/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/031217.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, December 17, 2003, Vol. 7, No. 249 Headlines 3370 BROWARD CORP: Case Summary and Largest Unsecured Creditor ADVANCED COMMS: Cuts Debt by an Additional $570,000 AFC ENTERPRISES: Files 2002 Annual Report & Restated Financials AIR CANADA: Monitor Provides Equity Solicitation Process Update AIR CANADA: Justice Farley Approves Trinity Investment Agreement AJAX ONE: Fitch Affirms Class IV Fixed-Rate Note Rating at BB+ ALLIED DEVICES: Implements Change of Control Pursuant to Plan ALPHASTAR INSURANCE: Case Summary & Largest Unsecured Creditors AMERICAN HOMEPATIENT: Gets OK to Reject Warrants Held by Lenders AMES DEPARTMENT: Trade Creditors Sell 7 Claims Totaling $1.2MM ANC RENTAL: Proposes to Establish Liquidating Trust Under Plan AURORA FOODS: Wants Pay $15 Million of Secured Vendor Claims AVAYA INC: Former Honeywell CFO Richard Wallman Joins Board BALDWIN CRANE: Jager Smith Represents Committee as Counsel CABLE & WIRELESS: Mirror Image Extends Customers Special Offer CALPINE CORP: Extends Initial Purchaser's Options to January 23 CHESAPEAKE ENERGY: Declares Common and Preferred Share Dividends CHESAPEAKE ENERGY: Provides Early Results of Exchange Offer COVANTA ENERGY: Plan-Filing Exclusivity Intact Until February 23 COX TECHNOLOGIES: Enters Pact to Sell Assets to Sensitech Inc. CPT HOLDINGS: Case Summary & 7 Largest Unsecured Creditors CRANSTON, RI: Fitch Plucks BB- Bond Rating from Watch Neg. DDI CORP: Issues 23.7M New Common Stock Shares Pursuant to Plan DELTA FINANCIAL: Prices $470 Million Asset-Backed Securitization DII INDUSTRIES: Files Prepack. Chapter 11 Petition in Pittsburgh DII INDUSTRIES: Case Summary & 30 Largest Unsecured Creditors DII INDUSTRIES: Halliburton Completes Debt Exchange Offer DILLARD'S INC: Increases Revolving Credit Facility to $1 Billion ECLICKMD: Court Confirms Reorganization Plan Effective Dec. 15 EL PASO: S&P Cuts Rating to B as Company Pursues Long-Range Plan EL PASO: Launches Long-Range Plan, Detailing Workout Initiatives ENRON: Seeks Court Clearance for Project Inauguration Settlement EUROGAS INC: September 30 Balance Sheet Upside-Down by $10 Mill. EVOLVE SOFTWARE: Final Decree Hearing Scheduled for Tomorrow FLEMING: Gets Go-Signal to Pay $325-Mill. to Prepetition Lenders FLOW INT'L: Files Second-Quarter Report on SEC Form 10-Q FMC CORP: Elects Mark P. Frissora to Board of Directors FYOCK & ASSOCIATES: Voluntary Chapter 7 Case Summary GENESIS: Neighborcare Halts Trading Under Employee Benefit Fund GINGISS GROUP: Auctioning-Off Tuxedo Assets on December 22 GULFTERRA ENERGY: S&P Affirms BB+ Rating Following Merger News H&E EQUIPMENT: S&P Says Company Concerns are Still Manageable HAND BRAND DISTRIBUTION: Sewell & Co. Bows-Out as Accountant HANOVER COMPRESSOR: Completes Two Senior Notes Public Offering HARKEN ENERGY: Sells Panhandle Assets and Repays All Bond Debt HARNISCHFEGER: Court Stays Distribution of HII Reserve Stock HAWAIIAN AIRLINES: Pilots Demand $4.25 Pension Back Payment HEALTHSOUTH: George Strong and Charles Newhall Resign from Board HORSEHEAD INDUSTRIES: Court Approves Asset Sale to Sun Capital ICO INC: Won't Make Preferred Share Dividend Payment INNSUITES HOSPITALITY: Oct. Net Capital Deficit Widens to $2.8MM INT'L PAPER: Will Redeem All 7.875% Capital Securities on Jan 14 INT'L STEEL: Underwriters Purchase Additional 2.4 Million Shares INTERNET CAPITAL: Will Continue Listing on Nasdaq SmallCap INTERPLAY ENTERTAINMENT: Sells Galleon to SCi Entertainment INTERPOOL INC: Will Pay Quarterly Cash Dividend on Jan. 2, 2004 ISLE OF CAPRI: Opens Casino at Westin and Sheraton in Bahamas JAMES CABLE: Consummates Pre-Negotiated Reorganization Plan J.P. MORGAN: S&P Takes Rating Actions on Series 2001-A Notes KMART CORP: Court Reclassifies 1,500 Claims Totaling $432 Mill. KSAT SATELLITE: Avihu Bergman Appointed as New Director LEGACY HOTELS: Concludes Refinancing Deal & Debenture Repayment LENNOX INT'L: 2004 Annual Shareholders Meeting Set for April 16 LENNOX INT'L: Declares Quarterly Cash Dividend Payable on Jan. 2 METROPOLITAN ASSET: Fitch Takes Rating Actions on 2 Note Issues MIRANT CORP: Equity Committee Taps Hohmann Taube as Co-Counsel MORGAN STANLEY: S&P Ups Ratings on Classes F & H Notes to BB+/B NEXMED INC: Completes $6 Million Refinancing Transactions NORSKECANADA: Powell River Council Cuts Property Tax by $200K NUTRAQUEST: Montgomery McCracken Retained as Committee's Counsel ONIX MICROSYSTEMS: Court Sets Dec. 31 as Claim-Filing Deadline PG&E NATIONAL: Mitsubishi Seeks Appointment of Examiner PHARMANETICS: Seeks Strategic Alternatives, Including Asset Sale PILLOWTEX CORP: Target & Mervyn Take Steps to Recover Damages PLAINS ALL AMERICAN: Takes 100% Stake in Atchafalaya Pipeline RANGE RESOURCES: Will Acquire West Texas Properties for $85 Mil. ROHN INDUSTRIES: Sale of Assets to Radian Communication Okayed ROOTIN TEUTON HOTEL: Voluntary Chapter 11 Case Summary ROWECOM/DIVINE: Creditors Have Until Month-End to Prove Claims SIX FLAGS INC: Wants $130-Million Increase in Credit Facility SK GLOBAL AMERICA: Keeps Plan-Filing Exclusivity Until Match 18 SOUTHWALL TECH.: Needham Letter Agreement Extended Until Friday STOLT-NIELSEN: Continuing Long-Term Waiver Talks with Lenders SUN NETWORK GROUP: Limited Cash Raises Going Concern Uncertainty SYMBOL TECHNOLOGIES: Names Three New Independent Directors TEMBEC: Closes Buy-Out of Ontario Weyerhauser Sawmill for C$26MM TENNECO AUTOMOTIVE: Closes on $800 Mill. Senior Credit Facility TEXON ENERGY: Creditors Must File Claims by December 31, 2003 UNITED RENTALS: Wayland Hicks Becomes Chief Executive Officer USEC INC: Names Lisa E. Gordon-Hagerty as EVP and COO USURF AMERICA: Independent Auditors Express Going Concern Doubt WISCONSIN AVENUE: Fitch Ups Series 1996-M3 Class D Rating to BB+ WISCONSIN AVE: Fitch Raises Class C Notes' Rating a Notch to BB- WMC FINANCE: S&P Assigns B- Rating to $200M Senior Debt Issue WORLD AIRWAYS: Adjourns Special Shareholders' Meeting to Friday WORLDCOM INC: October 2003 Net Loss Tops $194 Million WORLDWIDE WIRELESS: Wants to Amend Plan of Reorganization W.R. GRACE: New COO Festa Discloses Owning No Grace Common Stock XO: Receives $192MM in Value, Upon Global Crossing's Emergence XRG INC: Significant Losses Raise Going Concern Uncertainty * FTI Brings-In Gregory F. Rayburn as Senior Managing Director * Meetings, Conferences and Seminars ********* 3370 BROWARD CORP: Case Summary and Largest Unsecured Creditor -------------------------------------------------------------- Debtor: 3370 Broward Corp. 3370 North West 47th Terrace Lauderdale Lakes, FL 33319 Bankruptcy Case No.: 03-17917 Type of Business: Health & Medical services Chapter 11 Petition Date: December 15, 2003 Court: Southern District of New York (Manhattan) Debtor's Counsel: Bruce Buechler, Esq. Lowenstein Sandler, PC 65 Livingston Avenue Roseland, NJ 07068 Tel: 973-597-2308 Fax: 973-597-2309 Total Assets: $4,000,000 Total Debts: $950,000 Debtor's 1 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Judith M. Fink, Director $950,000 Tax Collector, Broward County 115 S. Andrews Ave., Room 218 Fort Lauderdale, FL 33301 ADVANCED COMMS: Cuts Debt by an Additional $570,000 --------------------------------------------------- Advanced Communications Technologies, Inc. (OTCBB:ADVC) has reduced an additional $570,000 of accrued and contingent liabilities including settlements with two of its major trade creditors, one of which is the Company's landlord in California. These settlements bring ACT's total debt reduction to over $2.2 million since September. ACT's President and CFO, Wayne Danson commented by saying, "This is an enormous accomplishment for the Company. We have just settled with two major creditors as we continue to put a substantial effort into settling the remainder of our debt as soon as practicable. We remain in full force with our restructuring strategy to clean up our balance sheet and reshape the Company." An additional $250,000 of debt discharge income was generated from these recent debt settlements, and will be reflected in the Company's second quarter interim financial statements. The Company anticipates announcing the next phase of its restructuring and repositioning strategy by mid January 2004, which includes investment and other profit generating activities expected to yield strong shareholder returns. Advanced Communications Technologies Inc., owns the exclusive marketing and distribution rights throughout the North and South American markets to SpectruCell, a software-defined radio multiple protocol wireless system that is currently being developed by an unrelated party in Australia. At June 30, 2003, the Company's balance sheet shows a total shareholders' equity deficit of about $6 million. AFC ENTERPRISES: Files 2002 Annual Report & Restated Financials --------------------------------------------------------------- AFC Enterprises, Inc. (Pink Sheets: AFCE), the franchisor and operator of Popeyes(R) Chicken & Biscuits, Church's Chicken(TM), Cinnabon(R) and the franchisor of Seattle's Best Coffee(R) in Hawaii, on military bases and internationally, announced the filing of its annual report on Form 10-K for 2002, as well as its restated financial statements for the fiscal years 2001 and 2000. Fiscal year 2002 versus fiscal year 2001, as restated, included: - System-wide sales at AFC's 4,071 restaurants, bakeries and cafes, including the Company's wholesale operations of Cinnabon and Seattle Coffee Company, increased 4.7 percent to $2.7 billion versus $2.6 billion in 2001. - Franchise revenues increased 10.1 percent to $111.3 million from $101.1 million in 2001. This increase was primarily attributable to a net increase of 397 franchised units. As of December 29, 2002, the Company had 3,532 franchised restaurants, bakeries and cafes. - Total revenues in 2002 were $619.6 million compared with total revenues of $687.2 million in 2001. This decline was primarily attributable to the sale of company-owned restaurant units to franchise partners. During 2002, the Company sold 175 of its company-operated units to franchisees as part of its ongoing strategy to concentrate on franchising. - Consolidated operating profit was $38.7 million in 2002 compared with $53.9 million in 2001. The decrease in consolidated operating profit was primarily the result of $44.6 million in non-cash charges for impairment of non- current assets, principally from the write-down of goodwill in the Company's coffee segment. - AFC reported $122.9 million in adjusted EBITDA, as defined, versus $116.4 million in 2001. - AFC reported a net loss of $11.7 million, or $0.37 per diluted share in 2002, compared with net income of $15.6 million, or $.50 per diluted share in 2001. The net loss was primarily the result of significant goodwill and other impairment charges. - AFC generated $93.8 million in cash flow from operating activities in 2002 compared to $57.4 million in 2001, representing a 63.4 percent increase over the prior year. Chairman and CEO Frank Belatti stated, "The release of these results is a major milestone that enables us to move forward as an organization. The Company is firmly committed to driving operational performance and focusing our business model on franchising. We strongly believe in the tremendous appeal of our concepts and despite the challenges that AFC has confronted recently, we continue to see strong opportunity for expanding our brands globally. We look forward to 2004 as we continue to implement actions to improve results and build a sustainable growth path for each of our brands." Financial Performance Review System-wide sales at AFC's 4,071 restaurants, bakeries and cafes were $2.7 billion which included Seattle Coffee Company's wholesale sales of $65.9 million in 2002 and Cinnabon wholesale sales of $3.6 million. This compared with total system-wide sales of $2.6 billion in 2001, including wholesale sales of $61.1 million for Seattle Coffee Company. Cinnabon did not implement its pre-packaged cinnamon roll wholesale strategy until 2002. For fiscal year 2002, franchise revenues increased 10.1 percent from 2001 to $111.3 million. This franchise related revenue increase represented the addition of 314 net domestic franchised units, including the conversion of 175 company-operated units to franchised units and 83 net new international franchised units, despite a decrease in franchise royalties due to lower same store sales performance. AFC's total revenue for fiscal year 2002 was $619.6 million compared to $687.2 million in 2001. The total revenue decrease was primarily due to the sale of company-operated units to franchise partners as part of AFC's conversion strategy. Popeyes and Church's posted a record year of $108.1 million in operating profit for 2002, an improvement from 2001 of approximately 18.5 percent. Operating profit for Cinnabon decreased $8.7 million due to a decline in per-bakery operating margins, softened same-store sales and a $3.1 million impairment of tangible assets at certain under-performing bakeries. Seattle Coffee Company experienced a decline in operating profit primarily due to the $33.3 million of asset impairments, reflecting the difference between the fair value of the Company's continental U.S. coffee segment and its book value. AFC completed the sale of the Seattle Coffee Company to Starbucks Corporation for $72.0 million on July 14, 2003. Consolidated operating profit for AFC was $38.7 million in 2002 compared to $53.9 million in 2001. The decrease was primarily attributable to charges for impairment of non-current assets. AFC reported $122.9 million in adjusted EBITDA in 2002 compared to $116.4 million in 2001. This increase was primarily driven by the strong operating performance of AFC's chicken brands. For fiscal year 2002, AFC's diluted earnings per share of $0.37 reflected a decrease of $.87 in earnings per share compared to $.50 per diluted share in 2001. This decline is primarily the result of impairment charges. For fiscal year 2002, AFC reported cash flow from operating activities of $93.8 versus $57.4 million in 2001 due to strong operating performance before consideration of non-cash charges relating to asset write-downs, increase in deferred taxes and favorable net fluctuations in operating asset and operating liability balances. Other Business Matters Share Repurchase Program On July 22, 2002, AFC's board of directors approved a share repurchase program of up to $50 million, effective as of such date. On October 7, 2002, AFC's board of directors approved an increase to this program from $50 million to $100 million. The program, which is open-ended, allows the Company to repurchase its shares from time to time in accordance with the requirements of the Securities and Exchange Commission. As of December 29, 2002, AFC repurchased 3,692,963 shares of its stock for $77.9 million under this program. These purchases were funded from the proceeds of the Company's bank credit facility and internally generated funds. The average weighted shares outstanding for 2002 were 30.0 million shares. AFC has not repurchased any additional shares in 2003. While the Company expects to continue with its repurchase program once it is fully compliant with the Securities and Exchange Commission reporting requirements, there are no assurances with regard to the number of shares the Company may repurchase nor the timing of when the additional repurchases will occur. Status of 2003 10-Q Filings Work on the Company's 10-Q filings for the current 2003 fiscal year is underway. The Company intends to make every effort to file its Quarterly Reports on Form 10-Q for the first three quarters of 2003 as soon as possible. Key Operational Measures: 2004 Outlook AFC previously reported the Company's operational expectations for the full year 2003 in a press release dated November 4, 2003. The following highlights AFC's key operational projections for 2004: Domestic Same-store Sales Growth AFC is projecting full year 2004 blended domestic same-store sales to be up 1.0-2.0 percent. By brand, AFC is estimating domestic same-store sales growth for 2004 to be up 1.0-2.0 percent for Popeyes, flat to up 1.0 percent for Church's and up 2.5-3.5 percent for Cinnabon. New System-wide Openings The Company is anticipating that 315-345 new unit openings will occur in 2004. This figure is comprised of the addition of 170- 180 Popeyes units, 55-65 Church's units, 65-70 Cinnabon units, and 25-30 Seattle's Best Coffee international units. Net new units for 2004 are projected to be 175-215 units as a result of approximately 130-140 unit closings. Commitments AFC is expecting a recovery in the sale of new commitments for future development in 2004. The Company is projecting to sign 550-600 new commitments with Popeyes recording 325-350, Church's with 125-135 and Cinnabon with 100-115. However, the 2004 domestic commitments will be dependent on the timing of the Company's franchise offering circulars and state franchise registrations, which are expected to be executed no later than the end of the first quarter of 2004. The Company will provide financial performance guidance for 2004 after the filing of Quarterly Reports on AFC's Form 10-Q for the first three quarters of 2003. Dick Holbrook, President and COO of AFC Enterprises, stated, "We continue to see a modest recovery in the business as we focus on action-oriented solutions to improve brand performance. We expect this trend to continue into 2004 but have taken a conservative position in our overall operational performance outlook to make sure that our initiatives continue to prove successful, and to allow AFC to return to a more normalized level of business activity once we are able to fully engage in our franchise sales activities." AFC Enterprises, Inc. is the franchisor and operator of 4,077 restaurants, bakeries and cafes as of November 30, 2003, in the United States, Puerto Rico and 35 foreign countries under the brand names Popeyes(R) Chicken & Biscuits, Church's Chicken(TM) and Cinnabon(R), and the franchisor of Seattle's Best Coffee(R) in Hawaii, on military bases and internationally. AFC's primary objective is to be the world's Franchisor of Choice(R) by offering investment opportunities in highly recognizable brands and exceptional franchisee support systems and services. AFC Enterprises had system-wide sales of approximately $2.7 billion in 2002 and can be found on the World Wide Web at http://www.afce.com/ * * * Credit Facility and Current Ratings The Company's outstanding debt under its credit facility agreement, net of investments, at the end of Period 9 of 2003 was approximately $125 million, down from approximately $218 million at the end of 2002 as a result of cash generated from ongoing operations and the sale of its Seattle Coffee Company subsidiary. On August 25, 2003, Standard & Poor's Ratings Services raised the Company's senior secured bank loan ratings to 'B' from 'CCC+' and on August 28, 2003, Moody's Investor Service lowered the Company's secured credit facility rating from Ba2 to B1. AIR CANADA: Monitor Provides Equity Solicitation Process Update --------------------------------------------------------------- Air Canada, which is restructuring under the Companies' Creditors Arrangement Act, said that the Fifteenth Report of the Monitor provided update on further developments relating to the equity solicitation process has been completed by Ernst and Young Inc., and is available at http://www.aircanada.com/ In the Report, the Monitor expresses the view that it is essential for Air Canada's equity plan sponsor selection process to be completed in order for the Company to re-commence critical restructuring initiatives that have been deferred. The Monitor is also of the view that there must be a definitive process and timeline for Trinity Time Investments to respond to the Cerberus Offer. The Monitor concurs with the Company's intention to immediately seek advice and directions of the Court in connection with bringing finality to the equity solicitation process. Air Canada made an application to the Court on December 16, 2003 for an order that the equity plan sponsor selection process be deemed to be completed on December 22, 2003. Subject to the Court's approval, Air Canada on December 22 will report to the Court regarding the material details of the investment proposal received from Cerberus on December 10, 2003, the amendments or improvements proposed by Trinity to the Trinity Agreement, if any, and any other matters relevant to Air Canada's intentions thereto including the date (if later) by which the Board of Air Canada expects to make a final determination in relation to the Cerberus Investment Proposal or any Trinity amendment. AIR CANADA: Justice Farley Approves Trinity Investment Agreement ---------------------------------------------------------------- "The fact that Cerberus delivered a superior proposal outside of the equity solicitation process demonstrates that the equity solicitation process was flawed in that it failed to achieve the objective of maximum value for [Air Canada's] Creditors," Harvey T. Strosberg, Esq., at Sutts Strosberg LLP, in Windsor, Ontario, representing Mizuho International , plc, tells the Court. On behalf of Mizuho International, plc, Mr. Strosberg notes that Ernst & Young Inc., in its report on December 4, 2003, indicated that Cerberus has agreed to submit a final investment proposal to Air Canada by Friday, December 12, 2003. Air Canada advised the CCAA Court that its Board of Directors will consider the Cerberus proposal to determine if it provides superior benefits for the creditors. Mr. Strosberg also notes that the Trinity Agreement itself contemplates that the equity solicitation process was not final or completed. As provided in the Trinity Agreement, nothing in that Agreement will prevent the Board from complying with a Court order to consider, approve, recommend or enter into any agreement, which the Board determines in good faith to be a "Superior Proposal," as defined in the Trinity Agreement. Mizuho believes that the appropriate course of action for the Court is to adjourn the hearing on the approval of the Trinity Investment to December 17, 2003, pending the Board's deliberations and recommendations of Cerberus' Final Proposal. "This is supposed to be an independent, fair and transparent process designed to achieve maximum value for the creditors," Mr. Strosberg says. Mr. Strosberg explains that adjourning the hearing preserves the Trinity Agreement, avoids the payment of any unnecessary break fees, does not delay the process and avoids the potential for appeals from any final decision approving the selection of the equity plan sponsor. Mizuho is a London-based securities company within the Mizuho Financial Group, the world's largest banking and securities institution. Mizuho is a member of the London Stock Exchange. Mizuho holds CND112,000,000 of Air Canada's financial debt. On October 6, 2003, Mizuho entered into an agreement with Air Canada whereby it agreed to restrict its ability to trade the debt it owns. Mizuho agreed to this restriction so that it could play a meaningful role in maximizing unsecured creditor recoveries. Unsecured Creditors' Conditional Support The Ad hoc Unsecured Creditors' Committee supports the approval of the Trinity Agreement on the conditions that: (a) an open, transparent and fair "topping process" be established by the Court and supervised by the Court, and that the Creditors Committee be provided a meaningful opportunity to provide its input to all concerned, including the Air Canada board of directors; and (b) certain material business points in the Trinity Agreement be clarified or modified prior to its incorporation into a plan of arrangement. The Creditors Committee contends that the equity process was closed, unclear, and did not account for the interests of unsecured creditors. The process ignored significant stakeholder input, and may not have obtained the maximum recovery available to Air Canada's stakeholders. In all the circumstances, the Committee asserts that the CCAA Court should supervise a final topping process and provide unsecured creditors and other stakeholders with a meaningful opportunity to provide their input. The CCAA Court should expressly reserve the power to approve the Cerberus offer or any other superior offer. On December 1, 2003, Cerberus delivered the "Additional Materials" to Ernst & Young, Inc. on the express condition that they be disclosed to Air Canada and all stakeholders simultaneously. The next day, Air Canada took the position that the Additional Materials should not be disclosed to anyone. Air Canada subsequently informed the Monitor that it intended to seek an injunction on December 5, 2003. Howard A. Gorman, Esq., at Macleod Dixon LLP, in Toronto, Ontario, tells Mr. Justice Farley that the Creditors Committee learned of this indirectly, and asked Air Canada and the Monitor that it be provided notice. But the Committee was not given notice. On December 4, 2003, the CCAA Court granted a Consent Order at a chambers attendance involving Air Canada, the Monitor, Trinity and Cerberus. The Order recites that a consensus had been reached among the parties as to a procedure to be followed in presenting and considering an "Investment Proposal" which may be a "Superior Proposal" within the meaning of the Trinity Agreement. Mr. Gorman says that the Committee was not consulted regarding the consensus. "Air Canada has advised that, provided that the Trinity Agreement is approved by [the] Court, and provided that it determines that it is obliged to do so under clause 9(4) of the Trinity Agreement, it would submit the Cerberus proposal to its board," Mr. Gorman says. "It is noteworthy that the topping process as contemplated by clause 9(4) does not expressly contemplate stakeholder involvement in determining whether the competing offer is a 'Superior Proposal.' However, nothing prevents the board from complying with any Court order to consider competing offers and nothing restricts the court from empowering other stakeholders to consider offers or participate in any discussions or negotiations with a competing equity sponsor." "Air Canada has given no assurance that it will give the [Committee] a meaningful opportunity to provide its suggestions and views. Based on past experience and the noted position of Air Canada, the [Committee] expects that Air Canada has no intention to give such an opportunity," Mr. Gorman says. Mr. Gorman also notes that clause 9(4) does not provide an end- date for any competing offers or potential enhancement of the Trinity Agreement. Air Canada advised that, provided that the Court approves the Trinity Agreement, and provided that the Cerberus offer constitutes a Superior Proposal, "the company will seek the authorization of this Honourable Court to take further steps in respect of that Superior Proposal, again in accordance with the terms of the Trinity Investment Agreement." Nevertheless, the Creditors Committee fully expects that Air Canada will not give it any opportunity to provide input as to whether the offer constitutes a Superior Proposal. Mr. Gorman also relates that the Creditors Committee attempted to seek clear confirmation that Trinity Time Investments is investing CND650,000,000 for 31.23% of the fully diluted equity of Air Canada Enterprise, and the proposed 2% equity grants to Messrs. Robert Milton and Calin Rovinescu would be made from the 31.23% holding and without any impact on the ownership interests of the unsecured creditors. The Committee also asked Air Canada to clarify this business term: "Corporate governance/control: e.g. (i) all voting rights and board appointments should be consistent with shareholdings of [Air Canada Enterprise] in order to ensure that all shares have comparable liquidity and value; and (ii) any new executive employment compensation, retention and stock option programs should be allocated by the new board." Air Canada hasn't been cooperative. Trinity Urges Court to Approve Investment Trinity Time Investment Limited tells the CCAA Court that its offer is the best there is for the cash-strapped airline. Trinity is a suitable long-term partner for Air Canada. It represents opportunities for Air Canada to exploit synergies with a myriad of premium transportation enterprises. Therefore, the Investment Agreement should be approved. Trinity relates that its CND650,000,000 offer in exchange for 31.23% if the fully diluted equity of Air Canada Enterprises, the holding company of Reorganized Air Canada, facilitates Air Canada's receiving an additional CND450,000,000 by way of a rights offering. Trinity also notes that the Investment Agreement permits Air Canada to use part of the CND650,000,000 to retire a $106,000,000 note to be issued to GE Capital Aviation Services. If, as anticipated, Trinity can reach an agreement with GE Capital, additional equity in Air Canada Enterprises will be available to unsecured creditors. Although the Investment Agreement contains customary anti- solicitation provisions in its favor, Trinity points out that the Investment Agreement affords Air Canada a "fiduciary out" which allows the airline to pursue a Superior Proposal. The Investment Agreement requires Trinity to stand ready to commit its CND650,000,000 over an extended period, during which it is exposed to material risks over which it has no control and which could prevent the transaction from closing. If the sale of an airline is complex, the selection of an equity investor for an airline is even more so. Trinity believes that the Air Canada directors, using their business judgments, are best-placed to assess matters of value -- not just price, including issues as completion risk, regulatory concerns, commitment to the enterprise, ability to work with the stakeholders and synergies with other enterprises. Trinity assures the Court that the Air Canada directors, in choosing it as the plan partner, made the right choice. Trinity attests that Air Canada acted properly and not improvidently in the equity solicitation process. The Process, therefore, should not be assessed in the abstract. It should be remembered that there was a limited time within which to conduct the Process, a limited number of eligible participants, and that it was conducted at a time when Air Canada was insolvent. Late bids are relevant only when in a very limited sense. In certain circumstances, Trinity admits that a late bid may be so much better than the proposed transaction when the price contained in an accepted offer is unreasonably low or the selection process was inadequate. Where that is not the case, late bids are irrelevant. Trinity informs Mr. Justice Farley that the courts in Noevir Canada Ltd. v. 149129 Canada Ltd. [1986] O.J. No. 2639 (H.C.J.) and In re 230 Travel Plaza Inc. [2002] O.J. No. 5006 (S.C.J.) have declined to consider late bids even when they have been "significantly" or "substantially" higher than the offers which were before the court for consideration. Trinity reminds the CCAA Court that Air Canada advised the participants in the Process that what was required of them was a "final and binding" investment agreement. The participants were told of the deadline to submit final offers. They were told that the investment agreement entered would form the basis of a plan of arrangement. Nevertheless, Cerberus chose not to make its best bid by the November 7, 2003 deadline. In other words, the offer Cerberus tendered by the deadline was the most it could. This cannot possibly lead to the conclusion that the Process was inappropriate or that the Investment Agreement was improvident, Trinity asserts. If nothing else, Air Canada was entitled to proceed on the basis that the parties had put their best foot forward, since it was abundantly clear that that is what they were being asked to do. Trinity put a great deal of time, energy and money in the Process. Its interests are worthy of consideration by the CCAA Court. Air Canada Reasserts that Trinity Offer is Best When considering whether to approve a particular transaction, Sean F. Dunphy, Esq., at Stikeman Elliott LLP, in Toronto, Ontario, tells Mr. Justice Farley that in Royal Bank v. Soundair Corp. (1991), 7 C.B.R. (3d) 1 at 6 (Ont. C.A.) and In re Canadian Red Cross Society/Societe Canadienne de la Croix-Rouge (1998), 5 C.B.R. (4th) 299 at 316 (Ont. Gen. Div. [Commercial List]), the Ontario Court of Appeal enunciated these factors: (a) Whether the debtor has made sufficient effort to obtain the best arrangement and has not acted improvidently; (b) Whether the proposed transaction has taken into consideration the interests of all parties; (c) Whether the process by which the offers were obtained was conducted efficaciously and with integrity; and (d) Whether there has been any unfairness in the working out of the process. Mr. Dunphy assures the CCAA Court that Air Canada has made sufficient effort and has not acted improvidently. Air Canada conducted its search for a plan sponsor in a very open, efficient and competitive manner so as to attract the best bid possible. Its Board of Directors has been active, diligent, independent and independently represented. Air Canada's efforts to obtain an equity investor were first made public in June 2003 through various press releases and Monitor's reports. The process was developed by Air Canada with advice from its advisors and in consultation with Ernst & Young Inc., all of whom have a great deal of experience in conducting and supervising -- on the Court's behalf -- such processes. Air Canada went to great lengths to ensure that all potential investors had the opportunity to participate in the process. A list of qualified institutions, investment companies and equity funds was created, and other potential investors were invited to approach the Monitor. Interested bidders were afforded adequate time and assistance to conduct due diligence and submit a letter of intent. Air Canada narrowed the list of potential investors to a group of finalists, who were invited to make presentations to the Board. Two final candidates were invited to conduct further due diligence, to keep the bid process competitive, and thereby protect the best interests of its stakeholders. Mr. Dunphy relates that the Trinity Agreement was selected by the Board in the exercise of its business judgment on the basis that combining it with the arrangement with Deutsche Bank represented the best available transaction, all things considered, resulting in the greatest overall return to the Applicants and their stakeholders generally while providing the best qualitative foundation for continuing to build a comprehensive, stable restructuring plan. To the extent that any balancing of interests is required, the benefits of the Agreements far outweigh any inconvenience, if any, to stakeholders, and substantial economic benefits will accrue to the Applicants and their stakeholders generally. The equity plan sponsor will have a material role in helping to build the equity value of a restructured Air Canada to deliver value to all of Air Canada's stakeholders. That value can be measured in a number of ways -- short term vs. medium to long- term equity value, stability and strength over the long term. The process of weighing the relative merits of competing investment proposals has quintessentially involved an independent Board in applying its business judgment to a complex task. Mr. Dunphy also notes that the Process was conducted in a purposeful manner and with integrity with the supervision and oversight of an independent Board and a court-appointed monitor. The Monitor was substantially involved in the process in both a participatory and oversight role, and has regularly reported on the status and progress of the process to the Court. The Process has been fair. Ernst & Young believes that a proper Solicitation Process has resulted in the selection of Trinity as plan sponsor, without compromising the principle of maximizing stakeholder recovery in the event that another investment proposal is submitted to Air Canada for its consideration. The Monitor recommends the approval of the Trinity Investment. * * * Mr. Justice James Farley approves the Trinity Investment Agreement. As agreed by the parties, Trinity, Air Canada and Cerberus will abide by the provisions of Section 9 (4) of the Agreement should a final investment proposal be submitted by Cerberus. In a news release on December 10, 2003, Air Canada announced that it received a revised proposal from Cerberus at 3:00 p.m. that day. Air Canada did not provide any comment. Mr. Justice Farley also dismisses Mizuho's proposal to adjourn the hearing. "I do not see that it is necessary or desirable in the circumstances to grant an adjournment notwithstanding [Mizuho's] able argument," Mr. Justice Farley says. Mr. Justice Farley explains that, while it is true that the equity solicitation process was approved by the Court in advance, no one cam forward from the start of the process in July 2003 to the selection of Trinity in November 2003 with a complaint that the process was unfair, skewed or otherwise flawed. Mr. Justice Farley states that the Monitor has been, without question, truly independent. Mr. Justice Farley observes that Mizuho, which was quite keen on getting the Trinity Agreement approved by the CCAA Court, had a change of heart. In a November 13, 2003 e-mail by Mizuho, Mr. Justice Farley notes that Mizuho called for the quick approval of the Trinity transaction. In the e-mail, Mizuho stated that: "In our view the [Ad Hoc Unsecured Creditors' Committee] should move quickly to endorse these transactions, removing unhelpful speculation, de-risking the restructuring and locking in the value imbedded in those proposals for unsecured creditors. Timing is of critical importance. The Trinity and Deutsche transactions have now been endorsed by the Board of Air Canada and Air Canada is rightly determined to obtain Court approval s quickly as possible. There is a better chance of Court approval and less risk of the restructuring being destabilised if the [Unsecured Creditors' Committee] endorses the proposals publicly and quickly." Mr. Justice Farley says that Mizuho overlooked the fact that Cerberus, Trinity and the other participants in the solicitation process agreed to be bound by the process originally and as it may have evolved. (Air Canada Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service, Inc., 215/945-7000) AJAX ONE: Fitch Affirms Class IV Fixed-Rate Note Rating at BB+ -------------------------------------------------------------- Fitch Ratings affirms all of the rated notes issued by Ajax One, Limited. The affirmation of these notes is a result of Fitch's annual rating review process. The following rating actions are effective immediately: -- $251,000,000 class I floating-rate notes 'AAA'; -- $33,000,000 class II fixed-rate notes 'A-'; -- $53,000,000 class III fixed-rate notes 'BBB-'; -- $9,000,000 class IV fixed-rate notes 'BB+'. Ajax One, Ltd. is a collateralized debt obligation, which closed Feb. 28, 2001, supported by a managed pool of asset backed securities (ABS; 2.2%), corporates (0.3%), commercial mortgage- backed securities (CMBS; 60.73%) and real estate investment trusts (REITs; 36.8%). Fitch has reviewed the credit quality of the individual assets comprising the portfolio. According to the Nov. 20, 2003 trustee report, the senior par coverage was 149.83% and the mezzanine par coverage was 111.60%, relative to test levels of 137% and 105%, respectively. The CDO has not experienced any significant credit migration or minimal change in weighted average rating factor. Based on the stable performance of the underlying collateral and the overcollateralization tests, Fitch has affirmed all of the rated liabilities issued by Ajax One, Limited. ALLIED DEVICES: Implements Change of Control Pursuant to Plan ------------------------------------------------------------- On September 10, 2003, after notice to all creditors and a formal hearing, U.S. Bankruptcy Judge Melanie L. Cyganowski issued an "Order Confirming Liquidating Plan of Reorganization" in the Bankruptcy Action of Allied Devices Corporation. In conjunction with that Bankruptcy Order, the Company's liabilities, among other things, were paid off and extinguished. The Bankruptcy Order, among other things, implements a change of control whereby Champion Equities, a Utah limited liability company, a Mr. David Roff, of Toronto, Canada, and a group of new investors, are ordered and allowed to take control of Allied Devices. The principal provisions of the Plan, which are authorized and implemented by the Bankruptcy Order, are the following, which is not an exhaustive list: (a) the termination of present management and the present Board of Directors and appoint Mr. David Roff in their place and stead; (b) giving a Utah entity known as Champion Industries, the power and authority to appoint such other directors, in addition to Mr. Roff, as Champion, in its sole discretion deems appropriate; (c) the reverse split of Allied Devices' common capital stock 1-for-30 on the basis of 5,048,782 shares issued and outstanding immediately prior to the Bankruptcy Order; (d) authorizing Champion to amend Allied Devices' Articles of Incorporation and Bylaws to i) effect a quasi-reorganization for accounting purposes, (ii) provide the maximum indemnification or other protections to Allied Devices' officers and directors that is allowed under applicable law, (iii) conform to the provisions of the Plan and the corollary Confirmation Order, (iv) set the authorized stock of the Company, post-reverse split, at fifty million (50,000,000) common capital shares; and (v) take all action necessary and appropriate to carry out the terms of the Plan; (e) authorizing Champion, without solicitation of or notice to shareholders, to issue (i) 2,000,000 post-reverse split shares of Allied Devices' common stock to the new management, and (ii) 4,000,000 post-reverse split shares, legend free, in the sole and unfettered discretion of Champion; (f) the Board of Directors, is authorized, without seeking or obtaining shareholder approval to take any and all actions necessary or appropriate to effectuate amendments to the Certificate of Incorporation and/or Bylaws called for under the Plan and the Board of Directors and officers are authorized to execute, verify, acknowledge, file and publish any and all instruments or documents that may be required to accomplish the same; and (g) the charter shall be amended in conformance with applicable bankruptcy rules and the amended charter or bylaws shall, among other provisions, authorize the issuance of any new shares while simultaneously prohibiting the issuance of nonvoting equity securities to the extent required by section 1123(a)(6) of the United States Bankruptcy Code. After the entry of the Bankruptcy Order, Allied Devices drafted and submitted a form of Restated and Amended Articles of Incorporation to the Secretary of State of Nevada implementing the foregoing, including, but not limited to, other provisions required of the Company under the Bankruptcy Order. As a result of the Bankruptcy Order giving Mr. Roff the power and authority to change the Company's name and direction, Allied Devices decided to change its name from "Allied Devices Corporation" to "Deep Well Oil and Gas, Inc." Accordingly, in the form of Restated and Amended Articles of Incorporation filed with the State of Nevada in October, Allied Devices changed its name to "Deep Well Oil and Gas, Inc." Its form of Restated and Amended Articles of Incorporation was accepted by the Nevada Secretary of State on October 22, 2003, pursuant to provisions of Nevada corporate law allowing the amending of corporate articles on the basis of orders entered by U.S. Bankruptcy Courts. By virtue of the control and influence acquired by Champion Equities and Roff under and pursuant to the Bankruptcy Order, the Bankruptcy Order is deemed to have involved a "change of control" of Allied Devices Corporation. Champion, after the Bankruptcy Order was implemented, has no longer had any control or influence over the Company. This is because Champion was used by Mr. Roff as the vehicle to implement the Liquidating Plan of Reorganization and obtain the Bankruptcy Order adopting the same. The primary basis of the "control" by Roff is stock ownership and also, his current position as the Company's only director and only officer. Prior to the Bankruptcy Order adopting the Liquidating Plan of Reorganization, there were 5,048,782 outstanding shares of common stock. Following the Bankruptcy Order and the acceptance by the Nevada Secretary of State of the form of Restated and Amended Articles which implements the 1-for-30 reverse split of the shares, and rounding up any fractional shares to the nearest share and also, after the issuance of 2 million shares to Mr. Roff as ordered by the Bankruptcy Court, there are now 2,168,292 issued and outstanding shares of the Company's common stock. ALPHASTAR INSURANCE: Case Summary & Largest Unsecured Creditors --------------------------------------------------------------- Lead Debtor: AlphaStar Insurance Group Limited 125 Maiden Lane New York, New York 10038 Bankruptcy Case No.: 03-17903 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- AlphaStar Insurance Services, Inc. 03-17904 Employee & Providers Resources Group, Inc. 03-17905 North American Risk, Inc. 03-17906 Stirling Cooke Brown North American 03-17908 Reinsurance Intermediaries Stirling Cooke New York Insurance Agency 03-17909 Services, Inc. Stirling Cooke North American Holdings, Inc. 03-17910 Stirling Cooke Risk Management Services, Inc. 03-17912 Stirling Cooke Southeast, Inc. 03-17913 Stirling Cooke Texas, Inc. 03-17914 World Trade Services (NJ) 03-17915 World Trade Services (PA) 03-17916 Type of Business: The Debtor, an insurance holding company, with subsidiaries in the UK and the US (New York- based Realm National Insurance accounts for some 60% of total revenues), is primarily focused on the workers' compensation (the majority of its business), occupational accident and health, and property/casualty insurance markets. The firm also provides reinsurance for its products as well as for the products of other insurers. Chapter 11 Petition Date: December 15, 2003 Court: Southern District of New York (Manhattan) Judge: Stuart M. Bernstein Debtors' Counsel: Schuyler G. Carroll, Esq. Arent Fox Kintner Plotkin & Kahn, PLLC 1675 Broadway 25th Floor New York, NY 10019 Tel: 212-484-3955 Fax: 212-484-3990 Total Reported Assets: Greater than $8,000,000 Total Reported Debts: Greater than $1,500,000 Debtors' 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Richard Butler, Int'l Law Firm Contract $1,600,000 Beaufort Hse. 15 St. Botolph St. S. Watson, Finance Director London EC3A 7EE KPMG LLP Trade $300,000 345 Park Ave. Attn: R. Corporasso New York, NY 10054 Concentra Managed Care Service Contract $150,000 Trade Fried Frank Harris et al. Trade $130,300 AON Risk Services Trade $125,000 Torrenzano Group Contract $42,673 Stroock Stoock Lavan, LLP Trade $36,900 Foley & Lardner Trade $23,323 Crawford & Company Contract $19,000 Insurity Contract $10,000 United HealthCare Contract $3,400 AMERICAN HOMEPATIENT: Gets OK to Reject Warrants Held by Lenders ---------------------------------------------------------------- American HomePatient, Inc. (OTC:AHOM) announced that the U.S. Bankruptcy Court for the Middle District of Tennessee issued an opinion ruling in favor of the Company's request to reject the warrants held by the Company's lenders to purchase 3,265,315 shares of the Company's common stock for $.01 per share. As a result of the ruling, the warrants, which represented approximately 20% of the Company's outstanding common stock, are terminated. The lenders now are entitled to an additional unsecured claim of approximately $846,000, which is the judicially determined value of the warrants as of July 30, 2002, the date immediately prior to the Company's bankruptcy filing. As announced previously, the Company was required to issue warrants to the lenders representing 19.999% of the common stock of the Company issued and outstanding as of March 31, 2001, pursuant to the terms of an April 1999 amendment to its then existing credit facility. To fulfill these obligations, warrants to purchase 3,265,315 shares of common stock were issued to the lenders on June 8, 2001. On July 11, 2003, the Company filed a motion with the Bankruptcy Court seeking approval to reject these warrants as executory contracts. Several warrant holders objected to this motion, and a hearing on the matter was held in the Bankruptcy Court on November 20-21, 2003. American HomePatient, Inc. is one of the nation's largest home health care providers with 288 centers in 35 states. Its product and service offerings include respiratory services, infusion therapy, parenteral and enteral nutrition, and medical equipment for patients in their home. American HomePatient, Inc.'s common stock is currently traded in the over-the-counter market or, on application by broker-dealers, in the NASD's Electronic Bulletin Board under the symbol AHOM. AMES DEPARTMENT: Trade Creditors Sell 7 Claims Totaling $1.2MM -------------------------------------------------------------- From July 16 to December 4, 2003, the Clerk of Court recorded transfers of claims against the Ames Department Stores Debtors amounting to $1,205,729, pursuant to Rule 3001(e) of the Federal Rules of Bankruptcy Procedure: Original Claimant Transferee Claim No. Amount ----------------- ---------- --------- ------ Capital Factors, Contrarian Funds, 5679 $165,645 Inc. LLC Corona USA, Inc. Corona Corporation 2516 375,845 Apparel Trading c/o Liquidity Solutions 101,697 Lazarus & Lazarus d/b/a Capital Markets Playgo, LTD Amroc Investments, 6450 26,486 LLC Deja Bleu, LLC Amroc Investments, 6473 245,341 LLC Capital Factors, Contrarian Funds, 5679 33,060 Inc. LLC Springfield Plaza American Enterprise 2553 155,958 Company Ltd Life Insurance Co. Capital Markets Capital Investors, 2360 101,697 as successor to LLC Apparel Trading International Inc. (AMES Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Service, Inc., 215/945-7000) ANC RENTAL: Proposes to Establish Liquidating Trust Under Plan -------------------------------------------------------------- John Chapman, President of ANC Rental Corporation, reports that the Official Committee of Unsecured Creditors currently contemplates that Denis O'Connor, a senior managing director with FTI Consulting, will serve as the Liquidating Trustee. Initial Distribution of Assets As soon as reasonably practicable after the Effective Date, the Liquidating Trustee will: (1) either: (a) pay in full in Cash the Allowed amount of a Secured Claim; (b) satisfy by returning to the Holder of a Secured Claim the Collateral securing the Allowed Secured Claim; (c) pay and satisfy through any combination of subparagraphs (a) and (b) of Section 2.2 of the Plan; or (d) treat the Claim as may otherwise be agreed upon by the Holder of the Secured Claim and the Liquidating Trustee; (2) pay in full all Allowed Ad Valorem Tax Claims from the Ad Valorem Tax Escrow established pursuant to the Sale Order; provided; however, in the event that the Ad Valorem Tax Escrow is insufficient to pay any Allowed Ad Valorem Tax Claim in full, the Liquidating Trustee will pay to the holder of the Allowed Ad Valorem Tax Claim an amount equal to the insufficiency; (3) pay in full all Allowed Priority Claims, if sufficient funds exist to make the distributions as is economically practicable in the judgment of the Liquidating Trustee; (4) transfer a Pro Rata Share of Cash to the Disputed Priority Claims Reserve Trust for the account of each holder of a Disputed Priority Claim; (5) pay each Disputed Priority Claim from the Disputed Priority Claims Reserve Trust on the last Business Day of the first month following the end of the fiscal quarter in which, and to the extent, the Claim becomes an Allowed Claim, if sufficient funds exist to make the distribution economically practicable in the judgment of the Liquidating Trustee; (6) retransfer, when all Disputed Priority Claims were either Allowed and paid, disallowed, or withdrawn, to the Distribution Reserve Account any Remaining Funds from the Disputed Priority Claims Reserve Trust; and (7) distribute all Cash that is not payable to or reserved for the Expense Reserve Account, or any other payments required under the Plan to be made or reserved by the Liquidating Trustee: (a) distribute a Pro Rata Share of Cash to each holder of an Allowed General Unsecured Claim; and (b) transfer a Pro Rata Share of Cash to the Liquidating Trustee, which will deposit the Pro Rata Share in the Disputed General Unsecured Claims Reserve Trust for the account of each holder of a Disputed General Unsecured Claim. (ANC Rental Bankruptcy News, Issue No. 44; Bankruptcy Creditors' Service, Inc., 215/945- 7000) AURORA FOODS: Wants Pay $15 Million of Secured Vendor Claims ------------------------------------------------------------ The Aurora Foods Debtors ask the Court for authority to pay certain prepetition obligations to vendors who are participating in a Vendor Lien Program. Aurora Foods, Inc. believes that $15,000,000 will fully pay off the Vendor Liens. The Debtors propose to pay the claims only if the Vendors have agreed to continue to provide goods and services to them on the terms and conditions, including credit terms, provided by a Vendors' Letter Agreement. According to Eric M. Davis, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Wilmington, Delaware, it is essential for the Debtors to maintain normal trade relations and terms with their vendors throughout the pendency of these Chapter 11 cases in order to continue their operations, preserve enterprise value, and emerge successfully from Chapter 11. Mr. Davis relates that the Debtors experienced a significant decline in their business operations in 2002, which impaired their cash flow and ability to comply with various financial covenants under the Fifth Amended and Restated Credit Agreement, dated as of November 1, 1999, as modified. Before implementing the Vendor Lien Program, the Debtors' vendors were either shortening or eliminating altogether trade credit and many were providing goods and services to the Debtors on a cash-in-advance basis. The Debtors did not have the liquidity to maintain their then-existing business levels and also pay vendors cash upon delivery or within a very few days after delivery. The Vendor Lien Program was implemented to rectify this situation, Mr. Davis explains. The Lenders under the Credit Agreement also recognized the significance of the Debtors' need to maintain established relationships with existing vendors and suppliers and agreed to permit the Debtors to grant a second-priority security interest in connection with the Vendor Lien Program. As evidence of the Lenders' recognition of the need for the Vendor Lien Program, on July 11, 2003, Chase Bank, as administrative agent under the Credit Agreement, and U.S. Bank Trust National Association as the Collateral Agent, with the support of the requisite number of Lenders pursuant to the Credit Agreement, entered into the Inter- creditor Agreement. The purpose of the Inter-creditor Agreement was to set the rights of the Collateral Agent with respect to its second-priority security interest. To implement the Vendor Lien Program, Aurora Foods entered into a Security Agreement, dated as of July 11, 2003, with the U.S. Bank Trust. Under the Security Agreement, Aurora granted to U.S. Bank Trust a second-priority security interest in substantially all of Aurora's personal property for the benefit of the participants in the Vendor Lien Program. The Vendor Lien is second in priority to the lien held by the Lenders under the Credit Agreement. On July 14, 2003, Aurora filed a financing statement with the Delaware Department of State, the state in which Aurora is incorporated, to perfect the security interest created under the Security Agreement. The Debtors believe that the Vendor Lien constitutes a valid and enforceable security interest in the Collateral. Under the Vendor Lien Program, the Vendor Lien was granted to those Vendors who agreed to do business with the Debtors on agreed terms. Each Vendor's agreement to the credit terms was transcribed in the Secured Trade Credit Program Letter Agreement executed by and between Aurora and the Vendor wanting to participate. The Letter Agreement provides, among other things, that: (a) Aurora granted the Vendor Lien to the Collateral Agent for each Vendor that executed a Letter Agreement, in order to secure all amounts due from the Debtors to the Vendor, in connection with all goods and services supplied or provided by the Vendor to the Debtors; (b) If a Vendor receives the benefit of the Vendor Lien, the Vendor is deemed to have agreed to continue to provide its goods and services to the Debtors on the normal and customary trade terms; and (c) The Vendor Lien terminates upon two weeks notice from the Debtors to the Vendor, in which case the termination will be with respect to all goods shipped by the Vendor to Debtors after the termination of the Vendor Lien. Mr. Davis tells the Court that the Debtors intend to provide the Vendors notice of their intention to terminate the Vendor Lien Program since any claim by a Vendor for shipment of goods or the providing of services after the Petition Date would be an administrative claim. Although the Letter Agreement reflecting the Vendor's trade terms became effective as of July 2, 2003, vendors were required to execute a Letter Agreement to become a participant in the Vendor Lien Program. One hundred forty-five Vendors, representing an annual trade expenditure by the Debtors of $310,000,000, joined the Vendor Lien Program. The Vendor Lien Program has helped to alleviate the cash flow problems that the Debtors were experiencing by allowing them to pay Vendors under normal and customary trade terms as compare to forced cash payment on delivery or within several days thereafter, as some of the Vendors were requiring. The Debtors estimate that the total prepetition amount to be paid under the Vendor Lien Program is $15,000,000. The Vendors are oversecured creditors because the total amount of the claims of all Vendors under the Vendor Lien Program is secured by Collateral having a value significantly greater than the amount of the claims. The Debtors, at this juncture, ask the Court to authorize payment of those Vendors who have become oversecured creditors under the Vendor Lien Program. Mr. Davis asserts that the payment of the Vendors will not diminish the Debtors' assets that would otherwise be available to satisfy the claims of general unsecured creditors because the payment affects only the timing of the required payments to these Vendors. The Debtors do not aim to continue the Vendor Lien Program with respect to obligations accrued subsequent to the Petition Date. Mr. Davis asserts that: -- The Vendor Lien held by the Vendors under the Vendor Lien Program constitutes a valid and enforceable security interest in the Debtors' Collateral, and was properly perfected, under the Delaware Uniform Commercial Code; -- The payment is warranted under the "doctrine of necessity" and Section 105(a) of the Bankruptcy Code; and -- The request for payment is supported by Section 549(a). Mr. Davis argues that under Section 9-203 of the Delaware Uniform Commercial Code "a security interest is enforceable against the debtor and third parties with respect to the collateral only if: (a) value has been given; (b) the debtor has rights in the collateral or the power to transfer rights in the collateral to a secured party; and (c) the debtor has authenticated a security agreement that provides a description of the collateral." The Vendors provided sufficient value in return for the security interest by agreeing to continue to provide their goods and services on normal and customary trade terms, as stipulated in each Vendors' Letter Agreement, and by supplying these goods and services. Vendors executed the Letter Agreements from July 2, 2003 through August 27, 2003. Thus, at this point, none of the liens secure preexisting receivables because the pre-existing obligations have been paid in full. Furthermore, the Debtors have rights in their own assets that act as collateral, and the Debtors signed the Security Agreement. The Vendors' interest was properly perfected, Mr. Davis asserts. The Delaware Uniform Commercial Code provides that the correct office for the filing of financing statements covering the Collateral is the office of the Secretary of State of the State of Delaware. U.S. Bank Trust filed a financing statement on July 14, 2003 with the Delaware Secretary of State, thereby perfecting the Vendor Lien. The financing statement covered all of the Debtors' personal property owned on July 14, 2003 or thereafter acquired. The filing of a financing statement in the jurisdiction of incorporation is a permissible method of perfecting a security interest. The Debtors tell Judge Walrath that valid business reasons exist for seeking approval of the Vendor Lien Program. The success and ultimate viability of the Debtors' business depends upon receiving goods and services from its Vendors in the normal course of business. A disruption in the Debtors' relationship with its Vendors would threaten their ability to reorganize and maintain the value of their businesses throughout the pendency of these Chapter 11 cases. (Aurora Foods Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000) AVAYA INC: Former Honeywell CFO Richard Wallman Joins Board ----------------------------------------------------------- Avaya Inc., (NYSE: AV) a leading global provider of communications networks and services for businesses, appointed Richard Wallman to its board of directors. Wallman is the former senior vice president and chief financial officer of Honeywell International Inc. He also served as AlliedSignal Inc.'s chief financial officer from 1995 to 1999, prior to its merger with Honeywell. Wallman currently serves on the boards of directors of Ariba, Inc., Hayes-Lemmerz and Lear Corporation. "Richard Wallman's experience leading finance organizations for some of the world's largest companies will be an asset to Avaya's board," said Don Peterson, chairman and CEO, Avaya. "Richard's proven management ability and strategic view of business operations is an excellent match for Avaya as we continue to help our customers migrate to IP telephony and use it to improve their businesses." Wallman began his career at Ford Motor Company in its finance and product development groups. He held a variety of finance positions with Chrysler Corporation, including assistant controller for sales and marketing, before moving to IBM where he was vice president and controller. Wallman has an M.B.A. from the University of Chicago and a B. S. in electrical engineering from Vanderbilt University. Avaya Inc. (S&P, B+ Corporate Credit Rating) designs, builds and manages communications networks for more than 1 million businesses worldwide, including 90 percent of the FORTUNE 500(R). Focused on businesses large to small, Avaya is a world leader in secure and reliable Internet Protocol (IP) telephony systems and communications software applications and services. Driving the convergence of voice and data communications with business applications -- and distinguished by comprehensive worldwide services -Avaya helps customers leverage existing and new networks to achieve superior business results. For more information visit the Avaya Web site: http://www.avaya.com/ BALDWIN CRANE: Jager Smith Represents Committee as Counsel ---------------------------------------------------------- The Official Committee of Unsecured Creditors of Baldwin Crane and Equipment Corporation seeks authority from the U.S. Bankruptcy Court for the District of Massachusetts to employ Jager Smith PC as its counsel. Jager Smith will provide: a. legal advice with respect to the Committee's responsibilities, powers and duties; b. assistance in the Committee's investigation of the acts, conduct, assets, liabilities and financial condition of the Debtor; c. review of, and representation of the Committee with respect to, pending motions before this Court; d. legal advice with respect to the Debtor's proposed plan of reorganization, the prosecution of avoidance actions or claims against third parties, and any other matters relevant to the case or to the formulation of a plan of reorganization in this case; e. preparation on behalf of the Committee of necessary applications, motions, answers, responses, orders, reports and other legal papers; and f. performance of all other legal services for the Committee which may be necessary and proper herein or under Section 1103 of the Bankruptcy Code. The individuals presently designated to represent the Committee and their rates are: Bruce F. Smith partner $325 per hour Steven C. Reingold associate $105 to $250 per hour Michael J. Fencer associate $105 to $250 per hour Headquartered in Wilmington, Massachusetts, Baldwin Crane and Equipment Corp., a crane-operating business, filed for chapter 11 protection on October 3, 2003 (Bankr. Mass. Case No. 03-18303). Nina M. Parker, Esq., at Parker & Associates represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed estimated debts and assets of over $10 million each. CABLE & WIRELESS: Mirror Image Extends Customers Special Offer -------------------------------------------------------------- In light of Cable & Wireless America's bankruptcy filing and proposed asset sale of its American business units on December 8, 2003, Mirror Image(R) Internet, a leading global e-Business provider of content delivery, streaming media, e-Commerce and Web computing services, announced a special "Satisfaction Guaranteed" promotion for Cable & Wireless customers. Cable & Wireless customers taking advantage of Mirror Image's promotion will benefit from a rapid integration process, 24x7 Web site availability and a near 100 percent cache hit ratio that guarantees seamless Web site performance. Transitioning customers that move content delivery and targeting to Mirror Image's global network or establish Mirror Image as a secure secondary provider to protect against service disruption are ensured business continuity without added investment. For participants who fail to be satisfied, Mirror Image will refund service charges when notified in writing before January 31, 2004. Mirror Image's patented network offers the most nimble, least-intrusive method available for the distribution of content without changing origin site Web code. "With 2003 holiday sales expected to surpass last year's record of $13.7 billion(1), online retailers need the peace of mind that their service providers can handle growing Web site capacity needs," said Bob Hammond, CTO of Mirror Image. "As a well-funded company with a patented architecture designed to handle heavy traffic loads, we encourage Cable & Wireless content delivery customers to take advantage and reap the benefits of our offer." Retailers such as Burton Snowboards, Lillian Vernon, Orvis and PacSun have improved conversion rates, maintained business continuity and enhanced the customer experience by leveraging Mirror Image's patented network to reliably sidestep Internet congestion and successfully deliver content to millions of users worldwide. For more information about the terms of the offer, visit http://www.mirror-image.com/cw/ Mirror Image Internet, a leading global e-Business provider of content delivery, streaming media, e-Commerce and Web computing services, increases the speed, performance and reliability of content, application and transaction delivery. With an enterprise- class infrastructure that combines an optimal mix of connectivity, processing power and storage, Mirror Image helps organizations efficiently serve users by utilizing the power of the Web to increase revenue opportunities, reduce infrastructure costs and improve customer satisfaction. Principally owned by Xcelera Inc. (AMEX:XLA), Mirror Image serves Global 2000 enterprises, service and hosting providers, publishers and e-businesses worldwide through its corporate headquarters in Woburn, Mass. For additional information, visit http://www.mirror-image.com/ CALPINE CORP: Extends Initial Purchaser's Options to January 23 --------------------------------------------------------------- Calpine Corporation (NYSE: CPN), in connection with its offering of $650 million of 4-3/4% Senior Unsecured Convertible Notes Due 2023, has agreed to a one-time extension of the initial purchaser's option to purchase up to $250 million of additional notes. Such option, to the extent not previously exercised, will expire on January 23, 2004. The 4-3/4% Senior Unsecured Convertible Notes Due 2023 were offered in a private placement under Rule 144A, have not been and will not be registered under the Securities Act of 1933, and may not be offered in the United States absent registration or an applicable exemption from registration requirements. Calpine (S&P, CCC+ Senior Unsecured Convertible Note and B Second Priority Senior Secured Note Ratings, Negative Outlook) is a fully integrated power company that owns and operates electricity generating facilities and natural gas reserves. The company generates power at plants it owns or leases in 21 states in the United States, three provinces in Canada and in the United Kingdom. Calpine also owns nearly 900 billion cubic feet equivalent of natural gas reserves, Calpine focuses its marketing and sales activities on securing power contracts with load-serving entities. The company has in-depth expertise in every aspect of power generation from development through design, engineering and construction management, into operations, fuel supply and power marketing. Founded in 1984, Calpine is publicly traded on the New York Stock Exchange under the symbol CPN. For more information about Calpine, visit http://www.calpine.com/ CHESAPEAKE ENERGY: Declares Common and Preferred Share Dividends ---------------------------------------------------------------- Chesapeake Energy Corporation's (NYSE: CHK) its Board of Directors has declared a $0.035 per share quarterly dividend that will be paid on January 15, 2004 to common shareholders of record on January 2, 2004. Chesapeake has approximately 217 million common shares outstanding. Chesapeake's Board has also declared a quarterly cash dividend on Chesapeake's 6.75% Cumulative Convertible Preferred Stock, par value $.01. The dividend for the 6.75% preferred stock is payable on February 17, 2004 to preferred shareholders of record on February 2, 2004 at the quarterly rate of $0.84375 per share. Chesapeake has 2.998 million shares of 6.75% preferred stock outstanding with a liquidation value of $150 million. Chesapeake's Board has also declared a quarterly cash dividend on Chesapeake's 5.0% Cumulative Convertible Preferred Stock, par value $.01. The dividend for the 5.0% preferred stock is payable on February 17, 2004 to preferred shareholders of record on February 2, 2004 at the rate of $1.208 per share. Chesapeake has 1.725 million shares of 5.0% preferred stock outstanding with a liquidation value of $172.5 million. In addition, Chesapeake's Board has declared a quarterly cash dividend on Chesapeake's 6.0% Cumulative Convertible Preferred Stock, par value $.01. The dividend for the 6.0% preferred stock is payable on March 15, 2004 to preferred shareholders of record on March 1, 2004 at the quarterly rate of $0.75 per share. Chesapeake has 4.6 million shares of 6% preferred stock outstanding with a liquidation value of $230 million. Chesapeake Energy Corporation (Fitch, BB- Senior Note and B Preferred Share Ratings, Positive) is one of the six largest independent natural gas producers in the U.S. Headquartered in Oklahoma City, the company's operations are focused on exploratory and developmental drilling and producing property acquisitions in the Mid-Continent region of the United States. CHESAPEAKE ENERGY: Provides Early Results of Exchange Offer ----------------------------------------------------------- Chesapeake Energy Corporation (NYSE: CHK) announced that pursuant to its previously announced exchange offer for its 8.125% Senior Notes due April 1, 2011 (CUSIP # 165167AS6), it has received valid tenders of approximately $377.1 million aggregate principal amount of Notes as of the early participation date. Approximately $125.2 million aggregate principal amount of Notes have been tendered in exchange for new 7.75% Senior Notes due 2015 and approximately $251.8 million aggregate principal amount of Notes have been tendered in exchange for new 6.875% Senior Notes due 2016. Holders who validly tendered their Notes by 5:00 p.m., New York City time, on December 12, 2003, the early participation date, will receive, in addition to new notes, $10.00 in cash per $1,000 principal amount of Notes validly tendered and accepted for exchange. Notes tendered pursuant to the Offer may no longer be withdrawn. The Offer will remain open until 12:00 midnight, New York City time, on December 29, 2003, unless extended. Payment for all Notes validly tendered and accepted for payment is expected to be made on December 31, 2003. The terms of the Offer are described in the Company's Offer to Exchange dated December 1, 2003, copies of which may be obtained from D.F. King & Co., Inc., the information agent for the Offer, at (800) 431-9633 (U.S. toll-free) and (212) 269-5550 (collect). Banc of America Securities LLC, Deutsche Bank Securities and Lehman Brothers are the joint lead dealer managers in connection with the Offer. Questions regarding the Offer may be directed to Banc of America Securities LLC, High Yield Special Products, at 888-292-0070 (US toll-free) and 704-388-4813 (collect), Deutsche Bank Securities, High Yield Capital Markets, 212-250-7466 (collect) or Lehman Brothers, 800-438-3242 (U.S. toll-free) and 212-528-7581 (collect). Chesapeake Energy Corporation (Fitch, BB- Senior Note and B Preferred Share Ratings, Positive) is one of the six largest independent natural gas producers in the U.S. Headquartered in Oklahoma City, the company's operations are focused on exploratory and developmental drilling and producing property acquisitions in the Mid-Continent region of the United States. COVANTA ENERGY: Plan-Filing Exclusivity Intact Until February 23 ---------------------------------------------------------------- U.S. Bankruptcy Court Judge Blackshear extends the Covanta Energy Debtors' exclusive periods to file a plan through and including February 23, 2004; and to solicit acceptances of that plan through and including March 24, 2004. (Covanta Bankruptcy News, Issue No. 43; Bankruptcy Creditors' Service, Inc., 215/945-7000) COX TECHNOLOGIES: Enters Pact to Sell Assets to Sensitech Inc. -------------------------------------------------------------- On December 12, 2003, Cox Technologies, Inc. (COXT.OB) entered into an Asset Purchase Agreement with Sensitech Inc., and its wholly owned subsidiary Cox Acquisition Corp., pursuant to which Sensitech will acquire substantially all the assets and business of Cox Technologies. Subject to the terms and conditions of the Asset Purchase Agreement, Sensitech will pay approximately $10,532,000 to Cox Technologies in exchange for substantially all of the assets of Cox Technologies exclusive of the Vitsab product line, cash and certain furniture and equipment. Of the $10,532,000 purchase price $10,240,000 is payable in cash with the remainder being paid through the assumption of an estimated $292,000 in assumed payables. The purchase price will be adjusted based on changes in the amount of receivables, inventory, payables, product claims and customer commitments. The sale is subject to approval by the Cox Technologies shareholders. Subject to receipt of shareholder approval and satisfaction of other closing conditions contained in the Asset Purchase Agreement, it is anticipated that the sale will be consummated in the first quarter of 2004. In connection with the negotiation of the asset sale, Cox Technologies has agreed to continue manufacturing products for Sensitech during a transition period to end no later than June 1, 2004. After the closing of the asset sale and following expiration of those manufacturing obligations, and subject to approval by its shareholders, Cox Technologies will wind up its operating business, effect a complete liquidation and dissolution of the Company, and distribute any remaining cash to its shareholders. Based upon receipt of the purchase price for the assets by Cox Technologies, the current level of cash and other limited assets of Cox Technologies that will not be transferred to Sensitech in the sale, and the estimated costs of liquidation, it is anticipated that the aggregate distributions payable to the Cox Technologies shareholders in the dissolution process will be between $.15 and $.19 per share. It is expected that the liquidation and final distribution to Cox Technologies shareholders will be completed during the third or fourth calendar quarter of 2004. Brian D. Fletcher, Co-Chief Executive Officer of Cox Technologies stated, "We are committed to continuing to serve the needs of our loyal customers until the consummation of the transaction, as well as supporting Sensitech after the closing date to ensure a smooth transition for all of our customers." Eric B. Schultz, Chairman and Chief Executive Officer of Sensitech stated, "We have great respect and admiration for Cox Technologies, and we look forward to continuing Cox's tradition of excellent service to their customers in the future." Cox Technologies is primarily engaged in the business of producing and distributing graphic and electronic transit temperature recording instruments, both domestically and internationally. These temperature recorders are marketed under the trade name Cox Recorders and produce a record that is documentary proof of temperature conditions. The Company also produces and markets Vitsab "smart label" technology. Sensitech is a leading provider of cold chain monitoring, management and information solutions serving the worldwide perishable product supply chain. The company markets and sells its services to a broad range of customers in the food and pharmaceutical industries who are committed to protecting the freshness, integrity and efficacy of their temperature-sensitive products. The company has been named three times to the Deloitte and Touche Technology Fast 500 and twice to the Inc. 500. Sensitech is headquartered in Beverly, Massachusetts, and has offices in Redmond, Washington, Fresno, California, and Calgary, Alberta. At July 31, 2003, Cox Technologies' balance sheet shows a total shareholders' equity deficit of about $1.2 million. CPT HOLDINGS: Case Summary & 7 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: CPT Holdings, Inc. 41 West Putnam Avenue 2nd Floor Greenwich, Connecticut 06830 Bankruptcy Case No.: 03-51629 Type of Business: The Debtor produces high quality lightweight structural steel shapes in the United States. J&L Structural, Inc., is the indirect operating subsidiary of the company. Chapter 11 Petition Date: December 11, 2003 Court: District of Connecticut (Bridgeport) Judge: Alan H.W. Shiff Debtor's Counsel: Melissa Zelen Neier, Esq. Ivey, Barnum, and O'Mara 170 Mason Street P.O. Box 1689 Greenwich, CT 06836 Tel: 203-661-6000 Total Assets: $24,897 Total Debts: $24,007,122 Debtor's 7 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Trinity Investment Corporation Financing under $17,318,720 41 West Putnam Avenue Loan Agreement 2nd Floor dated April 1, 1995 Greenwich, CT 06830 and accrued interest William Pineo, Chapter 7 Litigation claims $3,000,000 Trustee in the Bankruptcy in the adversary Estate of J&J Structural, Inc. proceeding. c/o Robert O. Lamol William Pineo, Trustee 960 Penn Avenue, Suite 1200 v. CPT Hldings Inc. et al. Pittsburgh, PA 15222 No. 02-2360 (BM) U.S.B.C. W.D. PA Trinity Investment Corporation Line of Credit, Feb. $2,395,530 41 West Putcam Avenue 1, 1996 and accrued 2nd Floor interest Greenwich CT 06830 Sunderland Industrial Holdings Deferred Purchase $1,045,769 Corporation Money Noted dated 103 Foulk Road, Suite 202 March 15, 1995 and Wilmington, DE 19803 accrued interest NYC Department of Finance Penalty $1,600 Internal Revenue Service Penalty $1,500 NYS Corporation Tax Penalty $1,234 CRANSTON, RI: Fitch Plucks BB- Bond Rating from Watch Neg. ---------------------------------------------------------- Fitch Ratings removes the Rating Watch Negative on Cranston, RI's 'BB-' general obligation bond rating and assigns a Positive Rating Outlook. The rating action affects approximately $75 million in outstanding GO bonds. Poor budgeting, planning, and disclosure, as well as a large unfunded pension liability, has weakened Cranston's financial position over the last three years, leading to a $1.4 million general fund cumulative deficit, as of June 30, 2002. Fitch assigned the Negative Rating Watch in December 2002 due to ongoing delays by state and city officials to stabilize the city's rapidly declining financial position, and concerns the city might default on its bond anticipation notes due in February 2003. The removal of Rating Watch Negative and assignment of Positive Rating Outlook reflects the fact that these notes were subsequently repaid on time after the passage of the Cranston Qualified Bond Act, and a fiscal recovery plan is in the process of being implemented, that is likely to improve the city's long- term credit. Under the plan, a finance review board was created comprised of city and state officials and chaired by the Auditor General. The finance review board monitors city finances through monthly and quarterly reports mandated for all cities under a new state law. Another pertinent aspect of the plan is the creation of a supplemental property tax to eliminate accumulated deficits in the internal service funds. The tax was levied in January 2003 and the city reports receiving $12.6 million by the close of fiscal June 2003 year-end (not yet audited). The tax will exist in perpetuity. Finally the city has adopted a plan to fund over the next 40 years its police and fire pension program. As of November 2003, the pensions were only 8.2% funded. The city has also eliminated recurring costs associated with a 1996 ordinance that increased retirees' annual benefits whenever increased benefits were negotiated by current employees. The city currently has $27.9 million outstanding in qualified BANs issued under the Cranston Qualified Bond Act which was signed into law by the governor on Feb. 5, 2003. Passage of the act was critical in allowing Cranston to rollover its BANs that came due Feb. 12, 2003. The act permits the city to apply for approval to issue qualified GO bonds, which are payable directly by the state treasurer from certain state aid moneys otherwise payable to the city. The city's full faith and credit also would be pledged to the qualified debt. The BANs are rated 'F1+' by Fitch, and the city has already applied for a qualified bond issue expected in January 2004. DDI CORP: Issues 23.7M New Common Stock Shares Pursuant to Plan --------------------------------------------------------------- DDi Corp. (OTC Bulletin Board: DDICQ), a Delaware corporation, announced that, in connection with its emergence from the Chapter 11 process, DDi Corp. has issued 23,750,000 shares of new common stock to be exchanged for its pre-reorganization common stock and certain pre-reorganization debt securities, in each case, as described in the Company's Plan of Reorganization, which was overwhelmingly approved by creditors and confirmed by the United States Bankruptcy Court for the Southern District of New York on December 2, 2003. In addition, the Company has reserved for issuance 1,250,000 shares of New Common Stock to be issued as restricted stock as part of the Company's long-term management equity incentive plan. These issuances represent a five-fold increase in the number of shares of New Common Stock described in the Plan of Reorganization; all security holders entitled under the Plan of Reorganization to shares of the Company's New Common Stock will receive a pro rata increase in the number of shares of the Company's New Common Stock to be received in exchange for their pre-reorganization securities as a result of the increase in the number of shares of the Company's New Common Stock. DDi. Corp. also issued 1,000,000 shares of preferred stock in connection with the restructuring. As a result of these issuances, the shares of the Company's New Common Stock and preferred stock will be distributed as follows: (1) the holders of the Company's pre-reorganization 5.25% convertible subordinated notes will receive 108.1 shares of the Company's New Common Stock and 5.00 shares of the Company's preferred stock for each $1,000 face amount of such 5.25% convertible subordinated notes, (2) the holders of the Company's pre-reorganization 6.25% convertible subordinated notes will receive 126.9 shares of the Company's New Common Stock and 5.00 shares of the Company's preferred stock for each $1,000 face amount of such 6.25% convertible subordinated notes; and (3) the holders of the Company's pre-reorganization common stock will receive .00504783 shares of New Common Stock for each share of the Company's pre-reorganization common stock. No fractional shares of the Company's New Common Stock or preferred stock will be issued in connection with these distributions. DDi is a leading provider of time-critical, technologically advanced, electronics manufacturing services. Headquartered in Anaheim, California, DDi and its subsidiaries offer fabrication and assembly services to customers on a global basis, from its facilities located across North America and in England. DELTA FINANCIAL: Prices $470 Million Asset-Backed Securitization ---------------------------------------------------------------- Delta Financial Corporation (Amex: DFC), a specialty consumer finance company that originates, securitizes and sells non- conforming mortgage loans, has priced a $470 million public offering of residential closed-end home equity loan-backed certificates through its subsidiary, Renaissance Mortgage Acceptance Corp. The securitization was lead-managed by RBS Greenwich Capital Markets, Inc. and co-managed by Citicorp Global Markets. The Renaissance Home Equity Loan Trust 2003-4 is a senior subordinate structure, with fully funded over-collateralization (credit enhancement) at closing. Standard & Poor's, Fitch IBCA, and Moody's Investors Service, Inc. rated the securities. The Company anticipates utilizing a pre-funding feature and delivering - and recognizing revenues and expenses on - at least 75 percent of the mortgage loans to the securitization trust by December 31, 2003. The Company further anticipates that it will deliver the remaining mortgage loans from the fourth quarter securitization in January 2004 as new loans are originated, with those revenues and expenses recognized in its 2004 first quarter results. In addition, Delta will recognize revenues and expenses in the fourth quarter on $90 million of mortgage loans that it delivered in October 2003 relating to the third quarter's securitization. Hugh Miller, President and Chief Executive Officer said, "We used a similar structure in the fourth quarter securitization as we did in our third quarter securitization. Furthermore, we have had an excellent year thus far and feel comfortable with our previously stated earnings guidance estimate for 2003, as stated in our press release dated October 30, 2003." Founded in 1982, Delta Financial Corporation is a Woodbury, New York-based specialty consumer finance company that originates, securitizes and sells non-conforming mortgage loans. Delta's loans are primarily secured by first mortgages on one- to four-family residential properties. Delta originates home equity loans primarily in 26 states. Loans are originated through a network of approximately 1,500 independent brokers and the Company's retail offices. Since 1991, Delta has sold approximately $9.3 billion of its mortgages through 38 securitizations. * * * In February 2001, DFC proposed an exchange offer in order to deal with its financial difficulties at that time. Three of DFC's bondholders - among the most prominent institutional investors in the marketplace, who together held the majority of DFC's bonds - hired a leading financial advisor with specific expertise in these situations, to advise them with regard to protecting their investment. The bondholders' expert reviewed DFC's financials, discussed the possibility of DFC filing for bankruptcy or attempting a workout, and ultimately recommended that the bondholders enter into the proposed exchange offer with DFC, as a preferable alternative to forcing DFC into bankruptcy. DFC provided full disclosure in the exchange offer prospectus filed with the SEC and the assets were valued as accurately as possible by Delta as of the date Delta estimated their value, using the same assumptions that it used to value other similar assets it owned. Following the overwhelming acceptance of the exchange offer, intervening market conditions which were out of the Company's control - including the events of September 11th, a precipitous drop in interest rates (to levels not seen in over 40 years), recession, threat of war and other geopolitical risks - dramatically lowered the value of interest-rate and credit- sensitive assets (like those transferred to the LLC in the exchange offer). In response, in November 2001, DFC lowered its estimates of the value of the excess cashflow certificates it held, as it was required to do in accordance with generally accepted accounting principals. Similar write-downs were taken by many of DFC's competitors for the same reason and, indeed, by countless other companies outside our sector which also held interest-rate and credit- sensitive assets, to account for these virtually unprecedented events. DII INDUSTRIES: Files Prepack. Chapter 11 Petition in Pittsburgh ---------------------------------------------------------------- The national law firm of Kirkpatrick & Lockhart LLP filed pre-packaged Chapter 11 cases on behalf of DII Industries, LLC (formerly known as Dresser Industries, Inc.); Kellogg Brown & Root, Inc., and certain affiliates -- all subsidiaries of Halliburton Company. The Chapter 11 filings were made in the United States Bankruptcy Court for the Western District of Pennsylvania and are intended to resolve all present and future asbestos and silica-related personal injury claims against the Chapter 11 debtors and all Halliburton affiliates. For further details of the filing please see the press release of Halliburton Company at http://www.halliburton.com/ Jeffrey N. Rich of K&L's New York office and Michael G. Zanic of its Pittsburgh office represent the debtors and were assisted by lawyers from each of K&L's 10 offices nationwide. Kirkpatrick & Lockhart LLP is a national law firm with more than 700 lawyers in Boston, Dallas, Harrisburg, Los Angeles, Miami, Newark, New York, Pittsburgh, San Francisco and Washington. K&L serves a dynamic and growing clientele in regional, national and international markets, currently representing over half of the Fortune 100. The firm's practice embraces three major areas -- litigation, corporate and regulatory -- and related fields. DII INDUSTRIES: Case Summary & 30 Largest Unsecured Creditors ------------------------------------------------------------- Lead Debtor: DII Industries, LLC 1401 McKinney Street Suite 2400 Houston, TX 77010 Bankruptcy Case No.: 03-35593 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Mid-Valley, Inc. 03-35592 Kellogg Brown & Root, Inc. 03-35595 KBR Technical Services, Inc. 03-35596 Kellogg Brown & Root Engineering Corporation 03-35597 Kellogg Brown & Root International, Inc. 03-35599 Kellogg Brown & Root International, Inc. 03-35600 BPM Minerals, LLC 03-35601 Type of Business: Providing engineering and construction services for defense and other governmental contracts. Chapter 11 Petition Date: December 16, 2003 Court: Western District of Pennsylvania (Pittsburgh) Debtors' Counsel: Jeffrey N. Rich, Esq. Kirkpatrick & Lockhart LLP 599 Lexington Avenue New York, NY 10022-6030 Tel: 212-536-4097 Estimated Assets: Estimated Debts: ----------------- ---------------- DII Industries, LLC more than $100 M more than $100 M Mid-Valley, Inc. $10 M to $50 M $1 M to $10 M Kellogg Brown & Root, more than $100 M more than $100 M Inc. KBR Technical Services, $10 M to $50 M $10 M to $50 M Inc. Kellogg Brown & Root $100,001 to $500,000 $0 to $50,000 Engineering Corporation Kellogg Brown & Root $50 M to $100 M $50 M to $100 M International, Inc. Kellogg Brown & Root $10 M to $50 M $1 M to $10 M International, Inc. BPM Minerals, LLC $10 M to $50 M $1 M to $10 M Debtors' 30 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Diane Lester Asbestos Personal $2,883,196 Law Offices of Peter G. Injury Settlement Angelos, P.C. or Verdict One Charles Center 100 North Charles Street, 22nd Floor Baltimore, MD 21201 Antonio Colella Asbestos Personal $1,535,948 Law Offices of Peter G. Injury Settlement Angelos, P.C. or Verdict One Charles Center 100 North Charles Street, 22nd Floor Baltimore, MD 21201 Leroy F. Lane, Sr. Asbestos Personal $1,288,332 Law Offices of Peter G. Injury Settlement One Charles Center or Verdict 100 North Charles Street, 22nd Floor Baltimore, MD 21201 Charles J. Habig Jr. Asbestos Personal $1,274,422 Law Offices of Peter G. Injury Settlement One Charles Center or Verdict 100 North Charles Street, 22nd Floor Baltimore, MD 21201 L.D. Easterwood Asbestos Personal $829,170 Reaud, Morgan & Quinn, Inc. Injury Settlement 801 Laurel Beaumont, TX 77701 Dock Shaheen Farris Asbestos Personal $829,170 Reaud, Morgan & Quinn, Inc. Injury Settlement 801 Laurel or Verdict Beaumont, TX 77701 Ralph S. Knopf Asbestos Personal $829,170 Reaud, Morgan & Quinn, Inc. Injury Settlement 801 Laurel or Verdict Beaumont, TX 77701 Cornelius C. Sellers Asbestos Personal $829,170 Reaud, Morgan & Quinn, Inc. Injury Settlement 801 Laurel or Verdict Beaumont, TX 77701 John E. Shelton Asbestos Personal $749,250 Waters & Kraus Injury Settlement 3219 McKinney Avenue or Verdict Dallas, TX 75204 Oscar Kelley Bell, Sr. Asbestos Personal $666,000 Reaud, Morgan & Quinn, Inc. Injury Settlement 801 Laurel or Verdict Beaumont, TX 77701 William Harold Benford Asbestos Personal $666,000 Reaud, Morgan & Quinn, Inc. Injury Settlement 801 Laurel or Verdict Beaumont, TX 77701 Samuel S. Freeman Asbestos Personal $666,000 Reaud, Morgan & Quinn, Inc. Injury Settlement 801 Laurel or Verdict Beaumont, TX 77701 Elbert Harris Asbestos Personal $666,000 Reaud, Morgan & Quinn, Inc. Injury Settlement 801 Laurel or Verdict Beaumont, TX 77701 Noah Harris Johnson Asbestos Personal $666,000 Reaud, Morgan & Quinn, Inc. Injury Settlement 801 Laurel or Verdict Beaumont, TX 77701 Jimmy Clyde Dunbar Asbestos Personal $663,669 Reaud, Morgan & Quinn, Inc. Injury Settlement 801 Laurel or Verdict Beaumont, TX 77701 Avery A. Parsons Asbestos Personal $663,669 Reaud, Morgan & Quinn, Inc. Injury Settlement 801 Laurel or Verdict Beaumont, TX 77701 Herrel W. Kilough Asbestos Personal $616,050 Waters & Kraus Injury Settlement 3219 McKinney Avenue or Verdict Dallas, TX 75204 Charles M. Cargilc Asbestos Personal $609,912 Law Offices of Peter G. Injury Settlement One Charles Center or Verdict 100 North Charles Street, 22nd Floor Baltimore, MD 21201 Carlos Martinez Asbestos Personal $600,000 Kazan, McClain, Edises, Injury Settlement Abrams, Fernandez & Farisse or Verdict 171 Twelfth Street Suite 300 Oakland, CA 94607 Ronald Simmons Asbestos Personal $600,000 Kazan, McClain, Edises, Injury Settlement Abrams, Fernandez & Farisse or Verdict 171 Twelfth Street Suite 300 Oakland, CA 94607 J.B. Gentry Asbestos Personal $500,000 Kazan, McClain, Edises, Injury Settlement Abrams, Fernandez & Farisse or Verdict 171 Twelfth Street Suite 300 Oakland, CA 94607 Manuel Jimenez Asbestos Personal $500,000 Kazan, McClain, Edises, Injury Settlement Abrams, Fernandez & Farisse or Verdict 171 Twelfth Street Suite 300 Oakland, CA 94607 Patricia McNally Asbestos Personal $500,000 Kazan, McClain, Edises, Injury Settlement Abrams, Fernandez & Farisse or Verdict 171 Twelfth Street Suite 300 Oakland, CA 94607 Vincent DePalma Asbestos Personal $499,500 Kneske & Reeves, LLP Injury Settlement 6301 Gaston Ave, Suite 735 or Verdict Dallas, TX 75214 James Foster Asbestos Personal $499,500 Kneske & Reeves, LLP Injury Settlement 6301 Gaston Ave, Suite 735 or Verdict Dallas, TX 75214 Percy Jackson Asbestos Personal $499,500 Kneske & Reeves, LLP Injury Settlement 6301 Gaston Ave, Suite 735 or Verdict Dallas, TX 75214 Wayne Simpson Asbestos Personal $499,500 Kneske & Reeves, LLP Injury Settlement 6301 Gaston Ave, Suite 735 or Verdict Dallas, TX 75214 James R. Terry Asbestos Personal $499,500 Kneske & Reeves, LLP Injury Settlement 6301 Gaston Ave, Suite 735 or Verdict Dallas, TX 75214 Leonard Toebe Asbestos Personal $499,500 Kneske & Reeves, LLP Injury Settlement 6301 Gaston Ave, Suite 735 or Verdict Dallas, TX 75214 Gary Vaughn Asbestos Personal $499,500 Kneske & Reeves, LLP Injury Settlement 6301 Gaston Ave, Suite 735 or Verdict Dallas, TX 75214 DII INDUSTRIES: Halliburton Completes Debt Exchange Offer --------------------------------------------------------- Halliburton (NYSE: HAL) completed its offer to issue its new 7.6% debentures due 2096 in exchange for a like amount of 7.60% debentures due 2096 of its subsidiary, DII Industries, LLC. The offer expired at 5:00 p.m., New York City time, on December 12, 2003. Valid and unrevoked tenders made prior to the expiration date in an aggregate principal amount of $294,283,000 (approximately 98% of the outstanding DII Industries debentures) have been accepted and become irrevocable. Halliburton will issue a like amount of its 7.6% debentures to the holders who properly tendered their DII Industries debentures prior to the expiration date. Prior to the closing of the exchange offer, Halliburton executed a supplemental indenture to the indenture governing the DII Industries debentures whereby it assumed as a co-obligor with DII Industries all obligations under the indenture. The exchange offer was related to DII Industries' solicitation of consents to amend the indenture governing the DII Industries debentures. As previously announced, as of 5:00 p.m., New York City time, on October 24, 2003, the consent payment deadline, DII Industries had received consents from holders of more than 95% of the principal amount of outstanding DII Industries debentures. These consents have been accepted and become irrevocable, and a supplemental indenture incorporating the proposed amendments has been executed. The amendments to the indenture governing the DII Industries debentures have taken effect as of the time of the closing of the exchange offer. Halliburton will pay the required consent payment to holders who tendered their DII Industries debentures prior to the consent payment deadline. The exchange offer and consent solicitation are subject to the terms and conditions of the Offering Memorandum and Consent Solicitation Statement dated October 9, 2003, as amended and supplemented. This announcement amends and supplements the Offering Memorandum and the related letter of transmittal with respect to the matters described above. All other terms and conditions of the Offering Memorandum and the related letter of transmittal remain in full force and effect. The debentures being offered by the company have not been registered under the United States federal or state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. Halliburton, founded in 1919, is one of the world's largest providers of products and services to the petroleum and energy industries. The company serves its customers with a broad range of products and services through its Energy Services and Engineering and Construction Groups. The company's World Wide Web site can be accessed at http://www.halliburton.com/ DILLARD'S INC: Increases Revolving Credit Facility to $1 Billion ---------------------------------------------------------------- Dillard's, Inc. (NYSE:DDS) (S&P, BB Corporate Credit Rating, Negative) has amended and extended its senior secured revolving credit facility. The amendments include an increase to the amount of the facility to $1 billion from the previous amount of $400 million. ($835 million of the facility is available immediately, with an additional $165 million becoming available immediately upon the Preferred Security redemption discussed below). In addition, the facility has been extended to provide an additional five years of term and will now expire in December 2008. The amended facility is available to the Company for general corporate purposes including, among other uses, working capital financing, the issuance of letters of credit, capital expenditures, and, subject to certain restrictions, the repayment of existing indebtedness. The Company has entered into an agreement to redeem its $331.6 million Preferred Securities effective February 2, 2004. This agreement is subject to certain contingencies. The Company anticipates that redemption will occur on February 2, 2004. This new credit facility as well as other financing resources will provide Dillard's ample liquidity to redeem the Preferred Securities. There are no financial covenant requirements under the amended credit facility provided that availability under the agreement exceeds $100 million. The credit facility was arranged by JPMorgan Chase Bank and Fleet Securities, Inc. acting as joint lead arrangers. Dillard's, Inc. is one of the nation's largest fashion apparel and home furnishing retailers. The Company's 330 stores operate with one name, Dillard's, and span 29 states. Dillard's stores offer a broad selection of merchandise, including products sourced and marketed under Dillard's exclusive brand names. ECLICKMD: Court Confirms Reorganization Plan Effective Dec. 15 -------------------------------------------------------------- eClickMD, Inc. (OTCBB:ECMDQ), an Internet-based document exchange and eSignature company for the home healthcare industry, announced the confirmation of its Reorganization Plan effective December 15, 2003. eClickMD filed a voluntarily petition under Chapter 11 of the Bankruptcy Code on May 13, 2003 as part of its financial strategy to ease the company's debt service associated with years of high- cost technology development. The company used the period of reorganization to streamline its operational model, add a highly experienced senior management core team, and develop a national network of 45 independent sales representatives, which it expects to grow in number to over 100 in 2004. "We are confident that by strategically restructuring the company we can now get on track for rapid growth," said Robert Woodrow, President and COO of eClickMD. "What's more, today more than ever our technologies deliver the improved workflow efficiency, higher productivity, risk protection, and cost savings that Home Healthcare Agencies (HHA) and Durable Medical Equipment (DME) Providers are looking for to stay viable in today's increasingly challenging healthcare industry." eClickMD currently delivers three HIPAA (Health Insurance Portability and Accountability Act) ready, web-based document exchange and eSignature applications, which are in the pre-grant patent stage: SecureMD, SecurePRO, and SecureCMN. These sophisticated technologies give providers a centralized, easy-to- use, and secure online application, where they can send, receive, sign, file, track, and manage the complete spectrum of patient care documents - without the hassles, risks, and high cost of mailing, faxing, and hand delivering documents. To use the applications, doctors, HHAs, and DMEs simply sign up at the company's Web site at http://www.eclickmd.com/ The applications are capable of integrating with all healthcare software systems used today. Although the U.S. Congress gave eSignature and electronic records the same legal effect and enforceability as paper documents on October 1, 2000, the home healthcare industry has been slow to adopt the automated functionality. According to Woodrow: "We believe that wide-spread adoption will take place when a complete solution that allows every home healthcare provider to send every type of patient care document is available - and that's exactly what eClickMD offers today. We're already feeling the traction from our new marketing and sales activities. Several leading HHAs and DMEs are using the services today and the initial opportunity in these two markets is significant, in excess of 7,000 HHAs and 12,000 DMEs. In addition to Robert Woodrow - President and COO, Neil Burley - CFO and Eugene Fry - VP of Strategic Alliances, heading up the reorganized company are two new management team members: Dennis Nasto, Vice President of Sales and Marketing, and Sean Woods, Director of Technology. Nasto has over 20 years of healthcare industry experience building high-performance sales teams and national accounts departments. Woods has 10 years of experience developing, managing, and building enterprise-quality software applications. eClickMD will continue to operate as a public company, and will remain at its headquarters at 3001 Bee Caves Road, Ste. 250, Austin, Texas 78746. In the near future, the company intends to change its name to SecureCARE Technologies, Inc. Founded in 1996, eClickMD is an emerging leader of Internet-based document exchange and eSignature solutions for today's home healthcare industry. The company delivers the first complete end- to-end eSignature and document exchange applications, which allow all home healthcare providers to exchange all patient care documents without the hassles, risks, and high-cost of mail, fax, and hand delivery. Using the applications' sophisticated, but easy-to-use "e-mail-like" functionality home healthcare providers gain the level of productivity, risk management, and cost savings they need to stay viable in today's increasingly challenging healthcare industry. EL PASO: S&P Cuts Rating to B as Company Pursues Long-Range Plan ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on natural gas pipeline and production company El Paso Corp. to 'B' from 'B+' as the company pursues a new long-range plan to trim its operations and repair its balance sheet. The outlook remains negative. Houston, Texas-based El Paso has almost $24 billion in outstanding debt and other long-term financing obligations. "The long-range plan released [Mon]day (See separate story in this edition. - Ed) by El Paso has many credit-friendly elements, but considerable risks remain as the company tries to execute the plan," said Standard & Poor's credit analyst Todd Shipman. "If the company is successful, Standard & Poor's believes it could provide a foundation for stabilizing and eventually improving El Paso's credit profile," he continued. The heightened risks during the transition period necessitate a lower credit rating and a continuation of the negative outlook until some progress on the plan is accomplished. El Paso plans to exit several business lines over the next three years that will leave the company focused on two primary business activities by 2006: natural gas pipelines and exploration and production with an emphasis on natural gas production. A scaled- back marketing and trading operation, some international power operations, and a smaller interest in oil and gas midstream operator GulfTerra Energy Partners L.P. (BB+/Watch Neg/--) will constitute the remainder of El Paso. The company intends to shed all other business interests, including oil refining, domestic electric power generation, and some international E&P operations in the short term and international power generation and telecommunications ventures in the longer term. The plan also features cost-cutting efforts and aggressive debt reduction with the proceeds of projected asset sales. The greatest task ahead for El Paso management is the transformation of its E&P operations, which today are characterized by an extensive geographic scope, rapidly-depleting production centered in mature basins, and intense capital needs to maintain and increase production levels. El Paso plans to sell most non-U.S. properties, with the exception of those in Brazil, to concentrate its operations on domestic opportunities mainly in Texas, the Rocky Mountains, and the deep shelf of the Gulf of Mexico. The company believes a greater emphasis on coal-bed methane operations will help stabilize its production profile and help lower costs. EL PASO: Launches Long-Range Plan, Detailing Workout Initiatives ---------------------------------------------------------------- El Paso Corporation (NYSE: EP) announced a long-range plan that defines the company's future businesses, targets significant debt reduction, establishes specific financial goals, and closely aligns compensation with shareholder interests. "The plan is the roadmap for the future of El Paso," said Doug Foshee, president and chief executive officer of El Paso Corporation. "It provides the details of how El Paso will reduce debt to $15 billion by the end of 2005, identifies the long-term businesses of the company, details a corporate reorganization that will result in significant cost savings, and establishes a new strategic direction for El Paso's exploration and production business. The plan is clear, achievable, and is the first step to making El Paso a strong natural gas provider that generates long- term value for our shareholders. It establishes specific performance objectives and clear milestones so that our shareholders can measure our progress." PLAN HIGHLIGHTS * El Paso's core businesses will be natural gas pipelines in the United States and Mexico, oil and natural gas production operations in the United States and Brazil, and a marketing and physical trading group focused primarily on El Paso's natural gas and oil production. * The company will streamline its operations into a new corporate structure organized around regulated and unregulated businesses. * The regulated businesses will consist of the company's three pipeline divisions-Southern Pipelines, Western Pipelines, and Eastern Pipelines (which includes joint ventures and operations in Mexico). * The unregulated businesses will consist of production and processing; the company's Brazilian integrated business; Asian power operations; domestic, European, and Central American power operations; marketing and trading; the company's ownership in GulfTerra Energy Partners, L.P. (NYSE: GTM); El Paso Global Networks, the company's telecom business; and discontinued operations. * GulfTerra and Enterprise Products Partners, L.P. (NYSE: EPD) announced their plan to merge and become the industry's leading midstream company. As a part of this transaction, El Paso will sell a 50-percent interest in the general partner of GulfTerra, approximately 14 million GulfTerra common units, and certain processing assets, and will realize approximately $1 billion of cash that will accelerate El Paso's debt restructuring program. The company will retain a significant ownership in a new midstream company with unequaled opportunities. * The long-range plan is designed to reduce the company's total debt (net of cash) to approximately $15 billion at year-end 2005 from approximately $22 billion at September 30, 2003. This will be achieved primarily through $3.3 billion to $3.9 billion of additional asset sales, the sale of restructured power contracts, the recovery of $500 million to $600 million in working capital, the conversion of the company's 9.00% equity security units ($575 million), free cash flow generation, and actions already taken in the fourth quarter of 2003. * The company expects that the majority of its plan will be complete by year-end 2005. El Paso's financial targets for 2006 include: -- $500 million to $725 million of net income, or earnings per share of $0.75 to $1.10; -- Cash flow from operations of $1.9 billion to $2.2 billion; -- Free cash flow after capital expenditures and dividends of $200 million to $400 million; -- Annual growth and maintenance capital of $1.6 billion to $1.7 billion; and -- $150 million in cost reductions in addition to the $445 million already identified. * El Paso expects to maintain significant liquidity through 2005, based upon operating cash flow generation, $2.1 billion of available cash and lines of credit on November 30, 2003 and the completion of planned asset sales. * The company identified potential sources of earnings volatility over the next several years. These include the impact of natural gas prices, discount rates utilized in its trading and restructured power contract portfolios, movement of the Euro relative to the dollar, the impact of commodity prices on its trading portfolio and possible changes in natural gas and liquids reserve estimates, which could cause ceiling test charges. In addition, the company identified areas where its restructuring activities may have an impact on earnings. These include severance and restructuring costs, asset impairments, and gains and losses on asset sales. BUSINESS UNIT OBJECTIVES Pipelines El Paso's Pipeline Group comprises the largest and most geographically balanced set of natural gas pipelines in North America and is poised to benefit from the regional supply and demand growth that is anticipated over the next several years. El Paso expects this segment to generate stable earnings and cash flow with average earnings growth of 2 to 5 percent annually. The Pipeline Group's annual capital budget will be approximately $800 million to $900 million over the next five years. Key business drivers will include major pipeline expansions, cost control, and continued success in capacity recontracting efforts. Exploration & Production El Paso will change the focus of its exploration and production business from production growth to managing for returns on invested capital. The company will focus its future operations on several growth areas: the deep shelf of the Gulf of Mexico, coal bed methane development, onshore Texas (primarily Vicksburg and Wilcox trends), and central operations (north Louisiana and east Texas). Capital expenditures will be approximately $850 million per year; however the company expects to achieve incremental benefits from third-party capital as it brings in partners on a promoted basis. The combined capital is expected to generate a production rate of approximately 1 billion cubic feet equivalent per day in 2006. The company plans to divest its international holdings in Canada (other than Nova Scotia), Hungary, and Indonesia. The following table shows natural gas production volumes that El Paso Production has hedged for 2004 through 2006: 2004 2005 2006 ---- ---- ---- Volume (TBtu) 75 130 84 Price ($/MMBtu) $2.55 $3.22 $3.28 Expected Production (TBtu) 288 to 311 304 to 326 333 to 356 Marketing, Trading, and Global Power El Paso plans to liquidate the majority of its existing trading positions by the end of 2004 with the goal of maximizing return of cash. The long-range plan includes a marketing and physical trading group that will continue to manage the marketing of El Paso Production Company's natural gas production and certain of its existing contractual positions as part of the company's going- forward operations. El Paso expects to sell the majority of its domestic power business by mid 2004. Over the next three to five years, the company intends to operate its international power assets to maximize cash flow and value. Compensation and Governance El Paso's new performance management system will be designed to link compensation with metrics tied directly to shareholder value created by the business units, as well as total shareholder return relative to its peer companies. With 10 of 12 independent directors on its board, separate chairman and CEO positions, no staggered board and no poison pill, El Paso continues to demonstrate its commitment to strong corporate governance. In addition, the company has added five new directors in 2003, all of whom have extensive backgrounds in the production business. "We are creating a 'fit-for-purpose' organization designed to provide natural gas in a safe, efficient, dependable manner," said Foshee. "We have a great group of employees and directors, and I'm confident we can deliver on the commitments in the plan." El Paso Corporation (S&P, B+ L-T Corporate Credit Rating, Negative) is the leading provider of natural gas services and the largest pipeline company in North America. The company has core businesses in pipelines, production, and midstream services. Rich in assets, El Paso is committed to developing and delivering new energy supplies and to meeting the growing demand for new energy infrastructure. For more information, visit http://www.elpaso.com/ ENRON: Seeks Court Clearance for Project Inauguration Settlement ---------------------------------------------------------------- Enron Corporation asks the Court to approve a Settlement Agreement and Mutual Release by and among: (a) the Enron Parties: -- Enron, -- Enron South America Turbine LLC, -- Enron Commecializadora de Energia Ltda., -- Enron America do Sul Ltda., -- Enron Brazil Power Holdings XVIII Ltd., -- RJG-Rio de Janeiro Generation Ltda., and -- Enron Netherlands Holding B.V.; (b) the Owner Trust Parties: -- the CayCos: * Brazilian Power Development Trust, * Enron Brazil Turbines I Ltd., * Enron Brazil Turbines II Ltd., and * Enron Brazil Power Holdings 20 Ltd., and -- SFE-Socidade Fluminense de Energia Ltda.; and (c) WestLB AG, New York Branch, as lender agent under the Amended and Restated Credit Agreement dated as of December 20, 2000 and the other lender parties to the Credit Agreement. The Project Inauguration Structure According to Martin A. Sosland, Esq., at Weil, Gotshal & Manges LLP, in New York, Project Inauguration is a $475,000,000 20-month term facility set up in December 2000 to: (a) finance, develop and construct a 379-megawatt power plant -- Eletrobolt -- in the State of Rio, Brazil; and (b) order for purchase four Mitsubishi Heavy Industries natural gas turbines, which were to be used in the development of other power plant projects in Brazil. Commencing in September 2001, Eletrobolt generated electricity, which was sold and delivered to the Brazilian electricity wholesale market known as the "MAE". To better market the electricity Eletrobolt produced, ECE, SFE and Petroleo Brasileiro S.A. - Petrobras entered into a Consortium Formation Agreement dated as of August 13, 2001 and the Consortium Internal Directives dated as of September 17, 2001. Under the Consortium Agreements, Petrobras supplied natural gas to SFE, SFE converts the natural gas into electricity, SFE supplies the electricity to ECE and then ECE markets the electricity through the MAE. ECE, as consortium leader and payment agent under the Consortium Agreements, collects and accounts for the sale proceeds and makes distributions to all Consortium Agreement parties pursuant to the terms of the Consortium Agreements. Mr. Sosland reports that the MAE suspended its settlement procedures for electricity sold for the period from September 2000 to September 2002. Consequently, certain payments for the power Eletrobolt produced to the MAE for the period of September 2001 through September 2002 were not made. As of July 31, 2003, the remaining outstanding amount is BRL$48,200,000 and ECE's allocation of that amount is BRL$8,700,000. Mr. Sosland relates that Project Inauguration was effected through that certain Amended and Restated Construction Agency Agreement dated as of December 20, 2000 between the Owner Trust and ESAT. Pursuant to the Construction Agency Agreement, the Owner Trust funded Eletrobolt's construction and the purchase of the MHI turbines. Pursuant to an Amended and Restated Guaranty Agreement dated as of December 20, 2000, Enron guaranteed all of the obligations of ESAT under the Construction Agency Agreement and certain other related agreements to which ESAT was a party, including, without limitation, payment of the "Termination Amount." The Owner Trust obtained the capital necessary to fund its obligations under the Construction Agency Agreement: (a) by issuing membership interests to Brazilian Power Development LLC, an entity owned by John Hancock Life Insurance Company and John Hancock Variable Life Insurance Company; and (b) through borrowings under the Credit Agreement. The Owner Trust, as borrower, and the Lender Parties are parties to the Credit Agreement dated as of December 20, 2000 pursuant to which the Lender Parties made available to the Owner Trust up to $460,750,000. To secure the obligations to the Lender Parties under the Credit Agreement: (i) Brazilian Power, SFE and each of the CayCos guaranteed the loans and other obligations of the Owner Trust under the Credit Agreement; (ii) Brazilian Power, SFE and each of the CayCos granted a security interest in favor of the Lender Parties in all of their assets pursuant to various security agreements, pledge agreements and related agreements; and (iii) the Owner Trust collaterally assigned to the Lender Parties all of the Owner Trust's right, title and interest in the Construction Agency Agreement and the Enron Guaranty. To further facilitate the financing, Mr. Sosland tells the Court that the Owner Trust loaned $214,160,000 to ENHBV pursuant to a promissory note dated as of May 7, 2001 from ENHBV to the Owner Trust. In turn, ENHBV loaned $214,160,000 to SFE pursuant to a promissory noted dated as of May 7, 2001 from SFE to ENHBV and the Import Finance Agreement dated as of May 7, 2001 between SFE and ENHBV. With Enron's Chapter 11 filing, an Event of Default occurred and is continuing under the Credit Agreement. Thus, the Owner Trust, the Lender Parties, ESAT and Enron Brazil and certain other parties entered into an Interim Funding Agreement dated as of December 17, 2001 and a Limited Forbearance and Amendment Agreement dated as of February 28, 2002, pursuant to which, among other things, ESAT's option to purchase Eletrobolt and the MHI turbines was deemed to have been exercised and the Lender Parties agreed to forbear exercising certain remedies under the Operative Agreements. Mr. Sosland informs the Court that the forbearance period under the Forbearance Agreement expired on August 1, 2002. The maturity date provided in the Credit Agreement was August 31, 2002 and as of that date, all amounts outstanding under the Credit Agreement became due and payable. As of August 2002, the aggregate principal amount of the loans outstanding under the Credit Agreement was about $335,000,000. Subsequently, on August 8, 2003, the Lender Parties exercised their rights pursuant to a Trust Certificate Pledge Agreement dated as of November 10, 2000 and foreclosed on Brazilian Power's interests in the Owner Trust, effectively resulting in the Lender Parties owning, directly or indirectly, the ownership interests in the Owner Trust and all other Owner Trust Parties. The Settlement Agreement Since the Petition Date, Mr. Sosland reports that the Parties discussed various alternatives to settle their claims, including the possible sale of Eletrobolt and the MHI Turbines. After extensive discussions and negotiations, the Parties agree that: (i) All rights and obligations of the parties under the Construction Agency Agreement will be terminated, and in connection therewith, any previous exercise by ESAT of any purchase option under the Construction Agency Agreement will be rescinded, any right or obligation of ESAT to consummate the purchase of Eletrobolt or pay any amount with respect thereto will be terminated and the "Termination Amount" will be deemed to be reduced to zero; (ii) The Enron Guaranty executed by Enron in connection with the Construction Agency Agreement will terminate; (iii) The ECE Receivables Pledge Agreement, ECE Account Pledge Agreement, Escrow Agreement, and Reservation of Rights Agreement will terminate. On the Settlement Closing Date, the amounts on deposit in the (a) "Pledged Account" will be distributed 50% to the Lender Parties and 50% to ECE, and (b) "Escrow Account" as of February 28, 2003 will be distributed to ECE; (iv) The Owner Trust Parties and the Lender Parties will release all claims against the Enron Parties arising from or relating to Project Inauguration. The Enron Parties release the Owner Trust Parties and the Lender Parties from all claims; (v) ESAT will resign as Trust Administrator, and the Enron Parties' representatives will resign from the board and all officer positions of the Owner Trust Parties; (vi) ECE will assign to SFE its rights and obligations under the Consortium Agreements as of the Settlement Closing Date. SFE agrees to cooperate in the collection of the MAE Receivable; (vii) The Enron Parties will convey the SFE Note and other related documents entered into between SFE and Enron Parties as full repayment for the ENHBV Note; and (viii) Enron will cooperate with the Lender Parties in the sale of the MHI Turbines and the Lenders will use their commercially reasonable efforts to sell the MHI Turbines. If the MHI Turbines are sold, ESAT will receive from the buyer a portion of the MHI Turbine gross proceeds: (a) if the MHI Turbine gross proceeds are in the aggregate at least $20,000,000, then ESAT will receive $2,000,000; (b) if the MHI Turbine gross proceeds are in the aggregate less than $20,000,000 but at least $10,000,000, then ESAT will receive $1,000,000; or (c) if the MHI Turbine gross proceeds are in the aggregate less than $10,000,000, then ESAT will receive no payment. The Settlement Agreement should be approved and the Court should authorize Enron to enter into and implement the Settlement Agreement because: (a) absent the settlement, the Lender Parties would continue to pursue their $364,000,000 claim against Enron; (b) the Parties would require extensive judicial intervention to resolve their disputes, with uncertain results, that would be costly, time-consuming and distracting to management and employees; (c) until the resolution of the disputes, $12,200,000 of funds would continue to be held in the Pledge Account and the Escrow Account pursuant to the terms of the ECE Account Pledge Agreement and the Escrow Agreement, and could not be distributed to Enron's estate; (d) Enron does not expect that Eletrobolt will generate any return in the foreseeable future, and therefore, continued use of Enron resources to support Eletrobolt is not in the best interest of Enron's estate; and (e) the settlement is a product of extensive, arm's-length, good faith negotiations among the Parties. (Enron Bankruptcy News, Issue No. 90; Bankruptcy Creditors' Service, Inc., 215/945-7000) EUROGAS INC: September 30 Balance Sheet Upside-Down by $10 Mill. ---------------------------------------------------------------- EuroGas Inc. has accumulated a deficit of $155,507,784 through September 30, 2003. EuroGas has had no revenue, losses from operations and negative cash flows from operating activities during the years ended December 31, 2002 and 2001 and during the nine months ended September 30, 2003. At September 30, 2003, the Company had a working capital deficiency of $20,321,881 and a net capital deficiency of $10,030,270. The Company has impaired most of its oil and gas properties. These conditions raise substantial doubt regarding the Company's ability to continue as a going concern. Realization of the investment in properties and equipment is dependent upon management obtaining financing for exploration, development and production of its properties. In addition, if exploration or evaluation of property and equipment is unsuccessful, all or a portion of the remaining recorded amount of those properties will be recognized as impairment losses. Payment of current liabilities will require substantial additional financing. Management of the Company plans to finance operations, explore and develop its properties and pay its liabilities through borrowing, through sale of interests in its properties, through advances received against future talc sales and through the issuance of additional equity securities. Realization of any of these planned transactions is not assured. As stated, the Company had an accumulated deficit of $155,507,784 at September 30, 2003, substantially all of which has been funded out of proceeds received from the issuance of stock and the incurrence of liabilities. At September 30, 2003, the Company had total current assets of $203,612 and total current liabilities of $20,525,493 resulting in a working capital deficiency of $20,321,881. As of September 30, 2003, the Company's balance sheet reflected $825,426 in mineral interests in properties not subject to amortization, net of valuation allowance. These properties are held under licenses or concessions that contain specific drilling or other exploration commitments and that expire within one to three years, unless the concession or license authority grants an extension or a new concession license, of which there can be no assurance. If the Company is unable to establish production or resources on these properties, is unable to obtain any necessary future licenses or extensions, or is unable to meet its financial commitments with respect to these properties, it could be forced to write off the carrying value of the applicable property. Throughout its existence, the Company has relied on cash from financing activities to provide the funds required for acquisitions and operating activities. During the nine months ended September 30, 2003, the Company received $300,000 from the sale of common stock and $186,675 from the sale of assets and expended $30,000 in the purchase of property and equipment and development of mineral interests, $548,746 was used in operating activities. As a result, the Company used net cash of $141,780 during the nine months ended September 30, 2003. While the Company had cash of $46,142 at September 30, 2003, it has substantial short-term and long-term financial commitments. Many of the Company's projects are long-term and will require the expenditure of substantial amounts over a number of years before the establishment, if ever, of production and ongoing revenues. As noted above, the Company has relied principally on cash provided from equity and debt transactions to meet its cash requirements. The Company does not have sufficient cash to meet its short-term or long-term needs, and it will require additional cash, either from financing transactions or operating activities, to meet its immediate and long-term obligations. There can be no assurance that the Company will be able to obtain additional financing, either in the form of debt or equity, or that, if such financing is obtained, it will be available to the Company on reasonable terms. If the Company is able to obtain additional financing or structure strategic relationships in order to fund existing or future projects, existing shareholders will likely continue to experience further dilution of their percentage ownership of the Company. If the Company is unable to establish production or reserves sufficient to justify the carrying value of its assets, to obtain the necessary funding to meet its short and long-term obligations, or to fund its exploration and development program, all or a portion of the mineral interests in unproven properties will be charged to operations, leading to significant additional losses. EVOLVE SOFTWARE: Final Decree Hearing Scheduled for Tomorrow ------------------------------------------------------------ Evolve Software, Inc., a Delaware corporation, filed with United States Bankruptcy Court for the District of Delaware its Joint Amended Chapter 11 Plan of Liquidation on June 19, 2003. On September 26, 2003, the Bankruptcy Court entered an order confirming the Plan, as modified, and the Plan became effective on October 28, 2003. It is expected that the Company will have its operations formally dissolved by the end of 2003. As a result of the final liquidation of the Company, the Company's common stock, Series A preferred stock and Series B preferred stock will cease to exist and the number of authorized shares of the Company has been reduced to one (1) share, to be held by the administrator of the Company's Plan. As of September 26, 2003, the Company possessed cash of approximately $8.6 million. The Company will be paying all valid pre-petition claims in full, and is expected to make aggregate distributions in the amount of approximately $1.4 million on account of these claims as allowed in the chapter 11 bankruptcy cases. All remaining amounts will be reserved for the wind-down of the Company's remaining operations and assets and distributions to the holders of the Series B Preferred Stock. On November 26, 2003, the Company filed a Form 15 with the SEC seeking to terminate the Company's status as a reporting public company. The Company has incurred $470,526 of liquidation related expenses through September 30, 2003. A hearing before the Bankruptcy Court is currently scheduled for December 18, 2003, at which time the Company expects to seek from the Bankruptcy Court, a final decree in the chapter 11 bankruptcy cases. Entry of a final decree by the Bankruptcy Court will effectively close the Company's bankruptcy case and allow the final distribution to the Series B Preferred Stock. FLEMING: Gets Go-Signal to Pay $325-Mill. to Prepetition Lenders ---------------------------------------------------------------- The Fleming Debtors and the Prepetition Agents obtained approval from the Court to transfer $325,000,000 to the Prepetition Agents for the Prepetition Lenders' benefit, in partial satisfaction of the Prepetition Indebtedness. The Debtors will retain the balance, subject to the current restrictions governing the use of the Cash Collateral. Backgrounder Fleming Companies, Inc., and its debtor-affiliates are party to a prepetition credit agreement with: * Deutsche Bank, as administrative agent; * JPMorgan Chase and Citicorp North America, Inc., as syndication agents; * Lehman Commercial Paper Inc. and Wachovia Bank, National Association, as documentation agents; * Deutsche and JPMorgan Chase, as joint book managers; * Deutsche Bank JP Morgan and Solomon Smith Barney Inc., as joint lead arrangers; and * a consortium of certain other secured prepetition lenders. Pursuant to the Credit Agreement, the Lenders made loans and advances to the Debtors and issued letters of credit on the Debtors' behalf. All the Debtors, other than Fleming Companies, Inc., executed guarantees of the prepetition loans in favor of the Prepetition Lenders. The Prepetition Loans were secured by first-priority security interests and liens on substantially all of the Debtors' then existing and after-acquired assets and all proceeds and products of any of the assets. As of the Petition Date, the Debtors owed the Prepetition Lenders $604,000,000 under the Credit Agreement, including $146,000,000 in outstanding letters of credit and fees, in addition to prepetition interests accrued plus costs, fees and expenses as well as Treasury Services obligations not to exceed $50,000,000. Furthermore, there was an automatic $5,000,000 step-up in one of the prepetition letters of credit that increased the overall exposure of the Prepetition Lenders to $609,000,000. Under the Final Order authorizing the Debtors to incur postpetition financing and use cash collateral, entered on May 7, 2003, the Prepetition Lenders and Prepetition Agents were provided with adequate protection against any diminution in value of the interest in the prepetition collateral resulting from, inter alia, the granting of the Liens and the carve-out, the priming of the Prepetition Financing Liens, the imposition of the automatic stay, and the use, sale or lease or other disposition of the Prepetition Collateral. Among other things, the Prepetition Lenders and Prepetition Agents were granted first priority liens and security interests on substantially all unencumbered Debtors' assets and junior liens on all assets encumbered by Senior Liens. The Prepetition Lender Replacement Liens are deemed perfected as of the Petition Date and may not be subject to any lien or security interest existing as of the Petition Date, other than the Senior Liens. In addition, to the extent of any Diminution Claim, the Prepetition Agents and the Prepetition Lenders were also allowed superiority administrative expense claims pursuant to Section 507(b) of the Bankruptcy Code. Pursuant to the Final DIP Order, the Debtors are authorized to, among other things, use the Cash Collateral to make adequate protection payments to the Prepetition Agents and Prepetition Lenders. In August 2003, the Court approved the Debtors' sale of their wholesale distribution business to C&S Acquisition LLC. The Debtors received $255,800,000 in cash at the closing of the Sale. The Debtors now hold approximately $575,100,000 in cash, substantially all of which constitutes the Prepetition Lenders' Cash Collateral. However, the Debtors cannot use the Cash Collateral except in strict compliance with an approved budget and subject to availability under the Borrowing Base. Moreover, the Debtors do not require the full $575,100,000 to run their remaining businesses. The Debtors forecast a $5,000,000 negative cash flow from now through the year-end. Thereafter, the Debtors expect that their average monthly cash flow from operations will be positive. However, their total cash flow, due to the administrative expenses related to the Bankruptcy cases, will be a negative $3,000,000 to $5,000,000. (Fleming Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service, Inc., 215/945-7000) FLOW INT'L: Files Second-Quarter Report on SEC Form 10-Q -------------------------------------------------------- Flow International Corporation (Nasdaq: FLOW), the world's leading developer and manufacturer of ultrahigh-pressure waterjet technology equipment used for cutting, cleaning (surface preparation) and food safety applications, filed its Quarterly Report on Form 10-Q for the period ended October 31, 2003 with the Securities and Exchange Commission. The second quarter results reported in the Form 10-Q are improved from the results announced on November 25, 2003 because of the implementation of EITF 00-21 "Revenue Arrangements with Multiple Deliverables." Revenues for the quarter were $43.7 million, an increase of $1 million from the $42.7 million reported in the November 25, 2003 press release. The revised net loss for the quarter was $3.3 million or $.21 diluted loss per share, compared with a net loss of $3.7 million or $0.24 diluted loss per share as reported in the November 25, 2003 press release. This change affects only the Waterjet Systems segment. Six month to date results were also adjusted accordingly. The Company's Form 10-Q contains further detail regarding these changes. Flow -- whose October 31, 2003 balance sheet shows a total shareholders' equity deficit of about $3.4 million -- provides total system solutions for various industries, including automotive, aerospace, paper, job shop, surface preparation, and food production. For more information, visit http://www.flowcorp.com/ FMC CORP: Elects Mark P. Frissora to Board of Directors ------------------------------------------------------- FMC Corporation (NYSE: FMC) announced that Mark P. Frissora has been elected to the company's board of directors, effective January 1, 2004. Frissora, 48, was elected chairman and chief executive officer of Tenneco Automotive (NYSE: TEN), a global designer and manufacturer of ride and emissions control products and systems, in March 2000 after serving as president and CEO. Previously, he served as senior vice president and general manager of Tenneco Automotive's worldwide original equipment business, having joined the company in 1996 as vice president of North American emissions control operations. Prior to joining Tenneco Automotive, he held executive positions with Aeroquip-Vickers Corporation and Philips N.V. Previously, he was with General Electric Co. for 10 years. Frissora also serves on the board of directors of NCR Corporation. With this election, Frissora becomes the ninth independent director on the FMC Board. William G. Walter, FMC chairman, president and chief executive officer is the lone inside director. FMC Corporation (S&P, BB+ $300 Million Senior Secured Notes Rating, Negative) is a diversified chemical company serving agricultural, industrial and consumer markets globally for more than a century with innovative solutions, applications and quality products. The company employs approximately 5,500 people throughout the world. FMC Corporation divides its businesses into three segments: Agricultural Products, Specialty Chemicals and Industrial Chemicals. FYOCK & ASSOCIATES: Voluntary Chapter 7 Case Summary ---------------------------------------------------- Debtor: James A. Fyock and Associates, Inc. fdba Red Chair, LLC fdba Fyock and Associates, Inc. 101 Charlois Blvd, Suite 100 Winston Salem, North Carolina 27103-0000 Bankruptcy Case No.: 03-53651 Type of Business: The Debtor is a public relations firm. Chapter 7 Petition Date: December 3, 2003 Court: Middle District of North Carolina (Winston-Salem) Judge: Catharine R. Carruthers Debtor's Counsel: Ashley S. Rusher, Esq. Blanco Tackabery Combs & Matamoros, P.A. 110 S. Stratford Road, Suite 500 P.O. Drawer 25008 Winston-Salem, NC 27114 Tel: 336-761-1250 - and - Bruce Magers, Esq. 2990 Bethesda Place, Suite 604-C Winston-Salem, NC 27103 Tel: 336-760-1520 Total Assets: $92,085 Total Debts: $1,796,916 GENESIS: Neighborcare Halts Trading Under Employee Benefit Fund --------------------------------------------------------------- On November 24, 2003, NeighborCare Inc. notified its employees that it will prevent those participants in the NeighborCare Retirement Plan, who will cease being participants in Retirement Plan as a result of the Spin-off, from transactions in its common stock. The reason for the blackout period is to permit the transfer of plan accounts of those participants who will cease being participants in the Retirement Plan and who will become participants in the GHC 401(k) Plan to the GHC 401(k) Plan. In a Form 8-K filing with the Securities and Exchange Commission dated December 4, 2003, NeighborCare Chief Executive Officer, John J. Arlotta, explains that, during the blackout period, participants in the Retirement Plan will not be able to purchase or otherwise acquire or sell or otherwise dispose of interests in the shares of NeighborCare common stock. The participants will not be able to make changes in investment elections or deferral percentages in the Retirement Plan or request loans or distributions. The blackout period will begin on December 24, 2003 at 3:00 p.m. Eastern Standard Time and end on January 7, 2004, when the transfer of the accounts is expected to be completed. On December 4, 2003, the NeighborCare notified its directors and executive officers of the blackout period and that, pursuant to the Sarbanes-Oxley Act of 2002 and the SEC's Regulation BTR, they are prohibited from engaging in transactions during the blackout period involving any NeighborCare equity security acquired in connection with their service or employment as a director or executive officer. In accordance with the SEC's rules and regulations, including the Regulation BTR, this blackout period is separate from, and in addition to, any other restrictions on trading NeighborCare equity securities currently applicable to NeighborCare's directors and officers. (Genesis/Multicare Bankruptcy News, Issue No. 51; Bankruptcy Creditors' Service, Inc., 215/945-7000) GINGISS GROUP: Auctioning-Off Tuxedo Assets on December 22 ---------------------------------------------------------- The Gingiss Group, Inc., and its debtor-affiliates plan to sell their assets relating to their tuxedo wholesale, retail and rental business to After Hours Formalwear, Inc., an affiliate of The May Department Stores Company. The sale is subject to higher and better offers. The U.S. Bankruptcy Court for the District of Delaware approved proposed Sale Procedures scheduling an auction for the assets. The auction is scheduled for December 22, 2003, at 10:00 a.m. Eastern Time, to be held at the offices of the Counsel for the Debtors, Pachulski, Stang, Ziehl, Young, Jones & Weintraub P.C., located at 919 North Market Street, 16th Floor, Wilmington, Delaware 19801. Only parties that have submitted a qualified bid for the assets by 5:00 p.m. tomorrow will be permitted to participate at the auction. At the conclusion of the sale, the Debtors will identify the successful bidder at their lawyers' Web site -- http://www.pszyjw.info/ A hearing before the Honorable Mary F. Walrath to confirm the results of the auction and approve the sale shall convene on Dec. 23, at 9:30 a.m. Headquartered in Addison, Illinois, The Gingiss Group, Inc., a national men's formal wear rental and retail company, filed for chapter 11 protection on November 3, 2003 (Bankr. Del. Case No. 03-13364). Jeffrey N. Pomerantz, Esq., Samuel R. Maizel, Esq., James E. O'Neill, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub represent the Debtors in their liquidating efforts. The Debtors listed debts of over $50 million in their petition. GULFTERRA ENERGY: S&P Affirms BB+ Rating Following Merger News -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB+' corporate credit rating on oil and natural gas services company GulfTerra Energy Partners L.P. (BB+/Watch Neg/--), which will remain on CreditWatch with negative implications, following the announcement of its intention to merge with Enterprise Products Partners L.P. (BBB-/Watch Neg/--) and the downgrade of the corporate credit rating of its primary general partner, El Paso Corp., to 'B' from 'B+'. The formal merger is not expected to be completed before fourth-quarter 2004, but Enterprise is immediately purchasing an economic interest in one half of GulfTerra's general partner with limited voting powers. The second owner of GulfTerra's general partner, 9.9% holder Goldman, Sachs & Co., will sell its interest back to El Paso, concurrent with Enterprise's initial investment. El Paso will have full management responsibility for GulfTerra until the merger is accomplished. Houston, Texas-based GulfTerra has about $1.9 billion in outstanding debt. "The proposed merger of GulfTerra and Enterprise would be complementary in several ways, including the fit of the operations and the improved corporate governance and management of the new company," said Standard & Poor's credit analyst Todd Shipman. "The ultimate ratings on the merged entity will depend on a complete analysis of the operations, integration, diversity, sector fundamentals, and financial measures when the merger is closer to completion," he continued. Standard & Poor's evaluation of the relationship between GulfTerra and El Paso was leading toward a conclusion where the steps taken to insulate itself from El Paso and strengthen its corporate governance (in particular, the insertion of Goldman Sachs as a 9.9% owner of its general partner) would result in the near- complete separation of the ratings of GulfTerra and El Paso. Today's developments supersede those steps, however, and could still affect GulfTerra's ratings during the merger process. Questions about the El Paso-GulfTerra relationship have become more acute with today's downgrade of El Paso. Standard & Poor's will be examining the terms of Enterprise's approval rights under its 50% stake in GulfTerra's general partnership, to be sure that Enterprise has the same ability to block a unilateral decision by El Paso to voluntarily file GulfTerra into bankruptcy. H&E EQUIPMENT: S&P Says Company Concerns are Still Manageable ------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on H & E Equipment Services LLC, including its 'B+' corporate credit rating, and removed them from CreditWatch where they were placed on Aug. 27, 2003. The outlook is negative. The Baton Rouge, Louisiana-based rental, service, and sales company has about $350 million in rated debt. "The affirmation is based upon Standard & Poor's expectations that the company's weaker-than-expected performance in the second quarter of 2003, concern about the prospects for continued challenging conditions (especially in the company's core Gulf Coast and crane operations), and liquidity issues (stemming from an unexpected adverse legal ruling) are manageable at the current rating," said Standard & Poor's credit analyst John Sico. The improved performance in the third quarter and somewhat better industry conditions, if continued, should enable H & E to maintain a credit profile adequate for the rating. Secondly, the company has met the appeal requirements stemming from the adverse legal judgment by posting the required letter of credit with the approval from its bank group. Unsuccessful resolution of this appeal should be manageable at the current rating. However, there are still concerns regarding the prospects for the company's challenging industry conditions. Year over year, sales for H & E were off by only 2% in the third quarter of 2003 (compared to 10% in the second quarter), mainly due to lower rental revenue attributable to lower time utilization in the crane and high lift segment. EBITDA for the company on a combined basis for the third quarter of 2003 was 15% below comparable 2002 EBITDA (this compares to a 27% decline that occurred in the second quarter). The company has consolidated some locations and expects to benefit from the reduced costs. H & E curtailed its capital spending and is expected to age its fleet to 41 months by the end of 2003 and increase it by another 5 months - 6 months in 2004. Liquidity was reduced by the unexpected adverse ruling in a civil case filed by a competitor. H & E posted a $19 million letter of credit (including interest) while it appeals. The company received an amendment from its bank group, permitting the LOC, and also amended restrictive financial covenants under its secured credit facility; H & E was in compliance as of Sept. 30, 2003. The company is appealing this judgment and there is the possibility of a settlement and reduction in the amount due. HAND BRAND DISTRIBUTION: Sewell & Co. Bows-Out as Accountant ------------------------------------------------------------ On September 10, 2003, Sewell & Company, PA declined to stand for re-election as independent auditor of GeneThera, Inc., formerly known as Hand Brand Distribution, Inc. (Commission File No. 000- 27237). During the most recent two fiscal years, S&O's reports on the financial statements of the Company contained a "going concern" qualification. On July 1, 2003, the Company filed with the Florida Secretary of State's office amendments to the Company's Articles of Incorporation to change the name from Hand Brand Distribution, Inc. to GeneThera, Inc. and to authorize one hundred million (100,000,000) shares of common stock and twenty million (20,000,000) shares of class A preferred stock. * * * GeneThera is a development stage company and has had negligible revenues from operations in the last two years. As a development stage company, its research and development expenditures cannot be capitalized. GeneThera plans to develop proprietary diagnostic assays for use in the agricultural and veterinary markets. Specific assays for Chronic Wasting Disease (among elk and deer), and E.coli (predominantly cattle) are in development. The Company is also in the process of developing therapeutic vaccines for these and other diseases. The Company utilizes their patent pending process called PURIVAX for purifying these vaccines. We believe this is where we have a competitive advantage over other companies developing molecular vaccines. The Company had a cash balance of $22,962 as of September 30, 2003. With the acquisition of 51% of GeneThera, it is estimated that it will require outside capital for the year 2003 for the commercialization of GeneThera's CWD assays. At the present time, and assuming continued forbearance by two creditors of GeneThera on defaulted notes in the approximate amount of $35,279, we believe we have adequate working capital through December 31, 2003. However, the Company's financial statements for the three months ended September 30, 2003 contain a going concern qualification expressing doubt regarding our ability to continue operating. HANOVER COMPRESSOR: Completes Two Senior Notes Public Offering -------------------------------------------------------------- Hanover Compressor Company (NYSE:HC) (S&P, BB- Corporate Credit Rating, Negative), a global market leader in full service natural gas compression and a leading provider of service, fabrication and equipment for oil and natural gas processing and transportation applications, completed its offering of $200 million of 8.625% Senior Notes due 2010 and $143.75 million of 4.75% Convertible Senior Notes due 2014. Of the $143.75 million of Convertible Senior Notes sold by Hanover, $18.75 million was sold pursuant to the exercise of the underwriters' over-allotment option. Hanover will use the net proceeds from the offerings to repay existing indebtedness. Hanover also has completed its new $350 million bank credit facility that amends and replaces the Company's former bank credit facility. The offering and sale of the Senior Notes and Convertible Senior Notes were pursuant to an effective shelf registration statement on Form S-3 previously filed with the Securities and Exchange Commission. JPMorgan and Citigroup were joint book-running managers for the Senior Notes offering. Copies of the prospectus supplement relating to the offering of the Senior Notes may be obtained from the offices of J.P. Morgan Securities Inc., Chase Distribution & Support Service, 1 Chase Manhattan Plaza, Floor 5B, New York, NY 10081 (copies can also be obtained by e-mail at: Addressing.Services@jpmchase.com), and the offices of Citigroup Global Markets Inc., 140 58th Street, Brooklyn, NY 11220, Attention: Prospectus Department, Floor 8-I. JPMorgan and Credit Suisse First Boston were joint book-running managers for the Convertible Senior Notes offering. Copies of the prospectus supplement relating to the Convertible Senior Notes offering may be obtained from the office of J.P. Morgan Securities Inc., Chase Distribution & Support Service, 1 Chase Manhattan Plaza, Floor 5B, New York, NY 10081 (copies can also be obtained by e-mail at Addressing.Services@jpmchase.com), and from the office of Credit Suisse First Boston, Prospectus Department, One Madison Avenue, New York, New York 10010. HARKEN ENERGY: Sells Panhandle Assets and Repays All Bond Debt -------------------------------------------------------------- Harken Energy Corporation (Amex: HEC) sold the majority of its oil and gas properties located in the Panhandle region of Texas. The purchasers agreed to pay approximately $7 Million in cash for the Panhandle assets. Harken considers the Panhandle assets as non-core assets since the majority of Harken's domestic reserves and production are located along the Gulf coast regions of Texas and Louisiana. Harken's Gulf coast assets are primarily natural gas. Harken also announced it repaid all outstanding bank debt, approximately $4 Million, with a portion of the Panhandle asset sales proceeds. Harken's Chairman, Alan G. Quasha, stated, "While we expected to close on the sale of these Panhandle assets a month ago, we achieved our goal of selling these properties at a reasonable price and significantly reducing our debt by year end. Our cash now exceeds our outstanding debt, and we have been able to accomplish the restructuring of our balance sheet and cost structure expeditiously and without sacrificing any of our core assets. The entire management team deserves a great deal of credit. We look forward to being able to focus on growing our revenues, cash flow and earnings, and taking advantage of energy related opportunities from a position of strength." As previously reported, 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. HARNISCHFEGER: Court Stays Distribution of HII Reserve Stock ------------------------------------------------------------ Judge Kent Jordan of the United States District Court for the District of Delaware stays the distribution of HII reserve stock until further Order, or in the event that Rockwell fails to post a bond for $2,000,000 within 48 hours of the time that the closing price of the stock of Joy Global (f.k.a. Harnischfeger Industries, Inc.) falls to or below $12.41 per share. (Harnischfeger Bankruptcy News, Issue No. 70; Bankruptcy Creditors' Service, Inc., 215/945-7000) HAWAIIAN AIRLINES: Pilots Demand $4.25 Pension Back Payment ----------------------------------------------------------- Hawaiian Airlines pilots demanded that the bankrupt carrier fully fund their pension before paying bonuses to senior management and compensation to the court-appointed trustee, Josh Gotbaum, the Honolulu Advertiser reported. Gotbaum, who was appointed trustee in July, has proposed that he be paid as much as $70,000 a month plus "the reasonable cost" of renting a single-family home and automobile. He also asked for severance and retention bonuses for senior managers. The Air Line Pilots Association said in a statement the company should make a $4.25 million pension payment it skipped in September before "handing over millions in executive compensation." The association said 11 senior officers at Hawaiian could receive as much as $1 million in severance packages and continue to be paid their salary for one year after they leave if they stay until the airline is handed over to a new owner. Attorney Bruce Bennett, who represented Gotbaum said the pension issue is a $60 million problem being negotiated between pilots and the company. The $4.25 million payment is just part of a larger issue that needs to be resolved, he said. The court has given them until February to find a solution, and they are in the middle of negotiations, Bennett said, reported the newspaper. (ABI World, Dec. 12, 2003) HEALTHSOUTH: George Strong and Charles Newhall Resign from Board ---------------------------------------------------------------- HealthSouth Corporation (Pink Sheets: HLSH) announced that George H. Strong and Charles W. Newhall III have voluntarily resigned from the HealthSouth Board of Directors effective December 15, 2003, as part of the previously announced board transition plan. Joel C. Gordon, Interim Chairman of the Board of HealthSouth said, "I want to thank George and Chuck for their many years of dedicated service and their tireless efforts on behalf of the Company and its shareholders. We appreciate their willingness to initiate the transition plan that the Special Committee of the Board has concluded is an important part of the rebuilding process at HealthSouth, although we regret their departure. "The support, diligence and wise counsel of all my fellow directors, especially over the last nine months, have been invaluable in helping to stabilize HealthSouth's operations -- thus restoring hope to our tens of thousands of employees, patients, security holders and others," Mr. Gordon continued. "As directors, we have shared the frustration, outrage and sense of betrayal of HealthSouth's public security holders and employees over the fact that a relatively small group of people deliberately deceived us. We also share the strong determination to build HealthSouth back to a respected position in the healthcare community and to help restore value for our stakeholders." "It has been a privilege to be part of the remarkable growth of a revolutionary force in the healthcare service business," said Mr. Strong. "I wish Joel, my other fellow directors, and the enormously dedicated managers and employees of HealthSouth every success as they continue the extraordinary progress we have achieved over the past nine months." "It has been an honor to work for so many years alongside of the thousands of good people who have given their heart and soul to this company," said Mr. Newhall. "I am confident that the grave damage that this outrageous deception has done will be repaired, thanks to the continuing commitment of our employees, the loyalty of our physicians, and the leadership of the management team and the Board." As previously announced on December 2, 2003, under HealthSouth's transition plan, two additional long-standing Directors will leave voluntarily not later than April 15, 2004 and one additional long- standing a fifth Director will leave voluntarily not later than August 31, 2004. Under the transition plan, the three Directors who joined HealthSouth's Board after August 2002 -- Jon F. Hanson, Robert P. May and Lee S. Hillman -- together with Joel C. Gordon, will remain on HealthSouth's Board in order to help ensure the continuity and stability of HealthSouth's current turnaround efforts. In addition, Messrs. Gordon and May have agreed to continue as Interim Chairman and Interim Chief Executive Officer, respectively, until such time as the Special Committee of HealthSouth's Board believes the turnaround is largely accomplished and a permanent management team is in place. HealthSouth's Special Committee consists of all of HealthSouth's current directors except Richard M. Scrushy, who has refused the Board of Directors' request that he resign as a director. As also noted on December 2, 2003, a search for four new Directors has begun, overseen by a Search Committee which will seek input from HealthSouth's largest institutional stockholders. The Search Committee will recommend candidates to HealthSouth's Nominating Committee with the goal of filling the vacancies as soon as practicable. HealthSouth is the nation's largest provider of outpatient surgery, diagnostic imaging and rehabilitative healthcare services, with nearly 1,700 locations nationwide and abroad. HealthSouth can be found on the Web at http://www.healthsouth.com/ As reported in Troubled Company Reporter's November 5, 2003 edition, HealthSouth Corporation, which previously announced that it had initiated discussions and submitted term sheets to its creditors providing for the restructuring of the Company's outstanding indebtedness, said that it has received a notice of technical default purportedly from the requisite holders of certain of its senior notes and its senior subordinated notes. Once notice has actually been received, the notes provide for a cure period, following which these noteholders would have the right to accelerate payment of the outstanding principal amount of these notes. The Company stated that it is current on all interest payments due to its bank and noteholders. The Company also reiterated its intention to remain current on all upcoming interest payments. HORSEHEAD INDUSTRIES: Court Approves Asset Sale to Sun Capital -------------------------------------------------------------- Horsehead Industries and Sun Capital announced that Chief Judge Stuart M. Bernstein of the U.S. Bankruptcy Court (Southern District of New York) approved the sale of substantially all of Horsehead's operating assets to an affiliate of Sun Capital Partners. Horsehead and Sun believe the transaction will close later this week. "We are extremely pleased to have cleared this last major hurdle and looking forward to quickly wrapping up the transaction and exiting bankruptcy," said Horsehead's Chairman and CEO Dave Carpenter. "Sun is an outstanding organization with a great track record and we are very excited to work with them. I can't thank our employees, suppliers and customers enough for sticking by the company. I also would like to thank our banks and creditors for working through what everyone agreed was a highly complicated situation." Horsehead and Sun said that the combination of Sun's cash infusion, improving zinc prices and recent cost reductions will enable the company to stabilize quickly and begin generating cash in the next few months. "This is a proven business that came under duress from all-time low zinc prices, too much debt and certain operating and cost issues. Those issues continue to be addressed and Sun looks forward to working with the Company to position it for future growth and prosperity", said Sun's Michael Kalb. "We are very supportive of the management team assembled under Dave Carpenter just before the company was forced to file for bankruptcy and appreciate the tremendous effort they have put into restructuring the company under such difficult circumstances." Horsehead is the largest zinc producer in the United States and the world's largest recycler of zinc bearing materials, including the steel industry's (EAF Dust). The company annually produces over 165,000 tons of zinc products and recycles more than 450,000 tons of EAF Dust. Horsehead operates primarily under its Zinc Corporation of America and Horsehead Resource Development brands employing over 1000 people in seven states. Sun Capital Partners, Inc. is a leading private investment firm focused on leveraged buyouts. Sun Capital has invested in more than 50 companies during the past several years with combined sales in excess of $8.0 billion. Sun Capital has more than $700 million under management and is making new investments through Sun Capital Partners III, LP, and Sun Capital Partners III QP, LP, together a $500 million fund raised in January 2003. Participating in Sun Capital's fund are leading fund-of-funds investors, university endowments, pension funds, financial institutions and high net worth individuals, families and trusts. For more information about Sun Capital, visit http://www.SunCapPart.com/ ICO INC: Won't Make Preferred Share Dividend Payment ---------------------------------------------------- ICO, Inc. (Nasdaq: ICOC) announced fiscal year 2003 and fourth quarter fiscal year 2003 financial results. ICO reported fiscal year 2003 revenues of $206,614,000, an operating loss from continuing operations of $22,611,000, including impairment, restructuring and other costs of $12,814,000, loss from continuing operations before cumulative effect of change in accounting principle of $20,855,000 or $.86 per share and net loss of $50,092,000 or $2.04 per share. For the quarter, ICO reported revenues of $53,446,000, an operating loss from continuing operations of $14,617,000 including $12,008,000 of impairment, restructuring and other costs and loss from continuing operations of $12,384,000 or $.50 per share. Including discontinued operations, net loss was $12,918,000 or $.52 per share for the quarter. Results of Operations Impairment, Restructuring and Other Costs Impairment, restructuring and other costs in the fourth quarter of 2003 were $12,008,000 related to an impairment of fixed assets of $11,267,000 and severance expenses of $823,000, offset by an $82,000 gain on early lease termination. The fixed asset impairment was due to a charge of $10,378,000 brought about due to continued operating losses at certain ICO Polymers locations in Europe and North America and an impairment related to capitalized software development costs of $889,000. The severance expenses were related to the resignation of the Company's Chief Executive Officer and severance payments related to other employee terminations. Year-over-year quarter comparison Revenues increased $3,653,000 or 7% compared to the fourth quarter of fiscal 2002. The year-over-year revenue increase was primarily due to the strengthening of the Euro and other foreign currencies relative to the U.S. Dollar which increased revenues by $3,900,000. Fourth quarter fiscal 2003 product sales volumes of ICORENE(TM) and COTENE(TM) rotational molding powders increased 25%, compared to the same quarter last year. Offsetting these increases was a decline in revenues caused by a change in revenue mix within the Company's North American concentrates manufacturing operation and a reduction in toll processing volumes. Gross profit declined $49,000 or 1% and gross margins declined from 16.6% to 15.4%. These declines were caused by weak operating performance of the Company's European operations due to a decline in volumes and inventory reserves of $513,000 relating to slow moving inventory. Additionally, a revenue mix change, caused by an increase in product sales and a decline in toll service revenues, and lower average selling prices reduced gross profits and margins. An improvement in gross margins at the Company's North American concentrates manufacturing operation partially offset the factors discussed above. Selling, general and administrative expenses increased $489,000 or 6% during the fourth quarter of fiscal 2003, due mostly to the strengthening of the Euro and other foreign currencies versus the U.S. Dollar which had the effect of increasing selling, general and administrative expenses by $500,000. Due to the decline in gross profit and increase in selling, general and administrative expenses, EBITDA declined $543,000 to a loss of ($133,000) for the quarter. The strengthening Euro and other currencies had a minimal impact on EBITDA during the quarter. Operating loss increased from a loss of $3,625,000 during the fourth quarter of 2002 to a loss of $14,617,000 due to the factors discussed above. Loss from continuing operations before cumulative effect of change in accounting principle increased $6,329,000 to a loss of $12,384,000 due to the operating loss increase discussed above, offset by a reduction in net interest expense of $2,358,000 or 78%. Net interest expense declined due to the repayment of $104,480,000 of the Company's 10-3/8% Senior Notes due 2007, during the first quarter of fiscal 2003. Sequential quarter comparison Revenues declined $970,000 or 2% due to lower volumes in Europe due to the usual summer vacation period and a decline in average sales prices in Europe due to lower resin prices, offset by an increase in volumes and revenues in the Company's North American concentrates manufacturing operation. Lower revenues produced lower gross profit which declined $211,000 or 3%, to $8,217,000 during the fourth quarter. Selling, general and administrative expenses decreased $513,000 or 6%, due to the cost reduction plan implemented in late fiscal year 2003. EBITDA improved $311,000 or 70% due to the factors above. Due to these changes and the impairment, restructuring and other costs of $12,008,000, operating loss increased to a loss of $14,617,000 compared to the third quarter fiscal 2003 loss of $3,623,000. Liquidity During the fourth quarter, cash balances increased $2,562,000 to $4,114,000. The increase was due to the sale of the Company's remaining oilfield services location in July 2003 for $4,053,000 in cash, a decline in accounts receivable of $4,654,000, a decline in inventory of $1,667,000, an increase in accounts payable of $1,620,000 offset by capital expenditures of $1,100,000 and a decline of $7,470,000 in short-term borrowings. Borrowing capacity available under the Company's existing credit arrangements increased $5,010,000 during the fourth quarter to $16,360,000 as of September 30, 2003. At September 30, 2003, the Company's balance sheet shows that its accumulated deficit further ballooned to close to $75 million, whittling down its total shareholders' equity to about $67 million from about $111 million a year ago. Business Outlook and Cost Reduction Plan Update "We are now beginning to see the benefits of our cost reduction program," said Jon Biro, interim Chief Executive Officer and Chief Financial Officer. "Our selling, general and administrative expenses declined on a sequential basis for the second consecutive quarter. Furthermore, our business volumes for the three months ended November 30, 2003 exceeded the volumes from the same months of the previous year, which has not been the case since July 2002. Our operations in Sweden and certain operations in the U.S., which dramatically under-performed during fiscal year 2003 are beginning to show improvement. Our North American concentrates manufacturing location and our locations in Australasia are also experiencing significant increase in volumes in the first quarter of fiscal year 2004. The annualized cost reductions implemented during the fourth quarter of approximately $6,500,000 will also improve our earnings. Despite the traditional holiday period during December, we expect to generate modest operating income before charges during our first fiscal quarter of 2004, a significant improvement compared to the first and fourth quarters of fiscal 2003." The $6,500,000 of annualized cost reductions were made at the Company's corporate headquarters ($3,200,000), ICO Polymers North American locations ($1,500,000) and European locations ($1,800,000). Of the $6,500,000 in cost reductions, $5,400,000 relates to reduced selling, general and administrative expenses. Additional cost reductions are planned for fiscal year 2004. Preferred Dividend The Company's Dividend Committee of the Board of Directors has determined not to declare any dividend on its depositary shares, each representing 1/4 of a share of $6.75 convertible preferred stock, for the quarter ending on December 31, 2003. These securities trade on the Nasdaq National Market System under the symbol "ICOCZ". Through twenty plants worldwide, ICO Polymers produces and markets ICORENE(TM) and COTENE(TM) rotational molding powders, as well as ICOFLO(TM) powdered processing aids and ICOTEX(TM) powders for textile producers. ICO additionally provides WEDCO(TM) size reduction services for specialty polymers. ICO's Bayshore Industrial subsidiary produces specialty compounds, concentrates, and additives primarily for the film industry. As previously reported, Standard & Poor's withdrew its 'B+' corporate credit and 'B-' senior unsecured debt rating on ICO Inc., at the company's request. INNSUITES HOSPITALITY: Oct. Net Capital Deficit Widens to $2.8MM ---------------------------------------------------------------- InnSuites Hospitality Trust (Amex: IHT) reports its Fiscal 2004 third-quarter results, with these highlights: * Trust revenue from continuing operations totaled $13.4 million for the nine months ended October 31, 2003, a decrease of 8.8% from the prior year period of $14.7 million. * Net loss from continuing operations was $1.3 million for the nine months ended October 31, 2003, which was consistent with the prior year period. * Net loss from continuing operations was $649,000 for the three months ended October 31, 2003 compared to a loss of $883,000 in the prior year period. * Recurring FFO for the first nine months was $(380,000) compared to $76,000 in the prior year period. InnSuites Hospitality Trust reported revenue from continuing operations of $13.4 million for the nine months ended October 31, 2003, a decrease of 8.8% from $14.7 million for the prior year period. This decrease reflects the sluggish economy during the first nine months of fiscal year 2004. The Trust reported revenue from continuing operations of $4.0 million for the three months ended October 31, 2003, a decrease of 6.1% from $4.2 million for the prior year period. The Trust's total net loss attributable to Shares of Beneficial Interest for the nine months ended October 31, 2003 was $1.6 million, or $0.80 per diluted share, compared to a loss of $1.1 million, or $0.52 per diluted share, during the first nine months of the prior fiscal year. During the nine months ended October 31, 2003, the Trust recorded a loss on impairment relating to the Buena Park, California property of $329,000, of which $168,000 was attributable to Shares of Beneficial Interest. The Trust's net loss from continuing operations for the nine months ended October 31, 2003 was $1.3 million, or $0.62 per diluted share, which was consistent with the prior year period loss from continuing operations of $1.3 million, or $0.62 per diluted share. The Trust's total net loss attributable to Shares of Beneficial Interest for the three months ended October 31, 2003 was $759,000, or $0.37 per diluted share, compared to a loss of $978,000, or $0.49 per diluted share, during the same three month period in the prior fiscal year. The Trust's net loss from continuing operations for the three months ended October 31, 2003 was $649,000, or $0.31 per diluted share, which was an improvement of $234,000 over the prior year period loss from continuing operations of $883,000, or $0.44 per diluted share. This improvement reflects the return of hotel revenues to near the prior year levels in addition to a decrease in total expenses due to the effects of cost cutting programs. The Trust had Recurring Funds From Operations (FFO) of a negative $380,000 for the nine months ended October 31, 2003. Recurring FFO decreased $456,000 from $76,000 in the prior year period. The decrease was due to decreased revenues caused by the challenging economic environment during the first nine months of fiscal year 2004. The Trust's October 31, 2003 balance sheet shows a total shareholders' equity deficit of about $2.8 million. Positioned for the Future The Trust has been impacted by the general economic slowdown and, specifically, the difficulties in the travel and hospitality industries. The Trust has taken steps, including tight cost controls and the disposition of underperforming assets, which it believes has mitigated the impact of these factors and has positioned the Trust to benefit from a recovery in the travel industry. Although the Trust expects a modest pickup in the economy over the balance of the current year and in the coming year, it continues to take aggressive steps to cut costs and increase sales. InnSuites Hospitality Trust is a mid-market studio and two-room suite hospitality real estate investment trust with 8 moderate service and full service hotels containing 1,243 hotel suites located in Arizona, New Mexico and Southern California. For investor information, visit http://www.innsuitestrust.com/ INT'L PAPER: Will Redeem All 7.875% Capital Securities on Jan 14 ---------------------------------------------------------------- International Paper (NYSE: IP) has notified the Bank of New York, as trustee, that it has elected to redeem all of the outstanding International Paper Capital Trust III 7.875 percent Capital Securities due Dec. 1, 2038, on Jan. 14, 2004, at a redemption price equal to 100 percent of the principal amount, plus interest accrued thereon to the date of redemption. International Paper also announced that it has successfully completed the previously announced offering of $1 billion aggregate principal amount senior notes. 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. INT'L STEEL: Underwriters Purchase Additional 2.4 Million Shares ---------------------------------------------------------------- International Steel Group Inc. (NYSE: ISG), announced that the underwriters of its initial public offering have exercised their over-allotment option in full to purchase an additional 2,475,000 shares of ISG's common stock from ISG at the initial public offering price of $28.00 per share. This exercise adds $69.3 million to the offering, increasing the total proceeds to $531.3 million. Goldman, Sachs & Co. and UBS Securities LLC acted as joint book- running lead managers of the initial public offering and JPMorgan, Bear, Stearns & Co. Inc. and CIBC World Markets acted as co- managers of the initial public offering. A prospectus relating to the offering may be obtained from Goldman, Sachs & Co., Prospectus Department, 85 Broad Street, New York, NY 10004, or UBS Securities LLC, ECMG Syndicate Department, 299 Park Avenue, New York, NY 10171. An electronic copy of the prospectus is also available from the Securities and Exchange Commission's Web site at http://www.sec.gov/ International Steel Group (S&P, BB Corporate Credit Rating, Developing Outlook) was formed by WL Ross & Co. LLC to acquire and operate globally competitive steel facilities. Since its formation, International Steel Group Inc. has grown to become the second largest integrated steel producer in North America, based on steelmaking capacity, by acquiring out of bankruptcy the steelmaking assets of LTV Steel Company Inc., Acme Steel Corporation and Bethlehem Steel Corporation. The company has the capacity to cast more than 18 million tons of steel products annually. It ships a variety of steel products from 11 major steel producing and finishing facilities in six states, including hot- rolled, cold-rolled and coated sheets, tin mill products, carbon and alloy plates, rail products and semi-finished shapes serving the automotive, construction, pipe and tube, appliance, container and machinery markets. INTERNET CAPITAL: Will Continue Listing on Nasdaq SmallCap ---------------------------------------------------------- Internet Capital Group, Inc. (Nasdaq: ICGE) received a notice from the Nasdaq Stock Market regarding the continuation of its listing status on the Nasdaq SmallCap Market. Based upon the Company's compliance with all SmallCap Market initial listing standards (other than the minimum bid price requirement), the Nasdaq Listing Qualifications Panel has granted ICG an exception to the bid price requirement through January 30, 2004, to allow for further developments in the SEC rulemaking process. This decision by the Panel reflects the amended rule change proposal submitted by the Nasdaq to the SEC on September 25, 2003. Under the proposed new rule change, SmallCap Market issuers may be afforded two 180-day "grace periods" to remedy a minimum bid price deficiency. Upon expiration of the two 180-day "grace periods," a SmallCap issuer would then be eligible for a third compliance period, up to its next annual meeting (but no later than two years from the initial notice of bid price deficiency), provided it met all of the SmallCap Market's initial listing requirements, other than bid price, and provided the issuer "commits to seek shareholder approval for a reverse stock split to address the bid price deficiency at or before its next annual meeting, and to promptly thereafter effect the reverse stock split; and the shareholder meeting to seek such approval is scheduled to occur no later than two years from the original notification of bid price deficiency." In ICG's case, Nasdaq has indicated that the rule change proposal would afford the Company an exception to no later than April 24, 2004. The SEC has not yet approved Nasdaq's rule change proposal. Internet Capital Group, Inc. -- http://www.internetcapital.com/-- is an information technology company actively engaged in delivering software solutions and services designed to enhance business operations by increasing efficiency, reducing costs and improving sales results. ICG operates through a network of partner companies that deliver these solutions to customers. To help drive partner company progress, ICG provides operational assistance, capital support, industry expertise, access to operational best practices, and a strategic network of business relationships. Internet Capital Group is headquartered in Wayne, Pa. At September 30, 2003, Internet Capital's balance sheet shows a total shareholders' equity deficit of about $47 million. INTERPLAY ENTERTAINMENT: Sells Galleon to SCi Entertainment ----------------------------------------------------------- Interplay Entertainment Corp. (OTC Bulletin Board: IPLY) sold all rights to Galleon: Islands of Mystery to SCi Games Ltd., an affiliate of SCi Entertainment Group of London. Terms of the transaction were not disclosed. Commenting on the announcement, Interplay Chairman and Chief Executive Officer Herve Caen said, "In development for more than three years, Galleon no longer fits with Interplay's strategy going forward. Heading into 2004, Interplay is facing critical decisions about its future strategy, its resources, and its product lineup. The company's development resources will be streamlined and focused on high profile game titles we have planned for release next year and in the near term, including Exalted, an action/adventure title now in development." Interplay Entertainment Corp. -- whose September 30, 2003 balance sheet shows a total shareholders' equity deficit of about $16 million -- is a worldwide developer and publisher of interactive entertainment software for both core gamers and the mass market. Founded in 1983, Interplay offers a broad range of products in the action/arcade, adventure/role-playing game (RPG) and strategy/puzzle categories across multiple platforms, including PlayStation(R)2 computer entertainment system, the Xbox(R) video game system from Microsoft, Nintendo GameCube(TM) and PCs. The company's common stock is publicly traded under the symbol IPLY. For more information about Interplay visit its Web site http://www.interplay.com/ INTERPOOL INC: Will Pay Quarterly Cash Dividend on Jan. 2, 2004 --------------------------------------------------------------- Interpool, Inc. (NYSE:IPX) will pay a cash dividend of $.0625 cents per share for the fourth quarter of 2003. The dividend will be payable on January 15, 2004 to shareholders of record on January 2, 2004. The aggregate amount of the dividend is expected to be approximately $1,700,000. The amount of the quarterly dividend is based on an indicated annualized dividend rate of 25 cents per share. Interpool (S&P, BB+ Long-Term Corporate Credit Rating, Negative) is one of the world's leading suppliers of equipment and services to the transportation industry. It is the world's largest lessor of intermodal container chassis and a world-leading lessor of cargo containers used in international trade. More information on Interpool can be viewed at the Company's Web site at http://www.interpool.com/ ISLE OF CAPRI: Opens Casino at Westin and Sheraton in Bahamas ------------------------------------------------------------- Isle of Capri Casinos, Inc. (Nasdaq: ISLE) has opened its casino at the Westin and Sheraton at Our Lucaya Beach & Golf Resort at Freeport, Grand Bahama. The approximately 19,000 square-foot resort-style casino offers 400 slot machines and 21 table games. The property also features a 110-seat upscale restaurant called The Cove. The casino is expected to draw customers from the south Florida area and the eastern United States, as well as international markets. Bernard Goldstein, chairman and chief executive officer of Isle of Capri Casinos, said, "Following our completion of the Isle of Capri's venture into the UK, the Our Lucaya casino furthers the company's presence on an international scale." The company held an opening ceremony and ribbon cutting to celebrate the event at 10 a.m. EST Monday. The Honorable Obediah H. Wilchcombe, Minister of Tourism with responsibility for Gaming was in attendance. Timothy M. Hinkley, president and chief operating officer of Isle of Capri Casinos, said, "Our Lucaya offers an exciting fit to the company's tropical branding efforts. This casino will bring greater opportunities to Isle players through more IsleOne deferred-reward program benefits with travel to the Bahamas." The 300 Isle employees marked the event with a pre-opening pep rally and party on Saturday, featuring live entertainment and giveaways. The Westin and Sheraton at Our Lucaya, operated by Starwood Hotels & Resorts Worldwide, Inc. includes, 14 food-and-beverage outlets, a conference center, a tennis center, four ocean-front pools and spa & fitness center, two 18-hole championship golf courses and a Butch Harmon School of Golf. Isle of Capri Casinos, Inc. (S&P, B+ Corporate Credit Rating, Stable) owns and operates 15 riverboat, dockside and land-based casinos at 14 locations, including Biloxi, Vicksburg, Lula and Natchez, Mississippi; Bossier City and Lake Charles (two riverboats), Louisiana; Black Hawk (two land-based casinos) and Cripple Creek, Colorado; Bettendorf, Davenport and Marquette, Iowa; and Kansas City and Boonville, Missouri. The company also operates Pompano Park Harness Racing Track in Pompano Beach, Florida. The Westin and Sheraton at Our Lucaya Beach and Golf Resort is a 372-acre resort on Grand Bahama Island. The 1,260 room resort features two 18-hole golf courses, the Butch Harmon School of Golf, Senses Spa and fitness center, 14 restaurants and lounges, four premier tennis courts, Camp Lucaya children's center and four oceanfront swimming pools. For information, please call toll-free (800) Westin - 1 (937-8461) for the Westin at Our Lucaya, (800) 325-3535 for the Sheraton at Our Lucaya or visit http://www.westin.com/ourlucaya/or http://www.sheraton.com/ourlucaya/ Starwood is one of the leading hotel and leisure companies in the world with more than 740 properties in 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, please visit http://www.starwood.com/ JAMES CABLE: Consummates Pre-Negotiated Reorganization Plan ----------------------------------------------------------- James Cable, LLC announced the completion of its reorganization plan under which GoldenTree Asset Management has become the Company's largest equity holder, holding approximately 72% of the outstanding equity. James Cable Partners, L.P. and its wholly owned subsidiary, James Cable Finance Corp., filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code on June 26, 2003. The pre- negotiated plan of reorganization was confirmed by Judge Robert Hershner, Jr. of the U.S. Bankruptcy Court for the Middle District of Georgia, Macon Division, on November 25, 2003. Under the plan, James Cable Partners, L.P. was reorganized as a Delaware limited liability company, James Cable, LLC, and converted $88 million of its 10-3/4 % Senior Notes due August 15, 2004 into 93% of the equity of James Cable, LLC. The remaining 7% is held by the previous equity holders of James Cable. James Cable also refinanced GoldenTree's $30 million prepetition senior secured loan facility with a $30 million term loan and a $4 million revolving credit facility provided by a bank syndicate led by Merrill Lynch Capital. "We believe that James Cable now has an appropriate capital structure with which it can grow its business. We look forward to working with Bill James and his team as they implement their upgrade program for the balance of the subscriber base and position the company for future growth," said Steven Shapiro, a partner at GoldenTree. James Cable owns, operates and develops cable television systems serving rural communities in Oklahoma, Texas, Georgia, Louisiana, Colorado, Wyoming, Tennessee, Alabama and Florida. Founded in March of 2000, GoldenTree Asset Management specializes in debt opportunity investing across various parts of capital structures. GoldenTree currently has approximately $5.7 billion under management, distributed between hedge funds, structured products, and long-only funds. J.P. MORGAN: S&P Takes Rating Actions on Series 2001-A Notes ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its rating on the class G notes from J.P. Morgan Chase Commercial Mortgage Securities Corp.'s series 2001-A and removed it from CreditWatch. Concurrently, the rating on class F is affirmed and removed from CreditWatch. Additionally, the ratings on two classes are raised and the ratings on three others are affirmed. The lowered rating reflects credit support deterioration due to anticipated losses associated with specially serviced assets. The raised ratings are warranted due to the increased subordination at the top of the capital structure. The affirmed ratings reflect appropriate levels of credit enhancement to offset deterioration in the collateral performance. As of Nov. 17, 2003, the trust collateral consisted of 22 commercial mortgages with an outstanding principal balance of $99.1 million, down from 25 loans totaling $113.8 million at issuance. The master servicer, GMAC Commercial Mortgage Corp., reported year-end 2002 net cash flow debt service coverage for 91.2% of the pool. Based on this information, Standard & Poor's calculated a pool weighted average DSC of 1.27x, down from 1.48x at the time of issue. The trust has experienced only one loss to date, which accounted for less than 0.1% of the initial pool balance. The top 10 loans comprise 77.3% of the pool and have a weighted average DSC of 1.23x, compared to 1.48x at issuance. This excludes the tenth-largest loan for which year-end 2002 financials are unavailable. Three of the top 10 loans are on GMACCM's watchlist and have an aggregate balance of $17.1 million (17.3%). Another two loans are with the special servicer (also GMACCM) and have an aggregate balance of $7.6 million (7.7%). The largest loan has an outstanding principal balance of $24.0 million (24.1%), and the underlying collateral was categorized as "fair" in a property inspection conducted in September 2003. Excluding the specially serviced assets, the remaining top 10 loans were characterized as "good" following the most recent property inspections. There are only two assets in special servicing. The ninth-largest loan has a scheduled balance of $3.9million and is secured by a 123-room hotel located in Dallas, Texas. The borrower entered into an 18-month modified loan agreement with the special servicer, but subsequently defaulted on the August 2003 payment. The property is in foreclosure proceedings, which may be prolonged by the borrower's bankruptcy filing in November 2003. A November 2003 property inspection rates the asset as "fair" and there is an appraisal reduction amount (ARA) of $1.6 million on this asset. A 142-room Comfort Inn located in Lakewood, Colorado. that has been re-flagged as a Days Inn secures the 10th largest loan. This asset is real estate owned and has an outstanding balance of $3.7 million, additional exposure of $0.9 million, and an ARA of $0.7 million. The asset is listed for sale at $3.0 million. Standard & Poor's anticipates losses on both loans. GMACCM's watchlist consists of 10 loans with an aggregate principal balance of $32.0 million (32.3%). There are three top 10 loans that appear on the watchlist because of DSC and occupancy issues. The Crossing Center portfolio in Norcross, Ga. secures the third-largest loan. This 160,795-sq.-ft. office facility has a scheduled balance of $6.8 million (6.9%). This property reported a 1.30x DSC in 2001, which dropped to 1.13x in 2002. Occupancy, reported to be 80.0% at year-end 2001, decreased to 60.0% at year- end 2002, and has not improved during 2003. The fifth-largest loan is secured by Southside Garden, a 115-unit senior housing/assisted living facility in Baton Rouge, Louisiana. This property has an outstanding balance of $5.7 million (5.8%) and reported a DSC of 1.10x in both 2001 and 2002. A slight occupancy decline has resulted in a 1.07x DSC for the first half of 2003. The Holiday Trail Plaza, a 24,481-sq.-ft. retail facility in Kissimmee, Florida secures the seventh-largest loan. A tenant, who previously occupied 43.0% of the space, vacated in March 2003, adversely effecting occupancy and DSC. Harley-Davidson Inc. ('A'/Stable) has signed a seven-year lease to occupy this space at the same rental rate as the vacating tenant. The remaining loans appear on the watchlist primarily due to DSC, occupancy, and lease expiry issues. The trust collateral has geographic concentrations in excess of 10.0% in California (30.5%) and Ohio (24.1%). Property concentrations are also found in retail (56.0%) and office (12.3%) assets. Lodging represents 7.7% of the outstanding pool balance. Standard & Poor's stressed the loans that appear on the watchlist, when appropriate, in its analysis. The resultant credit enhancement levels support the raised, affirmed, and lowered ratings. RATING LOWERED AND REMOVED FROM CREDITWATCH J.P. Morgan Chase Commercial Mortgage Securities Corp. Commercial mortgage pass through certs series 2001-A Rating Class To From Credit Enhancement (%) G B- B/Watch Neg 14.5 RATINGS RAISED J.P. Morgan Chase Commercial Mortgage Securities Corp. Commercial mortgage pass through certs series 2001-A Rating Class To From Credit Enhancement (%) B AA+ AA 49.6 C A+ A 41.9 RATING AFFIRMED AND REMOVED FROM CREDITWATCH J.P. Morgan Chase Commercial Mortgage Securities Corp. Commercial mortgage pass through certs series 2001-A Rating Class To From Credit Enhancement (%) F BB BB/Watch Neg 22.4 RATINGS AFFIRMED J.P. Morgan Chase Commercial Mortgage Securities Corp. Commercial mortgage pass through certs series 2001-A Class Rating Credit Enhancement (%) A-2 AAA 56.5 D BBB 31.0 E BBB- 27.5 X AAA N.A. KMART CORP: Court Reclassifies 1,500 Claims Totaling $432 Mill. --------------------------------------------------------------- The Kmart Corporation Debtors found 1,781 claims that incorrectly asserted priority status when in fact the claims are non-priority, general, unsecured claims. At their behest, the Court reclassifies 1,513 of the claims as non-priority, general unsecured claims: Type of Claims Amount Reclassified Amount -------------- ------ ------------------- Secured $1,219,256 $3,133,521 Administrative 10,931,690 19,442,124 Priority 311,639,776 - Unsecured 108,408,549 409,623,625 The Debtors withdraw their Objection with respect to 52 Claims. The hearing with respect to 216 Claims will be continued at a later date: Type of Claims Amount Reclassified Amount -------------- ------ ------------------- Secured $18,500,565 $18,498,851 Administrative 2,212,295 10,764,400 Priority 160,428,859 - Unsecured 76,010,710 227,889,178 (Kmart Bankruptcy News, Issue No. 66; Bankruptcy Creditors' Service, Inc., 215/945-7000) KSAT SATELLITE: Avihu Bergman Appointed as New Director ------------------------------------------------------- KSAT Satellite Networks Inc. announced that Mr. Avihu Bergman has been appointed as director of KSAT with effect from Dec. 1, 2003. Mr. Erez Antebi resigned as director on 26 November 2003. Mr. Avihu Bergman is the Executive Vice President of Sales in Gilat Satellite Networks Ltd, a company headquartered in Petah Tikva, Israel. KSAT is in the satellite telecommunications business in China. The common shares of KSAT trade on the Canadian TSX Venture Exchange under the trading symbol "KSA". The company's September 30, 2003, balance sheet shows a net capital deficit topping $20 million. LEGACY HOTELS: Concludes Refinancing Deal & Debenture Repayment --------------------------------------------------------------- Legacy Hotels Real Estate Investment Trust (TSX: LGY.UN) closed a refinancing transaction consisting of mortgage and bank financing and repayment of debentures. Legacy has entered into seven mortgage financings with certain major Canadian financial institutions for aggregate gross proceeds of $335 million. Legacy granted mortgages on seven of its properties -- The Fairmont Waterfront, The Fairmont Hotel Macdonald, Delta Toronto East, Fairmont Chateau Laurier, Fairmont The Queen Elizabeth, Delta Centre-Ville and Delta Halifax. The proceeds were used to repay the maturing amounts of Legacy's Series 2A and 3 debentures and the redemption price of its Series 1C, 1D and 2B debentures that had been called for redemption. Legacy's 7.75% convertible debentures due April, 2007 remain outstanding. The balance of the proceeds will be used to fund the call premium, the costs associated with the financing and to repay other debt. The call premium and deferred issue costs relating to the debentures totaling approximately $10 million will be fully expensed in the fourth quarter. As part of the refinancing, Legacy has also entered into a $90 million secured credit facility. This new facility replaces Legacy's current facility and is secured by several other Legacy properties. 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 Chateau 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. LENNOX INT'L: 2004 Annual Shareholders Meeting Set for April 16 --------------------------------------------------------------- Lennox International Inc. (NYSE: LII) confirmed the date for its 2004 Annual Meeting of Stockholders and the corresponding record date. The company announced the meeting will be held Friday, April 16, 2004, at 9:00 a.m. local time, at the University of Texas at Dallas School of Management, located on its campus at the southeast corner of Drive A and University Parkway in Richardson, Texas. Stockholders of record at the close of business on February 17, 2004 will be entitled to vote at the 2004 annual meeting. A Fortune 500 company operating in over 100 countries, Lennox International Inc. (S&P, BB- Corporate Credit Rating, Stable) is a global leader in the heating, ventilation, air conditioning, and refrigeration markets. Lennox International stock is traded on the New York Stock Exchange under the symbol "LII". Additional information is available at http://www.lennoxinternational.com/ LENNOX INT'L: Declares Quarterly Cash Dividend Payable on Jan. 2 ---------------------------------------------------------------- The board of directors of Lennox International Inc. (NYSE: LII) declared a quarterly cash dividend of $0.095 per share of common stock payable on January 2, 2004 to stockholders of record as of December 23, 2003. A Fortune 500 company operating in over 100 countries, Lennox International Inc. (S&P, BB- Corporate Credit Rating, Stable) is a global leader in the heating, ventilation, air conditioning, and refrigeration markets. Lennox International stock is traded on the New York Stock Exchange under the symbol "LII". Additional information is available at http://www.lennoxinternational.com/ METROPOLITAN ASSET: Fitch Takes Rating Actions on 2 Note Issues --------------------------------------------------------------- Fitch has taken rating actions on the following Metropolitan Asset Funding issues: Series 2000-A -- Class A-3, A-4 affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 downgraded to 'B-' from 'BB-'; -- Class B-1 remains at 'D'. Series 2000-B -- Class A1A, A1F affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class B-1, rated 'BBB', placed on Rating Watch Negative. The negative rating actions taken on series 2000-A, class M-2 and series 2000-B, class B-1 reflect the poor performance of the underlying collateral in the transaction. The level of losses incurred has been higher than expected. The affirmations on the above classes reflect credit enhancement consistent with future loss expectations. MIRANT CORP: Equity Committee Taps Hohmann Taube as Co-Counsel -------------------------------------------------------------- The Official Committee of Equity Security Holders, appointed in the Mirant Debtors' chapter 11 proceedings, seeks the Court's authority to retain Hohmann, Taube & Summers LLP as co-counsel of Brown Rudnick Berlack Israels LLP. Morris Weiss, Co-Chairperson of the Equity Committee, relates that the Equity Committee selected Hohmann because its attorneys have extensive experience in Chapter 11 business reorganizations. Members of Hohmann also have extensive experience in representing committees and equity interest holders in Chapter 11 proceedings. As co-counsel, Hohmann will: (a) advise the Equity Committee and its members as to rights and responsibilities and as to matters and issues arising in this proceeding; (b) negotiate with the Debtors and other parties-in-interest with respect to Chapter 11 plans for the Debtors; (c) prepare on behalf of the Equity Committee all necessary applications, motions and other pleadings and papers in connection with these cases; and (d) perform all other legal services required by the Equity Committee in connection with these Chapter 11 cases. Eric J. Taube, Esq., a partner at Hohmann, Taube & Summers, assures Judge Lynn that to the best of his knowledge, the members and associates of Hohmann do not have any connection with the Debtors, their creditors, shareholders or other parties-in- interest that are adverse to the matters it is being retained. According to Mr. Taube, the firm intends to apply to the Court for allowance of compensation and reimbursement of expenses in accordance with applicable provisions of the Bankruptcy Code, the Local Rules and the Court Orders. Mr. Weiss informs the Court that Hohmann's hourly rates range from $150 to $375. The primary attorneys who will be involved in these cases are Mr. Taube, whose rate is $375 per hour and Mark C. Taylor, whose rate is $300 per hour. * * * Judge Lynn authorizes the Equity Committee to retain Hohmann effective September 18, 2003. (Mirant Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., 215/945-7000) MORGAN STANLEY: S&P Ups Ratings on Classes F & H Notes to BB+/B --------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on classes B, C, D, E, F, and H of Morgan Stanley Capital I Inc.'s commercial mortgage pass-through certificates from series 1997-WF1. Concurrently, the rating on class A-2 is affirmed. The raised and affirmed ratings reflect significantly increased credit support levels as well as improved debt service coverage ratios, seasoning, and no losses to date. As of Nov. 17, 2003, the trust collateral pool consisted of 106 loans with an outstanding principal balance of $372.4 million, down from 132 loans totaling $559.2 million at issuance. The largest loan in the pool, $22.5 million (6% of the deal), which had been formerly secured by three lodging properties, is now defeased. Standard & Poor's calculated the DSCR, based on net cash flow (excluding defeasance), for the current pool at 1.59x, with 89% of the pool reporting at year-end 2002, versus a DSCR of 1.43x at issuance. All but one loan in the pool is current. The current top 10 loans (excluding defeasance) have an aggregate outstanding balance of $102 million (33% of the pool). The weighted average DSCR for the top 10 loans, based on net cash flow, is stable at 1.37x, compared to 1.38x at issuance. Currently, only one loan is with the special servicer, CRIIMI MAE Services L.P. The King Star Apartments loan ($7.7 million, 2%) is secured by a 422-unit apartment complex located in Columbus, Ohio. This is the second time the loan has been placed with the special servicer. The loan's most recent transfer to special servicing was due to the borrower not making his default interest payments since March 2003. Sufficient funds to make principal and interest payments were being received in a lock box at a local bank. A misunderstanding between the local bank, the master servicer, and the special servicer has caused a freeze on the lockbox funds. Once this misunderstanding is resolved, the loan is expected to be brought current and returned to the master servicer. As of Dec. 31, 2002, the occupancy at the apartment complex was 91% and the DSCR was 1.07x. The master servicer, Wells Fargo N.A., reports six loans on its watchlist, with an aggregate principal balance of $24 million (6%). Of note is the ninth-largest loan ($8.2 million, 2.2%), 8800 Sunset Boulevard, which is secured by a 70,877-square foot office building in West Hollywood, California. It appears on the watchlist due to a decrease in cash flow. This is a borrower- occupied building that has been subleased to four tenants at low rent rates. The servicer has stated that the borrower has not provided updated financials or rent rolls. The pool has property type concentrations in retail (49%), multifamily (17%), and industrial (11%), and has geographic concentration in California (38%). Based on discussions with the master and special servicers, Standard & Poor's stressed various loans in the mortgage pool as part of its analysis. The expected losses and resultant credit levels adequately support the raised and affirmed ratings. RATINGS RAISED Morgan Stanley Capital I Inc. Commercial mortgage pass-through certs series 1997-WF1 Rating Class To From Credit Enhancement B AAA AA+ 36.04% C AAA A+ 27.03% D AA+ BBB+ 19.52% E AA- BBB 16.52% F BB+ BB- 7.51% H B B- 3.75% RATING AFFIRMED Morgan Stanley Capital I Inc. Commercial mortgage pass-through certs series 1997-WF1 Class Rating Credit Enhancement A-2 AAA 44.30% NEXMED INC: Completes $6 Million Refinancing Transactions --------------------------------------------------------- NexMed, Inc. (Nasdaq: NEXM) has raised $6 million from the issuance of new convertible notes due May 2007, which are secured by the existing mortgage on NexMed's manufacturing facility in East Windsor, New Jersey. The Notes are convertible at a conversion price based on an average of the market price of NexMed's common stock for the six months following closing, subject to a minimum conversion price of $5.00 and a maximum of $6.50, and do not provide for any conversion price adjustments (except for standard provisions for stock splits and similar events). The Notes have a coupon rate of 5% per annum which is payable in cash or, with certain exceptions, in shares of NexMed common stock at a price of 105% of a five-day average of the market price of its common stock prior to the time of payment. Under certain conditions, NexMed has the option to compel the holders of the Notes to convert into NexMed common stock. NexMed has agreed to file a registration statement with the Securities and Exchange Commission covering the resale of the shares of common stock that are issuable upon conversion of the Notes. The Tail Wind Fund Ltd was one of two purchasers and purchased $5.5 million of the issue. In addition, The Tail Wind Fund has converted into NexMed common stock the $2 million outstanding balance of the convertible note issued to it in June 2002 at a conversion price of approximately $2.78 per share. Dr. Y. Joseph Mo, President and C.E.O., commented, "This new cash infusion on favorable terms essentially doubles our cash reserves and strengthens our negotiating position as we move further along in the partnering discussions." NexMed, Inc. is an emerging pharmaceutical and medical technology company, with a product development pipeline of innovative treatments based on the NexACT(R) transdermal delivery technology. Its lead NexACT(R) product under development is the Alprox-TD(R) cream treatment for erectile dysfunction. The Company is also working with various pharmaceutical companies to explore the incorporation of NexACT(R) into their existing drugs as a means of developing new patient-friendly transdermal products and extending patent lifespans and brand equity. * * * Liquidity and Capital Resources As reported in Troubled Company Reporter's November 18, 2003 edition, Nexmed, Inc., has an accumulated deficit of $78,594,390 at September 30, 2003 and while Alprox-TD(R) clinical development expenses for the year 2003 have been significantly less than in 2002 due to the completion of the two Phase 3 pivotal studies for Alprox-TD(R) in 2002, the Company still expects to incur additional losses in 2003. However, the Company expects operating losses in 2003 to be lower than those incurred in 2002. If the Company is successful in entering into partnering agreements for some of its products under development using the NexACT(R) technology, it anticipates that it will receive milestone payments, which may offset some of its research and development expenses. The Company's current cash reserves raise substantial doubt about the Company's ability to continue as a going concern. Management anticipates that it will require additional financing, which it is actively pursuing, to fund operations, including continued research, development and clinical trials of the Company's product candidates. Although management continues to pursue these plans, there is no assurance that the Company will be successful in obtaining financing on terms acceptable to it. If additional financing cannot be obtained on reasonable terms, future operations will need to be scaled back or discontinued. NORSKECANADA: Powell River Council Cuts Property Tax by $200K ------------------------------------------------------------- Papermaker NorskeCanada received some good news on the tax front in a decision by Powell River to restructure its property tax rate for heavy industry. Last week, Powell River municipal council reduced NorskeCanada property taxes by $200,000 annually for the next five years, with a total reduction of $1 million per-year-by-year five. Council also established a five-year economic revitalization rate of zero on capital upgrades as a way to encourage significant investments by heavy industry. "I commend Council for taking action that reflects the reduced asset value of our Mill and that begins to address the inappropriate tax burden we carry," said Russell J. Horner, president and CEO. "We're hopeful that other municipalities will follow suit. But, it's important to recognize this is only the first step in addressing the unfair tax subsidization that exploits long-time industrial citizens and discourages new industry from locating in B.C. particularly in our small communities." The negative effect of very high rates and ratios on the business climate in smaller B.C. municipalities was brought to light in an independent study published, in October, by Robert Bish, professor emeritus at the University of Victoria. Faced with the highest ratios in the province, NorskeCanada funded the study as it launched an appeal to municipalities for more equitable tax treatment. The company also took up the variable tax issue with Victoria, pressing the provincial government to address an underlying structural flaw in the system by implementing a "cap of reasonableness" on industrial rates set by municipalities. The Bish report noted that since unconstrained variable rate setting was introduced in 1984, ratios for major industry in the top quartile of B.C. municipalities have risen higher than in virtually all other parts of North America. For example, NorskeCanada faces a tax ratio of 19.55 times the residential assessment in North Cowichan, compared with a median in British Columbia of 4.86 and 1.14 in Alberta. NorskeCanada is North America's third largest producer of groundwood printing papers. The company also produces market kraft pulp. With five Mills employing 4,000 people within 100 miles of each other on the south coast of British Columbia, NorskeCanada has a combined annual capacity of 2.3 million tonnes of product. NorskeCanada's common shares trade on the Toronto Stock Exchange under the ticker symbol NS. The company is headquartered in Vancouver, BC. * * * In October 2003, Moody's revised its outlook on NorkeCanada's debt ratings to negative from stable and confirmed its existing ratings of Ba2 on the Company's senior unsecured debt and Ba1 on its bank credit facilities. Standard and Poor's also revised its outlook in October from stable to negative and affirmed its existing ratings of BB on the Company's long-term corporate and senior unsecured debt. At September 30, 2003, the Company's balance sheet shows that its total current liabilities outweighed its total current assets by about $1.2 billion. NUTRAQUEST: Montgomery McCracken Retained as Committee's Counsel ---------------------------------------------------------------- The Official Unsecured Creditors Committee of Nutraquest, Inc., asks the U.S. Bankruptcy Court for the District of New Jersey to approve its application to retain Montgomery, McCracken, Walker & Rhoads, LLP as Counsel, nunc pro tunc to November 5, 2003. The Creditors' Committee selected Montgomery McCracken because of the Firm's expertise in creditors' rights, bankruptcy matters and business reorganizations, and in particular, its experience in asset tracing and recovery and its experience in mass tort bankruptcy cases. The Committee expects Montgomery McCracken to: a) represent and advise the Creditors' Committee in its communications with the Debtor, the United States Trustee, individual creditors, and any other parties in interest, with respect to the administration of the Chapter 11 case; b) conduct such review as may appear appropriate concerning the acts, conduct, assets, liabilities, and financial condition of the Debtor, the operation of the Debtor's businesses, any causes of action belonging to the Debtor's estate or creditors, and any other matter of significance to the Creditors' Committee which may be relevant to the Chapter I1 case; c) conduct such negotiation and commence such litigation as may appear appropriate to maximize the estate for the benefit of the Debtor's creditors; d) represent and advise the Creditors' Committee in connection with the formulation, negotiation and confirmation of a Chapter 11 plan for the Debtor; e) advise, assist and represent the Creditors' Committee in the performance of its duties and the exercise of its powers under the Bankruptcy Code and the Bankruptcy Rules; f) prepare applications, motions and other papers for filing in the Chapter 11 case mud in any related proceedings, and represent the Creditors' Committee in proceedings herein or therein; g) advise the Creditors' Committee with respect to retaining a financial advisor and other professionals, as needed, and assist such advisor(s) and other professional(s) as necessary; and h) perform such other legal services as may be required by the Creditors' Committee in the Chapter I1 case and in any related proceedings. John H. Lewis, Esq., will lead the team in this engagement. His standard hourly rate is currently $470 per hour. Other professionals will also render necessary services and will bill the Debtor at its current hourly rates of: Partners $274 to $475 per hour Counsel $230 to $450 per hour Associates $175 to $290 per hour Paralegals $70 to $170 per hour 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. ONIX MICROSYSTEMS: Court Sets Dec. 31 as Claim-Filing Deadline -------------------------------------------------------------- Onix Microsystems, Inc., having obtained requisite board and shareholder approval, filed a Certificate of Dissolution with the Delaware Secretary of State on October 2003 and voluntarily dissolved. Pursuant to Sec. 280 of the Delaware Corporation Law, creditors of Onix Microsystems must file their written claims with the Company on or before December 31, 2003. Claims must be sent to: Onix Microsystems, Inc. 47071 Bayside Parkway Fremont, CA 94538 Attn: Gary Koss Prior to the Dissolution, Onix Microsystems designed, developed and supplied MEMS-based all-optical switching engines for telecommunications equipment suppliers. PG&E NATIONAL: Mitsubishi Seeks Appointment of Examiner ------------------------------------------------------- Pursuant to Section 1104(c)(2) of the Bankruptcy Code, Mitsubishi Heavy Industries asks the Court to appoint an examiner with the authority to examine the PG&E National Energy Group Debtors' activities with respect to: (a) their control of numerous non-debtor subsidiaries and affiliates; and (b) their direction of the liquidation of assets and claims settlement of the subsidiaries and affiliates. These activities, which will otherwise be completely unsupervised by the Court and without notice to the unsecured creditors, will have a direct and profound impact on the ultimate distributions to the creditors in the NEG Debtors' Chapter 11 cases. Section 1104(c)(2) of the Bankruptcy Code -- formerly Section 1104(b)(2) -- provides in pertinent part that: ". . . at any time before the confirmation of a plan, on request of a party-in-interest or the United States trustee . . . the court shall order the appointment of an examiner to conduct such an investigation of the debtor as is appropriate, including an investigation of any allegations of fraud, dishonesty, incompetence, misconduct, mismanagement, or irregularity in the management of the affairs of the debtor of or by current or former management of the debtor, if -- * * * (2) the debtor's fixed, liquidated, unsecured debts, other that debts for goods, services, or taxes, or owing to an insider, exceeds $5,000,000." Greg R. Yates, Esq., at Steptoe & Johnson LLP, tells the Court that in Morgenstern v. Revco D.S., Inc. (In re Revco D.S., Inc.), 898 F.2d 498, 500-01 (6th Cir. 1990), the appointment under Section 1104(c)(2) is mandatory upon establishing that a debtor has $500,000,000 in qualifying debt. There can be no dispute about that in the NEG Debtors' cases. Mr. Yates says that a very large part of the NEG Debtors' assets are in their equity interests in a number of "special purpose" project subsidiaries that, in turn, own power generation plants. There is typically one entity per power plant or project, completely controlled by NEG. NEG's own personnel often staff these affiliates. Mr. Yates also notes that NEG guarantees its subsidiaries' senior bank creditors. These subsidiaries -- whom NEG controls -- have reached agreements to permit the foreclosure on most of the projects. In the agreements, NEG, through its controlled subsidiaries, agreed to the deficiency amounts for each of the bank creditors without any Court supervision as to the fairness of the agreed amounts. In turn, the deficiencies form the basis for hundreds of millions of dollars in bank creditor "unsecured claims" in the NEG Debtors' Chapter 11 proceedings. Mr. Yates point out that the bank creditors comprise the majority of the Official Committee of Unsecured Creditors, controlling its actions. According to Mr. Yates, if the assets are surrendered to a secured creditor and an artificially low value is attributed to the secured assets, then the creditor will have a larger deficiency claim that to which it is entitled. In the alternative, there is the opportunity for the non-debtor subsidiary or affiliate and a secured creditor to enter into deals in which the value of the collateral is more than the amount of the lien securing the debt, but the subsidiary or affiliate -- and in turn, NEG's estate -- receives no consideration for the excess value. Thus, NEG's creditors may be harmed when the value ascribed to the secured assets of NEG's non-debtor affiliates is either to high or too low. If the secured assets were the NEG Debtors' direct assets, rather than being held at the controlled subsidiary and affiliate level, Mr. Yates maintains that any major disposition of those assets or claim settlements regarding those assets would be subject to notice and a hearing. However, without an examiner empowered to investigate the transactions, the NEG Debtors will escape all effective oversight in these Chapter 11 cases. A structure with massive asset disposition at "project company" subsidiary levels does not provide the unsecured creditors the protection envisioned by the Bankruptcy Code. Mr. Yates relates that many of NEG's non-debtor subsidiaries and affiliates are planning to consummate deals in the near future which could have a profound impact on the amount of funds available for distribution to the creditors and effect the magnitude of allowed claims. Moreover, the transactions would be consummated without any notice to NEG's creditors or any manner of oversight or approval by the Court. "In many large cases, the liquidation of non-debtor subsidiaries and affiliates and claims settlement against them would not give rise to any concern. Here, there is great potential for mischief, either intentional or unintentional," Mr. Yates warns. "This is particularly true in light of the compressed claims resolutions process and expedited final distributions envisioned in the plan of reorganization [NEG filed]." Noteholders Committee Objects The Official Noteholders' Committee shares Mitsubishi's view that the allowability and amount of disputed and contingent unsecured claims asserted against the NEG Debtors by their non-debtor subsidiaries should be subject to scrutiny. The project lenders that financed the La Paloma, Lake Road and GenHoldings power plant projects -- all of which are owned by NEG's non-debtor subsidiaries -- assert over $1,000,000,000 in unsecured contingent guarantee claims and claims based on so-called equity- funding commitments against the NEG Debtors. The collateral supporting the underlying project loans is currently slated for abandonment, foreclosure or transfer to the bank groups. In all events, the bank groups are only entitled to a single satisfaction of the underlying project loans and the value of the collateral repossessed by the bank groups must be taken into account in this calculation. The Noteholders Committee tells the Court that it is not unusual for a Chapter 11 case to entail disputes regarding the allowability of claims. Routinely, official Chapter 11 committees deal with those issues. Creditors committees are specially empowered to investigate "the acts, conduct, assets, liabilities, and financial condition of the debtor, among other things" in accordance to Section 1103 of the Bankruptcy Code. If every case in which claims were disputed required the appointment of an examiner, the Bankruptcy Code's provisions governing the appointment of examiners would become a full employment provision. In light of the active participation of the Noteholders Committee and its retained professionals in these cases, and their familiarity with the issues relating to the disputed, contingent and unliquidated claims asserted by the bank groups and other creditors -- and the complete alignment of noteholder interests with those of NEG's general unsecured creditors that do not hold collateral subject to disposition by the non-debtor subsidiaries -- the Noteholders Committee believes that there is no need of an examiner, and most especially no need to yet another set of retained professionals charged with examining the claims. Joel I. Sher, Esq., at Shapiro Sher Guinot & Sandler, in Baltimore, Maryland, says that there is simply nothing that an examiner could do with respect to "investigating" the claims that the Noteholders Committee is not already positioned to do more quickly and effectively. The Noteholders Committee is concerned about the exorbitant professional fees run up by examiners in other large Chapter 11 cases. Mr. Sher points out that in Enron Corporation, now pending before the Southern District of New York, the examiner, Alston & Bird LLP, through August 31, 2003, incurred over $75,000,000 in fees and expenses. The Noteholders Committee is also wary that an examiner's investigation, which would involve a new independent person inquiring from scratch about a series of complex claims and transactions and valuing complex and currently unmarketable assets, would materially delay the confirmation process of NEG's reorganization plan. Mr. Sher asserts that Mitsubishi fails to acknowledge that Section 1104(c)(2) only requires the appointment of an examiner when the Court determines that an examiner investigation is appropriate. The Court retains the discretion to deny appointment of an examiner when to do so would result in unnecessary waste of assets and undue delay in administering the Debtors' Chapter 11 cases. Mr. Sher adds that Mitsubishi's claims include obligations as to which the NEG Debtors are contingently liable. Those claims are the subject of litigation and may also require scrutiny. (PG&E National Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., 215/945-7000) PHARMANETICS: Seeks Strategic Alternatives, Including Asset Sale ---------------------------------------------------------------- PharmaNetics, Inc. (NASDAQ-SmallCap: PHAR) announced that, due to continued legal action against Aventis, it is seeking strategic alternatives, including the sale of the manufacturing operations. The Company also announced that, if a buyer for the operations is not identified, it plans to terminate its distribution agreement with Bayer Diagnostics. The Company has had discussions with potential purchasers and is optimistic about the consummation of an agreement. As was required in the distribution agreement with Bayer Diagnostics, PharmaNetics has notified Bayer in writing of its intent to terminate its agreement. In addition, the Company provided notice to PDI, the contractor for its field sales and technical support teams, that their service would be terminated in 90 days. PharmaNetics believes these steps are necessary in order to conserve cash to finance its recently filed lawsuit against Aventis Pharmaceuticals, Inc., the wholly owned subsidiary of French pharmaceutical company, Aventis. John P. Funkhouser, president and chief executive officer of PharmaNetics, said, "We believe these actions are a result of Aventis' failure to honor its contractual obligations. Most companies are forced to take such action because they failed to develop their technology or execute their plan. However, it is just the opposite in PharmaNetics' case. Our suit alleges that PharmaNetics' technology reveals variability in patient response to Lovenox(R), which challenges the core of the drug's marketing message used by Aventis. Instead of embracing the technology and recognizing the issues as contemplated in the agreement, we believe Aventis has breached its contractual obligations." Mr. Funkhouser continued, "We are doing everything possible to insure that the operations will continue and the technology platform and personnel will be acquired. Aventis has caused us irreparable harm by not fulfilling its contractual obligations and by continuing to advertise that Lovenox is therapeutic from dose one and does not require coagulation monitoring. Our lawsuit alleges that Aventis is competing against the test it co-developed and is marketing Lovenox in a false and misleading way. We believe that the best approach to insure that our shareholders' receive the maximum return on their investment is through this lawsuit against Aventis. Thus, we are taking these actions to protect our cash position." PharmaNetics, Inc., a leading biotech company, conceived the term "theranostics," defining an emerging field of medicine that enables physicians to monitor the effect of antithrombotic agents in patients being treated for angina, myocardial infarction (heart attack), stroke, and pulmonary and arterial emboli. The Company develops, manufactures and markets rapid turnaround diagnostics to assess blood clot formation and dissolution. PharmaNetics develops tests based on its proprietary, dry chemistry Thrombolytic Assessment System. Its principal target market is the management of powerful new drug compounds, some of which may have narrow therapeutic ranges, as well as monitoring routine anticoagulants. * * * LIQUIDITY AND CAPITAL RESOURCES In its most recent Form 10-Q filed with the Securities and Exchange Commission, PharmaNetics reported: "At September 30, 2003, we had cash, cash equivalents and investments of $10.3 million and working capital of $11.4 million, as compared to $9.3 million and $9.4 million, respectively, at December 31, 2002. During the nine months ended September 30, 2003, we used cash in operating activities of $7 million. The use of cash was due to funding our net operating loss of $6.5 million as well as funding working capital. Inventories increased in the nine months ended September 30, 2003 as we have prepared for anticipated higher sales of specialty products as well as increased sales of routine cards, controls and analyzers. The deferred revenue balance has decreased due to the normal amortization of payments from Aventis into development income and recognition of revenues for ECT cards shipped on behalf of The Medicines Company for which we had received advanced payments for in the second half of 2002. Accounts payable have also decreased to lower levels during the nine months of 2003 because high payables at December 31, 2002 related to fixed asset purchases, trial expenses related to enoxaparin and the timing of professional service expenses which were paid early in 2003. "During the first nine months of 2003, we incurred additional costs for equipment to support manufacturing and operations. We also made information technology purchases to support general company operations as well as the sales and marketing efforts related to enoxaparin. We do not anticipate significant capital expenditures for the remainder of 2003. "Cash provided by financing activities of $8.4 million in the nine months ended September 30, 2003 was attributable to the completion of a private placement of 95,800 shares of Series B convertible redeemable preferred stock. See a discussion of the terms of the Series B preferred stock in "Note 7 Preferred Stock" of the Notes to the Consolidated Unaudited Financial Statements. This cash inflow was offset by payments of approximately $307,000 on debt with GE Capital and by payments of approximately $15,000 on capital leases. We obtained a three-year $1.5 million equipment loan from GE Capital in December 2002. The loan has an interest rate of 9.5% and is collateralized by existing fixed assets. The loan includes customary covenants related to, among other things, maintenance of the collateral, but does not contain financial covenants. As of September 30, 2003, the outstanding balance under the loan was approximately $1,202,000. "We have sustained continuing operating losses in 2003 and had an accumulated deficit of $71.8 million as of September 30, 2003. We expect to incur operating losses until product revenues reach a sufficient level to support ongoing operations and expect these operating losses to occur during the remainder of 2003 and into 2004. Our cash flow from operations will be substantially affected by the sales of the Enox test card launched in the first quarter of 2003. In November, we filed a lawsuit against Aventis alleging that Aventis has engaged in false and misleading advertising of its drug Lovenox(R), which has damaged our sales of the Enox test card. Our dispute with Aventis might reduce or delay our revenue opportunities and increase our expenses, thereby accelerating our liquidity needs in 2003 and 2004. Because of the potential strategic and economic significance of the development agreement for the Enox test, we are continuing to review all strategic alternatives, including a possible sale of our manufacturing and routine test business in order to reduce overhead, preserve cash and keep our technology and manufacturing capability intact. We plan to aggressively pursue our claims against Aventis. While we cannot currently estimate the legal costs related to this matter, it could be material to our cash flows. "Our expected liquidity needs through the end of 2004 also include approximately $700,000 to repay capital leases and our debt with GE Capital. We do not expect our capital expenditures in 2004 to be significant. Our working capital requirements will depend on many factors, primarily the volume of subsequent orders of TAS products from Bayer and from sales of the Enox test card. We expect levels of receivables, inventories and payables for the next 12 months to be approximately the same as those at September 30, 2003 if product sales do not significantly increase. If product sales do significantly increase and levels of receivables, inventories and payables rise, we would consider seeking a working capital line of credit to fund expenses associated with these potential increases, if necessary. "Our revenue and projected cash flows are heavily dependent on our relationship with our principal distributor, Bayer, which accounted for approximately 94% of our revenues in 2002 and 99% of our revenues in the nine months ended September 30, 2003. In October 2003, the Company and Bayer agreed to extend the amended distribution agreement for another year, to December 31, 2004. If Bayer failed to satisfy its obligations under our distribution agreement or purchased less product, our revenues and cash flows would be negatively impacted. "To meet our liquidity requirements, we will consider sources of funding such as the sale of the routine manufacturing and distribution rights, equity financings such as another private placement of common or preferred stock or additional funds from current or potential collaborative partners. We cannot be certain these sources of funding will be available to us. Our sources of liquidity also could be affected by our dependence and reliance on Bayer as our exclusive distributor, the outcome of the Aventis litigation, our achievement of market acceptance in the developing market for theranostic products, particularly related to the Enox test card, compliance with regulations, as well as other factors." PILLOWTEX CORP: Target & Mervyn Take Steps to Recover Damages ------------------------------------------------------------- Before the Petition Date, Target Corporation and Mervyn's Inc. made regular purchases of home design goods from the Pillowtex Debtors, including bedding and bath goods. Pursuant to their customary practices and agreements with the Debtors, including a Partners Online Contracts, the Retailers are authorized to assess and deduct the amounts for any and all chargebacks and make any other adjustments for charges incurred by the Debtors from any and all amounts owed to the Debtors. The Retailers assessed and deducted chargebacks and other adjustments. Target expects to make further assessments for at least $172,582 while Mervyn's expects $50,000, which will be deducted from any and all outstanding amounts payable to the Debtors. Target currently has outstanding accounts payable to the Debtors for $1,003,481 while Mervyn's has $776,498. On August 4, 2003, the Debtors sought the approval of the sale of substantially all of their assets. The Debtors' request provides that: -- the Debtors file their Chapter 11 cases to facilitate the winddown of their business operations and an orderly liquidation of substantially all of their assets; and -- the Debtors' business operations cease and close their manufacturing, retail, and other facilities. As a result, the Debtors discontinued the Home Goods and were unable to continue to provide any of the Home Goods to the Retailers for sale in their stores. Due to the premature and unscheduled discontinuation of the Home Goods: (1) Mervyn's will be damaged from the markdowns for at least $822,461; (2) Target will lose a significant amount of profits from its sales that total at least $680,900; and (3) Mervyn's will also lose sales profits of at least $721,813. The Retailers want to lift the automatic stay to the extent that the stay might otherwise prevent them from recouping damages resulting from the unscheduled discontinuation of the Home Goods from the amounts payable to the Debtors. Mary Caloway, Esq., at Klett, Rooney, Lieber & Schorling, in Wilmington, Delaware, tells the Court that cause exist for lifting the stay because the interests of the Retailers are not adequately protected. The Debtors' inability to continue to provide the Home Goods has harmed and will continue to irreparably harm the Retailers. Ms. Caloway relates that in the ordinary course of the their business, the Retailers assess and deduct amounts for any and all chargebacks and other adjustments from the invoiced amounts payable to the Debtors, pursuant to an agreement with the Debtors. The Retailers are obligated only to pay the Debtors the amount remaining after assessing and making the decisions. The remaining amount is the only amount that can be considered property of the Debtors' estates. Therefore, Ms. Caloway asserts, the automatic stay must not prevent the Retailers from assessing and deducting any chargebacks or discounts, or making any other adjustments, from the invoiced amounts payable to the Debtors. Alternatively, even if the deductions are not ordinary course adjustments to the Debtors' accounts under their agreement terms, the Retailers may recoup these chargebacks, discounts, and other adjustments from any invoiced amounts payable to the Debtors. Ms. Caloway states that recoupment is an equitable remedy that permits the offset of mutual obligations when the respective obligations arise under the same transaction. Recoupment even permits the offset of prepetition obligations against postpetition obligations, so long as both arise from the same transaction. According to Ms. Caloway, the Retailers' obligations and the Debtors' arise out of the same agreements -- the Partners Online Contracts. The obligations also arise out of the same transactions -- the provision and purchase of the Home Goods. It is also inequitable to allow the Debtors to receive any payments from the Retailers for the Home Goods without also requiring the Debtors to honor their agreement to allow the Retailers to assess and deduct any chargebacks and other adjustments for the amounts payable to the Debtors as they would have absent the bankruptcy. Ms. Caloway adds that recoupment also allows the Retailers to offset their damages resulting from the unscheduled discontinuation of the Home Goods against any amounts payable to the Debtors. Ms. Caloway says that the Home Goods unscheduled discontinuation creates considerable hardships to the Retailers: (1) Due to the unscheduled discontinuation, Mervyn's will be forced to significantly mark down prices to provide an incentive to their guest to purchase the Home Goods particularly where current inventory is incomplete; (2) the Retailers are forced to seek alternative vendors to replace the Home Goods and incur other expenses closing out the Home Goods. The Retailers have been forced to negotiate with new vendors from a weakened bargaining position; (3) the Retailers also will suffer from a disruption of inventory flow as they sell the Home Goods at clearance sale prices to make room for new home design merchandise; and (4) the Retailers will be forced to incur losses and additional costs and expenses resulting from their guests' return of purchased Home Goods. Ms. Caloway contends that the unscheduled discontinuation of the Home Goods has, and will continue to have, a number of other significant negative effects on the Retailers. The unavailability of the Home Goods creates an impression with guests that the Retailers are unable to meet all of their guests' shopping needs. This impression negatively impacts the name and image of the Retailers and their reputation with their guests. The unavailability of the Home Goods may also cause the Retailers' customers to shop elsewhere. As with any retail department store, the loss of any guest or the reduction in overall guest traffic significantly and detrimentally impacts the Retailers' business operations in immeasurable ways. Accordingly, Target and Mervyn's ask the Court to lift the automatic stay to offset and otherwise recoup their damages resulting from the unscheduled discontinuation of the Home Goods from the amounts payable to the Debtors. Debtors Respond Christopher M. Winter, Esq., at Morris, Nichols, Arsht & Tunnell, in Wilmington, Delaware, contends that the Retailers failed to establish cause to lift the stay because they have not shown any legal basis for a claim against the Debtors. Target and Mervyn's failed even to allege, let along prove, that the Debtors had any obligation in contract or otherwise to continue supplying them with products. In the absence of an obligation, the shutdown and liquidation of the Debtors' business may have been inconvenient for them, but it did not give rise to a damages claim. Mr. Winter asserts that there is certainly no sense in which their unsupported assertions could be regarded as "undisputed" claims that properly would be subject to set-off or recoupment or that properly should be subject to a motion to lift the stay. To the extent that the Retailers wish to assert any claims against the Debtors, they can file proofs of claim in the bankruptcy proceeding or assert set-off as a defense to any turnover action brought by the Debtors. Mr. Winter states that the Retailers suffer no prejudice in proceeding in this manner since they are excused in the interim from making payment on their obligations to the Debtors to the extent of the disputed set-off. Mr. Winter contends that it is evident on its face that the Retailers' request is without merit. Furthermore, the request has been widely reported in the industry. Other customers of the Debtors have already indicated an inclination to defer payment of amounts owing to the Debtors for past inventory shipment until the Court decides on the Retailers' request. Everyday that the Retailers' assertions go unchallenged, the Debtors' collection of outstanding accounts receivable are delayed, damaging the Debtors and their creditors. The Debtors have over $50,000,000 in outstanding receivables that may be adversely affected by any delay. Thus, the Debtors ask the Court to deny the Retailers' request. In the event that the Court decides not to deny the Retailers' request at this time, the Debtors ask the Court to confirm that the automatic stay continues in effect pending a final hearing on the request. (Pillowtex Bankruptcy News, Issue No. 56; Bankruptcy Creditors' Service, Inc., 215/945-7000) PLAINS ALL AMERICAN: Takes 100% Stake in Atchafalaya Pipeline ------------------------------------------------------------- Plains All American Pipeline, L.P. (NYSE: PAA) has acquired all of the remaining interests in Atchafalaya Pipeline LLC, increasing its ownership from 33-1/3 percent to 100 percent. The additional interests were purchased from Shell Pipeline Company L.P. and Gulf Coast Field Services, L.L.C. in two separate transactions for a combined purchase price of approximately $4.4 million. The transactions were funded through a combination of cash on hand and borrowings under the Partnership's revolving credit facilities. The principal asset of Atchafalaya LLC is the Atchafalaya Pipeline System, which originates near Garden City, Louisiana, and traverses east until it reaches its terminus near Gibson, Louisiana. The system is an 8-inch diameter crude oil and condensate pipeline with a length of approximately 35 miles, 28 miles of which are in active service. The system receives crude oil and condensate from ANR Pipeline, CMS Trunkline and a barge dock in the Patterson, Louisiana, area and delivers into tankage controlled by PAA at Gibson. In 2002, the system transported approximately 18,100 barrels of crude oil and condensate per day. The Partnership acquired its original 33-1/3 percent interest in the system earlier in the year as part of its acquisition of a package of assets from an affiliate of El Paso Corporation. Plains All American Pipeline, L.P. (S&P, BB+ Senior Unsecured Rating, Positive) is engaged in interstate and intrastate crude oil transportation, terminalling and storage, as well as crude oil and LPG gathering and marketing activities, primarily in Texas, California, Oklahoma and Louisiana and the Canadian Provinces of Alberta and Saskatchewan. The Partnership's common units are traded on the New York Stock Exchange under the symbol "PAA". The Partnership is headquartered in Houston, Texas. RANGE RESOURCES: Will Acquire West Texas Properties for $85 Mil. ---------------------------------------------------------------- Range Resources Corporation (NYSE:RRC) agreed to acquire certain West Texas oil and gas properties for approximately $85 million after customary closing adjustments. The properties to be acquired are adjacent to the Company's Conger Field properties in Sterling County in West Texas. Year-end proved reserves attributed to the properties approximate 80 Bcfe, of which 88% is natural gas and natural gas liquids by volume and 80% is classified as proved developed. Current net production from the properties exceeds 14 Mmcfe per day. Range will operate more than 95% of the production. The properties have a shallow decline and long life with a reserve-to-production ratio of over 15 years. The properties include more than 500 wells which produce primarily from the Cisco and Canyon formations at an average depth of 7,500 feet. An associated 400-mile gathering system that collects and transports the properties' production is also being acquired. Over 40 proven drilling locations will be acquired along with all deep drilling rights on 38,000 gross (32,000 net) acres of leases. A development program will be initiated in 2004 to increase production over the course of the next three years. Given a modest allocation of the purchase price to the gathering system, the proved reserves are being acquired for approximately $1.00 per mcfe. The purchase, which is expected to close by year-end, will be financed with bank borrowings. Pro forma for the acquisition, the Company's debt-to-capitalization ratio will approximate 54% at year-end. Given projected debt reductions from free cash flow and the anticipated sale of certain non-strategic assets, the debt ratio is expected to fall below 50% within six to nine months. Commenting, John H. Pinkerton, Range President stated, "We are extremely pleased with this pending acquisition. It is large enough to immediately make a meaningful contribution to earnings and cash flow while fitting perfectly into our existing asset base. In addition, the purchase can readily be financed under our existing bank facility. The purchase will make Range the largest operator by far in the Conger Field and should permit us to achieve substantial economies of scale on the existing properties as well as on any future purchases in the vicinity. Given our technical and operating staff in the area, we can manage the properties without any material increase in overhead. We expect to methodically exploit the properties, increasing production and proved reserves over time. Given the recent success of our drilling program and the benefits of this acquisition, we now anticipate production will increase by 10% to 15% next year. At current commodity prices, that should position us to report outstanding financial performance throughout 2004." Range Resources Corporation (S&P, BB- Corporate Credit Rating, Stable Outlook) is an independent oil and gas company operating in the Permian, Midcontinent, Gulf Coast and Appalachian regions of the United States. ROHN INDUSTRIES: Sale of Assets to Radian Communication Okayed -------------------------------------------------------------- Radian Communication Services Corporation, a subsidiary of Onex Corporation, received approval from the United States Bankruptcy Court for the Southern District of Indiana (Indianapolis Division) to acquire all of the assets related to the tower and tower accessory manufacturing operations of ROHN Industries, Inc. and its affiliated debtors for US$7.9 million. This transaction is expected to close on or about December 19, 2003. ROHN has been a leading designer and manufacturer of towers, poles, masts and antenna mounts for the wireless telecommunications, lighting, wind power and utility transmission/distribution sectors since 1948. ROHN's product offerings, which include hollow leg towers, tapered monopoles, light towers, and tower accessories, complement Radian's extensive line of broadcast towers, solid round and angle leg towers, flange monopoles, and tower accessories. In addition, this purchase will allow Radian to provide its full range of maintenance and installation services to owners of ROHN's products. Radian is also pleased to announce that David Brinker, P.E., the head of ROHN's highly regarded engineering group, has agreed to join the Radian team following the acquisition. Together, the combined engineering leadership of Radian and ROHN has designed over 100,000 towers worldwide. The value provided by the group's collective experience will be available to all current and future Radian and ROHN customers. "This acquisition is an exciting new opportunity for Radian to expand its tower product offerings," said H. Douglas Tipple, President and Chief Executive Officer of Radian. "ROHN's products are well established and include a broad range of quality towers and tower accessories. Radian will continue to produce, market and support all of these products, enabling us to offer a full range of telecommunications infrastructure solutions to North American and international wireless carriers, broadcasters and governments." For over 40 years, Radian Communication Services Corporation has been a leading provider of communications infrastructure, including network design, installation and management, and tower engineering and construction to the telecommunications and broadcast industries. Radian operates from 20 offices across Canada and the United States. Radian's engineering and manufacturing is ISO 9001:2000 registered and AISC Certified for Complex Structures. Radian is a subsidiary of Onex Corporation (TSX:OCX). Onex Corporation is a diversified company with 2002 annual consolidated revenues of approximately $23 billion and consolidated assets of approximately $15 billion. Onex is one of Canada's largest companies with global operations in service, manufacturing and technology industries. Its subsidiaries include Celestica Inc., Loews Cineplex Entertainment Corporation, ClientLogic Corporation, Dura Automotive Systems, Inc., J.L. French Automotive Castings, Inc., Bostrom Holding, Inc., Radian Communication Services Corporation, Performance Logistics Group, Inc. and. InsLogic Corporation. Onex shares trade on the Toronto Stock Exchange under the stock symbol OCX. ROOTIN TEUTON HOTEL: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: Rootin Teuton Hotel, LLC P.O. Box 775263 Steamboat Springs, Colorado 80477 Bankruptcy Case No.: 03-34432 Type of Business: Hotel Chapter 11 Petition Date: December 10, 2003 Court: District of Colorado (Denver) Judge: Elizabeth E. Brown Debtor's Counsels: Duncan E. Barber, Esq. Beiging, Shapiro & Burrus LLP 4582 South Ulster Street Parkway Suite 1650 Denver, CO 80237 Tel: 720-488-5432 Fax: 720-488-7711 - and - Joanne C. Speirs, Esq. Department of Justice 999 18th Street Suite 1551 Denver, Colorado 80202 Tel: 303-312-7230 Fax: 303-312-7239 Estimated Assets: $1 Million to $10 Million Estimated Debts: $100,001 to $500,000 ROWECOM/DIVINE: Creditors Have Until Month-End to Prove Claims -------------------------------------------------------------- PricewaterhouseCoopers Inc., the Canadian trustee for the bankruptcy estates of Rowecom ULC and Divine Solutions ULC, discloses that a dividend will soon be declared in the matter of the Debtors' estates. Canadian creditors must prove their claims on or before December 31, 2003, pursuant to Sec. 149 of the Bankruptcy & Insolvency Act, or be forever barred from asserting their claims. Claim forms are available at: http://www.pwc.com/brs-divinesolutions/ PricewaterhouseCoopers Inc. was appointed Trustee in bankruptcy on February 26, 2003, by virtue of a Receiving Order issued in the Canadian Superior Court of Justice In Bankruptcy. The Trustee continues to liquidate the assets of the company for the general benefit of creditors. Rowecom ULC/Divine Solutions ULC carries on business in London, Ontario, Canada. SIX FLAGS INC: Wants $130-Million Increase in Credit Facility ------------------------------------------------------------- Six Flags, Inc. (NYSE: PKS) is seeking a $130 million increase in its existing $600 million term loan pursuant to the terms of its senior secured credit facility. All of the net proceeds of the increased term loan are expected to be used to redeem the $122.5 million principal amount of the Company's 9-3/4% Senior Notes due 2007 not called for redemption on December 5, 2003. The term loan increase and related redemption are expected to occur in mid-January 2004. Six Flags (S&P, B+ Corporate Credit Rating, Negative) is the world's largest regional theme park company, currently with thirty-nine parks throughout North America and Europe. SK GLOBAL AMERICA: Keeps Plan-Filing Exclusivity Until Match 18 --------------------------------------------------------------- SK Global America obtained the Court's approval extending exclusive period to file a Chapter 11 plan to March 18, 2004, and its exclusive period to solicit acceptances of that plan to and including May 18, 2004. (SK Global Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc., 215/945-7000) SOUTHWALL TECH.: Needham Letter Agreement Extended Until Friday --------------------------------------------------------------- Southwall Technologies Inc. (Nasdaq:SWTX), a global developer, manufacturer and marketer of thin-film coatings for the automotive glass, electronic display and architectural markets, has entered into an extension of the letter agreement dated November 11, 2003 with Needham & Company, Inc. The letter agreement outlines the principal elements of a proposed bank guarantee and equity financing package with Needham or its affiliates of up to $5 million. The letter agreement, which was due to expire on November 30, 2003 if definitive agreements for the financing were not entered into by that date, and was previously extended to December 12, 2003, has been further extended to December 19, 2003, while the parties work to complete negotiation of the definitive agreements. Southwall Technologies Inc. designs and produces thin-film coatings that selectively absorb, reflect or transmit light. Southwall products are used in a number of automotive, electronic display and architectural glass products to enhance optical and thermal performance characteristics, improve user comfort and reduce energy costs. Southwall is an ISO 9001:2000-certified manufacturer and exports advanced thin-film coatings to over 25 countries around the world. Southwall's customers include Audi, BMW, DaimlerChrysler, Hewlett-Packard, Mitsubishi Electric, Mitsui Chemicals, Peugeot-Citroen, Pilkington, Renault, Saint-Gobain SEKURIT, and Volvo. Needham & Company, Inc., a leading U.S. investment banking, securities and asset management firm focused primarily on serving emerging growth industries and their investors. Further information is available at http://www.needhamco.com/ * * * Liquidity and Going Concern Uncertainty In its most recent Form 10-Q filed with the Securities and Exchange Commission, Southwall Technologies reported: Liquidity: "Our cash and cash equivalents increased by $0.4 million from $2.0 million at December 31, 2002, to $2.4 million at June 29, 2003. Cash provided by operating activities for the first six months of 2003 increased by $1.7 million, from $0.07 million provided during the first six months of 2002, to $1.8 million provided during the first six months of 2003. The increase in cash provided by operating activities was primarily the result of a decrease in accounts receivable and inventory, and partially offset by a reduction in accounts payable and accrued liabilities. The cash used in investing activities decreased by $0.3 million, from $2.6 million during the first six months of 2002, to $2.4 million during the first six months of 2003. The decrease in cash used in investing activities was primarily the result of lower capital expenditures and a reduction in restricted cash. Cash generated from financing activities decreased by $0.5 million, from $1.6 million during the first six months of 2002, to $1.1 million during the first six months of 2003. The decrease was primarily attributable to significantly less cash received through the exercise of employee stock options, partially offset by additional borrowings from our lines of credit during the first six months of 2003. "We entered into an agreement with the Saxony government in May 1999 under which we receive investment grants. Since 1999 through June 29, 2003, we had received $6.4 million cumulatively of the grants and accounted for these grants by applying the proceeds received to reduce the cost of our fixed assets of our Dresden manufacturing facility. If we fail to meet certain requirements in connection with these grants, the Saxony government has the right to demand repayment of the grants (see Note 6 - Government Grants and Investment Allowances, in the notes to condensed consolidated financial statements included herewith). Since 1999 through June 29, 2003, we had also received $5.7 million in investment allowances, which are reimbursements for capital expenditures, from the Saxony government and those proceeds were also applied to reduce the cost of our fixed assets of our Dresden manufacturing facility. We expect to receive approximately $1.0 million in investment allowances in the second half of 2003, based on investments made during 2002. The funds received have been applied to reduce the cost of our fixed assets of our Dresden manufacturing facility. Additionally, we have received $0.5 million of Saxony government grants that as of June 29, 2003 were recorded as an advance until we earn the grant through future expenditures. The total annual amount of investment grants and investment allowances that we are entitled to seek varies from year to year based upon the amount of our capital expenditures that meet certain requirements of the Saxony government. Generally, we are not eligible to seek total investment grants and allowances for any year in excess of 33% of our eligible capital expenditures for that year. We expect to continue to finance a portion of our capital expenditures in Dresden with additional grants from the Saxony government and additional loans from German banks, some of which may be guaranteed by the Saxony government. However, we cannot guarantee that we will be eligible for or will receive additional grants in the future from the Saxony government. Under the terms of our grant agreement with the Saxony government, we are required to meet investment and hiring targets by June 30, 2006. If we fail to meet those targets, the Saxony government is permitted to require us to repay all grants and investment allowances previously received by us from the Saxony government. Borrowing arrangements: "On May 16, 2003, the Company entered into a $10.0 million receivable financing line of credit agreements with a financial institution that expires on May 16, 2004, subject to automatic one- year renewals unless terminated at any time by either party. The line of credit bears an annual interest rate of 7% above the financial institution's Base Rate (which was 4% at June 29, 2003), and is calculated based on the average daily accounts receivable against which the Company has borrowed. Half of the $10.0 million line of credit is represented by a $5.0 million credit line, guaranteed by the United States Export-Import Bank. Availability under the EXIM line is limited to 90% of eligible foreign receivables acceptable to the lender. The remaining $5.0 million portion of the $10.0 million credit line is supported by domestic receivables. Availability under the domestic line of credit is limited to 70% of eligible domestic receivable acceptable to the lender. The financial institution reserves the right to lower the 70% and 90% of eligible receivable standards for borrowings under the credit agreements. In connection with the line of credit, the Company granted to the bank a lien upon and security interest in, and right of set off with respect to all of the Company's right, title and interest in all personal property and other assets, but not certain of the Company Dresden assets and properties. The borrowing arrangements require the Company to maintain minimum net tangible net worth of $33.0 million, current ratio of at least 0.70, and revenues equal to or greater than 80% of revenues projected. As part of the agreements, the Company incurred and paid a one-time commitment fee of $0.1 million in the second quarter of 2003, which will be amortized over the life of the agreements. As of June 29, 2003, the Company had approximately $3.0 million of borrowings outstanding and $1.8 million of availability under the line of credit. The Company was in compliance with all financial covenants as of June 29, 2003. "At December 31, 2001 and 2002, we were not in compliance with certain of the covenants of the guarantee by Teijin of the Japanese bank loan. Teijin and the Japanese bank waived the defaults under Teijin's guarantee of the loan that may exist for any measurement period through and including September 30, 2003 arising out of our failure to comply with the minimum quick ratio, tangible net worth and maximum debt/tangible net worth covenants. The waiver was conditioned on our agreement to prepay $2.5 million of the debt out of the proceeds of our follow-on public offering, which prepayment of $2.5 million along with a scheduled principal payment of $1.25 million was made on November 6, 2002. On May 6, 2003, we made a scheduled payment of $1.25 million. Under the terms of the loan agreement, the remaining balance of $1.25 million outstanding under this loan at June 29, 2003 is due on November 6, 2003. Accordingly, we have classified it as current. "Our borrowing arrangements with various German banks as of June 29, 2003 are described in Note 5 - Term Debt in the condensed consolidated financial statements. We are in compliance with all of the covenants of the German bank loans, and we have classified $9.5 million outstanding under the German bank loans as a long- term liability at June 29, 2003. "We are in default under a master sale-leaseback agreement with respect to two of our production machines. We have withheld lease payments in connection with a dispute with the leasing company. An agent purporting to act on behalf of the leasing company has recently filed suit against us to recover the unpaid lease payments and the alleged residual value of the machines, totaling $6.5 million in the aggregate. The leasing company holds a security interest in the production machines and may be able to repossess them. As a result, we have classified all $3.3 million outstanding under those agreements as short-term capital lease liabilities as of June 29, 2003. Capital expenditures: "We anticipate spending approximately $4.0 million in capital expenditures in 2003, approximately $1.2 million of which will consist of progress payments for a production machine (PM 10) in Dresden, approximately $1.5 million of which will be used to install a new enterprise resource planning system, and approximately $1.3 million of which will be used to maintain and upgrade our production facilities in Palo Alto and Tempe. For the first six months of 2003, we incurred $2.2 million in capital expenditures, compared to $3.2 million in capital expenditures for the same period in 2002. Financing needs: "We have prepared our consolidated financial statements assuming we will continue as a going concern and meet our obligations as they become due. We incurred a net loss in the first six months of 2003, and expect to incur net losses through the remainder of 2003. These factors together with our working capital position and our significant debt service and other contractual obligations at June 29, 2003 raise substantial doubt about our ability to continue as a going concern. We will continue to look for additional financing to fund our operations. However, we cannot provide any assurance that alternative sources of financing will be available at all or on terms acceptable to us. If we are unable to obtain additional financing sources, we may be unable to satisfactorily meet all our cash commitments required to fully implement our business plans. "In December 2002, we restructured our operations to reduce our cost structure by reducing our work force in Palo Alto and vacating excess facilities after consolidating our operations in Palo Alto. These actions are expected to help improve our operating results in 2003 but will continue to impact our operating cash flows until our lease commitments for the excess facilities expire in December 2004." STOLT-NIELSEN: Continuing Long-Term Waiver Talks with Lenders ------------------------------------------------------------- Stolt-Nielsen S.A. (Nasdaq: SNSA; Oslo Stock Exchange: SNI) said that while the waivers of covenant defaults granted by its primary lenders expired Monday, the Company and its lenders remained in constructive discussions aimed at establishing longer-term waivers. "We continue to work closely with our primary lenders toward longer-term waivers that will give us the necessary time to allow us to develop a sensible financial restructuring plan," said Niels G. Stolt-Nielsen, Chief Executive Officer of SNSA. "SNSA is taking action to improve its liquidity, reduce debt and strengthen its balance sheet." Stolt-Nielsen S.A. is one of the world's leading providers of transportation services for bulk liquid chemicals, edible oils, acids, and other specialty liquids. The Company, through its parcel tanker, tank container, terminal, rail and barge services, provides integrated transportation for its customers. The Company also owns 63.5 percent of Stolt Offshore S.A. (Nasdaq: SOSA; Oslo Stock Exchange: STO), which is a leading offshore contractor to the oil and gas industry. Stolt Offshore specializes in providing technologically sophisticated offshore and subsea engineering, flowline and pipeline lay, construction, inspection, and maintenance services. Stolt Sea Farm, wholly-owned by the Company, produces and markets high quality Atlantic salmon, salmon trout, turbot, halibut, sturgeon, caviar, bluefin tuna, and tilapia. SUN NETWORK GROUP: Limited Cash Raises Going Concern Uncertainty ---------------------------------------------------------------- As reflected in its consolidated financial statements, Sun Network Group Inc. had an accumulated deficit of $2,599,309 and a working capital deficit of $1,207,193 at September 30, 2003, and cash used in operations in for the nine months ended September 30, 2003 of $140,677. In addition, revenues were nominal. In 2002, the Company received $500,000 in funding and a commitment for an additional $250,000. In November 2003, the Company received $167,400, net of $82,600 of fees. In addition, management has implemented revenue producing programs in its new subsidiary, Radio X Network, which have started to generate minimal revenues. Management expects operations to generate negative cash flow at least through December 2003 and the Company does not have existing capital resources or credit lines available that are sufficient to fund operations and capital requirements as presently planned over the next twelve months. The Company's ability to raise capital to fund operations is further constrained because they have already pledged substantially all of their assets and have restrictions on the issuance of the common stock. The Company expects to generate substantially all revenues in the future from sales of Radio X Network programs. However, the Company's limited financial resources have prevented the Company from aggressively advertising its product to achieve consumer recognition. The ability of the Company to continue as a going concern is dependent on the Company's ability to further implement its business plan and generate revenues. Management believes that the actions presently being taken to further implement its business plan and generate additional revenues provide the opportunity for the Company to continue as a going concern. SYMBOL TECHNOLOGIES: Names Three New Independent Directors ---------------------------------------------------------- Symbol Technologies, Inc. (NYSE:SBL) has named to its board three new independent directors. With these additions, the Symbol board now has nine members. With the intention of further strengthening its corporate governance, it has retained Heidrick & Struggles International, Inc. and DHR International, Inc. to assist in the process of recruiting additional independent directors. The new directors are Sal Iannuzzi, Robert Chrenc and Melvin A. Yellin. Iannuzzi will serve as the board's lead independent director, a newly created position, and along with the other new directors will conduct a thorough review of Symbol's corporate governance practices and determine the appropriate size, composition and committee structure of the board. Richard Bravman, Symbol chief executive officer and interim chairman, said, "We are very pleased that these three highly experienced executives are joining Symbol's board. We will benefit greatly from their knowledge and the integrity they will bring to our decision-making. The addition of independent directors demonstrates Symbol's commitment to transparency and strengthened corporate governance. We also will be adding other independent directors as expeditiously as possible as part of our ongoing plan to renew and strengthen the board and infuse the Company with new leadership." Iannuzzi said, "As new board members, our first task is to carry out a thorough review and to make whatever changes may be necessary to ensure the Company establishes and follows best practices in corporate governance - and that it conducts its operations and affairs with transparency and integrity. This work will begin immediately, and our efforts will be aided by additional independent board members as they are named." Sal Iannuzzi has held a number of executive positions in finance. He held several senior positions at Bankers Trust Company/Deutsche Bank, including senior control officer and head of corporate compliance. He also has significant experience working with federal and state regulators, including the Federal Reserve Bank, New York State Banking Department, Securities and Exchange Commission and U.S. Department of Labor. Robert J. Chrenc is a retired executive vice president and chief administrative officer of ACNielsen, the world's leading provider of marketing information based on measurement and analysis of marketplace dynamics and consumer attitudes and behavior. At ACNielsen, Chrenc was responsible for finance, human resources, communications and business development on a worldwide basis. Previously at ACNielsen he served as executive vice president and chief financial officer. Melvin A. Yellin until recently was of counsel at Skadden, Arps, Slate, Meagher and Flom, LLP, which he joined in 1999. His areas of concentration are banking and securities law, and merger and acquisitions, and he has provided advice and counsel to directors and senior officers of public companies on a wide range of issues, including corporate governance initiatives. Incumbent members of the Symbol Technologies board of directors are Harvey Mallement, George Bugliarello, Leo Guthart, James Simons, Raymond R. Martino, Sr. and Bravman. The previously reported investigations of Symbol Technologies by the SEC and the U.S. Attorney's office are ongoing. Symbol has not filed with the SEC its Annual Report on Form 10-K for the year ended December 31, 2002, and is working to finalize the audit for 2002. The Company also intends to file its Form 10-Q for the first, second and third quarters of 2003 after the Form 10-K for 2002 has been finalized. The Company currently cannot provide a timetable for those filings, and until the documents are filed with the SEC, results are subject to change. Symbol Technologies, Inc. delivers enterprise mobility solutions that enable anywhere, anytime data and voice communication designed to increase productivity, reduce costs and realize competitive advantage. Symbol systems and services integrate ruggedized mobile computing, advanced data capture, wireless networking and mobility software for the world's leading retailers, transportation and logistics companies, manufacturers, government agencies and providers of healthcare, hospitality and security. More information is available at http://www.symbol.com/ * * * As reported in Troubled Company Reporter's September 19, 2003 edition, Symbol Technologies reached agreement with its bank group to extend the Company's credit facility waiver for 60 days. The waiver allows Symbol additional time to become current with its periodic filings with the Securities and Exchange Commission. As part of the agreement, Symbol reduced the credit facility from $350 million to $100 million. The credit agreement originally was signed in late 1998 and will expire by its terms in January 2004. The previously reported investigations by the SEC and the U.S. Attorney's office are ongoing. The Company intends to file with the SEC its 2002 Annual Report on Form 10-K as well as Forms 10-Q for the 2003 first and second quarters upon the completion of their audits by the Company's external auditors. TEMBEC: Closes Buy-Out of Ontario Weyerhauser Sawmill for C$26MM ---------------------------------------------------------------- Tembec successfully completed the acquisition of the Weyerhaeuser sawmill located at Chapleau, Ontario, for $C26 million including certain elements of working capital. The acquired sawmill has a softwood allocation of approximately 524,000 cubic metres per year, produces 100 million board feet of lumber annually and employs close to 140 people. The acquisition will boost Tembec's annual Spruce Pine Fir lumber capacity to approximately 1.8 billion board feet. The Company owns sawmills in three Canadian provinces as well as in the United States, Chile and France. The acquisition of the Chapleau sawmill provides a secure long- term fiber base for the Marathon pulp manufacturing joint venture. The acquisition will also allow the Company to generate synergies with its existing sawmills in the region, particularly in the area of forest resource management. 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, and its 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/ TENNECO AUTOMOTIVE: Closes on $800 Mill. Senior Credit Facility --------------------------------------------------------------- Tenneco Automotive (NYSE: TEN) announced that on Friday, December 12, it closed on its $800 million senior credit facility and a private offering of $125 million of 10.25 percent Senior Secured Notes, due July 15, 2013. These two transactions completed the refinancing of Tenneco Automotive's senior credit facility, which the company started in June with the issuance of a $350 million senior secured note. With the closing of this most recent transaction, the company accomplished the following: - Replaced its current revolver facility with a new source of long-term liquidity; - Extended most of its debt maturities to 2009 and beyond with a minimal pro forma increase to its interest expense; and - Favorably reset its financial covenant ratios through 2010. The $800 million senior credit facility, which is an amendment and restatement of the company's prior senior credit facility, includes a 5-year revolving line of credit of $220 million, a 7-year term loan of $400 million and a 7-year letter of credit facility of $180 million, which can also be used as a revolving line of credit to fund short-term borrowings. Loans under the senior facility will be priced initially at LIBOR plus 3.25%. "We are very pleased to successfully complete this transaction, which will improve Tenneco Automotive's financial flexibility by providing a committed long-term source of liquidity, favorably adjusting our financial covenant ratios through 2010, and extending nearly all of our debt maturities to 2009 and beyond," said Mark P. Frissora, chairman and CEO, Tenneco Automotive. The notes were sold to investors at a premium of 13 percent above the face value, resulting in net proceeds to the company from the transaction of $136 million after deducting fees and other transaction related expenses. The notes were issued under the same indenture and have the same terms as the $350 million of 10.25% senior secured notes due in 2013 that the company issued in June of this year. The company used the net proceeds of initial borrowings under the $800 million senior credit facility and the sale of the notes to repay all amounts previously outstanding under the company's senior credit facility. Prior to these transactions, the company's senior credit facility was for $964 million, consisting of $514 million of term loans maturing in 2005, 2007 and 2008 and a $450 million revolving line of credit, which was scheduled to terminate in 2005. The prior term loans had a weighted average interest rate of LIBOR plus 4.05%. On a pro forma basis, this most recent transaction would have increased the company's 2002 full year interest expense by only $1 million. However the company is considering reducing its interest expense by using interest rate swaps to convert a portion of its fixed rate debt to lower-cost floating rate debt. Tenneco Automotive offered the notes in reliance upon an exemption from registration under the Securities Act of 1933 for an offer and sale of securities that does not involve a public offering. The notes have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration. Tenneco Automotive (S&P, B Corporate Credit Rating, Stable Outlook) is a $3.5 billion manufacturing company with headquarters in Lake Forest, Illinois and approximately 19,600 employees worldwide. Tenneco Automotive is one of the world's largest producers and marketers of ride control and exhaust systems and products, which are sold under the Monroe(R) and Walker(R) global brand names. Among its products are Sensa-Trac(R) and Monroe Reflex(R) shocks and struts, Rancho(R) shock absorbers, Walker(R) Quiet-Flow(R) mufflers and DynoMax(R) performance exhaust products, and Monroe(R) Clevite(R) vibration control components. TEXON ENERGY: Creditors Must File Claims by December 31, 2003 ------------------------------------------------------------- The U.S. District Court for the Central District of California directs all creditors of Texon Energy Corporation and/or Lonestar Petroleum Corporation to make and present their claims to the Receiver for Texon and/or Lonestar on or before December 31, 2003, or be forever barred from participation in the distribution of the Companies' Receivership Estates. In order to receive a court-approved claim form, write to: James H, Donnell, Receiver 12121 Wilshire Boulevard, Suite 200 Los Angeles, CA 90025 * * * On November 14, 2001, the Honorable Gary A. Feess issued a temporary restraining order halting an ongoing $1 million securities fraud by Texon Energy Corporation; Lonestar Petroleum Corporation; James E. Hammonds, age 60 of Inglewood, California and a recidivist securities violator; and Barry V. Reed, age 56, of Las Vegas, Nevada. The Court: (1) granted the Securities and Exchange Commission's application for a temporary restraining order and receiver; (2) froze the assets of the defendants; (3) prohibited the destruction of documents by the defendants; (4) ordered accountings from the defendants; and (5) granted expedited discovery. The Commission's complaint, alleged that since 1998, the defendants have raised over $1 million from investors, purportedly for investments in oil and gas wells, and promising investors a monthly dividend equal to 12% per year. In fact, the defendants are operating a Ponzi-like scheme in which they are making payments to existing investors with the money that they raise from new investors. As part of the defendants' sales pitch in September and October 2001, the defendants have tried to capitalize on the September 11th tragedy by telling elderly investors, that because of "the War," the demand and price of oil would increase and Texon is in a "good position" to benefit from all of this because it purchases domestic oil and gas wells. UNITED RENTALS: Wayland Hicks Becomes Chief Executive Officer ------------------------------------------------------------- United Rentals, Inc. (NYSE: URI) announced that Wayland Hicks has become chief executive officer in accordance with the company's previously announced succession plan. He succeeds Bradley Jacobs, who remains chairman. Mr. Hicks has served as chief operating officer since 1997. United Rentals, Inc. (S&P, BB Corporate Credit Rating) is the largest equipment rental company in North America, with an integrated network of more than 750 locations in 47 states, seven Canadian provinces and Mexico. The company serves 1.8 million customers, including construction and industrial companies, manufacturers, utilities, municipalities, homeowners and others. The company offers for rent over 600 different types of equipment with a total original cost of approximately $3.6 billion. USEC INC: Names Lisa E. Gordon-Hagerty as EVP and COO ----------------------------------------------------- USEC Inc. (NYSE:USU) announced that Lisa E. Gordon-Hagerty has joined the Company as Executive Vice President and Chief Operating Officer. In that role, she will be responsible for the day-to-day activities of USEC's operations, including oversight of production, regulatory affairs and advanced technology. "Lisa's impressive experience in managing a range of major national security programs, as well as increasing the efficiency of large organizations, adds depth to our leadership team," said USEC President and CEO William H. Timbers. Ms. Gordon-Hagerty joins USEC from the National Security Council staff, where she spent five years in a series of positions, including Director for Combating Terrorism, where she oversaw the federal government's readiness and response to acts of terrorism. She also served as the NSC's liaison to the Homeland Security Council. Prior to joining the White House NSC staff, she served for six years at the U.S. Department of Energy where she held positions overseeing several DOE programs including emergency management, operational emergency response and the safety of the country's nuclear weapons program. Prior to joining DOE, she was on the staff of the Energy and Commerce Committee of the U.S. House of Representatives. Ms. Gordon-Hagerty has been awarded many citations, including the Secretary of Defense Medal for Meritorious Civilian Service and the Secretary of Energy's Special Recognition Award. She holds a master's degree in health physics and a bachelor of science degree, both from the University of Michigan. USEC Inc. (NYSE:USU) (S&P, BB Corporate Credit Rating, Stable), a global energy company, is the world's leading supplier of enriched uranium fuel for commercial nuclear power plants. USURF AMERICA: Independent Auditors Express Going Concern Doubt --------------------------------------------------------------- USURF America Inc.'s auditors stated in their reports on the financial statements of the Company for the period ended December 31, 2001 and 2002 that the Company is dependent on outside financing and has had losses that raise substantial doubt about its ability to continue as a going concern. For the nine months ended September 30, 2003 and 2002, USURF incurred a net loss of $1,990,795 and $2,374,375, respectively. As of September 30, 2003, USURF had an accumulated deficit since re-entering the development stage of $42,198,284. These factors raise substantial doubt about the Company's ability to continue as a going concern. Since its inception, USURF has had significant working capital deficits. However, as of September 30, 2003, USURF had positive working capital of $148,708 compared to a net working capital deficit of $1,214,489 at September 30, 2002. A net working capital deficit means that current liabilities exceeded current assets at September 30, 2002. Current assets are generally assets that can be converted into cash within one year and can be used to pay current liabilities. Currently, USURF believes that it has sufficient cash from the sale of securities to continue its current business operations until it begins to obtain funds under the second Fusion Capital common stock purchase agreement. During the nine months ended September 30, 2003, USURF received approximately $1,477,232 from the sale of securities. At September 30, 2003, USURF had cash on hand of $260,309. The Company anticipates that its cash needs over the next 12 months will be approximately $1,518,265, consisting of general working capital needs of $960,000 and the satisfaction of current liabilities of $558,265. Over the long term, USURF will require at least $2,000,000 in order to accomplish its business objectives. Currently, it does not possess enough capital to accomplish its business objectives. USURF anticipates that its capital needs will be met under its Stock Purchase Agreement with Fusion Capital. USURF is required to register the sale of the stock by Fusion Capital prior to such capital becoming available to USURF. USURF anticipates filing a registration statement with respect to such shares in the forth quarter of 2003. USURF is also seeking other sources of financing to fund its operations, although no assurances can be given that it will be successful in such efforts. It is possible that USURF will not be able to secure adequate capital as needed. Also, without additional capital, it is possible that USURF would be forced to curtail or cease operations. WISCONSIN AVENUE: Fitch Ups Series 1996-M3 Class D Rating to BB+ ---------------------------------------------------------------- Fitch Ratings upgrades Wisconsin Avenue Securities' subordinate REMIC mortgage pass-through certificates, series 1996-M3 as follows: -- $2.5 million class B to 'AA' from 'BBB+'; -- $2.8 million class C to 'BBB' from 'BB+'; -- $1.9 million class D to 'BB+' from 'B+'. The $4.2 million class A-2, and $34.1 million class A-3 certificates were exchanged for Federal National Mortgage Association guaranteed REMIC pass-through certificates and are not rated by Fitch. The $2.5 million class E certificates are not rated by Fitch. The certificates are currently collateralized by 33 mortgage loans, which are secured by multifamily cooperative properties. The properties are all located in the state of New York. Fitch views this concentration positively since New York City has experienced a very stable rental market. Currently, no loans are delinquent or in special servicing. As of the November 2003 distribution date, the pool's aggregate principal balance has been reduced by 85% to $48.1 million from $312.7 million at issuance. The master servicer, NCB, FSB, collected operating statements for year-end 2002 on 95% of the loans remaining in the pool. The YE 2002 Fitch stressed weighted-average debt service coverage ratio declined slightly to 5.35 times from 5.56x as of YE 2001. The Fitch stressed DSCRs were calculated based on Fitch stressed mortgage constants and net operating income derived from hypothetical market rental income (rather than cooperative revenues) less actual borrower reported expenses. The hypothetical market rental income is based on conservative market rental rates. Fitch will continue to monitor this transaction, as surveillance is ongoing. WISCONSIN AVE: Fitch Raises Class C Notes' Rating a Notch to BB- ---------------------------------------------------------------- Fitch Ratings upgrades Wisconsin Avenue Securities' subordinate REMIC pass-through certificates, series 1995-M4 as follows: -- $1 million class B to 'BBB' from 'BB+'; -- $1.4 million class C to 'BB-' from 'B+'. The $297,752 class A-2, $17.9 million class A-3, and interest-only class XS certificates were exchanged for Federal National Mortgage Association guaranteed REMIC pass-through certificates, and are not rated by Fitch. The $824,269 class D certificates are also not rated by Fitch. The certificates are currently collateralized by seventeen mortgage loans, which are secured by sixteen multifamily cooperative properties and one multifamily property. By loan balance, 71% of the portfolio is located within the New York City metropolitan area. Fitch viewed this concentration positively because cooperatives within the New York City market have performed extremely well historically. As of the November 2003 distribution date, the pool's aggregate principal balance has been reduced by 81% to $21.4 million from $109.9 million at issuance. No loans are delinquent or in special servicing. NCB, FSB, the master servicer, provided year-end 2002 operating statements on approximately 93% of the outstanding loans. Fitch's YE 2002 stressed weighted average debt service coverage ratio is 2.93 times vs. 3.13x at YE 2001 and 3.10x at issuance. The stressed DSCRs were calculated based on Fitch stressed mortgage constants and net operating income derived from hypothetical market rental income (rather than the cooperative's maintenance and other revenues) less actual borrower reported expenses. The hypothetical market rental income is based on conservative market rental rates. Two loans, representing 4.3% of the pool, have stressed year-end 2002 DSCRs below 1.00x. The larger loan (3%) with a DSCR below 1.00x is located in Kansas City, Missouri and has seen a decline in occupancy to 70% due to a fire at the property in 2002. The other loan (1%) below 1.00x is located in Bronxfield, NY and the decline in DSCR was caused by an increase of expenses in 2002. Fitch will continue to monitor this transaction, as surveillance is ongoing. WMC FINANCE: S&P Assigns B- Rating to $200M Senior Debt Issue ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' senior debt rating to Woodland Hills, California-based WMC Finance Co.'s proposed issuance of $200 million, five-year senior notes to be issued pursuant to Rule 144A. Standard & Poor's also assigned a 'B' long-term counterparty credit rating to WMC. The outlook is stable. "The ratings are based on WMC's short track record of profitability under the current business strategy; its minimal equity base and high leverage; and the encumbered nature of its balance sheet," said Standard & Poor's credit analyst Steven Picarillo. "Partially offsetting these factors is the company's minimal credit and interest rate risk exposure." Since 2001, the company has demonstrated its ability to operate successfully under its current strategy, and the stable outlook encompasses the expectation that the company will be able to continue to improve its financial performance and produce acceptable cash flows. Additionally, the outlook incorporates the expectation that WMC will continue to expand its market reach as it executes its growth strategy. At Sept. 30, 2003, WMC had assets of $1.3 billion. WORLD AIRWAYS: Adjourns Special Shareholders' Meeting to Friday --------------------------------------------------------------- World Airways, Inc. (Nasdaq: WLDA) adjourned the special meeting of stockholders scheduled for Monday because of lack of a quorum. The special meeting will reconvene on Friday, December 19, 2003, at 11 a.m. Eastern Standard Time at the Company's executive offices in The HLH Building, 101 World Drive, Peachtree City, Georgia 30269. The special meeting was called to approve: * the proposed issuance of $25.5 million principal amount of six-year 8% Convertible Senior Subordinated Debentures in exchange for $22.5 million principal amount of the Company's currently outstanding 8% Convertible Senior Subordinated Debentures Due 2004 and $3.0 million in cash; and * the proposed issuance to the Air Transportation Stabilization Board of warrants to purchase shares of common stock in connection with a federal guarantee of $27.0 million to support a $30.0 million term loan facility. Hollis Harris, chairman and CEO of World Airways, said, "We need a quorum consisting of a majority of the Company's outstanding shares for the stockholders to act at the meeting. Unfortunately, we did not have enough stockholders return their proxies on time. We adjourned the meeting for four days to allow our stockholders additional time to submit their proxies. We are pleased, however, that of the proxies returned thus far, a large percentage were voted in favor of the two proposals." Utilizing a well-maintained fleet of international range, wide- body aircraft, World Airways, Inc., has an enviable record of safety, reliability and customer service spanning more than 55 years. The Company is a U.S. certificated air carrier providing customized transportation services for major international passenger and cargo carriers, the United States military and international leisure tour operators. Recognized for its modern aircraft, flexibility and ability to provide superior service, World Airways, Inc. meets the needs of businesses and governments around the globe. For more information, visit the Company's Web site at http://www.worldair.com/ At September 30, 2003, the company's balance sheet is upside down by $13.7 million. WORLDCOM INC: October 2003 Net Loss Tops $194 Million ----------------------------------------------------- MCI (WCOEQ, MCWEQ) filed its October 2003 monthly operating report with the U.S. Bankruptcy Court for the Southern District of New York. During the month of October, MCI recorded $1.977 billion in revenue, essentially flat with September revenue of $1.951 billion. The Company had a net loss in October of $194 million, of which $136 million relates to prior period transactions identified as part of the Company's ongoing restatement process. The net loss reflects a $102 million increase in miscellaneous expense primarily from prior period transactions, as well as a decline in the Company's operating income. In October, the Company reported an operating loss of $35 million, primarily reflecting an increase in the costs of services and products of $32 million as well as an increase in access costs of $51 million resulting from higher volumes and the impact of favorable accrual adjustments in the prior month. Results reflect a reclassification of certain selling, general, and administrative expenses to costs of services and products which had no net impact on operating loss. During the month of October, MCI recorded capital expenditures of $74 million. October's cash balance increased to $5.4 billion from $5.3 billion in September. The financial results discussed in the October 2003 Monthly Operating Report exclude the results of Embratel. On November 12, 2003, the Company announced its intentions to sell its investment stake in Embratel. Until MCI completes a thorough balance sheet evaluation, the Company will not issue a balance sheet or cash flow statement as part of its Monthly Operating Report. The Monthly Operating Reports are available on MCI's Restructuring Information Desk at: http://global.mci.com/news/infodesk/forward/operating_reports/ Based on the Company's confirmed Plan of Reorganization, holders of WorldCom preferred stock, WorldCom group common stock and MCI group common stock will not receive any value upon MCI's emergence from bankruptcy proceedings. WorldCom, Inc. (WCOEQ, MCWEQ), which, together with its subsidiaries, currently conducts business under the MCI brand name, is a leading global communications provider, delivering innovative, cost-effective, advanced communications connectivity to businesses, governments and consumers. With the industry's most expansive global IP backbone, based on the number of company-owned POPs, and wholly-owned data networks, WorldCom develops the converged communications products and services that are the foundation for commerce and communications in today's market. For more information, go to http://www.mci.com/ WORLDWIDE WIRELESS: Wants to Amend Plan of Reorganization --------------------------------------------------------- Worldwide Wireless Networks Inc. (OTC BB: WWWNQ), provides an update on the progress of the Chapter 11 Bankruptcy filing. As previously announced, WWWN filed for Chapter 11 Bankruptcy on September 11, 2002. The case number is SA 02-17020 JB. The filing occurred with the U.S. Bankruptcy Court located at 411 West Fourth St., Santa Ana, California 92701-8000. On November 20, 2003, WWWN in conjunction with the creditor's committee filed a Plan of Reorganization with the U.S. Bankruptcy Court. The Plan contemplates the merger of ECHEX International, Inc. into WWWN, with WWWN's creditors receiving approximately 4.74% of the shares in the combined company at the time of the merger. WWWN shareholders of record at the time of the merger will receive no distribution under the Plan, and will retain less than one-tenth of one percent of the stock of the Company on a fully diluted basis following the merger and the reverse stock split described below. A hearing will be held on December 24, 2003 to obtain court confirmation of the Plan. The creditor's committee in conjunction with WWWN filed Monday a Motion to Amend the Plan of Reorganization. The proposed change to the Plan of Reorganization will allocate shares in ECHEX to certain current shareholders of Worldwide Wireless Networks in the following manner. The shares of the currently issued and outstanding stock of WWWN will be reverse split in the ratio of ONE new share for every FIVE THOUSAND current shares. Shareholders who hold 5,000 or more shares in any discrete amount will receive one new share of common stock in ECHEX for each 5,000 original shares of common stock in WWWN. All resulting post split fractional shares will be rounded down to the whole integer and NO cash consideration in lieu of the issuance of any fractional new share of common stock will be paid. No fractional shares will be issued or allowed to be combined or aggregated. Stockholders who hold fewer than 5,000 shares in any discrete account will receive nothing as the reverse will result in their fractional shares being rounded down to zero and as a result they will no longer be stockholders of the Company with respect to such shares. Any shares not surrendered within 30 days of the effective date of the Plan will be extinguished and have no standing or redemption rights. About Worldwide Wireless Networks Worldwide Wireless Networks was a data-centric wireless communications company headquartered in Orange, California. The Company specialized in high-speed, broadband Internet access using an owned wireless network. W.R. GRACE: New COO Festa Discloses Owning No Grace Common Stock ---------------------------------------------------------------- Alfred E. Festa, W.R. Grace's new President and COO, discloses to the Securities & Exchange Commission through Mark A. Shelnitz, as his attorney-in-fact, that as of November 17, 2003, the date on which his employment at Grace commenced, he owned no shares of the common stock of W. R. Grace & Co. However, he does own Preferred Stock Purchase Rights, which entitle him to buy Preferred Stock or other securities or property upon the occurrence of certain events and subject to certain conditions. (W.R. Grace Bankruptcy News, Issue No. 51; Bankruptcy Creditors' Service, Inc., 215/945-7000) XO: Receives $192MM in Value, Upon Global Crossing's Emergence -------------------------------------------------------------- XO Communications, Inc., received $192.0 million in value, consisting of $164.8 million in cash and $27.2 million of Global Crossing common stock (based on the closing price of $33 per share of Global Crossing common stock as of December 12, 2003), in exchange for the $158.5 million XO Communications paid to acquire approximately 34% of pre-petition senior debt of Global Crossing. The cash payment and shares of common stock were distributed by Global Crossing upon its emergence from bankruptcy and represent the recovery on the investment XO Communications made in its earlier effort to acquire all of the assets of Global Crossing. In addition, XO Communications retains the rights to approximately 34% of the proceeds, if any, from the pending lawsuit between Global Crossing's bank group and former Global Crossing officers and directors that seeks $1.7 billion in damages. XO is a leading broadband telecommunications services provider offering a complete set of telecommunications services, including: local and long distance voice, Internet access, Virtual Private Networking, Ethernet, Wavelength, Web Hosting and Integrated voice and data services. XO has assembled an unrivaled set of facilities-based broadband networks and Tier One Internet peering relationships in the United States. XO currently offers facilities-based broadband telecommunications services within and between more than 60 markets throughout the United States. Please visit http://www.xo.com/for more information about XO. XRG INC: Significant Losses Raise Going Concern Uncertainty ----------------------------------------------------------- XRG Inc.'s consolidated financial statements have been prepared on a going concern basis which contemplates continuity of operations and realization of assets and liquidation of liabilities in the ordinary course of business. Because of significant operating losses, the Company's ability to continue as a going concern is dependent upon its ability to obtain sufficient additional financing and, ultimately, upon future profitable operations. Prior to the quarter ended September 30, 2003, the Company devoted substantially all of its efforts to establishing its freight transportation business and, therefore, has been in the development stage since 1999. During the quarter ended September 30, 2003, the Company's planned principal operations commenced and significant revenues were realized which allowed the Company to emerge from its development stage status. To date, the Company has funded its capital requirements and its business operations with funds provided by borrowings and equity investments. It has raised $1,393,120 in the form of notes payable at various interest rates of 12.0% to 15.0%, payable quarterly. These notes mature at various dates until November 2004 and are unsecured. None of these notes individually exceed $100,000. XRG, Inc. is the note issuer, and none of these note- holders are officers or directors of XRG. In connection with these notes, warrants to acquire 4,732,000 shares of common stock were granted to these note-holders. During the period ended September 30, 2003, 4,732,000 shares of the Company's common stock were issued in exchange for the these warrants. These warrants were exchanged for a like number of shares of common stock on a one for one basis for no additional consideration in connection with the conversion of the notes. In addition, during June 2003, approximately $753,000 of these notes were voluntarily converted to the Company's common stock at a price of $.50 per common share. During the six months ended September 30, 2003, the Company issued $170,000 of convertible notes payable. In connection with the notes, the Company issued detachable warrants to purchase 340,000 shares of the Company's restricted common stock. During the period ended September 30, 2003, 340,000 shares of the Company's common stock were issued in exchange for warrants. These warrants were exchanged for a like number of shares of common stock on a one for one basis for no additional consideration in connection with the conversion of the notes. During the period ended September 30, 2003, XRG raised an additional $403,368 pursuant to a stock purchase agreement in exchange for 1,605,000 shares of its restricted common stock. For the period ended September 30, 2003 the Company used $101,303 in cash used by operating activities as compared to $283,347 in the similar period ended September 30, 2002. Investing activities for the present period included equipment deposits of $51,305. Financing activities for the period ended September 30, 2003 provided $205,660 from the issuance of notes payable and the issuance of preferred stock. For the period ended September 30, 2003, cash increased $16,563 as compared to $315,179 in the prior year. Historically XRG has not generated sufficient revenues from operations to self-fund its capital and operating requirements. These factors raise substantial doubt concerning the Company's ability to continue as a going concern. Management expects that the Company's working capital will come from fundings that will primarily include equity and debt placements. XRG had a cash balance at September 30, 2003 of $69,615 and working capital of $173,903. Management believes that access to capital will be sufficient to sustain operations for at least 12 months. The Company's monthly cash "burn rate" is approximately $70,000 per month. There is no assurance that XRG will be successful in raising capital through debt or equity placements. If such financing is not available when required, the Company may be unable to pay its debts in a timely manner, develop its business, take advantage of acquisition opportunities, or respond to competitive pressures, any of which could have a material adverse effect on its business, financial condition and results of operations. Its inability to raise additional capital could cause the Company to breach its payment obligations to third parties or otherwise fail to satisfy its business obligations. * FTI Brings-In Gregory F. Rayburn as Senior Managing Director -------------------------------------------------------------- FTI Consulting, Inc. (NYSE: FCN), the premier national provider of corporate finance/restructuring, forensic accounting, economic consulting and trial services, announced that Gregory F. Rayburn joined the firm as a senior managing director in its Interim Management group, which is a core service offering in the Corporate Finance/Restructuring practice. Prior to joining FTI Consulting, Mr. Rayburn spent three years as a principal at AlixPartners. While there, he held two notable interim management positions. He was retained as the chief restructuring officer at WorldCom where he was responsible for stabilizing negative cash flows and streamlining operating functions to assist the company in closing and syndicating over $1 billion in debtor-in-possession financing despite a backdrop of massive accounting fraud. Mr. Rayburn was also responsible for developing a plan to achieve over $2.5 billion of annual cost savings and for development of the business plan which served as the basis for a successful reorganization of WorldCom. Prior to his engagement at WorldCom, Mr. Rayburn served as the chief executive officer of Sunterra Corporation, the world's largest vacation ownership company. Mr. Rayburn was hired by Sunterra's Board to replace the existing CEO in response to Board and bondholder concerns over the direction of its reorganization effort following a bankruptcy filing in May 2000. Mr. Rayburn charted a new strategic direction for Sunterra and moved the company from extreme negative cash flows to a viable and profitable business plan with substantial enterprise value. He was able to secure over $300 million in exit financing and lead Sunterra out of bankruptcy. Prior to his position at AlixPartners, Mr. Rayburn served as president of The Capstone Group LLC, a private investment partnership specializing in out of favor companies and sectors. Prior to that, he was recruited by the bondholders and management of The Piece Goods Shops, Inc. to act as chairman and chief executive officer leading the company out of bankruptcy. Mr. Rayburn started his career at Arthur Andersen LLC where as a partner, he successfully assisted in the building of the corporate recovery services practice specializing in working with troubled companies and their constituencies. While there, client engagements included Genesco, SNA Nut Company, Sunshine Junior Stores and Bargain Town/Shoe City Stores. Commenting on the new appointment, Stewart Kahn, president and chief operating officer said "We are committed to an integrated consulting practice with the best professionals in the country. Our Interim Management offering is a priority for us and Greg is going to play a critical role in spearheading our efforts in this space." "During our search, it quickly became apparent that Greg's hands- on interim management successes combined with his industry experience made him far and above our first choice for the job," said Mr. Kahn. "I was attracted to FTI Consulting because from an industry standpoint, they have the best reputation in the marketplace," said Mr. Rayburn. "I have an enormous amount of respect for the individuals that make up this company and I am excited about the opportunity to be a part of the FTI team." Mr. Rayburn has over 20 years of experience creating and maximizing value for shareholders of troubled companies with a demonstrated expertise in financial analysis, business plan development and execution, problem solving, communication and implementation of change under highly adverse conditions. He has a broad range of industry experience including manufacturing, freight, retail, telecommunications, hospitality and health-care. FTI is the premier provider of corporate finance/restructuring, forensic accounting, economic consulting, and trial services. Strategically located in 24 of the major US cities and London, we employ over 1,000 professionals consisting of numerous PHDs, MBAs, CPAs, CIRAs and CFEs who are committed to delivering the highest level of service to our clients. These clients include the world's largest corporations, financial institutions and law firms in matters involving financial and operational improvement and major litigation. FTI is on the Internet at http://www.fticonsulting.com/ * Meetings, Conferences and Seminars ------------------------------------ February 5-7, 2004 AMERICAN BANKRUPTCY INSTITUTE Rocky Mountain Bankruptcy Conference Westin Tabor Center, Denver, CO Contact: 1-703-739-0800 or http://www.abiworld.org March 5, 2004 AMERICAN BANKRUPTCY INSTITUTE Bankruptcy Battleground West The Century Plaza, Los Angeles, CA Contact: 1-703-739-0800 or http://www.abiworld.org April 15-18, 2004 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting J.W. Marriott, Washington, D.C. Contact: 1-703-739-0800 or http://www.abiworld.org April 29-May 1, 2004 ALI-ABA Partnerships, LLCs, and LLPs: Uniform Acts, Taxation, Drafting, Securities, and Bankruptcy Fairmont Hotel, New Orleans Contact: 1-800-CLE-NEWS or http://www.ali-aba.org May 3, 2004 AMERICAN BANKRUPTCY INSTITUTE New York City Bankruptcy Conference Millennium Broadway Conference Center, New York, NY Contact: 1-703-739-0800 or http://www.abiworld.org June 2-5, 2004 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort, Traverse City, MI Contact: 1-703-739-0800 or http://www.abiworld.org June 24-26,2004 AMERICAN BANKRUPTCY INSTITUTE Hawaii Bankruptcy Workshop Hyatt Regency Kauai, Kauai, Hawaii Contact: 1-703-739-0800 or http://www.abiworld.org July 15-18, 2004 AMERICAN BANKRUPTCY INSTITUTE The Mount Washington Hotel Bretton Woods, NH Contact: 1-703-739-0800 or http://www.abiworld.org July 28-31, 2004 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz-Carlton Reynolds Plantation, Lake Oconee, GA Contact: 1-703-739-0800 or http://www.abiworld.org September 18-21, 2004 AMERICAN BANKRUPTCY INSTITUTE Southwest Bankruptcy Conference The Bellagio, Las Vegas, NV Contact: 1-703-739-0800 or http://www.abiworld.org October 10-13, 2004 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES Seventy Seventh Annual Meeting Nashville, TN Contact: http://www.ncbj.org/ December 2-4, 2004 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Marriott's Camelback Inn, Scottsdale, AZ Contact: 1-703-739-0800 or http://www.abiworld.org April 28- May 1, 2005 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting J.W. Marriot, Washington, DC Contact: 1-703-739-0800 or http://www.abiworld.org July 14 -17, 2005 AMERICAN BANKRUPTCY INSTITUTE Ocean Edge Resort, Brewster, MA Contact: 1-703-739-0800 or http://www.abiworld.org July 27- 30, 2005 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop Kiawah Island Resort and Spa, Kiawah Island, SC Contact: 1-703-739-0800 or http://www.abiworld.org November 2-5, 2005 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES Seventy Eighth Annual Meeting San Antonio, TX Contact: http://www.ncbj.org/ December 1-3, 2005 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Hyatt Grand Champions Resort, Indian Wells, CA Contact: 1-703-739-0800 or http://www.abiworld.org The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Yvonne L. Metzler, Bernadette C. de Roda, Donnabel C. Salcedo, Ronald P. Villavelez and Peter A. Chapman, Editors. Copyright 2003. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $675 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***