/raid1/www/Hosts/bankrupt/TCR_Public/031212.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, December 12, 2003, Vol. 7, No. 246
Headlines
ABITIBI-CONSOLIDATED: Idles Three Paper Mills to Reduce Costs
ADVANCED LIGHTING: Completes Chapter 11 Bankruptcy Proceedings
ADVANCED LIGHTING: Saratoga Completes $30-Mil. Capital Infusion
AES TIETE: Fitch Hatchets Certs. Rating to Junk Level from B-
AGWAY: Plan-Filing Exclusivity Intact Until January 26, 2004
AIR CANADA: Receives Revised Proposal from Cerberus Capital
AIR CANADA: Reports 2.4% Drop in November 2003 Traffic
AIR CANADA: CIBS Discloses C$128 Million Air Canada Writedown
ALTERNATIVE TECHNOLOGY: Agrees to Pulls Plug on E&Y's Engagement
AMERCO: Wants Go-Signal to Assume AREC Restructuring Agreement
ARMSTRONG HOLDINGS: Court Okays Settlement with ACE USA Insurers
ATMEL CORPORATION: Raises Guidance for Fourth-Quarter 2003
AURORA FOODS: Seeks Nod to Obtain $50 Million of DIP Financing
BAY VIEW CAPITAL: Will Pay Cash Distribution on Common Shares
BIOVAIL CORP: CEO Melnyk Sells 2.7M Shares to Jim Pattison's Co.
CABLEVISION SYSTEMS: Declares Quarterly Preferred Share Dividend
CENTERPOINT ENERGY: Selling $225 Mill. Convertible Senior Notes
CHC INDUSTRIES: Brings-In Kohner Mann as Collection Counsel
CKE RESTAURANTS: Reports Improved Period Eleven Same-Store Sales
CKE RESTAURANTS: Third-Quarter Results Reflect Continued Growth
CKE RESTAURANTS: Appoints Douglas K. Ammerman to Board of Direc.
CONE MILLS: Committee Taps Cozen O'Connor as Local Counsel
CUMULUS MEDIA: Settles Issues with SEC re Alleged Actions
EAST ORANGE GEN.: S&P Cuts $12.45MM Outstanding Debt Rating to B
ELCOM INTERNATIONAL: Hires Vitale Caturano as New Accountants
ENRON CORP: Proposes Uniform PGE Asset Sale Bidding Procedures
EXTREME NETWORKS: Hosting Investor & Analyst Day on Tuesday
FAO INC: Retains DJM to Dispose of 89 Zany Brainy Leases
FAO INC: Ken Hakuta Engages in Talks to Acquire FAO Schwarz
FEDERAL-MOGUL: PD Committee Brings-In Ferry Joseph as Counsel
FIBRON PRODUCTS: Case Summary & 20 Largest Unsecured Creditors
GENESIS HEALTH: Reports Fiscal-Year 2003 Results After Spin-Off
GENUITY INC: Third Amended Liquidation Plan Declared Effective
GEORGIA-PACIFIC: $500M Senior Unsec. Notes Get S&P's BB+ Rating
GLOBAL CROSSING: Gets OK to Complete Intercompany Asset Transfer
GOLFGEAR INT'L: Hires Corbin to Replace Good Swartz as Auditors
GOODYEAR TIRE: Won't File Restated Financials Until Next Year
GOODYEAR TIRE: Steelworkers Closely Monitor Financial Reporting
HARKEN ENERGY: Annual Shareholders' Meeting Slated for Jan. 20
HEADWATERS: Moody's Places Ratings Under Review for Likely Cuts
HOLIDAY RV: Klett Rooney Serving as Committee's Co-Counsel
INDIGINET INC: Stark Winter Ends Client-Auditor Relationship
INTERNATIONAL PAPER: Supports Proposed Softwood Lumber Agreement
LEGACY HOTELS: Provides Redemption Price for Debentures
LEGACY HOTELS: Suspends Fourth-Quarter Dividends Distribution
MAGNUM HUNTER: Proposes $100-Million Notes Private Offering
MERRILL LYNCH: Fitch Affirms Series 1996-C1 Notes Rating at C
MESABA AVIATION: Enters Cooling-Off Period in Talks with Pilots
MIRANT CORP: Oak Mountain Sues Debtors to Recover $2 Million
MOSHUP TRAIL: Case Summary & 6 Largest Unsecured Creditors
NATIONAL CENTURY: Gets Nod to Commence Rule 2004 Examinations
NETCOM TECH: Case Summary & 20 Largest Unsecured Creditors
NETMEASURE TECHNOLOGY: Taps Amisano Hanson as New Accountants
NEXT INC: LaSalle Business Waives Default Under Credit Agreement
NRG ENERGY: Court Clears Peaker Bonds Settlement Agreement
NUTRAQUEST: U.S. Trustee Names 7-Member Creditors' Committee
OAKWOOD HOMES: S&P Further Junks Ratings on 6 Note Classes
ORIENTAL TRADING: Moody's Downgrades Ratings to Low-B Level
OWENS CORNING: Brings-In Joseph High as SVP, Human Resources
PACIFIC GAS: Makes Over $77-Mil. Tax Payments to Calif. Counties
PAXSON COMMS: Offering $365MM Notes to Refinance Credit Facility
PG&E NATIONAL: Proposes Uniform Excess Asset Sale Procedures
PIEZO INSTRUMENTS: Taps Gelfond Hochstadt as Independent Auditor
POPE & TALBOT: Endorses Proposed US-Canada Softwood Lumber Pact
POWERHOUSE TECHNOLOGIES: Hein & Assoc. Replaces Lee as Auditors
R.J. REYNOLDS: Wins in Emmett Hall Smoking and Health Case
ROUGE INDS: Committee Turns to Deloitte for Financial Advice
SCOTTISH RE GROUP: S&P Assigns BB Preferred Share Rating
SCOTTISH RE: Proposes Offering of BB-Rated Hybrid Capital Units
SEPRACOR: S&P Junks Rating on New Convertible Senior Sub. Notes
SOUTHERN STATES POWER: Kabani Resigns as Independent Accountant
SSP SOLUTIONS: Sets Annual Shareholders Meeting for December 19
SPIEGEL INC: Obtains Additional Time to File Audited Financials
STARWOOD: Singaporean Court Finds Unit Guilty of Contract Breach
SUPERIOR GALLERIES: Shoos-Away Haskell & White as Accountants
TEMBEC: Finds US-Canada Softwood Lumber Deal Unacceptable
THAXTON GROUP: Seeks to Engage Finley Group as Crisis Managers
TRINITY IND.: Declares Quarterly Dividend Payable on January 30
TXCC INC: Lone Star Steakhouse Proposes to Purchase Company
URANIUM RESOURCES: Wants Shareholders' Nod to Increase Shares
URSTADT BIDDLE: Reports Slight Growth in Fourth Quarter Results
URSTADT BIDDLE: Board Increases Quarterly Common Share Dividends
US AIRWAYS: Reliance Insurance Agrees to Reduce Claim to $4 Mil.
VENDALUX: Signs-Up Child Sullivan as New Independent Accountants
VOLUME SERVS.: Moody's Withdraws Ratings after Successful Tender
WARNACO GROUP: Undertaking Additional Restructuring Initiatives
WAVING LEAVES, INC: Case Summary & 20 Largest Unsecured Creditors
WEIRTON STEEL: Reaches Pact with Union on Temporary Layoff Plan
WORLDCOM INC: Richard Breeden Appointed as Distribution Agent
WORKFLOW MANAGEMENT: Q2 FY 2004 Results Show Marked Improvement
X10 WIRELESS: US Trustee Appoints Official Creditors' Committee
YOUNG BROADCASTING: Proposes Add-On Offering of 8-1/2% Sr. Notes
* BOOK REVIEW: Macy's for Sale
*********
ABITIBI-CONSOLIDATED: Idles Three Paper Mills to Reduce Costs
-------------------------------------------------------------
Abitibi-Consolidated Inc., (TSX: A, NYSE: ABY) announced a
continuation of its focused downtime strategy by indefinitely
idling the Company's Lufkin, Texas and Port-Alfred, Quebec paper
mills, as of December 14, 2003. These actions with improved
operating efficiencies will reduce annual operating costs by at
least $125 million.
The Company will begin 2004 with more than a million tonnes of
focused downtime. Despite these announcements, the Company
anticipates selling as much, if not more, product in 2004 than in
2003.
"We continue to work through an oversupplied market. Additionally,
the high-cost structure of Port-Alfred has been further
exacerbated by the rapid rise of the Canadian dollar, while
energy-related costs have jeopardized the cost position of our
Texas paper mill operations," stated President and CEO John
Weaver. "Considering the current consumption levels for North
American newsprint, [Wed]day's decisive actions are necessary and
consistent with our focused downtime strategy. This is a difficult
decision and we regret the impact on our employees, but it is
essential that we take these steps in order to bring the Company
back to a sustained level of profitability as quickly as possible,
while maintaining the production flexibility needed for the
future."
A provision for closure costs amounting to $64.5 million ($42.4
million after-tax) will be taken in the fourth quarter of 2003.
This announcement affects 580 employees at the Lufkin mill and 640
employees at the Port-Alfred mill.
The Company also announced today the closure of two previously
idled paper machines, one in Port-Alfred and one in Sheldon,
representing a combined annual capacity of 230,000 tonnes of
newsprint. A fourth quarter write-down of $69.3 million ($42.8
million after-tax) will be taken to reflect this action.
Abitibi-Consolidated remains committed to customer service and
delivery of a high-quality product. The Company will work closely
with its customers to offer a smooth transition.
Abitibi-Consolidated (Moody's, Ba1 Outstanding Debentures
Rating) is the world's leading producer of newsprint and value-
added paper as well as a major producer of wood products,
generating sales of $5.1 billion in 2002. With 16,000 employees,
the Company does business in more than 70 countries. Responsible
for the forest management of 18 million hectares, Abitibi-
Consolidated is committed to the sustainability of the natural
resources in its care. The Company is also the world's largest
recycler of newspapers and magazines, serving 17 metropolitan
areas with more than 10,000 Paper Retriever(R) collection points.
Abitibi-Consolidated operates 27 paper mills, 21 sawmills, three
remanufacturing facilities and one engineered wood facility in
Canada, the US, the UK, South Korea, China and
Thailand.
ADVANCED LIGHTING: Completes Chapter 11 Bankruptcy Proceedings
--------------------------------------------------------------
Advanced Lighting Technologies, Inc. (Nasdaq:ADLT) (OTCBB:ADLTQ)
announced that the Company's Plan of Reorganization has been
approved and is effective.
As a result, Advanced Lighting has emerged from bankruptcy and is
no longer operating under Chapter 11. The reorganization was
approved by an affirmative vote of all classes of its creditors
and shareholders. On Monday, December 8th, Judge Goldgar reviewed
the evidence presented by the Company and issued a confirmation
order in his Chicago bankruptcy court approving the terms of the
Plan.
Under the confirmed Plan, Saratoga Lighting Holdings LLC, an
affiliate of Saratoga Partners LLC, invested $30 million dollars
in cash and equity for the Company's preferred and common stock.
In addition, Wells Fargo Foothill entered into a $30 million
dollar senior secured credit facility. Operating management will
also have a significant equity investment in the Company.
After today, ADLT will no longer be a Company with publicly traded
stock. As a result, Advanced Lighting Technologies, Inc. Common
Stock will be cancelled and will cease trading effective December
10, 2003. As part of the Plan of Reorganization, a trust has been
established for the benefit of shareholders of record through
today's trading, who are expected to receive certain future
distributions as provided in the Plan.
"Since filing for Chapter 11 protection in February 2003, the
Company's revenues have grown and our earnings have improved
substantially," said ADLT CEO, Wayne Hellman. "All of the
Company's employees, suppliers, and customers are to be
congratulated for helping ADLT to emerge in ten months with a plan
that provides for the payment of its creditors in full. ADLT will
benefit by having a strong investor, such as Saratoga Partners,
who is very much interested in continuing the growth rates that
ADLT has achieved in the past." Hellman continues, "ADLT will
continue to be a leading producer and developer of metal halide
lighting products and advanced material products in the world
today."
ADLT is an innovation-driven designer, manufacturer, and marketer
of metal halide lighting products, including materials, system
components, systems and equipment. ADLT also develops,
manufactures, and markets high technology materials and thin film
coatings used in other energy-efficient lighting products.
Saratoga Partners is a leading middle-market private equity
investment firm with $750 million of committed and invested
institutional equity capital. It invests in businesses with strong
management teams and valuations of between $50 million and $500
million, specializing in companies in manufacturing, business
services, and the information services industries.
Since Saratoga was founded in 1984, as a division of the New York
investment firm Dillon, Read & Co., Inc., it has invested in 33
companies with an aggregate value of more than $3.8 billion. It
has been an independent firm since 1998 after Dillon Read was
acquired by Swiss Bank Corporation (a predecessor to UBS AG).
ADVANCED LIGHTING: Saratoga Completes $30-Mil. Capital Infusion
---------------------------------------------------------------
Saratoga Partners, the New York private-equity investment firm,
completed an investment of $30 million in Advanced Lighting
Technologies, a leading lighting products manufacturer, following
Monday's approval of the company's consensual plan of
reorganization by the U.S. Bankruptcy Court in Chicago.
The transaction gives Saratoga a controlling interest in the
company, which is based in Solon, Ohio. Operating management will
also have a significant equity investment in the company.
Advanced Lighting specializes in the design, manufacture and
marketing of metal halide lighting systems and components globally
and is the worldwide leader in sales of specialty chemicals used
to produce metal halide and other high-pressure lighting sources.
It has operations in Australia, Canada, China, India, New Zealand
and the United Kingdom, as well as the United States, and
generated revenue of approximately $150 million in fiscal 2003,
which ended June 30.
The reorganization plan, filed October 3, had the support of all
classes, including the Creditors Committee and the Equity
Committee, and provides that the creditors will be paid in full.
ADLT was the third bankruptcy/restructuring related investment
that Saratoga has made this year. Saratoga acquired Data Return,
LLC out of the Divine, Inc. Chapter 11 proceedings in May and co-
sponsored the Chapter 11 reorganization plan of Alterra, Inc.,
through Saratoga's publicly traded portfolio company, Emeritus
Corporation, a market leader in the assisted-living industry.
Christian Oberbeck, managing director of Saratoga Partners, said
the investments "exemplify the expertise that our firm has
developed to complete these kinds of complex transactions."
He pointed to the efficient conclusion of the ADLT Chapter 11
process, which is often messy and drawn out, and noted that
Monday's confirmation hearing lasted barely five minutes. The
final closing was two days later.
"The entire process, from confirmation to closing, was of
remarkably short duration, attesting to the professionalism and
execution capability of the Saratoga team, management and the
professionals involved with ADLT," Oberbeck said.
In addition to its transactions involving ADLT, Data Return and
Alterra, Saratoga in the past year has acquired Sericol, a
specialty printing inks business, and NAT, Inc., a leading
software and service provider for warranty and service plans.
Saratoga has also made three realizations this year -- a
recapitalization of Koppers, which resulted in a $31 million
dividend to Saratoga; the sale of Datavantage, a leading provider
of point-of-sale systems for specialty retailers, for $52 million,
and the sale of Saratoga's remaining interest in USI Insurance
Services Corp., a leading publicly traded commercial insurance
brokerage, an investment on which the firm achieved a return of
two and half times.
Saratoga Partners is a leading middle-market private equity
investment firm with $750 million of committed and invested
institutional equity capital. It invests in businesses with strong
management teams and valuations of between $50 million and $500
million, specializing in companies in manufacturing, business
services and the information services industries.
Since Saratoga was founded in 1984 as a division of the New York
investment firm Dillon, Read & Co., Inc., it has invested in 33
companies with an aggregate value of more than $3.8 billion. It
has been an independent firm since 1998 after Dillon Read was
acquired by Swiss Bank Corporation (a predecessor to UBS AG).
AES TIETE: Fitch Hatchets Certs. Rating to Junk Level from B-
-------------------------------------------------------------
Fitch Ratings has downgraded the AES Tiete Certificates Grantor
Trust (certificates) to 'CC' from 'B-' Rating Watch Negative.
The downgrade reflects near term concerns that negotiations
between the issuer (AES IHB Cayman, Ltd.'s, IHB) and certificate
holders regarding debt service payments in December 2003 and
possibly, June 2004, will result in either a payment default on
Dec. 15, 2003 or a distressed debt exchange of the certificates.
IHB is not expected to be able to meet all of its financial
obligations scheduled in December 2003, which include the
replenishment of the debt service reserve account of approximately
US$22 million, the repayment of approximately BRL70 million of
intercompany debt with AES Tiete S.A., the operating company, and
scheduled interest and principal of US$22 million due under the
certificates.
AGWAY: Plan-Filing Exclusivity Intact Until January 26, 2004
------------------------------------------------------------
As previously reported, the Agway Energy Products Group and
Suburban Propane, L.P., signed an agreement for Suburban to
purchase substantially all of the assets and business operations
of the Agway Energy Products Group. The Agway Energy Products
Group includes three wholly owned subsidiaries of Agway Inc.;
Agway Energy Products, LLC, Agway Energy Services, Inc. and Agway
Energy Services-PA, Inc. The agreement is for total cash
consideration of approximately $206 million. The purchase is
subject to the terms and conditions of the agreement, and 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 Suburban agreement is subject to Bankruptcy Court approval.
On November 12, 2003, Agway filed 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 and time
for conducting an auction to determine if there are higher or
better offers for the Agway Energy Products Group businesses. By
order dated November 24, 2003, the Bankruptcy Court, among other
things, authorized Agway to conduct an auction on December 18,
2003 at 2:00 PM (EST) and established a sale hearing to approve
the proposed sale to the successful bidder to be held immediately
following the auction.
Also as previously reported, on November 7, 2003, Agway and
Country Best Adams, LLC entered into an asset purchase agreement
with AMPCO Distribution Services, LLC (ADS) which provided for the
sale of substantially all the assets of Agway's Country Best
Produce and Country Best Adams, LLC businesses (Agway's Produce
Group), both components of the Country Product Group segment of
the Company. The aggregate purchase price in the agreement is
$8.3 million. The purchase is subject to the terms and conditions
of the agreement, and the purchase price is subject to certain
escrows required under the agreement such that net cash proceeds
to be realized at closing will be approximately $7.6 million.
The ADS agreement is subject to Bankruptcy Court approval. On
November 12, 2003, Agway filed a motion with the Bankruptcy Court
requesting that the Court establish bidding procedures and a date
and time for conducting an auction to determine if there are
higher or better offers for Agway's Produce Group businesses. By
order dated November 24, 2003, the Bankruptcy Court, among other
things, authorized Agway to conduct an auction on December 15,
2003 at 9:00 AM (EST) and established a sale hearing to approve
the proposed sale to the successful bidder to be held immediately
following the auction.
The asset purchase agreements for both the Agway Energy Products
Group and Agway's Produce Group sales have been filed with the
Bankruptcy Court.
PLAN OF REORGANIZATION EXCLUSIVITY PERIOD UPDATE
As previously reported, Agway currently has the exclusive right to
submit a Chapter 11 Plan (i.e., the document that describes the
path the Company will take for each of its businesses and
estimates the potential distribution and timing of such
distributions to creditors) to the Bankruptcy Court until
November 26, 2003. On Tuesday, November 4, 2003, Agway submitted
a motion to the Bankruptcy Court requesting a two-month extension
to January 26, 2004, during which time Agway would continue to
have the exclusive right to submit its Chapter 11 Plan to the
Bankruptcy Court. On November 20, 2003, the Bankruptcy Court
granted the 60 day extension with respect to all parties other
than the Unsecured Creditor's Committee to which the extension
will apply for only 30 days. The Bankruptcy Court will consider a
further extension with respect to the UCC on December 18, 2003,
without the need for a further motion by Agway.
AIR CANADA: Receives Revised Proposal from Cerberus Capital
-----------------------------------------------------------
Air Canada confirmed that it received a revised proposal from
Cerberus at approximately 3:00 p.m. Wednesday. As widely
reported, Mr. Justice Farley approve Trinity's investment proposal
a week ago today, subject to Cerberus presenting its final and
best bid this week. The Company declined to comment further at
this point.
AIR CANADA: Reports 2.4% Drop in November 2003 Traffic
------------------------------------------------------
Air Canada mainline flew 2.4 per cent fewer revenue passenger
miles in November 2003 than in November 2002, according to
preliminary traffic figures. Overall, capacity decreased by
5.3 per cent, resulting in a load factor of 69.2 per cent,
compared to 67.1 per cent in November 2002; an increase of 2.1
percentage points.
Jazz, Air Canada's regional airline subsidiary, flew 3.3 per cent
more revenue passenger miles in November 2003 than in November
2002, according to preliminary traffic figures. Capacity decreased
by 3.6 per cent, resulting in a load factor of 57.1 per cent,
compared to 53.3 per cent in November 2002; an increase of 3.8
percentage points.
"As a result of strengthening market demand and our continued
capacity discipline, the system load factor for November was the
highest in Air Canada's history for that month. In addition, we
recorded a small traffic increase within Canada, the first
domestic growth in over a year as the transcon routes particularly
improved," said Rob Peterson, Executive Vice President and Chief
Financial Officer. "Traffic on our Pacific routes was only 5.6 per
cent under last year in comparison to the large declines of up to
68% the past year, reflecting a full month of our service to Delhi
launched October 18 and renewed Japan demand. Increasing demand
for the Caribbean, Mexico and South America continued to
accelerate the traffic growth in the Other and Charter category."
AIR CANADA: CIBS Discloses C$128 Million Air Canada Writedown
-------------------------------------------------------------
Canadian Imperial Bank of Commerce discloses in a regulatory
filing with the Canadian Securities Administrators on
November 26, 2003 that its non-interest expenses for the year
were down CND1,001,000,000 from 2002, primarily due to the
reasons non-interest expenses were down from the fourth quarter
2002, partially offset by a CND109,000,000 reserve related to
Enron Corporation and a CND128,000,000 -- after-tax CND81,000,000
-- writedown related to Air Canada.
The write-down resulted from CIBC and Air Canada replacing the
existing Aerogold Visa contract with a new contract, subsequent to
Air Canada filing for protection under the Companies' Creditors
Arrangement Act. (Air Canada Bankruptcy News, Issue No. 20;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
ALTERNATIVE TECHNOLOGY: Agrees to Pulls Plug on E&Y's Engagement
----------------------------------------------------------------
On November 12, 2003, Alternative Technology Resources, Inc. and
Ernst & Young LLP, mutually agreed to cease their existing
professional relationship. The decision to cease the existing
relationship with Ernst & Young was recommended by the Audit
Committee. The Company is in the process of engaging a new
independent accountant.
The audit report of Ernst & Young for the past two fiscal years
contained an explanatory paragraph indicating that there is
substantial doubt about the Company's ability to continue as a
going concern.
AMERCO: Wants Go-Signal to Assume AREC Restructuring Agreement
--------------------------------------------------------------
Before the Petition Date, AREC and the AREC Noteholders executed
a Note Purchase Agreement dated March 15, 2002. Pursuant to the
Note Purchase Agreement, AREC issued these series of notes to the
AREC Noteholders:
(a) $95,000,000 Senior Notes, Series A, due April 30, 2012;
and
(b) $5,000,000 Senior Notes, Series B, due April 30, 2007.
Bruce T. Beesley, Esq., at Beesley, Peck & Matteoni, Ltd., in
Reno, Nevada, relates that the Notes evidence unsecured
obligations of AREC to the AREC Noteholders. Amerco guarantees
AREC's obligations under the Notes.
On August 12, 2003, Mr. Beesley informs the Court that AREC and
the AREC Noteholders executed a Restructuring Agreement to
facilitate a restructuring and recapitalization of AREC's
obligations under the Notes. The AREC Restructuring Agreement
provides, among other things, that the AREC Noteholders will
agree to vote their claims in favor of any plan of reorganization
that:
(i) grants them allowed claims in an amount equal to
outstanding principal and interest on the Notes;
(ii) does not prejudice their rights or claims; and
(iii) provides for certain consensual treatment for their
claims.
The Restructuring Agreement also provides that:
(a) it will not be deemed to be a solicitation for obtaining
consent to a plan that complies with the provisions of
the Restructuring Agreement. Instead, the Restructuring
Agreement requires the Debtors to solicit the AREC
Noteholders' consent to a plan by way of the standard
solicitation process; and
(b) AREC will use all efforts to obtain an order approving
the assumption of the Agreement pursuant to Section 365
of the Bankruptcy Code before December 16, 2003. If the
order is not obtained by this date, the AREC Noteholders
may declare a default in the Restructuring Agreement,
which may require the Debtors to re-start the process of
reaching consensual Plan treatment with the AREC
Noteholders, which may frustrate consensual arrangements
that have been reached or are being negotiated with other
key creditor constituencies.
The Debtors have engaged in extensive efforts to reach consensual
agreements with their key constituencies regarding treatment
under a plan of reorganization. The Plan and the Disclosure
Statement, as amended, provide for the treatment of all claims
against the Debtors and the treatment complies with the terms set
forth in the Restructuring Agreement and other consensual
agreements reached with other creditors.
Accordingly, by this motion, the Debtors seek the Court's
authority to assume the Restructuring Agreement pursuant to
Section 365.
Mr. Beesley contends that the assumption is essential to ensure
that solicitation and approval of the Plan proceeds according to
the timelines the Court established, and to facilitate as smooth
a confirmation process as possible.
The Debtors are current in all of their obligations under the
Restructuring Agreement and that they will be able to comply with
their future obligations under it. Moreover, Mr. Beesley assures
the Court that the assumption will not prejudice the rights of
other creditors or parties-in-interest in these cases. No
liability will result from the termination of the Restructuring
Agreement in any event, thus ensuring that the Debtors will not
subject their estates to potential, substantial administrative
expenses by assuming the Restructuring Agreement, Mr. Beesley
says. (AMERCO Bankruptcy News, Issue No. 15; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
ARMSTRONG HOLDINGS: Court Okays Settlement with ACE USA Insurers
----------------------------------------------------------------
U.S. Bankruptcy Court Judge Newsome approves Armstrong World
Industries Inc.'s settlement with the ACE USA Insurers.
The ACE USA Insurers include:
* Century Indemnity Company, as successor to CCI Insurance
Company, as successor to Insurance Company of North
America, and as successor to CIGNA Specialty Insurance
Company;
* Central National Insurance Company of Omaha, with respect
to policies issued through Cravens;
* Dargan Pacific Coast, as Managing General Agent; and
* International Insurance Company.
Rebecca L. Booth, Esq., at Richards Layton & Finger, in
Wilmington, Delaware, relates that before the Petition Date, AWI
signed a settlement agreement with Century, as successor to
Insurance Company of North America, to settle disputes and
coverage issues with respect to asbestos personal injury claims
under various insurance policies issued by Century. The 2000
Agreement permits Century to stretch out payments due to a trust
established in connection with the 2000 Agreement. AWI agreed to
indemnify Century against claims that may be asserted directly
against Century, and that would have been covered under the
Century Policies.
Although Century timely made its first payment to the Trust, it
failed to make a substantial payment that was due by January 5,
2001. In January 2001, Century asked the Court to compel AWI to
assume the 2000 Agreement as a condition of making the 2001
payment. AWI objected and asked Judge Newsome to, instead, force
Century to make the outstanding 2001 installment payment.
Subsequently, the Court ruled in AWI's favor and denied Century's
request. However, Judge Newsome expressly did not decide whether
the 2000 Agreement was or was not an executory contract. After
the ruling, Century paid the 2001 installment into the Trust.
In January 2002, Century brought an adversary proceeding against
AWI, and Chase Bank of Texas N.A., as trustee and the predecessor
of JPMorganChase Bank. Century sought a declaration that it need
make no further payments under the 2000 Agreement, that AWI was
required to indemnify Century for certain claims, and that it
could offset that indemnification against future payments to the
Trust.
In August 2001, Chase filed a proof of claim asserting a secured
claim in an unliquidated amount, saying its security was the
payments under the settlement agreement. AWI objected to the
allowance of Chase's claim as to both its amount and asserted
secured status. The claim objection was consolidated with the
pending adversary proceeding. Century became the lead claimant in
the ACE USA Insurers, and those parties objected to confirmation
of AWI's Fourth Amended Plan on various grounds.
Recognizing that the amount of time and money all these adversary
proceedings and contested matters could absorb, the parties
entered into negotiations, which culminated into a settlement
agreement. The parties agree that:
(1) All terms of the 2000 Agreement, unless expressly
modified by the Settlement, remain in full force and
effect and are binding upon the parties and their
successors and assigns.
(2) Century waives all of its rights to defense and
indemnification under the 2000 Agreement.
(3) The Confirmation objection has been orally withdrawn
and is now expressly withdrawn with prejudice.
(4) Century is entitled to the protection of the Asbestos
PI Permanent Channeling Injunction as a PI Protected
Party under the Plan.
(5) Century will pay:
(a) ACandS $41,772, its share of the interest
owed by Century with respect to the installment
that was due under the 2000 Agreement on
January 5, 2001, except to the extent that
Century is allowed to keep this amount under a
settlement with ACandS;
(b) $8,000,000, representing the principal amount
of the installments that were due under the
2000 Agreement on January 5, 2002, and 2003; and
(c) $735,641, the interest owed on the principal
amount of the installments that were due under
the 2000 Agreement on January 5, 2002 and 2003
-- as part of the settlement, this interest has
been calculated at 7.5% lower than the amounts
that would otherwise have been applied.
(6) Nothing in the Plan prejudices any right that ACE
USA Insurers may have under their policies with
respect to the defense and settlement of disputed
claims.
(7) To the extent that Reorganized AWI wishes to obtain
insurance coverage under the policies issued by the
ACE USA Insurers, nothing in the Plan relieves
Reorganized AWI or the ACE USA Insurers of obligations
under the issued policies. (Armstrong Bankruptcy News,
Issue No. 53; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
ATMEL CORPORATION: Raises Guidance for Fourth-Quarter 2003
----------------------------------------------------------
Atmel Corporation (Nasdaq: ATML), a worldwide leader in the
development, fabrication and sale of advanced semiconductors,
raised its guidance for the fourth quarter ending December 31,
2003.
The Company now anticipates that in the fourth quarter of 2003,
revenues should be up 7-10% from Q3, raising its guidance from the
3-6% sequential growth given on October 16, 2003. Gross margins
are also on track to be stronger than expected, as the Company
benefits from increased utilization, richer product mix and a
stable pricing environment.
"Broad-based demand strength has been even stronger than we
expected when, in October, we stated that the upturn for the next
semiconductor cycle had arrived," stated George Perlegos, Atmel's
President and Chief Executive Officer. "We are seeing the
increased demand in virtually all end markets, while PC and
consumer markets tend to be the strongest."
Operating expenses should be about on plan.
The Company expects that based on current trends, it could reach
operating break even this quarter, resulting in a small net loss
after taxes and interest expense.
"Virtually every product line has been at least slightly better
than expected," Perlegos added. "The stronger revenue upsides have
come from smart cards, serial EEPROM products, microcontrollers,
Data Flash(TM) and flash products.
"Overall pricing has stabilized, and we anticipate that we will
enjoy some pricing increases in the first quarter of 2004,"
concluded Perlegos.
No conference calls will be held in conjunction with the business
update. Atmel's fourth quarter financial results are scheduled to
be released on January 22, 2004.
Founded in 1984, Atmel Corporation (S&P, B Corporate Credit
Rating, Negative) is headquartered in San Jose, California, with
manufacturing facilities in North America and Europe. Atmel
designs, manufactures and markets worldwide, advanced logic,
mixed-signal, nonvolatile memory and RF semiconductors. Atmel is
also a leading provider of system-level integration semiconductor
solutions using CMOS, BiCMOS, SiGe, and high-voltage BCDMOS
process technologies.
AURORA FOODS: Seeks Nod to Obtain $50 Million of DIP Financing
--------------------------------------------------------------
Aurora Foods reports that it has approximately $24.1 million of
cash and available borrowing capacity under a Receivables
Facility backed by JPMorgan Chase Bank. Aurora has no
availability, however, under a secured $665 million Revolving
Credit Facility underwritten by Chase, National Westminster Bank
PLC, as syndication agent, and UBS AG, Stamford Branch. To
ensure that the company will have sufficient liquidity to conduct
their business while in Chapter 11, Aurora Foods solicited
commitments for debtor-in-possession financing. DIP financing,
the Debtors tell Judge Walrath, will ensure continued access to
sufficient working capital during the pendency of the Chapter 11
Cases and instill confidence in the Debtors' customers, critical
vendors, and employees that the Company will continue as a going
concern.
JPMorgan Chase Bank has arranged to extend up to $50 million of
post-bankruptcy financing to Aurora and Sea Coast. The principal
provisions of the DIP Facility are:
Borrowers: Aurora Foods, Inc., and Sea Coast Foods, Inc.
Lenders: A syndicate of financial institutions to be
arranged by J.P. Morgan Securities
Agent: JPMorgan Chase Bank
Commitment: $50 million with a sublimit of up to
$15 million for import documentary and
standby letters of credit
Purpose: For working capital, letters of credit,
capital expenditures, and general corporate
purposes of the Debtors, to make certain
payments to the Agent under existing agreements
on behalf of the Prepetition Lenders as adequate
protection, and to pay in full Aurora's
obligations under the Receivables Purchase
Agreement
Maturity Date: June 10, 2003
Priority: Superpriority status under Bankruptcy Code
Sections 364(c) and (d), subject to the Carve
Out
Liens: All of the Debtors' borrowings are secured,
subject to the Carve Out, pursuant to 11 U.S.C.
Sec. 364(c)(2), 364(c)(3) and 364(d)(1), by first-
priority priming liens on all otherwise
unencumbered assets and junior liens on all
otherwise encumbered assets.
Carve-Out: The DIP Lenders agree, in the event of a default,
to a carve-out from their liens to permit payment
of:
* up to $2,000,000 to Professionals;
* fees pursuant to 28 U.S.C. Sec. 1930 to the
United States Trustee and the Bankruptcy Clerk;
and
* in the event of a conversion of the Chapter 11
cases, the reasonable fees and expenses of a
Chapter 7 trustee under Bankruptcy Code Section
726(b), subject to a $500,000 cap.
Interest: The Debtors agree to pay Chase's Alternate Base
Rate plus 2.5% or, at the Debtors' option, LIBOR
plus 3.5%. In the event of a default, the
interest rate increases by 2.0%.
Fees: The Debtors agree to pay a variety of fees to the
DIP Lenders:
* a Commitment Fee equal to 0.75% per year of
every dollar NOT borrowed; and
* 3.5% per year on all outstanding letters of
credit plus customary fees for fronting,
insurance, amendments, and processing.
The Debtors ask Judge Walrath for immediate authority to begin
drawing on the DIP Facility to fund their working capital needs
and make adequate protection payments to the Prepetition Lenders.
On an interim basis, pending a final hearing, the Debtors ask the
Court to grant the DIP Lender dollar-for-dollar post-petition
liens. (Aurora Foods Bankruptcy News, Issue No. 1; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
BAY VIEW CAPITAL: Will Pay Cash Distribution on Common Shares
-------------------------------------------------------------
Bay View Capital Corporation (NYSE: BVC) will make a cash
distribution of $4.00 per share on its outstanding common stock on
December 30, 2003. The record date for the distribution will be
December 19, 2003.
As a result of the Company's change from a plan of complete
liquidation to a plan of partial liquidation, the federal income
taxation of the distributions may vary by stockholder.
Stockholders should consult with their tax advisors to determine
their individual tax situations.
Bay View Capital Corporation is a financial services company
headquartered in San Mateo, California and is listed on the NYSE:
BVC. For more information, visit http://www.bayviewcapital.com
* * *
As reported in Troubled Company Reporter's October 10, 2003
edition, Fitch Ratings withdrew its 'B-'long-term and 'B' short-
term debt ratings for Bay View Capital Corp and Bay View Bank, NA.
The ratings have been withdrawn based on what Fitch views to be a
fairly successful liquidation process that is expected to continue
until year-end 2005. A complete listing of all withdrawn ratings
is provided below.
Concurrently, Fitch raises its ratings for Bay View Capital Trust
I to 'BB-' from 'CCC', removes the securities from Rating Watch
Evolving and assigns a Stable Outlook, as Fitch believes BVC now
has sufficient means to meet the financial obligations of these
securities. The securities are callable on December 31, 2003, at
which point Fitch expects BVC to exercise its call option and
fully redeem the roughly $85 mln that remains outstanding.
Rating Upgraded and Assigned
Bay View Capital Trust I
-- Trust Preferred, to 'BB-' from 'CCC'.
-- Rating Outlook, 'Stable.'
Ratings Withdrawn
Bay View Capital Corporation and Bay View Bank, NA.
-- Long-term debt, 'B-';
-- Subordinate debt, 'CCC';
-- Individual, 'D.';
-- Support, '5'.
Bay View Bank, NA
-- Long-term deposits, 'B+';
-- Short-term deposits, 'B';
-- Short-term debt, 'B';
-- Support, '5'.
BIOVAIL CORP: CEO Melnyk Sells 2.7M Shares to Jim Pattison's Co.
----------------------------------------------------------------
Biovail Corporation's (NYSE:BVF)(TSX:BVF) Chairman and Chief
Executive Officer, Eugene Melnyk, sold in a private transaction
2.7 million shares at $18.00 per share to a company owned by Mr.
Jim Pattison, a well-known Canadian businessman.
This sale represents approximately 10% of Mr. Melnyk's personal
interest in Biovail Corporation.
Since December 1999, Mr. Melnyk's ownership interest in the
Biovail Corporation increased by approximately 530,000 shares to
27,599,516 common shares (including 1,797,700 stock options) prior
to the sale transaction. Mr. Melnyk remains Biovail's largest
shareholder whose ownership interest, after the transaction, is
23,101,816 or approximately 15% of Biovail's outstanding common
shares. Mr. Melnyk has filed a Form 13-D with the U.S. Securities
and Exchange Commission formalizing the elimination of a $55
million personal line of credit.
Mr. Pattison is Chairman and Chief Executive Officer of the
Pattison Group, Canada's third largest privately held company
employing 26,000 people with annual sales in excess of $4 billion.
The Pattison Group owns stakes in a number of publicly owned
companies including significant interests in Canfor Corporation
and Slocan Forest Products Ltd.
"We decided to invest in Biovail because we support the management
team and its more conservative approach, which is focused on cash
flow generation," commented Mr. Pattison. "We like the opportunity
to participate in the growth of the pharmaceutical industry."
Biovail Corporation (S&P, BB+ Long-Term Corporate Credit Rating,
Stable) is an international full-service pharmaceutical company,
engaged in the formulation, clinical testing, registration,
manufacture, sale and promotion of pharmaceutical products
utilizing advanced drug delivery technologies.
CABLEVISION SYSTEMS: Declares Quarterly Preferred Share Dividend
----------------------------------------------------------------
Cablevision Systems Corporation (NYSE:CVC) announced quarterly
dividends on CSC Holdings, Inc.'s Series H and M Preferred Stock:
-- 11-3/4% Series H Redeemable Exchangeable Preferred Stock -
($2.9375 per preferred share paid in cash)
-- 11-1/8% Series M Redeemable Exchangeable Preferred Stock -
($2.78125 per depositary share paid in cash)
The record date for dividends on the Series H and M Preferred
stock will be December 24, 2003. The payment date will be
January 2, 2004.
Cablevision Systems Corporation (S&P, BB Corporate Credit Rating,
Negative) is one of the nation's leading entertainment and
telecommunications companies. Its cable television operations
serve 3 million households located in the New York metropolitan
area. The company's advanced telecommunications offerings include
its Lightpath integrated business communications services; its
Optimum-branded high-speed Internet service and iO: Interactive
Optimum, the company's digital television offering. Cablevision's
Rainbow Media Holdings, Inc. operates programming businesses
including AMC, The Independent Film Channel and other national and
regional services. In addition, Rainbow is a 50 percent partner in
Fox Sports Net. Cablevision also owns a controlling interest and
operates Madison Square Garden and its sports teams including the
Knicks and Rangers. The company operates New York's famed Radio
City Music Hall and owns and operates Clearview Cinemas, one of
the tri-state area's leading motion picture exhibition circuits.
Additional information about Cablevision Systems Corporation is
available on the Web at http://www.cablevision.com/
CENTERPOINT ENERGY: Selling $225 Mill. Convertible Senior Notes
---------------------------------------------------------------
CenterPoint Energy, Inc. (NYSE: CNP) intends to sell through a
private offering $225 million of convertible notes due 2024.
The company will grant to the initial purchasers an option to
purchase up to an additional $30 million of convertible notes.
The company will use the net proceeds from this offering to redeem
a portion of the $250 million aggregate liquidation amount of
8.125 percent trust preferred securities, Series A, issued by HL&P
Capital Trust I, one of its subsidiary trusts. Pending such use,
the company intends to use the net proceeds to repay a portion of
the outstanding borrowings under its credit facility.
The convertible notes will be senior unsecured obligations of the
company and will be convertible into CenterPoint Energy common
stock under certain conditions at a conversion price representing
a to-be-determined premium to the current market price. It is
expected that the convertible notes will be interest bearing at a
rate to be determined and will bear contingent interest under
certain circumstances. The interest rate and other terms will be
provided upon pricing of such securities.
The convertible notes and the underlying common stock issuable
upon conversion have not been registered under the Securities Act
of 1933 and may not be offered or sold in the United States absent
registration or an applicable exemption from registration
requirements.
CenterPoint Energy, Inc., headquartered in Houston, Texas, is a
domestic energy delivery company that includes electric
transmission and distribution, natural gas distribution and sales,
interstate pipeline and gathering operations, and more than 14,000
megawatts of power generation in Texas. The company serves nearly
five million customers primarily in Arkansas, Louisiana,
Minnesota, Mississippi, Missouri, Oklahoma, and Texas. Assets
total approximately $20 billion. CenterPoint Energy became the
new holding company for the regulated operations of the former
Reliant Energy, Incorporated in August 2002. With more than
11,000 employees, CenterPoint Energy and its predecessor companies
have been in business for more than 130 years. For more
information, visit the Web site at
http://www.CenterPointEnergy.com/
* * *
As reported in Troubled Company Reporter's March 5, 2003 edition,
Fitch Ratings affirmed the outstanding credit ratings of
CenterPoint Energy, Inc., and its subsidiaries CenterPoint Energy
Houston Electric LLC and CenterPoint Energy Resources Corp. The
Rating Outlook for all three companies remains Negative.
The following ratings were affirmed by Fitch:
CenterPoint Energy, Inc.
-- Senior unsecured debt 'BBB-';
-- Unsecured pollution control bonds 'BBB-';
-- Trust originated preferred securities 'BB+';
-- Zero premium exchange notes 'BB+'.
CenterPoint Energy Houston Electric, LLC
-- First mortgage bonds 'BBB+';
-- $1.3 billion secured term loan 'BBB'.
CenterPoint Energy Resources Corp.
-- Senior unsecured notes and debentures 'BBB';
-- Convertible preferred securities 'BBB-'.
CHC INDUSTRIES: Brings-In Kohner Mann as Collection Counsel
-----------------------------------------------------------
CHC Industries, Inc., asks the U.S. Bankruptcy Court for the
Middle District of Florida to approve its application to employ
Kohner, Mann, Kailas, S.C., as Special Collection Counsel.
The Debtor reports that it requires the services of special
counsel to provide advice and services in connection with the
collection of certain delinquent accounts receivable. It selected
Kohner Mann because of the firm's experience in commercial
collection.
Kohner Mann will be paid on a contingency fee basis. Kohner
Mann's customary fee schedule on recoveries without legal action
is:
-- 25% of the first $2,000 collected;
-- 20% on the excess of $2,000 collected; and
-- 50% on small claims of $500 or less.
On recoveries requiring legal action, Kohner Mann will receive an
additional 10% contingent suit fee.
Headquartered in Palm Harbor, Florida and formerly known as
Cleaners Hanger Company, CHC Industries, Inc., manufactures and
distributes steel wire coat hangers. The Company filed for
chapter 11 protection on October 6, 2003 (Bankr. M.D. Fla. Case
No. 03-20775). Scott A. Stichter, Esq., at Stichter, Riedel,
Blain & Prosser, PA represent the Debtor in its restructuring
efforts. When the Company filed for protection from its
creditors, it listed $25,000,000 in total assets and $20,000,000
in total debts.
CKE RESTAURANTS: Reports Improved Period Eleven Same-Store Sales
----------------------------------------------------------------
CKE Restaurants, Inc. (NYSE: CKR), announced period 11 same-store
sales, for the four weeks ended December 1, 2003, for Carl's Jr.,
Hardee's and La Salsa.
Brand Period 11 Year to Date
FY 2004 FY 2003 FY 2004 FY 2003
----- ------- ------- ------- -------
Carl's Jr. +3.1% +3.8% +2.2% +0.6%
Hardee's +6.4% -5.6% +1.3% -1.6%
La Salsa +0.4% -1.6% -1.9% +1.0%
Commenting on the Company's performance, Andrew F. Puzder,
President and Chief Executive Officer, said, "For the fifth
consecutive period, same-store sales increased at our two major
brands."
"At Carl's Jr., we handily overcame last year's chili burger event
and strong prior year comparables of 3.8 percent. On an average
unit volume basis, this was our best period 11 in at least a
decade. Our strong performance this period was fueled by the
successful introduction of the Six Dollar Burger(R) line, which
features unique and 'craveable' flavor profiles that deliver on
quality and taste. The new product line was supported by
'breakthrough' advertising that has helped us to increase
awareness and drive sales."
Commenting on the performance at Hardee's, Puzder stated, "Same-
store sales increased 6.4 percent at Hardee's this period with the
ever-growing popularity of our Thickburger(TM) menu. Year-to-
date, same-store sales have grown 1.3 percent -- an accomplishment
that seemed unattainable just a few months ago. For the fourth
period in a row, Hardee's average unit volumes were higher than
any other comparable period since 1999. As of December 1, 97
percent of the Hardee's system has been converted to the new
Thickburger menu."
The Company will report period 12 same-store sales, for the four
weeks ending December 29, 2003, on or about January 7, 2004.
CKE Restaurants, Inc. (S&P, B Corporate Credit Rating, Negative),
through its subsidiaries, franchisees and licensees, operates over
3,200 restaurants, including 1,000 Carl's Jr. restaurants, 2,181
Hardee's restaurants, and 97 La Salsa Fresh Mexican Grills in 44
states and in 14 countries. For more information, go to
http://www.ckr.com/
CKE RESTAURANTS: Third-Quarter Results Reflect Continued Growth
---------------------------------------------------------------
CKE Restaurants, Inc. (NYSE: CKR) announced third quarter results
and the filing of its Report on Form 10-Q with the Securities and
Exchange Commission for the quarter ended November 3, 2003.
Third-Quarter Financial Highlights:
- Company reports second successive profitable quarter;
reports net income of $2.2 million, or $0.04 per diluted
share
- Consolidated revenue increases for second quarter in a row
to $334.8 million, a 7 percent increase over the prior year
- Consolidated operating income for the third quarter
increases 19 percent year-over-year -- to $12.3 million
- Same-store sales increase at major brands for second
quarter in a row; increase 5.4 percent and 6.8 percent at
company-operated Carl's Jr. and Hardee's restaurants,
respectively
- Restaurant-level margins at Carl's Jr. improve 90 basis
points over the prior-year quarter -- from 19.8 percent in
the prior-year to 20.7 percent in the current year
- Restaurant-level margins at Hardee's improve 40 basis
points over the second quarter -- from 11.5 percent in the
second quarter to 11.9 percent in the third quarter
- As of December 10, 2003, 97 percent of the Hardee's system
has been converted to the new Thickburger(TM) menu
EXECUTIVE COMMENTARY
Commenting on the Company's performance, Andrew F. Puzder,
President and Chief Executive Officer said, "Same-store sales at
company-operated Carl's Jr. restaurants increased 5.4 percent this
quarter. Revenues at company-operated Carl's Jr. restaurants
increased $7.1 million, or 6.3 percent, over the prior-year
quarter. Contributing to increases in same-store sales and
revenue were new product introductions, including The Western
Bacon Six Dollar Burger(TM) and the BBQ Ranch Charbroiled Chicken
Sandwich(TM). The net addition of three company-operated Carl's
Jr. restaurants over the past year also contributed to revenues.
An emphasis on higher-priced, premium products supported average
guest check this quarter, which climbed $0.39 year-over-year, or
7.6 percent, to $5.53 at company-operated restaurants this
quarter."
"The recent spike in the price of beef has impacted the entire
burger QSR segment. However, Carl's Jr. was able to maintain
strong restaurant-level margins this quarter. Restaurant-level
margins at company-operated Carl's Jr. restaurants increased 90
basis points year-over-year to 20.7 percent. Operating income at
Carl's Jr. increased $2.5 million this quarter, or 23.3 percent,
over the prior-year quarter."
"At Hardee's, same-store sales at company-operated restaurants
increased 6.8 percent over a prior-year decline of 3.5 percent.
Revenue from company-operated Hardee's restaurants increased
nearly $8 million, or 6 percent over the prior-year quarter.
Average guest check increased 10 percent year-over-year -- to
$4.35 from $3.94 in the prior-year quarter."
"Restaurant-level margins of 11.9 percent in the third quarter
showed a 40 basis point improvement over the second quarter.
However, restaurant-level margins declined 120 basis points from
the prior-year quarter due primarily to recent increases in
commodity prices, in particular the price of beef. To address
increased costs, Hardee's took a price increase effective
November 4 and is implementing a number of margin improvement
initiatives aimed at reducing costs while maintaining the quality
of our products. Despite recent cost pressures, Hardee's
contributed $77,000 to operating income this quarter."
"On a consolidated basis, revenues increased for the second
quarter in a row. Consolidated revenue for the quarter was $334.8
million, a 7 percent increase over the prior year. Consolidated
operating income increased 19 percent this quarter over the prior-
year quarter to $12.3 million. Net income for the third quarter
was $2.2 million, or $0.04 per diluted share, versus net income of
$9.5 million, or $0.16 per diluted share, in the prior-year
quarter. Prior year results benefited from $9.2 million in gains
related to a federal income tax benefit of $5.4 million, a $3.1
million gain on the sale of Checkers Drive-In Restaurants, Inc.
stock, and a gain on the retirement of debt of approximately
$700,000."
"[Wednes]day, we reported period 11 same-store sales in which
Carl's Jr. and Hardee's reported increases of 3.1 percent and 6.4
percent, respectively. This is the fifth successive period of
same-store sales increases at both brands."
CKE Restaurants, Inc. (S&P, B Corporate Credit Rating, Negative),
through its subsidiaries, franchisees and licensees, operates over
3,200 restaurants, including 1,000 Carl's Jr. restaurants, 2,181
Hardee's restaurants, and 97 La Salsa Fresh Mexican Grills in 44
states and in 14 countries. For more information, go to
http://www.ckr.com/
CKE RESTAURANTS: Appoints Douglas K. Ammerman to Board of Direc.
----------------------------------------------------------------
CKE Restaurants, Inc. (NYSE: CKR) has appointed Douglas K.
Ammerman as a director serving on the Company's Board of
Directors. Mr. Ammerman brings 30 years of public accounting
experience to the Board.
CKE Restaurants' President, CEO, and Director, Andrew F. Puzder,
said, "CKE shareholders are well served by the appointment of Doug
Ammerman to the Board. Doug had a distinguished career at KPMG
that earned him a high degree of respect among his peers and in
the business community. We welcome the contributions he will
surely make to the Board."
Ammerman began his career in 1973 as a staff accountant at KPMG, a
professional services firm that provides audit, tax, and advisory
services. In 1984, Ammerman was promoted to partner at KPMG, at
which time he represented numerous restaurant companies in the
casual dining and quick-service industries. In addition to
serving his clients, Ammerman became actively involved in the
management of the firm beginning in 1987. During his career at
KPMG, Ammerman served as a member of the nominating committee for
the KPMG board of directors, the partner-in-charge of the Orange
County office, and the national partner-in- charge of the
financial planning practice.
Ammerman earned a Bachelor of Arts in Business Administration --
with an emphasis in accounting -- from California State University
at Fullerton and a Masters in Business Taxation from the
University of Southern California. He is a licensed Certified
Public Accountant (CPA) under the laws of the State of California
and is a member of the California Society of CPA's as well as the
American Institute of CPA's (AICPA).
With the appointment of Douglas K. Ammerman, CKE's Board of
Directors is expanded to 11 members. He joins existing Board
members William P. Foley, II, Chairman of the Board, Carl N.
Karcher, Chairman Emeritus, Daniel D. Lane, Vice Chairman of the
Board, Byron Allumbaugh, Peter Churm, Carl L. Karcher, Ronald B.
Maggard, Sr., Daniel E. Ponder, Jr., Andrew F. Puzder, and Frank
P. Willey.
CKE Restaurants, Inc. (S&P, B Corporate Credit Rating, Negative),
through its subsidiaries, franchisees and licensees, operates over
3,200 restaurants, including 1,000 Carl's Jr. restaurants, 2,181
Hardee's restaurants, and 97 La Salsa Fresh Mexican Grills in 44
states and in 14 countries. For more information, go to
http://www.ckr.com
CONE MILLS: Committee Taps Cozen O'Connor as Local Counsel
----------------------------------------------------------
The duly-appointed Official Unsecured Creditors Committee in Cone
Mills Corporation's chapter 11 case seeks to retain Cozen O'Connor
as Local Counsel.
Due to the exigencies of these proceedings and the Committee's
need for immediate legal representation, Cozen needed to commence
representation before this application for approval of retention
could be prepared and submitted to the Court. Therefore, the
Committee requests that the Court approve the retention nunc pro
tunc to October 7, 2003, the date upon which Cozen O'Connor began
providing legal services.
Cozen O'Connor is familiar with the Debtors' businesses and
affairs and the issues which face their creditors. The Committee
believes that Cozen O'Connor's services are necessary to enable it
to execute faithfully its duties and responsibilities in these
cases.
To the best of Committee's knowledge, information and belief,
Cozen O'Connor does not hold or represent any interest adverse to
the matters upon which it is to be engaged and that the firm is a
"disinterested person."
The attorneys and assistants who will be principally involved in
the representation of the Committee and their current hourly rates
are:
Mark E. Felger member $375 per hour
Jeffrey R. Waxman associate $225 per hour
Ginger Akin paralegal $125 per hour
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.
CUMULUS MEDIA: Settles Issues with SEC re Alleged Actions
---------------------------------------------------------
Cumulus Media Inc. (NASDAQ: CMLS) has reached an agreement with
the United States Securities and Exchange Commission to settle the
previously disclosed investigation by the SEC of certain actions
alleged to have occurred in 1999.
The SEC has alleged that Cumulus, as a result primarily of the
actions of three of its former officers--Richard W. Weening, the
former Executive Chairman; Richard J. Bonick, Jr., the former
Chief Financial Officer; and Daniel O'Donnell, the former Vice
President of Finance--violated certain provisions of the federal
securities laws in 1999.
Pursuant to the settlement, and without admitting or denying any
of the SEC's allegations, Cumulus has consented to the entry of an
order enjoining Cumulus from future violations of certain
provisions of the federal securities laws. The SEC will assess no
monetary penalties or fines against Cumulus.
Cumulus believes that the SEC settlement represents the last step
in resolving the stockholder and regulatory matters that arose
over three years ago under its former management.
Cumulus Media Inc. (S&P, B+ Corporate Credit Rating, Stable
Outlook) is the second largest radio company in the United States
based on station count. Giving effect to the completion of all
announced pending acquisitions and divestitures, Cumulus Media
Inc. will own and operate 272 radio stations in 56 mid-size and
smaller U.S. media markets. The Company's headquarters are in
Atlanta, Georgia, and its Web site is http://www.cumulus.com/
Cumulus Media Inc. shares are traded on the NASDAQ National Market
under the symbol: CMLS.
EAST ORANGE GEN.: S&P Cuts $12.45MM Outstanding Debt Rating to B
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating to 'B' from
'BB+' on $12.45 million of outstanding debt issued by New Jersey
Health Care Facilities Finance Authority for East Orange General
Hospital, New Jersey. The outlook is negative.
"The rating action reflects an expected 2002 going concern audit
opinion and substantial losses largely due to a poor payor mix and
lack of a permanent senior management team to provide direction to
the facility," said Standard & Poor's credit analyst Cynthia
Keller Macdonald. "A lower rating is currently precluded by a
recent large cash infusion, which has enabled the hospital to
remain current on debt service payments, and by the potential
January 2004 closure of East Orange's main competitor, Hospital
Center of Orange," she added.
The effect of the closure will certainly increase East Orange's
overall volume levels; however, the state must also boost its
subsidies to cover increased bad debt and charity care if East
Orange's profitability is expected to improve.
The hospital is in technical default under its bond documents as
it cannot cover debt service with the current year's revenue. Year
to date through the nine months ended Sept. 30, 2003, East Orange
has posted a $6.3 million loss from operations and a $6.2 million
bottom-line loss. The hospital will have another rate covenant
violation at year-end.
East Orange has retained consultants to improve profits and
provide interim management at the CEO and CFO positions. The
report is expected to be ready in two to three months, at which
time, the 2002 audit will most likely be released as well.
East Orange competes with Hospital Center of Orange, owned by
Cathedral Health System. Cathedral Health System has filed a
certificate of need to close its hospital in January 2004. The
effect of the closure on East Orange depends in large part on the
negotiations the hospital will undoubtedly have with the state
regarding increased subsidy levels.
The negative outlook reflects East Orange's financial trend and
the high level of uncertainty in the hospital regarding future
competition, management staff, state subsidies, and the actions
that must be taken to potentially return the hospital to
profitability. Standard & Poor's will review the consultants'
report and 2002-2003 audits, as well as speak with the new
management to assess the situation next year.
ELCOM INTERNATIONAL: Hires Vitale Caturano as New Accountants
-------------------------------------------------------------
Effective October 24, 2003, KPMG LLP resigned as the independent
public accountants of Elcom International, Inc. The Company has
retained Vitale, Caturano & Company PC as its independent public
accountants effective October 27, 2003. The engagement of Vitale,
Caturano & Company PC was approved by the Audit Committee of the
Company's Board of Directors and affirmed by the entire Board of
Directors.
The audit reports of KPMG on the Company's consolidated financial
statements as of and for the years ended December 31, 2001 and
2002, did not contain any adverse opinion or disclaimer of
opinion, nor were they qualified or modified as to uncertainty,
audit scope, or accounting principles, except as follows:
"KPMG's report on the consolidated financial statements of
the Company as of and for the years ended December 31, 2001
and 2002, contained a separate paragraph stating "the Company
has suffered recurring losses from operations and has an
accumulated deficit that raise substantial doubt about its
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."
ENRON CORP: Proposes Uniform PGE Asset Sale Bidding Procedures
--------------------------------------------------------------
Prior to the Petition Date, Enron Corporation conducted a
marketing process for the sale of all of the issued and
outstanding shares, $3.75 par value per share, of Portland General
Electric Company. In 1999, Enron entered into an agreement to
sell the Shares to one party. However, Martin A. Sosland, Esq.,
at Weil, Gotshal & Manges LLP, in New York, reports that the
transaction did not close due to the purchaser's inability to
obtain financing. In 2001, Enron again entered into another
agreement for the sale of the Shares but the agreement was
terminated by mutual agreement of the parties.
Mr. Sosland related that Enron began its current marketing effort
of the Shares and certain other significant businesses in August
2002. Enron contacted in excess of 230 entities that it believed
would be interested in purchasing its businesses. Subsequently,
130 entities executed confidentiality agreements, 37 of which
accessed the data room relating to the Shares. Five entities
submitted first round bids and Enron invited four of them to a
second round of the sale process. Three entities submitted bids
in the final round. However, none of these parties pursued
negotiations. Outside the formal auction process, another entity
submitted two proposals but did not pursue the negotiations.
After extensive and substantial arm's-length negotiations, Enron
reached an agreement to sell the Shares to Oregon Electric
Utility Company LLC, a newly formed entity financially backed by
investments funds managed by Texas Pacific Group. According to
Mr. Sosland, TPG is a top-tier private equity firm with
significant transaction experience. It is a private investment
partnership managing over $13,000,000 in assets.
The parties' purchase agreement is subject to bidding
protections, among others. Accordingly, Enron asks the Court to:
(a) establish procedures for the solicitation and
consideration of qualified proposals and for selection of
the highest or best bid to purchase the Shares;
(b) approve Enron's payment of a break-up fee and certain
other expenses to Oregon Electric on the conditions set
forth in the Purchase Agreement;
(c) authorize and schedule an auction at which higher and
better bids will be solicited on February 2, 2004; and
(d) schedule the Sale Hearing for February 5, 2004 on the
sale of the Shares free and clear of all liens, claims,
encumbrances and other interests with the Winning Bidder
after the conclusion of the Auction.
Bidding Procedures and Auction
To maximize the value of the Shares, Enron wishes to implement
this competitive bidding process designed to generate a maximum
recovery for Enron:
A. Qualification as Bidder
Any entity that wishes to make a bid for the Shares must
provide Enron with sufficient and adequate information to
demonstrate, to Enron's satisfaction, upon consultation with
the Committee, that it has the financial wherewithal and
ability to consummate the transactions contemplated in the
purchase agreement submitted with its bid and the ability to
comply with all obligations under its purchase agreement.
B. Bid Requirements
(1) Same Terms. Enron, upon consultation with the Committee,
will entertain only those bids that are presented under a
contract substantially identical to the Purchase
Agreement, marked to redline any modifications made;
(2) Deposit. Each bid must be accompanied by a deposit at
least equal to the greater of $20,250,000 or 1.5% of the
bidder's proposed Purchase Price. Prior to the Bid
Deadline, the Earnest Money Deposit is to be delivered to
Enron in the form of a:
(a) wire transfer to:
JP Morgan Chase Bank
500 Stanton Christiana Road
Newark, DE 19713
ABA# 021000021
For Credit To: Weil, Gotshal & Manges LLP Special
Account
Acct# 0158-37-474
Reference: 43889.0003/PGE/M. Sosland; or
(b) cashier's check to:
Weil, Gotshal & Manges LLP
Attn: Norm LaCroix
Director of Accounting
767 Fifth Avenue
New York, New York 10153
Reference: 43889.0003/PGE/M. Sosland; or
(c) irrevocable letter of credit to the benefit of:
JP Morgan Chase, as Escrow Agent
500 Stanton Christina Road
Newark, Delaware 19713
(3) Escrow of Deposit. If a bidder submits the bid chosen as
the highest or best bid, then immediately upon execution
of a purchase agreement by Enron and the Winning Bidder,
the Winning Bidder will direct Weil, Gotshal & Manges to
transfer the Earnest Money Deposit into an escrow account
as required by the purchase agreement;
(4) Additional Requirements for Bids. Bids must be (a) in
writing, (b) signed by an individual authorized to bind
the prospective purchaser, and (c) received no later than
12:00 noon (New York Time) on January 28, 2004, by:
(a) Weil, Gotshal & Manges LLP
200 Crescent Court, Suite 300, Dallas, Texas 75201
Attn.: Martin A. Sosland, Esq.
E-mail: martin.sosland@weil.com
Facsimile: 212-310-8007
(b) Milbank, Tweed, Hadley & McCloy LLP
One Chase Manhattan Plaza, New York, New York 10005
Attn.: Luc A. Despins, Esq.
E-mail: ldespins@milbank.com
Facsimile: 212-530-5219
(c) Arnold & Porter
370 17th Street, Suite 4500, Denver, Colorado 80202
Attn.: Brian P. Leitch, Esq.
E-mail: Brian.Leitch@aporter.com
Facsimile: 303-832-0428
(d) Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza, New York, New York 10006
Attn.: Michael L. Ryan, Esq.
E-mail: Mryan@cgsh.com
Facsimile: 212-225-3999
(e) The Blackstone Group L.P.
345 Park Avenue, New York, New York 10154
Attn: Raffiq Nathoo
E-mail: Nathoo@blackstone.com
Facsimile: 212-583-5349
(5) No Conditions. Any bid must not be subject to due
diligence review or any board approval. Further, any bid
must not be subject to any conditions, or the receipt of
any consents, that are not otherwise required by the
Purchase Agreement;
(6) Initial Overbids. A bid must contain an initial overbid
that is at least $50,000,000 over and above the Base
Purchase Price in the Purchase Agreement;
(7) Qualified Competing Bid. Only a bid that meets the
set requirements will be considered a "Qualified
Competing Bid;" and
(8) Bankruptcy Court Approval. All bids, including that of
Oregon Electric's will be subject to approval of the
Bankruptcy Court.
C. Due Diligence
Any Qualified Bidder who desires to conduct due diligence
regarding the Shares should contact Raffiq Nathoo, The
Blackstone Group L.P., 345 Park Avenue, New York, New York
10154 (212) 583-5869, Financial Advisors to Enron, for the
due diligence procedures. Before a party will be allowed to
conduct due diligence, they must execute a Confidentiality
Agreement.
D. Auction
(1) Auction Date and Time. If there are any Qualified
Competing Bids, Enron will then conduct the Auction of
the Shares. The Auction will be held on February 2,
2004, commencing at 12:00 noon (New York Time) at the
offices of Weil, Gotshal & Manges LLP, 767 Fifth Avenue,
New York, New York 10153, or on other time and place as
may be agreed by Enron and the Committee, prior to the
Sale Hearing Date, for consideration of qualifying offers
that may be presented to Enron. Only Oregon Electric and
parties who have submitted Qualifying Competing Bids may
participate in the Auction;
(2) Adjournment of Auction. The Auction may be adjourned as
Enron, upon consultation with the Committee, deems
appropriate. Reasonable notice of adjournment and the
time and place for the resumption of the Auction will be
given to Oregon Electric, all Qualified Bidders, and the
Committee;
(3) Evaluation of Highest or Best Offer. Enron will,
immediately after the Bid Deadline and upon consultation
with the Committee: (i) evaluate all Qualified Competing
Bids received, and (ii) determine which Qualified
Competing Bid reflects the highest or best offer for the
Shares. During the course of the Auction, Enron will
inform each participant which Qualified Competing Bid
reflects, in Enron's view, upon consultation with the
Committee, the highest or best offer;
(4) Subsequent Bids. Any subsequent bid must be in an amount
at least $10,000,000 higher than the highest prior bid;
provided, however, that Enron, in consultation with the
Committee, may during the Auction reduce the amount
required for subsequent bids;
(5) Subsequent Purchaser Bids. Oregon Electric will have the
right to include the amount of the Break-up Fee in the
amount of any subsequent bid that it makes at the
Auction. If Oregon Electric is the Winning Bidder by
virtue of a subsequent bid in an amount that exceeds the
Preliminary Purchase Price plus the Initial Overbid,
Oregon Electric will be entitled to a credit against the
Purchase Price at Closing equal to the amount of the
Break-up Free that will not be required to be paid by
Enron;
(6) Other Terms. All Qualified Bids, the Auction, and the
Bidding Procedures are subject to other terms and
conditions as are announced by Enron, in consultation
with the Committee, not inconsistent with the Procedures
Order. Enron will, at the conclusion of the Auction,
announce its intention to either sell the Shares to
the Winning Bidder at the Auction or distribute the
Shares to creditors under a Chapter 11 plan;
(7) Irrevocability of Certain Bids. The bid of the Winning
Bidder will remain irrevocable in accordance with the
terms of the purchase agreement executed by the Winning
Bidder;
(8) Retention of Earnest Money Deposits. The Earnest Money
Deposit of the Winning Bidder will be retained by Enron
in accordance with the terms of the purchase agreement
executed by the Winning Bidder;
(9) Failure to Close. In the event a bidder is the Winning
Bidder and it fails to consummate the proposed
transaction by the contemplated closing date for any
reason, Enron (i) will retain the Earnest Money Deposit
of the bidder, to the extent provided in the purchase
agreement, (ii) maintain the right to pursue all
available remedies, whether legal or equitable available
to it and (iii) upon consultation with the Committee,
will be free to consummate the proposed transaction with
the next highest bidder at the highest price bid without
the need for an additional hearing or order of the Court;
and
(10) Non-Conforming Bids. Notwithstanding anything to the
contrary in the Procedures Order, Enron, in consultation
with the Committee, will have the right to entertain bids
for the Shares that do not conform to one or more
requirements specified herein and deem the bids Qualified
Competing Bids; provided, however, that a non-conforming
bid so entertained by Enron must meet each of these
conditions:
(i) a deposit must be made in the amount specified;
(ii) the Initial Overbid must meet the minimum
requirement specified; and
(iii) the identity of the party submitting the bid must
be adequately described to all participants at
the Auction, prior to the commencement of the
Auction.
E. Expenses
All bidders will bear their own expenses in connection with
the sale of the Shares, whether or not the sale is ultimately
approved, in accordance with the terms of the purchase
agreement. The Purchaser will recover expenses in accordance
with the provisions of the Purchase Agreement.
F. Conflict
Any conflict between the terms and provisions of the
Procedures Order and any purchase agreement executed by Enron
and the bidders will be resolved in favor of the Procedures
Order.
According to Mr. Sosland, the Initial Overbids and the Subsequent
Bids are beneficial to Enron's estate and creditors in that they
can provide the incentive required to induce a potential bidder
to submit or increase its bid prior to the Auction. To the
extent bids can be improved prior to the Auction, a higher floor
is established for further bidding. Thus, even if Oregon
Electric ultimately is not the successful bidder for the Shares,
Enron and its estate will have benefited from the higher floor
established by the improved bid.
Break-Up Fee and Expense Reimbursement
In the event the Shares are not sold to Oregon Electric, or if
Enron elects to distribute the Shares to its creditors, Oregon
Electric, as the stalking horse, will be entitled to a
$31,250,000 break-up fee to be paid as an administrative expense
claim under Section 503(b)(1)(A) of the Bankruptcy Code.
Moreover, if the Purchase Agreement is terminated due to Enron's
breach or its covenants, Enron will reimburse Oregon Electric for
its reasonable and documented third party fees and expenses
incurred in connection with the contemplated transactions up to
an aggregate amount equal to $3,500,000 plus $500,000 for each
30-day period that elapsed from the date of entry of the
Procedures Order until the termination of the Purchase Agreement.
Mr. Sosland contends that the Break-up Fee and expense
reimbursements is fair and reasonable as they may enable Enron to
induce one or more potential purchasers to submit a higher or
better bid that might otherwise be forthcoming and thereby
increase the chances that it will receive the highest or best
price for the Shares, to its benefit, and its estate, creditors
and all parties-in-interest.
The Break-up Fee, which was negotiated at arm's length, should be
approved, Mr. Sosland argues, because:
(a) it is reasonable in relation to the size of the proposed
sale;
(b) it does not hamper any other party from offering a higher
or better bid; and
(c) extensive work was undertaken by the Purchaser and its
professionals in investigating, negotiating and drafting
the necessary agreements.
Indeed, the Break-Up Fee and the Purchaser Expense Reimbursement
is relatively small when compared to the value of Oregon
Electric's efforts brought to Enron and its estate. (Enron
Bankruptcy News, Issue No. 90; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
EXTREME NETWORKS: Hosting Investor & Analyst Day on Tuesday
-----------------------------------------------------------
Extreme Networks, Inc. (Nasdaq: EXTR), a leader in broadband
Ethernet networking, will hold a Financial Analyst Day, Tuesday,
December 16, 2003, in New York City. The meeting will run from
8:00 a.m.-12:00 p.m. Eastern Standard Time. Key speakers include,
Gordon Stitt, chairman, president, CEO; Bill Slakey, Extreme's new
CFO, Alex Gray, COO and Varun Nagaraj, vice president of product
management.
A live webcast of the Financial Analyst Day can be accessed from
the investor section of the company's Web site at
http://www.extremenetworks.com/aboutus/investor/
Extreme Networks (S&P, B Corporate Credit & CCC+ Conv. Sub. Note
Ratings, Stable) delivers the most effective applications and
services infrastructure by creating networks that are faster,
simpler and more cost-effective. Headquartered in Santa Clara,
Calif., Extreme Networks markets its network switching solutions
in more than 50 countries. For more information, visit
http://www.extremenetworks.com/
FAO INC: Retains DJM to Dispose of 89 Zany Brainy Leases
--------------------------------------------------------
FAO, Inc. (Nasdaq: FAOO), has retained DJM Asset Management, LLC,
to dispose of the leases of 89 Zany Brainy stores as part of its
voluntary Chapter 11 bankruptcy petition filed last week.
The closing stores, located in 27 states nationwide, range in size
from 6,000 to 15,000 square feet.
"The Zany Brainy locations that we are marketing present a unique
opportunity for retailers to penetrate premium regional markets
with strong demographics in some of the highest quality shopping
centers in the country," said Andy Graiser, Co-CEO of DJM. "DJM
will conduct an auction of these leases at the end of January with
bids due by mid January."
For more information on specific Zany Brainy locations, contact
Jim Avallone or Andy Graiser at 631-752-1100.
Based in Melville, New York, DJM Asset Management, LLC,
specializes in disposing of surplus retail real estate. During the
past three years, DJM has disposed of or restructured over
120,000,000 square feet of space.
FAO, Inc. owns a family of high quality, developmental,
educational and care brands for infants, toddlers and children and
is a leader in children's specialty retailing. FAO, Inc. owns and
operates the renowned children's toy retailer FAO Schwarzr; The
Right Startr, the leading specialty retailer of developmental,
educational and care products for infants and toddlers; and Zany
Brainyr, the leading retailer of developmental toys and
educational products for kids.
For additional information on FAO, Inc. or its family of brands,
visit online at http://www.irconnect.com/faoo/
FAO INC: Ken Hakuta Engages in Talks to Acquire FAO Schwarz
-----------------------------------------------------------
Ken Hakuta, also known as Dr. Fad and the man responsible for
bringing Wacky WallWalkers to the United States, is in
negotiations to buy the ailing FAO Schwarz retail chain.
The chain, which is now in Chapter 11 bankruptcy, is on the brink
of closing before Christmas. FAO went into Chapter 11 in January
of this year, and emerged from it in April. However, this time
around, the Chapter 11 may be the end all, as the financial
situation in the entire toy industry is dreary, with no hot hits
for the holiday season, and sales of big sellers such as Mattel's
Barbie down.
"It is ironic that this iconic symbol of Christmas has announced
its bankruptcy just before Christmas," explained Ken Hakuta.
"After all, what would Christmas in New York be to millions of
kids without FAO Schwarz. I'm hoping we can save this
quintessential icon before that happens."
Entrepreneur Ken Hakuta introduced the Wacky WallWalker, which
became one of the best-selling fad toys of all time and was
recently chosen to be in the Pop Culture Collection at the
Smithsonian Museum of American History in Washington, DC. Over a
period of six years, Hakuta earned $20 million while selling 250
million of this toy. His Emmy-nominated "Dr. Fad Show" showcasing
kids' inventions, was syndicated nationally from 1987-1993. He is
a graduate of the Harvard Business School, the author of How to
Create Your Own Fad and Make a Million Dollars (William Morrow,
1988) and the owner of the Mt. Lebanon Shaker Furniture Collection
(the largest private collection in the U.S.). Mr. Hakuta sits on
the board of the Harvard Business School California Research
Center in Silicon Valley and the Smithsonian American Art Museum.
He is a frequent media guest and has appeared on such shows as The
Today Show, The Tonight Show with Jay Leno, Conan O'Brien, Oprah,
and 60 Minutes, to name a few.
Ken Hakuta is advised in this deal by the Peter J. Solomon
Company, coincidentally located in the same building as the
flagship FAO Schwarz store on Fifth Avenue in New York.
FEDERAL-MOGUL: PD Committee Brings-In Ferry Joseph as Counsel
-------------------------------------------------------------
The Official Committee of Asbestos Property Damage Claimants,
appointed in the Federal-Mogul Debtors' chapter 11 cases, wants to
retain Ferry, Joseph & Pearce, P.A., as its local counsel, nunc
pro tunc to November 6, 2003.
The PD Committee's Co-Chairman, Daniel A. Speights, relates that
Ferry Joseph will represent the PD Committee as local counsel in
the Debtors' Chapter 11 proceedings, and perform the necessary
legal services. Moreover, Ferry Joseph will work closely with
the national law firm to be selected by the PD Committee and will
divide tasks and responsibilities to avoid rendering unnecessary
and duplicative services.
According to Mr. Speights, the PD Committee will retain Ferry
Joseph under a General Retainer because of the extensive legal
services the Committee anticipates will be required in these
cases.
Ferry Joseph will be compensated on an hourly basis and will be
reimbursed of its actual, necessary expenses. The firm's current
hourly rates are:
Partners $200 - 325
Associates 150 - 185
Paralegals 80
Theodore J. Tacconelli, a partner at Ferry, Joseph & Pearce,
P.A., tells Judge Newsome that the firm had no prior connection
with the Debtors, their creditors or any other party-in-interest
or their attorneys, except:
(a) Anderson Memorial Hospital,
(b) Lon Morris College,
(c) Jacksonville College,
(d) Catholic Arch Diocese of New Orleans, and
(e) Westcoast Estates.
Ferry Joseph represented these entities in these cases prior to
the PD Committees' formation. However, the firm will no longer
continue to represent these parties in connection with the
Debtors' cases. Accordingly, Ferry Joseph has no connection
with, and holds no interest adverse to, the Debtors, their
estates, their creditors, or any other party-in-interest. Ferry
Joseph is a "disinterested person" as defined in Section 101(14)
of the Bankruptcy Code and as required under Section 327(a).
(Federal-Mogul Bankruptcy News, Issue No. 47; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
FIBRON PRODUCTS: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Fibron Products Inc.
dba Real Wood Tiles
170 Florida Street
Buffalo, New York 14208
Bankruptcy Case No.: 1-03-19096
Type of Business: Manufacturer of wood laminates and producer
of compreg wood components.
Chapter 11 Petition Date: December 8, 2003
Court: Western District of New York (Buffalo)
Judge: Carl L. Bucki
Debtor's Counsel: William E. Lawson, Esq.
730 Convention Tower
43 Court Street
Buffalo, NY 14202
Tel: 716-854-3015
Estimated Assets: $0 to $50,000
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Amalgamated Local Union 55 Judgment $304,001
Int. Union, United Automobile
Aerospace and Agricultural
Implement Workers of America
890-894 Main Street
Buffalo, New York 14203
Small Business Loan $180,956
Administration
Buffalo Economic Renaissance Loan $61,354
Corp.
Mary Oshei Loan $56,750
Swiantek, Falbo & Moscato Trade debt $40,803
Buffalo and Erie County Loan $37,200
Regional
Jim C. Hamer Company Trade debt $34,631
Avis Rent a Car System, Inc. Judgment $15,678
Concannon Lumber Company Trade debt $14,201
The Freeman Corporation Trade debt $12,787
Georgia Pacific Resins Trade debt $11,738
America's Family Benefit Judgment $10,344
Plans etal
America Family Health- Trade debt $6,535
Welfare
Wallace Wood Products Trade debt $4,500
Niagara Mohawk Trade debt $4,041
J. Stanley Trade debt $2,500
Mirabito Gas & Electric Trade debt $2,245
United States Life Insurance Trade debt $2,213
Company
Choice One Communications Trade debt $1,334
USF Holland, Inc. Trade debt $1,228
GENESIS HEALTH: Reports Fiscal-Year 2003 Results After Spin-Off
---------------------------------------------------------------
NeighborCare, Inc. (F/K/A Genesis Health Ventures, Inc.) announced
income from continuing operations of $51.1 million or $1.25 per
share and net income of $30.0 million or $0.74 per share for the
year ended September 30, 2003.
These results include the effect of certain strategic planning,
severance and other related costs, as well as tax and
transactional gains which are described below. Excluding the
effect of these costs and gains, income from continuing operations
on an as adjusted basis was $58.3 million or $1.42 per share and
net income on an as adjusted basis was $37.2 million or $0.91 per
share for the year ended September 30, 2003.
For the three months ended September 30, 2003, income from
continuing operations was $12.0 million or $0.30 per share and net
income was $6.9 million or $0.17 per share. These results also
include the effect of certain strategic planning, severance and
other related costs. Excluding the effect of these costs, income
from continuing operations on an as adjusted basis was $16.8
million or $0.42 per share and net income on an as adjusted basis
was $11.7 million or $0.29 per share.
On December 1, 2003, Genesis Health Ventures spun-off its
eldercare and rehabilitation businesses into a separately traded
public company, Genesis HealthCare Corporation (Nasdaq: GHCI).
Genesis Health Ventures also changed its name to NeighborCare,
Inc. (Nasdaq: NCRX) effective December 2, 2003.
NeighborCare (F/K/A Genesis Health Ventures)
Consolidated Financial Summary
Consolidated revenues for the year ended September 30, 2003 grew
6.6% to $2,649.0 million versus $2,485.8 million in the comparable
period in the prior year. For the three months ended September
30, 2003, revenues grew 10.0% to $699.0 million versus $635.6
million in the comparable period in the prior year. Increased
revenues were primarily driven by growth in the institutional
pharmacy business.
Consolidated EBITDA, as adjusted for the costs and gains described
below, for the year ended September 30, 2003, was $211.3 million
compared to $219.5 million for the same period in the prior year.
The decline in EBITDA as adjusted was caused by the impact of the
"Medicare Cliff," offset primarily by growth in EBITDA of the
pharmacy business.
Excluding the previously described impact of strategic planning,
severance and other related costs, debt restructuring and
reorganization costs, and the tax and transactional gains, results
for the year ended September 30, 2003 as compared to the same
period in the prior year are presented below and have been labeled
'as adjusted.'
($ in Millions, except per share)
As reported As adjusted
Year ended Year ended
September 30, September 30,
2003 2002 2003 2002
------------------- ---------------
Net Income $30.0 $70.2 $37.2 $61.1
Net Income Per Share
- Diluted $0.74 $1.68 $0.91 $1.47
Income from Continuing
Operations $51.1 $78.5 $58.3 $69.4
Income from Continuing
Operations Per Share,
Diluted $1.25 $1.87 $1.42 $1.66
EBITDA $193.8 $217.5 $211.3 $219.5
During the current and prior year periods, NeighborCare recognized
costs associated with the spin-off of its eldercare operations and
the transformation of NeighborCare to a pharmacy-based business.
These costs include: severance and other costs associated with
changes in NeighborCare's executive leadership, severance related
to an expense reduction program, costs associated with the
tendering of NeighborCare's employee stock options, advisory and
professional fees associated with the transformation of
NeighborCare to a pharmacy based business (including the spin-off)
and other costs incidental to these initiatives. During the three
months and year ended September 30, 2003, such costs before income
taxes were $7.0 million and $28.3 million, respectively, compared
to $8.9 million and $21.5 million, respectively, in the comparable
periods of the prior year. Also during these periods,
NeighborCare recognized several significant one-time gains. During
the fiscal year ended September 30, 2003, NeighborCare realized
$11.3 million of pre-tax gains, principally from a break-up fee
associated with an attempted pharmacy acquisition. During the
three months and year ended September 30, 2002, NeighborCare
realized pre-tax gains of $1.9 million and $23.8 million,
respectively, primarily associated with an arbitration award. In
the prior fiscal year ended September 30, 2002, NeighborCare
recognized $4.3 million of debt restructuring and reorganization
costs. During the years ended September 30, 2003 and 2002,
NeighborCare realized reductions of income tax expense of $4.4
million and $10.3 million, respectively, due to changes in the tax
law.
Pro Forma NeighborCare, Inc.
Financial Results
NeighborCare's pro forma revenues for the year ended September 30,
2003 grew 7.5% to $1,323.7 million versus $1,231.1 million in the
comparable period in the prior year. Of this growth,
institutional pharmacy services revenue increased by approximately
$72.9 million, or 6.9% over the same period in the prior year.
Institutional pharmacy services revenue in the three months ended
September 30, 2003 grew 10.6% to $341.7 million versus $308.8
million in the comparable period in the prior year. The increase
in revenue was primarily attributed to favorable changes in bed
mix, higher patient acuity mix and drug trends. These factors
have resulted in higher revenue per bed when comparing the year
ended September 30, 2003 to the year ended September 30, 2002.
Revenue per bed per month for the year ended September 30, 2003
was $383.15 compared to $357.67 in the prior year period.
NeighborCare served 246,141 beds at September 30, 2003 compared to
247,114 beds at September 30, 2002.
NeighborCare's pro forma income from continuing operations was
$24.1 million or $0.59 per share for the year ended September 30,
2003. Pro forma EBITDA for the year ended September 30, 2003 was
$93.6 million and pro forma EBITDA as adjusted was $112.2 million
for the same period.
"NeighborCare finished fiscal 2003 with strong performance that
positions us well to begin fiscal 2004 as we are now a stand alone
institutional pharmacy provider," stated John J. Arlotta, Chairman
and CEO of NeighborCare, Inc. "Our employees are very excited
about our new status, and I would expect that excitement to assist
us in continuing the positive momentum we have established in
reducing our costs as well as repositioning our sales efforts."
Reimbursement Update
In November 2003, Congress passed the Medicare Prescription Drug,
Improvement and Modernization Act of 2003, which the President
signed on December 8, 2003. Final regulations under the new law
have not been published. There remains uncertainty about the
implications of the law on our business. NeighborCare will
continue to work closely with the Center for Medicare & Medicaid
Services directly, as well as through the Long Term Care Pharmacy
Alliance to offer its expertise in pharmaceutical care for the
elderly and seek to assure that nursing home residents receive the
best possible care under the legislation.
Genesis HealthCare Corporation
Financial Results
GHC revenues for the year ended September 30, 2003 grew 3.5% to
$1,403.3 million from $1,356.2 million in the comparable period in
the prior year. On a pro forma basis for the spin-off and the
ElderTrust transactions, GHC revenues for the year ended September
30, 2003 grew 2.8% to $1,431.2 million from $1,392.3 million as
compared to the prior year. GHC experienced growth despite the
full-year impact of the Medicare Cliff which reduced revenues by
approximately $24.8 million. GHC saw improved Medicare mix,
increased rates from Medicaid sources and continued strength in
overall occupancy.
GHC income from continuing operations was $31.2 million for the
year ended September 30, 2003. On a pro forma basis for the spin-
off and the ElderTrust transactions, GHC pro forma income from
continuing operations was $24.0 million and $1.18 per share for
the year ended September 30, 2003. Pro forma EBITDA for the year
ended September 30, 2003 was $104.1 million and pro forma EBITDA
as adjusted was $103.0 million for the same period.
GHC made significant progress in reducing its reliance on
temporary nurses, reducing agency labor costs by $20.1 million, or
34% in fiscal 2003 over the same period in the prior year. Agency
labor on a per patient day basis represented 7.8% of total nursing
labor costs in fiscal 2003 compared with 12.2% in the same period
in the prior year. Nursing agency costs improved as a result of
continued efforts to manage overtime utilization and to reduce
reliance on agency staffing. Total nursing labor costs per
patient day declined for the second consecutive quarter by 0.4% to
$77.64 per patient day, while maintaining the level of nursing
hours per patient day.
"We were very pleased with the operating performance of Genesis
HealthCare over the last year, and are ending the year with strong
census and an improved reimbursement outlook," stated George V.
Hager Jr., Chairman and Chief Executive Officer of Genesis
HealthCare. "We look forward to a promising 2004 as we enter a
new fiscal year with positive momentum, focusing our efforts on
operational improvements in the areas of clinical outcomes,
employee recruitment and retention, and the realization of
operating cost savings through more efficient purchasing and
management of medical supplies and other purchased goods and
services."
Reimbursement Update
Effective October 1, 2003, CMS increased Medicare per diems
approximately 6.26% (3% increase in the annual update factor and a
3.26% upward adjustment correcting for previous forecast errors).
The estimated increase to GHC's Medicare payment rate for the
3.26% administrative adjustment approximates $10 per patient day
or about $10 million in revenues and EBITDA annually.
The Medicare Prescription Drug, Improvement & Modernization Act of
2003 will extend the moratorium on implementing payment caps on
Medicare Part B rehabilitation therapy services from the date of
the enactment of the legislation through calendar year 2005.
However, it will not be retroactive for therapy services to any
individuals who exceeded the cap from September 1, 2003 to the
date of enactment of the legislation. Extension of the moratorium
removes a significant financial threat to our therapy business.
Previously, GHC estimated that the therapy caps would reduce its
annual net revenues by approximately $18.9 million and EBITDA by
approximately $4.9 million.
Other
-- In November 2003, sold three of GHC's five properties in
Wisconsin for approximately $10 million ($4.3 in cash and
$5.7 million in notes).
-- Through December 10, 2003, completed $55.4 million of the
$70.4 million of previously announced transactions with
ElderTrust. The remainder are expected to close by January
2004. The ElderTrust transactions consist of purchases of
previously leased eldercare centers and the restructuring
of existing lease contracts.
Discontinued Operations
On October 1, 2001, NeighborCare and GHC adopted the provisions of
Statement of Financial Accounting Standards, No. 144 "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed Of" ("SFAS 144"). Under SFAS 144, discontinued
businesses including assets held for sale are removed from the
results of continuing operations and presented as a separate line
on the statement of operations.
The operations of GHC, which were spun-off on December 1, 2003,
will be reported as discontinued operations within the
consolidated financial statements of NeighborCare, Inc. beginning
in fiscal 2004.
NeighborCare, Inc. (Nasdaq: NCRX) is one of the nation's leading
institutional pharmacy providers serving long-term care and
skilled nursing facilities, specialty hospitals, assisted and
independent living communities, and other assorted group settings.
NeighborCare also provides infusion therapy services, home medical
equipment, respiratory therapy services, community-based retail
pharmacies and group purchasing. In total, NeighborCare's
operations span the nation, providing pharmaceutical services in
32 states and the District of Columbia.
Visit its Web site at http://www.neighborcare.com/
Genesis HealthCare (Nasdaq: GHCI) is one of the nation's largest
long-term care providers with over 200 skilled nursing centers and
assisted living residences in 12 eastern states operating under
the Genesis ElderCare banner. Genesis also supplies contract
rehabilitation therapy to over 730 healthcare providers in 21
states and the District of Columbia.
Visit its Web site at http://www.genesishcc.com/
GENUITY INC: Third Amended Liquidation Plan Declared Effective
--------------------------------------------------------------
William F. McCarthy, Esq., at Ropes & Gray, in Boston,
Massachusetts, informs the Court that Genuity and its debtor-
affiliates' Third Amended Joint Consolidated Liquidation Plan,
became effective on December 2, 2003.
In addition, Mr. McCarthy disclosed a number of deadlines by
which creditors must file certain claims:
Date Type of Claim
---- -------------
January 2, 2004 Rejection Damages Claims for Effective
Date Rejections
Administrative Claims Arising on or After
August 1, 2003
Senior Creditor Claims
Professional Fee and Substantial
Contribution Claims
February 2, 2004 Objections to Senior Creditor Claims
(Genuity Bankruptcy News, Issue No. 24; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
GEORGIA-PACIFIC: $500M Senior Unsec. Notes Get S&P's BB+ Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB+' senior
unsecured debt rating to Atlanta, Georgia-based Georgia-Pacific
Corp.'s new $500 million 8% senior unsecured notes due 2024, to be
issued under Rule 144a with registration rights.
"Proceeds from the notes will be used to repay amounts outstanding
under the company's bank credit facilities and/or its secured
receivables facility and for general corporate purposes," said
Standard & Poor's credit analyst Cynthia Werneth. At the same
time, Standard & Poor's affirmed all of its ratings on the
company. The outlook is negative.
The ratings reflect GP's position as a leading forest products
company with broad product diversity and good market and cost
positions in tissue, disposable tableware, and containerboard.
These attributes are offset by more cyclical building products,
pulp, and paper operations; aggressive debt leverage; asbestos-
related outlays that may rise in coming years, but should remain
manageable; and potentially significant environmental liabilities.
Conditions in many of GP's markets have been negatively affected
by the weak economy, as well as oversupply and poor pricing,
although strong wood-product pricing should boost second-half 2003
results somewhat. Recent results also have suffered from
competitive tissue-market conditions, as well as high energy,
fiber, and employee-benefit costs, offset to some extent by
administrative cost reductions. Although debt has been reduced--
primarily with asset-sale proceeds since the mostly debt-financed
acquisition of Fort James Corp. in 2000--debt levels remain high
(about $12 billion as of Sept. 30, 2003, including capitalized
operating leases). This follows about $400 million of debt
reduction during the nine months ended Sept. 30, 2003, largely
attributable to an income-tax refund and inventory reduction.
GLOBAL CROSSING: Gets OK to Complete Intercompany Asset Transfer
----------------------------------------------------------------
Michael F. Walsh, Esq., at Weil, Gotshal & Manges LLP, in New
York, informs the Court that as part of the consideration being
provided to certain creditors under the Plan, a subsidiary of
Global Crossing Limited, Global Crossing North American Holdings,
Inc., will issue new senior secured notes for $200,000,000. The
New Senior Secured Notes will be issued pursuant to an indenture,
having a maturity of three years, and bear interest at an 11%
annual rate, to be paid semi-annually.
To implement the Plan, the Debtors want to restructure certain
intercompany debts and effectuate the intercompany transfer of
certain assets. On the Effective Date and pursuant to the Plan:
(a) GX and Global Crossing Holdings Ltd. will transfer
substantially all of the Debtors' assets to a newly formed
GX subsidiary, GC Acquisition Limited -- the New Global
Crossing; and
(b) New Global Crossing and all of its material subsidiaries
will guarantee the New Senior Secured Notes and grant
security over substantially all of their assets.
Mr. Walsh reports that among the GX and GX Holding's assets that
are being transferred to New Global Crossing are two groups of
companies whose principal assets are in the United Kingdom. The
intermediate holding companies for those two groups are
incorporated under the laws of England and Wales:
* GC UK Holding Limited, and
* Global Crossing Intermediate UK Holdings Limited.
Pursuant to the Plan and the Indenture, New Global Crossing and
all its material subsidiaries will:
-- guarantee to the indenture trustee for the New Senior
Secured Notes all of GX North American Holdings'
obligations under the Indenture and the Notes; and
-- enter into a Global Security Agreement and certain other
local law security documents, which will govern the
security interest securing the New Senior Secured Notes.
In accordance with the Global Security Agreement, New Global
Crossing and each of its material subsidiaries will grant to the
Indenture Trustee a security interest in substantially all their
assets.
The Companies Act
Mr. Walsh explains that granting the guarantees and security
interests and entering into certain other documents required by
the Indenture by the U.K. Affiliates to secure GX North American
Holdings' obligations under the Indenture, as currently
contemplated, could constitute unlawful "financial assistance"
under Section 151(1) of the English Companies Act 1985.
Violation of the Companies Act could invalidate the guarantees
and supporting security interests granted by the U.K. Affiliates
and result in criminal or civil liability for each director of
the U.K. Affiliates.
Sections 151 to 155 of the Companies Act -- the Financial
Assistance Provision -- is generally viewed as protecting
unsecured creditors and minority stockholders in an acquisition
finance scenario, like a leveraged buyout, by restricting
financial assistance by a target company and its subsidiaries in
connection with the acquisition of stock. Mr. Walsh relates that
the Plan does not provide for a leveraged buyout and the Debtors
are not incurring new debt. The Debtors are restructuring
existing debt. Nevertheless, Mr. Walsh points out, one could
argue that the Financial Assistance Provisions would be triggered
by the transfer of the U.K. shares to New Global Crossing and the
guarantee of the New Senior Secured Notes by the U.K. Affiliates.
The Debtors need to implement the provision of guarantee and
security interests to assure that the Financial Assistance
Provisions are not triggered and the guarantees and liens
provided in support of the New Senior Secured Notes are
protected.
According to Mr. Walsh, to ensure compliance with the Companies
Act, the Debtors have two possible options:
(1) Sections 155 to 158 of the Companies Act provide a
procedure where the directors of each company providing
financial assistance make a statutory declaration that, as
of the day financial assistance is given, the Provider is
solvent and able to pay its debts as they become due
during the 12-month period immediately following the date
the financial assistance is given. In addition, the
auditors of the Provider must certify that the directors'
certification is reasonable. Completion of the Whitewash
Procedure can take months and would likely result in a
significant delay in emergence. This delay would require
the Debtors to seek to use cash collateral; or
(2) Give sufficient consideration to the Provider in return
for the guarantees and security interests.
Due to the length of time required to complete the Whitewash
Procedure and the resultant delay in the Debtors' emergence from
Chapter 11, the Debtors determined that the Consideration
Alternative would be the better course of action.
The Consideration Alternative
The Consideration Alternative is the result of an intensive
review of the corporate and capital structure of all Global
Crossing entities, Debtors and non-Debtors alike. The Debtors
consulted numerous legal and financial professionals and experts
in the Companies Act and determined that the Consideration
Alternative will enable them to execute the Indenture, consummate
the Plan, and emerge from Chapter 11 in the most expeditious
manner available.
The Consideration Alternative allows the Asset Transfer to be
effectuated in compliance with English Law because so long as a
company receives sufficient consideration for its granting of
guarantees and security interests, there is no financial
assistance within the meaning of the Companies Act. To provide
the U.K. Affiliates with sufficient consideration for their
granting of security interests and guarantees under the
Indenture, the Debtors will undertake a number of intercompany
transfers and forgive certain intercompany debts. The
Intercompany Transactions the Debtors will undertake involve
numerous steps to ensure that each U.K. Affiliate receives
sufficient consideration. Each of Intermediate U.K. and GCUK has
one main operating subsidiary each of which contains the majority
of the value of Intermediate U.K. and GCUK.
Although the transactions the Debtors will undertake are
complex and involve the transfer of assets and forgiveness of
debt aggregating billions of dollars, Mr. Walsh assures Judge
Gerber that there is no impact on the total value of the assets
securing the New Senior Secured Notes and, by extension, no
impact on creditors, as these amounts are made up exclusively of
intercompany claims and only affect the balance sheet of the
individual companies, but not of New Global Crossing. Moreover,
all the transactions the Debtors will undertake, including the
release of intercompany claims and the transfer of assets, are
expressly permitted by the Plan.
Intermediate U.K.
Intermediate U.K. is a direct, wholly owned subsidiary of GX
Holdings. Intermediate U.K. is the parent corporation of Global
Crossing (Holdco) Limited, which, in turn, is the direct parent
of Global Crossing (Bidco) Limited. Holdco and Bidco are holding
companies that have no assets other than the stock of their
subsidiaries and intercompany receivables. Bidco has five
English subsidiaries:
* Global Crossing Telecommunications Limited,
* Global Crossing Communications International Limited,
* Global Crossing Internet Services Limited,
* Global Crossing Telecommunications Networks Limited, and
* International Optical Network Limited.
Currently, there are a number of intercompany debts cascading
upward from GX Telecommunications through to GX Holdings. The
transfer of intercompany assets and forgiveness of intercompany
debts will take place in these steps:
(1) GX Holdings accepts Intermediate U.K.'s claim against
Holdco amounting to $400,000,000 in satisfaction of
Intermediate UK's $400,000,000 debt to GX Holdings. The
result is a $400,000,000 debt owed to GX Holdings by
Holdco;
(2) Holdco transfers its assets to GX Holdings in full
settlement of Holdco's $400,000,000 debt to GX Holdings.
Thus, Bidco:
* becomes a direct wholly owned subsidiary of GX Holdings;
and
* owes GX Holdings $763,000,000;
(3) GX Holdings releases $450,000,000 of Bidco's $763,000,000
debt to GX Holdings in exchange for Bidco:
* providing a guarantee of the New Senior Secured Notes,
granting liens to secure its obligations in respect of
the guarantee, and entering into certain other
documents required by the Indenture; and
* releasing $225,000,000 of the $742,000,000 debt owed to
Bidco by GX Telecommunications as consideration for GX
Telecommunications' guarantee of the New Senior Secured
Notes. This leaves balances of $313,000,000 owed by
Bidco to GC Holdings and $517,000,000 owed to Bidco by
GX Telecommunications;
(4) As part of the Asset Transfer, GX Holdings will transfer
to New Global Crossing:
* the Bidco shares; and
* the remaining $313,000,000 of the intercompany debt
Bidco owed to GX Holdings.
Bidco's transfer to New Global Crossing carries with
it $517,000,000 of intercompany debt owed by GX
Telecommunications. Each of Bidco's subsidiaries will
automatically become indirect subsidiaries of New Global
Crossing;
(5) Intermediate U.K. and Holdco will be transferred to New
Global Crossing without guaranteeing or securing the New
Senior Secured Notes. The only Intermediate U.K. asset
will be the Holdco stock, in which Intermediate U.K.
has a latent tax loss. Holdco will have no assets;
(6) GX International's only asset is a receivable of
GBP16,800,000 owed by GX Telecommunications. A waiver or
transfer of the claim would trigger the financial
assistance provisions of the Companies Act. As GX
International has no creditors and no other assets, Bidco
will use its best efforts to commence the liquidation of
GX International. Any liquidation would occur after the
Plan Effective Date to avoid a significant tax
liability under UK law. Assuming that GX International
is then liquidated, the receivable would be transferred to
Bidco as part of the liquidation to form part of the
assets securing the New Senior Secured Notes. GX
International will not grant any guarantees or security
interests in respect of the New Senior Secured Notes;
(7) GX Internet Services has no assets or liabilities.
Accordingly, Bidco will use its best efforts to commence
the liquidation of GX Internet Services in the same manner
as GX International, to avoid the incurrence of tax
liability described with respect to the liquidation of GX
International. GX Internet Services will not grant any
guarantees or security interests in respect of the New
Senior Secured Notes;
(8) GX Networks has no assets or liabilities. Accordingly,
Bidco will use its best efforts to commence the
liquidation of GX Networks. GX Networks will not grant
any guarantees or security interests in respect of the New
Senior Secured Notes; and
(9) The principal activity of International Optical is the
procurement and supply of transatlantic bandwidth.
International Optical continues to provide network
infrastructure to AC-1, the major transatlantic optical
fiber cable system GX operated. With the exception of
one contract with Metromedia Fiber Networks, Inc., all of
International Optical's contracts are with GX
subsidiaries. The MFN Contract, by its terms, is
assignable to a third party affiliate. It is intended to
vest in a GX subsidiary:
(i) the capacity rights that International Optical owns;
and
(ii) the corresponding obligations International Optical
has to supply capacity.
In the alternative, Bidco will use its best efforts to
commence the liquidation of International Optical.
International Optical will not grant any guarantees or
security interests in respect of the New Senior Secured
Notes.
These steps result in the consolidation of the assets of
Intermediate U.K. and its subsidiaries at Bidco and GX
Telecommunications, which will have been transferred to New
Global Crossing as part of the Asset Transfer, Mr. Walsh says.
However, the net value of the assets securing the New Senior
Secured Notes is unchanged.
GCUK
GCUK is a direct, wholly owned subsidiary of GX Holdings. GCUK
is the direct parent of Global Marine Systems Limited (U.K.).
GMS is the parent of Global Marine Systems (Investments) Limited,
Subserv Limited, and Subserv Pro Limited. GMS Investments is the
parent of Global Marine Systems (Japan) Limited.
The transfer of intercompany assets and forgiveness of
intercompany debt will take place in these steps:
(1) GCUK transfers the shares of GMS to GX Holdings for a
nominal amount. At the same time, GX Holdings will
release the $714,000,000 debt GCUK owed to GX Holdings.
Thus, GMS becomes a direct wholly owned subsidiary of GX
Holdings;
(2) GX Holdings enters into a comprehensive settlement of
intercompany issues between GMS, on the one hand, and GX
Holdings and its other subsidiaries, on the other hand.
The settlement will include these items that will provide
value to GMS:
(i) the set-off of existing claims between the two
companies, leaving a $44,200,000 balance owed by GMS
to GC Pan European Crossing Luxembourg II, s.a.r.l.;
(ii) the release of $44,200,000; and
(iii) a new undersea maintenance agreement between GMS and
New Global Crossing or one of its subsidiaries.
This settlement will be in exchange for GMS providing a
guarantee of the New Senior Secured Notes, granting liens
over substantially all its assets and entering into
certain other documents required by the Indenture;
(3) GX Holdings transfers GMS to New Global Crossing as part
of the Asset Transfer. The transfer of GCUK to New
Global Crossing is optional as it has no assets and will
be liquidated accordingly. GCUK will not grant any
guarantees or security interests to secure the New
Senior Secured Notes;
(4) The only asset owned by GM Investments is the stock of
Japan, which is currently valued at GBP1,000,000. GM
Investments' only liability is an account payable to GMS
in an amount not exceeding the GBP3,800,000 payable. GM
Investments will transfer its stock in Japan to GMS for a
nominal amount. At the same time, GM Investments will
release the Payable. GM Investments will not grant any
guarantees or security interests in respect of the New
Senior Secured Notes. In the alternative, GSM will use
its best efforts to liquidate GM Investments in the same
manner as that of GX International;
(5) Subserv's net book value, as of October 31, 2003, is
GBP121,387. A transfer of Subserv's assets for less than
fair market value, would breach the Financial Assistance
Provisions. GMS will use its best efforts to liquidate
Subserv in the same manner as GX International. Subserv
will not grant any guarantees or security interests in
respect of the New Senior Secured Notes; and
(6) Subserv Pro has GBP72,440 in third party liabilities and
GBP514,400 in receivables, the majority of which are owed
by GX affiliates. Subserv Pro has no fixed assets. GMS
will use its best efforts to liquidate Subserv Pro.
Subserv Pro will not grant any guarantees or security
interests to secure the New Senior Secured Notes.
Similar to the transactions to be undertaken regarding GM
Intermediate, the steps to be taken by GCUK and its subsidiaries
result in the consolidation of the assets of GCUK and its
subsidiaries at GMS, which will be transferred to New Global
Crossing as part of the Asset Transfer. GCUK and certain of its
subsidiaries, which were previously contemplated to be
transferred to New Global Crossing will either be liquidated
before or following the Asset Transfer. However, the net value
of the assets securing the New Senior Secured Notes is unchanged.
Intercompany Transactions Are Good
Mr. Walsh informs the Court that the Intercompany Transactions do
not modify the Plan or any Plan-Related documents and that the
Debtors can effectuate the Intercompany Transfers under the Plan
and Plan-Related documents as currently constituted without
further Court order. The Intercompany Transactions comply with
the letter and the spirit of the Plan as currently constituted.
There is also no adverse effect on the total value of the assets
securing the New Senior Secured Notes and, by extension, no
adverse impact on creditors, as these amounts are made up
exclusively of intercompany claims and only affect the balance
sheet of the individual companies. Although certain subsidiaries
that, absent the Intercompany Transactions, would have guaranteed
the New Senior Secured Notes, will not be guarantors, the
collateral package is effectively unchanged as the subsidiaries'
assets will be transferred to affiliates that will guarantee and
secure the New Senior Secured Notes. In addition, pursuant to
the Plan, the New Senior Secured Notes are secured only by assets
of material Subsidiaries.
Accordingly, Judge Gerber authorizes the Debtors to execute and
consummate the Intercompany Transactions. (Global Crossing
Bankruptcy News, Issue No. 52; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
GOLFGEAR INT'L: Hires Corbin to Replace Good Swartz as Auditors
---------------------------------------------------------------
On October 21, 2003 GolfGear International received notice from
its current auditors, Good, Swartz, Brown and Berns, LLP, that
they will no longer provide audit services to SEC reporting
companies, and are therefore resigning as the Company's
independent auditors.
Effective November 8, 2003 the Board of Directors approved the
engagement of Corbin & Company, LLP as its independent auditors
for the fiscal year ending December 31, 2003. The Company did not
consult with C&C prior to their retention.
GSBB's Auditors Report was modified to include an explanatory
paragraph where they expressed substantial doubt about the
Company's ability to continue as a going concern.
GOODYEAR TIRE: Won't File Restated Financials Until Next Year
-------------------------------------------------------------
The Goodyear Tire & Rubber Company (NYSE: GT) said that the filing
of its amended 2002 Form 10-K/A with the U.S. Securities and
Exchange Commission would be delayed until next year.
An ongoing internal investigation has identified possible improper
accounting issues in Europe, and the company is delaying the
filing until it completes the review into those issues. To date,
there has been no determination whether this would have a material
impact on the financial statements.
In addition, the delay could impact the company's ability to
satisfy an obligation to the United Steelworkers of America to
raise $250 million in debt and $75 million in equity-linked
financing by year-end.
Goodyear said its recently completed contract gives the USWA the
right, but not the obligation, to strike after going through a
grievance process if Goodyear does not complete these financings
by the end of the year. The company initiated discussions with
the Steelworkers today to explore mutually beneficial options that
would include aggressively pursuing financing options, including
capital market access, once the amended 2002 Form 10-K/A is filed.
Goodyear (Fitch, B+ Senior Secured and B Senior Unsecured Debt
Ratings, Negative) is the world's largest tire company.
Headquartered in Akron, Ohio, the company manufactures tires,
engineered rubber products and chemicals in more than 85
facilities in 28 countries. It has marketing operations in almost
every country around the world. Goodyear employs about 92,000
people worldwide.
GOODYEAR TIRE: Steelworkers Closely Monitor Financial Reporting
---------------------------------------------------------------
The United Steelworkers of America will closely monitor the
circumstances surrounding Goodyear Tire and Rubber Company's
announcement that it will be necessary to delay the filing of its
2002 Form 10-K/A with the U.S. Securities and Exchange Commission.
The company has recently identified possible improper accounting
issues in Europe and is in the process of reviewing these issues
and its possible impact on financial statements.
"We are hopeful that the problems in Europe are not significant,"
stated USWA International vice president Andrew V. Palm. "We
expect that the company will quickly resolve this situation and
move on to complete their financing commitments in the near
future."
In a three-year agreement reached in September with the USWA,
Goodyear committed to raising at least $250 million in debt and
$75 million in equity-linked financing by December 31, 2003.
Failure to meet this obligation gives the USWA the right to
strike.
"While we will be vigilant in protecting the rights of our members
and retirees, acting precipitously would be inconsistent with the
commitments the Company made during the recent negotiations to
revitalize Goodyear by investing in North American production,"
stated Palm.
The USWA represents more than 18,000 hourly employees in 20
Goodyear facilities and more than 24,000 retirees throughout the
U.S. and Canada.
HARKEN ENERGY: Annual Shareholders' Meeting Slated for Jan. 20
--------------------------------------------------------------
The Annual Meeting of Stockholders of Harken Energy Corporation, a
Delaware corporation, will be held at The American Stock Exchange,
86 Trinity Place, 14th Floor, New York, New York 10006 on
January 20, 2004 beginning at 2:00 p.m., local time, for the
following purposes:
(1) to approve an amendment to Harken's Certificate of
Incorporation to eliminate the classification of
directors and to eliminate the requirement that the
holders of two-thirds of the outstanding shares vote for
the removal of any or all directors;
(2) to approve an amendment to Harken's Certificate of
Incorporation to eliminate cumulative voting;
(3) to elect five directors to serve until the next annual
meeting of stockholders, or until their successors are
duly elected and qualified;
(4) solely in the event that the stockholders do not approve
the amendment of Harken's Certificate of Incorporation to
eliminate the classification of directors, to elect three
Class A Directors to hold office until the 2006 Annual
Meeting of Stockholders and until their respective
successors are duly elected and qualified;
(5) to approve an amendment to Harken's Certificate of
Incorporation to increase the number of shares of
Harken's Common Stock, par value $0.01, authorized for
issuance; and
(6) to transact such other business as may properly come
before the Annual Meeting or any adjournments or
postponements thereof.
The Board of Directors has fixed the close of business on
December 1, 2003 as the date of record for determining the
stockholders entitled to notice of, and to vote, either in person
or by proxy, at the Annual Meeting and any adjournment or
postponement thereof.
As reported in Troubled Company Reporter's October 28, 2003
edition, Harken said it was nearing the end of its restructuring
phase, and expected to end the year with a strong balance sheet.
"We are now turning our attention to significantly growing our
assets, earnings and cash flow."
In a previous report, Harken Energy Corporation retained Petrie
Parkman & Co., Inc., to evaluate its domestic oil and gas assets
and to make recommendations to maximize their value. Harken's
domestic assets currently consist of its productive properties
and prospects along the Gulf Coast of Texas and Louisiana, as
well as the Panhandle region of Texas.
Harken's management has spent the last few months actively
restructuring the liability side of its balance sheet and
examining and taking action on its cost structure. While Harken is
still burdened with significant long-term debt, the Company has
effectively dealt with most of its short-term debt without causing
excessive dilution.
HEADWATERS: Moody's Places Ratings Under Review for Likely Cuts
---------------------------------------------------------------
With about $125 million debt securities affected, Moody's
Investors Service placed the ratings for Headwaters Incorporated
under review for possible downgrade.
Moody's says that its review will give attention to the
sustainability of the company's cash flow and Headwaters' expected
long-term capital structure and business strategy. The review will
also look into the company's Covol Fuels business in light of the
recent IRS investigation of coal-based synfuels.
Affected Ratings
(i) B1 senior secured credit facility, consisting of a $105
million Term Loan B due 2007, and a $20 million revolving
credit facility,
(ii) B1 senior implied rating, and
(iii) B3 senior unsecured issuer rating.
Headwaters Incorporated, headquartered in South Jordan, Utah, is a
leader in providing technology and services that maximize the
value of fossil fuels. The company provides services to energy
companies, conversion of fossil fuels into alternative energy
products, and generally adding value to energy.
HOLIDAY RV: Klett Rooney Serving as Committee's Co-Counsel
----------------------------------------------------------
The Official Unsecured Creditors' Committee of Holiday RV
Superstore, Inc. seeks to employ and retain Klett Rooney Lieber &
Schorling, PC as co-counsel in the recreational vehicle dealer's
on-going chapter 11 restructuring.
The Committee choose Klett Rooney because of its expertise and
extensive knowledge of debtor and creditor representation under
the Bankruptcy Code.
The Committee expects Klett Rooney to:
a) advise the Committee with respect to its rights, duties
and powers in this case;
b) assist and advise the Committee in its consultations
with the Debtor relative to the administration of this
case;
c) assist the Committee in analyzing the claims of the
Debtor's creditors and in negotiating with such
creditors;
d) assist with the Committee's investigation of the acts,
conduct, assets, liabilities and financial condition of
the Debtor's business and any other matters relevant to
this case;
e) assist the Committee in its analysis of and negotiations
with the Debtor or any third party concerning matters
related to, among other things, the terms of the plan of
reorganization or other conclusion of this case;
f) assist the Committee in requesting the appointment of a
trustee or examiner, should such action become
necessary;
g) assist and advise the Committee as to its communications
to the general creditor body regarding significant
matters in this case;
h) represent the Committee at all hearings and other
proceedings;
i) review and analyze all applications, order, statements
of operations and schedules filed with the Court and
advise the Committee as to their propriety;
j) assist the Committee in preparing agreements, motions,
applications, orders, complaints, answers, briefs and
pleadings as may be necessary in furtherance of the
Committee's interests and objectives; and
k) perform such other legal services as may be required
under the circumstances of this case and are deemed to
be in the interests of the Committee in accordance with
the Committee's powers and duties as set forth in the
Bankruptcy Code.
The attorneys who will primarily represent the Committee and their
standard hourly rates are:
Mary F. Caloway $350 per hour
Peter J. Duhig $190 per hour
Headquartered in Ft. Lauderdale, Florida, Holiday RV Superstores,
Inc., owns real property which is leased to an RV dealership. The
Company filed for chapter 11 protection on October 20, 2003
(Bankr. Del. Case No. 03-13221). Mark J. Packel, Esq., at Blank
Rome LLP represent the Debtor in its restructuring efforts. When
the Company filed for protection from its creditors, it listed
$3,221,137 in total assets and $15,368,975 in total debts.
INDIGINET INC: Stark Winter Ends Client-Auditor Relationship
------------------------------------------------------------
On November 18, 2003, Stark Winter Schenklein & Co., LLP,
Indiginet Inc.'s independent auditors, notified the Company that
they intend to resign from the client-auditor relationship with
Indiginet.
As of November 21, 2003, the auditors had not furnished to the
Company a formal notification of their resignation or the reasons
for the resignation.
Stark Winter's reports on the Company's financial statements for
the years ended December 31, 2001 and December 31, 2002 and the
interim period through November 18, 2003 contained a paragraph
regarding Company's ability to continue as a going concern being
contingent upon its ability to secure financing, attain profitable
operations, and remain competitive in the environment in which the
Company operates. In addition, Stark Winter's report included, in
the Company's Form 10-KSB for the year ended December 31, 2002,
expressed doubt about the Company's ability to continue as a going
concern.
The decision to change accountants was not approved or recommended
by the Company's Board of Directors.
Indiginet had not yet engaged new independent auditors as of
November 21, 2003.
INTERNATIONAL PAPER: Supports Proposed Softwood Lumber Agreement
----------------------------------------------------------------
International Paper (NYSE: IP) announced support of the proposed
settlement in the softwood lumber dispute between the United
States and Canada.
"Because we operate a lumber business with operations in both
countries, International Paper has worked toward a negotiated
settlement that would end this long dispute and ongoing legal
challenges in a way that is both fair and durable," said George
O'Brien, senior vice president of forest resources and wood
products. "We are encouraged by the work of the negotiators and
urge U.S. and Canadian trade officials to finalize the pact."
O'Brien said the proposed settlement is a good solution for the
entire North American lumber industry because it reflects input-
and compromises-from forest products companies in both Canada and
the United States. "By providing clarity in the marketplace, the
settlement will allow us to better serve our customers."
"The plan immediately eliminates tariffs on Canadian lumber
imported to the United States and lays the groundwork for Canadian
provinces to develop long lasting policy changes that should
ultimately lead to unrestricted lumber trade," said O'Brien.
International Paper -- http://www.internationalpaper.com/-- is
the world's largest paper and forest products company. Businesses
include paper, packaging, and forest products. As one of the
largest private forest landowners in the world, the company
manages its forests under the principles of the Sustainable
Forestry Initiative(R) program, a system that ensures the
perpetual planting, growing and harvesting of trees while
protecting wildlife, plants, soil, air and water quality.
Headquartered in the United States, International Paper has
operations in over 40 countries and sells its products in more
than 120 nations.
As previously reported, Standard & Poor's Ratings Services
assigned its 'BB+' preferred stock ratings to International Paper
Co.'s $6 billion mixed shelf registration.
LEGACY HOTELS: Provides Redemption Price for Debentures
-------------------------------------------------------
Legacy Hotels Real Estate Investment Trust (TSX: LGY.UN) announced
that the redemption price for its outstanding Series 1C, 1D and 2B
Debentures is $1,030.05, $1,109.71 and $1,057.50, respectively,
per $1,000 principal amount, plus accrued and unpaid interest.
Pursuant to the trust indentures governing the Debentures, the
redemption price is the greater of par and the "Canada Yield
Price" set forth in the indentures. As previously announced,
Legacy has called these Debentures for redemption on
December 15, 2003.
Legacy is Canada's premier hotel real estate investment trust with
24 luxury and first-class hotels and resorts with over 10,000
guestrooms located in Canada and the United States. The portfolio
includes landmark properties such as Fairmont Le Chfteau
Frontenac, The Fairmont Royal York, The Fairmont Empress and The
Fairmont Olympic Hotel, Seattle.
* * *
As previously reported, Standard & Poor's Ratings Services
downgraded its ratings on Legacy Hotels Real Estate Investment
Trust (Legacy REIT or the trust) to 'BB-'. At the same time, the
senior unsecured debt rating was lowered to 'B+' from 'BB+'. The
outlook is negative.
The 'BB-' long-term corporate credit rating on Legacy REIT
reflects the deterioration of its business risk profile and
financial risk profile. Legacy REIT's credit strengths include a
portfolio of good quality real estate assets and its prominent
market position. Legacy REIT's credit weaknesses include the
aggressive business and financial policies of management, weak and
deteriorating credit measures, liquidity concerns, and uncertainty
in the lodging sector in general. Standard & Poor's is concerned
with Legacy REIT's business and financial strategies given a
challenging lodging environment when it is experiencing weakening
credit measures.
LEGACY HOTELS: Suspends Fourth-Quarter Dividends Distribution
-------------------------------------------------------------
Legacy Hotels Real Estate Investment Trust (TSX: LGY.UN) announced
that it will not pay a fourth quarter distribution. Legacy
suspended distributions in the second quarter given the
challenging operating environment.
"Legacy recognizes the importance of regular distributions to its
unitholders and will continue to evaluate the distributions on a
quarterly basis," commented Neil J. Labatte, Legacy's President
and Chief Executive Officer. "Legacy's intention is to resume an
appropriate distribution level as soon as operating performance
permits. While the fourth quarter is one of Legacy's weaker
quarters, we are encouraged by the recent pickup in activity
within our portfolio and are optimistic about our outlook for
2004."
Legacy will release its fourth quarter and year-end results on
January 27, 2004. At that time, Legacy will provide additional
information on recent trends and its outlook for 2004.
Legacy (S&P, BB- long-term corporate credit rating, Negative) is
Canada's premier hotel real estate investment trust with 22 luxury
and first-class hotels and resorts in Canada and two in the United
States, consisting of over 10,000 guestrooms. The portfolio
includes landmark properties such as Fairmont Le Chateau
Frontenac, The Fairmont Royal York, The Fairmont Empress, The
Fairmont Washington, D.C. and The Fairmont Olympic Hotel, Seattle.
MAGNUM HUNTER: Proposes $100-Million Notes Private Offering
-----------------------------------------------------------
Magnum Hunter Resources, Inc. (NYSE: MHR) is launching a private
placement of $100 million in Senior Unsecured Convertible Notes,
subject to market and other conditions. Magnum Hunter may raise
up to an additional $25 million if the initial purchasers exercise
their right to acquire additional Notes in connection with the
offering.
The Notes will be convertible into a combination of cash and
common stock of Magnum Hunter upon the happening of certain
events. The Notes will have a final maturity in year 2023. In
general, upon conversion of a Note the holder of such Note would
receive cash equal to the principal amount of the Note and Magnum
Hunter common stock for the Note's conversion value in excess of
such principal amount. Magnum Hunter expects to use substantially
all the net proceeds from the offering to repay outstanding
indebtedness under Magnum Hunter's revolving credit facility that
was recently increased to allow for the redemption of all of its
10% Senior Unsecured Notes due 2007. It is anticipated the Notes
will rank equally and ratably with all other senior unsecured
indebtedness of Magnum Hunter.
The Notes and common stock issuable upon conversion of the Notes
have not been registered under the Securities Act of 1933, as
amended, and may not be offered or sold in the United States
absent registration or an exemption from the registration
requirements of the Securities Act of 1933, as amended.
Magnum Hunter Resources, Inc. (S&P, BB- Corporate Credit and B+
Senior Unsecured Debt Ratings) is one of the nation's fastest
growing independent exploration and development companies
engaged in three principal activities: (1) the exploration,
development and production of crude oil, condensate and natural
gas; (2) the gathering, transmission and marketing of natural
gas; and (3) the managing and operating of producing oil and
natural gas properties for interest owners.
MERRILL LYNCH: Fitch Affirms Series 1996-C1 Notes Rating at C
-------------------------------------------------------------
Fitch Ratings upgrades Merrill Lynch Mortgage Investors, Inc.'s
mortgage pass-through certificates, series 1996-C1 as follows:
-- $38.8 million class B to 'AAA' from 'AA+';
-- $38.8 million class C to 'AAA' from 'A+';
-- $32.3 million class D to 'AA' from 'BBB'.
The following classes are affirmed:
-- $95.1 million class A-3 at 'AAA';
-- Interest-only class IO at 'AAA';
-- $48.5 million class E at 'BB';
-- $32.3 million class F at 'C'.
Classes A-PO, A-1 and A-2 have paid off in full. Fitch does not
rate the $9.4 million class G.
The rating upgrades are due to increased subordination levels
resulting from 54.3% paydown of the pool's certificate balance to
$295.5 million from $647.3 million.
The master servicer, GMAC Commercial Mortgage Corp., collected
year-end 2002 operating statements for 79.9% of the pool by
collateral balance. The YE 2002 weighted average debt service
coverage ratio for these loans is 1.53 times compared to 1.59x at
YE 2001 and 1.37x at issuance.
Fitch has concerns with the 6 loans, representing 7.7% of the
pool, in special servicing. The largest specially serviced loan,
West Kentucky Outlet Center (2.9%), is secured by a retail
property located in Eddyville, Kentucky. The loan transferred to
the special servicer in April 1999 and is now real estate owned.
The special servicer is marketing the property for sale. Of the
remaining five specially serviced loans, two are 90 days
delinquent (2.0%) and the other three are current (2.8%). While
Fitch expects losses, the investment grade classes are well
protected given their high credit support.
MESABA AVIATION: Enters Cooling-Off Period in Talks with Pilots
---------------------------------------------------------------
Mesaba Aviation, a subsidiary company of MAIR Holdings, Inc.
(Nasdaq:MAIR), has received a letter from the National Mediation
Board indicating the start of a 30-day cooling-off period in the
airline's contract negotiations with the Air Line Pilots
Association.
If the two sides fail to reach an agreement, ALPA could call a
strike beginning at 12:01 a.m. EST on Jan. 10, 2004.
"We will continue to negotiate with ALPA during the cooling-off
period and we remain optimistic that we can reach an agreement
that avoids a work stoppage," said John Spanjers, president and
chief operating officer of Mesaba Aviation. "Our goal has remained
the same since the beginning of the negotiation process: a market-
based contract that positions the airline for growth and long-term
viability. Our operation will continue as scheduled through early
January, and we will make every effort to keep customers informed
so they can plan their travel accordingly."
The two sides have been in negotiations since June 2001, and the
existing contract became amendable in June 2002. At the request of
both sides, the NMB began mediating the negotiations in August
2002. The NMB issued a proffer of arbitration, offering both sides
the opportunity to have the remaining open issues settled by
binding arbitration. ALPA rejected this offer on Monday,
triggering the announcement of a cooling-off period.
Mesaba Aviation, Inc., d/b/a Mesaba Airlines, operates as a
Northwest Jet Airlink and Northwest Airlink partner under service
agreements with Northwest Airlines. Currently, Mesaba Aviation
serves 112 cities in 30 states and Canada from Northwest's and
Mesaba Aviation's three major hubs: Detroit, Minneapolis/St. Paul,
and Memphis. Mesaba Aviation operates an advanced fleet of 100
regional jet and jet-prop aircraft, consisting of the 69 passenger
Avro RJ85 and the 30-34 passenger Saab SF340.
MAIR Holdings, Inc. is traded under the symbol MAIR on the NASDAQ
National Market.
More information about Mesaba Airlines is available on the
Internet at http://www.mesaba.com/
On April 11, 2003, the Troubled Company Reporter cited that
Mesaba Aviation, Inc., a subsidiary company of Mesaba Holdings,
Inc. (Nasdaq:MAIR), announced the elimination of 33 management
positions as a result of declining flight activity from Fiscal
Year 2003 to what is forecasted in Fiscal Year 2004. This
decline reflects the current economic conditions in the airline
industry and lower consumer demand.
The positions affected include both staffed and open positions.
The airline has reduced its management headcount to 312 from
345, a reduction of nearly 10 percent. All affected employees
were assisted through a package of severance pay, benefits and
outplacement services.
Mesaba plans to eliminate approximately 50 positions from its non-
management workforce over the next six months, through a
combination of furloughs and voluntary leaves. In addition,
Mesaba is also freezing all management base pay in Fiscal Year
2004, which began on April 1, 2003.
MIRANT CORP: Oak Mountain Sues Debtors to Recover $2 Million
------------------------------------------------------------
On April 15, 2002, Oak Mountain Products, LLC and Mirant Mi-
Atlantic LLC entered into a Solid Synthetic Fuel Sales Agreement,
as amended, whereby Mirant agreed to buy synthetic fuel product
from Oak Mountain. As of the Petition Date, the Agreement was in
full force and effect.
Steven T. Holmes, Esq., at Hunton & Williams LLP, in Dallas,
Texas, relates that between July 7, 2003 and July 14, 2003, Oak
Mountain sold synthetic fuel product on open account to Mirant
totaling $2,081,438 -- the Reclamation Goods. This amount
remains unpaid to date. During the period when Oak Mountain
delivered the Reclamation Goods to Mirant, Mirant was insolvent
as the term is defined in Section 101(32) of the Bankruptcy Code.
Mr. Holmes reports that on July 17, 2003, pursuant to Section
546(c) of the Bankruptcy Code and Section 2-702(2) of the Uniform
Commercial Code, Oak Mountain timely delivered to Mirant, by
facsimile transmission and overnight mail, a reclamation demand
letter. All of the Reclamation Goods were identifiable and were
in Mirant's possession when it received the Reclamation Demand.
Despite the demand made, Mr. Holmes tells Judge Lynn that Mirant
did not permit Oak Mountain to reclaim the Reclamation Goods, did
not return the Reclamation Goods and did not pay for them.
According to Mr. Holmes, Oak Mountain satisfied the requisite
elements for a valid reclamation claim:
-- Oak Mountain sold the Reclamation Goods to Mirant in the
ordinary course of business of both companies;
-- Oak Mountain delivered the Reclamation Goods to Mirant at
a time when Mirant was insolvent; and
-- Oak Mountain's Reclamation Demand was timely and Mirant
had possession of the Reclamation Goods at the time when
the Reclamation Demand was made.
Accordingly, Oak Mountain asks the Court to allow it to reclaim
the Reclamation Goods pursuant to Section 546(c) or granting it
administrative priority to its reclamation claim pursuant to
Section 503(b) of the Bankruptcy Code, or a lien against property
of Mirant's estate in favor of Oak Mountain for $2,081,438.
(Mirant Bankruptcy News, Issue No. 14; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
MOSHUP TRAIL: Case Summary & 6 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Moshup Trail Limited Partnership
c/o Barry White
Foley Hoag LLP
Boston, Massachusetts 02210
Bankruptcy Case No.: 03-19942
Chapter 11 Petition Date: December 2, 2003
Court: District of Massachusetts (Boston)
Judge: Carol J. Kenner
Debtor's Counsel: Vincent J. Pisegna, Esq.
Krokidas & Bluestein
141 Tremont Street
Boston, MA 02111
Tel: 617-482-7211
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 6 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Thrivent Financial For Mortgage Debt $2,700,000
Lutherans
c/o Kinghorn, Driver, Hough
& Co.
19 Briar Hollow Lane, #200
Houston, Texas 77027
Tax Assessor of Montgomery Real Estate Taxes due $109,835
In January, 2004
Moshup Trail Limited Loan $45,000
Partnership II
Entergy Utilities Bill $9,559
Greenbriar Appraisal Company Appraisal Fee $2,500
ATC Associates, Inc. Environmental Site $1,500
Assessment
NATIONAL CENTURY: Gets Nod to Commence Rule 2004 Examinations
-------------------------------------------------------------
National Century Financial Enterprises sought and obtained
permission from Judge Calhoun to take depositions and collect
documents from former officers, directors, financial institutions
and auditing firms concerning a broad range of topics related to
the healthcare finance company's meltdown.
In obtaining authiority to conduct its fishing expedition, the
Debtor battled against objections from:
A. Rebecca Parrett
Rebecca Parrett complains that the National Century Financial
Enterprises Debtors seek to serve improperly broad discovery on
her and certain affiliated entities in order to obtain
information and documents that grossly exceeds the intended
scope of Rule 2004 of the Federal Rules of Bankruptcy
Procedure.
It is well recognized that "once an adversary proceeding or
contested matter has been commenced, discovery is made
pursuant to Fed. R. Bankr. P. 7026 et seq., rather than by a
Fed. R. Bankr. P. 2004 examination." This is so because
Bankruptcy Rule 7026 contains procedural safeguards that are
not contained in Rule 2004. As Ms. Parrett is a cross-
claimant in Adversary Proceeding No. 03-02288, a Rule 2004
examination is not proper.
Moreover, the Debtors seek to impose an examination on Ms.
Parrett, the Rebecca S. Parrett Living Trust, and the
Cheyenne-Blaze LLC of which Ms. Parrett is an officer, which
exceeds the scope of discovery contemplated by Bankruptcy Rule
2004.
Benjamin S. Zacks, Esq., at Zacks Law Group, LLC, in Columbus,
Ohio, argues that the Debtors' requests:
(1) seek a number of items that bear no relevance to the
Debtors' estate or its administration;
(2) are so broad as to be more disruptive and costly to the
party sought to be examined than beneficial to the party
seeking discovery;
(3) seek information concerning matters other than the
Debtors' financial affairs.
B. Steven M. Scott and Stoneybrook Capital, LLC
Mack Sperling, Esq., at Brooks, Pierce, McLendon, Humphrey &
Leonard, in Greensboro, North Carolina notes that the
discovery proposed to be served on Steven M. Scott, M.D. is
actually directed to "Providers" in which Dr. Scott has an
ownership interest. Claims against Providers are excluded
from the scope of the Debtors' Special Counsel's engagement,
and discovery should not be had on the claims.
Moreover, the entities in which Dr. Scott has an ownership
interest from which discovery is sought are debtors in a
bankruptcy proceeding pending in the Maryland Bankruptcy
Court. Discovery from those entities may violate the
automatic stay.
On the other hand, Stoneybrook Capital, LLC is a potential
subject of discovery on the basis that it is an affiliated
entity. The Debtors' request defines "affiliated entities" as
"either directly or indirectly related to or owned by or
through NCFE, or NCFE officers or directors." Mr. Sperling
asserts that this definition does not fit Stoneybrook.
Neither NCFE, nor any of its officers or directors, has ever
held any ownership interest at all in Stoneybrook.
C. Credit Suisse First Boston, LLC and Credit Suisse First
Boston, New York Branch
CFSB asserts that by virtue of the common representation by
Gibbs & Bruns of CFSB's adversaries, if the Debtors' request
is granted, CSFB would effectively be forced to provide
unilateral discovery to adversaries in currently pending
lawsuits.
Sherri Blank Lazear, Esq., at Baker & Hostetler, in Columbus,
Ohio, notes that Court has time and again refused to permit
discovery under Bankruptcy Rule 2004 when the discovery would
thereby become available to parties to pending litigation.
Permitting Rule 2004 discovery would flout statutory stays,
circumvent procedurally proper judicial case management and
discovery under the Federal Rules of Civil Procedure, and
substantially prejudice the rights of Credit Suisse under non-
bankruptcy law.
Since Rule 2004 discovery is "generally used as a
pre-litigation device," it may only be put to use "during the
short time before a matter becomes contested." Thus, it is
the "well recognized rule that once an adversary proceeding or
contested matter is commenced, discovery should be pursued
under the Federal Rules of Civil Procedure and not by Rule
2004."
It is undisputed that the requested Rule 2004 discovery will
inure to the benefit of the Noteholders in the Gibbs & Bruns
Noteholder Actions. In fact, the Debtors have already
conceded that Gibbs & Bruns will use the information it learns
on the Debtors' behalf for the benefit of the Noteholders.
As a matter of common sense, it is impossible for the
professionals at Gibbs & Bruns to learn a fact for one client,
the Debtors, and not know that same fact for its other
clients, the Noteholders.
On the other hand, Ms. Lazear points out that denial of Rule
2004 discovery against CFSB will in no way force the Debtors
to forgo discovery altogether because the Debtors and
Noteholders share counsel, the Debtors and their counsel
already have access to all of the Noteholders' learning to
date, and will have access to any ensuing discovery that the
Noteholders gain as the non-bankruptcy actions proceed. Gibbs
& Bruns and the Debtors also already have access to the
Debtors' voluminous files and Rule 2004 discovery obtained by
the Debtors against certain healthcare providers and other
third parties.
The Noteholders, via their counsel Gibbs & Bruns, have already
adopted the position that they have a sufficient basis to file
complaints asserting numerous claims against several parties
in the Gibbs & Bruns Noteholder Actions. Because the Debtors
share the same counsel, the Debtors also have access to
precisely the same information as the Noteholders. The
Debtors have also stated at the retention hearing that the
"facts on which they would be relying" and the "common events
which give rise to their claims" are "identical" to those that
underlie the Noteholders' claims.
Balanced against the benefit to all parties of a coherent and
consolidated discovery program, and the prejudice and
unfairness to CSFB were the Noteholders to gain access to
unilateral Rule 2004 discovery, is the minor inconvenience to
the Debtors of foregoing discovery from the Discovery Targets
for a time -- an inconvenience, it must be noted, resulting
entirely from the Debtors' election to retain Gibbs & Bruns in
this unusual joint representation with the Noteholders.
Ultimately, the Debtors cannot demonstrate the required "good
cause" for any Rule 2004 examination, because Gibbs & Bruns
has already adopted the position that it has enough
information to bring the contemplated claims against Credit
Suisse and the other Discovery Targets. The estates will
suffer no prejudice because Gibbs & Bruns already has ready
access to the information sought through other means.
In sum, Ms. Lazear notes, granting the Debtors' request would
conflict with accepted Rule 2004 jurisprudence, impinge upon
non-bankruptcy law and procedure, and impose on judicial
management of pending non-estate litigation, simply to enable
the Debtors to obtain discovery that they are fully able to
seek in due course within pending and contemplated
litigations.
D. Bank One
Bank One asserts that the Debtors' improper effort to avoid
the constraints of the Bankruptcy and Federal Rules will
severely prejudice Bank One, as Bank One will be forced to
provide information to adversaries in ongoing litigation in
advance of the discovery regimen to be established by those
courts.
Christopher Meyer, Esq., at Squire, Sanders & Dempsey, in
Columbus, Ohio, relates that the Debtors' request should be
denied specifically as to Bank One because Bank One has
already disclosed substantial amounts of information in
response to:
-- numerous written requests of Milbank, Tweed, Hadley &
McCloy LLP on behalf of the NPF XII Noteholders; and
-- formal discovery requests of the Unsecured Creditors'
Committee.
Bank One also disclosed information directly to NCFE.
Bank One's previous disclosures were voluminous. In addition,
Bank One made Jeffrey Ayres, its Director of Fiduciary Workout
Global Corporate Trust Services, available for deposition by
the Committee on May 8, 2003. Mr. Meyer states that not only
are the Debtors already in possession of some of the requested
information as a result of Bank One's prior, direct production
to NCFE, the remainder of the requested information is easily
obtainable through parties aligned with the Debtors.
Thus, the Debtors' attorneys already possess or have access to
considerable information from Bank One, which they can use to
pursue their investigation of the Debtors' financial affairs.
Accordingly, Bank One asks the Court to deny the Debtors'
request for production of documents.
D. Donald H. Ayers, E&D Investments, LLC and Ayers, LLC
David G. Korn, Esq., at Maguire & Schneider, in Columbus,
Ohio, notes that while courts have recognized that a debtor
may invoke an examination of a third party in certain
circumstances, they have also made clear that Rule 2004 is
"creditor and trustee oriented." However, once an adversary
proceeding or a particular contested matter is under way,
discovery sought in furtherance of litigation is subject to
the Federal Rules of Civil Procedure rather than the broader
bounds of Bankruptcy Rule 2004. According to Mr. Korn, the
Debtors already initiated an adversary proceeding against Mr.
Ayers in Adversary Proceeding No. 03-02288.
Furthermore, examination of a non-debtor entity must be
limited to only those materials that have bearing on the
financial condition or dealings with the Chapter 11 debtor.
Mr. Korn reminds the Court that Mr. Ayers, E&D Investments,
LLC, and Ayers, LLC, are non-debtor entities. Neither E&D
Investments, LLC nor Ayers, LLC had any direct dealings with
the Debtors and therefore should not be subjected to a Rule
2004 examination as requested by the Debtors.
Furthermore, the Debtors' extensive documentary request is
much broader in scope than intended by Rule 2004 since the
Debtors seek information that have no bearing on their
financial condition. Rather, Mr. Korn says, the purpose of
the Debtors' request appears to be harassment of Mr. Ayers.
Therefore, Mr. Ayers asks the Court to deny the Debtors'
request.
E. JPMorgan Chase Bank, as Trustee
JPMorgan objects to the Debtors' request to the extent that
the Debtors' attorneys already possess sufficient information
on the subject of the supposed claims against JPMorgan and
other targets on the Rule 2004 Motion.
There are two principal categories of information already
available to Gibbs & Bruns:
(1) information generated by the Debtors in the course of
conducting their business over the years. Particularly
relevant are the business records of Debtor National
Premier Financial Services, since all records of money
transfers to, between, and from the bank accounts
maintained by the trustees, were to be created and
maintained by NPFS, and are already available to Gibbs
& Bruns from their client; and
(2) information readily available to the Debtors through
the Official Committee of Unsecured Creditors.
Specifically, JPMorgan has produced responsive
information in response to the Committee in connection
with its First Set of Interrogatories and Requests for
Expedited Production of Documents Propounded to
JPMorgan Chase Bank as Indenture Trustee, dated
March 12, 2003.
JPMorgan also objects to the Debtors' request on the basis
that Gibbs & Bruns has not made a showing to the Court that it
has reviewed available information and seeks only new
information relevant to the stated purpose of the Rule 2004
discovery.
William C. Wilkinson, Esq., at Thompson Hine, in Columbus,
Ohio, tells the Court that there is no need for additional
production by JPMorgan because the documents already produced
will permit special counsel to discharge their duty to the
creditors with respect to "the evaluation of available assets
and determining what assets and what claims may belong to the
Debtors' estates."
Rather than burdening JPMorgan by requiring it to respond
to each of the Debtors' proposed document requests, Mr.
Wilkinson relates, the Court should direct the Committee to
provide copies of the documents already produced to the
Debtors' special counsel. The documents JPMorgan produced
include:
* closing documents for each of the four outstanding series
of securities issued under the NPF VI program;
* sale and servicing agreements;
* lockbox agreements;
* monthly bank statements for the period May 30, 1998 to
October 31, 2002 for the (i) NPF VI Equity Account, (ii)
NPF VI Purchase Account, (iii) NPF VI Collection Account,
(iv) NPF VI Seller Credit Reserve Account, and (v) NPF VI
Offset Seller Reserve Account;
* samples of receivable purchase reports generated by the
servicer;
* samples of lockbox receipt reports generated by the
servicer;
* monthly investor reports provided by the servicer for the
period January 1, 1999 to October 31, 2002;
* consolidated financial statements for the debtors;
* independent accountant's reports for applying agreed upon
procedures;
* current list of holders of record;
* monthly bank statements for the NPF VI Incoming Wire
Account for the period May 1, 2001 to October 31, 2002;
* copies of UCC filings;
* JPMorgan's correspondence file;
* JPMorgan's compliance file;
* weekly purchase, charge summary and charge detail
reports;
* the monthly backup data tape received from the servicer;
* unaudited financial statements for the quarters ending
September 30, 1998 to June 30, 2002;
* agreed upon procedures reports for the purchased
receivables audits for 1998 to 2002;
* agreed upon procedure reports for the investor report
audit for 1998-2002;
* annual compliance certificates for 1999-2002; and
* samples of weekly collateral coverage reports.
Additionally, JPMorgan objects to Debtors' Requests to the
extent that they seek material that constitutes privileged
attorney-client communications or attorney work product.
Furthermore, JPMorgan objects to the lack of reasonable and
specific time frame for the Requests. Finally, of overriding
concern is the vague, overbroad and burdensome nature of the
Requests in that many of the requests make no attempt to
describe each item or category of documents sought with
reasonable particularity.
Accordingly, JPMorgan asks the Court to deny the Debtors'
Request in its entirety. Alternatively, if the Court grants
the Debtors' request, it should -- as a matter of fundamental
fairness -- place restrictions on Gibbs & Bruns' use of the
material for the benefit of its clients in other actions.
* * *
Judge Calhoun authorizes the Debtors to issue subpoenas or other
process to compel the production of documents from the Non-
Objecting Examinees.
The Court Order excludes any Rule 2004 Examinees who filed
objections or notices of objection and any and all related
entities identified in the objections, including:
* Deloitte & Touche,
* Bank One N.A.,
* Banc One Capital Markets,
* PricewaterhouseCoopers LLP,
* Credit Suisse First Boston,
* JP Morgan Chase,
* Harold Pote,
* Eric Wilkinson,
* Thomas Mendell,
* Purcell & Scott,
* Steven M. Scott,
* Stoneybrook Capital LLC,
* Rebecca Parrett,
* the Parrett Living Trust,
* Cheyenne/Blaze LLC,
* Donald Ayers,
* Ayers LLC, and
* E&D Investments.
Any Examinee inadvertently left off from the list that filed
objections or notice of objections with the Court by September 2,
2003 is likewise excluded from the Order.
The Court directs all Non-Objecting Examinees to produce on a
rolling basis all responsive documents requested by the Debtors
at the offices of Gibbs & Bruns.
The Court Order is without prejudice to the Debtors' rights to
apply for further discovery from or examination of the Non-
Objecting Examinees. (National Century Bankruptcy News, Issue No.
27; Bankruptcy Creditors' Service, Inc., 215/945-7000)
NETCOM TECH: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Netcom Technologies, Inc.
7423 Lindbergh Drive
Gaithersburg, Maryland 20879
Bankruptcy Case No.: 03-32325
Type of Business: The Debtor offers technical services that
provide their clients with telecommunications
solutions
Chapter 11 Petition Date: December 8, 2003
Court: District of Maryland (Greenbelt)
Judge: Paul Mannes
Debtor's Counsel: Linda D. Regenhardt, Esq.
Gary and Goodman
8500 Leesburg Pike,
Suite 7000
Vienna, VA 22182
Tel: 703-848-2828
Total Assets: $0
Total Debts: $2,625,577
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Communications Supply Corp. $482,707
Po Box 120001
Dept. 0580
Dallas, TX 75081-0580
Tel: 713-460-1241
Graybar $172,510
Presidio $163,510
Capitol Cable Technology $140,680
Valley Lighting, LLC $136,956
Accu-Tech $115,271
CSC - Florida $114,830
GE CDF $85,945
Emerson Energy Systems $74,668
Capital Lighting & Supply $60,101
Digicon $56,450
Rexel Datacom $44,351
Aetna U.S. Healthcare $35,183
Hagemeyer $32,416
GMAC $26,780
Primus Financial Services $25,889
Primestock / Seltronics $23,360
Tech Staff Of Tampa $22,459
GMAC $21,220
Anixter $19,809
NETMEASURE TECHNOLOGY: Taps Amisano Hanson as New Accountants
-------------------------------------------------------------
On July 31, 2003, Grant Thornton LLP, the principal accountant
previously engaged to audit NetMeasure Technology Inc.'s financial
statements, resigned as auditors of NetMeasure Technology, Inc.
Grant Thornton audited the Company's consolidated financial
statements for the two most recent fiscal years ended December 31,
2002.
The report of Grant Thornton accompanying the audit for the
Company's two most recent fiscal years ended December 31, 2002
contained a modification with regards to the entity's ability to
continue as a going concern.
During the two most recent fiscal years ended December 31, 2002,
and during the subsequent interim period preceding the date of
dismissal there were no reportable events except that Grant
Thornton notified the Company that, in connection with its audit
of the Company's consolidated financial statements for the year
ended December 31, 2002, it identified certain deficiencies
involving internal control it considered to be significant
deficiencies.
Grant Thornton formally notified the Company of these deficiencies
on May 20, 2003. The Company has authorized Grant Thornton to
discuss the subject matter of each significant deficiency
identified with the successor auditor subsequently engaged as the
principal accountant to audit the Company's financial statements.
The Company is in the process of taking the necessary steps to
address each of the deficiencies identified by Grant Thornton.
On August 21, 2003, the Board of Directors of the Company
appointed Amisano Hanson as the Company's new independent
accountants.
NEXT INC: LaSalle Business Waives Default Under Credit Agreement
----------------------------------------------------------------
Next, Inc. (OTCBB:NXTI) a creative and innovative sales and
marketing organization, has reached an agreement with LaSalle
Business Credit, LLC, its primary lender, on a revised credit
facility which waives the previously announced default under the
original terms.
Charles L. Thompson, CFO of Next, facilitated the waiver by
volunteering to guarantee a portion of the bank debt along with
existing guarantors.
In addition, the Company's Board of Directors, in response to the
previously announced bank default, had hired TBA Management
Services, LLC to perform a forensic audit to determine if the
Company was involved in any of the transactions alleged in the
complaint against its former Chairman and CEO. The Company learned
today that TBA has issued its report stating that its extensive
testing of the Company's books and records has failed to reveal
that the Company was involved in any alleged wrongdoings in that
matter.
William B. Hensley, III, CEO of Next, Inc. indicated that the
events of the past 3 weeks have had no adverse impact on the
Company's operation or its ability to move forward with its
business plan for 2004.
NRG ENERGY: Court Clears Peaker Bonds Settlement Agreement
----------------------------------------------------------
The NRG Energy Debtors ask the Court to approve their settlement
agreement with NRG Peaker Finance Company, LLC, Bayou Cove Peaking
Power, LLC, Big Cajun I Peaking Power, LLC, NRG Sterlington Power,
LLC, NRG Rockford LLC, NRG Rockford II LLC -- the Project
Companies -- and XL Capital Assurance, Inc.
Matthew A. Cantor, Esq., at Kirkland & Ellis, in New York, tells
the Court that the Project Companies are indirect, wholly owned,
non-debtor subsidiaries of the Debtors. Each of them owns a
"peaker" plant. A "peaker" plant is an electric generation
facility that generally runs only during periods of high demand
for electricity.
In June 2003, Peaker Finance issued $325,000,000 of Series A
Floating Rate Senior Secured Bonds due 2019 -- the Peaker Bonds
-- pursuant to an Indenture dated June 18, 2002, by and among,
Peaker Finance, XL Capital Assurance Inc., the Project Companies
and The Bank of New York, as trustee. While the Peaker Bonds
were issued to the public, they are guaranteed by XLCA. In
effect, XLCA is the major creditor of Peaker Finance.
The proceeds of the Peaker Bonds were used to make loans to the
Project Companies who, in turn, used the proceeds of the loans
to:
(a) reimburse the Debtors for construction and acquisition
costs of the Project Facilities;
(b) pay to XLCA the premium required under the XLCA Policies;
(c) provide funds to Peaker Finance to collateralize a portion
of the Debtors' obligation under the Contingent Guaranty
Agreement; and
(d) pay transaction costs incurred in connection with the
offering of the Peaker Bonds.
In connection with the Peaker Indenture, the parties entered into
a series of financing documents:
(a) The Issuer Pledge Agreement, dated June 18, 2002, among
Peaker Finance, NRG Capital II LLC and The Bank of New
York;
(b) The Issuer Security Agreement, dated June 18, 2002, among
Peaker Finance, NRG capital II LLC and Bank of New York;
(c) The Common Agreement, dated June 18, 2002, by and among
XLCA, Goldman Sachs, Mitsui Marine Derivative Products,
LP, The Bank of New York, Peaker Finance, and each of the
Project Companies, whereby the Project Companies jointly
and severally guarantee the Peaker Bonds;
(d) The Project Company Guarantees are secured by a pledge of
the membership interests in three of the Project Companies
and a security in substantially all of the Project
Companies' assets pursuant to:
-- the Project Company Pledge Agreements, dated June 18,
2002, by and among the applicable Pledgor, the
applicable Project Company and The Bank of New York;
-- the Project Company Security Agreements, dated June 18,
2002, by and between the applicable Project Company and
The Bank of New York; and
-- the Rockford II Equipment Security Agreement, dated
June 18, 2002, by and between Rockford II and The Bank
of New York.
(e) The XCLA Policies, where XLCA unconditionally guaranteed
the full and timely payment of regularly scheduled
payments of principal and interest on the Peaker Bonds and
regularly scheduled payments under the Swap Agreements;
(f) The Contingent Guaranty Agreement dated June 18, 2002,
where the Debtors are obligated to make payments to cover
principal and interest payments on the Peaker Bonds and
regularly scheduled payments under the Swap Agreements;
and
(h) The Swap Agreement dated June 18, 2002 by and between
Peaker Finance and Goldman Sachs Mitsui Marine Derivative
Products, LP, whereby Peaker Finance is obligated to make
fixed rate interest payments to Goldman and Goldman is
obligated to make floating rate interest payments to
Peaker Finance.
In September 2002, a non-payment of interest due on corporate
debt triggered a cross-default under the Peaker Financing
Documents. On October 22, 2002, XLCA, as Controlling Party,
issued a notice of default on the Peaker Financing Documents.
On May 12, 2003, XLCA accelerated the Peaker Bonds, rendering the
Peaker Bonds immediately due and payable. Upon the Acceleration,
the Contingent Guaranty Agreement was automatically terminated
and the Debtors became obligated to make certain collateralized
experience and deductible payments to the Collateral Agent
totaling $71,400,000.
Since October 2002, Mr. Cantor relates, the Debtors, the Project
Companies, and XLCA engaged in extensive, arm's-length
negotiations, which resulted in a settlement. The terms of the
Settlement are:
A. Waiver of Defaults
At the Closing Date, XLCA, as the Controlling Party, agrees to
waive all defaults existing under the terms of the Peaker
Financing Documents as of the date of execution of the Term
Sheet. The Debtors agree to undertake all actions necessary
to cause the cure of all the defaults existing as of the
Execution Date by the Closing Date.
B. Refinancing Option
The Debtors will have the option of paying off the principal
and interest of the Peaker Bonds at any time prior to the
Effective Date of the Debtors' Plan.
C. Assumption of Power Purchase Agreements/Claim Swap
The Debtors will use commercially reasonable efforts to cause
Louisiana Generating LLC to assume the Power Purchase
Agreements without modification by March 31, 2004. If the
Power Purchase Agreements are not assumed by that date, the
Debtors agree to cover the payments to be made under the Power
Purchase Agreements to the Project Companies at the contract
rate until the earlier of:
-- the assumption of the Power Purchase Agreements by
La Gen; and
-- the expiration of the term of the Power Purchase
Agreements.
Upon any payments by the Debtors, the Debtors will be
subrogated to any claim of Big Cajun or Sterlington against La
Gen or South Central to the extent of the payments.
D. Letter of Credit
The Bank of New York, as Collateral Agent, will receive a
letter of credit from the NRG letter of credit facility in an
amount equal to the Termination Claim multiplied by the
estimated recovery for the Secured Parties' creditor class set
forth in the disclosure statement relating to the NRG Plan.
The Letter of Credit will only be drawn upon at any time there
are insufficient funds available for payments under the Peaker
Bonds and the Swap Agreement.
E. Cash Reconciliation
A cash reconciliation of the amounts owed to and from the
Project Companies and any of the Debtors' affiliates will
occur and the payments will be paid within 30 days of the
Closing Date.
F. Releases
A full discharge and release of liability in favor of the
Secured Parties, Peaker Finance, the Project Companies and
certain of their affiliates from and against any and all
claims and causes of action relating to Peaker Finance or the
Project Companies and arising prior to the consummation of the
Term Sheet on the Closing Date other than under the Peaker
Financing Documents, the Term Sheet and any related
documents. In addition, XLCA will grant releases of Xcel
Energy Inc., NRG, PMI and the related parties as provided in
the NRG Plan.
G. Equity-Distributions
Provided that the Debt Service Reserve Account is fully
funded, the Debtors will have the option of:
(a) equity distributions in a given year subject to an
equity "claw back" from the Debtors to meet shortfalls
in debt or swap payments prior to any draw-down on the
Letter of Credit; or
(b) equity distributions with an increased distribution
threshold based on debt service coverage ratios
with reduced DSCRs during periods when one or more
Power Purchase Agreements or Tolling Agreements are in
place.
H. O&M
Certain Project Companies will enter into standard, market-
based, arm's-length O&M services contracts with an affiliate
of the Debtors which provides project management, labor,
engineering, outage planning, procurement, construction,
emergency services and other services as may be required from
time to time. Each Project Company agrees to pay for actual
O&M expenses. XLCA agrees that the expenses will be pre-
funded from the Revenue Account into the Operating Account
on a monthly basis based on the projected monthly expenditures
for each Project Company.
I. Power Sales Agreements and Fuel and Power Marketing Plan:
Each Project Company will enter into a new power sales
agreement with NRG Power Marketing Inc.
J. Corporate Services Agreements
The Issuer and Project Companies will enter into a new
Corporate Services Agreement with the Debtors to provide all
corporate services to the Issuer and the Project Companies for
$1,000,000 per year, subject to an equity "claw back" from
the Debtors.
K. Major Maintenance Reserve Account
A Major Maintenance Reserve Account will be established and
will be funded on an Equivalent Starts per unit basis
according to a set schedule determined by the parties. At
closing, the Debtors will fund the MMRA for all Equivalent
Starts from June 18, 2002 through October 31, 2002 in an
amount not to exceed $3,000,000.
L. Certain Waterfalls
The parties agree to certain prioritized waterfalls for:
(a) the expending of cash flows, which are to be collected
from each Project Company into the Revenue Account;
(b) the tapping of accounts maintained by the Collateral
Agent in order to accumulate funds for the payment of
principal and interest on the Peaker Bonds when due;
and
(c) the application, upon an Issuer Event of Default, of
all money, proceeds and other property received or held
by the Collateral Agent relating to the Project
Companies.
M. Cash Management System
All project revenues will be deposited directly to an account
with the Collateral Agent and O&M expenses and fuel expenses
will be paid out of the account to separate accounts held by
the Issuer and maintained by the Collateral Agent.
N. Reporting Requirements
The Issuer and the Project Companies will provide XLCA with a
detailed monthly reporting package, which will include
operating data by project, a power marketing report, monthly
unaudited financial statements, report of transactions with
affiliates and quarterly unaudited and annual audited
financial statements.
O. Existing Intercompany Account Balances
The Debtors will provide to XLCA the balances between the
Issuer or the Project Companies, on the one hand, and the
Debtors or its affiliates, on the other hand, and XLCA will
approve the amounts.
P. Covenants and Events of Default
Certain of the covenants and events of default in the Peaker
Financing Documents will be revised to be made more
restrictive on the Issuer and the Project Companies.
Q. Interconnection Solution
NRG will cause the Interconnection Solution to be in full
force and effect by May 31, 2004 so that Big Cajun has use, in
its own capacity, of an interconnection agreement for a
certain transmission system at the Big Cajun Facility instead
of utilization through La Gen's interconnection agreement with
a third party as currently operated. The Debtors agree to
satisfy certain milestones with respect to the Interconnection
Solution until that date.
R. Completion of Projects
The Debtors will cause the completion of the Bayou Cove
Facility and the Rockford II Facility by the Closing Date.
Current outstanding items to be satisfied include payment of
a lien on the assets of Bayou Cove held by General Electric
Company and the completion of spare parts procurement for
Rockford II.
S. Rockford Compressor
The Debtors will pay for the installation at the Rockford I
Facility and the Rockford II Facility of a temporary gas
compressor for the summer of 2003 and either a permanent gas
compressor or a temporary gas compressor for the summer of
2004.
Mr. Cantor points out that the Settlement will effect a
restructuring of the Peaker Bonds and the Financing Documents,
and allow the Debtors to maintain its equity in the Project
Companies. The Debtors believe that its equity in the Project
Companies has substantial upside. The Settlement will also allow
the Project Companies to continue their operations without
interruption. This will benefit La Gen since the Project
Companies provide La Gen with necessary "peaking" capacity.
Absent the Settlement, the Project Companies will have no option
but to immediately file for bankruptcy as they cannot pay the
full amount of the Peaker Bonds, which are currently due and
payable as a result of the Acceleration.
* * *
Judge Beatty approves the settlement among the parties in all
respects. (NRG Energy Bankruptcy News, Issue No. 17; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
NUTRAQUEST: U.S. Trustee Names 7-Member Creditors' Committee
------------------------------------------------------------
The United States Trustee for Region 3 appointed 7 creditors to
serve on an Official Committee of Unsecured Creditors in
Nutraquest, Inc.'s Chapter 11 case:
1. Richard Markowitz
c/o Scott A. Bursor, Esq.
500 Seventh Avenue, 10th Flr.
New York, NY 10018
Tel: 212-989-9113
Fax: 212-989-9163
2. Jason A. Park
c/o Todd E. Macaluso, Esq.
Macaluso & Associaates
600 West Broadway, Ste. 1200
San Diego, CA 92101
Tel: 619-230-0340
Fax: 619-230-8892
3. Kiley Bechler, Executrix of
Estate of Steven Scott Bechler
c/o David S. Douglas, Esq.
Meiselman, Danlea, et al.
1311 Mamaroneck Ave.
White Plains, NY 10602
Tel: 914-517-5000
Fax: 914-517-5055
4. Shelli Belanger
c/o J. Stewart White, Esq.
White & Meany, LLP
3185 Lakeside Drive
Reno, NV 89509
Tel: 775-828-9999
Fax: 775-828-9998
5. Carol Luenhagen
c/o Patrick J. Reda, Esq.
Kenneth B. Moll & Assocs.
Three First National Plaza
54th Floor
Chicago, IL 60602
Tel: 312-558-6444
Fax: 312-558-1112
6. Robert Bernacchia, guardian for
Anna Amanda Bernacchia
c/o Thomas J. Moverman, Esq.
Lipsig, Shapey, Manus, et al.
40 Fulton Street, 25th Floor
New York, NY 10038
Tel: 212-285-3300
Fax: 212-406-4544
7. Eagle Graphics, Inc.
c/o Arthur J. Abramowitz, Esq.
Cozen O'Connor
Liberty View Bldg., Suite 300
457 Haddonfield Road
Cherry Hill, NJ 08002
Tel: 856-910-5000
Fax: 877-286-4534
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 Manasquan, New Jersey, Nutraquest, Inc. markets
the ephedra-based weight loss supplement, Xenadrine RFA-1. The
Company filed for chapter 11 protection on October 16, 2003
(Bankr. N.J. Case No. 03-44147). Andrea Dobin, Esq., and Simon
Kimmelman, Esq., at Sterns & Weinroth, P.C. represent the Debtor
in its restructuring efforts. When the Company filed for
protection from its creditors, it listed estimated assets of over
$10 million and estimated debts of over $50 million.
OAKWOOD HOMES: S&P Further Junks Ratings on 6 Note Classes
----------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on the
subordinate B-1 classes of Oakwood Mortgage Investors Inc.'s pass-
through certificates series 1998-A, OMI Trust 2000-B, OMI Trust
2000-C, OMI Trust 2001-D, and OMI Trust 2001-E. At the same time,
the rating on the class M-2 of OMI Trust 2000-D is lowered.
The lowered ratings reflect the unlikelihood that investors will
receive timely interest and the ultimate repayment of their
original principal investments. OMI Trust 2000-B reported an
outstanding liquidation loss interest shortfall for its B-1 class
on the November 2003 payment date. Standard & Poor's believes that
B-1 interest shortfalls for this deal will continue to be
prevalent in the future, given the adverse performance trends
displayed by the underlying pool of manufactured housing retail
installment contracts originated by Oakwood Homes Corp., and the
location of B-1 write-down interest at the bottom of the
transaction payment priorities (after distributions of senior
principal).
High losses during the past year have reduced the
overcollateralization ratios for all six transactions to zero,
resulting in the complete principal write-down of the B-2 classes
and the partial principal write-down of the B-1 classes. In
addition, OMI Trust 2000-D has begun to experience principal
write-downs on the class M-2.
Standard & Poor's will continue to monitor the ratings associated
with these transactions in anticipation of future defaults.
RATINGS LOWERED
Rating
Issuer Class To From
------ ----- -- ----
Oakwood Mortgage Investors Inc.
Pass-thru certs series 1998-A B-1 CC CCC
OMI Trust 2000-B B-1 D CC
OMI Trust 2000-C B-1 CC CCC
OMI Trust 2000-D M-2 CC CCC-
OMI Trust 2001-D B-1 CC CCC-
OMI Trust 2001-E B-1 CC CCC-
ORIENTAL TRADING: Moody's Downgrades Ratings to Low-B Level
-----------------------------------------------------------
Moody's Investors Service dropped its ratings for Oriental Trading
Company, Inc., and at the same rated the company's new second lien
term loan. Outlook is negative.
Ratings lowered:
- Senior Implied to B1.
- Senior Secured to B1.
- Senior Unsecured Issuer to B3.
Assigned Rating:
- Senior Secured Second Lien at (P) B2.
Moody's says the ratings downgrade reflects the significant
increase in leverage from Oriental's current debt-financed
dividend and the implications of a shift towards a more aggressive
long-term financial policy.
The negative outlook mirrors Moody's concerns for further increase
in the company's debt leverage and weaker credit metrics.
A subsidiary of OTC Holdings, Oriental Trading Company is a
privately-held company headquartered in Omaha, Nebraska that sells
novelties and home decor by catalog and the Internet.
OWENS CORNING: Brings-In Joseph High as SVP, Human Resources
------------------------------------------------------------
Owens Corning announced that Joseph C. High will become the
company's senior vice president, human resources on Jan. 1, 2004.
Prior to accepting the Owens Corning human resources position, Mr.
High was vice president human resources for ConocoPhillips, an $80
billion, integrated energy company with 56,000 employees
headquartered in Houston, Texas, where he led the company's global
HR functions. He earned a bachelor's degree in business
administration from the University of North Carolina at Chapel
Hill and a master's of science degree from Central Michigan
University at Mt. Pleasant, Michigan.
"Joseph will be a welcome addition to our team. I will look to him
to lead our human resource efforts through his proven human
resource expertise," said Owens Corning CEO Dave Brown. "He will
be a critical factor in our efforts to further align and integrate
all human resources strategies with OC's business goals and
vision. His unique perspective will provide invaluable guidance
and management to our organization."
Mr. High will report to Dave Brown as a member of his leadership
team.
"Being selected to bring my personal leadership to Owens Corning
and its Human Resource function at such an important time in its
history is a great opportunity," said Mr. High. "I look forward to
partnering with business leaders to ensure strategic alignment and
execution of business goals and people processes to achieve high
quality results for customers, employees and other key
stakeholders."
"Maximizing the performance of intellectual capital across the
company to drive and sustain business goals is a strategic
imperative," added Mr. High.
Mr. High replaces Ed Mirra who retired from the company after 41
years of service. Mr. Mirra officially stepped down in late August
2003 but he has continued to work with the company's HR team to
ensure an orderly transition of his duties. Mr. Mirra served as
Owens Corning's senior vice president, human resources since July
2000; and, prior to this position, he was vice president of
Roofing Operations in the Roofing Systems Business Division, as
well as vice president and general manager of Trumbull and vice
president of Roofing Manufacturing Operations.
Owens Corning is a world leader in building materials systems and
composites systems. Founded in 1938, the company had sales of $4.9
billion in 2002. Additional information is available on Owens
Corning's Web site at http://www.owenscorning.com/
PACIFIC GAS: Makes Over $77-Mil. Tax Payments to Calif. Counties
----------------------------------------------------------------
Pacific Gas and Electric Company made property tax payments
totaling $77.2 million to the 49 counties in which it operates.
This amount represents full and timely payment of property taxes
due for the period from July 1 to December 31, 2003.
"Pacific Gas and Electric Company's payment of more than $77.2
million in property taxes to local governments provides a stable
source of revenue at a time when state funding is filled with
uncertainty," said Gordon R. Smith, president and chief executive
officer of Pacific Gas and Electric Company. "These revenues help
provide vital public services such as public safety, education,
health care and environmental protection that residents expect
from local governments."
Since filing for Chapter 11 bankruptcy protection in April 2001,
Pacific Gas and Electric Company has continued to meet its
obligations to local governments by making timely property tax,
franchise fee, and other fee payments to these government
entities. The most recent of these twice-yearly payments was made
on April 10, 2003, when the utility paid $75.5 million in property
taxes.
The company's biannual tax payments to counties increased by more
than $1.7 million in the second half of 2003, as a result of an
increased appraisal by the California State Board of Equalization,
the state agency responsible for assessing and allocating property
values of certain public utilities.
PAXSON COMMS: Offering $365MM Notes to Refinance Credit Facility
----------------------------------------------------------------
Paxson Communications Corporation (AMEX:PAX) has commenced a
private offering of senior secured floating rate notes. The senior
secured notes are redeemable at any time, will mature in January
2010 and are expected to generate gross proceeds of $365 million.
Proceeds of the offering will be used to repay in full the
outstanding indebtedness under the Company's existing senior
credit facility, to pre-fund letters of credit supported by the
revolving credit portion of the Company's existing senior credit
facility, to pay fees and expenses incurred in connection with the
proposed transaction and for general corporate purposes. The
Company expects to issue the senior secured notes in January 2004,
subject to market conditions.
The offering of senior secured notes will not be registered under
the Securities Act of 1933, as amended, and the senior secured
notes will be offered and sold only to "Qualified Institutional
Buyers" (as defined under Rule 144A under the Securities Act) and
outside of the United States in accordance with Regulation S under
the Securities Act. The senior secured notes may not be offered or
sold in the United States absent registration or an applicable
exemption from registration.
Paxson Communications Corporation owns and operates the nation's
largest broadcast television distribution system and PAX TV,
family television. PAX TV reaches 88% of U.S. television
households via nationwide broadcast television, cable and
satellite distribution systems. PAX TV's 2003 fall season
premieres with all new episodes of returning original drama series
including, "Doc," starring recording artist Billy Ray Cyrus and
"Sue Thomas: F.B.Eye," starring Deanne Bray. Other original PAX
series include "It's A Miracle" with new host, Roma Downey,
"Candid Camera," with hosts Peter Funt and Dina Eastwood and
"Animal Tails," with Mark Curry. For more information, visit PAX
TV's Web site at http://www.pax.tv/
* * *
Moody's Ratings Downgrades
As reported in Troubled Company Reporter's June 12, 2003 edition,
Moody's Investors Service's ratings on Paxson Communications Corp.
took a downward slide after the investors service's review.
Outlook is revised to stable from negative.
Downgraded Ratings
* approximately $355 million of bank facilities to B1
from Ba3,
* approximately $556 million of senior subordinated notes
to Caa1 from B3,
* approximately $366 million of cumulative exchangeable junior
preferred stock to Caa2 from Caa1,
* senior implied rating to B2 from B1,
* senior unsecured issuer rating to B3 from B2.
The ratings downgrade mirrors the company's slow revenue growth
which falls below Moody's expectations. However, the ratings are
supported by the high underlying asset value of Paxson's station
portfolio.
PG&E NATIONAL: Proposes Uniform Excess Asset Sale Procedures
------------------------------------------------------------
National Energy & Gas Transmission, Inc. and its debtor-affiliates
ask the Court to implement a streamlined procedure for the sale of
certain non-core excess assets with a book value and fair market
value not exceeding $200,000 per asset, free and clear of liens,
claims and encumbrances. The NEG Debtors also seek the Court's
authority to retain brokers and appraisers to assist with the
sales, as required.
The Excess Assets consist of various items of equipment, office
furniture, fixtures, vehicles, real property and residential real
property that the NEG Debtors no longer need in connection with
their ongoing businesses. Because of the administrative costs
associated with carrying, storing and maintaining the Excess
Assets, the NEG Debtors determined that their estates will
benefit from the sale of the Excess Assets.
The NEG Debtors believe that the Excess Assets should be sold
without further delay to obtain and preserve the value for the
estates. In many cases, a potential purchaser may have a unique
interest in quickly obtaining a specific Excess Asset and would
be prepared to make an offer substantially superior to what might
be obtained in a formal auction process. This approach would
minimize storage and moving costs, as well the risks of vandalism
and theft. Moreover, the expense and delay attendant to filing a
separate request for the sale of each asset would significantly
erode the benefit of the sales.
The NEG Debtors intend to adopt these procedures:
(a) Sales may only be completed upon 10 days written notice
by fax or hand delivery to:
-- the Office of the United States Trustee;
-- the Creditors Committees' counsel; and
-- any party known by the NEG Debtors to assert a lien on
the asset to be sold;
(b) The NEG Debtors may employ brokers and appraisers on usual
and customary terms to assist in the sales process;
(c) The NEG Debtors will keep a detailed accounting of the
proceeds from all dispositions and the cost of any broker
services used for each transaction;
(d) The Sale Notice will include:
-- a description of each Excess Asset to be sold;
-- the purchase price being paid for the asset;
-- the name and address of the purchaser, and a statement
as to whether the purchaser is an insider or affiliate
of the NEG Debtors;
-- the name of the applicable Debtor;
-- a copy of the proposed purchase agreement, if any,
intended to govern the sale; and
-- the name and address of the broker, if any, with a
statement of the broker's disinterestedness and the
amount of any commission of other fee payable to the
broker upon consummation of the sale;
(e) All sales will be made subject to higher and better
written offers received by the NEG Debtors before the
expiration of the 10-day notice period;
(f) If a written objection by one of the Notice Parties to any
sale is received by the NEG Debtors' counsel within the
notice period then, absent a settlement, Court approval of
the sale will be required. In the event that any
objection relates solely to the use of proceeds from the
sale, then the sale will proceed, but the NEG Debtors will
hold the proceeds of the sale in a segregated account
pending further Court order; and
(g) All sales will be free and clear of liens, claims, and
encumbrances, if any, with any liens, claims, and
encumbrances to attach to the sale proceeds. (PG&E National
Bankruptcy News, Issue No. 11; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
PIEZO INSTRUMENTS: Taps Gelfond Hochstadt as Independent Auditor
----------------------------------------------------------------
Mantyla McReynolds, Certified Public Accountants, of Salt Lake
City, Utah, audited Piezo Instruments Inc.'s financial statements
for the years ended December 31, 2002 and 2001, and reviewed the
Company's financial statements for the quarterly periods ended
March 31, 2002, June 30, 2002, September 30, 2002, and March 31,
2003, and June 30, 2003
Following the completion of an Agreement and Plan of
Reorganization between the Company, formerly known as Piezo
Instruments, Inc., and Omni Medical of Nevada, Inc., a Nevada
corporation, which was completed on or about September 5, 2003,
the Company's new directors agreed that it would be in the best
interest of the Company to retain the services of the certified
public accountants who had been auditing the books and records of
Omni Nevada prior to the completion of the Agreement.
On November 10, 2003, the Board of Directors of the Company
approved and accepted Gelfond, Hochstadt Pangburn, P.C. as the
audit firm for the Company for the newly adopted fiscal year
ending March 31, 2004.
The reports of Mantyla McReynolds contained a statement concerning
certain issues which raised substantial doubt about Piezo's
ability to continue as a going concern.
POPE & TALBOT: Endorses Proposed US-Canada Softwood Lumber Pact
---------------------------------------------------------------
"The proposed softwood lumber agreement between the United States
and Canada will put North America's lumber industry on a stable
and secure footing for the future," said Michael Flannery,
Chairman and Chief Executive Officer of Pope & Talbot, Inc.
(NYSE:POP).
"As a company with a long history and operations on both sides of
the 49th parallel, we join with the others in our industry who are
supporting the proposed agreement. The time has come to end this
lengthy dispute and this agreement is the right one for both
countries," Flannery said.
"Our Canadian based operations and our U.S. customers need the
assurance and stability of supply that this agreement will bring.
The compromise reached will end the protracted litigation and
remove the cloud of uncertainty of its outcome for companies,
communities, employees and shareholders," Flannery said.
Pope & Talbot (S&P, BB Corporate Credit Rating, Negative) is
dedicated to the pulp and wood products businesses. The Company is
based in Portland, Oregon and traded on the New York and Pacific
stock exchanges under the symbol POP. Pope & Talbot was founded in
1849 and produces market pulp and softwood lumber at mills in the
U.S. and Canada. Markets for the Company's products include the
U.S., Europe, Canada, South America, Japan and the other Pacific
Rim countries. For more information on Pope & Talbot, Inc., please
check the Web site at http://www.poptal.com/
POWERHOUSE TECHNOLOGIES: Hein & Assoc. Replaces Lee as Auditors
---------------------------------------------------------------
On November 19, 2003, PowerHouse Technologies Group, Inc. notified
Kenny H. Lee, CPA Group, Inc. that effective November 19, 2003,
Lee would be dismissed as the Company's independent accountant.
Lee had served as the Company's principal independent accountant
to audit the Company's financial statements for the fiscal years
ended March 31, 2002 and March 31, 2003. The dismissal of Lee was
approved by the Audit Committee of the Board of Directors of the
Company on November 14, 2003.
Lee's audit reports for fiscal years ended March 31, 2002 and
March 31, 2003, and Note 2 to the corresponding financial
statements, contained a qualification regarding the Company's
ability to continue as a going concern due to incurred net losses,
accumulated deficits, defaults in lines of credit due to recurring
losses from operations, and the inability to obtain adequate
financing and such audit reports stated these factors raised
"substantial doubt" about the Company's ability to continue as a
going concern. The audited financial statements of the Company for
the fiscal years ended March 31, 2002 and March 31, 2003, did not
include any adjustments in respect of the Going Concern
Qualifications.
As of November 14, 2003, the Company engaged Hein and Associates
LLP as its new independent accountants. The engagement of Hein was
approved by the Audit Committee of the Board of Directors of the
Company on November 14, 2003.
R.J. REYNOLDS: Wins in Emmett Hall Smoking and Health Case
----------------------------------------------------------
A Florida jury returned a verdict in favor of R.J. Reynolds
Tobacco Company in an individual smoking and health case. The jury
concluded that Reynolds Tobacco and one other tobacco-company
defendant were not responsible for the illness of Emmett A. Hall,
a smoker who claimed that he developed lung cancer and chronic
obstructive pulmonary disease from smoking the companies'
products.
"This verdict shows once again that jurors who have seen the
evidence generally use their common sense and conclude that
smokers have long been aware of the well-known risks of smoking,
and that people who choose to smoke in the face of these known
risks should not be financially rewarded," said Stephanie E.
Parker, Reynolds Tobacco's lead attorney in the case.
Daniel W. Donahue, senior vice president and deputy general
counsel for Reynolds Tobacco, added: "[Wednes]day's verdict
reconfirms the strength of our defenses in individual lawsuits.
The jury evaluated all of the evidence in this case and concluded
that Mr. Hall's claims lacked merit."
The jury in the Circuit Court of the 13th Judicial Circuit in
Hillsborough County, Fla., agreed with Reynolds Tobacco and Brown
& Williamson Tobacco Corporation that there was ample evidence
that Hall had long been aware of the potential health risks of
smoking, and that he, nevertheless, chose to smoke. The tobacco
companies also showed that Hall could not conclusively show that
smoking caused his lung cancer or COPD.
R.J. Reynolds Tobacco Holdings, Inc. (Fitch, BB+ Guaranteed Senior
Notes and Bank Credit Facility and BB Senior Notes, Negative
Outlook) is the parent company of R.J. Reynolds Tobacco Company
and Santa Fe Natural Tobacco Company, Inc. R.J. Reynolds Tobacco
Company is the second-largest tobacco company in the United
States, manufacturing about one of every four cigarettes sold in
the United States. Reynolds Tobacco's product line includes four
of the nation's 10 best-selling cigarette brands: Camel, Winston,
Salem and Doral. Santa Fe Natural Tobacco Company, Inc.
manufactures Natural American Spirit cigarettes and other tobacco
products, and markets them both nationally and internationally.
Copies of RJR's news releases, annual reports, SEC filings and
other financial materials are available on the company's Web site
at http://www.RJRHoldings.com/
ROUGE INDS: Committee Turns to Deloitte for Financial Advice
------------------------------------------------------------
The Unsecured Creditors Committee appointed in Rouge Industries,
Inc.'s chapter 11 cases, seeks to retain Deloitte & Touche LLP as
its Accountants, Consultants and Financial Advisors.
The Committee requested that Deloitte provide the urgently needed
services immediately. Consequently, the Committee is asking the
Court to approve Deloitte's retention, nunc pro tunc to
November 6, 2003.
In this engagement, the Committee anticipates Deloitte to:
i) assist and advise the Committee in the analysis of the
current financial position of the Debtors;
ii) assist and advise the Committee in its analysis of the
Debtors' business plans, cash flow projections,
restructuring programs, selling, general and
administrative structure and other reports or analyses
prepared by the Debtors or their professionals in order
to assist the Committee in its assessment of the
business viability of the Debtors, the reasonableness of
projections and underlying assumptions, and the impact
of the market conditions on forecasted results of the
Debtors;
iii) assist and advise the Committee in its analysis of
proposed transactions for which the Debtors seek
Bankruptcy Court approval including, but not limited to,
the sale of substantially all of the Debtors' assets and
evaluation of competing bids, DIP financing or use of
cash collateral, assumption/rejection of leases and
other executory contracts, management compensation and/
or retention and severance plans;
iv) assist and advise the Committee in its analysis of the
Debtors' internally prepared financial statements and
related documentation, in order to evaluate performance
of the Debtors as compared to its projected results;
v) attend and advise at meetings/calls with the Committee
and its counsel and representatives of the Debtors and
other parties;
vi) assist and advise the Committee and its counsel in the
development, evaluation and documentation of any plan(s)
of reorganization or strategic transaction(s), including
developing, structuring and negotiating the terms and
conditions of potential plans(s) or strategic
transaction(s) including the value of consideration that
is to be provided;
vii) assist and render expert testimony on behalf of the
Committee (as may be agreed by Deloitte which may
require a separate written engagement letter);
viii) assist and advise the Committee in its analysis of the
Debtors' hypothetical liquidation analyses under various
scenarios; and
ix) assist and advise the Committee in such other services,
including but not limited to, other bankruptcy,
reorganization and related litigation support efforts,
tax services, valuation assistance, corporate
finance/M&A advice, compensation and benefits
consulting, or other specialized services as may be
requested by the Committee and agreed to by Deloitte in
writing, which may require separate written engagement
letters.
Daniel S. Polsky, a Principal of Deloitte reports that the firm
will bill the Debtors' estates at its current hourly rates of:
Partners/Principals/Directors $550 to $675 per hour
Senior Managers/Managers $390 to $550 per hour
Senior Consultants/
Consultants/Associates $200 to $390 per hour
Paraprofessionals/Other $ 75 to $125 per hour
Headquartered in Dearborn, Michigan, Rouge Industries, Inc., an
integrated producer of flat-rolled steel, filed for chapter 11
protection on October 23, 2003 (Bankr. Del. Case No. 03-13272).
Donna L. Harris, Esq., Robert J. Dehney, Esq., at Morris, Nichols,
Arsht & Tunnell represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed total assets of $558,131,000 and total
debts of $558,131,000.
SCOTTISH RE GROUP: S&P Assigns BB Preferred Share Rating
--------------------------------------------------------
On Dec. 10, 2003, Standard & Poor's Ratings Services assigned its
'BB' preferred stock rating to the $115 million of hybrid capital
units (mandatory convertible preferred stock) being issued by
Scottish Re Group Ltd. (NYSE:SCT).
At the same time, Standard & Poor's affirmed its 'BBB-'
counterparty credit rating on SCT and its 'A-' counterparty credit
and financial strength ratings on Scottish Annuity & Life
Insurance Co. (Cayman) Ltd., Scottish Re (U.S.) Inc., and Scottish
Re Ltd.
The outlook on all these companies is positive.
SCT is drawing down from a $500 million shelf registration filed
earlier this year. The company previously issued $150 million of
common equity in June and is now issuing $115 million of hybrid
capital units, which will effectively exhaust the shelf. This is
in line with the plan communicated by the company at the time of
the shelf filing, when it indicated that it would issue common
stock in the summer of 2003 followed by debt or hybrid in early
2004. The pace was somewhat accelerated to solidify the company's
capital position following the acquisition of ERC Life Reinsurance
Corp., which is expected to close on Dec. 31, 2003.
Outlook
Following this issue, SCT will have debt-to-capital of less than
15% and debt-plus-hybrid-to-capital of about 30%. Operating
earnings in 2004, including the impact of the acquisition of ERC
Life, will increase by at least 25%, with interest coverage of
more than 10x and fixed-charge coverage of at least 4x. Organic
premium growth (excluding acquisition) will continue to be strong,
exceeding 20%. Capital adequacy is expected to remain very strong,
with a capital adequacy ratio of at least 150%.
Major Rating Factors
-- Strong and growing business position. In more than four years
of operation, Scottish Re has grown to be a solid top 10 player
in the North American life reinsurance marketplace, enhanced by
niche positions in international life reinsurance. Through the
first nine months of 2003, premium income was $252 million,
which is more than double the level of 2002.
-- Strong operating performance. Scottish Re achieved a strong
7.4% ROR in 2002 (excluding realized capital losses), which is
down from 14% for the comparable period in 2001. The decline
stems from increased expenses associated with insurance costs
and investments in staff and technology to support future
growth as well as a modest decline in mortality performance.
Over the same period, expenses as a percent of revenue improved
to 6.9% from 8.3%, reflecting improved scale.
-- Very strong capitalization. At year-end 2003, Scottish is
projected to have very strong capital adequacy, based on a
capital adequacy ratio of 150%. The ratio is lower than
historical levels because of the acquisition of ERC Life, which
is expected to close by the end of the year. Scottish Re has
consistently displayed conservatism in its approach to
capitalization and capital structure in support of its rapid
growth.
-- Strong investment management. Scottish maintains a conservative
asset portfolio, with very low exposure to credit risk (less
than 3% of assets below investment grade) and equity risk and
an average amount of interest rate risk. Scottish has shown
strong asset/liability management skills and works effectively
with its ceding companies in setting investment and crediting
rate strategies.
-- Strong management team. Scottish has assembled an impressive
staff of more than 140 professionals based primarily in
Charlotte, N.C.; Bermuda; and Windsor, U.K. The staff has
extensive industry experience, drawn from several of the
largest life reinsurers in the U.S. Management has effectively
executed its strategy since 1999, supporting rapid growth with
solid underwriting discipline and expense management along with
a low tolerance for financial risk.
Ratings List
Scottish Re Group Ltd.
Counterparty credit rating BBB- /Positive/--
Senior unsecured debt rating BBB-
Preferred stock rating BB
Scottish Annuity & Life Insurance
Co. (Cayman) Ltd.
Scottish Re (U.S.) Inc.
Scottish Re Ltd.
Counterparty credit rating A-/Positive/--
Financial strength rating A-/Positive
SCOTTISH RE: Proposes Offering of BB-Rated Hybrid Capital Units
---------------------------------------------------------------
Scottish Re Group Limited (NYSE:SCT) announced today that it is
seeking to raise, subject to market and other conditions, $115
million through an offering of Hybrid Capital Units ($132.3
million if the over-allotment option is exercised in full) --
rated BB by Standard & Poor's.
The Hybrid Capital Units are comprised of a share purchase
contract for Scottish Re Group Limited ordinary shares and a
convertible preferred share of Scottish Re Group Limited.
Bear, Stearns & Co. Inc. will act as the sole book-running manager
and structuring agent while UBS Securities LLC and J.P. Morgan
Securities Inc. will act as joint lead managers for the proposed
offering. A written prospectus relating to the offering may be
obtained from Bear, Stearns & Co. Inc., 383 Madison Avenue, New
York, N.Y. 10179.
A shelf registration statement relating to these securities has
been filed with the Securities and Exchange Commission and has
become effective.
Scottish Re Group Limited is a global life reinsurance specialist.
Scottish Re Group Limited has operating companies in Bermuda,
Charlotte, North Carolina, Dublin, Ireland, Grand Cayman, and
Windsor, England. Its flagship operating subsidiaries include
Scottish Annuity & Life Insurance Company (Cayman) Ltd. and
Scottish Re (U.S.), Inc., which are rated A- (excellent) by A.M.
Best, A (strong) by Fitch Ratings, A3 (good) by Moody's and A-
(strong) by Standard & Poor's, and Scottish Re Limited, which is
rated A- (excellent) by A.M. Best, A (strong) by Fitch Ratings and
A- (strong) by Standard & Poor's. Additional information about
Scottish Re Group Limited can be obtained from its Web site,
http://www.scottishre.com/
SEPRACOR: S&P Junks Rating on New Convertible Senior Sub. Notes
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'CCC+'
subordinated debt rating to Sepracor Inc.'s $600 million in
convertible senior subordinated notes, consisting of $200 million
in zero coupon Series A convertible subordinated notes due 2008
and $400 million in zero coupon Series B convertible subordinated
notes due 2010. At the same time, Standard & Poor's affirmed its
'B' corporate credit rating and 'CCC+' subordinated debt ratings
on Sepracor. The outlook remains stable.
Proceeds from the offering will be mainly used to redeem all
outstanding 5.75% convertible subordinated notes due 2006, which,
along with related unpaid interest, amount to approximately $435
million.
"The speculative-grade ratings on emerging specialty
pharmaceutical company Sepracor Inc. reflect the significant cash
outflows needed to fund ongoing R&D expenditures and increasing
marketing costs," said Standard & Poor's credit analyst Arthur
Wong. "The ratings also reflect the company's heavy debt burden
and the significant uncertainties inherent in drug development.
These negative factors are partially offset by the growing sales
of Sepracor's asthma drug Xopenex and the promise of the company's
sleep disorder medication Estorra."
Marlborough, Massachusetts-based Sepracor specializes in the
development of improved single-isomer versions of existing drugs
that may have fewer side effects or increased potency.
Sales of the company's first self-marketed product, the asthma
treatment Xopenex (a patented, single-isomer version of generic
albuterol, co-promoted with Abbott Laboratories), were $187
million for the nine months ended Sept 30, 2003, up more than 50%
from the same period in the previous year. The product is expected
to achieve sales of roughly $265 million for the full-year 2003,
and future sales growth may be driven by a metered-dose inhaler
version now in Phase III clinical trials.
Meanwhile, Sepracor expects a response from the FDA regarding the
approval of its sleep-disorder medication Estorra by Feb. 29,
2004. The level of cash flow generated by the product will be a
key determinant of Sepracor's ability to meet its future debt
obligations. The U.S. market for prescription sleep products is
estimated to be roughly $1.5 billion and Estorra may have a more
favorable side-effect profile than other currently marketed
treatments.
SOUTHERN STATES POWER: Kabani Resigns as Independent Accountant
---------------------------------------------------------------
Southern States Power Inc.'s primary accountant, Kabani & Company,
Inc., resigned on November 14, 2003. Kabani previously issued on
September 10, 2003, their report on the Company's balance sheet as
of April 30, 2003 and the related statements of operations,
stockholders' deficit and cash flows for each of the year ended
April 30, 2003.
Kabani's opinion on September 10, 2003 was modified to include an
explanatory paragraph wherein they expressed substantial doubt
about the Company's ability to continue as a going concern.
Southern States Power Co. has not yet retained the services of a
new principal accountant.
SSP SOLUTIONS: Sets Annual Shareholders Meeting for December 19
---------------------------------------------------------------
The annual meeting of stockholders of SSP Solutions, Inc., a
Delaware corporation, will be held at the Marriott Residence Inn,
2855 Main Street, Irvine, California 92614, on December 19, 2003
at 2:00 p.m. local time for the following purposes:
(1) to elect two Class I directors to the Board of Directors;
(2) to ratify and approve the adoption of the Second Amended
and Restated 1999 Stock Option Plan;
(3) to ratify and approve the issuance of securities in
certain financing transactions;
(4) to ratify the selection of Haskell & White LLP,
independent auditors, to audit the consolidated financial
statements for the year ending December 31, 2003; and
(5) to transact such other business as may properly come
before the meeting or any adjournments and postponements
thereof.
SSP Solutions' Board of Directors has fixed the close of business
on November 7, 2003 as the record date for the determination of
stockholders entitled to notice of, and to vote at, the meeting.
Only holders of the Company's common stock at the close of
business on the record date are entitled to vote at the meeting.
* * *
Through December 31, 2002, SSP Solutions Inc., had operated in two
business segments: information security solutions and network
solutions. During the first quarter of 2003, the Company
discontinued its network solutions segment, which was conducted
through a wholly owned subsidiary of the Company, Pulsar Data
Systems, Inc., as the Company determined that this segment would
not return to operating profits in a reasonable time period. The
total estimated cost to exit the segment was $106. The network
solutions segment assets did not require an impairment write down
as there was no remaining book value of assets in existence at the
date the decision to exit the business was made. In
addition, as a result of the discontinuance of the network
solutions segment, the Company now operates in only one reporting
segment.
At September 30, 2003, the Company had deficit working capital of
$7,275 and incurred a loss from operations for the three months
then ended. The Company expects to continue to incur additional
losses in 2003. Given the September 30, 2003 cash balance and the
projected operating cash requirements, and the completion of the
private placement of the Series A Preferred after September 30,
2003, the Company anticipates that existing capital resources will
be adequate to satisfy cash flow requirements through
December 31, 2004. The Company's cash flow estimates are based
upon achieving certain levels of sales, reductions in operating
expenses and liquidity available under its accounts receivable
financing. During 2002 and through September 30, 2003, the Company
incurred defaults, other than for the payment of principal and
interest, under both the Company's accounts receivable financing
and the Company's long-term convertible notes. The Company was not
able to obtain waivers for defaults on the long-term convertible
notes and has therefore classified such notes as short-term on the
balance sheets as of December 31, 2002 and September 30, 2003.
However, these notes are subject to a forbearance Agreement dated
September 1, 2003, which provided that the noteholders agreed
not to take any action relative to rights under these notes until
November 30, 2003, and further provided for these notes being
tendered for the purchase of Series A Preferred Stock in
accordance with the face value of such notes.
The Company's current financial condition is the result of several
factors, including the fact that prior period operating results
were below expectations.
The private placement of the Series A Preferred Stock provided the
Company a substantial amount of capital. While the Company does
not anticipate the need to raise additional capital after having
closed the private placement of the Series A Preferred Stock,
future capital needs will depend on many factors including, but
not limited, to:
* the ability to extend terms received from vendors
* the market acceptance of products and services
* the levels of promotion and advertising that will be
required to launch new products and services and
attain a competitive position in the marketplace
* research and development plans
* levels of inventory and accounts receivable
* technological advances
* competitors' responses to the Company's products and
services
* relationships with partners, suppliers and customers
* projected capital expenditures
* a downturn in the economy
To resolve the deficit working capital position, subsequent to
September 30, 2003, the Company completed the private placement of
a Series A Preferred Stock, which was dilutive to current
shareholders. During the three months ended September 30, 2003,
the Company also issued shares to pay obligations in several
transactions. The Company issued 23,076 shares of its common stock
for rent payments relating to a facility lease, 166,096 shares of
its common stock to pay interest on long-term notes and 414,450
shares of its common stock for payments relating to the final
settlement of a facility lease. In the future, under terms of
notes payable and the Series A Preferred Stock the Company may
issue additional common stock to pay interest and Series A
Preferred Stock dividends.
Ultimately, the Company's ability to continue as a going concern
is dependent upon its ability to successfully launch its new
products, grow revenue, attain operating efficiencies, sustain a
profitable level of operations and attract new sources of capital.
While the Company has a history of selling products in government
markets, new products that are just entering production after
years of development have no sales history. Additionally, the
Company is entering commercial markets with products and is still
developing acceptance of Company product offerings.
SPIEGEL INC: Obtains Additional Time to File Audited Financials
---------------------------------------------------------------
Spiegel Group announced that the U.S. District Court in Chicago
entered an Order on December 4, 2003, granting relief in response
to the company's motion to modify the Amended Partial Final
Judgment and Order of Permanent Injunction and Other Equitable
Relief entered on March 27, 2003.
The Amended Partial Final Judgment was modified previously by the
Order Granting Spiegel, Inc. Partial Relief From Permanent
Injunction, entered April 15, 2003, which provides, among other
things, that the company would not be in contempt of the Amended
Partial Final Judgment as a result of its inability to file its
periodic reports with the SEC until after the completion of the
report of the Independent Examiner appointed by the Court, but no
later than December 3, 2003.
On November 25, 2003, the company filed with the Court a motion
requesting an extension until April 7, 2004, to file its 2002
fiscal year annual report on Form 10-K and its three quarterly
reports for the 2003 fiscal year on Forms 10-Q with the Securities
and Exchange Commission. The Order provides that, Spiegel, Inc.,
and its officers, directors, employees and agents, are not, and
will not in the future, be in contempt of the Amended Partial
Final Judgment as a result of the company's inability to timely
file its 2002 Form 10-K and its quarterly reports for the 2003
fiscal year on Forms 10-Q with the SEC as required; provided that
Spiegel, Inc., among other requirements, continues to comply with
the additional reporting obligations on Form 8-K specified in the
Order Granting Spiegel, Inc. Partial Relief From Permanent
Injunction entered April 15, 2003 and files any past due Form 10-K
or Forms 10-Q with the SEC as soon as possible and not later than
April 7, 2004.
The company also announced that it has reached an agreement with
BDO Seidman, LLP to serve as its independent public accountants
and on December 5, 2003, filed a motion with the Bankruptcy Court
seeking approval to employ and retain them.
The Spiegel Group is a leading international specialty retailer
marketing fashionable apparel and home furnishings to customers
through catalogs, specialty retail and outlet stores, and e-
commerce sites, including eddiebauer.com , newport-news.com and
spiegel.com . The Spiegel Group's businesses include Eddie Bauer,
Newport News and Spiegel Catalog. Investor relations information
is available on The Spiegel Group Web site at
http://www.thespiegelgroup.com/
STARWOOD: Singaporean Court Finds Unit Guilty of Contract Breach
----------------------------------------------------------------
The High Court of Singapore has handed down a guilty verdict
against Starwood Asia Pacific Management Pte Ltd, a subsidiary of
Starwood Hotels & Resorts Worldwide Inc, for breach of a
non-circumvention agreement on a Bangkok hotel with Asia Hotel
Investments.
The breach was with regards to an agreement signed between Asia
Hotel Investments and Starwood in connection with Asia Hotel's
proposed purchase of a majority stake in Grand Pacific Hotel in
Bangkok, now known as Westin Grande Sukhumvit.
Asia Hotel had signed an agreement to purchase the hotel and have
it managed by Starwood. Under the terms of this confidentiality
and non circumvention agreement, Starwood bound itself for a
period of 12 months not to deal with or enter into any management
contract with owners of the hotel.
The agreement was set to expire on November 9, 2002. However, on
May 15, 2002, Starwood circumvented Asia Hotel and signed a
management agreement clearly in breach of its existing agreement
with Asia Hotel.
Gary Murray, President of Asia Hotel said: "We are happy that the
court has ruled in favor of Asia Hotel and found Starwood guilty.
Taking Starwood to court was a last resort for us and the first
time that we have been driven to do so with a hotel management
partner."
"In fact, we have an excellent relationship with all our partners
which includes Hilton International and other international
operators. We had hoped to develop similar win-win situations
with Starwood that would be long term and mutually beneficial, "
reports Gary Murray, President of Asia Hotel. "As a hotel
investor we take risks everyday. Our business is based on having
trust and confidence in our potential partners. We had never
expected that it would turn out this way especially with a large
international and public-listed company like Starwood. It has been
very disappointing."
On the award of S$10 by the Court as damages to Asia Hotel, Mr
Murray said: "Seeking damages was not our sole motivation for
taking Starwood to Court. We wanted to prove that Starwood had
breached its confidentiality and non-circumvention agreement with
us, and this, we have emphatically accomplished. Despite the
defences put up by Starwood, the Court has found Starwood to be
clearly in breach. We also wanted to send a clear message that
while we are a boutique company in the business of investing in
hotels, resorts and golf course, we will not stand for being taken
advantage of.
"We are disappointed with the amount of damages awarded, and are
currently in discussions with our lawyers on the possibility of an
appeal for more damages."
Moving forward, Asia Hotel is focusing its attention on current
developments and to expanding its hotel and resort business beyond
Thailand to include the Philippines and other resort markets in
South-east Asia. Its golf course business has also seen rapid
growth and Asia Hotel expects to begin work on several large real
estate leisure development projects around its Muang Kaew and
Sriracha golf clubs soon, according to Mr Murray.
After a multi-million-dollar renovation in 2002/03, Thai Golfers
Association has now rated Muang Kaew #1 in Bangkok and #2 in all
of Thailand. The Sriracha Golf Club is currently being renovated
and will be positioned as one of the top golf clubs in the Pattaya
area. The firm is also developing a trendy chic New York style
hotel in downtown Bangkok which is expected to open at the end of
2004.
Asia Hotel Investments is in the business of investing in four-
and five-star hotels and golf courses in Southeast Asia. The
Company identifies suitable hotels, secures majority control and
puts together a program to renovate, re-brand, reposition and
secure professional management.
Asia Hotel and its principals have completed hotel development and
investment transactions with Marriott International, Hilton Hotel
Corporation, Hilton International PLC, and Holiday Inn. It owns
the Hilton Hua Hin Resort & Spa which it purchased in 2000,
renovated and rebranded as a five-star hotel. Through its
subsidiary Siam Golf Properties Co Ltd, Asia Hotel also owns and
manages the Muang Kaew Golf Club in Bangkok and Country Club and
Sriracha International Golf Club in Pattaya.
Starwood Hotels & Resorts Worldwide, Inc. (Fitch BB+ Convertible
Debt Rating, Negative) is one of the leading hotel and leisure
companies in the world with 740 properties in more than 80
countries and 105,000 employees at its owned and managed
properties. With internationally renowned brands, Starwood is a
fully integrated owner, operator and franchisor of hotels and
resorts including: St. Regis, The Luxury Collection, Sheraton,
Westin, Four Points by Sheraton, W brands, as well as Starwood
Vacation Ownership, Inc., one of the premier developers and
operators of high quality vacation interval ownership resorts. For
more information, visit http://www.starwood.com/
SUPERIOR GALLERIES: Shoos-Away Haskell & White as Accountants
-------------------------------------------------------------
On November 18, 2003, Superior Galleries, Inc. and subsidiaries
notified Haskell & White LLP, the independent accounting firm that
was engaged as Superior's principal accountant to audit Superior's
financial statements, that it intended to engage new certifying
accountants, in effect terminating Superior's relationship with
H&W.
The audit reports of H&W dated September 5, 2003 and December 12,
2002 on the consolidated financial statements of Superior as of,
and for, the years ended June 30, 2003 and 2002, respectively,
each contained a separate paragraph stating as follows:
"The accompanying consolidated financial statements have been
prepared assuming that the Company will continue as a going
concern. As discussed in Note 15 to the consolidated
financial statements, the Company has suffered recurring
losses from operations, negative cash flows from operations,
is in default on a significant debt obligation, and has
limited working capital that raise substantial doubt about
its 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."
Superior's decision to change accountants was approved by
Superior's audit committee and board of directors.
On November 18, 2003 Superior engaged Singer Lewak Greenbaum and
Goldstein, LLP as its new certified public accountants.
TEMBEC: Finds US-Canada Softwood Lumber Deal Unacceptable
---------------------------------------------------------
Tembec intends to fight the proposed Canada-U.S. agreement on
softwood lumber and calls the deal "totally unacceptable".
"To date, five international arbitration panels convened under
NAFTA and the World Trade Organization have all reached similar
conclusions: agencies of the United States Government misapplied
and abused U.S. laws and violated international trade agreements
in order to disrupt Canadian imports," said Frank Dottori,
President and CEO of Tembec. "If the legal approach is continued,
Canada is expected to win and get full refund by late 2004. And
now, the Canadian Government wants to surrender? It is amazing
that our own government is about to give away control of its
forest policy and is even paying for it with industry money,"
Dottori said.
Since the beginning of the softwood lumber dispute with the United
States, Tembec has also supported the negotiation approach and
wished for a negotiated settlement leading to free trade as
guaranteed within the NAFTA agreement. Instead, the current
proposal provides the following:
1. Canadian exports will be limited to the level of the worst
year in the last two decades (31.5%) - what happens when
the housing boom cools?
2. Exports will be limited for a minimum of three years and
possibly in perpetuity since the U.S. and the U.S.
Coalition of producers will "decide" if the Canadian
provinces have made the changes acceptable to them;
3. A US$200 duty per thousand board feet will be imposed over
the 31.5% limit allowing other countries to supply the U.S.
at the expense of Canadian producers if demand and prices
rise;
4. And to add insult to injury, we will pay the U.S. industry
50% of the duties or about $1.07 billion to help them build
sawmills and become more competitive against us.
The governments of the United States and Canada seem to agree that
on top of all the damages Tembec has already suffered, it should
surrender half of the $100 million in cash deposits now being held
by the United States Treasury, surrender market share for at least
three years and potentially forever; and otherwise abandon its own
growth and development in North America in favor of its U.S.
competitors. Tembec finds it unacceptable that these governments
can confiscate Tembec's property and impose a settlement of a
dispute in which the United States has been found, repeatedly, to
be legally wrong.
"The Canadian forest industry contributes some $35 billion per
year to the Canadian balance of trade and almost 1 million direct
jobs and hundreds of communities depend on the forest industry.
Anyone who supports this deal will bear the consequences as small
communities are devastated over the next few years with sawmill
closures and layoffs," said Frank Dottori. "We all agree that
changes may be required, but at the end of the day, they must be
fair for both countries. Tembec believes in free and fair trade.
And this is not free trade, it's a total surrender," concluded
Dottori.
Tembec is a major producer of softwood lumber with sawmills
located in British-Columbia, Quebec, Ontario, and the United
States and annual production of over 1.7 billion board feet.
Tembec (S&P, BB Long-Term Corp. Credit, Negative) is an integrated
Canadian forest products company principally involved in the
production of wood products, market pulp and papers. The Company
has sales of approximately $4 billion, with over 58 manufacturing
operations in the Canadian provinces of New Brunswick, Quebec,
Ontario, Manitoba, Alberta and British Columbia, as well as in
France, the United States and Chile. Tembec's common shares are
listed on the Toronto Stock Exchange under the symbol TBC.
Additional information on Tembec is available on its Web site at
http://www.tembec.com/
THAXTON GROUP: Seeks to Engage Finley Group as Crisis Managers
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware gave its
nod of approval to The Thaxton Group, Inc., and its debtor-
affiliates' application to employ The Finley Group, Inc., as
Crisis Managers, and designate Robert R. Dunn as Chief
Restructuring Officer.
Mr. Dunn will assist the Debtors in their operations and manage
the Debtor's restructuring efforts, including negotiating with
parties in interest, and coordination the Debtor's employees and
professionals who are assisting the Debtors in the restructuring
process.
The Debtors expect Finley Group to:
a) manage the "working group" professionals who are
assisting the Board and the Company in the crisis
management process, or who are working for the Company's
various stakeholders, to improve the level of
coordination of their individual work products, and
ensure that such work is consistent with the Company's
overall strategic goals and restructuring alternatives;
b) oversee the communications and/or negotiations with
outside constituents, stakeholders, governmental
agencies and their representatives and assist in
reestablishing the Company's credibility through the
production of reliable and defensible operating and
financial information;
c) negotiate with the Company's lenders related to the
continued extension of existing credit facilities
through the use of cash collateral or source and
negotiate new facilities to provide the Company adequate
liquidity during and after its restructuring;
d) assist in implementing a rolling 13-week cash receipts
and disbursements forecasting tool to provide
information related to the Company's liquidity, which
task entails implementing an actual-to-forecast variance
reporting process;
e) assist in the assessment of the Company's operations,
loan loss reserve, and postpetition reporting practices,
including collateral reports to secured lenders and
public filings to the SEC as may be required;
f) assist with the analysis and negotiation of the
divestiture of any non-cored assets or business lines in
conjunction with considering other strategic
alternatives;
g) assist in the ongoing development of overall business
and financial plans, including analyzing alternative
strategic plans and exit strategies;
h) analyze performance improvement and cash enhancement
opportunities, including assisting with cost reduction
initiatives, operations improvement initiatives, and
accounts receivables and accounts payable process
improvement opportunities, as necessary;
i) assist in assessing the organizational and operational
structure of the company and implementing any potential
changes necessary, especially in view of potential
divestitures;
j) assist in establishing a process to monitor intercompany
transactions and activity if appropriate;
k) lead the Company's management and its professionals
specifically assigned to sourcing, negotiating and
implementing any financing, including use of cash
collateral and exit financing facilities, in conjunction
with the Plan of Reorganization and the overall
restructuring;
l) lead the Company in other business and financial aspects
of a Chapter 11 proceeding, including, but not limited
to, development of a Disclosure Statement and Plan of
Reorganization;
m) direct, or assist in negotiations with third party
constituents, including lenders, not holders, creditors,
governmental agencies and customers, as appropriate;
n) assist with the preparation of the statement of
financial affairs, schedules and other regular reports
required by the Bankruptcy Court;
o) provide testimony before the Bankruptcy Court on matters
that are within their areas of expertise;
p) assist the claims agent with the management of the
claims and claims reconciliation processes; and
q) assist with such other matters as may be requested that
fall within our expertise and that are mutually
agreeable.
Mr. Dunn as CRO, will be compensated at a weekly rate of $12,000
per week. Finley Staff who will be assisting the CRO in a period
of time will be paid in their current hourly rates of:
Armand J. Carrano, Jr. Principal $350 per hour
Elaine T. Rudisill Associate $275 per hour
Matthew W. Smith Associate $275 per hour
Richard Herskowitz Associate $250 per hour
Headquartered in Lancaster, South Carolina, The Thaxton Group,
Inc., is a diversified consumer financial services company. The
Company filed for chapter 11 protection on October 17, 2003
(Bankr. Del. Case No. 03-13183). Michael G. Busenkell, Esq., and
Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell
represent the Debtor in their restructuring efforts. When the
Company filed for protection from it creditors, it listed
$206,000,000 in total assets and $242,000,000 in total debts.
TRINITY IND.: Declares Quarterly Dividend Payable on January 30
---------------------------------------------------------------
Trinity Industries, Inc. (NYSE: TRN) declared a quarterly dividend
of 6 cents a share on its $1 par value common stock. The
quarterly cash dividend, Trinity's 159th consecutive, is payable
January 30, 2004 to stockholders of record January 15, 2004.
Trinity Industries, Inc. (S&P, BB Corporate Credit Rating, Stable
Outlook), with headquarters in Dallas, Texas, is one of the
nation's leading diversified industrial companies. Trinity
reports five principal business segments: the Trinity Rail Group,
Trinity Railcar Leasing and Management Services Group, the Inland
Barge Group, the Construction Products Group and the Industrial
Products Group. Trinity's Web site may be accessed at
http://www.trin.net/
TXCC INC: Lone Star Steakhouse Proposes to Purchase Company
-----------------------------------------------------------
Lone Star Steakhouse & Saloon, Inc. is proposing a plan of
reorganization to purchase TX.C.C., Inc., and affiliated entities
TXCC-Preston and TXLC-Albuquerque out of bankruptcy.
The plan will be funded by Lone Star and provides that the
creditors of TXCC will receive cash or Lone Star common stock, at
the option of the creditor. TXCC presently owns and operates 20
Texas Land and Cattle Steak House(r) restaurants located primarily
in Texas.
The plan is subject to the approval of the United States
Bankruptcy Court for the Northern District of Texas. The Court is
currently considering a plan of reorganization proposed by the
current management of TXCC. The Company believes that its plan is
superior to the management plan because creditors will receive
cash and stock while under the management plan a significant
portion of the consideration consists of promissory notes. Other
terms of the Company's offer have been disclosed in filings made
with the bankruptcy court. There can be no assurance that the
Company's Plan of Reorganization for TXCC will be accepted in its
current form or at all.
The Lone Star Plan of Reorganization is subject to a 72 hour due
diligence period, in order to analyze current financial data and
other data that has not been filed with the public information,
but was and is available to the proponents of the existing Plan
that is before the Court and TXCC's Creditors.
Lone Star owns and operates 249 domestic and 19 international Lone
Star Steakhouse & Saloon restaurants; 15 Sullivan's Steakhouse
restaurants; five Del Frisco's Double Eagle Steak House
restaurants and one Frankie's Italian Grille restaurant. Licensees
operate three domestic and one international Lone Star
restaurants, and one domestic Del Frisco's Double Eagle Steak
House restaurant. More information can be found at
http://www.lonestarsteakhouse.com/
URANIUM RESOURCES: Wants Shareholders' Nod to Increase Shares
-------------------------------------------------------------
Uranium Resources, Inc., a Delaware corporation, is soliciting the
consent of its stockholders to approve an amendment to the
Company's Restated Certificate of Incorporation to increase the
number of authorized shares of the Company's common stock, par
value $0.001 per share, from the current 100,000,000 shares to
200,000,000 shares.
The Company's Board of Directors has adopted a resolution allowing
stockholders to deliver their stockholders' Consent to the Company
by sending a facsimile of their signed and dated Consent to the
attention of the Secretary of the Company. Alternatively
stockholders may return the properly signed and dated Consent
either by hand, certified or registered mail.
At September 30, 2003, Uranium Resources' balance sheet shows a
total shareholders' equity deficit of about $5.2 million.
* * *
Going Concern Uncertainty
In recent Form 10-QSB filed with the Securities and Exchange
Commission, the company reported:
The financial statements of the Company have been prepared on the
basis of accounting principles applicable to a going concern,
which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. Because of
depressed uranium prices the Company ceased production activities
in 1999 at both of its producing properties and these properties
remain non-producing.
In 1999 and the first quarter of 2000 the Company monetized all of
its remaining long-term uranium sales contracts and sold certain
of its property and equipment to maintain a positive cash
position. The Company expects to resume production activities,
including seeking the necessary development financing, when there
is a recovery in the market price of uranium. See "Plan of
Operation" for a discussion of the Company's cash requirements and
its efforts to raise cash to remain in business.
Should the Company be unable to achieve profitable operations or
raise additional capital, it may be forced to seek protection
under federal bankruptcy laws. The accompanying financial
statements do not purport to reflect or provide for the
consequences of a possible bankruptcy proceeding. In particular,
such financial statements do not purport to show (a) as to assets,
their realizable value on a liquidation basis or their
availability to satisfy liabilities; (b) as to liabilities, the
amount that may be allowed for claims or contingencies, or the
status and priority thereof; (c) as to stockholder accounts, the
effect of any changes that may be made in the capitalization of
the Company; and (d) as to operations, the effect of any changes
that may be made in its business. These factors raise substantial
doubt concerning the ability of the Company to continue as a going
concern.
URSTADT BIDDLE: Reports Slight Growth in Fourth Quarter Results
---------------------------------------------------------------
Urstadt Biddle Properties Inc., announced its fourth quarter and
full year financial results for the fiscal year ended October 31,
2003.
Net income applicable to Class A Common and Common stockholders
for the year 2003 was $17,576,000 or $0.73 per diluted Class A
Common share and $0.66 per diluted Common share compared to
$16,080,000 or $0.87 per diluted Class A Common share and $0.78
per diluted Common share in fiscal 2002. For the three months
ended October 31, 2003, net income applicable to Class A Common
and Common shareholders was $4,656,000 or $0.19 per diluted Class
A Common share and $0.17 per diluted Common share compared to
$3,999,000 or $0.17 per diluted Class A Common share and $0.15 per
Common share in fiscal 2002.
Rental income from properties in fiscal 2003 increased 40.4% to
$59.2 million from $42.2 million last year. The increase in
revenues was largely the result of property acquisitions,
improvement in occupancy levels at the Company's core properties,
and higher recoveries for operating expenses. At year-end, the
Company's core operating properties were 97% leased and occupied.
Diluted funds from operations, the primary indicator of operating
performance, increased to $28,329,000 this year from $24,504,000
in fiscal 2002. On a diluted per share basis, FFO amounted to
$1.15 per Class A Common share on higher weighted average shares
outstanding compared to $1.29 per Class A Common share in fiscal
2002. Diluted FFO per Common share amounted to $1.04 per Common
share in 2003 compared to $1.17 per Common share last year. For
the quarter ended October 31, 2003, FFO increased to $7,537,000 or
$.30 per Class A Common share and $.28 per Common share compared
to $6,370,000 or $.26 per Class A Common share and $.23 per Common
share in last year's fourth quarter.
On October 1, 2003, the National Association of Real Estate
Investment Trusts, based on discussions with the SEC, provided
revised guidance regarding the calculation of FFO. This revised
guidance provides that amounts associated with preferred stock
that has been redeemed or repurchased should be factored into the
calculation of FFO per share. As a result, the Company has
adjusted its fiscal 2002 FFO to include a $3,071,000 adjustment to
record the excess of the carrying value over the cost to
repurchase $20 million of its Series B Preferred shares in that
year in accordance with NAREIT's revised guidance. The adjustment
to fiscal 2002 FFO did not affect net income or net income per
diluted Common and Class A Common share in that year.
Commenting on 2003's operating results, Charles J. Urstadt,
Chairman and CEO said "We are pleased to report the Company's
operating results this year. They reflect the efforts of our team
to add retail properties, attract quality tenants, and execute
higher lease renewals at our core retail properties. Our core
properties are performing well and, with the recent additions of
four shopping centers in the Fairfield, Connecticut and
Westchester County, New York areas to our portfolio, we expect
2004 to be another year of continued growth for the Company. Our
tenant base was enhanced with the addition of a number of quality
national retailers."
NEW CAPITAL
In June, the Company completed the sale of a new issue of 8.5%
Series C Cumulative Preferred Stock which resulted in net proceeds
to the Company of $38.4 million. A portion of these proceeds were
used to acquire a retail property during the year and the balance
of proceeds are expected to be used for property acquisitions in
2004. The shares are listed on the New York Stock Exchange under
the symbol "UBP.C".
ACQUISITIONS
UBP continued its strategy to acquire shopping center properties
in the Fairfield County, Connecticut and Westchester County, New
York areas. The Company acquired four retail properties totaling
460,000 square feet of leasable space at an aggregate cost of $83
million, including the 185,000 sf Westchester Pavilion in White
Plains, New York, the Company's second largest acquisition.
Despite increased competition for property in its target areas,
UBP has been successful in adding quality properties to its
growing portfolio of shopping centers.
UBP is a self-administered equity real estate investment trust
providing investors with a means of participating in ownership of
income-producing properties with investment liquidity. UBP owns 30
properties containing 3.4 million square feet of space.
As reported in Troubled Company Reporter's June 4, 2003 edition,
Fitch Ratings assigned a 'BB' rating to an offering of $40 million
8.5% series C cumulative preferred securities by Urstadt Biddle
Properties Inc. (NYSE: UBA).
Fitch also affirmed the 'BB' rating on UBA's outstanding $15
million 8.99% series B cumulative preferred securities. The Rating
Outlook is Stable.
URSTADT BIDDLE: Board Increases Quarterly Common Share Dividends
----------------------------------------------------------------
At their regular meeting Wednesday, the Directors of Urstadt
Biddle Properties Inc., (NYSE: UBA and UBP) increased the
quarterly dividends on the Company's Class A Common Stock and
Common Stock.
The dividends were declared in the amount of $.215 for each share
of Class A Common Stock and $.195 for each share of Common Stock.
The dividends are payable January 16, 2004 to stockholders of
record on January 5, 2004. The dividends were increased by 2.5%
from the previous quarterly rates of $.21 per class A common share
and $.19 per common share, and represent the 137th consecutive
quarterly dividend on common shares declared since the Company
began operating in 1969.
The Directors of UBP also declared the regular quarterly dividends
on the Company's Series B Preferred Stock and Series C Preferred
Stock. The dividends were declared in the amount of $2.2475 for
each share of Series B Preferred Stock and $2.125 for each share
of Series C Preferred Stock. The dividends are payable January 30,
2004 to stockholders of record on January 16, 2004.
UBP is a self-administered equity real estate investment trust
providing investors with a means of participating in ownership of
income-producing properties and investment liquidity. UBP owns 30
properties containing 3.4 million square feet of space. UBP's core
properties consist principally of community shopping centers
located in the northeast with a concentration in the Fairfield
County, Connecticut and Westchester and Putnam Counties, New York
areas.
As reported in Troubled Company Reporter's June 4, 2003 edition,
Fitch Ratings assigned a 'BB' rating to an offering of $40 million
8.5% series C cumulative preferred securities by Urstadt Biddle
Properties Inc. (NYSE: UBA).
Fitch also affirmed the 'BB' rating on UBA's outstanding $15
million 8.99% series B cumulative preferred securities. The Rating
Outlook is Stable.
US AIRWAYS: Reliance Insurance Agrees to Reduce Claim to $4 Mil.
----------------------------------------------------------------
Reliance Insurance Company, in Liquidation, filed Claim No. 3707
for $31,167,024 against the Reorganized US Airways Debtors. The
Debtors objected to the Claim.
To settle the dispute, the parties agree that Claim No. 3707 is
reduced and allowed as a general unsecured Class UASI-7 Claim for
$4,000,000. All other general unsecured claims associated with
Reliance are disallowed. (US Airways Bankruptcy News, Issue No.
43; Bankruptcy Creditors' Service, Inc., 215/945-7000)
VENDALUX: Signs-Up Child Sullivan as New Independent Accountants
----------------------------------------------------------------
Vendalux Corporation, a Delaware corporation, was informed by its
auditor, David T. Thomson, P.C., that it would no longer be
engaged in auditing public companies.
Accordingly, on November 5, 2003, Vendalux engaged Child, Sullivan
Company to act as Vendalux's independent certified public
accountant. Child and Sullivan will begin reviewing Vendalux's
quarterly accounting and 10QSB filings starting with the
September 30, 2003, quarter and handle the audit for the March 31,
2004, fiscal year.
David T. Thomson, P.C. has served as Vendalux's auditors including
the time period covering Vendalux's two most recent fiscal year
ended March 31, 2003. David T. Thomson, P.C.'s audit opinion did
include an explanatory paragraph discussing an uncertainty as to
the Company's ability to continue as a going concern.
VOLUME SERVS.: Moody's Withdraws Ratings after Successful Tender
----------------------------------------------------------------
Moody's Investors Service withdrew all its ratings for Volume
Services, Inc., as it concludes its review on the company
initiated on Oct. 24, 2003.
Volume Services replaced its $251.8 million Income Deposit
Securities and successfully tendered for most of its rated senior
subordinated notes.
Withdrawn Ratings
- B1 $184 million secured Bank Loan rating
- B3 $100 million 11.25% senior subordinated notes
(2009) rating
- B1 Senior implied rating, and
- B2 Long-term issuer rating.
Headquartered in Spartanburg, South Carolina, Volume Services
America, Inc., operates concession, catering, and merchandising
services through its operating subsidiaries under the trade name
Centerplate.
WARNACO GROUP: Undertaking Additional Restructuring Initiatives
---------------------------------------------------------------
The Warnaco Group, Inc. (NASDAQ: WRNC) will undertake additional
restructuring initiatives in order to further lower costs and
improve efficiency. The initiatives announced Wednesday include:
-- Further outsourcing of North American intimate apparel
production following the sale of the Company's Honduran
production facility;
-- The closure of Warnaco's 44 remaining Speedo(R) Authentic
Fitness(R) retail stores; and
-- Rationalization of its Warner's(R) brand organization in the
United Kingdom and other European countries.
As part of Warnaco's ongoing strategy to source product from
lower-cost third-party providers, the Company has entered into a
binding agreement to sell its intimate apparel production facility
in Honduras to an investor group led by the current manager of the
operation. The Company noted that the agreement to sell the
facility will not include a long-term production commitment. As a
result of the sale and attendant reductions in U.S. payroll
associated with the Company's manufacturing operations, Warnaco
expects to realize annualized expense savings of over $5 million
as well as reductions in inventory of over $20 million and
significant gross margin improvements.
In order to better focus on its core Speedo(R) wholesale business,
Warnaco said that it will close its remaining Speedo(R) Authentic
Fitness(R) retail stores in the United States; however, the
Company will continue to operate its e-commerce site located at
http://www.SPEEDOUSA.com/ The Speedo(R) Authentic Fitness(R)
retail stores account for less than 5% of overall sales of
Warnaco's Swimwear Group. The Company believes that the closure of
these stores will allow its Swimwear Group to focus on maximizing
organic growth and product extension opportunities in the
wholesale sector, which has experienced approximately 20% growth
in the first nine months of 2003. The Company expects the closures
to begin in January 2004 and be completed by April 2004. The
Company expects to convert certain of these existing retail stores
to Calvin Klein(R) underwear stores in 2004.
The Company also announced that it has commenced a consultation
process with employees associated with its Warner's(R) brand in
the United Kingdom and Europe to rationalize that organization.
The process is expected to conclude by fiscal year-end and may
result in significant job reductions.
Combined, the Company anticipates that these restructuring
initiatives will result in a total pre-tax restructuring charge of
between $18 million and $26 million. The Company expects that
approximately one-half of the total charges will be non-cash.
Separately, Warnaco announced that it has entered into an
agreement to sell its White Stag(R) trademark to Wal-Mart Stores,
Inc. Wal-Mart had licensed the trademark on an exclusive basis
from Warnaco since 1993. Warnaco will continue to design the White
Stag women's sportswear line at Wal-Mart's expense through 2006.
Joe Gromek, President and Chief Executive Officer of Warnaco,
said, "We are committed to continually working to reduce costs,
improve efficiency and enhance margins to enable our brands to
compete more effectively. It is also important that we focus our
energy and resources on the development and expansion of our core
brands. We believe we are taking the right steps to accomplish
these strategic objectives."
This press release, as well as the terms of the White Stag
transaction, will be available in a Current Report on Form 8-K
furnished today with the Securities and Exchange Commission.
The Warnaco Group, Inc., headquartered in New York, is a leading
manufacturer of intimate apparel, menswear, jeanswear, swimwear,
men's and women's sportswear and accessories sold under such owned
and licensed brands as Warner's(R), Olga(R), Lejaby(R), Body Nancy
Ganz(TM), Chaps Ralph Lauren(R), Calvin Klein(R) men's and women's
underwear, men's accessories, men's, women's, junior women's and
children's jeans and women's and juniors swimwear, Speedo(R)
men's, women's and children's swimwear, sportswear and swimwear
accessories, Anne Cole Collection(R), Cole of California(R),
Catalina(R) and Nautica(R) swimwear.
WAVING LEAVES, INC: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Lead Debtor: Waving Leaves, Inc.
PO Box 957
291 Branstetter St.
Wooster, Ohio 44691
Bankruptcy Case No.: 03-66524
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Leaf Investments, LTD 03-66527
Type of Business: Restaurant
Chapter 11 Petition Date: December 3, 2003
Court: Northern District of Ohio (Canton)
Judge: Russ Kendig
Debtors' Counsel: R. Timothy Coerdt, Esq.
Wegman, Hessler & Vanderburg
6055 Rockside Woods Boulevard #200
Cleveland, OH 44131
Tel: 216-642-3342
Total Assets Total Debts
------------ -----------
Waving Leaves, Inc. $6,806,785 $8,178,503
Leaf Investments, LTD $3,818,990 $22,999,163
Waving Leaves Inc.'s 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Peachtree Franchise Finance Bank loan $10,289,840
2839 Paces Ferry Rd., #1170
Atlanta, Georgia 30339
Thodore E. Smith Buyout $3,179,500
1130 Winston Ave.
San Marino, CA 91108
Franchise Loan Receivables Bank Loan $1,440,285
Trust c/o Bank of New York
600 E. Las Colinas Blvd.
Irwing, Texas 75039
Long Lane Master Trust, IV Bank Loan $1,906,767
c/o Asset Mgmt Co of America
600 E. Las Colinas Blvd.
Irwing, Texas 75039
Hardee's Food Systems Lease Obligations & $981,259
Department 1237 Royalties
Los Angeles, CA 90084-1237
MBM Corporation Goods Purchased $450,000
2641 Meadowbrook, Rd.
Rocky Mount, NC 27801
Hardee's Equipment Division Trade Debt $70,627
Nickels Bakery Trade Debt $20,823
Hershey Creamery Company Trade Debt $18,108
Clear Channel Communications Trade Debt $13,904
S&D Coffee, Inc. Trade Debt $13,626
WQMX FM 94.9 Trade Debt $13,260
Madison County Sheriff Property Tax $13,032
WONE 97.5 Trade Debt $12,198
WTRF Benedek Trade Debt $11,195
COMCAST Trade Debt $10,496
City of Morehead Property Tax $10,464
Klosterman Baking Company Trade Debt $10,079
Cumulus Broadcasting, Canton Trade Debt $9,180
WTOV-TV9 Trade Debt $8,225
Leaf Investments, LTD's 1 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Peachtree Franchise Finance Bank Loan $2,305,370
2839 Paces Ferry Rd., #1170
Atlanta, Georgia 30339
WEIRTON STEEL: Reaches Pact with Union on Temporary Layoff Plan
---------------------------------------------------------------
Weirton Steel Corp. and the Independent Steelworkers Union have
reached an agreement for the temporary layoff of 250 hourly and
salaried non-exempt represented employees.
The agreement is in addition to the employees who were laid-off
last week.
"As we work through our reorganization to emerge from bankruptcy,
reducing costs is essential. Layoffs are a disheartening, but a
necessary part of the process. The union and company worked
cooperatively to provide the employees with the most fair way to
conduct this process. A critical part of this agreement is the
commitment by both parties to provide for a cooperative approach
to working in the future," said D. Leonard Wise, Weirton Steel
chief executive officer.
"I view this agreement as a significant step toward securing a new
contract with the ISU."
The company and union have been negotiating for the past several
months to secure a new collective bargaining agreement. A new
accord, among other issues, is necessary for the company to
participate in the Emergency Steel Loan Guarantee Program and to
emerge from bankruptcy.
Weirton Steel, which filed for bankruptcy on May 19, is the fifth
largest U.S. integrated steelmaker and the nation's second largest
producer of tin mill products.
WORLDCOM INC: Richard Breeden Appointed as Distribution Agent
-------------------------------------------------------------
The Securities and Exchange Commission announced that on
November 7, 2003, the Honorable Jed S. Rakoff, United States
District Judge, issued an Order appointing former SEC Chairman
Richard C. Breeden, who is currently serving as WorldCom's Court-
appointed Corporate Monitor, to be the Distribution Agent to
supervise the distribution of the SEC's civil penalty judgment
against WorldCom.
The SEC obtained the civil penalty judgment pursuant to a
settlement approved by Judge Rakoff on July 7, 2003. Also on
November 7, 2003, Judge Rakoff appointed former SEC Commissioner
J. Carter Beese, Jr., to be the Equity Manager to oversee the
stock portion of the distribution fund.
The Court's selections of Mr. Breeden as Distribution Agent and
Mr. Beese as Equity Manager are the first steps in the Fair Fund
distribution process for the SEC's civil penalty judgment.
Future steps include WorldCom's payments into the distribution
fund and the SEC's submission of a formal distribution plan to
the District Court. These future steps are scheduled to take
place at or around the time WorldCom emerges from bankruptcy
court protection. After the District Court approves a
distribution plan, the Distribution Agent will commence the
process of identifying eligible investor claimants and processing
claims for payment from the distribution fund.
WorldCom, which is now doing business under the MCI brand name,
filed for bankruptcy court protection on July 21, 2002. On
October 31, 2003, the Bankruptcy Court approved the company's
plan of reorganization. The Commission staff anticipates that
the plan will become effective within a few months, resulting in
WorldCom's emergence from bankruptcy court protection. Because
WorldCom was in bankruptcy reorganization, the SEC's settlement
of its claims for civil penalties was reviewed and approved by
both the District Court and the Bankruptcy Court.
The SEC's civil penalty judgment against WorldCom provided that
WorldCom was liable for a civil penalty in the amount of
$2,250,000,000. It further provided that, in the event of
confirmation of a plan of reorganization of WorldCom by the
Bankruptcy Court -- which occurred on October 31, 2003 --
WorldCom's obligation to the SEC will be satisfied by the
company's payment of $500,000,000 in cash and its transfer of
common stock in the reorganized company having a value of
$250,000,000, on the effective date of its plan of
reorganization. Under the terms of the settlement, the funds
paid and the common stock transferred by WorldCom to
satisfy the SEC's judgment will be distributed to investor
victims of the company's fraud, pursuant to Section 308 (Fair
Funds for Investors) of the Sarbanes-Oxley Act of 2002.
Additional information regarding the Fair Fund distribution of
WorldCom's civil penalty is available on the Commission's
website.
The Commission's investigation into the events surrounding the
WorldCom fraud is continuing. (Worldcom Bankruptcy News, Issue No.
44; Bankruptcy Creditors' Service, Inc., 215/945-7000)
WORKFLOW MANAGEMENT: Q2 FY 2004 Results Show Marked Improvement
---------------------------------------------------------------
Workflow Management, Inc. (Nasdaq:WORK), reported results for the
three months ended October 31, 2003.
The Company reported GAAP net income for its second quarter ended
October 31, 2003 of $1.1 million or $0.08 per diluted share, up
from GAAP net income of $517,000 or $0.04 per diluted share in the
comparable period a year ago.
For the three months ended October 31, 2003, revenues increased
$5.3 million or 3.7% compared to the first quarter of fiscal 2004.
EBITDA increased $3.2 million or 46.2% on a comparable basis
excluding the non-recurring gains recorded in the first quarter of
fiscal 2004. As a percentage of revenues, excluding non-recurring
gains, EBITDA increased to 6.8% versus 4.8% in first quarter of
fiscal 2004.
Compared to the same quarter in the prior year, revenues of $148.2
million for the three months ended October 31, 2003 decreased
6.9%. Operating income was $7.8 million, or 5.2% of revenues, in
the second quarter versus operating income of $8.9 million, or
5.6% of revenues, last year. EBITDA was $10.1 million compared to
EBITDA of $11.4 million in the comparable period a year ago.
Income from continuing operations for the three months ended
October 31, 2003, excluding the after-tax impact of financing fees
expensed with our August 1, 2003 credit facility amendment and the
tax impact of pledging Canadian assets against U.S. debt as
required by our lenders, was $1.9 million or $0.14 per diluted
share versus income from continuing operations of $2.0 million or
$0.15 per diluted share a year ago on a comparable basis. Since
April 30, 2003, the Company's fiscal year-end, credit facility
debt outstanding has decreased $11.6 million or 7.0% to $153.5
million.
"Although we remain behind the prior year results, we are pleased
that we have shown notable improvement in the major financial
categories over our first quarter results. In particular,
operating profit, net income and EBITDA all show double digit
growth over the first three months of this fiscal year," stated
Gary W. Ampulski, President and Chief Executive Officer. "We have
begun to streamline our vendor base, eliminate unnecessary
facilities, consolidate our supply chain and renegotiate or
eliminate unprofitable customer and supplier relationships.
Coupled with the integrations and cost saving initiatives
implemented during the summer months, we believe that we are well
positioned as the economy continues to strengthen."
"We continue to reduce the level of debt outstanding on our credit
facility and we are experiencing debt levels not seen on a
consistent basis for over three years," stated Michael L.
Schmickle, EVP and Chief Financial Officer. "We are pleased with
the significant improvements in our working capital and we
continue to make operational changes that we believe will further
strengthen our balance sheet."
Please refer to the Company's Form 10-Q for the quarter ended
October 31, 2003 filed with the Securities and Exchange Commission
for additional information. The Form 10-Q will be filed on Monday,
December 15, 2003.
Workflow Management, Inc. is a leading provider of end-to-end
print outsourcing solutions. Workflow services, from production of
logo-imprinted promotional items to multi-color annual reports,
have a reputation for reliability and innovation. Workflow's
complete set of solutions includes document design and production
consulting; full-service print manufacturing; warehousing and
fulfillment; and iGetSmart(TM) - the industry's most comprehensive
e-procurement, management and logistics system. Through custom
combinations of these services, the Company delivers substantial
savings to its customers - eliminating much of the hidden cost in
the print supply chain. By outsourcing print-related business
processes to Workflow, customers streamline their operations and
focus on their core business objectives. For more information, go
to the Company's Web site at http://www.workflowmanagement.com/
* * *
Credit Facility Amendment
Workflow Management has entered into a definitive agreement with
its senior lenders that amends the Company's credit facility.
Under the terms of the amendment, the $50 million term loan
originally due on December 31, 2003 now matures on May 1, 2004.
The $16.8 million term loan and the approximately $100 million in
availability asset-based revolver, both of which were originally
due on June 30, 2005, now mature on August 1, 2004. In addition to
modifying the maturity dates of the Company's senior debt, the
credit facility amendment also provides the Company with improved
advance rates under the asset-based revolver on eligible accounts
receivable and inventory.
As previously announced, at April 30, 2003, the Company had
exceeded certain covenants in the credit facility that limited
capital expenditures and the incurrence of restructuring costs. As
part of the credit facility amendment, the Company's senior
lenders have waived these defaults. The amendment also modifies
the calculation of EBITDA for credit facility covenant purposes to
exclude the impact of the goodwill impairment and the results of
discontinued operations and amends certain financial covenants for
future periods in a manner consistent with the Company's current
business plan and forecasts.
As part of the credit facility amendment, the Company also changed
the conditions under which its lenders may exercise warrants to
purchase the Company's common stock and agreed to modify the
exercise schedule of the warrants. In addition, the Company agreed
to increase the number of shares of its common stock potentially
issuable upon exercise of these warrants.
Sale of Discontinued Operations
The Company also reported the successful divestiture of certain
non-core print manufacturing operations. The assets and
liabilities of the divested businesses, which have been excluded
from the Company's historical operating results and classified as
discontinued operations, were sold to a financial buyer for $5.0
million in gross proceeds. After payment of expenses, the
transaction generated net cash proceeds of approximately $4.9
million. Under the terms of the credit facility amendment
discussed above, the Company will use these net proceeds to make
certain earn-out payments that were due in May 2003 under purchase
agreements for prior acquisitions and to reduce outstanding
indebtedness under the credit facility.
X10 WIRELESS: US Trustee Appoints Official Creditors' Committee
----------------------------------------------------------------
The United States Trustee for Region 18 appointed 5 creditors to
serve on an Official Committee of Unsecured Creditors in X10
Wireless Technology, Inc.'s Chapter 11 case:
1. Matrix Resource Partners, Inc.
Attn: Erik Koch
11911 NE 1st Street
Bellevue, WA 98005
Tel: 425-586-1799, ext. 1004
Fax: 425-586-1796
E-mail: erik@matrixrp.com
2. The Weather Channel Interactive, Inc.
Attn: Michael Hays
300 Interstate North Pkwy
Atlanta, GA 30339
Tel: 770-226-2234
Fax: 770-226-2953
E-mail: mhays@weather.com
3. Advertisement Banners.com, Inc.
Attn: Tim Vanderhook
5101 E. LaPalma Ave., Suite 100
Anaheim Hills, CA 92807
Tel: 714-779-7272, ext. 11
Fax: 714-693-9943
E-mail: thook@advertisementbanners.com
4. Twofold Photos, Inc., d/b/a Webshots
Attn: Sara Taunton
1991 Broadway Street, Suite 320
Redwood City, CA 94063
Tel: 650-556-0114, ext. 19
Fax: 650-622-9956
E-mail: sara@webshots.com
5. Microsoft Corporation
Attn: Michell Marshall
One Microsoft Way
Samm C Location
Redmond, WA 98052-6399
Tel: 425-706-0939
Fax: 425-936-7329
E-mail: michelwh@microsoft.com
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 Kent, Washington, X10 Wireless Technology, Inc.,
is a Well-known Internet Pop-Up Advertiser and offers an
integrated suite of affordable hardware and software products that
provide powerful and affordable wireless solutions for homes and
small businesses. The Company filed for chapter 11 protection on
October 21, 2003 (Bankr. W.D. Wash. Case No. 03-23561). Mary Jo
Heston, Esq., at Lane Powell Spears Lubersky LLP represent the
Debtor in its restructuring efforts. When the Company filed for
protection from its creditors, it listed over $1 million in assets
and over $10 million in debts.
YOUNG BROADCASTING: Proposes Add-On Offering of 8-1/2% Sr. Notes
----------------------------------------------------------------
Young Broadcasting Inc., (Nasdaq: YBTVA) (S&P, B+ Corporate Credit
Rating, Negative) intends to consummate an add-on offering of $90
million aggregate principal amount of its 8-1/2% senior notes due
2008 in a private placement.
It is intended that the net proceeds from the senior note private
placement will be used to redeem all of YBI's outstanding 9%
senior subordinated notes due 2006. YBI also announced today that
it intends to consummate an offering of $140 million aggregate
principal amount of senior subordinated notes due 2014 in a
private placement. It is intended that the net proceeds from the
senior subordinated note private placement will be used to redeem
all of YBI's outstanding 8-3/4% senior subordinated notes due
2007.
The senior notes and the senior subordinated notes will be offered
to qualified institutional buyers under Rule 144A and to persons
outside the United States under Regulation S. The senior notes and
the senior subordinated notes will not be registered under the
Securities Act of 1933, as amended, and, unless so registered, may
not be offered or sold in the United States except pursuant to an
exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and applicable
state securities laws.
* BOOK REVIEW: Macy's for Sale
------------------------------
Author: Isadore Barmash
Paperback: 180 pages
List price: $34.95
Review by Henry Berry
Order your personal copy today at
http://www.amazon.com/exec/obidos/ASIN/1587981726/internetbankrupt
Isadore Barmash writes in his Prologue, "This book tells the story
of Macy's managers and their leveraged buyout, the newest and most
controversial device in the modern financial armament" when it
took place in the 1980s. At the center of Barmash's story is
Edward S. Finkelstein, Macy's chairman of the board and chief
executive office. Sixty years old at the time, Finkelstein had
worked for Macy's for thirty-five years. Looking back over his
long career dedicated to the department store as he neared
retirement, Finkelstein was dismayed when he realized that even
with his generous stock options, he owned less than one percent of
Macy's stock. In the years leading up to his unexpected, bold
takeover, Finkelstein had made over Macy's from a run-of-the-mill
clothing retailer into a highly profitable business in the lead of
the lucrative and growing fashion and "lifestyle" field.
To aid him in accomplishing the takeover and share the rewards
with him, Finkelstein had brought together more than three hundred
of Macy's top executives. To gain his support for his planned
takeover, Finkelstein told them, "The ones who have done the job
at Macy's are the ones who ought to own Macy's." Opposing
Finkelstein and his group were the Straus family who owned the
lion's share of Macy's and employees and shareholders who had an
emotional attachment to Macy's as it had been for generations,
"Mother Macy's" as it was known. But the opponents were no match
for Finkelstein's carefully laid plans and carefully cultivated
alliances with the executives. At the 1985 meeting, the
shareholders voted in favor of the takeover by roughly eighty
percent, with less than two percent opposing it.
The takeover is dealt with largely in the opening chapter. For
the most part, Barmash follows the decision making by Finkelstein,
the reorganization of the national company with a number of
branches, the activities of key individuals besides Finkelstein,
Macy's moves in the competitive field of clothing retailing, and
attempts by the new Macy's owners led by Finkelstein to build on
their successful takeover by making other acquisitions. Barmash
allows at the beginning that it is an "unauthorized book, written
without the cooperation of the buying group." But as he quickly
adds, his coverage of Macy's as a business journalist and his
independent research for over a year gave him enough knowledge to
write a relevant and substantive book. The reader will have no
doubt of this. Barmash's narrative, profiles of individuals, and
analysis of events, intentions, and consequences ring true, and
have not been contradicted by individuals he writes about,
subsequent events, or exposure of material not public at the time
the book was written.
First published in 1989, the author places the Macy's buyout in
the context of the business environment at the time: the
aggressive, largely laissez-faire, Reagan era. Without being
judgmental, the author describes how numerous corporations were
awakened from their longtime inertia, while many individuals were
feeling betrayed, losing jobs, and facing uncertain futures.
Isadore Barmash, a veteran business journalist and author, was
associated with the New York Times for more than a quarter-century
as business-financial writer and editor. He also contributed many
articles for national media, Reuters America, and the Nihon Kenzai
Shimbun of Japan. He has published 13 books, including a novel
and is listed in the 57th edition of Who's Who in America.
*********
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.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published by
Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania,
USA, and Beard Group, Inc., Frederick, Maryland USA. Yvonne L.
Metzler, Bernadette C. de Roda, Donnabel C. Salcedo, Ronald P.
Villavelez and Peter A. Chapman, Editors.
Copyright 2003. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
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re-mailing and photocopying) is strictly prohibited without prior
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herein is obtained from sources believed to be reliable, but is
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*** End of Transmission ***