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/raid1/www/Hosts/bankrupt/TCR_Public/031112.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, November 12, 2003, Vol. 7, No. 224 Headlines ABITIBI: Environment Canada Slaps Fisheries Act Violation Suits ACTERNA CORP: Stipulation Resolving Dispute with Benchmark OK'd ADELPHIA BUSINESS: Wants Clearance for TSI Settlement Agreement ADEPT TECH.: Taps Rohwedder Pematech for European Distribution AGWAY INC: Inks Pact to Sell Energy Products Unit to Suburban AHOLD LEASE: S&P Says Outlook Positive for Trust Certificates AIR CANADA: Repudiates Catering Contract with Cara Operations AMERCO: Pacific Investment Resigns from Creditors' Committee AMERICREDIT: Amends and Extends Master Warehouse Credit Facility AMERICREDIT: Fitch Affirms B Rating over Renewal of Facility ANC RENTAL: Claim Traders Won't Like Proposed Voting Procedures ARMSTRONG HOLDINGS: Court Clears AWI's Settlement Pact with CCR ATLANTIC COAST: Pilots Approve Revised New Labor Agreement BAYOU STEEL: Files Stand-Alone Chapter 11 Plan of Reorganization BETTER MINERALS: S&P's Sub. Debt Rating Upped 2 Notches to CCC- BRIDGE INFO: Plan Administrator Wants Cantor's Claims Disallowed CANNON EXPRESS: Takes Actions to Voluntarily Delist from AMEX CENTENNIAL COMMS: Will Use Share Offering Proceeds to Repay Debt CHARTER COMMS: Completes $500-Million 8.75% Senior Note Offering CLARION TECH.: Sept. 27 Net Capital Deficit Widens to $57 Mill. CONE MILLS: Court Approves Proposed Uniform Bidding Procedures CONE MILLS: US Trustee Appoints Official Creditors' Committee CONSECO FINANCE: Settles Securitization Committee Fee Dispute CTC COMMS: Plan Confirmation Hearing Set for November 20, 2003 CYGNUS: Restructures Arbitration Payments to Sanofi~Synthelabo DAN RIVER: Sept. 27 Working Capital Deficit Balloons to $64 Mil. DATA TRANSMISSION: Files Prepackaged Plan in S.D. of New York DDI CORP: Court Will Consider Proposed Plan on November 18, 2003 DEKA COMMERCIAL: Case Summary & 20 Largest Unsecured Creditors DIAMETRICS MEDICAL: Will Publish Third-Quarter Results Tomorrow EL PASO: Third-Quarter Net Loss More than Doubles to $146 Mill. ELAN CORP: Closes $460MM 6.50% Convert. Guaranteed Note Offering ENCOMPASS SERVICES: Admin Claims Objection Deadline on Dec. 11 ENRON CORP: Wants Court Approval to Dissolve Enron Operations LP ENTERTAINMENT TECHNOLOGIES: Voluntary Chapter 7 Case Summary EXTREME NETWORKS: William Slakey Named Chief Financial Officer FLEMING: Taps Keen Realty to Market Industrial Facility in Penn. FLEMING COS.: Gets Go-Signal to Sell Kansas Property to Spartan FOSTER WHEELER: Balance Sheet Insolvency Widens to $871 Million GENTEK INC: Successfully Emerges from Chapter 11 Proceedings GENUITY: Takes Action to Challenge Verizon's $79-Mill. MOU Claim GIANT INDUSTRIES: 3rd-Quarter Results Swing-Up to Positive Zone GLOBEL DIRECT: May 31 Balance Sheet Upside-Down by $5.6 Million HANOVER DIRECT: Sept. 27 Balance Sheet Upside-Down by $79 Mill. HOMESEEKERS.COM: Files for Chapter 11 Reorganization in New York HOMESEEKERS.COM: Case Summary & 20 Largest Unsecured Creditors HOST MARRIOTT: Completes Private Placement of New Senior Notes HUNTSMAN: Reports Sequential Increase in Third-Quarter EBITDA HYTEK MICROSYSTEMS: Red Ink Continued to Flow in Third Quarter IESI CORP: Sept. 30 Net Capital Deficit Burgeons to $56 Million IMPATH INC: U.S. Trustee Appoints 7-Member Creditors' Committee INT'L STEEL: WTO Ruling Doesn't Terminate US Steel Safeguards INTERNET SERVICES: Committee Taps Lowenstein Sandler as Counsel INTRAWEST: Reports Significant Growth in Third-Quarter Results ISLE OF CAPRI: Look for Second-Quarter Results Tomorrow KAISER ALUMINUM: Wants Nod to Sell Spokane Surplus Properties LEAP: Cricket Wins Court's Nod to Assume H.O. Systems Contract LTV: Blocks Allowance of Tax Claims and Proposes Allowed Amounts MARINER POST-ACUTE: Resolves Claims Dispute with Theracare Home MASSEY ENERGY: Completes Private 6.625% Senior Debt Offering MIDLAND COGENERATION: Third-Quarter Net Loss Tops $15 Million MIRANT CORP: Wants to Keep Exclusivity Through August 17, 2004 MOORE WALLACE: S&P Places BB+ Corp. Credit Rating on Watch Pos. MOSES TAYLOR HOSPITAL: S&P Cuts Outstanding Debt Rating to B NOMURA 1994-MD1: Fitch Keeps Watch on Junk-Rated Class B-1 Notes OMEGA HEALTHCARE: Provide Update on Portfolio Restructuring OPTIONS TALENT GROUP: Files for Chapter 7 Liquidation in Nevada OPTIONS TALENT: Inks Deal with Fashion Rock for $4.6MM+ Asset Sale OWENS CORNING: Hearing on Ch. 11 Trustee Appointment on Dec. 1 PARTNERS MORTGAGE: Court Fixes November 24 Claims Bar Date PERRY ELLIS: Allan Zwerner Resigns from Co.'s Board of Directors PG&E NATIONAL: USGen Hires Getzler Henrich as Financial Advisor PILLOWTEX CORP: Court Okays Blank Rome as Committee's Co-Counsel PLANET HOLLYWOOD: Proposes to Issue 9% Notes Pursuant to Plan PUBLICARD INC: Sept. 30 Balance Sheet Insolvency Tops $1.7 Mill. QUADRAMED CORP: Sept. 30 Net Capital Deficit Doubles to $15 Mil. QWEST COMMS: Says Customers Are Biggest Losers with FCC's Order REEVES COUNTY, TEX.: Fitch Junks $89-Million Trust Rating at CCC SBA COMMS: Third-Quarter 2003 Net Loss Narrows to $19.7 Million SBA COMMS: Will Restate 2001 and 2002 Financial Statements SILICON GRAPHICS: Annual Shareholders' Meeting Set for Dec. 16 SMITHFIELD FOODS: Expects Improved Fiscal Second Quarter Results STATION CASINOS: CFO Enters into Rule 10B5-1 Trading Plan SUPERIOR TELECOM: Emerges from Chapter 11 with New CEO & Board TENNECO AUTOMOTIVE: Sues Four Asian Companies for Counterfeiting TEREX CORP: Prices $300 Million Senior Subordinated Debt Issue TEREX CORP: S&P Rates Proposed $300-Mil. Subordinated Notes at B TOUCHSTONE SOFTWARE: Recurring Losses Raise Going Concern Doubt TRICO MARINE: Sets Third-Quarter Conference Call for Friday UBIQUITEL INC: Amends Sprint Affiliate Agreements to Cut Costs UNIVERSAL HEALTH: Updates Q3 Results Due to FASB 150 Deferral U.S. STEEL: Chairman Usher Airs Disappointment with WTO Decision VALHI INC: Reports an Upswing in Third-Quarter Financial Results VANGUARD HEALTH: 3rd-Quarter Results Reflect Strong Performance VINTAGE PETROLEUM: Acquiring Producing Properties in Uinta Basin WARNACO GROUP: Amends Polo/Ralph Lauren License Agreement WESTAR ENERGY: Third-Quarter 2003 Loss Reaches $81 Million WESTPOINT STEVENS: Bank of America Filing Master Proof of Claim WHEELING-PITTSBURGH: U.S. Trust Corp. Discloses 40% Equity Stake WOMEN FIRST: Will Publish Third-Quarter 2003 Results on Friday WORLDCOM: Klayman Posts Notice to Employees with SSB Accounts ZI CORPORATION: Third Quarter Conference Call Set for Friday * New Corporate Disclosure Bankruptcy Rule Takes Effect Dec. 1 * Steelworkers Condemn WTO Rejection of U.S. Steel Tariff * Meetings, Conferences and Seminars ********* ABITIBI: Environment Canada Slaps Fisheries Act Violation Suits --------------------------------------------------------------- Environment Canada has laid six charges under the Government of Canada's Fisheries Act against Abitibi Consolidated (Moody's, Ba1 Outstanding Debentures Rating), the operator of a paper mill in Grand Falls - Windsor, (Newfoundland and Labrador). Three of the charges relate to alleged violations under general prohibitions of the Fisheries Act. The other three charges result from alleged breaches of the Pulp and Paper Effluent Regulations under the Fisheries Act. The Regulations outline effluent standards for pulp and paper mills. Environment Canada laid the charges as the result of routine inspections, followed by the execution of two search warrants. The violations are alleged to have occurred between February 2002 and the end of March 2003. Representatives for Abitibi Consolidated are scheduled to appear in Provincial Court in Grand Falls - Windsor on November 25, 2003. Environment Canada's Enforcement staff investigates potential pollution offences under the Canadian Environmental Protection Act, 1999 (CEPA 1999) and the Fisheries Act. They help ensure that companies, government employees, and the general public comply with legislation and regulations that protect Canada's environment. ACTERNA CORP: Stipulation Resolving Dispute with Benchmark OK'd --------------------------------------------------------------- U.S. Bankruptcy Court Judge Lifland approves a stipulation resolving the Acterna Debtors' dispute with Benchmark Electronics, Inc. Acterna LLC is party to a Manufacturing Services Agreement with Benchmark dated April 1, 2001. Pursuant to the Agreement, Acterna outsources to Benchmark (a) the manufacture of certain of Acterna's printed circuit assemblies and (b) certain services in connection with the design and assembly of Products. Both parties have been in negotiations to reduce the number of services provided for under the Existing Contract to better suit Acterna's current business needs and to obtain Benchmark's consent to the proposed assumption. On September 12, 2003, Acterna and Benchmark entered into a memorandum of understanding, which memorialized the parties' agreements, including the agreements with respect to Benchmark's prepetition and administrative expense claims, as well as an amendment of the Existing Contract. To resolve their rights and obligations under the Existing Contract, the parties stipulate and agree that: (a) Acterna will enter into the New Contract with Benchmark; and (b) Benchmark's claim will be treated and satisfied as set forth in the MOU. The salient terms of the New Agreement include: (A) Pricing (1) Component Pricing Benchmark will follow Acterna's sourcing instructions as determined at each cost reduction review in the procurement of any raw materials, items or components used to manufacture the Product -- Components. (2) Exclusions from Price * Prices do not include freight, export licensing of the Product, or payment of freight broker's fees, duties, tariffs or other similar charges. * Prices do not include taxes or charges imposed by any taxing authority upon the manufacture, sale, shipment, storage, "value add" or use of the Product, which Benchmark is obligated to pay or collect. * Prices do not include the cost of compliance with any environmental legislation, which relates to the return of end of life Product from Acterna to Benchmark for disposal. * Prices do not include Non-Recurring Engineering Activity Charges, which will be separately stated and invoiced only upon prior written approval by Acterna, provided, however, that upon mutual agreement, Benchmark will amortize the NRE Charges over the production of the Product. * Prices do not include expedited fees or premiums charged by suppliers for the Components resulting from Acterna's schedule changes as permitted. (3) Other Price Adjustments * Acterna believes that Benchmark will be able to obtain the pricing set forth in the Acterna Bill of Materials. In the event Benchmark is unable to purchase Components at the prices set forth in the Bill of Materials, Benchmark will be permitted to increase its Prices in proportion to the increase in the cost of the Components. * Either party may reopen the subject of the Product pricing in response to changes in conditions. * Acterna will be entitled to a price adjustment resulting from cost savings. * In no event will the Prices for the Product be less favorable than those for goods which are substantially similar in specification or function, product mix, material terms and conditions of sale, and volume which are sold to other Benchmark customers whose total business revenue is substantially similar to that of Acterna. (4) No Volume Commitment Acterna will be under no obligation to request the Products and makes no guarantee or warranty, regarding any volumes, any particular mix, or any degree of customization of the Products. (5) Materials Provided by Acterna Benchmark will not charge any mark-up, handling fee or any other charge or cost to Acterna in respect of equipment or inventory of the Components procured by Acterna that are consigned to Benchmark for use in providing the Product. (6) Equipment All equipment necessary for or used by Benchmark to manufacture the Products and paid for by Acterna, as the parties may mutually agree, will be owned by Acterna. (7) Exclusive Charges Benchmark may not charge, and Acterna will not be responsible for paying, any charges for the Products other than the Prices set forth in the Agreement. (8) Incidental Expenses Benchmark's base prices will be inclusive of all incidental expenses that Benchmark incurs in providing the Product. (9) Pass-Through Expenses Any pass-through expenses that Benchmark wants Acterna to pay must be approved by Acterna in writing and in advance of incurring the expense. Benchmark may not charge Acterna any pass-through expenses or mark up any pass-through expenses other than those approved by Acterna in writing in advance. (10) Additional Support From time to time, Acterna may request that Benchmark provide additional support to meet the non-customary lead times. (11) Open Books Policy Benchmark will provide, subject to any confidentiality restrictions to which Benchmark is obligated, Acterna full visibility and access into Benchmark's costs to provide the Products, including the vendor of each part by Acterna part number, purchase order used, price, payment terms and cancellation terms. (12) Prototypes/New Products If Acterna selects a Benchmark NPI site as a facility to prepare a prototype for a new Product, the costs of the Components will not exceed those employed at the Benchmark manufacturing site for identical Components. (B) Payment Terms (1) Invoicing Benchmark will invoice Acterna upon shipment of the Products. Benchmark's invoices will be in a format and at a level of detail approved by Acterna, which will enable Acterna to allocate Prices for its internal accounting purposes. (2) Payment Payment terms are net 45 days after date of invoice, provided that there exists no good faith dispute in relation to the invoice. On any invoice not paid by maturity date, Benchmark reserves the right to charge Acterna interest from the maturity to date of payment at the rate of 0.4% per month, or the maximum permitted by law, whichever is the lesser. (C) Component and Product Ordering (1) Bin Management Process The parties will work towards developing a bin management process with implementation at mutually agreed to Benchmark sites and on a mutually agreed to schedule. (2) General Commitments These Component commitments apply to the standard scheduling method: * Acterna authorizes Benchmark to make Component commitments consistent with the Component supplier's lead times at the minimum quantities necessary to support Acterna's demand and scheduled for delivery in accordance with Acterna's demand. * The parties will mutually agree to a list of standard parts, applying Benchmark's criteria for liability codes that will be identified on the costed Bill of Materials provided in the Product Quotation, from time to time and will review the list not less often than quarterly. * Acterna will provide a non-binding 12-month rolling forecast, by finished Product as determined by Acterna, to Benchmark once a week. * These rescheduling commitments apply to standard scheduling methods: Days Before P.O. Sales Dollars % Change Delivery Date Allowance ---------------- ---------------------- 0 - 30 +/-10% 31 - 60 +/-25% 61 - 90 +/-50% > 90 +/-100% (3) Purchase Orders Acterna will use its standard purchase order form to order Product. Each purchase order will be in the form of a written or electronic communication and will contain this information: * a description of the Product by assembly number; * the quantity of the Product; * the delivery date; * the location to which the Product is to be shipped; * transportation instructions; and * price. (4) Delivery Dates At Acterna's written request in the purchase order, each build lot will contain a quantity of Products and schedule of delivery dates. (5) Acceptance of Purchase Orders All purchase orders will be confirmed by Benchmark within two business days of receipt of the purchase order or replenishment requests. If Benchmark does not accept or reject the purchase order within the two-day period after confirmation of order receipt, the purchase order will be deemed accepted by Benchmark. (D) Limitation of Liability (1) In no event will either party be liable to the other for any indirect, consequential, incidental or special damages, or any damages whatsoever resulting from loss of use, data or profits, even if the other party has been advised of the possibility of damages; (2) Notwithstanding anything in this agreement to the contrary, each party's maximum aggregate liability to the other will be: * for indemnification obligations: (i) $5,000,000 for legal fees; (ii) $5,000,000 for direct damages; and (iii) $5,000,000 for punitive damages. * Excluding to the extent that a party has engaged in fraud or intentional or willful misconduct and for any invoices owed by one party to the other, all other damages will not exceed the total amount of fees paid or payable by Acterna to benchmark during the 12-month period before the first date on which the liability arose. (3) Benchmark will have the right to suspend performance unless Acterna provides Benchmark with adequate assurance with respect to potential future liability for Claims. The New Agreement is effective as of October 15, 2003. (Acterna Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service, Inc., 609/392-0900) ADELPHIA BUSINESS: Wants Clearance for TSI Settlement Agreement --------------------------------------------------------------- Judy G.Z. Liu, Esq., at Weil, Gotshal & Manges LLP, in New York, recounts that on September 24, 1999, Hyperion Telecommunication, Inc., also known as Adelphia Business Solutions Inc., and TSI Telecommunications Services, Inc., now known as GTE Telecommunication Services, Inc., executed an Information and Network Products and Services Agreement and an Access Revenue Management Solution Addendum. On May 26, 2000, ABIZ and TSI amended the Addendum. Pursuant to the Agreement, TSI provides a service known as Access Revenue Management Solution to the ABIZ Debtors. Access Revenue Management Solution provides the billing capability necessary for a carrier to accurately capture revenue from long distance phone calls to that carrier's own customers from another long distance carrier's customers, and revenue from local phone calls to that carrier's own customers from customers of another phone company in that area. The service provides: (1) pre-billing management of the records used to produce the bills the Debtors send to their customers; (2) bill generation and distribution and application of payments and adjustments to members' accounts; and (3) information management, which includes a web-enabled warehouse that the ABIZ Debtors can access to view customer billing reports, like total monthly revenue and total monthly usage. According to Ms. Liu, the TSI services enable the ABIZ Debtors to bill their customers about $15,000,000 a month for their customers' use of the ABIZ's network. The TSI services furnish the ABIZ Debtors' infrastructure by enabling them to capture, bill, and record its customers' use. The ABIZ Debtors' ability to bill and collect revenues from their clients is directly tied to and dependent on the utilization of these TSI services. In September or October 2001, the ABIZ Debtors and TSI entered into a letter agreement wherein the Parties compromised and settled certain disputes between them arising in connection with the Agreement. Pursuant to the Settlement Letter, ABIZ made certain payments to TSI to satisfy certain disputed invoices and other remedies, liabilities, and damages TSI may have otherwise asserted against ABIZ. Pursuant to the Settlement Letter, TSI issued credits to ABIZ, including $450,000 in credits to be issued by TSI to ABIZ in six equal monthly installments beginning in November 2001 and ending in April 2002, to satisfy certain disputes, remedies, liabilities and damages that ABIZ may have otherwise asserted against TSI and all additional claims, remedies or damages that may have arisen through the date of the Settlement Letter. Pursuant to the Agreement, TSI alleges that ABIZ owes it $776,435 for prepetition services: Date Amount ---- ------ February 1-28, 2002 $461,651 March 1-26, 2002 314,784 ABIZ disputes the amount of the Prepetition Obligation TSI claimed. As of May 1, 2003, TSI alleges that ABIZ owes TSI $1,069,563 for postpetition services provided by TSI from the Petition Date through April 30, 2003. ABIZ disputes the amount of the Postpetition Obligations alleged by TSI. On May 16, 2002, TSI asked the Court to compel ABIZ to assume or reject the Agreement and pay the administrative expense for postpetition services provided to the ABIZ Debtors. On June 14, 2002, the ABIZ Debtors objected to the request. Prior to the hearing on the Contract Decision Motion, the parties mutually agreed to continue the hearing to allow the parties time to reach a settlement relating to the specifics underlying ABIZ's reasons for disputing the amount of the Postpetition Obligations. To date, the hearing has not been rescheduled. In October 2002, Ms. Liu notes that the Agreement was set to expire, provided 60 days prior written notice was given by either Party. Absent the notice, the terms of the Agreement continued on a month-to-month basis and the Agreement is terminable at will by either Party on 120 days' prior written notice. Since either party did not provide the requisite 60-day notice, the Agreement is presently in effect on a month-to- month basis. On October 1, 2002, ABIZ retained a third party vendor to provide services similar to those provided by TSI under the Agreement. On October 22, 2002 and November 5, 2002, TSI provided notice to ABIZ that TSI would exercise its rights to suspend or terminate services under the Agreement because TSI alleges that, postpetition, ABIZ was in default under the terms of the Agreement. ABIZ disputes this allegation. On March 31, 2003, TSI filed a proof of claim for $776,453. On April 10, 2003, the Debtors sought the Court's authority to reject the Agreement because it no longer served any useful "purpose of the Debtor's reorganization efforts." On April 22, 2003, the Debtors notified parties-in-interest of the removal of the Agreement from the list of executory contracts and unexpired leases identified in the Motion to Reject. TSI asserts that the Debtors' actions evidence their belief that the Debtors continue to derive substantial postpetition benefit by the Agreement remaining in force and effect. The ABIZ Debtors, on the other hand, dispute this assertion. To date, Ms. Liu tells Judge Gerber, ABIZ has not sought to reject the Agreement or provide the requisite written notice to TSI of its intention to terminate the month-to-month status, and the Agreement remains in full force and effect. The Parties desire to settle all claims between them relating to the Agreement, to avoid the expense, delay, and uncertainty of further litigation among them regarding the Agreement, and to agree on the terms for TSI to provide future services to ABIZ. The salient terms of the Compromise Settlement and Mutual Release Agreement are: (1) The Parties agree that, upon Court order approving the Settlement Agreement, the ABIZ Debtors will immediately pay to TSI, via wire transfer and according to TSI's wire instructions, $410,000 in partial satisfaction of the Postpetition Obligation asserted by TSI against the ABIZ Debtors; (2) The Parties agree that the balance of the Postpetition Obligation TSI asserted will be added to the Prepetition Obligation, thereby giving TSI an allowed unsecured claim for $1,436,016. This claim will be deemed an allowed unsecured claim and binding on the ABIZ Debtors, its successors and assigns or legal representatives, including any trustee or receiver in bankruptcy; (3) Upon TSI's receipt of the payment, TSI will provide ABIZ with access to or copies of certain records for an agreed upon fee, plus expenses, to be determined by TSI in accordance with its customary business practices. Production of any records requested by ABIZ will require no less than 30 days' advance written notice to TSI, and advance payment by ABIZ to TSI, via wire transfer and according to TSI's wire instructions, before TSI provides ABIZ with access to its records; (4) Except as otherwise provided in the Settlement Agreement, the Agreement and any outstanding obligations under it will automatically terminate and be of no effect; and (5) The Parties mutually release the other as to any and all claims arising on or before the execution of the Settlement Agreement, relating to the Agreement, but that all rights and obligations the Parties may have under separate agreements will remain in full force and effect. By this motion, the ABIZ Debtors ask the Court, pursuant to Rule 9019(a) of the Federal Rules of Bankruptcy Procedure, to approve their Settlement Agreement with TSI. Ms. Liu contends that the terms of the Settlement Agreement are fair and equitable, and fall well within the range of reasonableness. It is the product of hard-fought, arm's-length negotiations on both sides. Through the Settlement Agreement, the Parties have avoided the uncertainties attendant to potentially complex and protracted litigation with respect to the disputes, which have arisen from the Agreement. Experienced counsel for each of the Parties expended a great deal of time and effort in reaching a resolution. By avoiding the litigation and entering into the proposed settlement, ABIZ's estate will pay 40% of the total Postpetition Obligation, which TSI asserts is due, grant and fix TSI an allowed unsecured claim, establish a procedure to enable the ABIZ Debtors to obtain back-up documentation to support its billing records, and terminate an existing contract, which will enable the ABIZ Debtors to proceed with their Chapter 11 cases without the distraction of a prolonged and costly litigation with TSI, Ms. Liu argues. (Adelphia Bankruptcy News, Issue No. 44; Bankruptcy Creditors' Service, Inc., 609/392-0900) ADEPT TECH.: Taps Rohwedder Pematech for European Distribution -------------------------------------------------------------- Adept Technology, Inc. (OTCBB:ADTK), a leading manufacturer of flexible automation for the semiconductor, electronics, automotive, fiber optic, telecommunications and life sciences industries, has signed Rohwedder Pematech as its European distributor of the Adept CHADIQ(TM) odd-form electronic components assembly platforms and marks the first introduction of this technology to the European market. "Because of Rohwedder Pematech's excellent market coverage and strong electronics knowledge, they are ideally suited for the introduction of automated electronic assembly platforms to the European market," said Charlie Duncheon, executive vice president of Adept Technology. "We believe the Adept CHADIQ technology, coupled with Pematech's industry presence and systems process expertise, will provide customers with high-quality, cost- effective and well-supported electronics assembly systems." "With Adept's products and services and Pematech's worldwide market position and extensive experience in the electronic industry, we will have a strong partnership for efficiently serving the odd-form market in Europe," said Klaus Kroesen, managing director of Rohwedder Pematech. "Adept's quality and breadth of automation products give us the best opportunity to provide our customers with a broader range of value-added automated solutions for their electronic production." The Adept CHADIQh(TM) and Adept CHADIQt(TM) solutions are the hallmark of Adept's odd-form and electronics final assembly automation technology. The platforms are designed to provide cost- effective reliable performance for electronics board assembly. The Adept CHADIQ product line combined with patented modular tools, enables customers to assemble most odd-form component types, including axials, radials, header strip, DIPs, SIPs, connectors, transformers, telephone jacks, relays, TO-220s, displays, LEDs, surface mount, small daughter boards, switches, PGAs and more on a single platform. Rohwedder Pematech was founded in 1980 and is located in Radolfzell, Germany. The company produces high-quality semi- and fully automated test lines, handling modules and depanelizers for the electronics industry. Their service range includes complete system solutions for testing, assembly and handling of PCBs, components and completely assembled units. More information on Rohwedder Pematech can be found on their Web site at http://www.rohwedder.de/index-pema-e.html Adept Technology -- whose June 30, 2003 balance sheet shows a total shareholders' equity deficit of about $11 million -- designs, manufactures and markets factory automation components and systems for the fiber optic, telecommunications, semiconductor, automotive, food and durable goods industries throughout the world. Adept's robots, controllers, and software products are used for small parts assembly, material handling and ultra precision process applications. Our intelligent automation product lines include industrial robots, configurable linear modules, flexible feeders, semiconductor process components, nanopositioners, machine controllers for robot mechanisms and other flexible automation equipment, machine vision, systems and software, application software and simulation software. Founded in 1983, Adept is America's largest manufacturer of industrial robots. More information is available at http://www.adept.com AGWAY INC: Inks Pact to Sell Energy Products Unit to Suburban ------------------------------------------------------------- Agway Energy Products LLC, a wholly-owned subsidiary of Agway, Inc., and Suburban Propane, L.P., have signed an agreement for Suburban to purchase substantially all of the assets and business operations of Agway Energy Products for total cash consideration of approximately $206 million. The purchase price is subject to certain escrows required under the Agreement such that the net cash proceeds to be realized at Closing will be approximately $175 million. The agreement is subject to bankruptcy court approval. Agway's next step is to file a motion with the U.S. Bankruptcy Court for the Northern District of New York requesting that the court establish bidding procedures and a date for conducting an auction to determine if there are higher or better offers for the Energy business. Agway expects to complete the sale before the end of this calendar year. Agway Energy Products has a strong track record of profitability and growth. With annual sales exceeding $500 million, the Company is the second largest heating oil retailer in the U.S., and among the nation's top ten propane marketers. In addition, the Company sells natural gas and electricity in deregulated markets through Agway Energy Services, Inc. and Agway Energy Services-PA, Inc., the assets of which are also included in the agreement. Under the agreement, Suburban would continue operation of all Agway Energy Products' plants. Suburban would also honor all Agway Energy Products' contracts and service agreements. Agway CEO Michael Hopsicker said: "Since announcing last April that we would explore the potential sale of each of our businesses and other strategic alternatives for maximizing value for Agway's creditors, we have carefully evaluated all options for our Energy business to determine the best course of action. In addition to selling the business, we explored the option of reorganizing Agway around the Energy business and recapitalizing Agway Energy Products in a way that could provide cash to Agway's creditors. Based on the value of the Suburban agreement, we believe that the sale process is in the best interests of Agway's creditors. Our position is supported by the Official Committee of Unsecured Creditors." Agway, Inc. is an agricultural cooperative owned by 69,000 Northeast farmer-members. On October 1, 2002, Agway, Inc. and certain of its subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. Agway Energy Products LLC, Agway Energy Services, Inc. and Agway Energy Services-PA, Inc. were not included in the Chapter 11 filings. The Cooperative is headquartered in Syracuse, NY. Its Web site is http://www.agway.com Agway Energy Products, based in Syracuse, N.Y., provides fuel, equipment and service to more than 500,000 customers in homes, farms and businesses throughout Pennsylvania, New Jersey, New York and Vermont. For more information, visit them on the web at http://www.agwayenergy.com Suburban Propane Partners, L.P. is a publicly traded Master Limited Partnership (NYSE: SHP). Headquartered in Whippany, NJ, Suburban has been in the customer service business since 1928. The Partnership serves approximately 750,000 residential, commercial, industrial and agricultural customers through more than 320 customer service centers in 40 states. The Company's web site is http://www.suburbanpropane.com AHOLD LEASE: S&P Says Outlook Positive for Trust Certificates ------------------------------------------------------------- Standard & Poor's Ratings Services revised the CreditWatch status of its 'BB-' ratings on the A-1 and A-2 pass-through trust certificates issued by Ahold Lease 2001-A Pass Through Trusts to positive from negative. The revised CreditWatch status follows the revision of the CreditWatch status of the ratings on Ahold Koninklijke N.V.'s to positive on Nov. 7, 2003. The ratings on Ahold Lease 2001-A Pass Through Trusts are dependent on the corporate credit rating on Ahold, which guarantees leases that serve as the source of payment on the rated securities. The leases, which are "bondable" triple- net, are on 46 properties that include supermarkets and other retail stores, office buildings, warehouses, and distribution centers in 13 states. CREDITWATCH STATUS REVISED TO POSITIVE Ahold Lease 2001-A Pass Through Trusts Pass-thru trust certificates Rating Class To From A-1 BB-/Watch Pos BB-/Watch Neg A-2 BB-/Watch Pos BB-/Watch Neg AIR CANADA: Repudiates Catering Contract with Cara Operations ------------------------------------------------------------- Cara Operations Limited announced that by written notice received at 5:30 on Friday, November 7,2003, it has been advised by Air Canada that pursuant to the rights given to the airline under restructuring protection pursuant to the Companies' Creditors Arrangement Act (the "CCAA"), Air Canada has repudiated the contract for the provision of catering and commissary services by Cara to the airline. The effective date of the repudiation according to the notice from Air Canada is the date of emergence of the airline from CCAA protection, currently scheduled for December 31, 2003, but not expected to be later than March 31, 2004. It is not uncommon for corporations undergoing court-supervised restructuring to repudiate contracts with service providers while continuing to hold discussions. Further discussions between Air Canada and Cara have been scheduled for later this week. Air Canada is Cara's largest customer, with the repudiated contract representing approximately 13.7% of the fiscal 2003 total gross revenues of Cara and 8.8% of the fiscal 2003 total system sales. Until the matter is fully resolved, it is difficult to completely assess the impact of the repudiation on Cara and its earnings. In the meantime, the terms and conditions of the existing contract remain in effect. With annual system sales in excess of $1.8 Billion, Cara Operations Limited, based in Toronto, Ontario, Canada, is one of Canada's leading integrated restaurant companies, and the largest operator of full service restaurants in Canada, providing employment for approximately 39,000 Canadians in its owned and franchised operations. Cara's wholly owned businesses include Swiss Chalet, Harvey's, Second Cup, Kelsey's Neighborhood Bar & Brill, Montana's Cookhouse, and as a franchisee, Outback Steakhouse restaurants in Eastern Canada; Cara Air Terminal Restaurants Division; Cara Airport Services Division; and Summit Food Service Distributors Inc. Cara also owns 74% of Milestone's Restaurants Inc., an upscale casual restaurant chain. Cara is a values-based organization and further information may be obtained by visiting http://www.cara.com AMERCO: Pacific Investment Resigns from Creditors' Committee ------------------------------------------------------------ U.S. Trustee for Region 17, William T. Neary, informs Judge Zive that Pacific Investment Management Company LLC resigned from the Official Committee of Unsecured Creditors of the AMERCO Debtors. The Creditors' Committee is now composed of: Law Debenture Trust Company of New York 767 Third Avenue, 31st Floor New York, NY 10017 Contact: Daniel Fisher Represented by: Arnold Gulkowitz, Esq. Orrick, Herrington & Sutcliffe LLP 666 Fifth Avenue New York, NY 10103 Telephone (212) 506-5000 Fax (212) 506-5151 Bank of America, N.A. Strategic Solutions, Inc. 555 South Flower Street, 9th Floor Los Angeles, CA 90071 Contact: Timothy C. Hintz, Managing Director Represented by: Evan M. Jones, Esq. O'Melveny & Myers LLP 400 South Hope Street Los Angeles, CA 90071 Telephone (213) 430-6000 Fax (213) 430-6407 G.E. Asset Management Inc. 3003 Summer Street Stamford, CT 06905 Contact: John Endres Telephone (203) 326-4287 Fax (203) 356-4910 The Bank of New York 101 Barclay Street, 8W New York, New York 10286 Represented by: Gerald Facendola Telephone (212) 815-5440 (AMERCO Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., 609/392-0900) AMERICREDIT: Amends and Extends Master Warehouse Credit Facility ---------------------------------------------------------------- AmeriCredit Corp. (NYSE:ACF) announced the extension and amendment of its $1.95 billion multi-year master warehouse credit facility, which includes commitments from 12 lenders. The Class A-1 portion of this facility in the amount of $150 million now matures in November 2004. The remaining classes totaling $1.8 billion mature in November 2006. The Company uses warehouse credit facilities for short-term financing of its receivables until it permanently finances the receivables in securitization transactions. In conjunction with the renewal, the Company amended certain covenants provided under the facility, including an increase in the maximum annualized portfolio net loss ratio to 9% from 8%. If the Company's required credit enhancement levels are reduced in future asset-backed securitizations due to more favorable credit trends, the covenant will be lowered to 8.5%. Additionally, AmeriCredit amended the covenants related to annualized portfolio net losses and net liquidated receivables included in its $500 million medium term note conduit facility, which matures in February 2005, to conform to the changes in the master warehouse credit facility. AmeriCredit is reiterating its previous guidance that the net loss ratio for the managed portfolio will remain in the 7.0 to 7.9 percent range for the next six months. However, the Company amended the related covenants to allow for portfolio seasoning and potential adverse developments such as unexpected weakness in the economy and used car values. AmeriCredit Corp. is a leading independent middle-market auto finance company. Using its branch network and strategic alliances with auto groups and banks, the Company purchases retail installment contracts entered into by auto dealers with consumers who are typically unable to obtain financing from traditional sources. AmeriCredit has more than one million customers and approximately $14 billion in managed auto receivables. The Company was founded in 1992 and is headquartered in Fort Worth, Texas. For more information, visit http://www.americredit.com AMERICREDIT: Fitch Affirms B Rating over Renewal of Facility ------------------------------------------------------------ Fitch Ratings has affirmed the 'B' rating for AmeriCredit Corp.'s senior unsecured debt and revised the Rating Outlook to Stable from Negative following ACF's announcement of the renewal of its master warehouse facility. Approximately $375 million of debt is affected by this action. Fitch's Rating Outlook revision to Stable reflects the company's successful renegotiation of its warehouse credit facilities. In conjunction with the renewal of the warehouse facility, the warehouse covenant limiting the annualized managed net charge-off ratio below an average of 8.0% for two consecutive quarters was increased to 9.0%. The increased covenant level provides greater cushion relative to the company's current annualized charge-off level. Fitch expects ACF to maintain an adequate cushion relative to this covenant going forward. In addition to this change there were other modifications to the agreement which Fitch believes is consistent with the current rating and outlook. Fitch's rating reflects ACF's improved liquidity position, lengthening of the company's funding maturities, and expectation of asset quality improvement. ACF's liquidity position has improved as unrestricted cash has increased to $358 million at Sept. 30, 2003 from $92 million at June 30, 2002. Fitch expects ACF to breach trigger levels in two securitizations over the next two months trapping the majority of cash distributions from FSA insured trusts for the remainder of the year. However, unrestricted cash is not expected to deviate materially from current levels, which should be sufficient to fund operations over the near term. Asset quality is expected to improve over the next year as ACF's older portfolio liquidates and newer originations with higher underwriting criteria begin to season. Although still not fully seasoned, originations starting in late 2002 are performing better, based on cumulative charge-off data, than originations from previous years. In addition, delinquencies (measured as 31+ days delinquent of the securitized portfolio) have trended favorably to 9.52% at Oct. 31, 2003 from 14.66% at Dec. 31, 2002. ANC RENTAL: Claim Traders Won't Like Proposed Voting Procedures --------------------------------------------------------------- As ANC Rental Corporation and its debtor-affiliates prepare to send their Joint Chapter 11 Liquidating Plan out to creditors for a vote, the company asks Judge Walrath to approve uniform solicitation and voting procedures. Claim traders won't like the proposed protocol because it looks at who they are rather than the claims they hold against the estates. Improper Counting ANC proposes that "[e]ach transferee will be treated as a single creditor for purposes of the numerosity requirements in Section 1126(c) and the proposed voting and solicitation procedures." A stroll through the Bankruptcy Code and Rules shows that ANC's proposed aggregation confuses creditors with claims. A "claim" is a "right to payment." 11 U.S.C. Sec. 101(5). A "creditor" is an "entity that has a claim against the debtor that arose at [or before] the [petition date]." 11 U.S.C. Sec. 101(10). The rules of construction for interpreting the text of the Bankruptcy Code provide that "the singular includes the plural." 11 U.S.C. Sec. 102(7). Section 1122 of the Code calls for classification of claims under a chapter 11 plan -- not classification of creditors. Section 1123(a)(4) of the Code requires that any chapter 11 plan must "provide the same treatment for each claim [in a class], unless the holder . . . agrees [otherwise]." Section 1126(c) of the Code requires acceptance of a plan by "creditors . . . that hold . . . more than one-half in number of the allowed claims of such class held by creditors . . . [that have accepted a plan]." That's creditors holding one-half of the claims; not one-half of the creditors. Rule 3001(e) provides for the transfer of claims, not aggregation of a creditor's rights. Rule 3003(b)(1) directs that "[t]he schedule of liabilities filed pursuant to Sec. 521(1) of the Code shall constitute prima facia evidence of the validity and amount of the claims of creditors." The Bankruptcy Code and Rules distinguish claims from creditors. ANC's Voting Procedures do not make the distinction. A claim trader, or any other purchaser of a claim against a debtor's estate, steps into the shoes of the seller of the claim. Colonial-period vulture investors banked on this when they bought certificates issued by the Continental Congress at 7 cents-on-the- dollar while Alexander Hamilton was crafting the plan to have the United States assume those obligations and honor them at par with interest -- to James Madison's and other Antifederalists' chagrin. Mr. Madison favored discriminating between the original holders of the debt (for example, soldiers and those who had loaned Congress money) and holders who had purchased the certificates at less than face value. Mr. Madison proposed to the Congress on February 11, 1790, a scheme where secondary purchasers -- often called speculators in a derogatory tone -- would recoup a little more than what they paid for the debt obligation and the balance of the sum due from the public would be paid to the original certificate holder. Opponents of this discrimination saw it as an unconstitutional violation of basic contract law. By a 36-to-13 vote on February 22, 1790, the Congress rejected Mr. Madison's proposal. A claim purchaser accepts all of the rights and infirmities of a purchased claim. There is no mystical transformation in the character, nature or other rights attendant to a claim upon its transfer from one entity to another after the commencement of a chapter 11 case. ANC improperly focuses on the identity of the creditor rather than the classification, character and nature of the claim. Excess Documentation With respect to a transferred claim, the ANC Debtors propose that the transferee will be entitled to receive a Solicitation Package and cast a Ballot on account of the transferred claim only if by the Record Date: (1) all actions necessary to effect the transfer of the claim pursuant to Bankruptcy Rule 3001(e) have been completed; or (2) the transferee files: (a) the documentation required by Bankruptcy Rule 3001(e) to evidence the transfer: and (b) a sworn statement of the transferor supporting the validity of the transfer. Nothing in the Bankruptcy Code or Rule 3001(e) of the Federal Rules of Bankruptcy Procedure hints at the need for a claim trader to obtain sworn statements from the transferor. A filing under Rule 3001(e) by the transferee is all that's required. False evidence of the transfer subjects the filer to penalties under Rule 11 if not a criminal charge. A fraudulent proof of claim subjects the filer to a $500,000 fine and five years behind bars. The United States Supreme Court says in Rule 3001(e) what's required to effect a transfer of a claim -- no more and no less -- in ANC's bankruptcy case or any other debtor's. Janice Mac Avoy, Esq., at Fried, Frank, Harris, Shriver & Jacobson in New York and Bonnie Fatell, Esq., at Blank Rome LLP in Wilmington, represent ANC Rental. ANC's Creditors' Committee is represented Andrew N. Goldman, Esq., and Adam Dembrow, Esq., at Wilmer, Cutler & Pickering and Brendan L. Shannon, Esq., at Young, Conaway, Stargatt & Taylor, LLP, in Wilmington. Judge Walrath is scheduled to review ANC's proposed voting and solicitation procedures at a hearing on Nov. 19, 2003. ARMSTRONG HOLDINGS: Court Clears AWI's Settlement Pact with CCR --------------------------------------------------------------- Armstrong World Industries obtained U.S. Bankruptcy Court Judge Newsome's approval of a Settlement Agreement with Center for Claims Resolution, Inc. The principal terms of the CCR Settlement Agreement are: (1) Contribution by, and Claims of, Safeco: Subject to the terms and conditions of the CCR Settlement Agreement, Safeco will pay $5 million to CCR. In exchange, Safeco will have a $4 million general unsecured claim against AWI's estate, which will be treated in Class 6 of the Plan. (2) Cancellation of Safeco Bond: Upon CCR's receipt of the $5 million payment by Safeco, the Safeco Bond will be deemed cancelled. (3) Allowed General Unsecured Claim Of CCR: CCR asserts a claim against AWI's estate for the costs of CCR's overhead -- both prepetition, as well as costs accruing postpetition -- on account of the claim. CCR will have an allowed unsecured claim for $4 million against AWI's estate, which will be treated under Class 6 of the Plan. (4) Allowed Liquidated Claims of CCR against the Asbestos PI Trust: CCR will have an allowed Prepetition Liquidated Claim against the Asbestos PI Trust for $62.5 million with respect to Existing Resettlements. The CCR Settlement Agreement contains various provisions relating to the treatment of the Existing Resettlement Claim, including a restriction that the maximum distribution payable by the Asbestos PI Trust on account of the Existing Resettlement Claim will not exceed $8 million. In addition, the CCR Settlement Agreement permits CCR to assert a claim against the Asbestos PI Trust with respect to Future Resettlements. For a Future Resettlement Claim to be valid against the Asbestos PI Trust: (i) it may only relate to a Future Resettlement that is listed on the Future Resettlement list provided to AWI and the Future Claimants' Representative in connection with the CCR Settlement Agreement; (ii) CCR must provide to the Asbestos PI Trust -- subject to certain confidentiality provisions information relating to the Future Resettlement; (iii) either: (a) CCR must provide to the Asbestos PI Trust a release of the Asbestos PI Trust by the plaintiff(s), or (b) CCR must assign all its rights to the plaintiff(s)' claim against AWI to the Asbestos PI Trust, which rights must include an assignment of at least 50% of the plaintiff's claim against the Asbestos PI Trust; and (iv) the amount claimed against the Asbestos PI Trust cannot exceed the lesser, of: (a) the face amount of AWI's share as set forth on the Future Resettlement list, and (b) the percentage of AWI's share as set forth on the Future Resettlement list times the total amount paid by CCR under the actual settlement. The CCR Settlement Agreement places limits on the amounts distributable to CCR on account of Future Resettlement Claims, including that the aggregate distributions from the Asbestos PI Trust on account of all Future Resettlement Claims will not exceed $12 million. (5) Withdrawal of Proofs of Claim: On the Settlement Effective Date -- the date the Court enters an order approving the CCR Settlement Agreement -- each of the CCR Proofs of Claim will be deemed withdrawn with prejudice -- but without prejudice to the rights to assert claims against the Asbestos PI Trust to the extent provided in the Agreement -- except that one proof of claim will be deemed amended to provide for the $4 million general unsecured claim. (6) Dismissal of Pending Actions: On the Settlement Effective Bate, these disputes will be dismissed with prejudice: (a) all claims between CCR and AWI in the Century Adversary Proceeding, (b) the Preference Action, and (c) the Safeco Bond Litigation and Appeal. (7) Withdrawal of Confirmation Objections. On the Settlement Effective Date, the objections to confirmation of the Plan filed by the CCR Members, CCR, and Safeco will be deemed withdrawn without prejudice. (Armstrong Bankruptcy News, Issue No. 50; Bankruptcy Creditors' Service, Inc., 609/392-0900) ATLANTIC COAST: Pilots Approve Revised New Labor Agreement ---------------------------------------------------------- Atlantic Coast Airlines, the Dulles, VA-based carrier (Nasdaq: ACAI) has been informed by the Air Line Pilots Association (ALPA) that ACA's pilots have overwhelmingly ratified a revised contract that includes market-based pay rates and work rule improvements designed to give the company a competitive advantage as it moves forward toward operating as an independent low-fare airline. The new agreement is conditional and goes into effect only as the company implements its low-fare airline plans, with the current ACA pilot agreement remaining in effect until then. Atlantic Coast Airlines President Tom Moore said, "The overwhelming support of our pilots is another strong indication of continued progress with our plan to launch a new low-fare carrier to serve the Washington Dulles market. We remain confident that we are moving in the direction that will provide the best possible future for this company, its stockholders and employees." Steve Hunt, Chairman of ACA's Master Executive Council which represents the company's 1,700 pilots said, "The pilot group is very excited about transforming ACA into an independent low-fare airline. 93% of our eligible crew members participated in the ratification process, and of those, 97% voted in favor of the agreement. This is a clear demonstration that we are absolutely unified in our commitment to working with all ACA employees to ensure the success of our new airline." ACA currently operates as United Express and Delta Connection in the Eastern and Midwestern United States as well as Canada. On July 28, 2003, ACA announced plans to establish a new, independent low-fare airline to be based at Washington Dulles International Airport. The company has a fleet of 148 aircraft -- including a total of 120 regional jets -- and offers over 840 daily departures, serving 84 destinations. ACA employs approximately 4,600 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 http://www.atlanticcoast.com 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 BAYOU STEEL: Files Stand-Alone Chapter 11 Plan of Reorganization ---------------------------------------------------------------- Bayou Steel Corporation President Jerry Pitts announced that Bayou Steel has filed with the Bankruptcy Court its stand-alone plan of reorganization shortly. Mr. Pitts said he is hopeful that the Company will be able to emerge from Chapter 11 by early February 2004. Bayou had previously explored various business options in an effort to maximize creditor recoveries. Those efforts included developing a stand-alone business plan and undertaking a marketing process for new investors or purchasers. No acceptable cash proposals were received. Bayou's Board of Directors concluded that a stand-alone plan of reorganization providing an internal restructuring of its business operations and a revised debt structure gave creditors the greatest value. The Bayou management team developed a long-term business plan over the last six months. That business plan will be the foundation for Bayou's plan of reorganization. Mr. Pitts said, "Bayou will emerge from bankruptcy a stronger company and will be primed to implement our strategic business plan." Pitts stated he was pleased with the fourth fiscal quarter results and that he is optimistic about the Company's business prospects. Pitts added that "All of Bayou's employees worked hard over the last year to successfully turn-around our business operations. Their loyalty and commitment to excellence is reflected in our improved financial results over the last six months." Pitts noted "Our customers and our trade creditors were loyal to us during this period and we will always be appreciative of their support." Bayou filed for Chapter 11 on January 22, 2003. Bayou Steel Corporation manufacturers light structural and merchant bar products in LaPlace, Louisiana and Harriman, Tennessee. The Company also operates three stocking locations along the inland waterway system near Pittsburgh, Chicago, and Tulsa. BETTER MINERALS: S&P's Sub. Debt Rating Upped 2 Notches to CCC- --------------------------------------------------------------- Standard & Poor's Ratings Services raised its subordinated debt rating on West Virginia-based Better Minerals & Aggregates Company to 'CCC-' from 'CC'. At the same time, Standard & Poor's affirmed its corporate credit rating. The outlook is negative. "The rating action follows the company's reduction in senior secured indebtedness from the sale of its aggregates business, improving the subordinated debt's position in the capital structure," said Standrad & Poor's credit analyst Dominick D'Ascoli. The ratings on Better Minerals & Aggregates reflect a weak business position, limited financial flexibility, aggressive debt leverage, and growing silica product liability claims. Better Minerals & Aggregates mines, processes, and sells industrial minerals, primarily industrial silica, from numerous operations in the Eastern and Midwestern U.S., accounting for approximately 24% of industry sales volume during 2002. Industrial silica is used in a variety of end products, including various types of glass, fiberglass, stucco, asphalt shingles, detergents, dental products, ceramic, and floor tiles to name a few. While the sale of the aggregates business reduced operating diversity, it also brought more stability as the industrial minerals business is not as volatile. Net proceeds from the aggregates business sale were applied to debt reduction in an effort to reduce the company's onerous debt levels. Proforma for the transaction, Standard & Poor's estimates total debt to annualized six-month EBITDA at a very aggressive 6.6x for the period ending June 30, 2003. The company will be challenged to reduce debt further through cash generated from operations as Standard & Poor's expects a break even free cash flow run rate, excluding cash payouts for litigation. Proforma annualized six month EBITDA to interest is estimated at a very weak 1.3x for the period ended June 30, 2003. Holding all else constant, Standard & Poor's would expect leverage and interest coverage ratios to improve slightly, as certain cost savings become fully reflected. However, high energy costs are depressing margins because the company--and the industry in general--cannot pass through these costs in the current sluggish economic environment. Because of its financial position, Better Minerals & Aggregates has hired Jefferies & Company, Inc. as a financial advisor to evaluate strategic options. BRIDGE INFO: Plan Administrator Wants Cantor's Claims Disallowed ---------------------------------------------------------------- Cantor Fitzgerald Securities filed three prepetition, unsecured, non-priority claims against the Bridge Information Debtors: (a) Claim No. 1436 for no less than $165,959,620 plus interest, other undetermined amounts, and postpetition interest, filed on June 29, 2001; (b) Claim No. 1455 for no less than $140,000,000 plus interest, other undetermined amounts, and postpetition interest, filed on June 29, 2001; and (c) Claim No. 1819 for no less than $196,834,904 plus interest and inflation adjustments, other undetermined amounts, and postpetition interest to the extent allowable, filed on January 14, 2002. Cynthia A. Fonner, Esq., at Foley & Lardner, in Chicago, Illinois, informs the Court that the Cantor's Claims generally concern its obligation to furnish Telerate, Inc. with certain exclusive governmental securities market data. Cantor bases its Claims on two agreements: (1) An agreement between Telerate and Cantor Fitzgerald Securities Corp., Cantor's predecessor-in-interest, dated February 23, 1990, as amended; and (2) A Master Optional Services Agreement between Telerate and Market Data Corporation, dated February 23, 1990, as amended. The Cantor Claims allege these grounds for relief: A. Non-Qualified Broker Data Fees Telerate's non-payment of fees to Cantor for Telerate's supposed failure to display or publish Non-Qualified Broker Data under the Cantor Agreement, in no less than $23,793,117 plus interest -- Claim No. 1436 -- and for an unspecified amount believed to be no less than $1,834,904 plus interest and inflation adjustments -- Claim No. 1819. B. Monthly Secondary Competitor Fees Telerate's non-payment of Monthly Secondary Competitor Fees to Cantor under the Cantor Agreement, in no less than $50,270 plus interest -- Claim No. 1436 -- and for the unspecified remaining portion of the amount believed to be no less than $1,834,904 plus interest and inflation adjustments -- Claim No. 1819. C. Amended Master Optional Agreement Fees Telerate's non-payment of fees under the Amended Master Optional Agreement of which Cantor claims to be a third-party beneficiary, in no less than $2,116,232 plus interest -- Claim No. 1436 -- and believed to be no less than $95,000,000 plus interest and inflation adjustments -- Claim No. 1819. D. Initial Damages Damages believed to be no less than $140,000,000 plus interest for: * fees and lost business opportunity arising from Telerate's alleged failure to display or publish the Cantor Data on the entire Te1erate System -- Claim No. 1436; * Telerate's alleged breach of the implied covenant of good faith and fair dealing -- Claim No. 1436; and * Bridge's alleged tortious interference with the Agreements -- Claim No. 1455. E. Punitive Damages Unspecified punitive damages for Bridge's alleged tortious interference with the Agreements -- Claim No. 1455. F. Unspecified Lost Profits Damages Unspecified damages for supposed lost commercial opportunities, profits, and goodwill and other consequential damages believed to be no less than $100,000,000 -- Claim No. 1819. G. Unspecified Screen Damages Unspecified damages for alleged failure to display the Cantor Data beyond the minimum number of screens on the Telerate System -- Claim No. 1819. H. Other Unspecified Costs Unspecified costs, expenses, and interest allegedly owed in connection with the three Claims. Ms. Fonner argues that the Cantor Claims are objectionable for a number of reasons: A. Duplication Claim No. 1436 asserts the Initial Damages for $140,000,000 under two theories -- breach of contract and breach of the implied covenant of good faith and fair dealing. Ms. Fonner contends that Claim No. 1455 was filed on the same date, contains descriptions from which it is clear that it stems from the same debts, and was filed for the same amount of money as Claim No. 1436. Thus, Claim No. 1455 is duplicative of Claim No. 1436. To the extent that there is additional duplication, Ms. Fonner asserts, the Court should disallow the Claims. Possible additional duplications may arise with respect to: (a) all of the Fees: * Non-Qualified Broker Data, * Monthly Secondary Competitor, and * Amended Master Optional Agreement; and (b) various Damages: * Initial, * Unspecified Lost Profits, and * Unspecified Screen. However, Ms. Fonner notes, Cantor failed to provide sufficient information to allow determination of any additional duplication. B. No Scheduled Amounts for Claims Ms. Fonner maintains that the Cantor Claims must be disallowed since per the Debtors' records, there is no amount scheduled for the Claims. C. Lack of Sufficient Information A number of the claim amounts are either not specified or just estimated based on belief. None of the Claims has adequate support. D. Improper Calculation of Damages Cantor fails to present properly calculated damages. Cantor fails to mitigate its damages. As part of the damages, Cantor seeks recovery for Telerate's alleged failure to distribute the Cantor Data. Yet since the rejection of the Amended Master Optional Agreement and the Cantor Agreement, Cantor has been free to distribute the same data to other entities but has failed to do so. Ms. Fonner explains that in effect, Cantor would like Telerate to pay for data that Telerate is no longer receiving, while Cantor now has the ability to distribute that data to other third parties for a profit. Ms. Fonner claims that even if Cantor experienced damages, they are more than offset by those suffered by Telerate as a result of Cantor's breach of the Cantor Agreement. Under the Cantor Agreement, Cantor promised Telerate that the Cantor Data would be exclusive to Telerate. Cantor knew that Telerate was paying for that exclusivity, and that Telerate's business depended on it. Cantor knowingly failed to honor this promise, distributing Cantor Data through its own rival eSpeed service, and thereby siphoning Telerate customers away. This inequitable conduct by Cantor not only amounted to a serious breach of the Cantor Agreement, but contributed significantly to Telerate's financial demise and caused Telerate to incur hundreds of millions of dollars in damages. Ms. Fonner informs the Court that the Chapter 11 Plan Administrator has filed counterclaims against Cantor regarding these damages, which are pending before the Court. Ms. Fonner further argues that there is no basis for Cantor's: (a) claims that Telerate did not pay for all of the screens on which the Cantor Data was displayed and that Telerate did not display that Data throughout the Telerate System; (b) suggestion that Telerate owes it Non-Qualified Broker Data Fees. Telerate did not distribute Non-Qualified Broker Data; (c) suggestion that Telerate damaged it by allegedly violating the covenant of good faith and fair dealing. It is actually Cantor that violated that covenant by developing, marketing and operating eSpeed, which impermissibly diverted business from Telerate; (d) allegation that Bridge caused it damage by tortiously interfering with the Amended Market Optional Agreement and the Cantor Agreement. To the contrary, it is Cantor, through its development of eSpeed that tortiously interfered with Telerate's rights under the Amended Market Optional Agreement. Ms. Fonner asserts that Cantor's actions were willful, wanton, and in bad faith, and caused Telerate severe injury; (e) alleged punitive damages. Cantor failed to show the purported tortious conduct allegedly giving rise to damages, let alone that any conduct was willful, wanton, or malicious; and (f) claim for the Unspecified Lost Profits Damages. Cantor has not and cannot even come close to meeting the requirement of proving that damages within a reasonable certainty. D. Double or Triple Recovery Ms. Fonner points out that Cantor and Market Data both asserted claims under the Cantor Agreement and the Amended Market Optional Agreement against Dow Jones & Company, Inc. in a consolidated action pending before the New York Supreme Court relating to Dow Jones' guarantee of various Telerate obligations. To avoid double-dipping, any duplicate recovery received by Cantor from Dow Jones should reduce any recovery by Cantor in its claims. One possible example of a duplicative recovery is evident in Claim No. 1436, which states that Dow Jones already paid Market Data $5,848,344 for fees for the first half of the first quarter of 2001, which was the precise amount that Cantor states was outstanding for that period. Cantor also contends that if Dow Jones asserts a claim in the Debtors' bankruptcy case for that payment, that claim would be subordinated to the claims of Cantor and Market Data. In effect, Cantor appears to be asserting a "right" to double- dip. E. Unclean Hands "Even if Cantor had a legitimate claim for damages, it still must be barred from recovery by the doctrine of unclean hands," Ms. Fonner says. Cantor promised Telerate exclusivity with respect to the Cantor Data, but failed to honor that commitment, even though Cantor knew that it threatened Telerate's existence. F. Frustration of Contract Cantor breached the Cantor Agreement and undermined the Amended Market Optional Agreement by failing to maintain the exclusivity of the Cantor Data. This failure frustrated fulfillment of the fundamental purpose of these Agreements. As a result, Cantor cannot collect damages from Telerate with respect to them. G. Waste of Resources Given that the subject matter of the Cantor Claims is already being considered otherwise, and given that recovery would be largely fruitless, the Cantor Claims should be disallowed to preserve the bankruptcy estates and promote judicial economy. H. Equitable Subordination Even if the Court determines that Cantor is somehow entitled to recover damages, the doctrine of equitable subordination should prevent the recovery until all other creditors have received their proper distribution. Cantor's conduct seriously injured Telerate. Thus, any claim by Cantor, if granted, must be equitably subordinated under Section 510(c)(1) of the Bankruptcy Code. Accordingly, the Plan Administrator asks the Court to disallow all claims filed by Cantor. If all claims are not disallowed, the Plan Administrator asks Judge McDonald to at least disallow the Duplicative Claims. (Bridge Bankruptcy News, Issue No. 52; Bankruptcy Creditors' Service, Inc., 609/392-0900) CANNON EXPRESS: Takes Actions to Voluntarily Delist from AMEX ------------------------------------------------------------- Cannon Express, Inc. (Amex: AB) said that effective October 14, 2003, trading in the Company's securities has been halted by the American Stock Exchange, Inc., due to the Company's inability to meet certain continued listing standards. The Company has commenced proceedings to voluntarily delist its securities from the AMEX. The Company's management expects to file its annual report on Form 10-K and its quarterly report on Form 10-Q with the Securities and Exchange Commission in mid-November. As reported in Troubled Company Reporter's July 31, 2003, Cannon Express, received notice from CitiCapital Commercial Corporation that CitiCapital would exercise its right to terminate its funding agreement with the Company. The agreement between the Company and CitiCapital included, among other terms and conditions, a clause which allowed CitiCapital certain remedies if conditions deemed to be an "Event of Default" existed. One such event was "if there shall be a material change in the stockholders or management of the Borrower." Following the previously announced, May 28, 2003 purchase by Arizona Diversified of 60% of the Company's outstanding shares, the Company notified CitiCapital of the change in both majority stockholders and in the management of the Company, as required in such agreement. At that date, the Company was also in default regarding a payment obligation for equipment. The Company reached an agreement with CitiCapital to extend this funding agreement as well as certain equipment obligations until August 30, 2003. The Company is also in negotiations with various lenders to replace this funding relationship and will strive to have a replacement for CitiCapital in the near future. Cannon Express, Inc., operates a fleet of 775 tractors and more than 1,600 trailers. The company ships retail and wholesale goods (largely for discount merchandisers), automotive supplies and parts, nonperishable food products, and paper goods. Major customers include Wal-Mart and International Paper. Cannon Express monitors and coordinates routes through a company-designed computer system. The company also operates CarriersCo-Op.com, an Internet-based forum for smaller carriers to share or swap extra loads. Co-founders Dean and Rose Marie Cannon own 60% of the company. CENTENNIAL COMMS: Will Use Share Offering Proceeds to Repay Debt ---------------------------------------------------------------- Centennial Communications Corp. (NASDAQ: CYCL) has closed on a public offering of 10,000,000 shares of its common stock at $5.50 per share for total gross proceeds of $55.0 million. The offering included 7,000,000 primary shares sold by Centennial and 3,000,000 shares sold by affiliates of The Blackstone Group. The Company and Blackstone have also granted the underwriter an option to purchase up to an additional 1,500,000 shares of common stock to cover over-allotments, if any. Net proceeds to Centennial (before expenses) of approximately $36.8 million will be used to pay down a portion of Centennial's unsecured subordinated notes due 2009 which are currently accruing pay-in-kind interest at a rate of 13%. The Company did not receive any of the proceeds from the sale of the shares owned by affiliates of The Blackstone Group. Lehman Brothers Inc. served as sole book-running manager of this offering. "This transaction almost doubles the public float in our stock," said Michael J. Small, chief executive officer of Centennial. "In addition, we have continued to improve our balance sheet through the completion of this offering." Centennial (S&P, B- Corporate Credit Rating, Negative) is one of the largest independent wireless telecommunications service providers in the United States and the Caribbean with approximately 17.1 million Net Pops and approximately 929,700 wireless subscribers. Centennial's U.S. operations have approximately 6.0 million Net Pops in small cities and rural areas. Centennial's Caribbean integrated communications operation owns and operates wireless licenses for approximately 11.1 million Net Pops in Puerto Rico, the Dominican Republic and the U.S. Virgin Islands, and provides voice, data, video and Internet services on broadband networks in the region. Welsh, Carson Anderson & Stowe and an affiliate of the Blackstone Group are controlling shareholders of Centennial. For more information regarding Centennial, visit its Web sites at http://www.centennialcom.com and http://www.centennialpr.com CHARTER COMMS: Completes $500-Million 8.75% Senior Note Offering ---------------------------------------------------------------- Charter Communications, Inc. (Nasdaq: CHTR) announced that its subsidiaries, CCO Holdings, LLC and CCO Holdings Capital Corp., have closed on the issuance of $500 million 8.75% Senior Notes due 2013 in a private transaction. The net proceeds of this issuance will be used to repay indebtedness under the revolving credit facilities of the Company's subsidiaries and for other general corporate purposes. With the completion of this financing, the Company intends to terminate the backstop commitment it received from Vulcan, Inc. since the financing satisfies the purpose of that commitment. The Notes were sold to qualified institutional buyers in reliance on Rule 144A and outside the United States to non-U.S. persons in reliance on Regulation S. The Notes will not be registered under the Securities Act of 1933, as amended (the Securities Act), and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. As previously reported, Standard & Poor's Ratings Services assigned its 'CCC-' rating to the $500 million senior unsecured notes due 2013 of CCO Holdings LLC, an indirect, wholly owned subsidiary of cable TV system operator Charter Communications Inc. (CCC+/Developing/--). Although the CCO notes are structurally senior to the 'CCC-' rated debt of Charter Communications Holdings LLC and CCH II LLC, the substantial amount of priority obligations, largely in the form of secured bank debt structurally ahead of the new CCO notes, constrains the rating on these notes to two notches below the 'CCC+' corporate credit rating. CLARION TECH.: Sept. 27 Net Capital Deficit Widens to $57 Mill. --------------------------------------------------------------- Clarion Technologies, Inc. (OTC Bulletin Board: CLAR) announced financial results for the fiscal period ended September 27, 2003. Clarion's 2003 sales for the period were $26.1 million versus $19.9 million in 2002, a 31% increase in revenues. Year-to-date 2003 revenues for the nine-month period are up over 21% ($13.0 million) during the same period in 2002. Clarion's net income from continuing operations for this period in 2003 was $424,000 versus a net loss of $1,888,000 in 2002. YTD Net Income is $1,780,000 versus a net loss of $4,694,000 during the same period in 2002. These improvements in revenue and income were attributable to significant sales growth and continued focus on operational performance and execution. The Company's September 27, 2003 balance sheet shows a working capital deficit of about $24 million, and a total shareholders' equity deficit of about $53 million. Clarion Technologies' President, Bill Beckman, commented, "Our efforts to grow the business profitably are generating favorable results. We are pleased with our progress and proud of three consecutive quarters of positive bottom line results. Were it not for earlier incurred, unanticipated costs associated with a new automotive launch, which is now in full production, our results would have been even better. We will continue to increase our revenues and deliver return for all of our stakeholders." Clarion Technologies, Inc. operates five manufacturing facilities in Michigan and South Carolina with approximately 155 injection molding machines ranging in size from 55 to 1500 tons of clamping force. The Company's headquarters are located in Grand Rapids, Michigan. Further information about Clarion Technologies can be obtained on the Web at http://www.clariontechnologies.com CONE MILLS: Court Approves Proposed Uniform Bidding Procedures -------------------------------------------------------------- Cone Mills Corporation announced that the Delaware Bankruptcy Court has approved bid procedures agreed upon by the company and its creditors that will enable the company to move forward with its proposed sale of assets to WL Ross & Co. in accordance with Section 363 of Chapter 11 of the U.S. Bankruptcy Code. WL Ross & Co. has agreed to purchase substantially all of the company's assets for an estimated total consideration of approximately $90 million, positioning the purchaser as the "stalking horse" -- or original bidder -- in the auction process. The WL Ross & Co. offer sets a floor for other bids to be submitted during a Section 363 auction process approved by the court, and is subject to higher or better offers. In addition, the agreement calls for WL Ross & Co. to receive a $1.8 million breakup fee if a higher or better bid for the company is accepted. The bidding procedures will also allow parties interested in purchasing only selected assets of Cone Mills to do so as long as Cone Mills will obtain greater value from such offers than under the offer submitted by WL Ross & Co. The bidding procedures set January 23, 2004 as the deadline for receipt of bids for an auction to be held on January 29, 2004. John L. Bakane, Chief Executive Officer of Cone Mills, said "Having established bid procedures and an opening bid to finance our exit from bankruptcy gives comfort to our stakeholders for a speedy exit from Chapter 11 early next year." Founded in 1891, Cone Mills Corporation, headquartered in Greensboro, NC, is the world's largest producer of denim fabrics and one of the largest commission printers of home furnishings fabrics in North America. Manufacturing facilities are located in North Carolina and South Carolina, with a joint venture plant in Coahuila, Mexico. Visit http://www.cone.comfor additional information on the Company. CONE MILLS: US Trustee Appoints Official Creditors' Committee ------------------------------------------------------------- The United States Trustee for Region 3 appointed 7 members to an Official Committee of Unsecured Creditors in Cone Mills Corp.'s Chapter 11 cases: 1. Parkdale Mills, Inc. Attn: Daniel K. Wilson P.O. Box 1787, 531 Cotton Blossom Circle Gastonia, NC 28053 Phone: 704-874-5040, Fax: 704-874-5177; 2. UNITE Attn: Harris Raynor, Vice President Southern Region, 4405 Mall Boulevard, Union City, GA 30291 Phone: 770-306-8856, Fax: 770-306-8939; 3. Spectrum Textured Yarns, Inc. Attn: James Walter Roark P.O. Box 669, Kings Mountain, NC 28086 Phone: 704-739-7401 x133, Fax: 704-739-7257; 4. Dunavant Enterprises, Inc. Attn: William H. Stubblefield 3797 New Getwell Road, Memphis, TN 38118 Phone: 901-369-1510, Fax: 901-369-1626; 5. Clariant Corp Attn: Gary Mulherin 4000 Monroe Rd., Charlotte, NC 28205 Phone: 704-331-7270, Fax: 704-331-7070; 6. Sunstates Maintenance Corp. Attn: Kevin J. Morris 3400-C W. Wendover Ave., Greensboro, NC 27407 Phone: 336-294-9411, Fax: 336-294-2971; and 7. Brenntag Southeast, Inc. Attn: Michael J. McMahon 2000 E. Pettigrew St., Durham, NC 27703 Phone: 919-281-2935, Fax: 919-281-1910. Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Headquartered in Greensboro, North Carolina, Cone Mills Corporation is one of the leading denim manufacturers in North America. The Debtor also produces fabrics and operates a commission finishing business. The Company, with its debtor- affiliates filed for chapter 11 protection on September 24, 2003 (Bankr. Del. Case No. 03-12944). Pauline K. Morgan, Esq., at Young, Conaway, Stargatt & Taylor represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $318,262,000 in total assets and $224,809,000 in total debts. CONSECO FINANCE: Settles Securitization Committee Fee Dispute ------------------------------------------------------------ The Conseco Finance Debtors and the Ad Hoc Securitization Holders' Committee have reached a Stipulation settling the Committee's fee and expense amounts. On March 14, 2003, Conseco Finance Corp., U.S. Bank, Wells Fargo, Fannie Mae, the Official Committee of CFC Unsecured Creditors, CFN Investment Holdings and the Ad Hoc Committee entered into a Consent Agreement. Section 4(i) of the Agreement expressly provides that "[t]he legal fees, costs and expenses of Fannie Mae and the Ad Hoc Committee and its members shall be paid on or before the Closing Date by CFC as a final allowed substantial contribution claim from the proceeds of the Acquisition or the $35 million adequate protection lien in favor of the Trustees." Daniel J. Carragher, Esq., at Day, Berry & Howard, in Hartford, Connecticut, explains that from December 17, 2002 through September 9, 2003, the Ad Hoc Committee and its members incurred $1,728,675 in legal fees, costs and expenses: Description Amount ----------- ------ Ad Hoc Committee $393,013 Day, Berry & Howard 1,052,957 Lord, Bissell & Brook 263,378 Development Specialists 19,326 ---------- TOTAL 1,728,675 Amount reimbursed by CFC to date 1,693,055 ---------- Remaining Amount to be $35,620 Reimbursed by CFC ========== Pursuant to the Stipulation, all payments to the Ad Hoc Committee are made in accordance with Section 4(i) of the Consent Agreement. The payments constitute full and final satisfaction of all amounts owing by the CFC Debtors or the Post-Consummation Estate to the AD Hoc Committee or its professionals. Amounts incurred after the Confirmation Date may be reimbursed from the Consent Agreement Reserve Account in accordance with the terms of the Plan. (Conseco Bankruptcy News, Issue No. 37; Bankruptcy Creditors' Service, Inc., 609/392-0900) CTC COMMS: Plan Confirmation Hearing Set for November 20, 2003 -------------------------------------------------------------- On October 14, 2003, the United States Bankruptcy Court for the District of Delaware approved the Disclosure Statement prepared by CTC Communications Group, Inc., and its debtor-affiliates to explain their Joint Amended Plan of Reorganization. The Court found that the Disclosure Statement contains the right kind and amount of information for creditors to make informed decisions whether to accept or reject the Plan. Judge Walsh will convene a hearing to consider confirmation of the Debtors' Plan on November 20, 2003, at 9:30 a.m., Eastern Time, in Wilmington. CTC Communications Group, Inc., a source provider of voice, data, and Internet Communications services to medium and larger sized business customers, filed for chapter 11 protection on October 3, 2002 (Bankr. Del. Case No. 02-12873). Pauline K. Morgan, Esq., at Young, Conaway, Stargatt & Taylor represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $306,857,985 in total assets and $394,059,938 in total debts. CYGNUS: Restructures Arbitration Payments to Sanofi~Synthelabo -------------------------------------------------------------- Cygnus, Inc. (OTC Bulletin Board: CYGN) has restructured the remaining royalty payments owed to Sanofi~Synthelabo pursuant to a 1997 Final Arbitration Award. The original payment schedule required $4.0 million to be paid on February 28, 2004, with additional $4.0 million payments due on February 28, 2005 and 2006. The amended schedule delays each of these payments for one-year periods. Thus, the first $4.0 million payment is due on February 28, 2005, and the remaining two payments are due on February 28, 2006 and February 28, 2007. Under this amendment, Cygnus granted Sanofi~Synthelabo a subordinate security interest in certain of Cygnus' assets. Furthermore, Sanofi~Synthelabo has the possibility of receiving accelerated payments in the event that Cygnus receives a lump-sum cash payment from its ongoing dispute with Sankyo Pharma Inc. and Sankyo Co., Ltd. On October 2, 2003, Sankyo Pharma Inc., stated that it was stopping performance of its contractual obligations under its Sales, Marketing and Distribution Agreement and related contracts. In addition, Sankyo Pharma acknowledged that it had not paid invoices owed to Cygnus and informed Cygnus that it had no intention of remitting payment. As of October 10, 2003, these invoices total over $6.0 million. On October 6, 2003, the Company filed a complaint in the Superior Court of the State of California for the County of San Mateo against Sankyo Pharma and Sankyo Co., Ltd., for breach of contract and intentional interference with contract relating to the sales, marketing and distribution of the Company's GlucoWatch(R) Biographer products. During the initial 12-year term of the Sales, Marketing and Distribution Agreement with Sankyo Pharma, there are no termination rights except in very specific circumstances, none of which has occurred. The Company is seeking compensatory damages and other relief. On November 6, 2003, Sankyo Pharma filed an answer and cross-claims against Cygnus for declaratory relief, breach of contract, and defamation. Cygnus has not yet filed a response to these claims. Cygnus believes that it has meritorious defenses to the causes of action asserted against it by Sankyo Pharma and intends to vigorously defend itself against these claims. This litigation is in its early stages, however, and is therefore inherently difficult to assess. "Delaying each payment for a full year helps us pursue our lawsuit against Sankyo Pharma and Sankyo Japan," stated John C Hodgman, Chairman, CEO and President of Cygnus. "Cygnus has been put under financial pressure by Sankyo's breach of contract, including its refusal to pay us the $6.0 million in past due invoices, so the delay in the Sanofi~Synthelabo payments in conjunction with the 60% reduction of our organization will assist in conserving our cash." "Since Sankyo announced it would no longer perform its contractual obligations, we have received a number of calls from physicians inquiring whether the GlucoWatch(R) G2(TM) Biographer products will continue to be available to purchase," added Mr. Hodgman. "According to Sankyo Pharma, they have approximately a two-year supply of Biographers and AutoSensors in inventory. Further, Sankyo has stated that they are continuing to provide marketing, sales and distribution support for the GlucoWatch G2 Biographer and have instructed their sales force to continue these activities. Sankyo has reiterated its commitment to people with diabetes and the health care professionals who care for them, so we assume Sankyo will not abruptly abandon their customers." Cygnus -- http://www.cygn.comand http://www.glucowatch.com-- founded in 1985 and headquartered in Redwood City, California, develops, manufactures and commercializes new and improved glucose-monitoring devices. Cygnus' products are designed to provide more data to individuals and their physicians and enable them to make better-informed decisions on how to manage diabetes. The GlucoWatch Biographer was Cygnus' first approved product. The device and its second-generation model, the GlucoWatch G2 Biographer, are the only products approved by the FDA that provide frequent, automatic and non-invasive measurement of glucose levels. Cygnus believes its products represent the most significant commercialized technological advancement in self- monitoring of glucose levels since the advent of "finger-stick" blood glucose measurement approximately 20 years ago. The Biographer is not intended to replace the common "finger-stick" testing method, but is indicated as an adjunctive device to supplement blood glucose testing to provide more complete, ongoing information about glucose levels. Cygnus, Inc.'s June 30, 2003 balance sheet shows a working capital deficit of about $46 million, and a total shareholders' equity deficit of about $55 million. DAN RIVER: Sept. 27 Working Capital Deficit Balloons to $64 Mil. ---------------------------------------------------------------- Dan River Inc. (NYSE: DRF) (S&P, B+ Long-Term Corporate Credit Rating, Stable Outlook) reported results for the third fiscal quarter and nine months ended September 27, 2003. For the third quarter of fiscal 2003, the Company reported a net loss of $103.5 million. As previously announced, this loss includes a non-cash write-down of $91.7 million related to goodwill impairment as a result of recent operating performance. The loss in the third quarter of fiscal 2003 compared to net income of $4.7 million for the third quarter of fiscal 2002. Net sales for the third quarter of fiscal 2003 were $103.7 million, down $43.7 million or 29.6% from $147.4 million for the third quarter of fiscal 2002. Net sales of Dan River's home fashions products were $76.4 million, down $29.5 million or 27.8% compared to the same quarter of fiscal 2002. Net sales of apparel fabrics were $20.5 million, down $10.7 million or 34.3%. Net sales of engineered products were $6.8 million, down $3.5 million or 34.0%. At September 27, 2003, the Company's balance sheet shows that its total current liabilities exceeded its total current assets by about $64 million, while net capitalization dropped over 50% to about $109 million. "Our third quarter sales were very disappointing," stated Joseph L. Lanier, Jr., Chairman and Chief Executive Officer. "We believe this reflects continuing adjustments in customer inventory levels during this period. The softness we experienced in home fashions occurred in all retail channels and across all price points and products." The Company reported a net loss of $120.2 million, for the nine months ending September 27, 2003. Included in the year to date performance, in addition to the write-down of goodwill explained above, was a $12.2 million pre-tax charge, primarily non-cash, related to closing two manufacturing facilities in the second quarter of fiscal 2003. Also included in these results are other expense of $1.3 million related to the write-off of unamortized costs pertaining to financings which were prepaid in full during the second quarter of fiscal 2003, and $1.0 million in increased interest expense due to a one-month period during the second fiscal quarter when both the Company's 1993 subordinated notes and its recently issued 12-3/4% notes were outstanding. This compares to net income of $3.2 million for the nine months ended September 28, 2002, before the effect of an accounting change related to the write-down of goodwill under SFAS No. 142, "Impairment of Goodwill and Intangible Assets." The nine months results for fiscal 2002 include an increase in income tax expense of $2.8 million, attributable to the tax law changes associated with the Job Creation and Worker Assistance Act of 2002, and $1.4 million in bad debt expense related to the January 2002 Chapter 11 filing of Kmart Corporation. For the first nine months of fiscal 2003, the Company's net sales were $367.4 million, down $92.3 million or 20.1% from $459.8 million for the first nine months of fiscal 2002. Net sales of Dan River's home fashions products were $262.2 million, down $66.8 million or 20.3% compared to the first nine months of fiscal 2002. Net sales of apparel fabrics were $79.7 million, down $20.5 million or 20.5%. Net sales of engineered products were $25.6 million, down $5.0 million or 16.3% compared to the first nine months of fiscal 2002. Mr. Lanier stated, "As we have previously announced, the reduction in sales activity has resulted in certain actions being taken by the Company to offset the shortfall and to improve profitability. We have reduced home fashions capacities by closing our Greenville and Fort Valley facilities as announced in the second fiscal quarter. A salary freeze has been in place since May of this year, and certain hourly wage increases have been delayed. A reduction of 80 managerial and administrative positions was announced in August. Planned capital expenditures have been reduced to $13 million for fiscal 2003. "Additionally, we announced [Mon]day that we are going to close our Sevierville, Tennessee apparel fabrics weaving facility and our Camellia home fashions distribution center in Juliette, Georgia over the next 60 to 90 days. Our apparel weaving will be consolidated into our Danville weaving facilities, and the Camellia operations will be consolidated into our other home fashions distribution facilities. Service to our customers is not expected to be affected by these actions. As a result of these closures, we expect to take a charge of up to $17 million in the fourth quarter, most of which will be non-cash. The charge includes a write-down of home fashions equipment from our closed Greenville plant that we originally planned to relocate in Danville. Instead, apparel looms from Sevierville will be relocated in the space we intended to use for the equipment from Greenville. To the extent we need additional home fashions greige cloth we intend to source it externally. The anticipated annual savings from the Sevierville and Juliette closures are expected to be in the range of $6 to $7 million. "In summary, the actions we have taken since May are expected to save the Company approximately $18 million per year when the savings are fully realized. The full benefits of these actions will not begin to be reflected in our income statement until fiscal 2004. "As we look to the fourth quarter of fiscal 2003, we are projecting sales to be at levels similar to the third quarter," Mr. Lanier continued. "In order to keep inventories in line, we have scheduled production downtime for several weeks during the fourth fiscal quarter. These curtailment costs will significantly impact our operating results in the fourth quarter. Although we expect to report a net loss in the fourth fiscal quarter, based on current information we believe that we will have sufficient liquidity under our revolving line of credit to provide for our operating and debt service requirements in the fourth fiscal quarter." On October 14, the Company announced that it had received a waiver from its senior lenders in respect of the Company's violation of its maximum leverage ratio covenant for the third fiscal quarter. As a result of the waiver, the Company is currently in compliance with the terms of its senior secured credit facility. In connection with the waiver, additional covenants were established requiring minimum levels of excess availability under the Company's revolving credit facility and monthly operating EBITDA (as defined in the credit facility) during the fourth fiscal quarter. These covenants are set forth in an amendment to the Company's credit facility which was filed on October 14, 2003 as an exhibit to its Current Report on Form 8-K. As it is probable that the Company will not meet the maximum leverage ratio and the minimum fixed charge ratio covenants at the end of the fourth quarter, the Company is required to report its senior secured debt as long-term debt due currently. Additionally, all senior debt which would be subject to cross acceleration in the event the senior secured lenders elected to accelerate has been reported as current, despite the fact that no default has occurred with respect to this debt, which consists primarily of the 12-3/4% senior notes. Mr. Lanier said, "This has been a very difficult year for our Company. However, our outlook for the first quarter of fiscal 2004 is more optimistic across all of our divisions. Customers have indicated strong support for our recently introduced home fashions products that will begin to ship during the first quarter of fiscal 2004. Our apparel fabrics division has also had success in new product placements that will ship in the first quarter of fiscal 2004. With the announced cost savings measures fully implemented, we expect to see the benefit of those savings contribute directly to the bottom line in fiscal 2004." DATA TRANSMISSION: Files Prepackaged Plan in S.D. of New York ------------------------------------------------------------- Data Transmission Network Corporation and its debtor-affiliates delivered their Prepackaged Joint Plan of Reorganization and the accompanying Disclosure Statement to the U.S. Bankruptcy Court for the Southern District of New York. Full-text copies of the documents are available for a fee at: http://www.researcharchives.com/bin/download?id=030928213717 and http://www.researcharchives.com/bin/download?id=030928214117 Under the Plan, Allowed Claims (other than Allowed Administrative Expense Claims and Allowed Priority Tax Claims) and Equity Interests are divided into 8 Classes, for all purposes, including voting on this Plan, Confirmation of this Plan and Distributions made pursuant to this Plan: Class Description Treatment ----- ----------- --------- n/a Administrative Expense Unimpaired; Except as otherwise Claims agreed, will be paid in full, in Cash. n/a Priority Tax Claims Unimpaired; Will be paid in full, in Cash. 1 Priority Claims Unimpaired; If otherwise agreed, all claims will be paid in full, in cash. 2 Secured Lender Claims Impaired; At the option of VSA, holders will receive: 1) Cash Option - a Pro-Rata Distribution of a) $185,000,000 and b) a Cash payment in the amount of accrued, and unpaid interest at the non-default rate through the Effective Date and all other required payments; or 2) Recapitalization Alternative 3 Other Secured Claims Unimpaired; The Debtors, as applicable, will either 1) pay the Allowed amount of such Claim in full on the later of the Effective Date or the date such Claim becomes Allowed, 2) return the Collateral securing such Claim to the secured creditor, 3) reinstate the Other Secured Claim in accordance with the provisions of Section 1124(2) of the Bankruptcy Code, 4) pay such Other Secured Claim in the ordinary course of business, 5) otherwise treat such Other Secured Claim in a manner that will render such Other Secured Claim unimpaired or 6) as otherwise agreed to by the Parties. 4 General Unsecured Unimpaired; To the extent not Claims satisfied, the legal, equitable, and contractual rights to which a entitles the holder will be left unimpaired. 5 Senior Subordinated Impaired; On the Effective Convertible Note Claim date, the holder will not receive or retain any property under the Plan on account of its Claim. 6 Huston Note Claims Impaired; On the Effective Date, the holder will not receive or retain any property under the Plan on account of their Claims. 7 Equity Interests in Impaired; The legal, equitable, Subsidiaries and contractual rights of the holders are impaired by the Plan. On the Effective Date, the Equity Interests of non- Debtors in Subsidiaries will be cancelled, annulled and extinguished. 8 Equity Interests in Impaired; The legal, equitable, VS&A-DTN and contractual rights of the holders are impaired by the Plan. On the Effective Date, the Equity Interests in VS&A- DTN will be cancelled, annulled and extinguished and the holders of such Equity Interests in VS&A-DTN will not receive or retain any property under the Plan. Headquartered in Omaha, Nebraska, Data Transmission Network Corporation, delivers targeted time-sensitive information via a comprehensive communications system, including: Internet, Satellite, leased lines and other technologies. The Company, together with its debtor-affiliates filed for chapter 11 protection on September 25, 2003 (Bankr. S.D.N.Y. Case No.: 03- 16051). Jeffrey D. Saferstein, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison LLP represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed estimated assets of more than $100 million and debts of over $50 million. DDI CORP: Court Will Consider Proposed Plan on November 18, 2003 ---------------------------------------------------------------- The United States Bankruptcy Court for the Southern District of New York, on October 3, 2003, ruled on the adequacy of the Disclosure Statement prepared by DDi Corp. and its debtor- affiliate to explain their First Amended Joint Reorganization Plan. The Court found that the Disclosure Statement contains the right kind and amount of information to enable creditors to make informed decisions whether to accept or reject the Debtors' Plan. Accordingly, on November 18, 2003, at 10:00 a.m., a hearing to consider the confirmation of the Debtors' Plan will convene before the Honorable Stuart M. Bernstein. The Debtors, through the services of their operating subsidiaries, are providers of time-critical electronics design, fabrication, and assembly services for makers of communications and networking gear, computers, medical and industrial instruments and aerospace equipment to original equipment manufacturers and other providers of electronics manufacturing services. DDi filed for Chapter 11 protection on August 20, 2003, (Bankr. S.D.N.Y. Case No. 03- 15261). Sharon M. Kopman, Esq., at Kirkland & Ellis represents the Debtors in their restructuring efforts. DEKA COMMERCIAL: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: DEKA Commercial Services, Inc. 1216 South Highway 377 Pilot Point Texas 76258 dba DEKA Plumbing Services Bankruptcy Case No.: 03-90657 Chapter 11 Petition Date: November 3, 2003 Court: Northern District of Texas Debtor's Counsel: Robert A. Simon, Esq. Simon & Simon, LLP 3327 Winthrop Avenue Suite 200 Fort Worth, TX 76102 Tel: 817-735-9100 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Deborah David $300,000 PO Box 393 Pilot Point Texas 76256 Frances Pursur $217,000 Hughes Supply, Inc. $62,081 Verizon $9,548 Pilot Point Hardware $9,191 Republic Insurance $6,920 Accountemps $5,713 American Express $5,632 Biggs $4,000 Cingular Wireless $3,756 Kelsey, Kelsey & Collister $3,682 84 Lumber $2,828 Gretchen Benolken $2,607 Bank One National $2,134 Moore Supply $1,895 Leigh Engineering $1,700 T-5 Distributors $1,542 Lowe's Company $1,529 Foxworth Galbraith Lbr. Co. $1,513 Cecilia Donohue $1,326 DIAMETRICS MEDICAL: Will Publish Third-Quarter Results Tomorrow --------------------------------------------------------------- Diametrics Medical, Inc. (OTCBB:DMED) will issue financial results for the third quarter of fiscal year 2003 before the open of market trading on Thursday, November 13, 2003. The company will broadcast its third quarter conference call live the same day at 11:00 a.m. Eastern Time, 10:00 a.m. Central, to discuss financial results and to provide a business update. To listen, please dial 800-299-8538 or 617-786-2902 and enter passcode 28459941. A replay will be available for 7 days. To access the replay, please dial 888-286-8010 or 617-801-6888 followed by the passcode 67624947. Diametrics Medical -- whose June 30, 2003 balance sheet shows a total shareholders' equity deficit of about $1.2 million -- is a leader in critical care technology. The company is dedicated to creating solutions that improve the quality of healthcare delivery through products and services that provide continuous, accurate and cost-effective blood and tissue diagnostic information. Primary products include the the TrendCare(R) continuous blood gas monitoring system, including Paratrend(R) and Neotrend(R) for use with adult, pediatric and neonatal patients; and the Neurotrend(R) cerebral tissue monitoring system. Additional information is available at the company's Web site -- http://www.diametrics.com EL PASO: Third-Quarter Net Loss More than Doubles to $146 Mill. --------------------------------------------------------------- El Paso Corporation (NYSE: EP) reported results for the third quarter of 2003 and updated its progress on its 2003 operational and financial plan. Third Quarter Results Quarter Ended September 30 El Paso reported a net loss of $146 million, for the third quarter of 2003 compared with a net loss of $69 million in the third quarter of 2002. Adjusted for significant items, the company had a third quarter 2003 net loss of $6 million, compared with net earnings of $54 million in the third quarter of 2002. Third quarter 2003 significant items affecting continuing operations totaled $91 million, mostly attributable to various asset impairments. Last year's third quarter results included significant items totaling $30 million related to asset sales. "We continued to show progress on debt reduction and liquidity in the quarter," said Doug Foshee, El Paso's president and chief executive officer. "In addition, we're on track to meet our asset sales goal for the year. Unfortunately, a good quarter in the pipeline and midstream areas was offset by disappointing results in E&P as we continue to rationalize this business. My first two months at El Paso confirm my belief that while we have significant challenges still ahead, our people and our core assets will allow us to restore the long-term earnings power of the company and restore our balance sheet. I look forward to sharing in more detail later this year our plan for the future." Recent Accomplishments Since reporting its second quarter 2003 earnings, El Paso has achieved a number of important financial and operational accomplishments that evidence continued progress implementing its 2003 operational and financial plan. -- Third quarter cash flow from operations totaled $752 million, raising year-to-date cash flow to $1.8 billion. -- The company's obligations senior to common were reduced by approximately $620 million during the third quarter. Additionally, approximately $775 million of obligations senior to common were retired in October. -- As part of the asset sales, El Paso has eliminated $710 million of non-recourse project and power plant restructuring debt that was consolidated on El Paso's balance sheet. Through the sale of El Paso's interest in East Coast Power, L.L.C., the purchaser assumed $571 million of project debt. In addition, last month the company sold its interests in Mohawk River Funding I for $11 million, eliminating $139 million of non- recourse power plant restructuring debt. -- El Paso sold a 9.9-percent general partner interest in GulfTerra Energy Partners, L.P. (NYSE:GTM) to Goldman Sachs & Co. for $88 million. This transaction confirmed the significant value of the general partner interest and furthered El Paso's and GulfTerra's efforts to enhance the credit separation of the two companies. In addition, GulfTerra redeemed all of the Series B Preference Units held by El Paso for $156 million. These units would not have paid cash to El Paso until late 2010. -- The company announced a $500-million drilling venture with wholly owned subsidiaries of Lehman Brothers and Nabors Industries Ltd. that will result in an incremental $350 million of drilling activity over the next nine to 12 months. El Paso is pursuing additional drilling ventures in order to develop its substantial inventory as it reduces the capital spending for the production business. -- El Paso initiated a tender offer in October 2003 to exchange common stock and cash for the company's 9.0-percent equity security units. If all units are tendered, this would result in a reduction of up to $575 million of balance sheet debt, an increase in shareholders equity of approximately $475 million, and a reduction in cash of up to $112 million. -- In September the company reduced its exposure to fluctuations in the Euro by entering into swap agreements that had the effect of replacing 250 million of Euro-denominated fixed-rate debt with dollar-denominated floating rate debt. -- El Paso made continued progress towards the liquidation of its trading portfolio. THIRD QUARTER SEGMENT RESULTS Pipeline Group The Pipeline Group's third quarter reported EBIT was $301 million compared with $302 million during the third quarter of 2002. Third quarter 2003 results include a $20-million benefit related to the revaluation of common stock to be issued under the western energy settlement, as the liability was adjusted for El Paso's closing stock price on September 30, 2003. The remaining significant item is a $3-million gain associated with an Australian asset sale. After adjusting for significant items, third quarter 2003 EBIT was $278 million compared with $302 million for the same 2002 period. The decline is primarily due to a favorable resolution of measurement issues at a processing plant serving the Tennessee Gas Pipeline Company system in 2002, the sale of El Paso's interest in the Alliance pipeline system, and lower revenues on the El Paso Natural Gas Company pipeline system as a result of expired capacity contracts that the company cannot remarket due to various Federal Energy Regulatory Commission orders. These factors were partially offset by completed system expansions and new transportation contracts, primarily on the Colorado Interstate Gas Company and Southern Natural Gas Company pipeline systems. Third quarter system throughput was down from 2002 levels as cooler summer weather and higher natural gas prices reduced demand. El Paso's Pipeline Group continues its active expansion program. In September, Cheyenne Plains Gas Pipeline Company announced plans to increase its capacity from 560 thousand dekatherms per day (Mdth/d) to at least 730 Mdth/d due to significant customer demand. The Cheyenne Plains system is expected to be in-service in early 2005, and the expansion is expected to be in-service in early 2006. The FERC has granted preliminary approvals for the original 560 Mdth/d project. In August, El Paso Natural Gas Company announced the purchase of Copper Eagle Gas Storage, LLC, which is developing a natural gas storage project near Phoenix, Arizona. In addition, TGP placed the first phase of its South Texas Expansion Project, which connects TGP's existing South Texas system to a new natural gas pipeline in northern Mexico, into service in August 2003. Production Production's reported EBIT for the third quarter 2003 was $103 million versus $179 million during the third quarter of 2002. Third quarter 2003 results include a $2-million ceiling test charge primarily relating to the company's Turkish full-cost pool that was partially offset by a $1-million asset sale gain. Third quarter equivalent production declined 32 percent due largely to sales of approximately 1.6 trillion cubic feet equivalent (Tcfe) of proved reserves since the third quarter of 2002, normal declines in base production, and mechanical failures on certain wells. The realized price for natural gas, net of hedges, rose to $3.95 per thousand cubic feet (Mcf) in 2003 from $3.21 per Mcf in 2002, while the realized price for oil, condensate, and liquids, net of hedges, rose to $23.82 from $22.19 per barrel (Bbl). Total per-unit costs increased to an average of $2.95 per thousand cubic feet equivalent (Mcfe) in the third quarter 2003 compared with $2.02 per Mcfe during the same 2002 period. The per-unit costs were affected by a higher DD&A rate, which resulted from higher finding and development costs. In addition, the sale of reserves at unit prices that were lower than the average DD&A rate contributed to the increase. Per-unit costs were also affected by higher workover costs and by increased G&A on lower equivalent production during the third quarter of 2003. In the third quarter of 2003, the company produced 80 billion cubic feet (Bcf) of natural gas, 54 Bcf of which was hedged at an average price of $3.51 per MMBtu, or $3.65 per Mcf. The company has hedged approximately 54 trillion British thermal units (TBtu) of its fourth quarter 2003 natural gas production at a NYMEX price of $3.38 per million British thermal units (MMBtu) or $3.52 per Mcf. For 2004, El Paso has hedged approximately 19 TBtu per quarter of its natural gas production at an average NYMEX price of $2.55 per MMBtu or $2.65 per Mcf. The company expects that its 2003 realized price for natural gas will be approximately $.20 less than the NYMEX spot price due to transportation costs and regional price differentials, net of adjustments for Btu content. During the third quarter of 2003, El Paso Production drilled a total of 129 wells, with an overall success rate of 90 percent. Most of this drilling took place as part of the company's coal bed methane and Gulf of Mexico deep shelf exploration programs. The deep shelf program continues to exceed expectations with a 56- percent success rate (nine successful wells out of 16 drilled) thus far in 2003. The average deep shelf well has had an estimated 48 Bcf of recoverable reserves with an initial production rate of 30.5 million cubic feet (MMcf) of gas per day and 1,479 barrels of condensate per day. The most recent development in the deep shelf program is a confirmation well in the Jim Bob Mountain discovery. This well doubled the aerial extent of the original discovery to approximately 2,000 acres. In Brazil, El Paso completed the Santos #14B "Luana" prospect well, as a discovery in the upper Itajai, with 75 feet of pay and estimated proved reserves of 162 Bcfe gross, 88 Bcfe net to El Paso's interest. A confirmation well, Santos #15D, has been drilled and encountered 118 feet of upper Itajai. This interval, along with lower Itajai sands that are present in both wells, will be tested, and if successful, would further increase proved reserves. Field Services Field Services reported EBIT of $33 million for the third quarter 2003 compared with a loss of $11 million during the third quarter of 2002. Third quarter 2003 results include a $2-million asset sale loss while last year's quarterly results included a $47- million impairment of an asset that was contracted for sale along with a $1-million loss on an asset sale. Third quarter 2003 EBIT, after adjusting for significant items, was lower than 2002 levels, primarily due to the loss of earnings from divestitures of midstream assets in the mid-continent and north Louisiana. These items were partially offset by increased earnings from GulfTerra and reduced G&A expenses. The earnings contribution from GulfTerra increased to $40 million this quarter from $17 million during the third quarter of 2002. GulfTerra had a strong third quarter due in part to contributions from the completion of the Cameron Highway transaction. Cash distributions from GulfTerra totaled $34 million during the quarter compared with $19 million in the second quarter of 2002. Gathering, transportation, and processing volumes as well as gathering margins were below third quarter 2002 levels due to asset sales. In addition, processing margins were down slightly from a year ago due to an unfavorable movement between natural gas and natural gas liquids prices. Merchant Energy The Merchant Energy Group, consisting of domestic and international power, energy trading, and LNG, reported an EBIT loss of $37 million in the third quarter 2003 compared with a loss of $83 million in the prior-year period. Significant items for 2003 total $91 million and include $68 million of impairments for LNG and power assets, including the East Coast Power project and turbines held in inventory. Merchant Energy also incurred losses of $13 million associated with domestic power asset sales during the quarter and $10 million of restructuring costs associated with the closure of the London office. El Paso's power business had third quarter EBIT, after adjusting for significant items, of $135 million versus $98 million in 2002. EBIT from the consolidation of Electron and Gemstone in the second quarter of this year increased third quarter EBIT by $61 million compared with the same period last year. This increase was offset by higher losses on the company's merchant plants, mark-to-market losses on a derivative fuel supply contract, and lower earnings due to asset sales. Trading operations had a third quarter EBIT loss, after adjusting for significant items, of $73 million compared with a $200 million EBIT loss in the same 2002 period. 2003 results reflect $33 million of losses from a decrease in fair value of derivative contracts and losses on accrual transactions, primarily related to transportation and storage demand charges not recovered during the quarter, $11 million of accretion for the western energy settlement, and $29 million of G&A and depreciation expense. LNG and Other had an EBIT loss, after adjusting for significant items, of $8 million in the third quarter of 2003 versus income of $20 million last year. The decrease was primarily due to mark-to- market income from the execution of the Snovhit LNG supply contract in 2002 and mark-to-market losses on LNG supply contracts in 2003. El Paso continues to show consistent progress in exiting the trading business. Since the beginning of the year through September 30, 2003, El Paso's forward contract positions have declined 48 percent, including the liquidation of its European trading portfolio and its coal, currency, and interest rate books. In addition, the company's transportation capacity has declined 57 percent, and storage capacity has declined 84 percent. LIQUIDITY UPDATE As of October 31, 2003, El Paso had $2.7 billion of available cash and lines of credit. As of September 30, 2003, El Paso had $2.0 billion of available cash and lines of credit, consisting of $1.3 billion of readily available cash and $.7 billion of lines of credit. The company had $1.6 billion of total cash on September 30, 2003. NEW DEBT SCHEDULES ON COMPANY WEB SITE El Paso adds a new section to its Web site that contains a complete schedule of the company's debt as of September 30, 2003 along with a debt maturity schedule as well as an abbreviated legal organization chart with descriptions of the entities in the corporate structure. These materials can be accessed at www.elpaso.com in the Investors section, by clicking "Corporate Debt and Corporate Structure." 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: Closes $460MM 6.50% Convert. Guaranteed Note Offering ---------------------------------------------------------------- Elan Corporation, plc (NYSE:ELN) has completed the offering and sale of $460 million in aggregate principal amount of 6.50% Convertible Guaranteed Notes due 2008 issued by Elan Capital Corp., Ltd., a wholly-owned subsidiary of Elan, and guaranteed by Elan. The offering and sale of the Notes was made outside the United States to non-U.S. persons in reliance on Regulation S under the Securities Act of 1933, as amended. The Notes, the guarantee of the Notes and the shares to be issued upon conversion of the Notes have not been and will not be registered under the Securities Act and, unless so registered, may not be offered, sold or distributed within the United States or to U.S. persons (as defined in Regulation S under the Securities Act) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Elan (S&P, B- Corporate Credit and CCC Subordinated Debt Ratings, Stable) is focused on the discovery, development, manufacturing, sale and marketing of novel therapeutic products in neurology, severe pain and autoimmune diseases. Elan shares trade on the New York, London and Irish Stock Exchanges. ENCOMPASS SERVICES: Admin Claims Objection Deadline on Dec. 11 -------------------------------------------------------------- Encompass Services Debtors' Disbursing Agent, Todd A. Matherne, sought and obtained a Court order extending the deadline to file objections to administrative claims to December 11, 2003. According to Marcy E. Kurtz, Esq., at Bracewell & Patterson, LLP, in Houston, Texas, the Debtors are currently reviewing the nearly 4,000 proofs of claim filed in their bankruptcy cases to find out if the claims truly represent valid liabilities or must be disallowed for a number of reasons. The Debtors are operating with a small number of essential employees who must, in conjunction with their counsel, and in addition to their other duties necessary to wind up the Debtors' operations, reconcile the amounts of the proofs of claim with the Debtors' books and records, negotiate with creditors, and file objections where necessary. This process is extremely time-consuming, Ms. Kurtz says. Ms. Kurtz notes that the Disbursing Agent has filed seven omnibus objections to duplicate claims, one omnibus objection to late filed claims, and one omnibus objection to duplicate claims of government entities, pursuant to which the Court has entered orders disallowing approximately 315 claims. Moreover, approximately 23 individual claim objections are currently set for hearing. The Disbursing Agent has also already filed objections to and settled numerous administrative expense applications. At present, the Disbursing Agent is in the process of preparing objections to, and negotiating 10 more administrative expense applications, as well as reviewing many administrative expense proofs of claim. "The 45-day extension will increase the Disbursing Agent's probability of resolving its objections to various administrative claims," Ms. Kurtz says. (Encompass Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service, Inc., 609/392-0900) ENRON CORP: Wants Court Approval to Dissolve Enron Operations LP ---------------------------------------------------------------- Enron Corporation, Enron Transportation Services Company and Enron Operations Services Corporation, ask the Court, pursuant to Sections 105 and 363 of the Bankruptcy Code and Rules 2002, 6004 and 9013 of the Federal Rules of Bankruptcy Procedure, to approve and authorize: (a) the dissolution and liquidation of Enron Operations, LP and the transfer of assets to EOC Preferred, LLC; (b) the conversion of Enron Transportation and EOSC to limited liability companies; (c) the temporary forbearance of Enron Corp. and certain of its debtor-affiliates of certain rights to receive payment for certain accounts receivable claim in connection with the dissolution, which account receivable claims will be assumed in their entirety by EOC Preferred; and (d) EOC Preferred's assumption of the EOLP's liabilities. EOLP, ETSC, EOSC, EOC Management LLC, EOC Holdings LLC and EOC Preferred are part of a structured finance vehicle, entitled Project Teresa. Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, in New York, relates that Project Teresa was formed and capitalized in March 1997 by Enron, certain of its affiliates, and two third party investors: (1) EN-BT Delaware, Inc., a Deutsche Bank affiliate, and (2) Potomac Capital Investment Corporation. Project Teresa currently includes: (i) Enron Leasing Partners, LP, (ii) Enron Pipeline Holding Company, (iii) OPI, a 98% limited partner of ELP, (iv) EOLP, which wholly owns Enron Transportation, (v) EOC Preferred, (vi) EOC Management, (vii) EOC Holdings, (viii) Enron Cayman Leasing Ltd., and (ix) Enron Property Management Corp. According to Mr. Rosen, Enron is the sole member of EOC Preferred. EOC Preferred owns a preferred limited partnership interest in EOLP. EOLP owns ETSC, which, in turn, owns EOSC. EOLP's remaining partnership interests are directly owned by EOC Management, the general partner of EOLP, and EOC Holdings, a limited partner of EOLP. EPHC is the sole member of each of EOC Management and EOC Holdings. Enron and OPI own 80% and 20% of the issued and outstanding common stock of EPHC. In addition, Enron and ELP own 20% and 80% of the issued and outstanding preferred stock of EPHC. Therefore, Enron indirectly controls EOLP through its control of EPHC, which owns EOC Management, the general partner of EOLP. In addition, Enron indirectly owns a preferred limited partnership interest in EOLP pursuant to that certain Limited Partnership Agreement of EOLP dated March 31, 2000, by and among EOC Management, EOC Preferred and EOC Holdings, as the general partner, the Class A limited partner, and the Class B limited partner of EOLP. The Contemplated Dissolution Mr. Rosen recalls that the Court approved the Contribution and Separation Agreement between ETSC, EOSC, EOLP, Enron and CrossCountry Energy Corp. -- the CrossCountry Transaction. To facilitate the CrossCountry Transaction, the parties need the Court's authority for the dissolution and liquidation of the EOLP assets and the attendant transactions. The EOLP Partnership Agreement sets the priority for the distribution of EOLP's assets upon dissolution in this order: (1) third party creditors; (2) Partners for any unreimbursed costs and expenses owing to the partners; (3) the repayment of loans, with interest, made by any partner; (4) EOC Preferred, as Class A Limited Partner, in respect of any accrued and unpaid Class A Distributions; (5) EOC Preferred, as Class A Limited Partner, in respect of its unreturned capital contributions; (6) unreturned capital contributions of EOC Management, as general partner, and EOC Holdings, as Class B Limited Partner, in proportion to the amount of the balances; and (7) any remainder will be distributed to EOC Management and EOC Holdings, pro rata, in accordance with their Sharing Ratios. In connection with the Dissolution: -- each of EOSC and ETSC will be converted to Delaware limited liability companies; -- Enron and subsidiaries Enron North America Corp., LRCI Inc., Enron Property & Services Corp. and Enron Net Works LLC, will temporarily forebear their rights, if any, under the EOLP Partnership Agreement, to receive payment from EOLP upon Dissolution for accounts receivable claims, which claims will be assumed in full by EOC Preferred upon its assumption of all of EOLP's liabilities; -- EOLP will transfer all of its assets to EOC Preferred pursuant to a plan of dissolution; and -- EOC Preferred, which is not waiving any of its rights in respect of its equity interest in EOLP, will assume all of EOLP's liabilities, including the EOLP Intercompany Account Payable Claims, pursuant to an assumption agreement to be entered into by Enron in its capacity as the sole member of EOC Preferred. Since all of the EOLP assets and liabilities are being transferred to EOC Preferred, Mr. Rosen says, Enron, ENA, LRCI, and Enron Net Works will not be prejudiced by agreeing to a temporary forbearance of their rights to receive payment of their EOLP Intercompany Account Payable Claims. Upon conversion, ETSC will be Enron Transportation Services LLC, which will be wholly owned by EOC Preferred, and EOSC will be Enron Operations Services LLC, which will be wholly owned by ETS LLC. Dissolution of EOLP EOLP's assets primarily consist of its equity interest in ETSC and $2,760,585 intercompany accounts receivable from six Enron- affiliated companies, four of which are Debtors. Conversely, EOLP's only significant third party creditor is Enron, which holds a $262,000,000 note payable. With respect to EOLP's equity, EOC Preferred is owed, in respect of its preferred equity interest, $2,870,620,067 in unreturned capital contributions and $352,000,000 in accrued but unpaid Class A distributions. However, Mr. Rosen notes that EOLP may have certain liabilities, the aggregate potential exposure of which is currently unknown, related to: (i) service agreements, (ii) operational services provided to certain Enron-related entities and other third parties, (iii) stock sales, and (iv) certain franchise taxes. EOLP is also a defendant in a personal injury lawsuit filed by an employee of a contractor. While the potential exposure in connection with the litigation is estimated by Enron to be about $5,000,000, it may be covered by one of EOLP's insurance policies. Upon EOLP's filing of a Statement of Dissolution with the office of the Secretary of State of Delaware, EOC Management, as the general partner of EOLP, will cause the distribution of the assets of EOLP pursuant to the EOLP Partnership Agreement. At this time: (i) Enron will temporarily forebear its, and will cause ENA, LRCI, EPSC and Enron Net Works to temporarily forebear their, EOLP Intercompany Accounts Payable Claims in connection with the Dissolution, and EOLP will transfer all of its assets to EOC Preferred; and (ii) in its capacity as sole member of EOC Preferred, Enron will enter into an assumption agreement, pursuant to which EOC Preferred will assume all of the liabilities of EOLP including the EOLP Intercompany Account Payable Claims. Furthermore, because the value of EOLP's assets is significantly less than the value of EOC Preferred's unpaid distributions and capital account, EOLP's plan of dissolution will provide for EOC Preferred to receive all of the assets of EOLP. Pursuant to Section 363(b)(1) of the Bankruptcy Code, Mr. Rosen argues that the contemplated transaction should be approved because: (a) it will provide commercial resolution of the ETSC ownership; (b) it will simplify the ownership and legal relationships of ETSC and EOSC to Enron and the Teresa Entities; (c) it will address the contingent liabilities of EOLP; (d) it will, with respect to the consummation of the CrossCountry Transaction, make it possible for the Debtors, in certain circumstances, to satisfy the requirements for making an election pursuant to Section 338(h)(10) of the Internal Revenue Code in respect of the CrossCountry Shares; (e) it will reduce the number of federal and state income tax filings for the Enron consolidated tax group; (f) pursuant to Section 266(d) of the Delaware General Corporation Law, the conversion of each EOSC and ETSC to a Delaware limited liability company will not affect the obligations or liabilities of any corporation, or the personal liability of any person, incurred prior to the conversion; and (g) the parties' possible election under Section 338(h)(10) could increase the basis in the assets of Transwestern Pipeline Company, a subsidiary of ETSC and CrossCountry, to their fair market values, thereby increase the value of the CrossCountry Shares by as much as $120,000,000, which is a significant benefit to the Debtors' creditors. (Enron Bankruptcy News, Issue No. 86; Bankruptcy Creditors' Service, Inc., 609/392-0900) ENTERTAINMENT TECHNOLOGIES: Voluntary Chapter 7 Case Summary ------------------------------------------------------------ Lead Debtor: Entertainment Technologies & Programs, Inc. 17300 Saturn Lane Suite 111 Houston, Texas 77058 Bankruptcy Case No.: 03-46010 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. Date Filed ------ -------- ---------- Stargate Entertainment, Inc 03-45936 October 4, 2003 Type of Business: The Debtor provides entertainment services and facilities for more than 35 US military bases in Asia, Europe, and the US. Chapter 7 Petition Date: November 6, 2003 Court: Southern District of Texas (Houston) Judge: Karen K. Brown Debtor's Counsel: Kenneth Paul Thomas, Esq. Attorney at Law 4615 SW Fwy Suite 500 Houston, TX 77027 Tel: 713-355-6728 Estimated Assets: $570,039 Estimated Debts: $1,878,646 EXTREME NETWORKS: William Slakey Named Chief Financial Officer -------------------------------------------------------------- Extreme Networks, Inc. (Nasdaq: EXTR), a leader in broadband Ethernet networking, announced that William (Bill) Slakey has joined the Company, as senior vice president and chief financial officer. Slakey is a seasoned financial executive who brings more than 17 years of experience strengthening corporate operations and financial performance. He has held senior and executive financial positions for leading technology firms, such as Handspring, 3Com Corporation, QUALCOMM, Palm Computing, Apple Computer, and WJ Communications. Slakey will be responsible for all of Extreme Networks' finance, information technology, legal and investor relations efforts. Prior to joining Extreme Networks, Slakey was the chief financial officer for Handspring, Inc. While there, Slakey played a key role in helping the Company restructure its operations while it continued to develop and deliver leading-edge products and technology. "With his extensive finance and investor relations expertise, Bill is a great addition to the Extreme management team," said Gordon Stitt, president and CEO of Extreme Networks. "His operations and manufacturing experience will help enable us accelerate our efforts in building a best-in-class operation and reach the next business level." Slakey has served as the chief financial officer of WJ Communications, a leading RF semiconductor company, and at SnapTrack Inc., a leader in advanced GPS-based wireless tracking systems, which was acquired by QUALCOMM. Slakey's extensive experience at market leading technology companies also includes senior level finance and investor relations positions at 3Com Corporation, Apple Computer and Palm Computing. "I am pleased to be joining Extreme Networks and becoming part of a team with a history of delivering innovative networking solutions," said Slakey. "With new advancements in connectivity and converged communications, it's an exciting time for networking infrastructure companies." Slakey holds a B.A. from the University of California and an M.B.A. from the Harvard Graduate School of Business Administration. 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 FLEMING: Taps Keen Realty to Market Industrial Facility in Penn. ---------------------------------------------------------------- Keen Realty, LLC has been retained by Fleming Companies, Inc. to auction on January 28, 2004 its 171,996 sq. ft. industrial facility located 3010 Seventh Avenue, Altoona, PA. Keen Realty, LLC provides real estate consulting, valuation, disposition and restructuring services to companies in bankruptcy and workout situations. "We anticipate a tremendous amount of interest in this facility and we expect to sell it very quickly," said Mike Matlat, Keen Realty's Vice President. "This prime industrial facility is suitable for many users and presents an excellent opportunity for many investors. Interested parties are encouraged to act immediately, as the company may enter into a contract prior to the auction date." Matlat added. The facility was constructed in 1950 with additions in 1993, and consists of approximately 7,722+/- sq. ft. of office space, 24,624+/- sq. ft. of cooler/freezer space, and 139,650+/- sq. ft. of warehouse space. The two sections of the freezer reportedly are rated at -5 degrees (F) and -15 degrees (F), respectively. The facility is set on an 8+/- acre site and has good access to all major transportation routes. Founded in 1982, Keen Realty has assisted clients with over 220 million square feet of property and repositioned nearly 12,000 retail stores across the country. Other current and recent clients of Keen include Arthur Andersen, Big V Holdings, Cooker Restaurants, Country Home Bakers, Cumberland Farms, Eddie Bauer, Premcor, Spiegel, and Warnaco. For more information regarding these locations, please contact Keen Realty, LLC, 60 Cutter Mill Road, Suite 407, Great Neck, NY 11021, Telephone: 516-482-2700, Fax: 516-482-5764, e-mail: mmatlat@keenconsultants.com or rtramantano@keenconsultants.com. FLEMING COS.: Gets Go-Signal to Sell Kansas Property to Spartan --------------------------------------------------------------- U.S. Bankruptcy Court Judge Walrath authorizes the Fleming Debtors to consummate the sale of a real estate property in Kenneth Parkway and Highway 101 in Leawood, Kansas. Spartan Real Estate LLC will buy the property for $1,800,000. Spartan is a Kansas limited liability company not affiliated with any of the Debtors. (Fleming Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., 609/392-0900) FOSTER WHEELER: Balance Sheet Insolvency Widens to $871 Million --------------------------------------------------------------- Foster Wheeler Ltd. (NYSE: FWC) reported a net loss for the third quarter of 2003 of $26.9 million, which included net pre-tax charges of $26.1 million. Charges for the third quarter of 2003 included expenses of $13.9 million for professional services and severance benefits driven by the company's restructuring process and an impairment loss of $15.1 million on the anticipated sale of a domestic corporate office building. This compares to a net loss of $151.0 million for the same quarter last year, which included net pre-tax charges of $146.7 million. Revenues for the third quarter of 2003 totaled $896.2 million compared to $814.2 million in the third quarter of last year. "Our operating performance continues to improve," said Raymond J. Milchovich, chairman, president and chief executive officer. "Although our backlog is down in these challenging market conditions, we are winning quality business with strategic and tactical importance and are seeing a steady level of opportunities. The increased rigor and discipline that we have instilled in the organization is allowing us to execute better, provide more value to our clients and improve project financial performance. "We have seen improvement in domestic liquidity and our current forecast indicates that we will have adequate liquidity through year-end 2004. We intend to improve our position by taking a number of actions that include the successful completion of a major asset monetization," continued Mr. Milchovich. "We are beginning to realize the benefits of our operational restructuring and continue our focus on completing our balance sheet restructuring during early 2004," added Mr. Milchovich. "We believe the combination of an improved financial structure and substantial operational enhancements will allow us to unlock the considerable upside potential in our worldwide operations." Worldwide, total cash and short-term investments at the end of the quarter were $470 million, compared to $419 million at the end of the second quarter of 2003, and $522 million at the end of the third quarter of 2002. Of the $470 million in cash and short-term investments at the end of the third quarter, $407 million was held by non-U.S. subsidiaries. As of September 26, 2003, the company's indebtedness was $1.1 billion, essentially unchanged from year-end 2002 and down $67 million from the end of the third quarter of 2002. For the nine months ended September 26, 2003, revenues were $2.6 billion, flat with revenues in the first nine months of last year. Excluding the impact of the sale of the assets of the environmental business in the first quarter of 2003, revenues were up 8%. The net loss for the period was $76.1 million compared to a net loss of $413.1 million in the first nine months of 2002. Pre- tax charges of $86.9 million and $421.4 million were included in the first nine months of 2003 and 2002, respectively. At September 26, 2003, the Company's balance sheet shows a working capital deficit of about $140 million, and a total shareholders' equity deficit of about $871 million. Bookings and Segment Performance Management uses several financial metrics to measure the performance of the company's business segments. Earnings before interest expense, taxes, depreciation and amortization (EBITDA) is the primary financial measure used by the company's chief decision makers and is one of the covenant metrics in the company's outstanding debt. New orders booked during the third quarter of 2003 were $582.4 million compared to $1,019.8 million in the third quarter of last year, excluding environmental orders of $23.7 million. The company's backlog was $3.0 billion, compared to $4.0 billion at the end of the third quarter of 2002, excluding $1.8 billion related to the environmental business. Third-quarter new bookings for the Engineering and Construction Group were $443.4 million, essentially flat with orders of $446.2 million during the year-ago quarter, excluding the environmental orders. The Group's backlog was $2.0 billion, compared to $2.5 billion at quarter-end 2002, excluding the environmental backlog. Revenues for the E&C Group in the third quarter of 2003 were $575.5 million, up 45% compared to $396.2 million in the third quarter of 2002, excluding environmental revenues of $66.3 million. Both the UK and Continental Europe recorded significant increases. EBITDA was $19.2 million this quarter, compared to a negative EBITDA of $26.5 million for the same period last year. New bookings in the third quarter for the Energy Group were $135.2 million, compared to $579.5 million in third quarter 2002. Last year's quarter included a contract award of $342 million to the company's Finnish subsidiary for the engineering, procurement and construction of two power plants in Ireland. Backlog at quarter- end was $1.0 billion, compared to $1.6 billion at quarter-end 2002. Energy Group revenues for the quarter were $321.4 million, down from $355.8 million in the same quarter of 2002, as improvements in the European power business were more than offset by the U.S. power operations decline. EBITDA for the quarter was $32.4 million compared to a negative EBITDA of $29.2 million last year. Operations in Europe continue to improve on revenue growth while the U.S. business is benefiting from cost reductions and better execution on existing projects. Foster Wheeler Ltd. is a global company offering, through its subsidiaries, a broad range of design, engineering, construction, manufacturing, project development and management, research and plant operation services. Foster Wheeler serves the refining, oil and gas, petrochemical, chemicals, power, pharmaceuticals, biotechnology and healthcare industries. The corporation is based in Hamilton, Bermuda, and its operational headquarters are in Clinton, New Jersey, USA. For more information about Foster Wheeler, visit its0 Web site at http://www.fwc.com GENTEK INC: Successfully Emerges from Chapter 11 Proceedings ------------------------------------------------------------ GenTek Inc. (OTC Bulletin Board: GETI), a diversified manufacturer of telecommunications and other industrial products, has emerged from Chapter 11. Its Plan of Reorganization, which was confirmed by the United States Bankruptcy Court for the District of Delaware on Oct. 7, 2003, has become effective. The company's previously existing common stock (OTCBB: GNKIQ) has been cancelled and the new stock issued under the Plan will begin trading under the symbol OTCBB: GETI. "[Mon]day marks the start of an exciting period in GenTek's history," said Richard R. Russell, President and Chief Executive Officer of GenTek. "Thanks to the extraordinary efforts of our employees and the continuing support of our customers and suppliers, our reorganization has been a textbook example of how the Chapter 11 process is intended to work. We are emerging with substantially less debt, lower interest expense and a more competitive cost structure." New Capital Structure GenTek's aggregate balance-sheet debt upon emergence is approximately $280 million, representing a reduction of approximately $670 million from the company's pre-petition funded debt of $950 million. The Plan calls for the initial distribution of approximately 10 million shares of new common stock and other consideration to be made as follows: -- Holders of pre-petition secured bank claims will receive a total of approximately $60 million in cash, $250 million in new senior notes and approximately 94 percent of the new common stock; -- Pre-petition subordinated bondholders (excluding those who voted to reject the Plan) will receive approximately 4 percent of the new common stock and warrants to purchase additional stock; -- General unsecured claimholders will receive approximately 2 percent of the new common stock and warrants to purchase additional stock, or a cash distribution if elected; and -- Certain litigation claimants may receive additional shares and warrants subject to the liquidation of their claims. Distributions to pre-petition creditors of new senior notes, new common shares, new warrants and cash, as applicable, will be made in accordance with the Plan. The Joint Plan of Reorganization and First Modification to Plan are available at http://www.gentek-global.com/restructure/conf_reorg_plan.html In conjunction with its emergence from Chapter 11, GenTek closed on a $125 million multi-year, asset-based revolving-credit facility, which will be used to fund working capital requirements, pay Plan obligations and for other general corporate purposes. Bank of America is the lead arranger and syndication agent of this credit facility. New Board of Directors As part of the company's emergence, a new eight-member board of directors took office Monday. "Our pre-petition lenders have done an excellent job of selecting a slate of highly qualified directors," said Mr. Russell. "These individuals bring a wealth of industry, operational and financial expertise that will serve GenTek well. Our management team is excited about working closely with these distinguished individuals to maximize value in the future." Serving with Mr. Russell on the new board will be the following directors: -- John G. Johnson, Jr.: Mr. Johnson was previously President and Chief Executive Officer of Foamex International Inc., and serves as a Director of McWhorter Technologies, Inc., and Thermadyne Industries, Inc. Mr. Johnson has been nominated to serve as Chairman of the new board. -- Dugald K. Campbell: Mr. Campbell is Chairman of Tower Automotive, Inc. -- Henry L. Druker: Mr. Druker is a Partner of Questor Management Company, a private investment firm and serves as a Director of Aegis Communications. -- Kathleen R. Flaherty: Ms. Flaherty was previously President and Chief Operating Officer of Winstar International and serves as a Director of CMS Energy Corporation and Marconi Corporation. -- Bruce D. Martin: Mr. Martin is a Director of Angelo, Gordon & Co., a private investment firm. -- John F. McGovern: Mr. McGovern is Founder and a Partner of Aurora Capital LLC and was previously Executive Vice President, Finance and Chief Financial Officer of Georgia-Pacific Corporation. -- William E. Redmond, Jr.: Mr. Redmond is a Director of World Kitchen Incorporated and Arch Wireless and was previously Chairman, President and Chief Executive Officer of Garden Way Incorporated. "We also wish to thank our outgoing directors for their years of service and counsel, particularly during this challenging period in GenTek's history," said Mr. Russell. "Their contributions to GenTek's successful reorganization were immeasurable and we wish them well in the future." Key Milestones Achieved in Reorganization During the company's reorganization process, GenTek completed a number of strategic and operational initiatives that have reduced the company's cost structure and improved its overall competitive positioning. Key achievements include: -- Developed, patented and launched the innovative AirES(TM) structured cabling technology (Air Enhanced System), which enables the production of higher performing data cables with up to a 30 percent reduction in overall size; -- Secured 100 percent supply of the roller finger follower (RFF) on the current 5.4L and future 4.6L 3-valve Modular engines for Ford's new F-150 truck series; and -- Entered into a joint venture with Italian chemical producer Esseco S.p.A. to further enhance GenTek's competitive positioning and provide a host of value-added services in its sulfur-derivative chemicals business. "Throughout the 13-month Chapter 11 process we maintained our commitment to invest in GenTek's people and its future," said Mr. Russell. "Going forward, that commitment is stronger than ever. We are confident that we have the finest team in place and best-in- class global manufacturing to execute on our product initiatives and to be the supplier of choice in the markets we serve." GenTek Inc. is a diversified manufacturer of telecommunications and other industrial products. Additional information about the company is available on GenTek's Web site at http://www.gentek-global.com GENUITY: Takes Action to Challenge Verizon's $79-Mill. MOU Claim ---------------------------------------------------------------- On January 3, 2002, the Genuity Debtors entered into a Memorandum of Understanding with Verizon Services Corp., Telesector Resources Group, Inc. and GTE Consolidated Services Inc., each on behalf of certain Verizon operating telephone companies and Verizon Advanced Data Inc. and Verizon Advanced Data-Virginia, Inc. Pursuant to the MOU, Verizon provided Access Services, specifically dedicated access services, frame relay, ATM, and certain other services. Under the MOU, the Debtors agreed to purchase an aggregate minimum of $283,000,000 of Access Services over a five-year period. The MOU stated that Verizon was not obligated to provide services in a state until it received all necessary regulatory and other governmental approvals. In the event that the approval process materially and adversely changed the rights, obligations or risks of Verizon or the Debtors, both parties agreed to negotiate in good faith to reach new terms that would satisfy their original intentions and in the event they were unable to agree on new terms, either party has the right to terminate the MOU or affected services. In the event of a termination, the MOU provided that the Debtors would not be subject to any termination or shortfall liability, nor to any other liability that would otherwise apply under Verizon Services' tariffs. In July 2002, Verizon verbally notified the Debtors that the Federal Communications Commission refused to approve the MOU because the FCC disapproved the MOU's waiver of termination liabilities and required a cost justification from Verizon. Verizon Services did not provide the FCC with a cost justification for the waiver and advised the Debtors that they had no intention to do so. The waiver would have protected the Debtors from substantial termination liabilities in migrating a large number of previously provisioned Verizon circuits to the MOU pricing structure and terms. The Debtors took the position that any prospect of imposing termination liabilities would eliminate most or all of the benefit of the MOU for them. The Debtors attempted to negotiate new terms with Verizon that would satisfy the original intention of the parties, but was unable to come to an agreement that would meet this objective. Consequently, the Debtors gave written notice to Verizon Services on September 20, 2002 that they were terminating the MOU due to Verizon's failure to secure necessary regulatory approval resulting in a material adverse change, and accompanied by the Verizon's failure to propose any alternative agreement that might satisfy the original intentions of the parties. In response, Verizon asserted that the Debtors' termination was not justified under the MOU and, in a claim submitted to the Court, asserted that the Debtors owe them various liabilities totaling $78,883,356. On April 18, 2003, Verizon filed Proofs of Claim Nos. 4178, 4179 and 4180 for unsecured claims totaling $1,474,708,777, which covers some 17 distinct claims. One of the Claims asserted was the $78,883,356 MOU Claim. The Debtors' Objection David S. Elkind, Esq., at Ropes & Gray, in Boston, Massachusetts, argues that the MOU Claim represents Verizon's effort to collect damages for a contract whose provisions it breached and ignored. It also seeks to recover damages resulting from the Debtors' lawful termination of the Agreement, when in fact, Verizon suffered little damage. In particular, Mr. Elkind asserts that the MOU Claim is without merit and should be disallowed since: (a) the Debtors were authorized to terminate the MOU because: -- Verizon breached its obligations under the Agreement; -- the terms and conditions of the Agreement were otherwise not fulfilled; and -- a "Material Adverse Change " to the Debtors' "rights" and "risks" had clearly occurred within the express terms of the MOU; and (b) even if the Debtors had not been authorized to terminate the MOU, as it was, Verizon's claim for damages is wholly without merit. After the MOU's termination, the services that were to be covered by the MOU were continued and billed for by Verizon under pre- existing FCC tariffs at prices that, in most instances, were higher than the prices that would have been paid to Verizon under the MOU. Accordingly, Mr. Elkind maintains that Verizon suffered little, if any, damages and its Claim really amounts to an effort to receive double payment for the very same services. Verizon's damage claim, Mr. Elkind continues, also seeks to assert claims for damages to which it is clearly not entitled under the MOU and under applicable law. In short, even if liability could be established, Verizon can show little, if any, injury or ensuing loss to support its claim of "damage". Mr. Elkind tells the Court that the Debtors also reserve the right to object to cure claims, rejection claims or other claims asserted by Verizon to the extent that they relate to the circuits referred to or covered under the MOU. The Debtors also object to the other portions of Verizon's Claim, and the Debtors further reserve the right to seek recovery of all amounts owed by Verizon to the Debtors under the MOU by separate adversary proceedings, counterclaim or otherwise. (Genuity Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service, Inc., 609/392-0900) GIANT INDUSTRIES: 3rd-Quarter Results Swing-Up to Positive Zone --------------------------------------------------------------- Giant Industries Inc. (NYSE: GI) reported net earnings of $7.5 million for the third quarter ended Sept. 30, 2003. Net earnings in the third quarter of 2003 included a pre-tax write-down of assets that totaled $1.1 million. Net earnings were a loss of $4.6 million in the third quarter of 2002. The company reported net earnings of $9.6 million for the first nine months of 2003 compared to a net loss of $8.7 million in 2002. Giant's chairman and chief executive officer, Fred Holliger, commented, "Good performance from each of our strategic business units led to record third quarter earnings. Our refining operations had a strong quarter as higher gasoline crack spreads contributed to a significant improvement in refining margins versus the prior year levels. Refining margins at our Four Corners refineries increased from $6.04 in the third quarter of last year to $9.51 in the same quarter this year and refining margins at our Yorktown refinery increased from $1.71 to $4.61 for the same period. These margins, combined with an increase in volumes, contributed to a significant improvement in earnings. Refinings' operating earnings were $23.8 million in the third quarter of 2003 versus a breakeven level for the same period last year. These results were realized even though operations at our Yorktown refinery were scaled back and subsequently shut down for a period of time as Hurricane Isabel passed through the area. I would like to commend our Yorktown personnel for their efforts in securing and protecting our refinery. As a result of their efforts, our facility experienced very minimal damage. "Our retail operations also had good results in the quarter. Store operating profit from continuing operations increased to $5.1 million in the third quarter of 2003 versus $2.1 million for the same period last year. While a significant improvement in retail fuel margins was a major factor in the improved profitability, our program to divest of non-strategic, poor performing stores and continuing creative marketing in our stores also made strong contributions to the improved profitability. "In the quarter, Phoenix Fuel continued to achieve growth in both wholesale and cardlock fuel volumes that contributed to increased earnings versus the prior year level. In addition, our team at Phoenix Fuel did a superb job of servicing our Phoenix-based customers when the recent pipeline problem between Tucson and Phoenix interrupted the supply of finished products to this market." Holliger continued, "When we reported our 2002 earnings earlier this year, I stated that we had a goal to realize $20-$30 million from the sale of non-strategic assets in 2003. With the recent completion of the sale of our corporate office building we have reached this goal, and we are working on additional sales." With regard to the company's debt reduction strategy, Holliger remarked, "We have made significant progress in reducing our level of debt. Since we acquired the Yorktown refinery, in May 2002, we have reduced our debt by approximately $83 million, $19 million of which was achieved in the recent third quarter. Presently, our revolver has no borrowings outstanding. While we are pleased with this level of debt reduction, we remain committed to further debt reduction as it will contribute to improved profitability and will also provide the needed flexibility to further grow our company." Giant Industries Inc. (S&P, B+ Corporate Credit Rating, Negative), headquartered in Scottsdale, Ariz., is a refiner and marketer of petroleum products. Giant owns and operates one Virginia and two New Mexico crude oil refineries; a crude oil gathering pipeline system based in Farmington, N.M., which services the New Mexico refineries; finished products distribution terminals in Albuquerque, N.M., and Flagstaff, Ariz.; a fleet of crude oil and finished product truck transports; and a chain of retail service station/convenience stores in New Mexico, Colorado and Arizona. Giant is also the parent company of Phoenix Fuel Co. Inc., an Arizona wholesale petroleum products distributor. For more information, visit Giant's Web site at http://www.giant.com GLOBEL DIRECT: May 31 Balance Sheet Upside-Down by $5.6 Million --------------------------------------------------------------- Globel Direct inc., (GBD - TSX - Venture) has released its audited financial statements for Fiscal 2003, year ended May 31, 2003 and its unaudited financial statements for first quarter Fiscal 2004, the three months ended August 31, 2003. Both statements are made on a comparable basis taking into account retroactive restatements made to 2002 results to ensure comparability. Management believes the operating results show a significant reduction in all expenses and set the stage for future profitability. Cost reductions initiated in early 2003 made an impact in operating results, with Fiscal 2003 operating expenses of $19.3 million as compared to $25.6 million in Fiscal 2002, reducing the operating loss by 88% to $0.2 million as compared to $1.9 million for the same period last year. The Company reported a loss from operations for its first quarter Fiscal 2004 of $218,676, improving from a loss from operations of $640,422 in the comparable period a year ago. During the 2003 fiscal year, revenues decreased to $19.1 million from $23.7 million for the comparable period in 2002. Revenues for the first quarter Fiscal 2004 decreased to $3.47 million versus $4.47 million in the prior year. This decrease in revenue is the result of voluntarily exiting much small-scale business judged unprofitable, exiting certain product lines including the e- Seminar business, intense competition and the lingering effects on the slowdown in the sector attributable to the events of 9/11. The company's May 31, 2003, balance sheet discloses a working capital deficit of about $1.5 million while net capital deficit tops $5.6 million. "Our goal is to grow the business at both the top and bottom line with our initial focus being operating results", says J.R. Richardson, Globel's President and CEO. "Although we are seeing a decrease in revenues, a trend that continued during our historically slower first quarter period, we also seeing better operating margins as a result of management's adjustments to our cost base. Given the distractions from the substantial restructure efforts underway over the past two years, the implementation of our new lending facility and other macro and micro economic factors that influenced our fiscal 2003 and 2004 first quarter performance, we are looking forward to refocusing our efforts on attracting new business." "Today, our sales focus is on the recurring revenue model where we are contracted to perform functions that are core strengths of our Company, taking over important, yet non-core functions of business," says Sandi Gilbert, Globel's Senior VP Strategy. "Successful contract awards in 2003, as demonstrated by our Accenture Business Services for Utilities win announced previously, establish our ability to attract this type of business. With the Company operating more efficiently, we are positioned to secure more revenue that will move the Company toward sustainable profitability." Bottom line net loss decreased to $5.1 million in fiscal 2003 from $7.0 million in fiscal 2002. The net losses for 2003 include the full expense treatment of the bonus interest of $1.6 million owing pursuant to the outstanding $3 million debenture, higher interest costs due to the Company's debt structure and increased restructure expenses. The net loss during the first quarter 2004 consisted of $0.69 million compared to $1.09 million loss from the year earlier. First quarter net loss includes the higher interest costs the Company is currently incurring. "Now that we have our operating expenses contained," Richardson adds, "the Company's corporate focus must be on the balance sheet and reducing our interest expense." To that end, the Company has entered into a Letter of Intent with RoyNat Capital proposing a partial conversion of debt subject to the corporation meeting certain conditions, including the raising of new equity. It also includes forgiveness of bonus interest expensed in Fiscal 2003. "Once achieved, these improvements in our balance sheet will be the final step in our restructure process, allowing the Company to once again turn its focus to growth and product development," concludes Richardson. Additionally, the Company announces the departure of Ed Gades, a former officer of the corporation. Full and complete results are available at the Sedar website. The foregoing is subject to regulatory approvals. Globel also advises that its first quarter financials are available at http://www.sedar.com HANOVER DIRECT: Sept. 27 Balance Sheet Upside-Down by $79 Mill. --------------------------------------------------------------- Hanover Direct, Inc., announced operating results for the 13- and 39- weeks ended September 27, 2003. The Company reported that internet sales continue to demonstrate strong growth over the prior year reaching 27.6% of total revenues for the 39-week period ended September 27, 2003. Internet net revenues for the 13- and 39-week periods ended September 27, 2003 were $26.2 million and $79.2 million, respectively, or 21.3% and 28.3% above comparable fiscal periods in 2002. Total net revenues for the 13- and 39- weeks ended September 27, 2003 were $96.6 million and $304.9 million, respectively, a decrease of $9.4 million (8.9%) and $24.5 million (7.4%), respectively, from the prior year 13- and 39-week results. The decreases were due to a number of factors including softness in the market for the Company's products and continued reductions in unprofitable circulation. Hanover reported income from operations for the 39-weeks ended September 27, 2003 of $1.5 million, a $1.9 million improvement over a reported loss from operations of $0.4 million for the comparable period in 2002. The improvement in operating income was due to the continued reduction of general and administrative expenses of $5.9 million and a decrease in special charges of $1.0 million which were partially offset by the impact of the decline in total net revenues. Hanover also reported a loss from operations for the 13- weeks ended September 27, 2003 of $(0.1) million, an improvement of $2.8 million over the comparable period in 2002. The Company reported a net loss of $15.8 million for the 39- weeks ended September 27, 2003 compared with a net loss of $4.2 million for the comparable period in the year 2002. The $11.6 million increase in net loss was primarily due to an $11.3 million deferred Federal income tax provision incurred to establish a valuation allowance against the Company's remaining net deferred tax asset. In addition, the increase in net loss was also due to the recording of $4.5 million of additional interest expense incurred as a result of the implementation of SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity" issued by the Financial Accounting Standards Board. Effective June 29, 2003, because the Company's Series B Participating Preferred Stock is mandatorily redeemable, FAS 150 required the Company to reclassify its Preferred Stock to liabilities and to prospectively reflect the accretion of the Preferred Stock balance as interest expense rather than Preferred Stock dividends. These charges were partially offset by continued reductions in general and administrative expenses, a decrease in special charges and depreciation and amortization, and the recording of the $1.9 million deferred gain during the 39- weeks ended September 27, 2003 related to the June 29, 2001 sale of the Company's Improvements business. Net loss per common share was $0.17 for the 39- weeks ended September 27, 2003 and $0.11 for the 39-weeks ended September 28, 2002. The per share amounts were calculated after deducting preferred dividends and accretion of $7.9 million and $10.6 million for the 39- weeks ended September 27, 2003 and September 28, 2002, respectively. In addition, the per share amounts were calculated after deducting additional preferred dividends and accretion of $4.5 million incurred as interest expense after June 28, 2003. The weighted average number of shares of Common Stock outstanding used in both the basic and diluted net loss per common share calculation was 138,315,800 for the 39- weeks ended September 27, 2003 and 138,268,327 for the 39- weeks ended September 28, 2002. The Company reported a net loss of $16.6 million for the 13-weeks ended September 27, 2003 compared with a net loss of $4.2 million for the comparable period in the year 2002. The $12.4 million increase in net loss is attributable as explained above to the $11.3 million deferred Federal income tax provision incurred to increase the valuation allowance and fully reserve the remaining net deferred tax asset and the $4.5 million of increased interest expense due to the implementation of FAS 150. These increases were partially offset by the continued reductions in general and administrative expenses, special charges and depreciation and amortization. Net loss per common share was $0.12 and $0.06 for the 13- weeks ended September 27, 2003 and September 28, 2002, respectively. The weighted average number of shares of Common Stock outstanding used in both the basic and diluted net loss per common share calculation was 138,315,800 for both the 13- weeks ended September 27, 2003 and September 28, 2002. At September 27, 2003, the Company's balance sheet shows a total shareholders' equity deficit of about $79 million. Hanover Direct, Inc. (Amex: HNV) and its business units provide quality, branded merchandise through a portfolio of catalogs and e-commerce platforms to consumers, as well as a comprehensive range of Internet, e-commerce, and fulfillment services to businesses. The Company's catalog and Internet portfolio of home fashions, apparel and gift brands include Domestications, The Company Store, Company Kids, Silhouettes, International Male, Scandia Down, and Gump's By Mail. The Company owns Gump's, a retail store based in San Francisco. Each brand can be accessed on the Internet individually by name. Keystone Internet Services, LLC -- http://www.keystoneinternet.com-- the Company's third party fulfillment operation, also provides the logistical, IT and fulfillment needs of the Company's catalogs and web sites. Information on Hanover Direct, including each of its subsidiaries, can be accessed on the Internet at http://www.hanoverdirect.com HOMESEEKERS.COM: Files for Chapter 11 Reorganization in New York ---------------------------------------------------------------- HomeSeekers.com, Inc., dba Realigent (Pink Sheets: HMSK) has filed a voluntary petition for reorganization pursuant to Chapter 11 of the U.S. Bankruptcy Code in the Southern District of New York. Notwithstanding almost two years of debt reduction effort by a new management team and other significant improvements in the Company's operating performance, the Company continues to suffer from a significant working capital deficit and has been unable to restructure or otherwise renegotiate its remaining debt load in excess of $10 million. These legacy debts, primarily originated from several ill-fated acquisitions in the late 1990s, have made it impossible for the company to attract new financing to restructure the business and stimulate growth. Accordingly, the Company has filed a voluntary petition for protection pursuant to Chapter 11. The Company intends to file promptly a plan of reorganization with the U.S. Bankruptcy Court, allowing the Company to restructure its liabilities and capital structure in such a manner that the Company can re-emerge and compete successfully in its marketplace. The Company continues to sell, market and fully support its products and services as it did prior to the filing, and believes that consummation of a reorganization pursuant to Chapter 11 is the best way to both protect and preserve the company's existing business and provide the basis for a platform for future growth. HomeSeekers.com Inc. (Pink Sheets: HMSK), d/b/a Realigent Inc., is a leading technology solutions provider to the real estate industry. The company offers numerous products, applications, services and custom solutions serving brokers, agents, multiple listing services, builders, lenders, consumers and all constituents involved in a real estate transaction. Detailed product and service offerings can be viewed at the company's primary Web site at http://www.realigent.com HOMESEEKERS.COM: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Lead Debtor: Homeseekers.com, Inc. 2800 Saturn Street Suite 200 Brea, California 92821 dba Realigent, Inc. aka Dine Magazine LLC aka Foresclosureseekers.com aka Formulator Group aka Genstar Media aka Holloway Publications, Inc. aka HomeSeekersFrance.com aka Home Seekers Magazines, Inc. aka Imco LLC aka Information Solutions Group, Inc. aka Immediate Results Through Intuitive Systems LLC aka Orlando House & Home aka RealEstateForms.com aka RealtySeekers International LLC aka Real Estate Information Inc. aka REO Seekers LLC aka Visual Listings, Inc. aka XMLS LLC aka YMLS LLC aka Realigent Development Inc. aka Aurora Energy Inc. aka FOCUS Publications Inc. aka NDS Software Inc. aka Nevada Data Systems Inc. aka TDT LLC aka XRF Corporation Bankruptcy Case No.: 03-37669 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Realigent Development, Inc. 03-37668 Type of Business: HomeSeekers.com, which does business as Realigent, allows potential buyers to search online commercial and residential real estate listings on its Web site and then links the buyer with a real estate agent. Chapter 11 Petition Date: November 6, 2003 Court: Southern District of New York (Poughkeepsie) Judge: Cecelia G. Morris Debtors' Counsel: Alan David Halperin, Esq. Halperin & Associates 1775 Broadway Suite 515 New York, NY 10019 Tel: 212-765-9100 Fax: 212-765-0964 Estimated Assets: $100,000 to $500,000 Estimated Debts: $1 Million to $10 MIllion Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Alpenglow, Inc. $747,500 14118 168th Avenue Woodinville, WA 98072 Salomon, Smith, Barney, Inc. $369,199 388 Greenwich St. New York, NY 10013 The Action Group, Inc. $260,000 5757 W. Century Blvd. Suite 700 Los Angeles, CA 90045 Mortgage Information Corp. $112,331 Toronto Real Estate Board $110,194 Stradling Yocca Carlson Rauth $108,963 GE Capital $90,000 Publishers Press $83,080 Steve Wostenberg $74,583 Karl Ziegler $74,583 Metrolist Services $73,000 Maggie Etheridge-Ureno $65,633 Eddie Ureno $65,633 Wells Fargo Bank Card $65,230 Spherion, Inc. $54,540 Baker Botts LLP, Attorneys $51,867 Stonefield Josephson Inc. $48,508 First Sierra Financial $46,566 Michael O'Day $46,540 Merril Communications LLC $44,432 HOST MARRIOTT: Completes Private Placement of New Senior Notes -------------------------------------------------------------- Host Marriott Corporation (NYSE: HMT) announced that Host Marriott, L.P. closed its private placement to qualified institutional buyers of $725 million senior notes due 2013, or the "New Notes" on November 6, 2003. The New Notes bear interest at a rate of 7-1/8%. The proceeds from the New Notes will be used to redeem $429 million of Host Marriott L.P.'s existing 7-7/8% Series A senior notes due in 2005 and $282 million of its 8.45% Series C senior notes due in 2008. The terms of both existing notes require the payment of a premium to the holders in exchange for the right to retire these notes in advance of their maturity dates. The date of redemption is December 8, 2003. The call premium payments, additional interest expense on the New Notes during the call period and the acceleration of the related deferred financing fees will result in a one-time increase to interest expense of approximately $33 million, impacting earnings and Funds From Operations, or FFO, per diluted share for the year. Additionally, Host Marriott Corporation announced that its full year earnings will be affected by the Financial Accounting Standards Board, or "FASB," decision to indefinitely defer the application of accounting standard SFAS No. 150 with respect to minority interests in certain consolidated ventures, which was announced by the FASB on October 29, 2003. The reversal of the FASB's position on this matter will result in a $24 million gain being recorded in the fourth quarter, eliminating the $24 million loss the Company had recorded in the third quarter. Accordingly, the Company is issuing the following updated guidance for full year 2003: * Diluted loss per share should be approximately $.78 to $.73; * Net loss should be approximately $183 million to $169 million; * FFO per diluted share should be approximately $.51 to $.55; and * Adjusted Earnings before Interest Expense, Taxes, Depreciation and Amortization and other items, or Adjusted EBITDA, remains consistent with prior guidance of approximately $715 million to $730 million. Host Marriott Corporation (S&P/B+/Stable) is a lodging real estate company, which owns 122 upscale and luxury full-service hotel properties primarily operated under Marriott, Ritz-Carlton, Four Seasons, Hyatt, Hilton and Swissotel brand names. For further information on Host Marriott Corporation, visit the Company's Web site at http://www.hostmarriott.com HUNTSMAN: Reports Sequential Increase in Third-Quarter EBITDA ------------------------------------------------------------- The combined Huntsman companies reported third quarter 2003 EBITDA of $170.0 million, which includes $10.7 million in restructuring charges and losses on the sale of accounts receivable. This compares to second quarter 2003 pro forma EBITDA of $136.3 million and third quarter 2002 pro forma EBITDA of $210.5 million, which included $53.7 million and $16.0 million, respectively, of restructuring charges and losses on the sale of accounts receivable. The combined Huntsman companies include HMP Equity Holdings Corporation, and its operating subsidiaries Huntsman LLC, Huntsman International Holdings LLC and Huntsman Advanced Materials LLC. Peter R. Huntsman, President and CEO, stated, "We are pleased that EBITDA at the Huntsman companies stabilized in the third quarter relative to second quarter at a time when earnings in our industry generally have been soft. We believe this reflects the strength of our differentiated product portfolio and our vigilance in managing costs as the chemical industry remains in the trough of the cycle." Mr. Huntsman also said the Huntsman companies have commenced an initiative to reduce fixed costs by a minimum of $200 million over the next eighteen months. He further stated the current conditions in the chemical industry present the Huntsman companies with "an opportunity to reposition our businesses at the bottom of the cycle to ensure their long-term competitiveness and profitability." Each of the six Huntsman business segments, Polyurethanes, Advanced Materials, Performance Products, Pigments, Base Chemicals and Polymers, has developed cost reduction plans to meet the overall minimum $200 million goal. The Company also plans to reduce costs by increasing the use of shared services across its businesses. The Company expects to make additional announcements of site consolidations and headcount reductions in the near future. The Huntsman companies completed a $380 million offering of senior secured notes at Huntsman LLC in the third quarter and raised $205 million of additional Term B and Term C loans at Huntsman International in October. Proceeds from these transactions have allowed Huntsman to make significant pre-payments of term debt maturities and significant payments under the revolving credit facilities of both companies, freeing up substantial amounts of liquidity as trough conditions persist in the industry. Huntsman company chart available on http://www.huntsman.com As a result of HMP's acquisition of the 39% minority interest in Huntsman International on May 9, 2003 (HMP now directly and indirectly owns 100% of Huntsman International), HMP's financial results include the consolidated results of Huntsman International for the periods from May 2003. In prior periods, the combined Huntsman companies' results included their share of the equity income from Huntsman International. HMP's financial results also include the consolidated results of Huntsman Chemical Company Australia from October 2002 forward and the equity income from HCCA for all prior periods. On June 30, 2003, HMP and its parent company, Huntsman Holdings LLC, completed the acquisition of Vantico Group S.A. Advanced Materials was formed to hold the Vantico business. As a result of the Vantico acquisition, HMP's financial results include the results of Vantico from July 2003. The following pro forma information is provided to show HMP financial results as if Huntsman International, HCCA and Advanced Materials were consolidated for all periods presented and Huntsman LLC financial results as if HCCA was consolidated for all periods presented. Three Months Ended September 30, 2003 (Compared to Three Months Ended September 30, 2002 Pro Forma) For the three months ended September 30, 2003, HMP had EBITDA of $170.0 million, which includes $10.7 million in restructuring charges and losses on the sale of accounts receivable. This compares to second quarter 2003 pro forma EBITDA of $136.3 million and third quarter 2002 pro forma EBITDA of $210.5 million, which included $53.7 million and $16.0 million, respectively, of restructuring charges and losses on the sale of accounts receivable. Revenues for the three months ended September 30, 2003 increased to $2,301.2 million, or 9%, from $2,112.6 million during the same period in 2002. The increase in revenue was due to an increase of revenues in all segments. EBITDA for the three months ended September 30, 2003 decreased to $170.0 million, or 19%, from $210.5 million during the same period in 2002. The decrease in EBITDA was due to a decrease in EBITDA in the Polyurethanes, Performance Products, Polymers and Base Chemicals segments, partially offset by increases in EBITDA in the Advanced Materials and Pigments segments. Polyurethanes The increase in revenues in the Polyurethanes segment was primarily the result of higher average selling prices principally due to the strength of the major European currencies versus the U.S. dollar, offset in part by lower volumes resulting largely from a reduction in spot sales to co-producers in the 2003 period. The decrease in EBITDA in the Polyurethane segment was primarily the result of revenue increases failing to keep pace with substantial increases in raw material costs due to the rise in oil and natural gas prices, and the incurrence in the third quarter of a $3.7 million restructuring charge taken in connection with cost reduction efforts at our Rozenburg, Netherlands facility. Advanced Materials The increase in revenues in the Advanced Materials segment was primarily the result of higher average selling prices, principally due to the strength of the major European currencies versus the U.S. dollar, and a 1% volume increase. The increase in EBITDA in the Advanced Materials segment was the result of increased revenue, a reduction of SG&A costs primarily due to a reduction in restructuring charges, and reduced costs as a result of cost reduction initiatives. Performance Products The increase in revenues in the Performance Products segment was primarily the result of higher average selling prices in North America in response to higher raw material costs, strong volume gains in our linear alkylbenzene, ethyleneamines, ethanolamines and ethylene glycol product lines and higher average selling prices in Europe due to the strengthening of the major European currencies versus the U.S. dollar, partially offset by lower volumes in Europe due to softer European demand and decreased European export business as a result of the strength of the major European currencies. The decrease in EBITDA in the Performance Products segment was primarily the result of revenue increases failing to keep pace with substantial increases in raw material costs. Pigments The increase in revenues in the Pigments segment was primarily the result of higher average selling prices, the majority of which resulted from the strengthening of the major European currencies versus the U.S. dollar, which more than offset a 1% volume decline. The increase in EBITDA in the Pigments segment was primarily the result of improved margins due to a more favorable industry supply-demand balance in the most recent quarter. Polymers The increase in revenues in the Polymers segment was primarily the result of higher volumes and higher average selling prices as industry demand strengthened and prices increased in response to higher raw material costs. The decrease in EBITDA in the Polymers segment was primarily the result of revenue increases failing to keep pace with substantial increases in raw material costs due to the rise in oil and natural gas prices. Base Chemicals The increase in revenues in the Base Chemicals segment was primarily the result of higher volumes in the U.S. as U.S. demand strengthened, and higher average selling prices in the U.S. and Europe in response to higher raw material costs. The decrease in EBITDA in the Base Chemicals segment was primarily the result of revenue increases failing to keep pace with substantial increases in raw material costs due to the rise in oil and natural gas prices. Unallocated Items Unallocated items include unallocated corporate overhead, foreign exchange gains and losses and restructuring and reorganization costs. For the three months ended September 30, 2003, expenses from unallocated items decreased by $6.1 million to $18.5 million from $24.6 million for the same period in 2002. The decrease was primarily due to a reduction of restructuring and reorganization expenses versus the same period in 2002, partially offset by higher unallocated foreign exchange gains in the current period. Huntsman LLC (excluding HIH) Three Months Ended September 30, 2003 (Compared to Three Months Ended September 30, 2002) For the three months ended September 30, 2003, Huntsman LLC (excluding HIH) had EBITDA of $49.7 million on revenues of $828.9 million, compared to pro forma EBITDA of $70.0 million on revenues of $730.5 million for the same period in 2002. This compares to second quarter 2003 reported pro forma EBITDA of $46.6 million, which included $0.9 million of restructuring charges. The pro forma results of Huntsman LLC exclude the consolidated results of Huntsman International and include the consolidated results of HCCA for all periods. Revenues for the three months ended September 30, 2003 increased to $828.9 million, or 13%, from $730.5 million during the same period in 2002. Revenues increased in all business segments as the result of higher volumes and higher average selling prices as industry demand strengthened and prices increased in response to higher raw material costs. EBITDA for the three months ended September 30, 2003 decreased to $49.7 million, or 29%, from $70.0 million during the same period in 2002. EBITDA decreased in all segments as the result of the increases in revenues failing to keep pace with substantial increases in raw material costs due to the rise in oil and natural gas prices. Performance Products The increase in revenues in the Performance Products segment was primarily the result of higher average selling prices in response to higher raw material prices and strong volume gains in our linear alkylbenzene, ethanolamines and ethylene glycol product lines. The decrease in EBITDA in the Performance Products segment was primarily the result of revenue increases failing to keep pace with substantial increases in raw material costs. Polymers The increase in revenues in the Polymers segment was primarily the result of higher volumes and higher average selling prices as industry demand strengthened and prices increased in response to higher raw material costs. The decrease in EBITDA in the Polymers segment was primarily the result of revenue increases failing to keep pace with substantial increases in raw material costs due to the rise in oil and natural gas prices. Base Chemicals The increase in revenues in the Base Chemicals segment was primarily the result of higher volumes and higher average selling prices as industry demand strengthened and prices increased in response to higher raw material costs. The decrease in EBITDA in the Base Chemicals segment was primarily the result of revenue increases failing to keep pace with substantial increases in raw material costs due to the rise in oil and natural gas prices. Unallocated Items Unallocated items include unallocated corporate overhead, foreign exchange gains and losses and reorganization costs. For the three months ended September 30, 2003, expenses from unallocated items decreased by $10.5 million to $8.9 million from $19.4 million for the same period in 2002. The decrease was primarily due to reduced reorganization expenses in the 2003 period as compared to the same period in 2002. Three Months Ended September 30, 2003 (Compared to Three Months Ended September 30, 2002) For the three months ended September 30, 2003, Huntsman International had EBITDA of $104.2 million on revenues of $1,275.7 million, compared to EBITDA of $131.0 million on revenues of $1,195.2 million for the same period in 2002. This compares to EBITDA of $88.5 million in the second quarter of 2003, which included charges of $39.0 million. The third quarter 2003 results of Huntsman International include charges of $10.7 million, consisting of $4.8 million in restructuring charges and $5.9 million in loss on sale of accounts receivable. The $4.8 million in restructuring charges relate to an overall corporate cost reduction program to be implemented throughout 2003 and 2004, and consist of a $1.1 million charge related to the company's Pigments segment and a $3.7 million charge relating to the company's Polyurethanes segment. Revenues for the three months ended September 30, 2003 increased to $1,275.7 million, or 7%, from $1,195.2 million during the same period in 2002. The increase in revenue was due to an increase in revenues in the Polyurethanes, Performance Products and Pigments segments and relatively flat revenues in the Base Chemicals segment. EBITDA for the three months ended September 30, 2003 decreased to $104.2 million, or 20%, from $131.0 million during the same period in 2002. The decrease in EBITDA was due to decreases in EBITDA in the Polyurethanes and Base Chemicals segments, partially offset by increases in EBITDA in the Performance Products and Pigments segments. Polyurethanes The increase in revenues in the Polyurethanes segment was primarily the result of higher average selling prices principally due to the strength of the major European currencies versus the U.S. dollar, offset in part by lower volumes resulting largely from a reduction in spot sales to co-producers in the 2003 period. The decrease in EBITDA in the Polyurethane segment was primarily the result of revenue increases failing to keep pace with substantial increases in raw material costs due to the rise in oil and natural gas prices, and the incurrence in the third quarter of a $3.7 million restructuring charge taken in connection with cost reduction efforts at our Rozenburg, Netherlands facility. Performance Products The increase in revenues in the Performance Products segment was primarily the result of higher average surfactant selling prices primarily due to the strength of the major European currencies versus the U.S. dollar, partially offset by a decline in surfactant sales volumes due to softer European demand and weaker export sales. Additionally, ethyleneamines revenues increased largely due to increased export sales. The increase in EBITDA in the Performance Products segment was primarily the result of reductions in costs. Pigments The increase in revenues in the Pigments segment was primarily the result of higher average selling prices, the majority of which resulted from the strengthening of the major European currencies versus the U.S. dollar, which more than offset a 1% volume decline. The increase in EBITDA in the Pigments segment was primarily the result of improved margins due to a more favorable industry supply-demand balance. Base Chemicals The increase in revenues in the Base Chemicals segment was primarily the result of higher average selling prices in response to higher raw material costs, partially offset by lower sales volumes. The decrease in EBITDA in the Base Chemicals segment was primarily the result of revenue increases failing to keep pace with substantial increases in raw material costs due to the rise in oil and natural gas prices. Unallocated Items Unallocated items include unallocated corporate overhead, foreign exchange gains and losses and reorganization costs. For the three months ended September 30, 2003, expenses from unallocated items increased by $1.1 million to $9.4 million from $8.3 million for the same period in 2002. The increase was primarily due to increased losses on the sale of accounts receivable. Three Months Ended September 30, 2003 (Compared to Three Months Ended September 30, 2002 Pro Forma) For the three months ended September 30, 2003, Advanced Materials had EBITDA of $16.2 million on revenues of $257.8 million, compared to EBITDA of $6.5 million on revenues of $241.2 million for the same period in 2002. EBITDA for the three months ended September 30, 2002 included charges of $5.9 million. This compares to an EBITDA loss of $7.0 million in the second quarter of 2003, which included charges of $22.0 million. Advanced Materials The increase in revenues in Advanced Materials was primarily the result of higher average selling prices, principally due to the strength of the major European currencies versus the U.S. dollar, and a 1% volume increase. The increase in EBITDA in Advanced Materials was the result of increased revenue, a reduction of SG&A costs primarily due to a reduction in restructuring charges, and reduced costs as a result of cost reduction initiatives. Liquidity HMP Equity Holdings HMP is a holding company established to hold the equity in Huntsman LLC, Huntsman International and Advanced Materials. HMP has no short-term debt outstanding and maintains no short-term credit facilities. As of September 30, 2003, HMP has approximately $163 million of cash on its consolidated balance sheet. Huntsman LLC (excluding HIH) As of September 30, 2003, Huntsman LLC had borrowings of approximately $85 million outstanding under its $275 million revolving credit facility in addition to approximately $14 million in letters of credit issued, and Huntsman LLC had approximately $28 million of cash on its balance sheet. Huntsman LLC's cash and undrawn commitments under the revolving credit facility, as of September 30, 2003, were approximately $204 million, subject to covenants under the revolving credit facility, including a minimum revolving credit facility availability covenant. Capital expenditures for the third quarter were approximately $28 million compared with $13 million in the third quarter of 2002. The capital spending through September 30, 2003 of approximately $65 million is representative of our normalized capital expenditure run rate. On September 30, 2003, Huntsman LLC completed a $380 million offering of Senior Secured Notes issued at a discount, the proceeds of which were used to repay approximately $65 million on the revolving credit facility and approximately $297 million on the Term Loan A. As a result of this offering, there are no scheduled term loan payments under Huntsman LLC's senior secured credit facilities until December of 2005. Huntsman International As of September 30, 2003, Huntsman International had borrowings of $199 million outstanding under its $400 million revolving credit facility in addition to approximately $7 million in letters of credit issued, and Huntsman International had approximately $81 million of cash on its balance sheet. Huntsman International also maintains $25 million of short-term overdraft facilities, of which approximately $21 million was available at September 30, 2003. As part of a refinancing that was completed on October 22, 2003 as described below, approximately $53 million was repaid against the revolving credit facility. Total liquidity of as of September 30, 2003 was approximately $296 million, or approximately $349 million on a pro forma basis after giving effect to the October 22, 2003 refinancing. Capital expenditures for the third quarter were approximately $42 million compared with $40 million in the third quarter of 2002. On October 17, 2003, Huntsman International amended its senior secured credit facilities. The amendment provides, among other things, for changes to certain financial covenants, including the leverage and interest coverage ratios, the annual amount of permitted capital expenditures, and the consolidated net worth covenant. These changes to the financial covenants apply to the quarterly period ended September 30, 2003 and will continue through the quarterly periods ended December 31, 2004. The amendment also allows for the issuance of $205 million of additional term B and term C loans, which was accomplished on October 22, 2003, the net proceeds of which have been applied to pay down our revolving loan facility by approximately $53 million, and the remainder of the net proceeds have been applied to repay, in full, the term A loan. As a result of the prepayment of term debt with the proceeds from the recent refinancing of the term loan A, there are no scheduled term debt maturities under the senior secured credit facilities until the second quarter 2005. In 2005 and 2006, the scheduled term debt maturities under the senior secured credit facilities are approximately $12 million in each year. Huntsman Advanced Materials As of September 30, 2003, Advanced Materials had no borrowings outstanding under its $60 million revolving credit facility and approximately $15 million in letters of credit issued thereunder. Advanced Materials had approximately $46 million of cash on its balance sheet as of September 30, 2003 and total liquidity was approximately $91 million. Advanced Materials has no scheduled debt amortization payments until July 2008. The combined Huntsman companies (S&P, B+ Corporate Credit Rating, Developing Outlook) constitute the world's largest privately held chemical company. The operating companies manufacture basic products for a variety of global industries including chemicals, plastics, automotive, footwear, paints and coatings, construction, high-tech, agriculture, health care, textiles, detergent, personal care, furniture, appliances and packaging. Originally known for pioneering innovations in packaging, and later, rapid and integrated growth in petrochemicals, Huntsman-held companies today have more than 13,000 employees, facilities in 44 countries and had 2002 revenues of more than $7 billion. HYTEK MICROSYSTEMS: Red Ink Continued to Flow in Third Quarter -------------------------------------------------------------- Hytek Microsystems, Inc. (OTC Bulletin Board: HTEK) announced unaudited results for the three and nine month periods ended September 27, 2003. The Company incurred a net loss of $182,887 for the three months ended September 27, 2003, as compared to a net loss of $377,684 for the same period last year. Net revenues were $2.5 million for the third quarter of 2003, compared to prior year third quarter net revenues of $2.7 million. For the first nine months of fiscal 2003, the Company had a net loss of $389,428 as compared to a net loss of $59,427 for the first nine months of fiscal 2002. Net revenues for the nine-month period in 2003 were $7.6 million, a 19% decrease from net revenues of $9.4 million for the same period in 2002. At September 27, 2003, current backlog was approximately $5.7 million as compared to $6.5 million at June 28, 2003. Although Hytek incurred a net loss of $182,887 for the third quarter of 2003, on a 6% decrease in revenues during that quarter, operating results were improved over the comparable period last year. "We are continuing our internal efforts to improve operational efficiencies, add management expertise, attract new customers and expand business opportunities with existing customers," stated John Cole, Hytek's chief executive officer. "These are ongoing programs that generate results as changes are implemented over time. Consequently, we do not expect to see significant improvements in operating results this fiscal year." Founded in 1974, Hytek, headquartered in Carson City, Nevada, specializes in custom microelectronic packaging solutions for use in oil exploration, military applications, satellite systems, industrial electronics, opto-electronics and other OEM applications. * * * Going Concern Uncertainty In its most recent Form 10-QSB filed with Securities and Exchange Commission, Hytek reported: "In the opinion of management, the [Company's] unaudited financial statements include all adjustments (consisting of only normal recurring adjustments) that are necessary in order to make the financial statements contained herein not misleading. These financial statements, notes and analyses should be read in conjunction with the financial statements for the fiscal year ended December 28, 2002, and notes thereto, which are contained in our Annual Report on Form 10-KSB for such fiscal year. The reports of our independent auditors in the fiscal 2002 financial statements included explanatory paragraphs stating that there is substantial doubt with respect to our ability to continue operating as a going concern. The operating results for the three- and nine-month periods ended September, 27 2003 are not necessarily indicative of the results that may be expected for the entire year ending January 3, 2004. We operate on a 52/53-week fiscal year, which approximates the calendar year. "The unaudited financial statements as of September 27, 2003 have been prepared in accordance with accounting principles generally accepted in the United States, which require the use of estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ materially from those estimates." IESI CORP: Sept. 30 Net Capital Deficit Burgeons to $56 Million --------------------------------------------------------------- IESI Corporation reported that revenue for the three months ended September 30, 2003 increased 12.2% to $64.2 million, as compared with revenue of $57.2 million for the corresponding three-month period in 2002. Income from operations for the three months ended September 30, 2003 was $4.9 million, substantially the same as the corresponding period in 2002. Net income for the three months ended September 30, 2003 was a loss of $2.7 million, as compared with a loss of $264,000 for the corresponding period in 2002. Revenue for the nine months ended September 30, 2003 increased 15.5% to $180.5 million, as compared with revenue of $156.2 million for the corresponding nine-month period in 2002. Income from operations for the nine months ended September 30, 2003 was $13.4 million, as compared with $16.1 million for the corresponding period in 2002. Loss before cumulative effect of change in accounting principle (related to the Company's adoption of SFAS No. 143) for the nine months ended September 30, 2003 was $2.9 million, as compared with net income of $780,000 for the corresponding period in 2002. Effective January 1, 2003, the Company adopted Statement of Financial Accounting Standards No. 143, "Accounting for Asset Retirement Obligations." SFAS No. 143 required the Company to change its method of accounting for landfill capping, closure and post-closure costs. At September 30, 2003, the Company's balance sheet shows a working capital deficit of about $5 million, and a total shareholders' equity deficit of about $56 million. During the quarter, as previously announced, IESI purchased certain assets from Waste Corporation of Texas LP, a Waste Corporation of America company. The assets purchased consist of 3 hauling operations located in Mineral Wells, Stephenville, and Graham, Texas and one transfer station located in Granbury, Texas. In addition, during the quarter, IESI commenced operations at three landfills in its South Region. The first, in early July was a landfill purchased from the City of Weatherford, Texas (approximately 30 miles west of Ft. Worth). In late August IESI opened two greenfield landfills in Richwoods, Missouri (approximately 50 miles southwest of St. Louis) and in Oakdale, Louisiana (approximately 60 miles north of Lake Charles and Lafayette). On October 9, 2003, IESI acquired the stock of Seneca Meadows, Inc., the owner and operator of the Seneca Meadows Landfill in Seneca Falls, New York. The Seneca Meadows Landfill is a fully permitted municipal solid waste landfill located in the Finger Lakes Region of upstate New York, approximately 45 miles southeast of the City of Rochester, New York, that is permitted to accept an average of 6,000 tons of municipal solid waste per day. Revenue at the landfill for fiscal year 2002 was $47.7 million. On October 10, 2003, IESI completed the sale of $47.5 million of new equity capital, primarily to existing shareholders and their affiliates and management. In addition, IESI plans to sell an additional $2.5 million to $7.5 million of equity. The new Series E Convertible Preferred Stock is the most senior class of IESI's equity and has substantially the same terms and conditions of the Company's outstanding Series D Preferred Stock. The new preferred stock was used to help finance the purchase of Seneca Meadows. To date, IESI has raised over $240.0 million of funded equity capital. On the same day, IESI finalized a refinancing of its senior secured credit facility. The expanded $400.0 million senior secured credit facility is made up of a $200.0 million revolver and a $200.0 million term loan. The revolver matures October 2008 and the term loan matures in October 2010. The $200.0 million term loan and borrowings of $33.7 million under the revolver were used to refinance IESI's existing credit facility, and to finance the purchase price and expenses related to the Seneca Meadows acquisition. Future borrowings under the revolver will be available to finance acquisitions, capital expenditures, working capital and other general corporate purposes. The credit facility was rated as B1 and B+ by Moody's Investors Services and Standard and Poor's, respectively. Both agencies have given IESI a stable outlook. Fleet Securities, Inc. was the arranger for the facility, Fleet National Bank is the Administrative Agent and LaSalle National Bank Association is the Syndication Agent. "The third quarter of 2003 was one of the most exciting quarters in our Company's history," said Mickey Flood, President and Chief Executive Officer of IESI. "We are now operating four more landfills than we operated at the end of the 2nd quarter. Seneca Meadows Landfill, the largest of the four, was a fantastic acquisition for us. Seneca Meadows Landfill is the largest landfill in New York State. This premier landfill solidifies our Northeast Region operations and promises to have a huge positive impact on our revenue growth and income from operations going forward. The other three new landfills, all of which are in our South Region, may not be as large as Seneca Meadows Landfill, but all should be catalysts for additional top and bottom line growth in the markets they are located and also to our Company. We could not have done these transactions without the continued support of our investors and bank group, and I thank each of them for their support." The Company is one of the leading regional, non-hazardous solid waste management companies in the United States. The Company provides collection, transfer, disposal and recycling services to 275 communities, including more than 545,000 residential and 55,000 commercial and industrial customers, in nine states. IMPATH INC: U.S. Trustee Appoints 7-Member Creditors' Committee --------------------------------------------------------------- The United States Trustee for Region 2 appointed 7 members to an Official Committee of Unsecured Creditors in Impath Inc.'s Chapter 11 case: 1. First American Commercial Bancorp 255 Woodclift Drive Fairport, NY 14450-4226 Attn: J. Bruce Masterson, Esq. Tel. No. (585) 598-0900 2. Park National Bank & Trust of Chicago 2958 North Milwaukee Avenue Chicago, IL 60618 Attn: Patricia A. Widmar Tel. No. (773) 384-3400 3. Pullman Bank 3930 Edison Parkway, Suite 310 Mishawaka, IN 46545 Attn: Patricia A. Widmar Tel. No. (574) 243-1005 4. Pharmingen 1 Becton Drive Franklin Lakes, NJ 07417 Attn: Elise Magree Becton Dickinson 5. DukoCytomation California, Inc. 6392 Vin Real Carpinteria, CA 93013 Attn: Michael J. Sarrasin, Esq. Tel. No. (805) 566-5487 6. Dr. Ivetta Kogarko c/o Stassia Kogarko BIK-Collaborative Tissue Group 197 M Boston Post Road, #248 Marlborough, MA 01752 Tel. No. (617) 791-2395 7. Alpha Therapeutic Corporation 5555 Valley Boulevard Los Angeles, CA 90032 Attn: Harry Knapp Tel. No. (323) 227-7541 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Headquartered in New York, New York, Impath Inc., together with its subsidiaries, is in the business of improving outcomes for cancer patients by providing patient-specific diagnostic and prognostic services to pathologists and oncologists, providing products and services to biotechnology and pharmaceutical companies, and licensing software to hospitals, laboratories, and academic medical centers. The Company filed for chapter 11 protection on September 28, 2003 (Bankr. S.D.N.Y. Case No. 03- 16113). George A. Davis, Esq., at Weil, Gotshal & Manges, LLP represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $192,883,742 in total assets and $127,335,423 in total debts. INT'L STEEL: WTO Ruling Doesn't Terminate US Steel Safeguards ------------------------------------------------------------- International Steel Group said that the denial of the United States Government's appeal of the World Trade Organization ruling on Section 201 Steel Safeguards cannot result in the immediate termination of the Administration's tariffs on imported steel. "The WTO ruling against the President's steel safeguards, which is subject to ratification by the WTO Dispute Settlement Body in any event, said that the International Trade Commission did not provide sufficient explanations for some of its conclusions on the injury caused by the surge of steel imports. The WTO did not rule that the tariffs imposed under Section 201 of our nation's trade laws violated WTO agreements. Furthermore, the denial of the Administration's appeal of the WTO decision does not automatically terminate the Section 201 steel tariffs," said Wilbur L. Ross, chairman of International Steel Group. Mr. Ross said that the ITC could respond to the appellate body's ruling by providing additional explanations about its findings, thereby eliminating the basis for the WTO's initial ruling. He also said that under US law, implementation of an adverse decision from the WTO Appellate Body requires the Administration to follow a statutorily prescribed process. The President does not have authority to terminate the steel safeguards in response to an adverse WTO decision outside of the Congressionally-mandated process. International Steel Group (S&P, BB Corporate Credit Rating, Developing Outlook) was formed by WL Ross & Co. LLC to acquire and operate globally competitive steel facilities. Since its formation, International Steel Group Inc. has grown to become the second largest integrated steel producer in North America, based on steelmaking capacity, by acquiring out of bankruptcy the steelmaking assets of LTV Steel Company Inc., Acme Steel Corporation and Bethlehem Steel Corporation. The company has the capacity to cast more than 18 million tons of steel products annually. It ships a variety of steel products from 11 major steel producing and finishing facilities in six states, including hot- rolled, cold-rolled and coated sheets, tin mill products, carbon and alloy plates, rail products and semi-finished shapes serving the automotive, construction, pipe and tube, appliance, container and machinery markets. INTERNET SERVICES: Committee Taps Lowenstein Sandler as Counsel --------------------------------------------------------------- The Official Committee of Unsecured Creditors of Internet Services of Michigan, Inc.'s chapter 11 cases, seeks to employ Lowenstein Sandler PC as Counsel. The Committee submits that the retention of Lowenstein Sandler is necessary to enable it to property execute its duties in the Debtors' chapter 11 case. The professional services that is expected of Lowenstein Sandler include: a) advising the Committee with respect to its duties and powers; b) assisting the Committee in investigating the acts, conduct, assets, liabilities, and financial condition of the Debtors, the operation of the Debtors' businesses, potential claims, and any other matters relevant to the case or to the sale of assets or confirmation of a plan of reorganization or liquidation; c) assisting the Committee in the review and/or formulation of a Plan; d) assisting the Committee in requesting the appointment of a trustee or examiner should such action be deemed necessary; e) preparing necessary motions, applications and other pleadings as may be appropriate and authorized by the Committee and appearing in court to prosecute such pleadings; and f) performing such other legal services as may be required and be in the interests of those represented by the Committee. Lowenstein will be compensated for services rendered on an hourly basis: Members $285 - $535 per hour Senior Counsel $250 - $395 per hour Counsel $240 - $325 per hour Associates $150 - $260 per hour Legal Assistants $75 - $140 per hour Kenneth A. Rosen, Esq., will lead the team in this engagement. Mr. Rosen adds that the firm is a "disinterested person" as that term is defined in the Bankruptcy Code. Headquartered in Mishawaka, Indiana, Internet Services of Michigan, Inc., an internet service provider, files for chapter 11 protection on September 23, 2003 (Bankr. Del. Case No. 03-12921). Linda Marie Carmichael, Esq., at White And Williams, LLP represents the Debtors in their restructuring efforts. When the Company filed protection from its creditors, it estimated its debts and assets of more than $10 million each. INTRAWEST: Reports Significant Growth in Third-Quarter Results -------------------------------------------------------------- Intrawest Corporation, the world's leading operator and developer of village-centered resorts, announced its results for the fiscal 2004 first quarter ended September 30, 2003. Total revenue for the quarter was $227.8 million compared with $114.5 million for the same period last year. Income from continuing operations was $0.9 million or $0.02 per share compared with a loss of $11.1 million or $0.23 per share in 2002. Total Company EBITDA (earnings before interest, income taxes, non-controlling interest, depreciation and amortization) was $25.5 million compared with $6.5 million in 2002. Cash flow from continuing operating activities was $18.0 million in the first quarter of fiscal 2004 compared with negative cash flow of $114.9 million in the same period last year. This positive swing in cash of $132.8 million was mainly due to increased real estate closings and the impact of selling the first four projects to Leisura. "Our successful migration to a less capital-intensive model is reflected in the positive swing in cash flow this quarter," said Joe Houssian, Intrawest's chairman, president and chief executive officer. The format of the statement of operations has been changed to reflect the company's move to a more expertise-based business model and the growth in management services income. Revenue and expenses are now broken out into three primary sources: resort operations, management services and real estate development. Management services mainly comprise lodging and property management fees, golf course management fees, RezRez reservations and licensing fees, and real estate development and sales services fees. Resort operations revenue and profit contribution increased to $54.4 million and $3.5 million, respectively, from $49.1 million and $1.7 million due mainly to strong summer results from mountain operations and food and beverage. Management services revenue and profit contribution increased to $24.5 million and $2.6 million, respectively, from $18.1 million and $2.4 million primarily as a result of higher lodging and property management fees and increased real estate development and sales services fees. While occupied room nights in the first quarter were approximately the same as the first quarter last year, average daily rates increased five per cent. Revenue from real estate development increased to $144.5 million from $47.1 million in 2002 as 317 units were closed compared with 87 units last year. The timing of unit closings is tied to a significant degree to construction completion and two major projects at Sandestin and Lake Las Vegas completed construction during the first quarter, allowing the closing of 229 units. The profit contribution from real estate development increased to $14.5 million from $3.1 million last year. Resort Club sales in the quarter were $12.4 million, up from $12.1 million last year. Closed real estate units and pre-sold units scheduled to close in fiscal 2004 now amount to approximately $480 million. In addition, Leisura has pre-sales of approximately $280 million due to close in fiscal 2004 and 2005. The Leisura partnerships were established earlier in 2003 with Manulife Capital in Canada and JPMorgan Fleming in the U.S. to take on the production phase of Intrawest's real estate development business. Intrawest's Board of Directors declared a dividend of Cdn$0.08 per common share payable on January 21, 2004 to shareholders of record on January 7, 2004. Intrawest Corporation (IDR:NYSE; ITW:TSX) (S&P, BB- Long-Term Corporate Credit Rating, Positive Outlook) is the world's leading developer and operator of village-centered resorts. The company owns or controls 10 mountain resorts, including Whistler Blackcomb, North America's most popular mountain resort. Intrawest also owns Sandestin Golf and Beach Resort in Florida and has a premier vacation ownership business, Club Intrawest. The Company is developing additional resort villages at six resorts in North America and Europe. The Company has a 45 per cent interest in Alpine Helicopters Ltd., owner of Canadian Mountain Holidays, the largest heli-skiing operation in the world. Intrawest is headquartered in Vancouver, British Columbia and is located on the World Wide Web at http://www.intrawest.com ISLE OF CAPRI: Look for Second-Quarter Results Tomorrow ------------------------------------------------------- Isle of Capri Casinos, Inc. (Nasdaq: ISLE) will release its second quarter results on Thursday, November 13, 2003, and will host a conference call and simultaneous webcast on Friday, November 14, 2003, at 9:30 a.m. central time. The conference call will consist of a review of the second quarter results and other statements by management including business and company trends that will be followed by a question and answer session. The toll free telephone number to access the call for the U.S. is 888-423-3280. The international telephone number to access the call is 651-224-7558. The conference call reference number is 705930. The investor's conference call will be recorded and available for review starting at 1:00 p.m. on Friday, November 14, 2003, until midnight on Wednesday, November 19, 2003, by dialing 800-475-6701 (international: 320-365-3844) and access number 705930. The live web cast will be accessible at http://www.firstcallevents.com/service/ajwz393542350gf12.htmlor on Isle of Capri's Web site at http://www.islecorp.com Please log on to either Web site approximately ten minutes prior to the call to register and download and install any necessary audio software. Following the call's completion, a replay will be available on-demand on either website through February 14, 2004. Isle of Capri Casinos, Inc. (S&P, B+ Corporate Credit Rating, Stable) owns and operates 15 riverboat, dockside and land-based casinos at 14 locations, including Biloxi, Vicksburg, Lula and Natchez, Mississippi; Bossier City and Lake Charles (two riverboats), Louisiana; Black Hawk (two land-based casinos) and Cripple Creek, Colorado; Bettendorf, Davenport and Marquette, Iowa; and Kansas City and Boonville, Missouri. The company also operates Pompano Park Harness Racing Track in Pompano Beach, Florida. KAISER ALUMINUM: Wants Nod to Sell Spokane Surplus Properties ------------------------------------------------------------- The Kaiser Aluminum Debtors own several parcels of raw land located in Spokane, Washington. These surplus properties are near, but not contiguous with or utilized by the Debtors' alumina smelter in Mead, Washington. Two of these properties are located to the north and west of the actual plant site -- Parcels 3 and 6B -- and another is located to the east -- Parcel 4. Parcels 3 and 6B have never been used by the Debtors in the operation of the Mead facility or for any other purpose and, in fact, are zoned for residential use only. While zoned for industrial use, Parcel 4 also has not been used by the Debtors in the operation of Mead facility or for any other purposes. As undeveloped land, the Surplus Properties does not contain any buildings or other improvements and would require a full range of infrastructure, including streets, a sewer system and electricity, as a part of their development. The Sale Agreements As a result of the Debtors' marketing efforts concerning the surplus land, the Debtors and Secure Self Storage, LLC entered discussions about purchasing Parcels 3 and 6B. The Debtors subsequently entered into a purchase and sale agreement with Secure LLC, pursuant to which the Debtors agreed to sell Parcels 3 and 6B for $1,230,000. The Debtors also entered into discussions, and subsequently reached a purchase and sale agreement, with the Jack E. Hessel Trust to sell Parcel 4 for $1,370,000. Both Sale Agreements contain substantially similar terms: (a) The Surplus Properties are being sold on an "as is, where is" basis with all faults and without any warranties, representations or guarantees, either express or implied, as to the condition, fitness for any purpose, merchantability, or any other warranty or any kind, nature or type from or on behalf of the Debtors; (b) Secure LLC is required to deposit $50,000 and Jack Hessel is required to deposit $60,0000, in earnest money with a qualified title insurance company issuing the title policies for both of the Surplus Properties. The earnest amounts will be credited towards the applicable purchase price upon closing of each sale. Except in limited circumstances, the earnest amounts cannot be refunded after the expiration of due diligence periods identified in each of the Sale Agreements; (c) In the event that the Court orders that auctions are to be held for the sale of the Surplus Properties and Secure LLC or Jack Hessel are not the successful bidders of those properties, Secure LLC and Jack Hessel will each be entitled to receive reimbursement of the lesser of: -- their reasonable out-of-pocket expenses incurred in connection with purchases of the Surplus Properties; or -- 3% of the applicable purchase price. By this motion, the Debtors ask the Court to approve the Sales Agreements pursuant to Section 363 of the Bankruptcy Code. Kimberly D. Newmarch, Esq., at Richards, Layton & Finger, in Wilmington, Delaware, explains that the Surplus Properties do not provide the Debtors and their estate any benefits. Moreover, the Debtors do not plan to convert the Surplus Properties into residential or industrial developments as a part of their restructuring. Ms. Newmarch says that in addition to the Debtors' ready compliance to any auction that the Court may warrant, the Sales Agreements were negotiated at arm's length and likely represent the most favorable terms on which the Surplus Properties could be sold. Creditors Committee Objects The Official Committee of Unsecured Creditors of Kaiser Aluminum Corporation disputes the sale of the Surplus Properties. In the process of ascertaining whether there might be any alternative buyers interested in purchasing the Surplus Properties, the Creditors Committee discovered that the Debtors had not undertaken the formal marketing process for the Surplus Properties before signing the Sale Agreements. The Creditors Committee subsequently learned from the Debtors that, after the request was filed, other parties have expressed an interest in purchasing the Surplus Properties. Accordingly, the Creditors Committee believes that is appropriate for the Debtors to conduct an auction for the Surplus Properties. The Creditors Committee proposes these bidding procedures: (a) The Debtors, in consultation with the Creditors Committee, will prepare: -- appropriate solicitation materials relating to the Surplus Properties; -- summaries of the Bidding Procedures; and -- a form of purchase agreement for Parcels 3 and 6B and for Parcel 4, each in form and substance reasonable satisfactory to the Creditors Committee, to be distributed to any potential purchasers; (b) Persons or entities interested in potentially purchasing either or both of the Surplus Properties should contact Joseph A. Fischer, III, Esq., Assistant General Counsel of the Debtors, by voice at 713-332-4764 or by e-mail at tre.fischer@kaiseral.com (c) Upon delivery to the Debtors of executed confidentiality agreements, the Debtors will provide potential purchasers with access to the documentation, personnel and financial data necessary to evaluate the Surplus Properties, including on-site due diligence access to the Surplus Properties as reasonably asked by potential purchasers; (d) Any potential purchaser that desire to become qualified to participate in an auction of the Surplus Properties may do so by: -- submitting in writing to: Joseph A. Fischer, III, Esq. Kaiser Aluminum & Chemical Corporation 5847 San Felipe, Suite 2600, Houston, TX 77057 or -- facsimile at 713-332-4605. Bids must be received on or before 5:00 p.m. Central Time on December 9, 2003. The bid conditions are: -- An initial bid of $1,291,900 for Parcels 3 and 6B or an initial bid of $1,436,100 for Parcel 4; -- Documentation of proof of delivery of a deposit in immediately available funds of $50,000 for Parcels 3 and 6B and $60,000 for Parcel 4 to the Escrow Agent, pursuant to instructions to be provided by the Debtors. The Escrow Agent's address is: Spokane Title Company Northbank Building, Suite 100 1010 N. Normandie Street, Spokane, Washington 99201 -- A Form Purchase Agreement for the appropriate Surplus Property or Properties, as the case may be, marked with any changes the potential purchaser may request. According to William P. Bowden, Esq., at Ashby & Geddes, in Wilmington, Delaware, the Bidding Procedures will provide other parties with an opportunity to undertake due diligence and make a bid on the Surplus Properties. The Creditors Committee wants to see if the Debtors can obtain a "higher and better" offer for the Surplus Properties, Mr. Bowden says. (Kaiser Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Service, Inc., 609/392-0900) LEAP: Cricket Wins Court's Nod to Assume H.O. Systems Contract -------------------------------------------------------------- Cricket Communications, Inc., H.O. Systems, Inc. and Illuminet, Inc., sought and obtained the Court's approval of a stipulation to assume certain license agreements. On August 22, 2003, Cricket proposed to assume: * the License Agreement with H.O. Systems; * the IS-41 Transport Service Agreement with Illuminet; and * the Standard Terms and Conditions with Illuminet. The proposed assumption was identified in the Debtors' Notice of Assumption Schedule. Cricket identified the cure amount for the H.O. Systems Agreements as $5,404,334 and the cure amount for the Illuminet Agreements as $210,748. On September 24, 2003, H.O. Systems and Illuminet objected that the cure amount should be $6,586,410 for the H.O. Systems Agreement and $228,673 for the Illuminet Agreements. Cricket, in an attempt to appease H.O. Systems and Illuminet, amended the cure amount to reflect that the H.O. Systems Agreement has $6,604,334 cure amount and the Illuminet Agreements has $210,748. Consequently, Cricket, H.O. Systems and Illuminet agree that the appropriate cure amount for the H.O. Agreement is $6,586,410 and $228,673 for the Illuminet Agreements. The parties agree that Cricket will assume the Agreements pursuant to Section 365 of the Bankruptcy Code. H.O. Systems and Illuminet also agree to withdraw their Objection. (Leap Wireless Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service, Inc., 609/392-0900) LTV: Blocks Allowance of Tax Claims and Proposes Allowed Amounts ---------------------------------------------------------------- LTV Steel Corporation objects to the amount and classification of certain tax claims. William L. Kelly, Director of Tax of LTV Steel Company, avers to the pertinent facts. Each of the Tax Claimants has filed a claim on account of taxes allegedly owed. Each of the claims in this objection was filed against LTV Steel and asserts an entitlement to administrative expense priority. LTV Steel has reviewed these claims and has determined that each is improperly asserted for one or more of these reasons: (1) the tax claim is duplicative of another or other claims already filed in these cases; (2) the tax claim has been amended and superseded by another claim filed in these cases; (3) the tax claim represents a liability of a debtor other than LTV Steel; (4) the tax claim has been satisfied or otherwise represents an alleged liability of LTV Steel that is not due and owing; (5) the tax claim asserts liabilities in excess of the amounts actually owed by LTV Steel; (6) the tax claim fails to liquidate the amount of the alleged liabilities; or (7) the tax claim arose prior to the Petition Date and is not entitled to administrative expense priority. Accordingly, LTV Steel seeks to establish the proper amount of each tax claim in this objection. The tax claims included in this objection, the basis for each objection, and the proposed allowed amount are: Basis for Proposed Taxing Authority Objection Allowed Amount ---------------- --------- -------------- City of Brentwood, California 7 as to $38.82 $39.68 City of Kalamazoo, Michigan 7 as to $98.12 $18.72 City of Shelby, Ohio 3, 4 $00.00 Commonwealth of Pennsylvania 4 $00.00 County of Barbour, West Virginia 7 as to $245.84 $262.28 County of Butler, Ohio 6 $14,884.90 County of Cuyahoga 6 $3,301,793.49 County of Hamilton, Ohio 7 as to $3,233.36; 595.03 3 (Steel Products) County of Harrison, Texas 7 $00.00 County of Lorain, Ohio 7 as to $129,849.55 $248,166.65 County of Oakland, Missouri 2 $00.00 County of St. Louis, Missouri 5 as to $6,398.29 $2,206.49 County of Summit, Ohio 1 $00.00 County of Summit, Ohio 3 (Steel Products) $129,535.10 Internal Revenue Service 2 $00.00 Internal Revenue Service 6 $4,600.35 Internal Revenue Service 6 $13,344.44 State of Arizona 1, 4 $00.00 State of Michigan 7 $00.00 State of New York 7 $00.00 State of North Carolina 4 $00.00 State of Ohio 6 $145,728.46 State of Ohio 4 $00.00 State of Ohio 2 $00.00 Wood County, Ohio 6 $107,664.18 (LTV Bankruptcy News, Issue No. 57; Bankruptcy Creditors' Service, Inc., 609/392-00900) MARINER POST-ACUTE: Resolves Claims Dispute with Theracare Home --------------------------------------------------------------- Theracare Home Health Care Agency, Inc., and HCS of Middle Tennessee, Inc., filed Claim Nos. 4945, 20116 and 10224 against the Mariner Post-Acute Network Debtors' cases asserting sums due under a Stock Purchase Agreement. The Debtors objected to the Claims. In a Court-approved stipulation, the Parties resolve all issues related to the Claims. The Parties agree that Claim No. 10224 will be allowed as a general unsecured claim for $1,189,579, while all other claims are disallowed. (Mariner Bankruptcy News, Issue No. 52; Bankruptcy Creditors' Service, Inc., 609/392-0900) MASSEY ENERGY: Completes Private 6.625% Senior Debt Offering ------------------------------------------------------------ Massey Energy Company (NYSE: MEE) has closed on its private offering of $360 million principal amount of 6.625% senior notes due November 15, 2010. The Company is using the proceeds of the offering to permanently repay all indebtedness under its secured term loan, to cancel its current revolving credit facility and for general corporate purposes. The Company has also entered into an interest rate swap with respect to $240 million of these notes. The notes were offered only to qualified institutional buyers and non-U.S. persons, pursuant to Rule 144A and Regulation S, respectively, of the Securities Act of 1933, as amended, at a price of $1,000 per note. The notes are senior unsecured and unsubordinated obligations of the Company. They are guaranteed by substantially all of the Company's current and future operating subsidiaries, and will pay interest semi-annually. In connection with this private offering, the notes have not been registered under the Securities Act and, unless so registered, may not be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. Massey Energy Company (S&P, BB Corporate Credit Rating, Stable Outlook), headquartered in Richmond, Virginia, is the fourth largest coal company in the United States based on produced coal revenue. MIDLAND COGENERATION: Third-Quarter Net Loss Tops $15 Million ------------------------------------------------------------- The Midland Cogeneration Venture Limited Partnership announced a net loss of $15.2 million for the third quarter of 2003 and net income of $39.1 million for the first nine months of 2003. These net income results include a $32.0 million mark-to- market loss for the third quarter and a $6.3 million mark-to-market loss for the first nine months of 2003, related to a second quarter 2002 accounting change on nine long-term gas contracts with volume optionality, as further described below. This compares to earnings of $9.0 million for the third quarter of 2002 and $105.3 million for the first nine months of 2002. These net income results include a $3.4 million mark-to-market loss for the third quarter and a $70.0 million mark-to-market gain for the cumulative effect of the accounting change on the nine long-term gas contracts. Excluding the effects of the above accounting change, the earnings for the third quarter of 2003 were $16.8 million as compared to $12.4 million for the third quarter of 2002 and the earnings for the first nine months of 2003 were $45.4 million as compared to $35.3 million for the first nine months of 2002. Under implementation guidance approved by the Financial Accounting Standards Board, natural gas contracts that contain volume optionality are treated as derivatives and beginning April 1, 2002 were required to be marked- to-market and reported in earnings. Prior to April 1, 2002, these contracts qualified as a normal purchase transaction and did not require mark-to-market accounting. During the fourth quarter of 2002, MCV removed the optionality from three of the nine affected long-term gas contracts. The mark-to-market impact of these six contracts will affect MCV's earnings until 2007, which is the remaining life of these six contracts. The earnings increase of $10.1 million, for the first nine months, excluding the accounting change, was primarily due to lower natural gas prices, higher electric and steam energy rates under the purchase agreement with The Dow Chemical Company and lower interest expense on MCV's financing arrangements. This increase was partially offset by lower electric rates under the Power Purchase Agreement with Consumers Energy Company and higher property tax expense. Energy delivered under the PPA decreased to 5.4 million megawatt hours (MWh) for the first nine months of 2003 from 6.1 million MWh for the first nine months of 2002. Dispatch under the PPA was 66.9% for the first nine months of 2003 versus 75.1% for the nine months of 2002. During the first nine months of 2003, MCV burned 52.6 billion cubic feet ("bcf") of natural gas at an average cost of $3.11 per million British thermal units ("MMBtu"). During the first nine months of 2002, MCV burned 58.4 bcf of natural gas at an average cost of $3.24/MMBtu. MCV (Fitch, BB Lease Obligation Bonds Rating) leases and operates a gas-fired, combined-cycle cogeneration facility in Midland, Michigan. The plant is capable of producing approximately 1,500 megawatts of electricity and up to 1.35 million pounds per hour of process steam for industrial use. MCV partners include CMS Midland, Inc., a subsidiary of CMS Energy Corporation; The Dow Chemical Company (limited partner); and El Paso Midland, Inc. and other affiliates of El Paso Corporation. MIRANT CORP: Wants to Keep Exclusivity Through August 17, 2004 -------------------------------------------------------------- "The [Mirant] Debtors' Chapter 11 case is one of the largest and most complex of all time," Robin Phelan, Esq., at Haynes and Boone LLP, in Dallas, tells the U.S. Bankruptcy Court for the Northern District of Texas. The Debtors' assets, which include power plants and related infrastructure throughout the United States, the Caribbean and the Philippines, have a book value in 2002 of over $20,000,000,000 while total liabilities exceed $11,000,000. In addition, the Debtors' constituencies are diverse, and at this point, hardly harmonious. In fact, Mr. Phelan relates, three official committees -- the Mirant Creditors' Committee, the MAGI Creditors' Committee and the Equity Committee -- have been appointed and are actively participating in these cases. At least two ad hoc committees purporting to represent the landlords and the pass-through Noteholders of MIRMA have also been formed and appear at most hearings. Mr. Phelan reminds the Court that there's been very active participations from various creditors and the Federal Energy Regulatory Commission. Despite being comprised of over 80 separate legal entities, the Debtors operate their business as a single, integrated, unitary enterprise. This has given rise to countless intercompany arrangements, relationships and claims that must now be assessed and analyzed by the Debtors and their various constituencies in connection the determination of who is entitled to what. The process of review, now only in its nascent stages, will ultimately affect the allocation of billions of dollars of value among the Debtors' estates and is thus sure to be arduous and time consuming. If not resolved amicably, litigation over these matters will be hard-fought. Mr. Phelan notes that Section 1121(b) of the Bankruptcy Code provides for an initial 120-day period after the Petition Date during which a debtor has the exclusive right to file a Chapter 11 plan. Section 1121(c)(3) provides that, if a debtor proposes a plan within the exclusive filing period, it has a period of 180 days after the Petition Date to obtain acceptances of the plan. Since the Debtors' formation 10 years ago, fundamental changes occurred in their industry, the financial markets and the regulatory environment. Accordingly, from an operational perspective, the Debtors face the monumental challenge of revamping their business model from the ground up to maximize value for the benefit of their constituencies. Although much has been achieved to this point in terms of transitioning the Debtors' business into Chapter 11 administration, Mr. Phelan contends that much remains to be done before the Debtors will be able to propose a plan consistent with their fiduciary duties to maximize value. Until a reliable business plan can be developed, vetted and validated, and the myriad intercompany issues can be brought into greater focus, efforts to propose a value-maximizing plan of reorganization will be futile. By this motion, the Debtors ask the Court to extend: -- their Exclusive Plan Proposal Period through and including August 17, 2004; and -- their Exclusive Solicitation Period through and including October 15, 2004. Since the Petition Date, the Debtors have to cope with the impending departures and replacements of three members of their governing Management Council, including their Chief Operating Officer, Chief Financial Officer and Senior Vice President of International. As a result, the Debtors continue to identify and integrate replacement members of senior management. During the beginning stages of these cases, the Debtors and their professionals focused on ensuring a smooth transition into Chapter 11 and stabilizing their business operations. Immediately after the commencement of these cases, the Debtors successfully obtained numerous first-day orders designed to ensure their seamless transition into Chapter 11. In addition, the Debtors have aggressively moved forward to manage dozens of civil litigation actions pending in both state and federal courts. According to Mr. Phelan, the requested extensions "are realistic and necessary given the multiple tasks to be completed and issues to be resolved before confirmable plans can be proposed and negotiated." Thus, the extension will allow the Debtors to: (a) develop a viable long-term business plan acceptable to the Committees, which will become the framework of the plan of reorganization. Any business plan formulated must validated through implementation and tested until the summer season of 2004; and (b) begin the analysis and reconciliation of all proofs of claims filed against the Debtors' estate after the December 16 Bar Date. This process must begin before the Debtors can propose a plan. Mr. Phelan assures the Court that the extension will not harm the parties-in-interest since the time will be spent to develop fully the grounds upon which serious negotiations towards a plan of reorganization can be based. In any case, the Debtors are current with their postpetition debts as they become due. Moreover, expiration of the Exclusive Periods and the threat of multiple plans filed by other parties would likely lead to adversarial situations that would cause a deterioration in the Debtors' business operations, the value of their assets and their ability to negotiate a consensual restructuring. Mr. Phelan fears that the expiration of the Exclusive Periods may signal to their trading parties that there is a loss of confidence in the Debtors and their reorganization efforts. In compliance with Local Bankruptcy Rule 3016.1, the Debtors will, without limitation, take these steps to file a plan: (1) Improvement of operations performance, including a full-scale effort to coordinate the North American operations to ensure the most cost-efficient operations at discreet plants; (2) Improvement of accounting functions, including updating accounting information necessary to facilitate integration of businesses; (3) Development of price forecasting, i.e., forecasting future gross margins and modeling methodology; (4) Development of collateral forecasting, i.e., the capability of predicting the collateral requirements of the Debtors' businesses for hedging and optimization; (5) Creation of synergies among the domestic and international businesses; (6) Development of new metrics to manage the Debtors' businesses in a manner that makes it more easily understood both internally and externally; (7) Development of a proposed business plan and projections given the current state of the energy industry, which will include strategic planning to move into more competitive markets and achieve margins in the new regulatory environment; (8) Validation of the proposed business plan and projections; (9) Resolution of PEPCO/FERC contract issues; (10) Continue analysis of executory contracts; (11) Continue to stabilize trading operations, including, re-characterizing the Debtors' commercial business, refocusing efforts to become a marketing-focused organization and simplifying the book structure (which will help with accounting issues, measuring performance and managing risk); (12) Continue the negotiation and development of trading policies and procedures; (13) Continue to analyze business operations and restructure operations where appropriate to create additional efficiencies; (14) Stabilize employee turnover and incentivize employees to remain with the Debtors; (15) Resolve pending investigations and litigation; (16) Reconcile and assess claims filed against the estates; (17) Discuss and negotiate the terms of the business plan with the Committees; (18) Value the business of the Debtors; (19) Develop a proposed and appropriate capital structure for each of the reorganized Debtors; (20) Discuss and negotiate the proposed and appropriate capital structure for each of the reorganized Debtors; and (21) Draft a plan of reorganization and disclosure statement. (Mirant Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service, Inc., 609/392-0900) MOORE WALLACE: S&P Places BB+ Corp. Credit Rating on Watch Pos. --------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings for R.R. Donnelley & Sons Co., including its 'A' long-term and 'A-1' short- term corporate credit ratings, on CreditWatch with negative implications. At the same time, the ratings for Moore Wallace Inc., including the 'BB+' corporate credit rating, were placed on CreditWatch with positive implications. The CreditWatch placements follow the announcement by the two companies that they have signed a definitive merger agreement to create the world's largest full-service commercial printer, with more than $8 billion in annual revenues and a leading competitive position in North America. Under the terms of the transaction, Moore Wallace shareholders will receive Donnelley shares based on a fixed exchange ratio of 63 cents of a Donnelley share for each Moore Wallace share. This represents $17.66 in value per Moore Wallace share, or approximately $2.8 billion in total equity value. In addition, Donnelley will assume approximately $900 million in Moore Wallace debt. The transaction is expected to close in the first quarter of 2004, subject to shareholder and regulatory approvals. The combined company will provide customers with the industry's broadest array of high-quality, long- and short-run print products and solutions, from magazines, telephone directories, books, catalogs, inserts and financial documents, to billing statements, outsourced customer communications, highly personalized direct mail, premedia, print fulfillment, labels, collateral materials, forms and logistics services. The transaction is expected to be accretive to Donnelley's earnings in the first full year of operations, excluding the impact of transaction-related charges. In addition, the combined company expects to generate cost savings in excess of $100 million on an annualized basis in the first 12-24 months after the closing. These savings are expected to result from the elimination of duplicative administrative and infrastructure costs, reduction in procurement expenses, and asset rationalization. "In resolving its CreditWatch listings, Standard & Poor's will review the combined company's near- and longer-term growth objectives, integration plans, pro forma financial profile and overall financial policies," said Standard & Poor's credit analyst Michael Scerbo. In addition, while a CEO has been named for the combined entity, a definitive management team has not been established at this time. Mr. Scerbo added, "If a downgrade for Donnelley were the ultimate outcome of Standard & Poor's analysis, it would be limited to one notch." MOSES TAYLOR HOSPITAL: S&P Cuts Outstanding Debt Rating to B ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its rating to 'B' from 'BB+' on $40.7 million of Scranton-Lackawanna Health and Welfare Authority, Pennsylvania's outstanding debt issued for Moses Taylor Hospital. The outlook is negative. "The rating reflects continued operating pressure at the hospital; substantial losses at the system level; and unfavorable balance sheet characteristics, evidenced by very slim liquidity and high leverage," said Standard & Poor's credit analyst Stephen Infranco. A lower rating is precluded at this time because cash flow was sufficient to cover maximum annual debt service at 1.4x for the hospital and 1.15x for the system in fiscal 2003 (unaudited). Furthermore, management is putting plans in place to stem losses, including reducing staff; implement revenue enhancement initiatives; and close about 10 out of 16 beds that went online in 2002. The operating loss for the first two months of fiscal 2004 is slightly less than the budgeted loss, but ahead of the previous year-to-date loss of $361,000. With the operating deficit for fiscal 2003, MTH will have posted negative operating margins in four out of the last five years. Management has indicated that the increased losses are the result of labor issues (increased costs due to agency nursing), increased malpractice costs, and lower- than-expected volume in fiscal 2003 after a strong 2002. The negative outlook reflects MTH's weak balance sheet, which leaves little cushion to absorb continued losses from operations. The rating could be lowered again if management's plans do not positively affect financial performance in fiscal 2004. NOMURA 1994-MD1: Fitch Keeps Watch on Junk-Rated Class B-1 Notes ---------------------------------------------------------------- Nomura Asset Securities Corp., commercial mortgage pass-through certificates, series 1994-MD1, class B-1, currently rated 'CCC', is placed on Rating Watch Positive from Rating Watch Negative. The $21.3 million class A-3 and interest-only class A-3X are affirmed at 'AAA'. Classes B-2, B-3A, B-3B, and B-3P are rated 'D' as they have experienced realized losses. Classes A-1A, A-1AX, A-1B, A- 1BX, and A-2 have been paid in full. Class B-1 has $1.8 million in interest shortfalls outstanding. Unless the Oly Realty One loan (75.6% of the pool) prepays before the interest shortfall is repaid, Fitch expects that the interest shortfalls and the principal amount outstanding will be fully recovered. As soon as the interest shortfalls on this class are repaid, the class will be upgraded. The timing for the repayment is dependent upon the amount and timing of the Canton resolution. The upgrade will be dependent upon the credit enhancement to the class that results after the resolution of the Canton Centre loan. The class B-1 will most likely remain below investment grade. The Canton Centre loan (24.4%) became REO in November 2001. The loan is collateralized by a regional mall in Canton, OH. Lennar Partners Inc., as special servicer, has negotiated the sale of a portion of the mall that includes the former Montgomery Wards, theater, and Staples to Wal-Mart for $4 million. The balance of the mall is being marketed for sale. The mall is situated in an in-fill location in Canton, however, competition from other malls in the area remains strong. Fitch will continue to monitor this transaction, as surveillance is ongoing. OMEGA HEALTHCARE: Provide Update on Portfolio Restructuring ----------------------------------------------------------- Omega Healthcare Investors, Inc. (NYSE:OHI) has re-leased seven skilled nursing facilities, one assisted living facility and sold three closed facilities. Sun Healthcare Group, Inc. Effective November 1, 2003, the Company re-leased two SNFs formerly leased by Sun Healthcare Group, Inc., located in California and representing 185 beds, to a new operator under a Master Lease, which has a ten-year term and has an initial annual lease rate of $0.6 million. In addition, on October 1, 2003, the Company re-leased three SNFs formerly leased by Sun, located in California and representing 271 beds, to a new operator under a Master Lease, which has a 15-year term and has an initial annual lease rate of $1.24 million. In addition, the Company is in the process of negotiating terms and conditions for the re-lease of ten additional Sun properties with new operators. Separately, the Company continues its ongoing restructuring discussions with Sun. At the time of this press release, the Company cannot determine the timing or outcome of these discussions. There can be no assurance that Sun will continue to pay rent at the current level, although, the Company believes that alternative operators would be available to lease or buy the remaining Sun facilities if an appropriate agreement is not completed with Sun. However, as a result of the above mentioned transitions of the five former Sun facilities, Sun's contractual monthly rent, starting in November, was reduced approximately $0.15 million from approximately $2.00 million to approximately $1.85 million. For the month of November, Sun remitted approximately $1.51 million in lease payments (or $18.1 million on an annual basis) similar to what was paid on a monthly basis during the third quarter of 2003. Rent received in November from the ten former Sun facilities (five mentioned above, plus five facilities re-leased in July) totaled approximately $0.35 million or $4.22 million annually. Claremont Healthcare Holdings, Inc. Effective November 7, 2003, the Company re-leased two SNFs formerly leased by Claremont Healthcare Holdings, Inc., located in Ohio and representing 279 beds, to a new operator under a Master Lease, which has a ten-year term and has an initial annual lease rate of $1.2 million. Claremont failed to pay base rent due on November 1, 2003 in the amount of $0.5 million. On November 10, 2003, the Company applied a security deposit in the amount of $0.5 million to pay Claremont's November rent payment and the Company demanded that Claremont restore the $0.5 million security deposit. As of the date of this press release, the Company has no additional security deposits with Claremont. The Company is recognizing revenue from Claremont on a cash-basis as it is received. Alterra Healthcare Corporation Effective November 1, 2003, the Company re-leased one ALF formerly leased by Alterra Healthcare Corporation, located in Washington and representing 52 beds, to a new operator under a Lease, which has a ten-year term and has an initial annual lease rate of $0.2 million. The Company is in the process of negotiating terms and conditions for the re-lease of the remaining two properties. In the interim, Alterra will continue to operate the two facilities. Other Assets On November 4, 2003, the Company sold one closed facility located in Iowa for its approximate net book value. On October 31, 2003, the Company sold one closed facility located in Florida, realizing proceeds of approximately $2.6 million, net of closing costs, resulting in a gain of $1.5 million. In addition, on October 31, 2003, the Company sold its remaining held for sale facility located in Texas, realizing proceeds of approximately $1.5 million, net of closing costs, resulting in a loss of $0.8 million. At the time of this press release, the Company has eight closed facilities remaining with a total net book value of $2.7 million. 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. OPTIONS TALENT GROUP: Files for Chapter 7 Liquidation in Nevada --------------------------------------------------------------- On October 31, 2003, Options Talent Group, a Nevada corporation, and its two principal subsidiaries filed voluntary petitions, in the United States Bankruptcy Court for the District of Nevada, for protection under Chapter 7 of the United States Bankruptcy Act, as amended. Prior to the Petitions, OTI, the Company's wholly-owned subsidiary, had experienced a decline in monthly enrollment sales in excess of 50% during the fourth quarter of fiscal 2003 and an additional 25% decline in the first quarter of fiscal 2004. Such decline was deemed to be other than temporary. Furthermore, both of the Company's wholly owned subsidiaries: Options Sports Group, a Nevada corporation, and OTI, had failed to achieve profitability and positive cash flows since their respective inceptions. In order to minimize the impact of these factors in the Company's operations, in July 2003 Options Talent Group and its subsidiaries implemented a number of cost reduction initiatives including: a reduction in employee headcount in excess of 60% and the discontinuation of efforts to expand their operations. During this time the Company was unsuccessful in its attempts to secure outside financing to fund its losses. Additionally, the Company and its subsidiaries and certain former corporate consultants terminated the agreements pursuant to which such corporate consultants provided certain management services to the Company and its subsidiaries. Despite their arduous efforts, Options Talent Group and its subsidiaries were unable to resolve certain matters and to achieve sustained earnings and positive cash flows. At July 31, 2003, the Company had an accumulated deficit of approximately $8 million and a stockholders' equity deficit of approximately $7 million. As a result, the Company and its subsidiaries' credit ratings have deteriorated significantly and the Company and its subsidiaries are unable to secure the commercial credit necessary to conduct business. Accordingly, Options Talent Group and its subsidiaries are unable to satisfy their obligations in the ordinary course of business. OPTIONS TALENT: Inks Deal with Fashion Rock for $4.6MM+ Asset Sale ------------------------------------------------------------------ On October 9, 2003, two individual shareholders, officers and directors of Options Talent Group, a Nevada corporation, notified Options Talent Group of their intent to pursue legal action to rescind the previously reported reverse merger between Options Talent and Trans Continental Classics, Inc. of September 5, 2002 pursuant to which such shareholders, in the aggregate, had acquired 51% of Option Talent's voting common stock. Further, the Shareholders notified the Company of their intent to terminate the Trademark Sublicense Agreement dated September 5, 2002 between Options Talent Group and TCC pursuant to which Options Talent and its subsidiaries acquired a license to use the Trans Continental name. Additionally, the Shareholders demanded that Options Talent and its subsidiaries immediately cease and desist from using certain trademarks, including the Trans Continental name. Finally, the Shareholders notified Options Talent of their intent to terminate their employment agreements with the Company and of their intent and the intent of a third director to resign as directors of the Company. In light of Options Talent's precarious financial conditions (see paragraphs below), the Company determined it to be in the best interest of its constituents to try to resolve the matters with the Shareholders, and the third director, out of court. After several rounds of negotiations, on October 29, 2003, the Company and the Shareholders reached an agreement to rescind the TCC Merger. Additionally, Options Talent, Inc. (formerly Trans Continental Talent, Inc.), a Delaware corporation agreed to sell certain assets to Fashion Rock, LLC., a Florida limited liability company in which Mr. Louis Pearlman is the manager and beneficial owner, in exchange for cash and the assumption of certain obligations (for an aggregate purchase price of $4,662,500). The assets sold principally consist of Options Talent's web-based database, trade accounts receivable in connection with an upcoming talent convention, certain computer software, certain computer, telephone and other office equipment, and certain furniture and fixtures previously used in Options Talent's principal business. The obligations assumed include secured bank debt of approximately $2,000,000, obligations to the winners of previous talent competitions held by Options Talent, certain obligations in connection with an upcoming talent convention, certain Option Talent obligations for unpaid wages from October 25, 2003 to October 29, 2003, inclusive, and obligations under certain equipment leases. In addition, FRLLC agreed to offer employment to approximately 145 of Options Talent's employees, to continue to support the web- based database and to conduct an upcoming talent convention for the benefit of Options Talent's customers at the time of the sale. OWENS CORNING: Hearing on Ch. 11 Trustee Appointment on Dec. 1 -------------------------------------------------------------- On October 29, 2003, U.S. Bankruptcy Court Judge Fitzgerald ordered that the request of the Creditors' Committee to appoint a Chapter 11 Trustee in the Owens Corning Debtors cases is stricken and will not be considered. The Official Committee of Unsecured Creditors failed to attach a proposed order as required by Rule 9013-1(e) of the Local Rules of Bankruptcy Practice and Procedures of the U.S. Bankruptcy Court for the District of Delaware. The Order is without prejudice to re-filing in compliance with the Local Rule. The Commercial Committee re-filed their request on October 30, 2003. Judge Fitzgerald will convene a status hearing on December 1, 2003 regarding the Commercial Committee's request. Objections are due November 21, 2003. (Owens Corning Bankruptcy News, Issue No. 61; Bankruptcy Creditors' Service, Inc., 609/392-0900) PARTNERS MORTGAGE: Court Fixes November 24 Claims Bar Date ---------------------------------------------------------- The Honorable Thomas T. Glover signed an order setting a deadline for creditors of Partners Mortgage Corporation to file their proofs of claim in this chapter 11 case. All creditors wishing to assert a claim against the Debtor's estate have until 4:30 p.m. (Pacific Daylight Savings Time) on November 24, 2003, to file their proof of claims or be forever barred from asserting that claims. All proofs of claim must be delivered to: Clerk of the Bankruptcy Court 315 Park Place Building 1200 Sixth Avenue Seattle, WA 98101 Headquartered in Mercer Island, Washington, Partners Mortgage Corporation is a high-yield mortgage backed income fund. The Company filed for chapter 11 protection on September 26, 2003 (Bankr. W.D. Wash. Case No. 03-22404). Shelly Crocker, Esq., at Crocker Kuno LLC represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it estimated its debts and assets of over $50 million each. PERRY ELLIS: Allan Zwerner Resigns from Co.'s Board of Directors ---------------------------------------------------------------- Perry Ellis International Inc. (Nasdaq:PERY) announced that its board of directors has accepted the resignation of director Allan Zwerner and it is looking to fill the vacancy with an independent outside director. Mr. Zwerner has accepted a position as president of Tommy Hilfiger children's division. "On behalf of the board and the entire Perry Ellis International family, we sincerely appreciate Allan's leadership and counsel during his four years of service as a company director," said George Feldenkreis, chairman and chief executive officer. "Allan's contributions helped guide the company during a period of explosive growth, including our acquisitions of the Jantzen business and Salant Corp. We are sure that his business acumen will be of invaluable help in his new position and we all wish him continued success." Perry Ellis International, Inc. (S&P, B+ Corporate Credit Rating, Stable) is a leading designer, distributor and licensor of a broad line of high quality men's sportswear, including causal and dress casual shirts, golf sportswear, sweaters, dress casual pants and shorts, jeans wear, active wear and men's and women's swimwear to all major levels of retail distribution. The company's portfolio of brands includes 18 of the leading names in fashion such as Perry Ellis(R), Jantzen(R), Munsingwear(R), John Henry(R), Grand Slam(R), Natural Issue(R), Penguin Sport(R), the Havanera Co.(TM), Axis(R), and Tricots St. Raphael(R). The Company licenses the Nike(R), Tommy Hilfiger(R), PING(R), Ocean Pacific(R) and NAUTICA(R) brands. Additional information on PEI is available at http://www.perryelliscorporate.com PG&E NATIONAL: USGen Hires Getzler Henrich as Financial Advisor --------------------------------------------------------------- USGen New England, Inc. sought and obtained the Court's permission to employ Getzler Henrich & Associates LLC as financial advisor, nunc pro tunc to August 13, 2003. Getzler Henrich will: (a) establish and approve appropriate methodologies for allocations and charges of G&A costs with respect to ongoing postpetition intercompany and affiliate relations and transactions between USGen and USG Services and the NEG Debtors or affiliated companies; (b) assist and advise USGen with respect to determining prepetition claims associated with Pittsfield Generating Company, LP; (c) assist and advise USGen with respect to determining prepetition claims associated with the Energy Trading Debtors; (d) assist and advise USGen with respect to determining prepetition claims associated with other prepetition transactions between USGen and the NEG Debtors and other affiliated entities; and (e) perform other tasks as appropriate or as may reasonably be requested by USGen's management, Board of Directors or counsel. Getzler Henrich is one of the nation's oldest corporate turnaround and restructuring firms, and has successfully restructured hundreds of companies throughout North and Central America, Europe and Asia, spanning a wide range of industries, including the energy sector. USGen selected Getzler Henrich because, among other things, Getzler Henrich and its professionals have an excellent reputation for providing high quality management consulting and financial advisory services to debtors. Getzler Henrich's resources, capabilities, and experience in advising USGen will be crucial to its successful restructuring. Alvarez & Marsal, Inc. has been engaged as interim crisis manager to provide services to the NEG Debtors, USGen's parent, for the benefit of its bankruptcy case. It is anticipated that the USGen and its creditors may have divergent interests from the NEG Debtors and its creditors with respect to issues that may arise during the course of USGen's Chapter 11 case. Therefore, USGen requires the services of an independent financial consultant to advise it with respect to the anticipated issues. USGen will pay Getzler Henrich on an hourly basis, plus reimbursement of incurred actual and necessary expenses. Getzler Henrich's customary hourly rates are: Principals $395 - 500 Managing Directors 335 - 385 Directors 275 - 335 Associate Professionals and Consultants 75 - 385 If the engagement lasts more than six months, Getzler Henrich reserves the right, upon written notice to USGen, to increase the hourly fees charged. USGen will also indemnify Getzler Henrich for any claim arising from the special financial advisory services, but not for any claim arising from Getzler Henrich's postpetition performance of any services other that financial advisory services unless the postpetition services and the related indemnification are approved by the Court. USGen will have no obligation to indemnify Getzler Henrich, or provide contribution or reimbursement for any claim or expense that is either: -- judicially determined to have arisen solely from Getzler Henrich' gross negligence or willful misconduct; or -- settled before a judicial determination as to Getzler Henrich's gross negligence or willful misconduct, but determined by the Court to be a claim or expense for which Getzler Henrich should not receive indemnity, contribution or reimbursement. Getzler Henrich Vice Chairman, William H. Henrich, assures the Court that the firm does not have any connection with or hold any interest adverse to, USGen or any party-in-interest. (PG&E National Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc., 609/392-0900) PILLOWTEX CORP: Court Okays Blank Rome as Committee's Co-Counsel ---------------------------------------------------------------- The Official Committee of Unsecured Creditors of the Pillowtex Debtors obtained the Court's permission to retain Blank Rome as its co-counsel, nunc pro tunc to August 11, 2003. Blank Rome's primary role is anticipated to be the Committee's Delaware counsel, facilitating the Committee's interaction with the Court and other Delaware counsel. The firm will also support and assist the Committee's lead counsel, Hahn & Hessen, as appropriate. Blank Rome will be compensated for its legal services on an hourly basis in accordance with its ordinary and customary rates that are in effect on the date the services are rendered, subject to periodic adjustment. Blank Rome's current hourly rates with respect to the primary members of the engagement team are: William J. Burnett $245 Michael B. Schaedle 320 Bonnie Glantz Fatell 440 Other Blank Rome attorneys who may be involved in the case as needed have these hourly rates: Partners and Counsel $310 - 700 Associates 185 - 310 Paralegals 80 - 210 In addition to the hourly rates, Blank Rome customarily charges clients for the firm's actual and necessary costs of support services provided in connection with a representation, including court reporters, transcripts, computerized research, filing fees, photocopying charges, long distance telephone calls, facsimile transmissions, messengers, courier mail, secretarial overtime, temporary services, travel, lodging, and catering for meetings. (Pillowtex Bankruptcy News, Issue No. 54; Bankruptcy Creditors' Service, Inc., 609/392-0900) PLANET HOLLYWOOD: Proposes to Issue 9% Notes Pursuant to Plan ------------------------------------------------------------- Planet Hollywood International, Inc., a Delaware corporation, proposes to issue, as part of the Third Amended Joint Plan of Reorganization of Planet Hollywood International, Inc., et. al. dated November 4, 2003, its 9% Secured Deferrable Interest Notes Due 2010. Pursuant to the Plan of Reorganization, (a) each holder of an allowed Class 6 Claim (as defined in the Plan of Reorganization) is entitled to receive its pro rata share of (i) $20 million principal amount of Notes and (ii) 51% of the equity of the Company. The Company filed with the United States Bankruptcy Court for the Middle District of Florida a Third Amended Joint Disclosure Statement that was distributed to holders of claims against or stock interests in the Debtor for the purpose of soliciting their votes for the acceptance or rejection of the Plan of Reorganization. Pursuant to an order dated November 12, 2002, the Bankruptcy Court approved the Disclosure Statement. After a hearing held on December 16, 2002, the Bankruptcy Court entered an order dated January 6, 2003, confirming the Plan of Reorganization. In accordance with a Notice of Effective Date filed with the Bankruptcy Court on March 31, 2003, the Plan of Reorganization became effective March 31, 2003. The Notes are to be issued under an indenture among the Company, as Issuer, the Subsidiary Guarantors named therein and SouthTrust Bank, as trustee. The Company believes that the issuance of the Notes is exempt from the registration requirements of the Securities Act of 1933 pursuant to Section 1145(a)(1) of the United States Bankruptcy Code. Generally, Section 1145(a)(1) of the Bankruptcy Code exempts the issuance of securities from the registration requirements of the Securities Act and equivalent state securities and "blue sky" laws if the following conditions are satisfied: (i) the securities are issued by a debtor, an affiliate participating in a joint plan of reorganization with the debtor, or a successor of the debtor under a plan of reorganization, (ii) the recipients of the securities hold a claim against, an interest in, or a claim for an administrative expense against, the debtor, and (iii) the securities are issued entirely in exchange for the recipient's claim against or interest in the debtor, or are issued "principally" in such exchange and "partly" for cash or property. The Company believes that the issuance of Notes contemplated by the Plan of Reorganization will satisfy the aforementioned requirements. PUBLICARD INC: Sept. 30 Balance Sheet Insolvency Tops $1.7 Mill. ---------------------------------------------------------------- PubliCARD, Inc. (OTC Bulletin Board: CARD.OB) reported its financial results for the three and nine months ended September 30, 2003. Sales for the third quarter of 2003 increased to $1,417,000, compared to $1,298,000 a year ago driven by a 6% increase from foreign currency changes. Excluding the impact of foreign currency changes, sales in 2003 increased by 3%. The Company reported a net loss for the quarter ended September 30, 2003 of $749,000, or $0.03 per share, compared with a net loss of $2,343,000, or $0.10 per share, a year ago. The results for 2002 include a charge of $2,068,000 to write-down a minority investment and income from discontinued operations of $1,066,000. As of September 30, 2003, cash and short-term investments totaled $1,391,000. For the nine months ended September 30, 2003, sales increased to $4,023,000 compared to $3,513,000 a year ago driven by an 11% increase from foreign currency changes. Excluding the impact of foreign currency changes, sales in 2003 increased by 4%. The Company reported a net loss of $678,000, or $.03 per share, for the nine months ended September 30, 2003 versus a net loss of $4,839,000, or $.20 per share, in 2002. The 2003 results include a gain of $1,705,000 relating to two separate settlements with various historical insurers that resolve certain claims (including certain future claims) under policies of insurance issued to the Company by those insurers. At September 30, 2003, the Company's balance sheet shows a working capital deficit of about $2.4 million, and a total shareholders' equity deficit of about $1.7 million. In October 2003, the Company announced it had reached a settlement with a third insurer and sold a parcel of unused land. The Company expects to receive additional proceeds from these two transactions aggregating approximately $2,750,000 in cash in the fourth quarter of 2003. Headquartered in New York, NY, PubliCARD, through its Infineer Ltd. subsidiary, designs smart card solutions for educational and corporate sites. The Company's future plans revolve around a potential acquisition strategy that would focus on businesses in areas outside the high technology sector while continuing to support the expansion of the Infineer business. However, the Company will not be able to implement such plans unless it is successful in obtaining additional funding, as to which no assurance can be given. More information about PubliCARD can be found on its Web site http://www.publicard.com Liquidity and Going Concern Considerations The condensed consolidated statements of operations and balance sheets contemplate the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred operating losses, a substantial decline in working capital and negative cash flow from operations for the years 2002, 2001 and 2000 and the nine months ended September 30, 2003. The Company has also experienced a substantial reduction in its cash and short-term investments, which declined from $17.0 million at December 31, 2000 to $1.4 million at September 30, 2003. The Company also had a working capital deficit of $2.4 million and an accumulated deficit of $112.7 million at September 30, 2003. If the distress termination of the Company's defined benefit pension plan for which the Company has applied is completed, for which no assurance can be given, the Company's 2003 funding requirements for the plan could be eliminated, in which case management believes that existing cash and short term investments may be sufficient to meet the Company's operating and capital requirements at the currently anticipated levels through December 31, 2003. However, additional capital will be necessary in order to operate beyond December 2003 and to fund the current business plan and other obligations. While the Company is actively considering various funding alternatives, the Company has not secured or entered into any arrangements to obtain additional funds. There can be no assurance that the Company will eliminate the 2003 funding requirements for the defined benefit pension plan or be able to obtain additional funding on acceptable terms or at all. If the Company cannot raise additional capital to continue its present level of operations it may not be able to meet its obligations, take advantage of future acquisition opportunities or further develop or enhance its product offering, any of which could have a material adverse effect on its business and results of operations and could lead the Company to seek bankruptcy protection. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. The independent auditors' report on the Company's Consolidated Financial Statements for the year ended December 31, 2002 contained an emphasis paragraph concerning substantial doubt about the Company's ability to continue as a going concern. QUADRAMED CORP: Sept. 30 Net Capital Deficit Doubles to $15 Mil. ---------------------------------------------------------------- QuadraMed Corporation (QMDC.PK) reported its financial results for the third quarter ended September 30, 2003. The company reported its second sequential quarter of improved operating results including a reduction in net loss and higher cash provided by operations. Although third quarter total revenue was only slightly higher than the second quarter, deferred revenue increased by $2.1 million in the three months ended September 30, 2003 and increased by $9.6 million in the nine months since December 31, 2002. Quadramed's September 30, 2003 balance sheet shows a total shareholders' equity deficit of about $15 million, up from a deficit of about $7 million nine months ago. QuadraMed will be holding its Investor Day Conference on Tuesday, November 11, 2003 at 1:15 PM Pacific Time (4:15 PM Eastern Time) in San Francisco and on Tuesday November 18, 2003 at 1:00 PM Pacific Time (4:00 PM Eastern Time) in New York. These events will be webcast live and available to the public through the Investor Relations section of QuadraMed's webpage at http://www.quadramed.com Please note that the webcast is listen- only. Listeners should access the Web site at least 15 minutes prior to the scheduled webcast time in order to register, and to download and install any necessary applications. Webcast replays will be available shortly after the live call's completion, and then for two weeks thereafter. QuadraMed is dedicated to improving healthcare delivery by providing innovative healthcare information technology and services. From clinical and patient information management to revenue cycle and health information management, QuadraMed delivers real-world solutions that help healthcare professionals deliver outstanding patient care with optimum efficiency. Behind our products and services is a staff of more than 850 professionals whose experience and dedication to service has earned QuadraMed the trust and loyalty of customers at more than 1,900 healthcare provider facilities. To find out more about QuadraMed, visit http://www.quadramed.com QuadraMed's SEC filings can be accessed through the Investor Relations section of its Web site -- http://www.quadramed.com-- or through the SEC's EDGAR Database at http://www.sec.gov (QuadraMed's EDGAR CIK (Central Index Key) No. 0001018833). QWEST COMMS: Says Customers Are Biggest Losers with FCC's Order --------------------------------------------------------------- The following statement is attributable to Gary Lytle, Qwest senior vice president, federal affairs in Washington, D.C.: "Unfortunately, over the long-term, customers stand to be the biggest losers with [Mon]day's announcement. This is a one-way street that will leave millions of customers stranded without the ability to convert wireless numbers to wireline. Millions of customers prefer the security and quality of a wireline telephone. Additionally, as we've seen with recent natural and man-made disasters, a traditional wireline number is invaluable. "Qwest supports wireless to wireline number portability, but once again the Federal Communications Commission is creating a regulatory scheme that picks winners and losers. Qwest supports true customer choice, which means the ability to take their telephone numbers with them to either a wireless or wireline option. "This mandate will create irreparable harm to customer choice and the industry as a whole. Consequently, Qwest is exploring its legal options." 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 47,000 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 REEVES COUNTY, TEX.: Fitch Junks $89-Million Trust Rating at CCC ---------------------------------------------------------------- Fitch Ratings downgrades the underlying ratings of Reeves County, TX's approximately $89 million outstanding certificates of participation-lease rentals (Reeves County Detention Center (RCDC Trust) to 'CCC' from 'BB'. The Rating Outlook is Stable. The bonds have been taken off of Rating Watch Negative. Earlier this week, Reeves County Commissioners reportedly hired Wackenhut Corrections Corp. to manage and market unused beds at RCDC. As noted by Fitch with its Sept. 3 downgrade, the Federal Bureau of Prisons has not certified the approximately 1,000-bed addition to RCDC financed with 2001 COP proceeds. While discussions with BOP are ongoing, the continuing delay causes Fitch to be skeptical that the prior relationship between RCDC and BOP will resume anytime soon, and the positive nature of that relationship was a key rating factor. As an availability fee for use of the expansion, Wackenhut reportedly will cover debt service payments in the near term. Wackenhut is not rated by Fitch. County general fund resources have been depleted. Downsizing of the RCDC workforce has been reported in the press as a possibility, and this would be a severe economic concern for the county. Fitch has not yet received copies of agreements between the county and Wackenhut, but will examine them as submitted. 'CCC' ratings indicate high default risk. Should Wackenhut or the county be successful in improving occupancy at RCDC, the rating would be reviewed at a later date based on such information. SBA COMMS: Third-Quarter 2003 Net Loss Narrows to $19.7 Million --------------------------------------------------------------- SBA Communications Corporation (Nasdaq: SBAC) reported results for the third quarter ended September 30, 2003. Highlights of the results include: -- Sequential and year-over-year growth in site leasing revenue, site leasing gross profit and site leasing gross profit margin -- Year-over-year site leasing gross profit growth of 16.2% -- High yield debt retirement of $35 million in third quarter -- Net debt reduced 15% year to date Operating Results Total revenues in the third quarter of 2003 were $52.4 million, compared to $60.8 million in the year earlier period. Site leasing revenue of $32.2 million and site leasing gross profit (formerly referred to as tower cash flow) of $21.7 million were up 8.3% and 16.2%, respectively, over the year earlier period, which percentages approximate the same tower revenue and site leasing gross profit growth on the 3,008 towers owned at September 30, 2002 and 2003. Site leasing gross profit margin in the third quarter was 67.5%, a 90 basis point sequential improvement over the second quarter of 2003 and a 460 basis point improvement over the third quarter of 2002. Site leasing contributed 96.2% of the Company's gross profit in the third quarter. Site development revenues were $20.2 million compared to $18.7 million in the second quarter of 2003 and $31.1 million in the year earlier period. Selling, general and administrative expenses were $7.9 million in the third quarter, including approximately $0.9 million of non-recurring professional fees related to the Company's reaudit of its 2001 consolidated financial statements, compared to $8.7 million in the year earlier period. Net loss from continuing operations before cumulative effect of a change in accounting principle for the third quarter was $32.6 million, compared to $30.5 million in the year earlier period. Net loss in the third quarter of 2003 was $19.7 million, compared to a net loss of $31.7 million in the year earlier period. Adjusted EBITDA was $15.8 million, compared to $16.0 million in the year earlier period. Adjusted EBITDA margin was 30.1%, a 380 basis point improvement over the year earlier period. Net cash used in operating activities for the nine months ended September 30, 2003 was $20.3 million, compared to $20.2 million for the nine months ended September 30, 2002. Of the original 801 towers subject to the AAT Communications Corp. transaction, the Company ultimately sold 784 towers and intends to dispose of the 17 towers excluded from the AAT sale together with the other towers located in the Company's western region that were reflected as discontinued operations in the second quarter of 2003. The results of the 784 towers sold and the 68 towers held for sale are reflected as discontinued operations in accordance with generally accepted accounting principles for the three and nine month periods ended September 30, 2003, the comparable periods of 2002 and for all other purposes of this release. Investing Activities SBA built 3 towers and sold 137 towers, ending the quarter with 3,109 towers. SBA received approximately $48.1 million of gross cash proceeds from tower sales in the third quarter. Subsequent to quarter-end, SBA has received an additional approximately $9.4 million of gross cash proceeds in exchange for the sale of 16 towers. SBA anticipates that the final gross cash proceeds to be realized from the sale to AAT, after all potential purchase price adjustments, will be approximately $194 million. Excluding the 16 towers sold to AAT subsequent to September 30 and the 68 towers held for sale, SBA owned, as of September 30, 2003, 3,025 towers. Capital expenditures for the third quarter were $3.1 million, down from $11.6 million in the year earlier period. Financing Activities SBA ended the quarter with $166.9 million borrowed under its $195 million senior credit facility, $709 million of senior notes outstanding and net debt of $817.6 million. Total debt has decreased from $1.019 billion at December 31, 2002 to $875.9 million at September 30, 2003. Debt amounts as of September 30, 2003 and December 31, 2002 exclude approximately $4.7 million and $5.2 million, respectively, of deferred gain from a derivative termination. In the third quarter, SBA repurchased $25 million in principal amount of its 12% Senior Discount Notes. The Company purchased the notes in the open market and paid cash of $25.5 million, plus accrued interest. The Company also exchanged 2.85 million shares of its Class A Common Stock for $10 million in principal amount of its 10.25% Senior Notes plus accrued interest. Liquidity at September 30, 2003 was $86.4 million, consisting of $58.3 million of cash and restricted cash, and $28.1 million of availability under the credit facility. Such liquidity does not include any asset sale proceeds received subsequent to September 30, 2003. "We were very pleased with the results of our core business, tower leasing, in the third quarter," commented Jeffrey A. Stoops, President and Chief Executive Officer. "Site leasing revenue, site leasing gross profit and site leasing gross profit margin were all new highs for us. Leasing activity remains solid, and our leasing backlog is growing. Services activity and backlog have also improved, but pricing continues to be challenging and services gross profit margins need to improve. On the cost side, we continued to reduce recurring overhead expense and capital expenditures. Improving our balance sheet by reducing our interest expense and deleveraging the Company remains a primary focus. We were able to make additional progress on those goals in the quarter through repurchasing more of our high-yield debt. "While we remain cautious, we believe there are clear signs that the business environment has improved since the beginning of the year. Carrier activity and demand for both our tower space and our services business have picked up in the second half of the year. We expect continued growth in the fourth quarter in our core leasing business and believe that we will have good momentum carrying into 2004." Outlook The Company has provided its Fourth Quarter 2003 and Full Year 2003 Outlook. This outlook is based on current expectations and assumptions and reflects the results of 852 towers as discontinued operations in the fourth quarter and for the full year. SBA (S&P, CCC Corporate Credit Rating, Developing Outlook) is a leading independent owner and operator of wireless communications infrastructure in the United States. SBA generates revenue from two primary businesses -- site leasing and site development services. The primary focus of the company is the leasing of antenna space on its multi-tenant towers to a variety of wireless service providers under long-term lease contracts. Since it was founded in 1989, SBA has participated in the development of over 20,000 antenna sites in the United States. SBA COMMS: Will Restate 2001 and 2002 Financial Statements ---------------------------------------------------------- As previously reported, SBA Communications Corporation (Nasdaq: SBAC) is required according to SEC rules to restate its financial statements for all periods presented to reflect as discontinued operations the 2003 sale of towers to AAT Communications Corporation and certain other towers held for sale. In that regard, SBA engaged Ernst & Young LLP, the Company's independent accountants since 2002, to re-audit the Company's financial statements for the year ended December 31, 2001. SBA Communications Corporation will be restating its financial statements for fiscal years 2002 and 2001 to reflect as discontinued operations the sale of towers to AAT and certain other towers held for sale, and to make certain adjustments identified through the audit process primarily related to the accounting for certain business combinations. These adjustments are primarily a result of changes in 2001 to reflect the elimination of net deferred tax liabilities and corresponding goodwill established in connection with certain business combinations, the accounting for earn-out obligations settled in 2002 related to previous business combinations and certain other adjustments. As a result, reported net loss for the year 2002 is expected to be reduced by approximately $24.2 million related to a reduction to the previously reported write-off of goodwill, consisting of a $19.9 million reduction of the cumulative effect of a change in accounting principle and a $4.3 million reduction of asset impairment charges. Certain adjustments identified in the restatement of the 2002 and 2001 financial statements, primarily those related to the accounting for certain business combinations, also affect the June 30, 2003 and 2002 financial statements previously filed. In addition, the loss on sale of towers previously reported in the second quarter of 2003 will be restated to reflect additional loss associated with tower sale indemnity obligations. Reported net loss for the six months ended June 30, 2003 will be increased by approximately $11.2 million related to the loss on the AAT tower sale, which is classified as a component of discontinued operations. The sale of the remaining 153 towers sold from July 1, 2003 through October 1, 2003, in the AAT transaction is expected to result in an aggregate gain, net of provisions for purchase price adjustments, of approximately $16 million. The Company expects its cumulative loss on the entire AAT transaction to be approximately $2 million. Reported net loss for the six months ended June 30, 2002 will be reduced by approximately $24.2 million related to a reduction to the previously reported write-off of goodwill, consisting of a $19.9 million reduction of the cumulative effect of a change in accounting principle and a $4.3 million reduction of asset impairment charges. The Company intends to file restated audited financial statements for 2002 and 2001 together with the opinion of Ernst & Young LLP, thereon by means of Form 8-K as soon as practicable. The independent auditors' report included in the initial issuance of the Company's 2002 consolidated financial statements contained an explanatory paragraph regarding substantial doubt about the Company's ability to continue as a going concern. The Company does not believe the conditions that raised substantial doubt about whether the Company will continue as a going concern will exist at the time the independent auditor's report on the 2002 and 2001 financial statements is issued and therefore such report will not contain a "going concern" qualification. Additionally, the Company intends to amend its Form 10-Q for the three and six months ended June 30, 2003. SBA (S&P, CCC Corporate Credit Rating, Developing Outlook) is a leading independent owner and operator of wireless communications infrastructure in the United States. SBA generates revenue from two primary businesses -- site leasing and site development services. The primary focus of the company is the leasing of antenna space on its multi-tenant towers to a variety of wireless service providers under long-term lease contracts. Since it was founded in 1989, SBA has participated in the development of over 20,000 antenna sites in the United States. SILICON GRAPHICS: Annual Shareholders' Meeting Set for Dec. 16 -------------------------------------------------------------- The Annual Meeting of Stockholders of Silicon Graphics, Inc. will be held on Tuesday, December 16, 2003 at 3:00 p.m., local time, in the Ballroom of the Hyatt Rickeys, 4219 El Camino Real, Palo Alto, California, for the following purposes: 1. To elect three Class II directors of the Company to serve for three-year terms. 2. To approve an increase in the number of shares reserved for issuance under the 1998 Employee Stock Purchase Plan. 3. To approve the issuance of up to 185,000,000 additional shares of common stock in connection with the Company's exchange offer or other refinancing of its 5.25% Senior Convertible Notes due 2004. 4. To approve an amendment to the Company's Certificate of Incorporation to increase the number of authorized shares of common stock from 500,000,000 to 750,000,000. 5. To ratify the appointment of Ernst & Young LLP as independent auditors of the Company for the fiscal year ending June 25, 2004. 6. To consider any other business that may properly come before the meeting. The close of business on October 31, 2003 is the record date for notice and voting. Silicon Graphics, Inc., manufactures servers (about 40% of sales) as well as workstations used by customers ranging from scientists, graphic artists, and engineers to large corporations and government agencies. It also makes modeling and animation software (through subsidiary Alias/Wavefront) and advanced graphics computers that are used to create some of Hollywood's most striking special effects. SGI has sold the supercomputer business it acquired from Cray Research. It has also spun off its streaming media software operations (Kasenna) and its microprocessor business (MIPS Technologies). At September 26, 2003, SGI's balance sheet shows a total shareholders' equity deficit of about $211 million. SMITHFIELD FOODS: Expects Improved Fiscal Second Quarter Results ---------------------------------------------------------------- Smithfield Foods, Inc. (NYSE: SFD) expects earnings for its fiscal second quarter, ended October 26, to approximate $.33 per share, versus $.04 per share a year ago. Smithfield expects that earnings per share from continuing operations, excluding Schneider Corporation results, will be $.29 per share, compared to breakeven results last year. On September 25, Smithfield announced a definitive agreement to sell its wholly-owned Canadian subsidiary, Schneider Corporation, to Maple Leaf Foods, Inc. The sale, which is subject to regulatory approval, is expected to close before the end of the company's fiscal year. The company attributed the favorable results to sharply-improved hog production results and dramatically higher beef margins that more than offset somewhat lower fresh pork and processed meats margins due to higher raw material prices. The acquisition of Farmland Foods pork processing and hog production assets was completed on October 28 and will be reflected in Smithfield's third quarter results. The acquisition of Farmland Foods, net of the disposition of Schneider, is expected to be immediately accretive to earnings. Smithfield will report second quarter earnings on November 20. With annualized sales of $9 billion, Smithfield Foods (S&P, BB+ Corporate Credit Rating, Negative) is the 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 STATION CASINOS: CFO Enters into Rule 10B5-1 Trading Plan --------------------------------------------------------- Glenn C. Christenson, Executive Vice President and Chief Financial Officer of Station Casinos Inc., has entered into a Rule 10b5-1 trading plan to sell up to 178,845 shares of the Company's common stock upon the exercise of certain options. Included in the 178,845 shares, are 70,384 shares that were included in Mr. Christenson's prior Rule 10b5-1 trading plan but were not sold prior to the expiration of that plan on October 31, 2003. Portions of the shares may be sold any time the stock achieves certain prearranged minimum prices and may take place beginning on November 3, 2003 and ending on January 30, 2003, unless sooner terminated. Mr. Christenson will have no control over the timing of any sales under the plan and there can be no assurance that the shares covered by the plan actually will be sold. Mr. Christenson entered into the plan in order to diversify his financial holdings, although he will continue to have a significant ownership interest in the Company. This trading plan is intended to comply with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, and the Company's insider trading policy. Rule 10b5-1 allows corporate insiders to establish prearranged written plans to buy or sell a specified number of shares of a company stock over a set period of time. A plan must be entered into in good faith at a time when the insider is not in possession of material, nonpublic information. Subsequent receipt by the insider of material, nonpublic information will not prevent transactions under the plans from being executed. Station Casinos, Inc. (S&P, BB Corporate Credit Rating, Stable Outlook) is the leading provider of gaming and entertainment to the residents of Las Vegas, Nevada. Station's properties are regional entertainment destinations and include various amenities, including numerous restaurants, entertainment venues, movie theaters, bowling and convention/banquet space, as well as traditional casino gaming offerings such as video poker, slot machines, table games, bingo and race and sports wagering. Station owns and operates Palace Station Hotel & Casino, Boulder Station Hotel & Casino, Santa Fe Station Hotel & Casino, Wildfire Casino and Wild Wild West Gambling Hall & Hotel in Las Vegas, Nevada, Texas Station Gambling Hall & Hotel and Fiesta Rancho Casino Hotel in North Las Vegas, Nevada, and Sunset Station Hotel & Casino and Fiesta Henderson Casino Hotel in Henderson, Nevada. Station also owns a 50 percent interest in both Barley's Casino & Brewing Company and Green Valley Ranch Station Casino in Henderson, Nevada and a 6.7 percent interest in the Palms Casino Resort in Las Vegas, Nevada. In addition, Station manages the Thunder Valley Casino in Sacramento, California on behalf of the United Auburn Indian Community. SUPERIOR TELECOM: Emerges from Chapter 11 with New CEO & Board -------------------------------------------------------------- Superior TeleCom Inc. (OTC: SRTOQ.OB) has completed its financial restructuring and has emerged from Chapter 11, effective November 10, 2003. As previously reported, Superior TeleCom's Plan of Reorganization was confirmed by the Delaware Bankruptcy Court on October 22, 2003. As contemplated under the Reorganization Plan, Superior Essex Inc., a newly-formed company has become the parent and holding company for the Company's principal operating subsidiaries: Superior Essex Communications LLC (formerly Superior Telecommunications Inc.) and Essex Group, Inc. Appointment of Chief Executive Officer and Board of Directors Superior Essex Inc. announced that Stephen M. Carter has been named as Chief Executive Officer, a position that had been vacant at Superior TeleCom since December 31, 2002. Mr. Carter has previously served in a number of CEO and senior executive positions in the telecommunications industry. Most recently, Mr. Carter served as President and Chief Executive Officer of Cingular Wireless, one of the largest worldwide providers of wireless services. Prior to Cingular Wireless, Mr. Carter also served in various positions with SBC Communications and its predecessor company, Southwestern Bell, including President and CEO of SBC Wireless, President of SBC Strategic and Special Markets and President/CEO of Southwestern Bell Telecom. Justin F. Deedy, Jr. and H. Patrick Jack will continue to serve in their current positions as President of Superior Essex Communications and Essex Group, respectively. Superior Essex also named its Board of Directors which includes, in addition to Mr. Carter: Andrew D. Africk, Denys Gounot, James F. Guthrie, Monte R. Haymon, Andrew P. Hines and Perry J. Lewis III. Mr. Africk is a senior partner of Apollo Management L.P., a global investment and buy-out company and a major new shareholder of Superior Essex. Mr. Africk also serves on the Board of Directors of Mobile Satellite Ventures, LLC and SkyTerra Communications, Inc. Mr. Gounot is the principal of DG Network, a strategic advisory firm. Mr. Gounot also serves on the Board of Directors of Rexel S.A., a $7 billion global distributor of electrical products. Mr. Gounot previously served as President of Lucent's multi-billion dollar optical fiber division and held senior executive positions with Alcatel Alsthom Group, one of the largest worldwide telecom equipment/wire and cable companies. Mr. Guthrie is an executive consultant principally to early stage telecom technology enterprises and has previously served in senior executive positions at IXC Communications Inc. (now Broadwing Communications), The Times Mirror Company and W.R. Grace among others. Mr. Guthrie also serves on the Board of Directors and as Chairman of the Audit Committee for Orius Corp. Mr. Haymon is the former Chairman, President and CEO of Sappi Fine Paper North America, a $1.6 billion manufacturer of coated and specialty paper products. Mr. Haymon had previously served as President of Ply Gem Industries and for thirteen years as President and CEO of Packaging Corporation of America. Mr. Haymon also serves on the Boards of Directors of other companies, including Agfa Gaevert and Sappi Limited. Mr. Hines is the principal of Hines and Associates, a strategic senior management consulting firm. Mr. Hines has served in senior executive positions with RJR Nabisco Inc., F.W. Woolworth, Outboard Marine Corporation and Adidas USA. Mr. Hines also serves on the Board of Directors of Nations Rent Companies, Inc. Mr. Lewis is a principal of CRT Capital Group/Sheffield Merchant Banking, an investment banking and M&A advisory firm. Mr. Lewis was also a founding partner of Morgan, Lewis, Githens & Ahn, Inc., an LBO/investment banking firm and has held various other positions within the investment banking industry including Director and member of the executive committee of Smith Barney, Harris Upham, Inc. Mr. Lewis currently serves on the Board of Directors of Clear Channel Communications, Inc. Distribution of Common Equity Securities Pursuant to the Plan of Reorganization, Superior Essex Inc. announced that it has distributed 16.5 million shares of its common stock to Superior TeleCom's senior secured lenders. The Company expects to file, as soon as practicable, a registration statement with the Securities and Exchange Commission to become a public reporting company pursuant to the Securities Exchange Act of 1934. Subject to the regulatory process, the Company anticipates this registration will be completed in the next 90 days. Additionally, in connection with the Plan of Reorganization, Superior TeleCom Inc. will deregister as a public company and its existing common shares will be cancelled. Completion of Financing Arrangements The Company announced consummation of all financing arrangements contemplated under its Plan of Reorganization, including closing of a $120 million revolving credit facility which is being provided by Fleet Capital Corporation and GE Capital. The Company projects borrowings of approximately $45-$50 million under this facility, after refinancing its DIP borrowings and funding all accrued restructuring expenses, with more than $50 million of undrawn excess availability. The revolving credit facility is due in 2007 and has an initial interest rate of LIBOR + 2.25%. The Company also completed Monday the distribution of $145 million of 9-1/2% Senior Secured Notes to Superior TeleCom's senior secured lenders. The Senior Secured Notes have no principal amortization requirements and are due in November 2008. In addition to the revolving credit facility and Senior Secured Notes, the Company also distributed $5 million of 9-1/2% subsidiary preferred stock to Superior TeleCom's senior secured lenders. As has been previously reported, the Company's total debt balance, including certain existing capital lease arrangements and pro forma for all accrued restructuring expenses, should approximate $200 million, a reduction in total debt from the restructuring of more than $1.1 billion. Annualized cash interest expense should approximate $17 million under the Company's revised capital structure, a reduction of more than $100 million annually as compared to pre-restructuring interest costs. The Company's principal financial advisors were Rothschild, Inc. The Company's principal legal advisors were Proskauer Rose LLP. Superior Essex Inc. is a worldwide leader in the development, manufacture and supply of a wide range of wire, cable and accessory products. Through its Superior Essex Communications and Essex Group (magnet wire) businesses, Superior Essex provides a broad portfolio of communications wire and cable products to telephone companies, distributors and system integrators and magnet wire for motors, transformers, generators and electrical controls. Headquartered in Atlanta, Georgia, Superior Essex operates manufacturing facilities in the United States, United Kingdom and Mexico. Additional information can be found on the Company's Web site at http://www.superioressex.com TENNECO AUTOMOTIVE: Sues Four Asian Companies for Counterfeiting ---------------------------------------------------------------- Tenneco Automotive (NYSE: TEN) has filed suit against four Asia-based companies for counterfeiting Tenneco Automotive elastomer products, which the company sells in the original equipment and replacement parts market primarily for vehicle suspension systems. Tenneco Automotive took the legal action against the following companies after finding counterfeited Tenneco Automotive bushings on display at each of their booths during the AAPEX trade show in Las Vegas last week: -- Altezza Company Ltd., Taipei, Taiwan -- Hill/Progressive Gear Industries, Delhi, India -- Keystone Company Ltd., Shihueng-City, South Korea -- Sheng Mhau, Taiping Taichung Hsien, Taiwan Tenneco Automotive alleges that these companies were displaying counterfeit bushings with the Clevite(R) Elastomer and Harris(TM) brand names. Additionally, many of the counterfeit bushings on display included Tenneco Automotive's part numbers and Rubber Manufacturers Association codes. "Counterfeiting and intellectual property violations represent a multi-billion dollar problem in our industry," said Mark Frissora, chairman and CEO, Tenneco Automotive. "Automotive suppliers, especially those recognized as advanced technology leaders with strong brands, must take swift and aggressive action in protecting the value and integrity of their brand assets and intellectual properties." The Motor and Equipment Manufacturers Association (MEMA) estimates counterfeit parts cost the industry more than $12 billion per year worldwide. Tenneco Automotive is a leader in developing and manufacturing elastomer products for the light vehicle and heavy-duty markets, both as replacement parts and as original equipment components. These products are marketed under the respected Clevite(R) Elastomer brand and include a broad range of bushings, torque rods, mounts, links, and exhaust isolators. The company filed claims of unfair competition and false designation of origin under the Lanham Act in the U.S. District Court in Nevada. Tenneco Automotive is seeking permanent injunctive relief and unspecified damages. Tenneco Automotive (S&P, B+ Senior Secured Bank Debt, B Senior Secured Notes, B- Subordinated Debt Ratings, Stable Outlook) is a $3.5 billion manufacturing company with headquarters in Lake Forest, Illinois and approximately 19,600 employees worldwide. Tenneco Automotive is one of the world's largest producers and marketers of ride control and exhaust systems and products, which are sold under the Monroe(R) and Walker(R) global brand names. Among its products are Sensa-Trac(R) and Monroe Reflex(R) shocks and struts, Rancho(R) shock absorbers, Walker(R) Quiet-Flow(R) mufflers and DynoMax(R) performance exhaust products, and Monroe(R) Clevite(R) vibration control components. TEREX CORP: Prices $300 Million Senior Subordinated Debt Issue -------------------------------------------------------------- Terex Corporation (NYSE: TEX) priced $300,000,000 principal amount of Senior Subordinated Notes due 2014. The notes will be issued with a coupon of 7.375% and will have a yield to maturity of 7.5%. Terex intends to use the net proceeds from the offering to prepay the remaining $200,000,000 in principal amount outstanding of its 8.875% Senior Subordinated Notes due 2008 and to prepay approximately $100,000,000 of its existing bank term loans. Terex also intends to prepay an additional $100,000,000 of its existing bank term loans with cash on hand. The result of these transactions will be to reduce total debt by $100,000,000. In addition, $200,000,000 in principal amount of the Notes will be swapped to a floating rate similar to that paid by Terex under its existing credit facility. The transactions are expected to close during the fourth quarter of 2003. Terex will take a pre-tax charge of approximately $5,500,000 in the fourth quarter due to the early retirement of existing debt. In connection with the offering of the new Notes, Terex is seeking to amend its existing bank credit facility. The closing of the Notes offering is conditioned upon Terex gaining approval of the amendment to its bank credit facility. Terex expects that the amendment will, among other things, permit the redemption of the 8.875% Senior Subordinated Notes due 2008 with proceeds from this offering, allow for the repurchase of Terex's 10.375% Senior Subordinated Notes due 2011 on or after April 1, 2006, and modify certain financial covenants for the second half of 2004 and 2005. It is intended that Terex Corporation will offer these Senior Subordinated Notes pursuant to Rule 144A promulgated under the Securities Act of 1933, as amended, and that they will not initially be registered under the Act. Accordingly, these Senior Subordinated Notes will not be able to be offered or sold in the United States absent registration under the Act or an applicable exemption from the registration requirements. Terex Corporation (S&P, BB- Corporate Credit Rating, Stable) is a diversified global manufacturer based in Westport, Connecticut, with 2002 revenues of $2.8 billion. Terex is involved in a broad range of construction, infrastructure, recycling and mining- related capital equipment under the brand names of Advance, American, Amida, Atlas, Bartell, Bendini, Benford, Bid-Well, B.L. Pegson, Canica, Cedarapids, Cifali, CMI, Coleman Engineering, Comedil, CPV, Demag, Fermec, Finlay, Franna, Fuchs, Genie, Grayhound, Hi-Ranger, Italmacchine, Jaques, Johnson-Ross, Koehring, Lectra Haul, Load King, Lorain, Marklift, Matbro, Morrison, Muller, O&K, Payhauler, Peiner, Powerscreen, PPM, Re- Tech, RO, Royer, Schaeff, Simplicity, Square Shooter, Telelect, Terex, and Unit Rig. Terex offers a complete line of financial products and services to assist in the acquisition of Terex equipment through Terex Financial Services. More information on Terex can be found at http://www.terex.com TEREX CORP: S&P Rates Proposed $300-Mil. Subordinated Notes at B ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit and secured bank loan ratings and its 'B' subordinated debt ratings on Terex Corp. At the same time, Standard & Poor's assigned its 'B' subordinated debt ratings to the company's proposed $300 million subordinated notes due in 2013 (144A with registration rights). Proceeds from this offering will be used to repay about $200 million in outstanding 8-7/8% notes due in 2008. The remaining $100 million proceeds along with $100 million of cash will be used to reduce bank debt. The company is seeking and expects to receive an amendment on its credit facility to allow for the repayment of the callable 8-7/8% notes. Westport Connecticut-based Terex, a low-cost global provider of construction equipment, has about $1.3 billion in debt outstanding. The outlook is stable. "Terex's good geographic, product, and customer diversity, and modest capital expenditures (about 1%-2% of sales) should help to stabilize earnings and cash flow generation throughout a business cycle," said Standard & Poor's credit analyst John Sico. "Operating margins are expected to be about 10%-12% over the economic cycle," Mr. Sico said. "Restructuring and cost-saving initiatives are expected to result in additional annual cost savings of about $25 million-$30 million and, along with increased operating income from the acquisitions made in the past year, should help to improve operating performance and credit protection measures over time." Terex has a highly leveraged capital structure because of its aggressive growth strategy. Terex is integrating the acquisitions it made in 2002 and is not expected to make any sizable acquisitions in 2003. TOUCHSTONE SOFTWARE: Recurring Losses Raise Going Concern Doubt --------------------------------------------------------------- TouchStone Software Corporation and subsidiaries markets, and supports a line of computer problem-solving utility software and supporting products and engineering services which simplify personal computer installation, support, and maintenance. TouchStone operates from one location in the United States. The Company markets its products, domestically and internationally, directly to original equipment manufacturers and end users. The Company's consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has suffered recurring operating losses and operating cash flow deficits, has an accumulated deficit of $20,460,996 at September 30, 2003, and is dependent on its current cash reserves to fund future operations and operating cash flow. In addition, the Company is subject to a number of risks. Principally among these risks are marketing of its products and services, which are susceptible to increased competition from other companies and obsolescence of its products and services. Also amoung these risks are the decreased sales leads the Company is facing with the change of Phoenix Technology's website. Prior to February 2003 the Company's website was linked to Phoenix's website by a Company logo prominently displayed. In February 2003 the logo was removed. These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern at September 30, 2003. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Management's reorganization plan of providing for significant staff reductions in non-core operating and support functions, limitations on corporate travel and a realignment of senior management responsibilities has been fully executed. In order to meet its cash requirements over the next twelve months, management expects to supplement cash flow benefits expected from these initiatives with current cash reserves. Other additional sources of financing, including additional private debt or equity capital, are being explored, along with seeking merger candidates with whom the Company has synergies. The Company's revenues consist of product sales, royalties and engineering services revenues. Product revenues are recorded at the time products are shipped. Royalty income is recognized upon receipt of a royalty report from the licensee. Engineering services revenue generally consists of amounts charged for customization of the software prior to delivery and are generally recognized as the services are performed. For the nine months ended September 30, 2003 the Company experienced an overall decline in revenues of 20% as compared to the same period a year ago. The decrease in revenues is due to major changes that were made to Phoenix Technology's website which has decreased the flow of traffic to the Company's website. Phoenix Technology is the manufacturer of Phoenix and Award Bios, which constitutes 86% of the BIOS upgrade revenue and 64% of the Company's total revenue for the nine months ended September 30, 2003. Prior to February 2003 the Company's website was linked to Phoenix's website by a Company logo prominently displayed. In February 2003 the logo was removed. This change drastically reduced the Company's leads. These leads enable the Company to sell other core products, most of which have also decreased in 2003. The Company is currently working with Phoenix Technologies on a solution that will satisfy both parties. Future revenue could be adversely affected by the current situation if a change to Phoenix's website is not made. BIOS product sales decreased approximately 9% as compared to the same period one year ago. Royalty revenue decreased by approximately 23% as compared to the same period one year ago. This is a direct result of both royalty agreements the Company had in place coming to an end. Cost of revenues consists of the cost of materials, freight expenses, royalties paid to other software development companies and direct costs associated with engineering services revenues. Cost of revenues as a percentage of revenue remained at 12% of revenues for the nine month period ended September 30, 2003 as it was for the same period a year ago. Royalty expense decreased 17% for the nine months ending September 30, 2003 from the same period a year ago. This is due primarily to the decline of award BIOS sales. Sales, marketing, general and administrative expenses consist primarily of salaries & commissions, professional services and facilities costs. Sales, marketing, general and administrative expenses decreased by approximately $214,000, or 26%, for the nine month period ended September 30, 2003, from the same period one year ago. This reduction is related to various cost cutting efforts to keep expenses in line with revenue. Another factor in this decrease is the settlement agreement between the Company and former legal counsel which waived approximately $32,000 in fees which were recorded in a prior year and reversed during the first quarter of 2003. Research and development expenses consist primarily of engineering personnel and related expenses. Research and development expenses increased by approximately $21,000 or 5%, for the nine month period ended September 30, 2003 from the same period one year ago. This is directly related to a purchase agreement the Company entered into with Storage Technologies. The agreement allowed the Company to buy the rights to use a product called Power BIOS. This product is used to target BIOS upgrades for motherboards that the Company was not able to upgrade without this technology. In June 2003 the Company sold 30,000 shares of one of its investments for $30,000 in cash. The transaction resulted in a gain of $13,200. In September 2003 the Company sold another 70,487 shares of the same investment for $70,487 in cash. The transaction resulted in a gain of approxiamtely $31,000. Other income, net consist of a $51,500 settlement payment received from the Company's former legal counsel and interest income associated with the related party note partially offset by interest expense associated with the long term debt. The increase from the same nine month period a year ago is primarily a result of the legal settlement. LIQUIDITY AND CAPITAL RESOURCES During the nine months ended September 30, 2003, cash resources of approximately $197,000 were used by the Company's operating activities as compared to cash of approximately $26,000 used during the same period a year ago. The Company's cash balance at September 30, 2003 was approximately $343,000 as compared to approximately $23,000 a year ago. Investments in marketable securities totaled $0 at September 30, 2003, as compared to $348,400 a year ago. This security, PartsBase, Inc., closed a merger transaction on February 21, 2003 where each share of PartsBase, Inc. common stock was converted into the right to receive $1.50 in cash. The Company held 260,000 shares of Partsbase, Inc. and received $390,000 in cash in March 2003. The Company has also received a settlement payment of $51,500 from the lawsuit settled with its former legal counsel and proceeds of $100,487 from the sale of a portion the Company's investment in Xdimensional. Working capital increased from approximately $39,500 at September 30, 2002 to approximately $214,000 at September 30, 2003 primarily driven by the net income over the nine month period and Xdimensional sale. A portion of these proceeds has been used to pay down a portion of the Company's current liabilities. During the quarter ended September 30, 2003 three principal and interest payments were made on the debt related to the settlement agreement with a former CEO, aggregating approximately $8,100. The remaining outstanding principal balance as of September 30, 2003 is approximately $18,500 and is scheduled to be repaid through April 2004. Management expects that the cash balance and the benefits from the reduction in overall operating expenses to be sufficient to meet its cash requirements. Other additional sources of financing, including additional private debt or equity capital are being explored, along with seeking merger candidates with whom the Company has substantial synergies. The Company continues to operate with no material commitments for capital expenditures and anticipates that expenditures will continue to decrease in the immediate future as the Company continues to cut costs during its efforts to restructure current operating expenditure in line with its current revenue stream. TRICO MARINE: Sets Third-Quarter Conference Call for Friday ----------------------------------------------------------- Trico Marine Services, Inc. (Nasdaq: TMAR) has scheduled a press release and a conference call to discuss its earnings for the third quarter ended September 30, 2003. The press release will be issued before the market opens on Friday, November 14, 2003, and a conference call will be held at 2:00 p.m. Eastern time. Interested parties may listen to the call by dialing 973-409-9256 and asking for the Trico Marine Conference. It is recommended that listeners dial in five to ten minutes before the call begins. A telephonic replay will also be available shortly after the conclusion of the call and will be available until 5:00 p.m. Friday, November 21, 2003. To access the replay, dial 973-341-3080 using the pass code 4308580. Trico Marine (S&P, B Corporate Credit Rating, Negative) provides a broad range of marine support services to the oil and gas industry, primarily in the Gulf of Mexico, the North Sea, Latin America, and West Africa. The services provided by the Company's diversified fleet of vessels include the marine transportation of drilling materials, supplies and crews, and support for the construction, installation, maintenance and removal of offshore facilities. Trico has principal offices in Houma, Louisiana, and Houston, Texas. Visit http://www.tricomarine.comfor more information on the Company. UBIQUITEL INC: Amends Sprint Affiliate Agreements to Cut Costs -------------------------------------------------------------- UbiquiTel Inc. (Nasdaq: UPCS), a PCS Affiliate of Sprint (NYSE: FON, PCS), announced an addendum to its Sprint management and services agreements that improves the predictability and clarity over key economic drivers such as roaming, reseller and back office rates while providing an immediate savings to UbiquiTel's cost structure. UbiquiTel agreed to continue to purchase from Sprint back office services such as billing, customer care, collections, network control center monitoring, voice mail and other network services through 2006, at an approximately 15% reduction from the current rate. In addition, the parties agreed to extend their reciprocal roaming rate and the reseller rate at the current year rate of $0.058 per minute through 2006. "We are very pleased at the cost savings and predictability this addendum helps us achieve in future periods," said Donald A. Harris, chairman and chief executive officer of UbiquiTel Inc. "With the highest roaming ratio of the public PCS Affiliates and with the expected rapid growth in minutes in our reseller channel from the addition of Qwest customers, we expect the extension of the current roaming and reseller rates will allow our wholesale revenues to grow by approximately 40% in 2004." The addendum provides a pricing process to determine new rates beyond 2006 for support services, roaming and reseller rates. Among other items, the addendum also provides the company certain protective rights relating to potential new capital spending requirements imposed by Sprint and a most favored nation provision to be offered over the next three years for all future changes that Sprint offers to other PCS Affiliates of similar size in their agreements with Sprint. In a related agreement, UbiquiTel and Sprint resolved all previously disputed charges between the companies. "The new addendum simplifies the way we conduct business with Sprint and builds a better foundation for a partnership to allow us to fully focus our attention on improving our market share and growing the business," said Harris. Conference Call to be held Today at 10:30 a.m. ET UbiquiTel's management will conduct a conference call today, at 10:30 a.m., Eastern Time, to discuss its results for the three months ended September 30, 2003 and provide guidance for the fourth quarter 2003. Investors and interested parties may listen to the call via a live webcast accessible through the company's Web site at http://www.ubiquitelpcs.com To listen, please register and download audio software at the site at least 15 minutes prior to the start of the call. The webcast will be archived on the site, while a telephone replay of the call will be available for 7 days beginning at 12:30 p.m., Eastern Time, November 12, at 888-286-8010 or 617-801-6888, passcode: 88678893. UbiquiTel (S&P, CCC Corporate Credit Rating, Developing) is the exclusive provider of Sprint digital wireless mobility communications network products and services under the Sprint brand name to midsize markets in the Western and Midwestern United States that include a population of approximately 10.0 million residents and cover portions of California, Nevada, Washington, Idaho, Wyoming, Utah, Indiana and Kentucky. UNIVERSAL HEALTH: Updates Q3 Results Due to FASB 150 Deferral ------------------------------------------------------------- Universal Health Services, Inc. (NYSE: UHS) released updated financial results for the three- and nine-month periods ended September 30, 2003 solely due to the Financial Accounting Standard Board's October 29, 2003 announcement that certain provisions of Statement of Accounting Standards No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity", related to the accounting for minority interest of consolidated subsidiaries with finite lives, will be indefinitely deferred. In the Company's October 20, 2003 press release announcing earnings for the three- and nine-month periods ended September 30, 2003, the Company had recorded an after-tax charge of $1,699,000 or $.03 per diluted share, for the cumulative effect of an accounting change related to this provision of FASB 150. Due to the revised accounting treatment, the Company has revised its earnings for the three- and nine-month periods ended September 30, 2003 (previously reported on October 20, 2003) to eliminate this $1,699,000 after-tax charge. Accordingly, the Company is now reporting net income and earning per diluted share of $49.1 million and $.79, respectively, for the three-month period ended September 30, 2003 and $152.8 million and $2.45, respectively, for the nine-month period ended September 30, 2003. Included in the net income and earnings per diluted share for the three- and nine-month periods ended September 30, 2003 were after- tax (and after minority interest expense) gains on sales of assets and businesses of $4.4 million or $.07 per diluted share. Universal Health Services, Inc. is one of the nation's largest hospital companies, operating acute care and behavioral health hospitals, ambulatory surgery and radiation centers nationwide, in Puerto Rico, and in France. It acts as the advisor to Universal Health Realty Income Trust, a real estate investment trust (NYSE: UHT). For additional information on the Company, visit http://www.uhsinc.com Universal Health Services' 0.416% bonds due 2020 are currently trading at about 62 cents-on-the-dollar. U.S. STEEL: Chairman Usher Airs Disappointment with WTO Decision ---------------------------------------------------------------- Monday a World Trade Organization (WTO) Appellate Body failed to overturn a flawed Dispute Settlement Body decision regarding the steel safeguard measures. Thomas J. Usher, chairman and CEO of United States Steel Corporation (NYSE: X), expressed disappointment with the decision, but added that he was "hardly surprised" by this outcome. "The fact that this decision is not a surprise to anybody illustrates what is wrong with the WTO. The WTO has ruled against every safeguard action instituted by any WTO-member country," said Usher. "While we are frustrated by the WTO's decision, we understand that the Administration must now analyze this ruling and consider what implementation steps or additional explanation might be appropriate or necessary. Congress has established very specific procedures under the law, which must be followed in implementing a decision. We hope and expect that the Administration will follow these procedures and will, in considering any implementation steps, ensure that this critically needed relief is in no way disrupted." Regarding the retaliatory threats made by the European Union (EU), Usher explained that immediate retaliation against the United States following this flawed decision would violate WTO agreements and must therefore not be allowed to "influence the President's decision regarding the steel relief measures." The steel safeguard measures have already been significantly weakened through the exclusions process. In addition to the many countries that were excluded from the tariffs from the outset of the relief, over 1,000 specific product exclusions have been granted -- most of which were granted to European suppliers. Congressional sources have expressed concern that bowing to such illegal tactics would further undermine Congressional confidence in the WTO and other free trade initiatives. The American steel industry is in the middle of an historic restructuring effort, having invested over $3 billion dollars to consolidate and having entered into a new agreement with the United Steelworkers of America to further improve productivity. It is essential that the industry not be subjected to a renewed surge of imports because of an early termination or weakening of the safeguard measures. "The industry is doing its part under the Section 201 program," said Usher. "The industry now needs the President to maintain the relief measures for the full three-year term if the President's program is to come to a successful conclusion." For more information about U. S. Steel visit http://www.ussteel.com United States Steel Corporation (S&P, BB- Corporate Credit Rating, Negative) is engaged domestically in the production, sale and transportation of steel mill products, coke and taconite pellets (iron ore); steel mill products distribution; the management of mineral resources; the management and development of real estate; engineering and consulting services; and, through U. S. Steel Kosice in the Slovak Republic and U. S. Steel Balkan, d.o.o. in Serbia, in the production and sale of steel mill products and coke primarily for the central and western European markets. As mentioned in Note 5, effective June 30, 2003, U. S. Steel is no longer involved in the mining, processing and sale of coal. VALHI INC: Reports an Upswing in Third-Quarter Financial Results ---------------------------------------------------------------- Valhi, Inc. (NYSE: VHI) reported net income of $8.8 million in the third quarter of 2003 compared to a net loss of $7.1 million in the third quarter of 2002. For the first nine months of 2003, the Company reported income before cumulative effect of a change in accounting principle of $28.2 million, compared to a loss of $4.4 million in the first nine months of 2002. Chemicals sales and operating income increased in 2003 compared to the same periods of 2002 due primarily to higher average selling prices for titanium dioxide pigments ("TiO2") and higher TiO2 production volumes, partially offset by lower sales volumes and higher operating costs (particularly for energy). Excluding the effect of fluctuations in the value of the U.S. dollar relative to other currencies, NL's average TiO2 selling prices in billing currencies in the third quarter of 2003 were 2% higher than the third quarter of 2002, with the greatest improvements realized in European and export markets, and were 5% higher in the first nine months of 2003 compared to the first nine months of 2002. Expressed in U.S. dollars computed using actual foreign currency exchange rates prevailing during the periods, NL's average TiO2 selling prices in the third quarter of 2003 were 10% higher than the third quarter of 2002, and were 15% higher in the first nine months of 2003 compared to the same period in 2002. NL's TiO2 sales volumes in the third quarter of 2003 decreased 6% compared to the third quarter of 2002, with substantially all of the decrease occurring in export markets. NL's TiO2 sales volumes in the first nine months of 2003 were 1% lower than the first nine months of 2002. NL's TiO2 production volumes in the third quarter of 2003 were 1% higher than the third quarter of 2002, and were 6% higher in the first nine months of 2003 compared to the same period of 2002, with operating rates at near capacity in all periods presented. Component products sales were higher in 2003 compared to the same periods in 2002 due primarily to the favorable effect of fluctuations in foreign currency exchange rates. Fluctuations in the value of the U.S. relative to other currencies increased component products sales by $2.0 million in the third quarter of 2003 as compared to the third quarter of 2002, and increased sales by $6.3 million in the year-to-date period. In addition to the favorable impact of changes in currency exchange rates, component product sales increased in the third quarter of 2003 as compared to the third quarter of 2002 due principally to higher sales volumes of slide products. Offsetting the favorable effect of changes in currency exchange rates during the first nine months of 2003 as compared to the same period of 2002, sales were negatively impacted by lower sales volumes of ergonomic computer products. Component products operating income declined in the third quarter and first nine months of 2003 compared to the same periods in 2002 due to the unfavorable effect of fluctuations in foreign currency exchange rates, relative changes in product mix and expenses associated with the consolidation of its two Canadian facilities into one facility. The fluctuations in the value of the U.S. relative to other currencies decreased components products operating income by $1.3 million in the third quarter of 2003 as compared to the third quarter of 2002, and decreased operating income by $2.6 million in the year-to-date period. In addition, component products operating income in the third quarter of 2003 includes a $3.5 million restructuring charge associated with the implementation of certain headcount reductions in CompX's Netherlands operations. Waste management sales declined in 2003, and its operating loss increased, due to continued weak demand for waste management services as well as costs incurred in 2003 related to certain licensing and permitting activities. TIMET reported higher sales in the third quarter of 2003 compared to the third quarter of 2002, and improved from a $4.3 million operating loss in the 2002 period to operating income of $1.3 million in the third quarter of 2003. TIMET's net sales increased primarily due to a 95% increase in sales volumes of melted products (ingot and slab), a 4% increase in average selling prices for mill products and the weakening of the U.S. dollar as compared to the British pound sterling and the euro. These factors were partially offset by a 27% decrease in average selling prices for melted products. The improvement in melted product sales volumes, and the decrease in melted products selling prices, reflects a change in product mix relative to a significant sale of slab in the third quarter of 2003, for which selling prices are lower than ingot. TIMET's results in the third quarter of 2003 also include a $6.8 million charge related to the termination of TIMET's purchase and sales agreement with Wyman-Gordon Company. The Company's equity in losses of TIMET in the first nine months of 2002 includes (i) a third quarter impairment provision of $15.7 million ($8.0 million, or $.07 per diluted share, net of income tax benefit and minority interest) related to an other than temporary decline in value of the Company's investment in TIMET and (ii) a $10.6 million first quarter charge ($5.4 million, or $.05 per diluted share, net of income tax benefit and minority interest) related to TIMET's impairment for an other than temporary decline in value of certain preferred securities held by TIMET. General corporate expenses were higher in the first nine months of 2003 compared to the same period of 2002 due primarily to higher environmental expense accruals of NL related principally to one formerly-owned site for which the remediation process is expected to occur over the next several years, and higher legal expenses of NL. The legal settlement gains in both 2002 and 2003 (which aggregated $1.2 million, or $.01 per diluted share, net of income taxes and minority interest, in the first nine months of 2002) related to legal settlements with certain of NL's former insurance carriers. The foreign currency transaction gain in 2002 ($4.7 million, or $.04 per diluted share, net of income taxes and minority interest) related principally to the second quarter extinguishment of certain intercompany indebtedness of NL. The gain on the disposal of fixed assets in the 2003 periods related primarily to the sale of certain real property of NL not associated with NL's TiO2 operations, (which aggregated $4.1 million, or $.03 per diluted share, net of income taxes and minority interest, in the third quarter of 2003 and $4.7 million, or $.04 per diluted share, in the first nine months of 2003). Securities transactions gains in both periods (which aggregated $1.2 million, or $.01 per diluted share, net of income taxes, in the first nine months of 2002) related to the disposal of certain marketable securities. The Company recognized a $24.6 million income tax benefit in the first nine months of 2003 ($20.8 million, or $.17 per diluted share, net of minority interest) related to NL's previously- reported second quarter favorable German court ruling concerning NL's claim for refund suit. NL currently expects to receive the equivalent of approximately $15 million of additional German income tax refunds over the next four to six months, a portion of which may result in the recognition of additional income tax benefits. The cumulative effect of the change in accounting principle in the first nine months of 2003 relates to the Company's adoption of Statement of Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations, effective January 1, 2003. Such change in accounting relates principally to accounting for closure and post-closure obligations at the Company's waste management operations. Valhi, Inc. (Fitch, BB- Senior Secured Credit Facility and BB- Unsecured Ratings, Stable Outlook) is engaged in the titanium dioxide pigments, component products (ergonomic computer support systems, precision ball bearing slides and security products), titanium metals products and waste management industries. VANGUARD HEALTH: 3rd-Quarter Results Reflect Strong Performance --------------------------------------------------------------- Vanguard Health Systems, Inc. announced results for the first quarter ended September 30, 2003. Total revenues for the quarter ended September 30, 2003, were $409.9 million, an increase of $142.0 million or 53.0% from the prior year period. Patient service revenues and health plan premium revenues increased $137.6 million and $4.4 million, respectively, from the prior year period. Income before income taxes was $10.5 million for the quarter ended September 30, 2003, an increase of $6.5 million or 162.5% from the prior year period. Net income for the quarter ended September 30, 2003 was $6.3 million, an increase of $3.9 million or 162.5% from the prior year period. Adjusted EBITDA was $34.3 million for the quarter ended September 30, 2003, an increase of $14.2 million or 70.6% from the prior year period. A reconciliation of Adjusted EBITDA to net income as determined in accordance with generally accepted accounting principles for the quarters ended September 30, 2002 and 2003 is included in the attached supplemental financial information. The consolidated operating results for the quarter ended September 30, 2003, reflect a 65.5% increase in discharges and a 72.8% increase in patient days compared to the prior year period. On a same hospital basis, discharges decreased 1.3%, while revenues per adjusted discharge for hospitals increased 4.6% during the quarter ended September 30, 2003, compared to the prior year period. Same hospital discharges were unfavorably impacted by our preparations for the July 2003 reopening of the emergency department and the expansion of other acute services at one of the Company's Phoenix hospitals and the termination of the hospital's relationship with a large cardiology practice during the fourth quarter ended June 30, 2003. Absent the effect of this hospital, same hospital discharges would have increased 3.3% during the quarter. In August 2003, a large multi-specialty physician group in Phoenix purchased a minority interest in this Phoenix hospital. After an initial start-up period, management expects this new partnership to improve the future operating results of this hospital. Additionally, the opening of our newest hospital in Phoenix, Arizona, West Valley Hospital, favorably impacted same hospital discharges during the quarter ended September 30, 2003. Excluding both the transition hospital described above and West Valley Hospital, same hospital discharges would have increased 2.5% during the quarter ended September 30, 2003, compared to the prior year period. Cash flows from operating activities were $0.4 million for the quarter ended September 30, 2003, a decrease of $27.6 million from the prior year period. The decrease in cash flows from operating activities during the quarter ended September 30, 2003, was primarily a result of the timing of payments of accounts payable and accrued expenses. "We are pleased with the results of the quarter and are excited about the prospects for growth in our existing markets. Worth noting are the successful opening of the West Valley Hospital in Phoenix and the reopening of Phoenix Memorial in Phoenix as a full-service facility," commented Charles N. Martin, Jr., Chairman and Chief Executive Officer. "We continue to be enthused by the progress of the Baptist Health System in San Antonio. We remain committed to expanding our facilities and service lines in our markets to best provide high quality care for our patients." At September 30, 2003, Vanguard Health Systems, Inc. (S&P, B Corporate Credit Rating, Stable Outlook) owned and operated 16 acute care hospitals and complementary facilities and services in Chicago, Illinois; Phoenix, Arizona; Orange County, California; and San Antonio, Texas. The Company's strategy is to develop locally branded, comprehensive health care delivery networks in urban markets. Vanguard will pursue acquisitions where there are opportunities to partner with leading delivery systems in new urban markets. Upon acquiring a facility or network of facilities, Vanguard implements strategic and operational improvement initiatives including expanding services, strengthening relationships with physicians and managed care organizations, recruiting new physicians and upgrading information systems and other capital equipment. These strategies improve quality and network coverage in a cost effective and accessible manner for the communities we serve. VINTAGE PETROLEUM: Acquiring Producing Properties in Uinta Basin ---------------------------------------------------------------- Vintage Petroleum, Inc. (NYSE: VPI) announced the signing of an agreement to acquire producing properties in the Uinta basin of Utah for $52.5 million, subject to customary closing adjustments from the transaction's June 1, 2003, effective date. The agreement calls for Vintage to acquire an approximately 80 percent, operated working interest in fields primarily in Duchesne and Uintah counties in Utah covering over 200,000 net acres from various subsidiaries of El Paso Corporation. Current net production attributable to the properties is estimated at 2,000 barrels of oil and natural gas liquids per day and 920 thousand cubic feet of gas per day from the Green River and Wasatch formations. Vintage believes the properties contain significant workover, drilling and waterflood potential which it plans to pursue along with the implementation of operational efficiencies. In addition to the property interests, Vintage is to acquire the majority interest and operational control of three gas plants which will provide Vintage with an increase in its natural gas gathering and processing income. "These properties provide us with the type of operational and work program opportunities in which we have excelled historically. We are excited about operating in the Rockies and its potential to become a significant producing area for us," said S. Craig George, CEO. Vintage currently has just over 2.1 million barrels of oil hedged during 2004 and nearly 1.4 million barrels of oil hedged during 2005 at average NYMEX reference prices of $29.00 and $25.73, respectively. "We're taking advantage of the strong oil price environment with hedges in place for 2004 and 2005, a portion of which helps to protect our projected acquisition returns," added S. Craig George, CEO. 2004 Targets Revised As a result of this acquisition, Vintage is increasing its 2004 annual targets for cash flow from continuing operations from $214 million to $230 million and for EBITDAX from $315 million to $333 million. The 2004 annual production target has been increased by nearly one million barrels of oil equivalent (BOE) to 27.8 million BOE. The capital spending budget increase of $15 million will be allocated to exploitation spending in the United States, bringing the total capital spending budget for 2004 to $240 million. These revised targets and others along with the definitions of cash flow and EBITDAX are enumerated in the accompanying table, "Vintage Petroleum, Inc., Revised Targets for 2004" and are based on average NYMEX prices for 2004 of $27.00 per barrel of oil and $5.00 per MMBTU of natural gas. The transaction is scheduled to close on or before December 2, 2003, subject to ordinary conditions precedent. Cash required at closing will be provided by the company's existing bank credit facility. Vintage Petroleum, Inc. (S&P, BB- Debt Rating, Negative) is an independent energy company engaged in the acquisition, exploitation, exploration and development of oil and gas properties and the gathering and marketing of natural gas and crude oil. Company headquarters are in Tulsa, Oklahoma, and its common shares are traded on the New York Stock Exchange under the symbol VPI. WARNACO GROUP: Amends Polo/Ralph Lauren License Agreement --------------------------------------------------------- Jay A. Galluzzo, The Warnaco Group Inc. Vice President, General Counsel and Secretary, disclosed in a regulatory filing with the Securities and Exchange Commission on September 22, 2003 that Warnaco has amended its existing license agreement with Polo/Ralph Lauren Corporation for the CHAPS line of men's sportswear. The amendments to the Polo/Ralph Lauren License Agreement are: (a) The duration of the license term is extended beyond its current term, which expires on December 31, 2008, by adding two five-year renewal terms up to and through December 31, 2018; (b) The scope of the licensed products is expanded to include a jeanswear collection, activewear and swimwear in addition to the current sportswear products; and (c) The range of approved accounts is expanded. As part of the amendment, Mr. Galluzzo says, Warnaco will introduce a newly redesigned CHAPS trademark and logo, in time for the new CHAPS men's line scheduled to launch in Fall 2004. (Warnaco Bankruptcy News, Issue No. 55; Bankruptcy Creditors' Service, Inc., 609/392-0900) WESTAR ENERGY: Third-Quarter 2003 Loss Reaches $81 Million ---------------------------------------------------------- Westar Energy, Inc. (NYSE:WR) announced a loss of $81.3 million, or $1.12 per share, for the third quarter 2003. As discussed below, the loss primarily results from a further write-down of the Company's investment in Protection One. This compares to earnings of $43.3 million, or $0.61 per share, for the third quarter 2002. Third quarter ongoing earnings, a non-GAAP measure which excludes special items, were $61.1 million, or $0.84 per share, compared to $63 million, or $0.88 per share, for the third quarter 2002. "We have made substantial progress in executing the debt reduction plan approved by the Kansas Corporation Commission. Despite the additional Protection One write-down, we still expect to achieve the debt reduction goals outlined in our plan," said Mark Ruelle, executive vice president and chief financial officer. For the nine months ended Sept. 30, 2003, the Company reported earnings of $70.4 million, or $0.97 per share, compared to a loss of $693.8 million, or $9.71 per share, for the first nine months of 2002. Year-to-date ongoing earnings were $103 million, or $1.43 per share, as compared to $101.1 million, or $1.41 per share, for 2002. The decrease in ongoing earnings for the third quarter 2003 when compared to the same period in 2002 was largely the result of decreased retail sales due to milder weather, increased maintenance expenses and reduced investment earnings due to the sale of a portion of our ONEOK shares. Power marketing's positive performance helped to offset the impact of lower retail sales. The increase in ongoing earnings for the nine months ended Sept. 30, 2003, when compared to the same period in 2002 was largely the result of power marketing's positive performance, which offset the same factors that caused the decline for the third quarter. This release describes "ongoing earnings" in addition to earnings calculated in accordance with generally accepted accounting principles (GAAP). Ongoing earnings is a non-GAAP financial measure that differs from GAAP earnings because it excludes the effect of certain special or unusual items. Ongoing earnings is reconciled to GAAP earnings in the attachments to this release. We believe the measure of ongoing earnings provides investors a useful indicator of our results that is comparable between periods because it excludes the effects of special items, which may occur on an irregular basis. Investors should note that this non-GAAP measure involves judgments by management including whether an item is classified as a special item. Utility Operations Revenues for Westar Energy's utility operations were $438.2 million for the third quarter 2003, compared to revenues of $442.1 million for the same period last year, a decrease of 0.9 percent. Retail revenues from residential, commercial and industrial customers decreased $11.2 million, or 3.2 percent, reflecting milder weather than for the same period last year. Higher wholesale and power marketing revenues largely offset the reduction in retail revenues. Utility operations contributed earnings of $57.1 million, or $0.79 per share, for the third quarter 2003, compared to $38.6 million, or $0.54 per share, for the same period 2002. Ongoing earnings for utility operations were $56.5 million, or $0.78 per share, for the third quarter 2003 compared to ongoing earnings of $54 million, or $0.75 per share, for the third quarter 2002. The increase in ongoing earnings for utility operations during the third quarter 2003 as compared to the same period in 2002 was attributable to more favorable wholesale market conditions and lower interest expense, offset by modestly higher operating expenses. Revenues in the first nine months of 2003 were $1.13 billion compared to revenues of $1.09 billion in the same period a year ago, an increase of 3.4 percent. This increase in revenues is largely the result of higher wholesale and power marketing revenues. Utility operations contributed earnings of $101.6 million, or $1.40 per share, for the nine months ended Sept. 30, 2003, compared to $21.2 million, or $0.30 per share, for the same period 2002. Utility operations for the nine months ended Sept. 30, 2003 contributed ongoing earnings of approximately $85.7 million, or $1.19 per share, compared to ongoing earnings of $68.6 million, or $0.96 per share, for the same period in 2002. The increase in ongoing earnings at the utility for this period was attributable primarily to more favorable wholesale market conditions, offsetting higher operations and maintenance expenses as compared to the same period in 2002. Other Operations Westar Energy's other operations include its ownership interest in ONEOK, discontinued operations and other miscellaneous investments. Effective the first quarter 2003, the Company classified its monitored security businesses as discontinued operations. Other operations contributed a loss of $138.3 million, or $1.91 per share, for the quarter ended Sept. 30, 2003, compared to earnings of $4.7 million, or $0.07 per share, for the same period in 2002. Other operations contributed ongoing earnings of $4.6 million, or $0.06 per share, for the third quarter 2003, compared to ongoing earnings of $9 million, or $0.13 per share, for the same period last year. Other operations contributed a loss of $31.2 million, or $0.43 per share, for the nine months ended Sept. 30, 2003, compared to a loss of $715 million, or $10.01 per share, for the same period in 2002. Other operations contributed ongoing earnings of $17.3 million, or $0.24 per share, for the nine months ended Sept. 30, 2003 compared to ongoing earnings of $32.5 million, or $0.45 per share, for the same period last year. The decline in ongoing earnings of other operations for the three months ended and nine months ended Sept. 30, 2003, as compared to the same periods in 2002, results primarily from lower investment earnings from our holdings in ONEOK due to the sale of a portion of our ONEOK shares. Based on continuing negotiations with potential buyers of Protection One, the Company has taken a further write-down of its Protection One investment by $165.6 million. This writedown is consistent with our current estimate of the debt reduction value from the sale of Protection One of $500 million to $650 million. Westar Energy, Inc. (NYSE:WR) (S&P/BB+/Developing/--) is the largest electric utility in Kansas and owns interests in monitored security businesses and other investments. Westar Energy provides electric service to about 657,000 customers in the state. Westar Energy has nearly 6,000 megawatts of electric generation capacity and operates and coordinates more than 36,600 miles of electric distribution and transmission lines. The company has total assets of approximately $6.7 billion, including security company holdings through ownership of Protection One, Inc. (NYSE: POI). Through its ownership in ONEOK, Inc. (NYSE: OKE), a Tulsa, Okla.- based natural gas company, Westar Energy has, prior to completion of the ONEOK transaction described herein, a 27.5 percent interest in one of the largest natural gas distribution companies in the nation, serving nearly 2 million customers. For more information about Westar Energy, visit http://www.wr.com WESTPOINT STEVENS: Bank of America Filing Master Proof of Claim --------------------------------------------------------------- The Bank of America, N.A., as administrative and collateral agent, and certain other bank lenders are prepetition secured claimholders against the WestPoint Stevens Debtors arising under the DIP Credit Agreement, the Collateral Trust Agreement, and collateral and other ancillary documents executed. To facilitate the claims processing, to ease the Court's burden and to reduce any unnecessary expense to the Debtors' estates which would be incurred by requiring each Bank Lender to file a separate proof of claim against the Debtors, the Debtors and Bank of America agree that Bank of America will file a single master proof of claim on behalf of the other bank lenders on account of their claims against the Debtors arising under the Loan Documents. Upon the filing of the Master Proof of Claim, each Bank will be deemed to have filed a proof of claim against the Debtors in respect of their claims against the Debtors arising under the Loan Documents. Bank of America may amend the Master Proof of Claim from time to time to reflect a change in the claimholders or claim amounts or a reallocation of claims resulting from any transfer. Judge Drain approves the parties' stipulation. (WestPoint Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., 609/392-0900) WHEELING-PITTSBURGH: U.S. Trust Corp. Discloses 40% Equity Stake ---------------------------------------------------------------- U.S. Trust Corporation and United States Trust Company of New York beneficially own 4,000,000 shares of the common stock of Wheeling- Pittsburgh Corporation. The entities hold sold voting and dispositive powers over the stock, a holding representing 40% of the outstanding common stock shares of the Company. U.S. Trust Corporation is a wholly-owned direct subsidiary of The Charles Schwab Corporation. Each entity files reports completely separate and independent from the other. Correspondingly, neither entity shares with the other any information and/or power with respect to either the voting and/or disposition of the securities reported by each. U.S. Trust, NA, a subsidiary of U.S. Trust Corporation, is Investment Manager of Wheeling-Pittsburgh's Retiree Plan. WOMEN FIRST: Will Publish Third-Quarter 2003 Results on Friday -------------------------------------------------------------- Women First HealthCare, Inc. (Nasdaq:WFHC) announced its 2003 third quarter earnings release date. On Friday, November 14, 2003, before the market opens, Women First will issue a press release announcing its financial results for the third quarter ended September 30, 2003. Beginning at 8:00 AM Pacific Time (11:00 AM Eastern Time) the same day, Edward F. Calesa, chairman and CEO, Michael Sember, president and COO, and Richard G. Vincent, vice president and CFO, will host a conference call to discuss the results. Discussions may include forward-looking and other material information. The November 14 conference call will be broadcast live on the Internet and will be accessible at CCBN's http://www.fulldisclosure.comand at http://www.womenfirst.com Investor Relations, Conference Calls, http://www.irconnect.com/wfhc/pages/conference.html Windows Media Player is the required software plug-in and can be downloaded at no cost from both Web sites. The conference call will be archived and available on the above websites for two weeks beginning at approximately 5:00 PM Eastern Time, Friday, November 14, through 5:00 PM. Eastern Time, Friday, November 28. A telephone replay of the call will also be available during this same timeframe and will be accessible by calling (800) 642-1687 (domestic) or (706) 645-9291 (international), conference code No. 3979754. Women First HealthCare, Inc. (Nasdaq: WFHC) is a San Diego-based specialty pharmaceutical company. Founded in 1996, its mission is to help midlife women make informed choices regarding their health care and to provide pharmaceutical products--the Company's primary emphasis--and lifestyle products to meet their needs. Women First HealthCare is specifically targeted to women age 40+ and their clinicians. Further information about Women First HealthCare can be found online at http://www.womenfirst.com About Us and Investor Relations. * * * At June 30, 2003, the Company's balance sheet shows a working capital deficit of about $7 million, while total net capitalization dropped to about $15 million from $46 million six months ago. As reported in Troubled Company Reporter's May 15, 2003 edition, Women First HealthCare Inc. received $2.5 million of new capital through a private placement of its common stock and completed agreements to obtain waivers of past defaults and restructure the terms of both its $28.0 million principal amount of senior secured notes and convertible redeemable preferred stock issued to finance the company's acquisition of Vaniqa(R) Cream. WORLDCOM: Klayman Posts Notice to Employees with SSB Accounts ------------------------------------------------------------- The law firm of Klayman & Toskes, P.A. -- http://www.nasd-law.com -- is pursuing an arbitration claim against Salomon Smith Barney, Inc. with the New York Stock Exchange on behalf of an employee stock option participant whose highly margined investment portfolio was over-concentrated in WorldCom (OTC Pink Sheets: MCIAV MCWEQ WCOEQ) stock. The claim, (NYSE Case #2003-011460), seeks compensatory damages of $3,919,706 and alleges specific sales practice violations, most importantly the concentration of the investor's portfolio and the failure to recommend hedging strategies known as "zero cost" dollars to properly protect the investor's concentrated stock position. Hedging strategies are usually offered to employee stock option plan participants to protect their concentrated position in their company stock as a result of the exercise of their stock options. The alleged unlawful acts took place at Salomon's Atlanta, Peach Tree Road, branch office. Smith Barney recently consented to a finding by the New York Stock Exchange that it failed to adequately supervise its brokers at the Atlanta, Peachtree Road, branch office who advised WorldCom employees to exercise their stock options and to hold the resulting company shares on margin. This advice given to employees created highly concentrated and leveraged positions in company stock. The outcome of this advice was the virtual loss of the employees' retirement "nest egg." The NYSE findings included that Smith Barney's brokers uniformly made these recommendations despite the customers' varying risk profiles, investment experience or investment objectives. These findings confirm the contentions that have been alleged against Salomon Smith Barney by K&T on behalf of their WorldCom employee clients since 2001. A growing trend among investors is to use arbitration as a means of recovering losses. K&T currently represents numerous employee stock option participants who were damaged by highly margined, over-concentrated portfolios. Arbitration as an alternative path will ultimately depend on whether the alleged losses are a result of sales practice violations and whether the alleged damages are large enough to justify the costs required to file a securities arbitration claim. Empirical evidence shows that when an investor suffers losses in larger amounts, usually in excess of $100,000, an individual dispute resolution process such as an arbitration claim filed before the New York Stock Exchange or the National Association of Securities Dealers is the best means of recovering losses suffered. The sole purpose of this release is to investigate, on behalf of our clients, sales practice violations at major brokerage firms. We would greatly appreciate any information concerning the method or process used by various brokerage firms with regard to the handling of investor stock portfolios. K&T has offices in California, Florida and New York and represents investors throughout the nation. If you wish to discuss this announcement or have information relevant to our securities arbitration claims, please contact Lawrence L. Klayman, of K&T at 888-997-9956 or visit http://www.nasd-law.com ZI CORPORATION: Third Quarter Conference Call Set for Friday ------------------------------------------------------------ Zi Corporation (Nasdaq: ZICA) (TSX: ZIC), a leading provider of intelligent interface solutions, announced plans to release its third quarter and nine-month results before the market opens on Friday, November 14, 2003, and to host a conference call at 9:00 AM Eastern Time that same day. Conference Call Toll free dial-in number: 1-888-208-1812, or 1-719-457-2654 RSVP Nathan Abler, Allen & Caron Inc: 949-474-4300 or nathan@allencaron.com Webcast A live webcast and 10-day archive of the call can be accessed at: http://www.zicorp.com Recording A recording will be available shortly following the conference call until 11:59 PM Eastern time on Monday, November 17, 2003. Toll free in North America: 1-888-203-1112(a) International: 1-719-457-0820(a) (a) Reservation Number: 583683 Zi Corporation -- http://www.zicorp.com-- is a technology company that delivers intelligent interface solutions to enhance the user experience of wireless and consumer technologies. The company's intelligent predictive text interfaces, eZiTap(TM) and eZiText, allow users to personalize the device and simplify text entry providing consumers with easy interaction for short messaging, e- mail, e-commerce, Web browsing and similar applications in almost any written language. eZiNet(TM), Zi's new client/network based data indexing and retrieval solution, increases the usability for data-centric devices by reducing the number of key strokes required to access multiple types of data resident on a device, a network or both. Zi supports its strategic partners and customers from offices in Asia, Europe and North America. A publicly traded company, Zi Corporation is listed on the Nasdaq National Market (ZICA) and the Toronto Stock Exchange (ZIC). At March 31, 2003, Zi Corporation's balance sheet shows a working capital deficit of about $2 million. * New Corporate Disclosure Bankruptcy Rule Takes Effect Dec. 1 -------------------------------------------------------------- New Rule 7007.1 and an amendment to Rule 1007 of the Federal Rules of Bankruptcy Procedure, promulgated by the United States Supreme Court and applicable in all bankruptcy cases filed on and afer December 1, 2003 (and various conforming amendments to Rules 2003, 2009 and 2016), impose a requirement on corporations to file a corporate ownership statement when the corporation is either a debtor (FRBP 1007, as amended) or a party to an adversary proceeding (new FRBP 7007.1). For corporate debtors, the corporate ownership statement is due at the time of the filing of the petition. For corporate parties to an adversary proceeding, the corporate ownership statement should be filed with the first pleading. The corporate ownership statement should identify any other corporation owning ten percent or more of the corporate filer's stock. The purpose of the new corporate disclosure requirement is to provide the court with some of the information necessary to make judicial disqualification decisions. It is modeled on similar disclosure provisions in the Federal Rules of Appellate, Civil, and Criminal Procedure. Requiring debtors to file the statement, the Advisory Committee explains, provides the court with an opportunity to make judicial disqualification determinations at the outset of the case. This could reduce problems later in the case by preventing the initial assignment of the case to a judge who holds a financial interest in a parent company of the debtor or some other entity that holds a significant ownership interest in the debtor. Moreover, by including the disclosure statement filing requirement at the commencement of the case, the debtor does not have to make the same disclosure filing each time it is involved in an adversary proceeding throughout the case. The debtor also must file supplemental statements as changes in ownership might arise. The Advisory Committee notes that this new rule does not prohibit the adoption of local rules requiring disclosures beyond what Rule 7007.1 requires. * Steelworkers Condemn WTO Rejection of U.S. Steel Tariff --------------------------------------------------------- Leo W. Gerard, International President of the United Steelworkers of America, issued the following statement in response to today's determination by the World Trade Organization that the U.S. government's steel safeguard tariffs are "illegal." "[Mon]day's ruling is the latest in a long line of WTO decisions undercutting America by overriding our trade laws and the nation's ability to make sovereign decisions in the interest of the American economy and the American people," Gerard said. "The decision undoubtedly confronts Mr. Bush with a test of wills. Will he exercise his sovereign right as President to protect the jobs and survival of the entire American steel industry, or will he knuckle under to the threat of economic blackmail being leveled by the European Union?" Gerard pointed out that since the steel crisis began, more than 300,000 active and retired American steelworkers have unnecessarily paid the burden of unfair trade. "We've reached a crucial crossroad in how this country and this President address the rules of fair trade. Our government and the American steel industry have diligently complied with the WTO safeguard procedures. A long process of public fact finding by our trade commission has documented irrefutable evidence of unfair trade by foreign steel producers. "Now it's come down to whether or not the President will stand by his decision to combat unfair trade by enforcing America's trade laws." The USWA president cited the consequences of the assault since 1998 on American steel, listing 42 companies forced into bankruptcy, more than 50,000 steelworkers who have lost their jobs, and government takeover of pension plans for 17 steel companies involving 240,000 participants and nearly $7 billion in unfunded pension benefits. * Meetings, Conferences and Seminars ------------------------------------ November 12-14, 2003 AMERICAN BANKRUPTCY INSTITUTE Litigation Skills Symposium Emory University, Atlanta, GA Contact: 1-703-739-0800 or http://www.abiworld.org November 18, 2003 NEW YORK INSTITUTE OF CREDIT Joint Cocktail Partyu with TMA Chapters NY, LI, NJ Contact: info@nyic.org; 212-629-8686 November 18, 2003 NEW YORK INSTITUTE OF CREDIT NICHE Players in Alternative Lending Markets Contact: info@nyic.org; 212-629-8686 November 19, 2003 NEW YORK INSTITUTE OF CREDIT Joint Event with Nassau Bar Association Melville New York Hilton Contact: info@nyic.org; 212-629-8686 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, 2004 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 ***