed the Debtors' purchase of 52 vehicles; (2) General Motors holds a valid, first priority, perfected, purchase money security interest in the Vehicles; (3) As of the Petition Date, the balance due under the Contracts was $484,727, exclusive of interest, costs and attorneys' fees; (4) On December 19, 2001, the Court approved the sale of substantially all assets of the Debtors to Winstar Holdings, LLC formerly known as IDT Winstar Acquisition, LLC, as assignee of IDT Winstar Acquisition, Inc.; (5) The Sale Order provided that the Purchased Assets transferred to Winstar Holdings' predecessor were transferred "free and clear of all Interests of any kind or nature whatsoever, with all such Interests to attach to the Sale Proceeds in the order of their priority, with the same validity, force and effect, which they now have as against the Purchased Assets, subject to the Carve-out and to any claims and defenses the Debtors or other parties may possess with respect thereto"; (6) The Purchased Assets included the Vehicles; (7) Pursuant to the Sale Order, General Motors holds a valid, first priority, perfected, purchase money security interest in the Sale Proceeds equal to the value of the Vehicles; (8) The collective retail value of the Vehicles as of the Petition Date was $946,350; (9) The collective wholesale value of the Vehicles as of the Petition Date was $809,850; (10) The collective average value of the Vehicles as of the Petition Date was $719,075; (11) The collective retail value of the Vehicles as of the date of the sale of the Vehicles to Winstar Holdings was $760,450; (12) The collective wholesale value of the Vehicles as of the date of the sale of the Vehicles to Winstar Holdings was $634,575; and (13) The collective average value of the Vehicles as of the date of the sale of the Vehicles to Winstar Holdings was $697,512. Nothing contained in the Stipulation of Facts is to be construed by the Court as an admission by either party of a legal entitlement to the proceeds of the sale of assets as a matter of law. Lucent Objects to the Value of the Vehicles Lucent Technologies, Inc. argues that the valuation is based upon the National Automobile Dealers Association publications and not what Winstar Holdings paid for the Vehicles in the Sale. Rebecca L. Scalio, Esq., at Richards, Layton & Finger, in Wilmington, Delaware, recounts that all of the Debtors' assets were sold to Winstar Holdings in one transaction that generated a purchase price substantially less than the aggregate value of the assets. Lucent, CitiCapital, General Motors and the Debtors' postpetition secured lenders are asserting liens against the Sale Proceeds. Until the extent, validity and priority of Lucent, CitiCapital and General Motors's liens against the Sale Proceeds are known, Ms. Scalio asserts, the Court should not make any determinations regarding the value of any of the liens for purposes of allocating the Sale Proceeds. Accordingly, Lucent asks the Court that the value of the vehicles based on the stipulation not be determinative of the ultimate allocation of the Sale Proceeds on account of the Vehicles. General Motors Seeks Summary Judgment Pursuant to Rule 56(c) of the Federal Rules of Civil Procedure, General Motors asks the Court for a final summary judgment on the adversary proceedings commenced by the Chapter 7 Trustee against General Motors, CitiCapital Financial Corporation and Lucent Technologies, Inc., each asserting some claim to the proceeds of the sale by virtue of prior existing liens on the assets. Mr. Minuti asserts that as of the Petition Date and as of the Sale Date, General Motors held a valid and perfected first priority purchase money security interest in the sale of 52 motor vehicles. Furthermore, there is no genuine dispute as to any material fact, and it is entitled, as a matter of law, to payment in full of its principal, accrued interest and reasonable attorneys' fees from the sale proceeds. To prevail on a motion for summary judgment, a movant must meet the statutory criteria set forth in Civil Rule 56 made applicable to adversary proceedings by Rule 7056 of the Federal Rules of Bankruptcy Procedure. Civil Rule 56(c) reads, inter alia: "The Judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issues as to many material fact and that the moving party is entitled to a judgment as a matter of law." Based on the facts stipulated by the Chapter 7 Trustee and General Motors, there is no dispute that General Motors held a valid, first priority perfected, purchase money security interest in the Vehicles. It if further undisputed that pursuant to the Sale Order, General Motors' purchase money security interest in the collateral continues in any proceeds of the collateral. Mr. Minuti points out that General Motors did not waive or otherwise relinquish its security interest in the Vehicles. Accordingly, General Motors' lien automatically attached to the sale proceeds. Mr. Minuti relates that the sole issue remaining is the allocation and amount to be paid to General Motors on account of its interest in the sale proceeds. The parties have stipulated that: -- the outstanding balance due under the Contracts as of the Petition Date was $484,727 exclusive of interest at the contract rate of 8-1/4% per annum, costs and attorneys' fees; and -- the value of the Vehicles, as of the Sale Date, range from a collective wholesale value of $634,575 to a collective retail value of $740,450 [sic.]. Therefore, under either valuation method accepted by the Court, General Motors is an oversecured creditor of the estate, Mr. Minuti contends. Section 506(b) of the Bankruptcy Code provides that an oversecured creditor is entitled to contractual interest, attorneys' fees, if reasonable, and costs to the extent that the claim is oversecured. To the extent that an allowed secured claim is secured by property the value of which, after any recovery under Section 506(c) is greater than the amount of the claim, there will be allowed to the claim holder: -- interest on the claim, and -- any reasonable fees, costs, or charges provided for under the agreement under which the claim arose. Therefore, a secured creditor may recover interest, fees and costs from the difference between the principal amount of its claim and the value of the collateral. According to Mr. Minuti, at some point the quantum of the equity cushion must be determined by determining the value of the collateral and the amount of the claim. Value in the context of Section 506 is a fluid concept. "[V]alue shall be determined in light of the purpose of the valuation and of the proposed disposition or use of the property, and in conjunction with any hearing on such disposition or use or on a plan affecting such creditor's interest." The Bankruptcy Court of the Northern District of Ohio ruled in In re LTV Steel Company, Inc., et al., 285 B.R. 259, 267, that when several assets are sold as one unit, courts generally determine the value of each asset based on competent evidence. Courts have concluded that competent evidence of valuation may be determined through various methods. Since the parties have stipulated that at all times relevant to the proceedings, the Vehicles had a fair market value of at least $634,575, and since the principal balance due to General Motors never exceed the value of the Vehicles, there was substantial equity in the Collateral at the time of the sale to satisfy General Motors' claim under the Contracts. Accordingly, General Motors is entitled to be paid the value of its collateral from the Sale Proceeds. Thus, General Motors is entitled to summary judgment in its favor, Mr. Minuti maintains. Chapter 7 Trustee Responds In its Motion for Summary Judgment, General Motors raised a new argument for the first time, that "[t]o pay GMAC any less than the full value of its claim would violate the takings clause of the Fifth Amendment." This argument is untimely, according to Sheldon K. Rennie, Esq., at Fox Rothschild O'Brien & Frankel LLP, in Wilmington, Delaware, For one, General Motors did not raise the argument in its motion papers. Clearly, a party cannot raise a new, albeit defective, basis for the granting of summary judgment in the first instance in its reply papers. On that basis alone, General Motors' "takings" argument should be rejected. According to Mr. Rennie, the second, and more fundamental reason that the "taking" argument must fail, is that General Motors had an opportunity to object when the Debtors sought leave to sell its assets to IDT Communications, Inc. At that point, General Motors, like any other secured creditor, had the right to object and to require the Debtors to show which provision of Section 363(f) of the Bankruptcy Code allowed it to consummate that sale without assuring that General Motors would be paid in full. Section 363(k) protects secured creditors from having their property sold without their consent by allowing them to credit bid at the sale. When it is unclear whether secured creditors' bid rights under Section 363(k) are properly protected in a bulk sale, the customary practice is for those creditors to object prior to the sale, because the creditors do not know whether they will be paid in full out of the sale proceeds. The Trustee is not aware of any objection by General Motors to the IDT sale on the grounds that absent an allocation of sale proceeds in advance of the sale, General Motors did not know whether its Section 363(k) rights were being eviscerated. As a matter of equity, General Motors should not now be heard to say that its property was taken without its consent when it had every opportunity to prevent that taking and failed to act. General Motors can claim neither surprise nor prejudice that it is now being asked to go through a process where the value of its collateral is compared to the value of all assets sold and the proceeds thereby received, in order to determine what portion of those proceeds should be paid to it, Mr. Rennie points out. * * * Judge King orders the Chapter 7 Trustee to make an interim payment to General Motors Corporation for $363,545, which represents 75% of General Motors' Claim for $484,727, plus 75% of the aggregate of: (1) accrued postpetition interest on the claim; (2) reasonable and necessary attorneys' fees; and (3) actual costs incurred not to exceed $697,512. (Winstar Bankruptcy News, Issue No. 49; Bankruptcy Creditors' Service, Inc., 609/392-0900) WORLDCOM INC: Reaches Pact to Settle 21st Century Claims Dispute ---------------------------------------------------------------- Twister Communications Network, Inc. provides pre-paid telephone calling cards for which MCI WorldCom Network Services, Inc. provided switching and line services under a contract. Pursuant to that business relationship, on May 19, 2000, MCI filed an action against Twister captioned "MCI WorldCom Network Services, Inc. v. Twister Communications Network, Inc.," in the 221st Judicial District Court of Montgomery County, Texas, to recover more than $30,000,000 in unpaid invoices. Timothy W. Walsh, Esq., at Piper Rudnick LLP, in New York, relates that on May 23, 2000, MCI and other petitioning creditors initiated an involuntary bankruptcy proceeding against Twister in the United States Bankruptcy Court for the Southern District of Texas, Houston Division. A trustee was appointed as Chapter 7 Trustee of the Twister Estate. In the State Court Action, the Trustee, on Twister's behalf, asserted counterclaims against MCI, seeking more than $1,600,000,000 in damages, plus punitive damages equal to four times the actual damages, plus attorneys' fees, costs and expenses. MCI denied the allegations asserted in the counterclaims. 21st Century Communications, Inc., doing business as U.S. Communications, eventually intervened in the State Court Action and asserted claims against MCI. MCI denies the allegations asserted by 21st Century. 21st Century then timely filed a $8,428,000 claim against the Twister Estate. When the MCI Debtors filed for bankruptcy, 21st Century timely filed a $14,994,135 claim against them, for the claims arising in the State Court Action. The Debtors objected to 21st Century's Claim and asked the Court to disallow the entire Claim because: -- they do not have any liability to 21st Century; and -- the Claim amount is equal to the alleged or consequential damages 21st Century sought in the State Court Action. In addition, the Claim is overstated and seeks damages on behalf of another entity that did not file a proof of claim. Consequently, the Debtors and 21st Century decided to settle the dispute and enter into a settlement agreement. By this motion, the Debtors ask Judge Gonzalez to approve the Agreement. The salient terms of the Settlement Agreement are: (a) The 21st Century Claim against the Debtors will be allowed as a Class 6 Claim for $4,500,000; and (b) 21st Century will assign its Twister Claim to the Debtors without recourse. 21st Century will execute a Notice of Transfer of Interest to be filed with the Twister Estate. 21st Century will execute any documents necessary to effectuate the assignment of its Twister Claim to the Debtors. Mr. Walsh informs the Court that the settlement, upon satisfaction of certain conditions precedent, fully and finally settles and resolves all claims asserted or which could have been asserted by and between the Debtors and 21st Century related to the State Court Action, the bankruptcy cases, and the 21st Century claim on the Debtors. The Settlement will also avoid the uncertain outcome of a complicated, time-consuming and expensive litigation. (Worldcom Bankruptcy News, Issue No. 40; Bankruptcy Creditors' Service, Inc., 609/392-0900) WORLDSPAN: Ninan Chacko Appointed as SVP for Product Planning ------------------------------------------------------------- Worldspan announced the appointment of Ninan Chacko to the position of senior vice president - Product Planning. The new position consolidates product planning and marketing communications functions for Worldspan's traditional and online travel agencies, travel suppliers and corporate customers. "Ninan is an extremely talented executive and he brings a wealth of skills and expertise to Worldspan's operations," said Rakesh Gangwal, Worldspan chairman, president and chief executive officer. Previously, Chacko served as senior vice president of Emerging Business at Sabre Holdings, where he led the development, launch and operation of the company's hotel merchant business in the travel agency channel. Prior to that, he served in a variety of leadership roles at Sabre, including senior vice president of Marketing for Travel Marketing and Distribution, now known as Sabre Travel Network. In that position he was responsible for strategy, industry affairs, marketing planning, advertising, public relations, event planning and brand communications. In addition, he served as Sabre's senior vice president of Information Technology Services, where he helped establish the company's IT outsourcing business and developed strategies for global airline alliances. Chacko began his career as manager of Airline Engineering Services for System One. In 1990, he joined American Airlines' Decision Technologies group, eventually rising to run all of Sales and Marketing worldwide for the Airline Solutions business unit at Sabre Holdings. He was educated in Asia, Europe and the U.S., earning master's and bachelor's degrees in aerospace engineering at the University of Kansas. He also graduated from Harvard Business School's Advanced Management Program. Highly Speculative Credit Rating As reported in Troubled Company Reporter's June 19, 2003 edition, Standard & Poor's Ratings Services assigned a its 'B+' corporate credit rating to Atlanta, Georgia-based Worldspan L.P. Standard & Poor's also assigned ratings to Worldspan's $549 million of debt securities to be issued in connection with its acquisition by Citigroup Venture Capital and Teachers' Merchant Bank, based on a review of proposed terms and conditions. The debt securities consist of $315 million senior notes due 2011, rated 'B-'; a $100 million secured term loan and $50 million secured revolving credit facility, both maturing 2007, rated 'BB-'; and $84 million senior subordinated notes due 2011, rated 'B-'. The ratings outlook is stable. About Worldspan Worldspan is a leader in travel technology resources for travel suppliers, travel agencies, e-commerce sites and corporations worldwide. Utilizing fast, flexible and efficient networks and computing technologies, Worldspan provides comprehensive electronic data services linking approximately 800 travel suppliers around the world to a global customer base. The company offers industry-leading Fares and Pricing technology such as Worldspan e-Pricing(SM), hosting solutions, and customized travel products, including Worldspan Travel Enginuity(SM). Worldspan enables travel suppliers, distributors and corporations to reduce costs and increase productivity with best-in-class technology like Worldspan Go!(R) and Worldspan Trip Manager(R). Worldspan is headquartered in Atlanta, Georgia. Additional information is available at http://www.worldspan.com * Conner & Associates Gains Strength via CPAConnect Membership -------------------------------------------------------------- Conner & Associates, a rapidly growing professional services firm based in Southeastern Pennsylvania, has gained additional strength in their service offerings through their membership in the CPAConnect network, a network of independent accounting firms which recently surpassed the 100-member mark. CPAConnect is a companion network to CPAmerica International, one of the largest networks of CPA and consulting firms in the world. CPAConnect was founded in 1995. CPAConnect firms are sponsored by the larger CPAmerica firms and have access to the resources and expertise of affiliate CPAmerica and CPAConnect firms across the country. Together, the two networks include nearly 200 firms with more than 2,000 CPAs nationwide. "Through CPAConnect, our firm has the ability to tap into the resources and knowledge base of some of the nation's largest independent firms," said Kevin Conner, Managing Director of Conner & Associates. "We are also able to network with firms our own size from every section of the country to stay abreast of the latest developments in the profession." For Conner & Associates clients, CPAConnect provides the close, personal attention and loyalty of the local firm along with the national and international resources and specialized expertise of a larger firm. CPAmerica's strategic alliance with Horwath International also allows CPAConnect members to deal with their clients' international issues. Together, the Horwath, CPAmerica, CPAConnect alliance has total firm revenues approaching $1 billion. Founded in 1991, Conner & Associates is a professional services firm that provides a full range of consulting, corporate finance, tax and assurance services. The firm is a member of the SEC Practice Section of the American Institute of Certified Public Accountants. The directors of the firm hold membership in the American and Pennsylvania Institute of Certified Public Accountants, New Jersey Society of Certified Public Accountants, the Association of Insolvency and Restructuring Advisors and the American Bankruptcy Institute. Additional information about Conner & Associates is available on their Web site at http://www.connercpa.com * Deloitte Admits 24 Partners, Principals & Directors in Chicago ---------------------------------------------------------------- Deloitte, one of the nation's leading professional services firm, announced the admission of 24 new partners, principals and directors in its Chicago practice, including 11 partners, four principals and nine directors. "We're thrilled to announce the admission of some of the Firm's most valuable leaders as partners, principals and directors," said Jeff Rohr, managing partner of Deloitte's Chicago office. "As the Firm embarks on a period of growth and change as we launch the new 'Deloitte' brand in a challenging market, the leadership and experience of these individuals will be crucial to both the success of the firm and our clients." Deloitte, one of the nation's leading professional services firms, provides audit, tax, financial advisory services and consulting through nearly 30,000 people in more than 80 U.S. cities. The firm is dedicated to helping its clients and its people excel. Known as an employer of choice for innovative human resources programs, Deloitte has been recognized as one of the "100 Best Companies to Work For in America" by Fortune magazine for six consecutive years. "Deloitte" refers to Deloitte & Touche LLP and affiliated entities. Deloitte is the US member firm of Deloitte Touche Tohmatsu. Deloitte Touche Tohmatsu is a Swiss Verein (association), and, as such, neither Deloitte Touche Tohmatsu nor any of its member firms has any liability for each other's acts or omissions. Each of the member firms is a separate and independent legal entity operating under the name "Deloitte," "Deloitte & Touche," "Deloitte Touche Tohmatsu" or other related names. The services described herein are provided by the US member firm and not by the Deloitte Touche Tohmatsu Verein. For more information, please visit Deloitte's Web site at http://www.deloitte.com/us * Eight Specialists Join Fasken Martineau's Quebec City Office -------------------------------------------------------------- Louis Bernier, Managing Partner of Fasken Martineau, a leading firm in corporate and litigation law in Canada, announced that eight specialists in business, taxation, property financing and development, and litigation law have joined its Quebec City office. The arrival of these new members, all from the firm Flynn Rivard, is an important transformation of Quebec City's legal landscape. "The firm continues to be a major force in the Canadian legal market. Our presence was strengthened with the opening earlier this year of our office in Calgary, and is now even stronger with the addition of eight new members in Quebec City. We will again distinguish ourselves on the international market with the opening of our Johannesburg, South Africa office in November. This is excellent proof of our firm's dynamism, solid growth and ability to attract the best talent out there to create multidisciplinary teams that meet all of our clients' legal and business needs," declared Louis Bernier. "The arrival of eight new colleagues will add real value to our existing teams of specialists and will help Fasken Martineau consolidate its position as a leading player in Quebec City's business law market," noted Claude Auger, Managing Partner of the Montreal and Quebec City offices. Here is a list and short biography of the eight new members who will be joining Fasken Martineau in Quebec City: Michel Leblond, (Quebec Bar, 1971) specializes in corporate and labour law and acts as legal counsel and attorney for many corporations. He also has experience as an industrial relations advisor, and has had the opportunity to negotiate a wide range of collective agreements and government agreements for the transfer of public institutions. Michel will be joining our firm as Equity Partner. Rene Roy, (Quebec Bar, 1977) also a member of the Ordre des comptables agrees du Quebec, specializes in taxation and corporate law. He has particular expertise in corporate tax planning and in the acquisition, sale, merger and reorganization of corporations. Ren� will be joining our firm as Partner. Yves Lacroix, (Quebec Bar, 1980) practices in corporate and business law, with expertise in corporate financing, commercial credit, as well as in banking, construction and agricultural law, with a particular emphasis on credit and product marketing. Yves will be joining our firm as Equity Partner. Yves Letarte, (Quebec Bar, 1982) specializes in real estate law. Yves is particularly recognized for his expertise in this field and is frequently invited as lecturer. He will be joining our firm as Equity Partner. Yves Chasse, (Quebec Bar, 1988) practices mainly in real estate law, especially as legal counsel representing financial institutions and real estate owners in the financing, purchase or sale of real estate. Yves counsels and represents his clients in real estate litigation. He will be joining our firm as Partner. Gary Makila, (Quebec Bar, 1990) specializes in commercial litigation, banking law and business law. His expertise is much sought after by financial and multinational institutions, notably with regard to retail credit and insolvency. Gary will be joining the firm as Partner. S�bastien Roy, (Quebec Bar, 1999) specializes in commercial law. S�bastien has particular expertise in intellectual property and electronic commerce. He will be joining the firm as an Associate. Julie Paquet, (Quebec Bar, 2002) specializes in corporate law and mainly advises and represents non-profit corporations. Julie will be joining our firm as an Associate. Fasken Martineau is a leading Canadian business law and litigation firm that is recognized for its strength and expertise in financial services, corporate finance, securities, mergers and acquisitions, mining and environmental law, aboriginal affairs, taxation, wealth management, litigation, arbitration, labour and employment law, human rights, intellectual property and information technologies. More than 550 lawyers guarantee the firm a solid presence in Vancouver, Calgary, Yellowknife, Toronto, Montreal and Quebec City. Fasken Martineau also has offices in New York and London, and is currently preparing to open an office in Johannesburg, South Africa before the end of 2003. Fasken Martineau DuMoulin LLP is a limited liability partnership under the laws of Ontario. * Jefferies Hires Gilbertson as Equity Research Assoc. Director --------------------------------------------------------------- Jefferies & Company, Inc., the principal operating subsidiary of Jefferies Group, Inc. (NYSE: JEF), announced the hiring of Susan F. Gilbertson as Senior Vice President and Managing Director of Equity Research. She will report to and work with Steven R. Black, Director of Equity Research, in managing all aspects of the firm's Equity Research Department. Jefferies' research effort was started in 1992 and has grown significantly since the firm hired Mr. Black in 1999. While equity research is the largest component of the firm's overall research effort, Jefferies also follows high yield, convertible and international securities. Most recently, Jefferies announced the addition of post-reorganization equity research in connection with its Bulletin Board trading effort and to complement the firm's high yield and distressed research of companies either in or recently out of the bankruptcy process. "Susan Gilbertson is an exceptional professional whose outstanding experience and reputation on the Street will significantly enhance Jefferies' equity research effort," commented Mr. Black. "We will continue to expand our areas of research focus as we seek to offer the greatest value for institutional investors." "I am excited by Jefferies' entrepreneurial culture and look forward to working with Steve Black in continuing to build one of the best fundamental research firms on the Street," said Ms. Gilbertson. "Jefferies' strong middle-market focus is full of opportunity given how this area has been overlooked by the rest of Wall Street." Ms. Gilbertson has been involved in the securities industry for nearly twenty years. Prior to Jefferies, she served as Managing Director and Head of Equity Research at Cathay Financial LLC, and previously in similar positions at ABN AMRO Inc. Ms. Gilbertson also has related experience at Paribas Corporation, D.A. Campbell Co. Inc., and Bankers Trust. She is based in the firm's New York headquarters office. Jefferies & Company, Inc., the principal operating subsidiary of Jefferies Group, Inc. (NYSE: JEF), is a full-service investment bank and institutional securities firm focused on the middle market. Jefferies offers financial advisory, capital raising, mergers and acquisitions, and restructuring services to small and mid-cap companies. The firm provides outstanding trade execution in equity, high yield, convertible and international securities, as well as fundamental research and asset management capabilities, to institutional investors. Additional services include correspondent clearing, prime brokerage, private client services and securities lending. The firm's leadership in equity trading is recognized by numerous consulting and survey organizations, and Jefferies' affiliate, Helfant Group, Inc., executes approximately eleven percent of the daily reported volume of the NYSE. Through its subsidiaries, Jefferies Group, Inc. employs more than 1,400 people in offices worldwide, including Atlanta, Boston, Chicago, Dallas, London, Los Angeles, New York, Paris, San Francisco, Tokyo, Washington and Zurich. Further information about Jefferies, including a description of investment banking, trading, research and asset management services, can be found at http://www.jefco.com * Meetings, Conferences and Seminars ------------------------------------ November 4-5, 2003 EUROFORUM INTERNATIONAL The Art and Science of Russian M&A Ararat Park Hyatt Hotel, Moscow Contact: +44-20-7878-6897 or liu@ef-international.co.uk November 12-14, 2003 AMERICAN BANKRUPTCY INSTITUTE Litigation Skills Symposium Emory University, Atlanta, GA Contact: 1-703-739-0800 or http://www.abiworld.org December 1-2, 2003 RENAISSANCE AMERICAN MANAGEMENT, INC. Distressed Investing The Plaza Hotel, New York City, NY Contact: 800-726-2524 or http://renaissanceamerican.com December 3-7, 2003 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference La Quinta, La Quinta, California Contact: 1-703-739-0800 or http://www.abiworld.org February 5-7, 2004 AMERICAN BANKRUPTCY INSTITUTE Rocky Mountain Bankruptcy Conference Westin Tabor Center, Denver, CO Contact: 1-703-739-0800 or http://www.abiworld.org March 5, 2004 AMERICAN BANKRUPTCY INSTITUTE Bankruptcy Battleground West The Century Plaza, Los Angeles, CA Contact: 1-703-739-0800 or http://www.abiworld.org April 15-18, 2004 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting J.W. Marriott, Washington, D.C. Contact: 1-703-739-0800 or http://www.abiworld.org April 29-May 1, 2004 ALI-ABA Partnerships, LLCs, and LLPs: Uniform Acts, Taxation, Drafting, Securities, and Bankruptcy Fairmont Hotel, New Orleans Contact: 1-800-CLE-NEWS or http://www.ali-aba.org May 3, 2004 AMERICAN BANKRUPTCY INSTITUTE New York City Bankruptcy Conference Millennium Broadway Conference Center, New York, NY Contact: 1-703-739-0800 or http://www.abiworld.org June 2-5, 2004 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort, Traverse City, MI Contact: 1-703-739-0800 or http://www.abiworld.org June 24-26,2004 AMERICAN BANKRUPTCY INSTITUTE Hawaii Bankruptcy Workshop Hyatt Regency Kauai, Kauai, Hawaii Contact: 1-703-739-0800 or http://www.abiworld.org July 15-18, 2004 AMERICAN BANKRUPTCY INSTITUTE The Mount Washington Hotel Bretton Woods, NH Contact: 1-703-739-0800 or http://www.abiworld.org July 28-31, 2004 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz-Carlton Reynolds Plantation, Lake Oconee, GA Contact: 1-703-739-0800 or http://www.abiworld.org September 18-21, 2004 AMERICAN BANKRUPTCY INSTITUTE Southwest Bankruptcy Conference The Bellagio, Las Vegas, NV Contact: 1-703-739-0800 or http://www.abiworld.org October 10-13, 2003 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES Seventy Seventh Annual Meeting Nashville, TN Contact: http://www.ncbj.org/ December 2-4, 2004 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Marriott's Camelback Inn, Scottsdale, AZ Contact: 1-703-739-0800 or http://www.abiworld.org April 28- May 1, 2005 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting J.W. Marriot, Washington, DC Contact: 1-703-739-0800 or http://www.abiworld.org July 14 -17, 2005 AMERICAN BANKRUPTCY INSTITUTE Ocean Edge Resort, Brewster, MA Contact: 1-703-739-0800 or http://www.abiworld.org July 27- 30, 2005 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop Kiawah Island Resort and Spa, Kiawah Island, SC Contact: 1-703-739-0800 or http://www.abiworld.org November 2-5, 2005 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES Seventy Eighth Annual Meeting San Antonio, TX Contact: http://www.ncbj.org/ December 1-3, 2005 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Hyatt Grand Champions Resort, Indian Wells, CA Contact: 1-703-739-0800 or http://www.abiworld.org The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com. Bond pricing, appearing in each Thursday's edition of the TCR, is provided by DebtTraders in New York. DebtTraders is a specialist in global high yield securities, providing clients unparalleled services in the identification, assessment, and sourcing of attractive high yield debt investments. For more information on institutional services, contact Scott Johnson at 1-212-247-5300. To view our research and find out about private client accounts, contact Peter Fitzpatrick at 1-212-247-3800. Real-time pricing available at http://www.debttraders.com/ Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., 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 publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $675 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***