/raid1/www/Hosts/bankrupt/TCR_Public/031219.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, December 19, 2003, Vol. 7, No. 251
Headlines
3D SYSTEMS: Completes Private Placement of 6% Conv. Debentures
360NETWORKS: Committee Wants Action Discovery Dates Established
ACCLAIM ENTERTAINMENT: Resolves Nasdaq Compliance re Notes Offer
ADF GROUP: Third-Quarter Net Loss Narrows to $12.6 Million
AGAPE CLINICS: Case Summary & 8 Largest Unsecured Creditors
AGCO CORP: Prices $175MM Convertible Notes Private Offering
AHOLD: Ends Exclusive Discussions with Cencosud over Disco Sale
AIR CANADA: Court Clears & Declares Cerberus Proposal as Final
AIRGATE PCS: Will Hold Fourth-Quarter Conference Call Today
AMERICAN FINANCIAL: Sells Remaining Stake in Infinity Property
ANTEON INT'L: Prices Tender Offer for 12% Sr. Subordinated Notes
ARCH COAL: Board Declares Quarterly Preferred Share Dividend
ARISTOCRAT LEISURE: S&P Lowers Rating to BB- on Poor Performance
AURORA FOODS: Wants to Pay Prepetition Employee Obligations
AVAYA INC: Will Host 1st Quarter 2004 Conference Call on Jan. 27
BELL CANADA: Receives Early Prepayment of $8.6MM for Axtel Notes
BRIDGEPORT HLDGS: Court Fixes January 5, 2003 as Claims Bar Date
BUDGET: Plan's Claims and Interests Classification and Treatment
CANWEST GLOBAL: Nominates Two Additional Independent Directors
CE GENERATION: S&P Affirms Low-B Debt Rating After SCE Upgrade
CENTENNIAL COMMS: Red Ink Continued to Flow in Second Quarter
CHI-CHI'S: Committee Taps Ernst & Young for Financial Advice
COMPASS MINERALS: Completes IPO of 16.675 Million Shares
CORDOVA FUNDING: S&P Lowers Debt Rating to B on El Paso Exposure
COTT CORP: Closes Secondary Offering of 7.5 Mill. Common Shares
COVANTA: Wants DHC Disclosure Statement Hearing Set for Jan. 14
COWHEY MATERIALS: Voluntary Chapter 11 Case Summary
CTC COMMS: Emerges from Chapter 11 & Completes Asset Sale to CVC
DII INDUSTRIES: Insurers Seek Dismissal of Chapter 11 Proceeding
DIRECTV LATIN: Provides Chapter 11 Plan Summary and Overview
DLJ MORTGAGE: Fitch Takes Rating Actions on 3 Securitizations
DOMAN IND.: CCAA Monitor KPMG Files December Report in Canada
EAGLEPICHER: Prelim. Q4 & FY 2003 Results are Available Online
ENRON CORP: Bankr. Court Approves Enbridge Settlement Agreement
EQUIFIN INC: Secures $3 Million in Sub-Debt from Laurus Funds
EQUISTAR CHEMICALS: Arranges New $450-Million Credit Facility
FAO INC: Evaluating Proposals Offering to Acquire FAO Schwarz
FASTNET CORP: Completes Sale of Assets to US LEC Corp.
FFP OPERATING: Committee Signs-Up Gardere Wynne as Co-Counsel
FPL ENERGY CAITHNESS: S&P Raises Rating on $150M Debt to BBB-
FRUIT OF THE LOOM: Trust Wants to Pay $2.2 Million to Bank Agent
GALEY & LORD: Chairman and CEO Arthur C. Wiener Retiring
GAYLORD ENTERTAINMENT: Credit Facility Increased to $100 Million
GINGISS GROUP: US Trustee Appoints Official Creditors' Committee
HAWAIIAN AIRLINES: Proofs of Claim & Interest Due by Jan. 26
HOLIDAY RV: Committee Brings-In Lowenstein Sandler as Counsel
IMMTECH INT'L: Names Lawrence Potempa Chief Scientific Officer
IMPERIAL PETROLEUM: Closes Sale of Stake in Powder River Basin Gas
INT'L STEEL: S&P Revises Outlook to Positive After $531-Mil. IPO
ISTAR FINANCIAL: Selling 5 Million Shares via Public Offering
KMART CORP: Creditor Trust Sues PwC and Six Former Officers
KROLL INC: S&P Assigns Lower-B Level Sub. Note & Credit Ratings
LES BOUTIQUES: Commences Restructuring Under CCAA in Canada
LTV CORP: Copperweld Emerges from Chapter 11 Proceedings
MCDERMOTT INT'L: Shareholders Approve Proposed B&W Settlement
MESA AIR GROUP: SEC Declares Registration Statement Effective
METALLURG INC: Fin'l Concerns Prompt S&P to Further Junk Ratings
MICRON TECHNOLOGY: Acknowledges Plea by Former Sales Employee
MILK PALACE DAILY: Case Summary & 20 Largest Unsecured Creditors
MIRANT CORP: Asks Court to Approve Unitil Settlement Agreements
NAT'L CENTURY: Files Second Amended Plan & Disclosure Statement
NEXSTAR BROADCASTING: Launches Senior Subordinated Note Offering
NORTHSTAR CBO: Fitch Drops & Affirms Ratings for 3 Note Classes
NORTHSTAR CBO: S&P Rating on Class A-2 Notes Cut to Junk Level
NRG ENERGY: S&P Lowers Bank Loan Rating over Increased Facility
NUTRAQUEST: Wants Nod to Hire Catalina as Litigation Counsel
OBSIDIAN ENT.: Commences Offer for Net Perceptions Shareholders
O-CEDAR HLDGS: General Claims Bar Date Set for January 12, 2004
OLYMPIC WORLD: Files for Chapter 11 Restructuring in Honolulu
OLYMPIC WORLD: Case Summary & 19 Largest Unsecured Creditors
PACIFIC GAS: Fitch Says TURN Compromise Won't Affect Ratings
PILGRIM AMERICA: Fitch Affirms Junk Ratings for Cl. B & C Notes
PLAINS ALL AMERICAN: Proposes 2 Million Common Units Offering
RADIO UNICA: Plan and Disclosure Statement Hearing on Tuesday
RAINIER CBO: Fitch Affirms Three Note Ratings at Lower-B Level
REPUBLIC ENGINEERED: Court Allows Asset Sale to Perry Strategic
RURAL/METRO CORP: Appoints Robert Wilson to Board of Directors
SAFETY-KLEEN CORP: Resolves Admin Claim Dispute with Cendian
SALTON SEA: SCE's Rating Prompt S&P to Up Debt Rating to BB+
SCARBOROUGH-ST JAMES: Case Summary & 10 Largest Unsec. Creditors
SCOTTISH RE GROUP: Will Host Investor Day on January 14 in NYC
SIDA OF HAWAII INC: Voluntary Chapter 7 Case Summary
SK GLOBAL: Sovereign Wants SK Corp. Directors Ousted in March
SOLUTIA: S&P Drops Credit Rating to D After Chapter 11 Filing
SOLUTIA INC: Fitch Yanks Sr. Sec. & Unsecured Ratings to DDD/D
SOLUTIA INC: Monsanto Discloses Exposure to Company's Bankruptcy
SUMMITVILLE TILES: Files for Chapter 11 Protection in Ohio
SUMMITVILLE TILES: Case Summary & 20 Largest Unsecured Creditors
SUNRISE SR. LIVING: Stronger Profile Spurs S&P to Up Ratings
TUPPERWARE: S&P Cuts Corp. Credit Rating to Speculative Level
UNITEDGLOBALCOM: Exchange Offer for UGC Europe Shares Approved
US AIR: Court Allows Two Claims for Distribution Reserve Purpose
US TIMBERLANDS: Interest Payment Spurs S&P to Up Ratings to CCC
USG CORP: Creditors' Committee Wants to Recuse Judge Wolin
WEIRTON STEEL: Bankr. Court Adjourns Plan Confirmation Hearing
WESTERN GAS RESOURCES: Will Redeem 800K Conv. Preferred Shares
* New Chubb Insurance Policy Adds Layer of Protection for D&O's
* BOOK REVIEW: Landmarks in Medicine - Laity Lectures
of the New York Academy of Medicine
*********
3D SYSTEMS: Completes Private Placement of 6% Conv. Debentures
--------------------------------------------------------------
3D Systems Corp. (Nasdaq:TDSC) completed its private placement of
6% convertible subordinated debentures, initially reported on
December 2, 2003.
As more fully discussed in the 8-K filed with the SEC Wednesday,
from November 24, 2003 to December 11, 2003, the Company privately
placed $22.7 million principal amount of 6% convertible
subordinated debentures, which mature on November 30, 2013. The
debentures bear interest at the rate of 6% per year payable in
cash semi-annually in arrears on May 31 and November 30 of each
year, commencing May 31, 2004. The debentures are convertible into
shares of 3D Systems common stock at the option of the holder at
any time prior to maturity at $10.18 per share. 3D Systems has
agreed to register the shares of its common stock issuable upon
conversion of the debentures for resale under the Securities Act.
The net proceeds to 3D Systems from the sale of the debentures
were approximately $22.3 million. 3D Systems used $8.6 million of
the net proceeds to repay the then outstanding balance owed under
its credit facility with U.S. Bank, and intends to use the
remainder of the net proceeds for working capital purposes.
Commenting on the completion of this financing, Abe Reichental, 3D
Systems' President & Chief Executive Officer: "This financing has
enabled us to pay off our existing bank debt and has substantially
improved our cash position in the short term. We are continuing to
work to improve the company's profitability, as well as pursue
initiatives which improve our customer's bottom line. We plan to
use some of the proceeds of this financing to support our new
product development efforts."
Founded in 1986, 3D Systems(R), the solid imaging company(SM),
provides solid imaging products and systems solutions that reduce
the time and cost of designing products and facilitate direct and
indirect manufacturing. Its systems utilize patented proprietary
technologies to create physical objects from digital input that
can be used in design communication, prototyping, and as
functional end-use parts.
3D Systems offers a wide range of imaging, communication rapid
prototyping and on demand manufacturing systems including the MJM
product line (InVision 3-D printer and ThermoJet(R) solid object
printer), SLA(R) (stereolithography) systems, SLS(R) (selective
laser sintering) systems, and Accura(R) materials (including
photopolymers, metals, nylons, engineering plastics, and
thermoplastics).
More information on the company is available at
http://www.3dsystems.com/
* * *
Going Concern Uncertainty
The Company's condensed consolidated financial statements have
been prepared assuming the Company will continue as a going
concern. The Company incurred operating losses totaling $14.4
million and $21.4 million for the nine months ended September 26,
2003 and the year ended December 31, 2002, respectively. In
addition, the Company had a working capital deficit of $4.4
million and an accumulated deficit in earnings of $35.8 million at
September 26, 2003. These factors among others raise substantial
doubt about the Company's ability to continue as a going concern.
Management's plans include raising additional working capital
through debt or equity financing. In May 2003, the Company sold
approximately 2.6 million shares of its Series B Convertible
Preferred Stock for aggregate consideration of $15.8 million and
the Company repaid $9.6 million of the U.S. Bank term loan balance
with a portion of the net proceeds.
Management intends to obtain debt financing to replace the U.S.
Bank financing, and in July 2003, management accepted a proposal
from Congress Financial, a subsidiary of Wachovia, to provide a
secured revolving credit facility of up to $20.0 million, subject
to its completion of due diligence to its satisfaction and other
conditions. In October 2003, Congress determined not to extend a
commitment of financing to the Company. In October 2003,
management accepted a proposal from Silicon Valley Bank to provide
a revolving line of credit up to $12.0 million. In October 2003,
Silicon Valley Bank preliminarily approved this credit facility.
Any credit facility will be subject to completion by Silicon of
its due diligence and other customary closing conditions.
Management continues to pursue alternative financing sources.
Additionally, management intends to pursue a program to improve
its operating performance and to continue cost saving programs.
However, there is no assurance that the Company will succeed in
accomplishing any or all of these initiatives.
360NETWORKS: Committee Wants Action Discovery Dates Established
---------------------------------------------------------------
The Official Committee of Unsecured Creditors of the Reorganized
360networks Debtors, asks the Court, pursuant to Rules 7016(b),
7042(a) and 9006(b) of the Federal Rules of Bankruptcy Procedure,
to establish dates for conducting and completing discovery and for
filing and responding to dispositive motions on 242 Adversary
Actions.
Norman N. Kinel, Esq., at Dreier LLP, in New York, relates that
in accordance with the confirmed Plan, the Committee, on behalf
of itself and the Debtors, filed with the Court over 300
adversary proceedings seeking, inter alia, to avoid and recover
preferential and fraudulent transfers pursuant to Sections 547,
548 and 550 of the Bankruptcy Code. Since the filing of the
Avoidance Actions, around 100 were settled or dismissed. The
defendants in 90 Avoidance Actions defaulted by failing to answer
the complaint.
Mr. Kinel reports that settlement negotiations were initiated in
most, if not all, of the Avoidance actions in which the defendant
has not defaulted. In certain of the Avoidance Actions in which
the payments challenged as preferential exceed $100,000 in the
aggregate, discovery has commenced and initial disclosure have
been made. In addition, individual discovery schedules have been
negotiated with most of the defendants in the larger cases and
reports pursuant to Rule 7026 of the Federal Rules of Bankruptcy
Procedure and Rule 26(f) of the Federal Rules of Civil Procedure
have been submitted. Formal discovery has not yet commenced in
those Avoidance Actions in which the challenged payments are less
than $100,000 in the aggregate.
Mr. Kinel notes that the Court has held several pretrial
conferences in the Adversary Proceedings and has expressed its
desire that the Avoidance Actions be prosecuted in as coordinated
a fashion as possible. In fact, at the scheduling hearing held
on October 27, 2003, the Court noted that while each Avoidance
Action is a separate case and will be considered on is own
merits, time limits and other scheduling matters should be
coordinated and standardized to the greatest extent possible.
The Court then directed the Committee to make a proposal for the
coordinated schedule that would coordinate or supersede the
necessity for individual reports under Civil Rule 26(f).
According to Mr. Kinel, the Committee endeavored to develop a
coordinated discovery schedule that creates an appropriate
framework for the prosecution or settlement of the Avoidance
Actions. Since the inception of the Avoidance Actions, the
Debtors and the Committee categorized the cases by size of the
demand in the complaint. The categories used are:
Bucket 1: Cases seeking the return of $1,000,000 or more;
Bucket 2: Cases seeking the return of more than $99,999 but
less than $1,000,000; and
Bucket 3: Cases seeking the return of less than $100,000.
Given the differences in the size and likely issues to be raised
in the cases in each of these categories, the Committees believe
that each of these categories should proceed on a slightly
different timetable. Moreover, given that formal discovery has
not commenced in the Bucket 3 cases, additional differences in
the Proposed Schedule are warranted.
Accordingly, the Committee proposes to follow this timetable:
Event Bucket 1 Bucket 2 Bucket 3
----- -------- -------- --------
Deadline for Initial 12/31/03 12/31/03 01/30/04
Disclosure under 26(a)
Deadline for Service of 01/30/04 01/15/04 02/13/04
Document demands, request
for admission and
interrogatories
Deadline for responses 30 days 30 days 30 days
to document demands, after after after
requests for admission service of service of request
and interrogatories request request service
Designation of experts 04/02/04 03/12/04 02/27/04
and service of expert
reports
Disclosure of rebuttal 45 days 21 days same as
experts and substance after after bucket 2
of testimony, if any service of service of
opposing opposing
party's party's
designation designation
Close of Discovery 07/14/04 05/07/04 04/16/04
Status Conference 07/__/04 05/__/04 05/__/04
Deadline for Dispositive 08/31/04 07/28/04 07/14/04
Motions
Required notice for 30 days 30 days 30 days
Dispositive Motions
Response to Dispositive within the within the within
Motions notice notice the
period period notice
period
Replies to Dispositive 15 days 15 days 15 days
Motions after after after
service of service of service
response response of
response
The Committee further proposes these other procedures to
streamline the disposition of the Avoidance Actions:
* If multiple Defendants file dispositive motions that raise
a common principal issue or issues, the Committee would be
authorized to file a consolidated memorandum in opposition,
and the Court could issue a single opinion regarding the
issues;
* If common principal issues or defenses arise, the Committee
would be authorized to file a consolidated motion or
memorandum requesting the Court to determine or narrow the
issues;
* Except as provided for in the following sentence, no
defendant in any Avoidance Action will be required to
appear at any further pre-trial or status conferences
unless specifically advised by the Committee or the Court
that the appearance is required. In any case where a
dispositive motion is not filed by the applicable
deadline, the Court will set a final pretrial conference
and counsel and a party representative for each party with
final settlement authority would be required to attend that
conference in person;
* Depositions are to be conducted in accordance with the
Bankruptcy Rules and the Federal Rules of Civil Procedure.
The Parties will be required to make all reasonable efforts
to coordinate depositions among the Avoidance Actions,
taking into particular consideration:
(a) the costs to the Debtors' estates; and
(b) the burden that will likely be imposed on the Debtors'
employees, former employees and experts as a result of
the numerous actions which are pending where deposition
testimony of individuals may be required;
* Any deadline contained in the Scheduling Order, excluding
the discovery cut-off date and the deadlines for
dispositive motions, may be extended by the parties'
consent without any filing, notice to, or approval of the
Court. In the alternative, any deadline may be extended by
the Court upon written motion and for good cause shown; and
* In the discretion of the Committee, any notice, pleading or
order applicable to multiple Avoidance Actions may be filed
electronically in the main Chapter 11 case and recorded on
that docket, rather than being filed in each adversary
proceeding for each Preference Action. Service of the
documents will be made on each party affected thereby and
service may be effected by e-mail, notwithstanding any
provisions of the Federal Rules of Bankruptcy Procedure or
the Local Rules of the Court.
Mr. Kinel contends that the proposed schedules and procedures
should be approved because it will help streamline the resolution
of the Avoidance Actions and ensure the efficient determination
of contested issues. (360 Bankruptcy News, Issue No. 59;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
ACCLAIM ENTERTAINMENT: Resolves Nasdaq Compliance re Notes Offer
----------------------------------------------------------------
Acclaim Entertainment, Inc. (Nasdaq: AKLM), has resolved the
issues raised by Nasdaq surrounding compliance with Nasdaq
Marketplace Rules of the Company's October 2003 offering of its
10% Convertible Subordinated Notes.
The Company and the investors in the October Note offering have
amended the terms of the October agreements to comply with
applicable Nasdaq Marketplace Rules. The terms of the amendment
documents were disclosed by the Company in its revised Preliminary
Proxy Statement filed with the Securities and Exchange Commission
on December 5, 2003.
"We are pleased to have resolved this matter in such an amicable
and expeditious manner and appreciate the support of all of the
involved parties," said Rod Cousens, Chief Executive Officer for
Acclaim Entertainment, Inc.
Based in Glen Cove, N.Y., Acclaim Entertainment, Inc. is a
worldwide developer, publisher and mass marketer of software for
use with interactive entertainment game consoles including those
manufactured by Nintendo, Sony Computer Entertainment and
Microsoft Corporation as well as personal computer hardware
systems. Acclaim owns and operates five studios located in the
United States and the United Kingdom, and publishes and
distributes its software through its subsidiaries in North
America, the United Kingdom, Australia, Germany, France and Spain.
The Company uses regional distributors worldwide. Acclaim also
distributes entertainment software for other publishers worldwide,
publishes software gaming strategy guides and issues "special
edition" comic magazines periodically. Acclaim's corporate
headquarters are in Glen Cove, New York and Acclaim's common stock
is publicly traded on NASDAQ.SC under the symbol AKLM. For more
information please visit its Web site at http://www.acclaim.com/
At September 28, 2003, Acclaim Entertainment's balance sheet shows
a total shareholders' equity deficit of about $55 million.
ADF GROUP: Third-Quarter Net Loss Narrows to $12.6 Million
----------------------------------------------------------
Financial results for the third quarter at ADF GROUP INC. (ticker
symbol DRX/TSX) continue to be affected by the significant
decrease in demands in the non-residential construction industry
in North America, as well as the increase in the Canadian dollar
in the last months. Moreover, the pressures exerted on the prices
continue, and profit margins are therefore impacted. In this
perspective, the Company's priorities remain the pursuing of its
restructuring program and the maintenance of a rigorous approach
in order to improve operating profitability, to recover the
amounts associated with change orders and to reduce fixed and
operating costs.
As per its restructuring plan, the Company announced that it put
up for sale the assets of its US subsidiary Owen Steel Company
Inc., in South Carolina, owned by ADF since March 2002. Also, as
announced on July 31, 2003 at its Annual General Shareholders
Meeting, ADF closed its fabrication plant, ADF Heavy Industries
Inc., located in Lachine. This closure is effective since
November 14, 2003. These discontinued operations will allow the
Company to realize annual savings in fixed costs of more than $18
million. ADF's activities will be centralized in its Terrebonne
facilities. ADF built in 1997, one of the most modern fabrication
plants in North America. The Company's objective is to revise its
business strategy to renew with profitability in an eventual
context of market recovery.
The financial statements of the third quarter ended October 31,
2003 take into account the accounting standards of Chapter 3475 of
the CICA Manual entitled "Disposal of Long-term Assets and
Discontinued Operations", which was introduced in May 2003, as
well as the reclassification of the results published for the same
period last year. This standard specifies that a long-term asset
to be disposed of by sale must be classified as an asset held-for-
sale in the period during which all required criteria have been
met. Pursuant to the Company's decision to sell assets of Owen, a
loss in value of $15.4 million was recognized in the second
quarter's results to reduce the book value of Owen's long-term
assets to their liquidation value. These results, that include the
loss value, have been presented separately in the financial
statements. As for ADF Group's subsidiary ADF Heavy Industries
Inc., its operations will be presented separately in the financial
statements, only when its operations will be discontinued, meaning
in the next quarter.
Clarifications, regarding Owen's discontinued activities, will be
made to the quarterly report notes to disclose correctly the
evaluation basis used as at October 31 and July 31 for the assets
and liabilities of Owen.
Consequently, for the three-month period ended October 31, 2003,
ADF's sales decreased 22.8% to $30.7 million, compared with $39.8
million in the corresponding quarter of the previous fiscal year.
The operating loss (EBITDA) which amounted to $11.2 million,
compared with $62.5 million a year earlier, was affected by lower
sales and the pressure exerted on prices and on profit margins, as
well as by the upward revision of costs to complete certain
contracts, as well as the increase in the Canadian dollar that had
a major impact on the contracts denominated in U.S. dollar. The
loss of the previous period was mainly due to recognition of a
provision of $49.0 million for the additional costs encountered to
complete certain contracts.
Therefore, ADF closed the quarter with a net loss of $12.6 million
or $0.48 per share ($0.48 fully diluted), compared with a net loss
of $44.9 million or $1.69 per share ($1.69 fully diluted) for the
same quarter last year. The quarterly net loss of $12.6 million
includes a quarterly benefit of $0.7 million coming from
discontinued operations of Owen and an exchange rate loss of $2.7
million caused by the weakness of the American dollar.
For the nine-month period ended October 31, 2003, ADF achieved
sales of $111.6 million, down 49.8% from the corresponding period
of the previous fiscal year. EBITDA went from a loss of $47.8
million to a loss of $20.3 million, due primarily to the
aforementioned reasons. ADF posted net losses of $44.1 million or
$1.69 per share ($1.69 fully diluted), compared with net losses of
$39.9 million or $1.52 per share ($1.52 fully diluted). The net
losses of $44.1 million include a loss of $14.5 million resulting
from discontinued operations and an exchange rate loss of $1.5
million. Cash flow from operations was a deficit of $23.5 million
as opposed to $11.6 million last year.
At October 31, 2003, the Company's balance sheet shows that its
total current liabilities outweighed its total current assets by
about $40 million, while its total shareholders' equity is further
whittled down to $24 million, from about $70 million nine months
ago.
Operating Activities
During the second quarter ended July 31, 2003, positive cash flows
of $11.5 million were allocated to the operating activities of
continued activities but they were in fact related to abandoned
activities. This inaccuracy is corrected in the statements of the
third quarter.
Owen Steel Company Inc.
ADF Group announces on December 15 that following expiry date of
the forbearance agreement of July 21, 2003 between Bank of
Montreal, St. Paul Guarantee and CNA Surety Corporation for the
assets of Owen Steel Company, Bank of Montreal has requested and
obtained, as per the agreement, the nomination of an interim
receiver for Owen's assets. Therefore, starting December 16, 2003,
the interim receiver designated by Bank of Montreal will take
appropriate measures to manage and sell Owen's assets. On basis of
this agreement, the lender will write-off the balance of the loan
owed by ADF Group for financing the acquisition of Owen on April
2002 and will take control of Owen.
Outlook and Priorities
The Company's signed order backlog totals $60 million as at
October 31, excluding that of Owen.
Given the continued market weakness, management still does not
foresee any significant improvement in the level of activity for
fiscal 2003-2004. Short-term priorities remain the pursuing of the
Company's restructuring program to reduce fixed costs in order to
be more competitive, to increase operating profitability, to
restructure the Company's debt and recover the amounts associated
with the additional costs incurred on certain contracts, in order
to improve the Company's cash position and balance sheet.
To this effect, ADF announced that it has favorably settled,
during its last quarter, certain contractual dispute including
modifications to contracts for a total amount of more than $7.5
million, of which a large portion has previously been recognized.
Furthermore, discussions progress on many other contracts.
Management intends to pursue actively, in the coming months,
negotiations with its other clients in order to settle other
pending change orders.
CVMQ
The adjustments, related to the results of the second quarter
ended July 31, 2003, made to the cash flows and related notes of
the statements were done at the request of the Commission des
valeurs mobilieres du Quebec.
ADF Group Inc. is a North American leader in the design,
engineering, fabrication and erection of complex steel
superstructures, as well as in architectural metal work. ADF is
one of the few players in the industry capable of handling highly
technically complex megaprojects on fast-track schedules in the
commercial, institutional, industrial and public sectors.
For more information about ADF Group visit
http://www.adfgroup.com/
AGAPE CLINICS: Case Summary & 8 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Agape Clinics of Texas, Inc.
801 E. Border Suite C
Arlington, Texas 76101
Bankruptcy Case No.: 03-91970
Type of Business: Medical clinic service
Chapter 11 Petition Date: December 16, 2003
Court: Northern District of Texas (Ft. Worth)
Judge: D. Michael Lynn
Debtor's Counsel: Daniel C. Durand, III, Esq.
Durand and Associates
522 Edmonds Lane, Suite 101
Lewisville, TX 75067
Tel: 972-221-5655
Total Assets: $140,000
Total Debts: $1,565,000
Debtor's 8 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Nova Factor $406,673
1445 Ross Avenue
Ste 300
Dallas, TX 75202
Internal Revenue Service $160,000
Benemax II/US Personnel $160,000
Aventis Pasteur $113,750
Aventis Pasteur $81,000
McKesson Medical-Surgical, Inc. $52,047
General Injectibles & Vaccines $15,000
SW Bell Yellow Pages $3,860
AGCO CORP: Prices $175MM Convertible Notes Private Offering
-----------------------------------------------------------
AGCO Corporation (NYSE: AG), a worldwide designer, manufacturer
and distributor of agricultural equipment, announced the pricing
of its private offering of $175,000,000 aggregate principal amount
of its Convertible Senior Subordinated Notes due 2033, pursuant to
Rule 144A under the Securities Act of 1933, as amended.
The sale of the notes is expected to close on December 23, 2003.
AGCO also granted the initial purchasers of the notes a 30-day
option to purchase up to an additional $26,250,000 aggregate
principal amount of the notes.
The notes will bear interest at the rate of 1.75% per annum. The
notes are convertible into shares of AGCO common stock at a
conversion rate of 44.7193 shares of common stock per $1,000
principal amount of notes, which is equivalent to an initial
conversion price of $22.36 per share of common stock, subject to
adjustment in certain circumstances. On December 16, 2003, the
reported closing price per share of AGCO common stock on the NYSE
was $17.07.
AGCO intends to use the net proceeds to pay part of the purchase
price for its previously announced acquisition of the business of
Valtra.
The notes will be offered and sold only to "qualified
institutional buyers" in accordance with Rule 144A.
The notes and the shares of common stock issuable upon conversion
of 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
requirements.
AGCO Corporation (S&P, BB+ Corporate Credit Rating, Negative),
headquartered in Duluth, Georgia, is a global designer,
manufacturer and distributor of agricultural equipment and related
replacement parts. AGCO products are distributed in over 140
countries. AGCO offers a full product line including tractors,
combines, hay tools, sprayers, forage, tillage equipment and
implements through more than 8,450 independent dealers and
distributors around the world. AGCO products are distributed
under the brand names AGCO(R), AgcoAllis(R), AgcoStar(R), Ag-
Chem(R), Challenger(R), Farmhand(R), Fendt(R), Fieldstar(R),
Gleaner(R), Glencoe(R), Hesston(R), Lor*Al(R), Massey Ferguson(R),
New Idea(R), RoGator(R), Soilteq(TM), Spra-Coupe(R), Sunflower(R),
Terra-Gator(R), Tye(R), White(R) and Willmar(R). AGCO provides
retail financing through AGCO Finance in North America and through
Agricredit in the United Kingdom, France, Germany, Ireland, Spain
and Brazil. In 2002, AGCO had net sales of $2.9 billion.
Visit http://www.agcocorp.com/for more information on the
Company.
AHOLD: Ends Exclusive Discussions with Cencosud over Disco Sale
---------------------------------------------------------------
Ahold confirmed that the exclusivity period for negotiations with
Chilean retailer Cencosud S.A. for the sale of Ahold's controlling
stake in the Argentine supermarket chain Disco S.A. has lapsed.
Both parties could not reach final agreement within this period.
Discussions on the sale of Disco are continuing with interested
parties but cannot be commented on in detail at this stage.
The intended divestment of Disco S.A. is part of Ahold's strategic
plan to restructure its portfolio, to divest underperforming
assets, and to concentrate on its mature and most stable markets.
As of June 30, 2003, Disco S.A. operated 237 stores in Argentina.
* * *
As previously reported, Fitch Ratings, the international rating
agency, assigned Netherlands-based food retailer Koninklijke Ahold
NV a Stable Rating Outlook while removing it from Rating Watch
Negative. At the same time, the agency has affirmed Ahold's Senior
Unsecured rating at 'BB-' and its Short-term rating at 'B'.
The Stable Outlook reflects the benefits from the shareholder
approval, granted on Wednesday, for a fully underwritten
EUR3billion rights issue. Ahold however continues to face
financial and operational difficulties which have been reflected
in the Q303 results. Ahold announced in early November its
strategy for reducing debt through its EUR3bn rights issue and
EUR2.5bn of asset disposals as well as improving the trading
performance of its core retail and foodservice businesses. Whilst
the approved rights issue addresses immediate liquidity concerns,
operationally, the news is less positive with Ahold's core Dutch
and US retail operations both suffering from increased
competition, mainly from discounters, resulting in operating
profit margin erosion. Ahold's European flagship operation, the
Albert Heijn supermarket chain in the Netherlands, recently
reported both declining sales and profits, as consumers turn to
discount retailers. In reaction to this, Albert Heijn, has amended
its pricing structure which in turn would suggest that it will be
more challenging in the future to match historic operating margin
levels.
AIR CANADA: Court Clears & Declares Cerberus Proposal as Final
--------------------------------------------------------------
Air Canada, which is restructuring under the Companies' Creditors
Arrangement Act, reported:
In a decision issued on Dec. 17, Mr. Justice James Farley of the
Ontario Superior Court granted a motion made by Air Canada for an
order to bring finality to the equity plan sponsor process. The
Order deems that the Cerberus investment proposal received on
December 10, 2003 is final and not subject to further
modification. The Order further states that the Air Canada equity
plan sponsor selection process will be deemed completed and Air
Canada will report to the Court respecting the Cerberus investment
proposal on December 22, 2003.
Trinity has advised the Monitor by letter that, if any amendments
to the Trinity investment agreement currently in force are to be
made, Trinity will submit such amendments by 11:59 p.m. Friday,
December 19, 2003. Justice Farley, in his decision, observed that
pressing matters relating to Air Canada's restructuring should
proceed without disruption and delay in the interests of all
stakeholders and that there must be finalization and certainty in
the equity process.
Court Approves Canada Germany Cooperation Agreement
between Air Canada and Lufthansa
In a further decision issued, the Court approved the Canada
Germany Cooperation Agreement between Air Canada and Lufthansa.
Air Canada considers its relationship with Lufthansa to be one of
its most important strategic relationships. The loss of Lufthansa
and any attendant impact on Star Alliance would have had a
significant impact on future revenues and profitability. Air
Canada sought approval of the CGCA in order to ensure that its
relationship with Lufthansa continues and that the commitment of
both parties to investing in and developing the relationship is
formalized by contract prior to putting a plan of arrangement to
Air Canada's creditors.
AIRGATE PCS: Will Hold Fourth-Quarter Conference Call Today
-----------------------------------------------------------
AirGate PCS, Inc. (OTCBB: PCSA), a PCS Affiliate of Sprint,
announced that its fourth quarter fiscal 2003 conference call is
scheduled to begin at 9:00 a.m. Eastern time today.
The live broadcast of AirGate PCS' quarterly conference call will
be available on-line at http://www.airgatepcsa.com/and
http://www.fulldisclosure.com/
The on-line replay will follow shortly after the call and continue
through January 19, 2004. To listen to the live call, please go to
the Web site at least 15 minutes early to register, download, and
install any necessary audio software.
During this call AirGate PCS will review the Company's financial
and operating results for the fourth quarter and fiscal year ended
September 30, 2003.
AirGate PCS, Inc. (S&P, CC Corporate Credit Rating, Negative),
excluding its unrestricted subsidiary iPCS, is the PCS Affiliate
of Sprint with the exclusive right to sell wireless mobility
communications network products and services under the Sprint
brand in territories within three states located in the
Southeastern United States. The territories include over 7.1
million residents in key markets such as Charleston, Columbia, and
Greenville-Spartanburg, South Carolina; and Augusta and Savannah,
Georgia.
AMERICAN FINANCIAL: Sells Remaining Stake in Infinity Property
--------------------------------------------------------------
American Financial Group, Inc. (NYSE: AFG) announced the closing
of the sale of its remaining shares in Infinity Property and
Casualty Corporation (Nasdaq: IPCC).
Net proceeds from the sale were $227 million. AFG expects to
record an after-tax gain on the sale of approximately $35 million.
In connection with the sale, AFG and IPCC agreed to commute the
indemnification of IPCC against certain extracontractual and
corporate litigation. The proceeds of the sale will be available
to provide capital to grow the company's specialty business, to
reduce financial leverage and for other corporate purposes.
Through the operations of Great American Insurance Group, AFG
(A.M. Best, bb+ Preferred Securities Rating) is engaged primarily
in property and casualty insurance, focusing on specialized
commercial products for businesses, and in the sale of annuities,
life and supplemental health insurance products.
ANTEON INT'L: Prices Tender Offer for 12% Sr. Subordinated Notes
----------------------------------------------------------------
Anteon International Corporation (NYSE: ANT), a leading
information technology and systems engineering and integration
company, has determined the price on its previously announced
tender offer relating to its outstanding 12% Senior Subordinated
Notes due 2009. The total outstanding principal amount of the
Notes is $75 million.
The Total Consideration for each $1,000 in principal amount of
Notes is $1,110.95, which includes accrued and unpaid interest to,
but not including, the payment date. Assuming a payment date of
December 23, 2003, the accrued and unpaid interest will be $12.67
per $1,000 in principal amount of Notes. The Total Consideration
was determined based on a formula using the yield of the 3.25%
U.S. Treasury Note due May 31, 2004, plus 100 basis points as of
10:00 a.m., Eastern Standard Time, on December 16, 2003. The total
tender offer yield was determined to be 2.068%. The pricing
formula assumes that the Notes would otherwise be redeemed in
full, at a price of $1,060 per $1,000 principal amount of Notes on
May 15, 2004, the first date on which the Notes may be redeemed.
The Total Consideration includes a consent payment of $20.00 per
$1,000 principal amount of Notes to holders who validly consented
(and did not revoke such consent) to the Proposed Amendments (as
defined in the Statement) to eliminate substantially all of the
restrictive covenants and certain events of default under the
Indenture for the Notes, and to make certain other amendments at
or prior to the Consent Date, which was 5:00 p.m., Eastern
Standard Time, on December 5, 2003.
The tender offer expires today, at 12:00 a.m., midnight, Eastern
Standard Time, unless extended. Closing of the tender offer
is subject to the closing by Anteon of certain amendments to its
existing credit facility, the proceeds of which will be used in
part to pay the consideration for the tender offer and consent
solicitation and certain other customary conditions.
Credit Suisse First Boston LLC is the Dealer Manager and
Solicitation Agent for the tender offer and consent solicitation.
Questions concerning the tender offer or consent solicitation may
be directed to the Liability Management Group at CSFB toll-free,
at (800) 820-1653 or at (212) 538-4807. Copies of documents may be
obtained from D.F. King & Co., Inc., the information agent for the
tender offer and consent solicitation, at (212) 269-5550 or toll-
free at (888) 644-6071.
Anteon (S&P, BB Corporate Credit Rating, Stable), headquartered in
Fairfax, Virginia, is a leading information technology and
engineering solutions company providing support to the federal
government and international sectors. For over 27 years, the
Company has designed, integrated, maintained and upgraded state-
of-the-art systems for national defense, intelligence, emergency
response and other high priority government missions. Anteon also
provides many of its government clients with the systems analysis,
integration and program management skills necessary to manage the
development and operations of their mission critical systems. For
2002, Anteon reported revenues of $826 million with a year-end
personnel strength of approximately 5,900 employees. The Company
acquired Information Spectrum, Inc. in May 2003 and currently has
approximately 7,400 employees in more than 100 offices worldwide.
Anteon frequently ranks among the top information technology
integrators based on independent surveys, and was recently named
one of the world's top 100 information technology companies in
Business Week's INFOTECH 100 Annual Report (2003). For more
information, visit http://www.anteon.com/
ARCH COAL: Board Declares Quarterly Preferred Share Dividend
------------------------------------------------------------
The board of directors of Arch Coal, Inc. has declared a quarterly
dividend of $0.625 per share on the company's preferred stock
(NYSE: ACI_p). The dividend is payable January 30, 2004, to
shareholders of record on January 16, 2004.
Arch Coal (S&P, BB+ Corporate Credit Ratying, Negative) is the
nation's second largest coal producer, with subsidiary operations
in West Virginia, Kentucky, Virginia, Wyoming, Colorado and Utah.
Through these operations, Arch Coal provides the fuel for
approximately 6% of the electricity generated in the United
States.
ARISTOCRAT LEISURE: S&P Lowers Rating to BB- on Poor Performance
----------------------------------------------------------------
Standard & Poor's Rating Services lowered its ratings on
Aristocrat Leisure Ltd. and removed them from CreditWatch, where
they were placed with negative implications on Oct. 17, 2003. The
corporate credit rating was lowered to 'BB-' from 'BB'. The
outlook is stable.
"The downgrade reflects Aristocrat's recent poor operating
performance (especially in North and South America) and a slowing
domestic environment, where regulatory and tax changes are posing
longer-term challenges," said Standard & Poor's credit analyst
Andrew Lally. "Also, the company's market position is small in the
highly competitive U.S. market, where the company is susceptible
to price discounting from larger competitors and more dependent on
the continual creation of quality new games for success."
Aristocrat recorded a net loss of A$32.9 million in the six months
ended June 30, 2003, reflecting the effect of smoking bans and
several new harm-minimization regulatory initiatives in Australia,
the release of inferior products and poor sales practices in North
and South America, and some significant write-off and
restructuring charges. The company's reported operating cash flows
also were affected, falling 22% to A$33 million, though net debt
was reduced by A$16.5 million, to A$254.7 million at June 30,
2003. Aristocrat's performance should improve in the second half
of fiscal 2004, with the company making solid progress in both
gaining further regulatory approvals for its games and systems in
the U.S., and in rectifying the product problems and its trade and
sales practices in that market.
Aristocrat's debt maturity profile is very short, but the
improving momentum in its cash flow generation should ensure that
its maturing debt could principally be met by internally generated
funds. Furthermore, although Aristocrat has historically paid the
majority of discretionary cash flow as dividends, it has been
willing to underwrite its dividend reinvestment plan to facilitate
debt reduction. The company's liquidity profile is strengthened
through its holding of A$88.7 million in cash at June 30, 2003,
which is well in excess of its operational needs.
AURORA FOODS: Wants to Pay Prepetition Employee Obligations
-----------------------------------------------------------
Pursuant to Sections 105(a), 507(a)(i), and 549 of the Bankruptcy
Code, the Aurora Foods Debtors seek the Court's authority to pay
their Prepetition Employee Obligations, as well as its withholding
and payroll-related taxes. The Debtors also ask the Court to
direct all Banks to honor and pay all prepetition and postpetition
checks issued in respect of the Prepetition Employee Obligations.
As of the Petition Date, the Debtors employed 1,500 employees,
all located in the United States. The Debtors also have six
independent contractors or agency contractors that perform
functions that otherwise would be performed by employees. None
of the Debtors' Employees are covered by collective bargaining
agreements.
Eric M. Davis, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP,
in Wilmington, Delaware, tells the Court that the Debtors'
Prepetition Employee Obligations include:
(a) unpaid prepetition wages, salaries, and other compensation
and expense reimbursements;
(b) accrued vacation, sick, holiday, and excused leave days;
and
(c) Employee Benefits.
Wages
The Debtors seek Judge Walrath's permission to continue paying
obligations related to Employees' compensation, including accrued
but unpaid salaries and wages of Employees. On the Petition
Date, the Debtors have outstanding Compensation Obligations in a
de minimus amount, and not greater than $4,650 in any individual
case.
No Employees are owed in excess of $4,650 on account of the
Compensation Obligations. Thus, pursuant to Section 507(a)(3) of
the Bankruptcy Code, all of the Employees would have a priority
claim with respect to the entire amount of Compensation
Obligations outstanding as of the Petition Date, Mr. Davis
asserts.
The Debtors, in the normal course of their business, withhold
certain payments from their Employees' compensation for federal,
state, local, unemployment, social security, and medicare taxes.
The Debtors are required to withhold the payments by a variety of
state, federal, and local laws. These taxes are generally
regarded as held in trust for the taxing authorities and thus,
are not property of the Debtors' estates. Out of an abundance of
caution, the Debtors seek the Court's permission to withhold or
remit any of these taxes accrued prior to the Petition Date in
the normal course of business. Mr. Davis contends that
permitting the Debtors to withhold or remit the taxes accrued
prior to the Petition Date, will help avoid costly disputes with
taxing authorities, prevent the potentially draconian penalties
for violating tax laws, and will ease in the administration of
the Debtors' estates.
Vacation
Generally, vacation time for Employees is earned on January 1 of
each year for the ensuing calendar year and is lost if not used
during that year. Upon termination, however, an employee is
entitled to be paid for his or her accrued but unused vacation
time. The Debtors estimate that the aggregate dollar amount of
earned but unused vacation time is $200,000.
Expenses
The Debtors customarily reimburse their Employees who incur a
variety of business expenses in the ordinary course of performing
their duties on behalf of the Debtors. These expenses include
amounts for travel, conferences, seminars, and work-related
meals. It is essential to the continued operation of the
Debtors' businesses that the Debtors be permitted to reimburse
Employees for the Business Expenses. Because the Employees do
not always submit claims for reimbursement for Business Expenses
promptly, however, it is difficult for the Debtors to determine
the amount outstanding at any particular time. The Debtors
estimate that, as of the Petition Date, their obligations in
respect of Business Expense reimbursements to be made to
Employees total $100,000. The Debtors also request that they be
permitted to pay the reimbursement obligations in respect for the
Business Expenses to their Employees.
Employee Benefits
Before the Petition Date, the Debtors offered employees many
standard employee benefits, including:
(a) medical and dental claims under the Debtors' group health
care plans;
(b) COBRA;
(c) basic term life insurance and accidental death and
dismemberment insurance;
(d) short-term disability salary continuance and long-term
disability insurance;
(e) employee assistance programs like counseling services
and educational reimbursement, child care expenses, and
flexible spending plans;
(f) a 401(k) plan with contributions from the Debtors;
(g) various employee incentive, retention, and bonus programs;
(h) severance;
(i) relocation expenses; and
(j) miscellaneous other benefits provided to the Employees in
the ordinary course of business.
The Debtors seek authority to pay all amounts due and owing as of
the Petition Date for Employee Benefits. The Debtors estimate
that, as of the Petition Date, accrued, unpaid Employee Benefits
total less than $4,000,000.
Workers' Compensation
According to Mr. Davis, the Debtors maintain self-insured
workers' compensation programs in all states in which they
operate. It is critical that the Debtors be permitted to pay
related prepetition claims, assessments, and premiums as the
amounts become due and payable in the ordinary course of
business, because alternative arrangements for workers'
compensation coverage likely would be more costly. Furthermore,
the failure to provide coverage may, in some states, subject the
Debtors or their officers to draconian penalties.
To retain the Employees and maintain their morale under the
difficult circumstances imposed by Chapter 11, the Debtors seek
authority to satisfy the Prepetition Employee Obligations.
Paying the Prepetition Employee Obligations also maintains
accrued levels of benefits and continue the accrual where payment
is not yet due, in accordance with the policies, plans, and
programs that were in place before the Petition Date. Mr. Davis
submits that the amounts to be paid to Employees are reasonable
considering the importance and necessity of preserving the
Employees' loyalty and morale and the difficulties and losses the
Debtors likely would suffer if those amounts are not paid.
Payments to Benefit Administrators
To efficiently deliver the Employee Benefits to their Employees,
the Debtors contract with several vendors, the "Benefit
Administrators," to administer and deliver payments or other
benefits under their various employee benefit programs. In most
cases, any disbursements made in the ordinary course of the
employee benefit programs will be paid by the Benefit
Administrators, who either have been prefunded by the Debtors or
subsequently invoice the Debtors for any payments made.
In conjunction with the Debtors' continuation of their employee
benefit programs, Mr. Davis asserts that it is necessary to
obtain specific authorization to pay any claims of the Benefit
Administrators for prepetition services rendered, and claims for
reimbursement based on prepetition disbursements made by the
Benefit Administrators. Because the services of the Benefit
Administrators are vital in order to manage the employee benefit
programs, the Debtors intend to maintain their use of the Benefit
Administrators' services or enter into similar arrangements with
other comparable administrators, during the pendency of these
cases.
The Benefit Administrators may terminate their services to the
Debtors unless their prepetition claims for reimbursement and
administrative services rendered are paid. Besides, Mr. Davis
adds, the unpaid prepetition claim is minimal.
Payments to Payroll Administrator
The Debtors also request authorization to pay the prepetition
claims of Automatic Data Processing, Inc., an independent payroll
service -- the "Payroll Administrator".
As with the Benefit Administrators, payment of the Payroll
Administrator's prepetition claims will ensure uninterrupted
delivery of Employee payroll. Because the services of the
Payroll Administrator are vital to management of the Employee
payroll, the Debtors plan to continue using the Payroll
Administrator's services or enter into similar arrangements with
another payroll administrator during the pendency of these cases.
Bank Accounts
Finally, the Debtors ask the Court to direct all banks to
receive, process, honor, and pay any and all checks drawn on the
Debtors' payroll and general disbursement accounts, related to
Prepetition Employee Obligations, whether presented before or
after the Petition Date, upon receipt by each bank and
institution of notice of the authorization, provided that
sufficient funds are on deposit in the applicable accounts to
cover the payments. The Debtors' payroll and general
disbursement accounts, includes, but are not limited to:
-- the manual payroll account, JP Morgan Chase Bank #323-
367178; and
-- the medical benefit checks account, JP Morgan Chase Bank
#6301486001509.
Payment Of Obligations Should Be Authorized
The Debtors believe that substantially all of their Prepetition
Employee Obligations constitute priority claims. To the extent
any Employee is owed over $4,650 on account of Prepetition
Employee Obligations, Mr. Davis asserts that payment of these
amounts is necessary and appropriate and is authorized under
Section 105(a) of the Bankruptcy Code pursuant to the "necessity
of payment" doctrine, which "recognizes the existence of the
judicial power to authorize a debtor in a reorganization case to
pay prepetition claims where such payment is essential to the
continued operation of the debtor." The Debtors' payment of the
Prepetition Employee Obligations in the ordinary course of
business should neither prejudice general unsecured creditors nor
materially affect the Debtors' estates, because Section 507(a)(3)
and (a)(4) priority claims are entitled to full payment under a
reorganization plan. Mr. Davis further asserts that the payment
of the prepetition claims is authorized under Section 549(a),
which provides that a debtor's transfer of estate property may be
avoided if the transfer "is not authorized under Chapter 11 or by
the court." Thus, the Bankruptcy Code does not absolutely
prohibit the payment of prepetition claims prior to confirmation.
Rather, "the [Bankruptcy] Code recognizes that the court has some
limited power to authorize preferential treatment to certain
creditors. The question is when it is appropriate to exercise
that power." (Aurora Foods Bankruptcy News, Issue No. 2;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
AVAYA INC: Will Host 1st Quarter 2004 Conference Call on Jan. 27
----------------------------------------------------------------
Avaya Inc. (NYSE: AV), a leading global provider of communications
networks and services to businesses, invited investors and others
to listen to its quarterly earnings conference call to be
broadcast live over the Internet on Tuesday, Jan. 27, 2004, at
5:00 p.m. EST.
To access the webcast and presentation notes accompanying the
conference call, log onto Avaya's Web site at
http://www.avaya.com/investors/and follow the instructions. The
webcast will be available in our archives after the call at
the same web address.
You also may listen to a replay of the conference call beginning
at 8:00 p.m. EST on Jan. 27 through Feb. 3, by dialing 800-642-
1687 within the United States and 706-645-9291 outside the United
States. The replay access code is 4302920.
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 at http://www.avaya.com/
BELL CANADA: Receives Early Prepayment of $8.6MM for Axtel Notes
----------------------------------------------------------------
Bell Canada International Inc., has received US$ 8.6 million in
connection with the prepayment by Axtel S.A de C.V., of two
promissory notes held by BCI: a US$1.2 million face value note due
December 31, 2003, and a US$9.4 million face value note due in the
second quarter of 2006.
These prepayment amounts were provided for in the agreement
governing the notes.
The Axtel notes were originally issued in connection with the
Axtel restructuring transactions announced on March 27, 2003. At
that time, the Short-Term Note was recorded at its face value
while the Long-Term Note was recorded at zero fair value. As a
result of these prepayments, BCI will record a gain of
approximately US$ 7 million in the fourth quarter of 2003.
BCI continues to hold a 1.5% equity interest in Axtel.
BCI is operating under a court supervised Plan of Arrangement,
pursuant to which BCI intends to monetize its assets in an orderly
fashion and resolve outstanding claims against it in an
expeditious manner with the ultimate objective of distributing the
net proceeds to its shareholder and dissolving the company. BCI is
listed on the Toronto Stock Exchange under the symbol BI and,
until December 31, 2003, on the NASDAQ National Market under the
symbol BCICF. Visit the Company's Web site at http://www.bci.ca/
BRIDGEPORT HLDGS: Court Fixes January 5, 2003 as Claims Bar Date
----------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the District of
Delaware, January 5, 2004, at 4:00 p.m., is fixed as the deadline
for prepetition creditors of Bridgeport Holdings, Inc., and its
debtor-affiliates, except Governmental claim holders, to file
their proofs of claim against the Debtors.
The Governmental claims bar date is set for March 8, 2004.
Proof of claim forms, together with information concerning their
filing, have been mailed to all known creditors and parties in
interest. Parties who have not received the mailing and who
believe they have a claim against the Debtors should contact AP
Services Case Management Group at 972-535-7128.
Bridgeport Holdings, Inc. and its debtor-affiliates filed for
Chapter 11 relief on September 10, 2003, (Bankr. Del. Case No. 03-
12825). Brendan Linehan Shannon, Esq., Matthew Barry Lunn, Esq.,
Michael R. Nestor, Esq., at Young, Conaway, Stargatt & Taylor LLP
and Kenneth H. Eckstein, Esq., Mitchell A. Seider, Esq., Robert T.
Schmidt, Esq., and Jack A. Hazan, Esq., at Kramer Levin Naftalis &
Frankel LLP represent the Debtors in their restructuring efforts.
BUDGET: Plan's Claims and Interests Classification and Treatment
----------------------------------------------------------------
The Liquidation Plan reflects an allocation of value between the
U.S. Budget Group Debtor Group, on the one hand, and BRACII, on
the other hand.
The Debtors' classification and treatment of claims and interests
against the U.S. Debtors are:
Claim Type or
Class Equity Interest Treatment
----- --------------- ---------
N/A Administrative At Reorganized BGI's option, cash
Claims equal to the unpaid portion of the
the Allowed U.S. Debtor Group
Unimpaired Administrative Claim or the other
treatment as to which Reorganized
BGI and the Allowed U.S. Debtor
Group Administrative Claim Holder
will have agreed in writing;
provided, however, that the
Allowed U.S. Debtor Group
Administrative Claims with respect
to liabilities incurred by the
U.S. Debtor Group in the ordinary
course of business during the
Chapter 11 Cases will be paid in
the ordinary course of business
in accordance with the terms and
conditions of any agreements
relating to it.
N/A Priority Tax At Reorganized BGI's option, cash
Claims equal to the unpaid portion of the
Allowed U.S. Debtor Group Priority
Unimpaired Tax Claim or other treatment as to
which Reorganized BGI and the
Allowed U.S. Debtor Group Priority
Tax Claim will agree in writing,
provided however, that any Claim
or demand for payment of a penalty
will be disallowed pursuant to the
Plan and the Allowed U.S. Debtor
Group Priority Tax Claim will not
assess or attempt to collect the
penalty from the Debtors, their
estates, Reorganized BGI or their
property.
1A Priority Non-Tax At Reorganized BGI's option, cash
Claims equal to the amount of the allowed
priority non-tax claim or other
Unimpaired treatment as to which Reorganized
BGI and the Allowed Priority
Non-Tax Claim agreed in writing.
2A Miscellaneous At Reorganized BGI's option, the
Secured Claims Plan will leave unaltered the
legal, equitable and contractual
Unimpaired rights to which each Class 2A
Claim entitles the holder or
each allowed Class 2A claim will
receive cash equal to the amount of
the Allowed Class 2A claim or other
treatment as to which Reorganized
BGI and the Allowed 2A claim holder
agreed in writing.
3A General Unsecured An amount of cash equal to each
Claims Holder's Initial Pro Rata share of
the Initial U.S. Debtor Group
Impaired Unsecured Claim Available Amount
plus each Holder's Pro Rata share
of the Final U.S. Debtor Group
Unsecured Claim Distribution
Amount plus if the Holder is an
Allowed Senior Notes Claim Holder
or an Allowed Rosenthal Note Claim
Holder, the amount which the
Holder is entitled to receive
under Section 3.3(b) and Section
3.3(c) of the Plan; additionally,
the Senior Notes Indenture Trustee
will receive the Senior Notes
Indenture Trustee Fee Amount.
4A Convertible If Classes 3A, 4A and 5A accept
Subordinated the Plan, an amount of cash equal
Notes Claims to each Holder's Pro Rata share of
the Class 4A Retention Amount;
Impaired additionally, if Classes 3A, 4A
and 5A accept the Plan, the
Convertible Subordinated Notes
Indenture Trustee will receive the
Convertible Subordinated Notes
Indenture Trustee Fee Amount.
5A High Tide Claims If Classes 3A, 4A and 5A accept
the Plan, an amount of cash equal
Impaired to each Holder's Pro Rata share of
the Class 5A Retention Amount. In
addition, if Classes 3A, 4A and 5A
accept the Plan, the High Tides
Indenture Trustee will receive the
High Tides Indenture Trustee Fee
Amount.
6A Intercompany The U.S. Debtor Group Intercompany
Claims Claims will be eliminated and the
holders of those claims will
Impaired receive no recovery.
7A Equity Interests The U.S. Debtor Group Equity
and Subordinated Interests will be cancelled and
Claims the U.S. Debtor Group Equity
Interest and Subordinated Claim
Impaired holders will receive no recovery.
With respect to the claims and interests against BRACII, the
Debtors classify and will treat them as:
Claim Type or
Class Equity Interest Treatment
----- --------------- ---------
N/A Administrative At the U.K. Officeholder's option,
Claim cash equal to the unpaid portion
of the Allowed BRACII
Unimpaired Administrative Claim or other
treatment as to which the U.K.
Officeholder and the Allowed
BRACII Administrative Claims
holder will have agreed in
writing; provided, however,
BRACII Administrative Claims
which the U.K. Administration
Claims will receive their
distributions from the Vested
Assets as and when provided in the
BRACII CVA and holder of the
Allowed BRACII Administrative
Claims, which are not U.K.
Administration Claims will receive
their distributions from the
BRACII Administrative Claims
Reserve; provided further that
Allowed BRACII Administrative
Claims with respect to liabilities
incurred by BRACII in the
ordinary course of business during
the Chapter 11 Cases will be paid
in the ordinary course of business
in accordance with the terms and
conditions of any agreements
relating thereto.
N/A Priority Tax At the UK Officeholder's option,
Claims cash equal to the unpaid portion
of the Allowed BRACII Priority Tax
Unimpaired Claim or other treatment as to
which Reorganized BRACCI and the
Allowed BRACII Priority Tax Claim
will agree in writing; provided,
however, holders of Allowed BRACII
Priority Tax Claims which are U.K.
Administration Claims will receive
their distributions from the
Vested Assets as and when provided
in BRACII CVA and holders of
Allowed BRACII Priority Tax Claims
which are not U.K. Administration
Claims will receive their
distributions from the BRACII
Administrative Claims Reserve;
provided further that any Claim or
demand for payment of a penalty
will be disallowed pursuant to the
Plan and the Allowed BRACII
Priority Tax Claim holder will not
assess or attempt to collect
penalty from the Debtors and their
estates, the U.K. Officeholder, or
their property.
1B Priority Non-Tax At the UK Officeholder's option,
Claims cash equal to the amount of the
Allowed Priority Non-Tax Claim or
Unimpaired other treatment as to which the
U.K. Officeholder and the Allowed
Priority Non-Tax Claim agreed in
writing; provided, however,
holders of Allowed BRACII Priority
Non-Tax Claims, which are U.K.
Administration Claims will receive
their distributions from the
Vested Assets and when provided in
the BRACII CVA and holders of
Allowed BRACII Priority Non-Tax
Claims, which are not U.K.
Administration Claims will receive
their distributions from the
BRACII Administration Claims
Reserve.
2B Preferential At the UK Officeholder's option,
Claims cash from the Vested Assets equal
to the amount of the Allowed
Unimpaired BRACII Preferential Claim or other
treatment as to which the U.K.
Officeholders and the Allowed
BRACII Preferential Claim agreed
in writing.
3B Miscellaneous At the UK Officeholder's option,
Secured Claims the Plan will leave unaltered the
legal, equitable and contractual
Unimpaired rights to which each Class 3B
entitles the Holder or each Allowed
Class 3B Claim holders will receive
cash from the Vested Assets equal
to the amount of the Allowed Class
3B Claim or other treatment as to
which Reorganized BRACII and the
holder of the Allowed Class 3B
claim agreed in writing.
4B General Unsecured Cash amount from the vested assets
Claims equal to each Holder's Pro Rata
Share of the Class 4B Available
Impaired Amount.
5B Equity Interests The BRACII Equity Interests will
and Subordinated be cancelled and the BRACII Equity
Claims Interests and Subordinated Claims
will receive no recovery.
Impaired
Classes 3A, 4A, 5A and 4B will be entitled to vote to accept or
reject the Plan. Pursuant to Section 1126(f) of the Bankruptcy
Code, each Unimpaired Class of Claims is deemed to have accepted
the Plan and, therefore, is not entitled to vote to accept or
reject the Plan. Since holders of Classes 6A, 7A and 5B Claims
are not entitled to receive or retain any property under the
Plan, pursuant to Section 1126(g) of the Bankruptcy Code, these
Classes are presumed to have rejected the Plan and are,
therefore, not entitled to vote on the Plan. (Budget Group
Bankruptcy News, Issue No. 30; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
CANWEST GLOBAL: Nominates Two Additional Independent Directors
--------------------------------------------------------------
CanWest Global Communications Corp., announced that Mr. Paul V.
Godfrey and Professor Ronald J. Daniels, both of Toronto, Ontario,
have been nominated to stand for election to the Company's Board
of Directors at its forthcoming annual general meeting of
shareholders to be held in Montreal on January 29th, 2004.
These nominations, announced by CanWest's Chairman, The Honourable
Frank McKenna P.C. Q.C., represent the appointment of two
additional independent Board members.
"Paul Godfrey and Ron Daniels will each bring unique and
complementary skills, as well as vast experience, to CanWest's
Board, and we look forward to their wise counsel," said Frank
McKenna.
Mr. Godfrey, currently President and Chief Executive Officer of
the Toronto Blue Jays Baseball Club, brings a wealth of experience
as a corporate director, business leader, newspaper publisher and
a leader in municipal politics. Prior to joining the Toronto Blue
Jays, Mr. Godfrey was President and Chief Executive Officer of Sun
Media Corporation, having previously served as Publisher and Chief
Executive Officer of the Toronto Sun newspaper. Before joining The
Toronto Sun, Mr. Godfrey was prominent in municipal politics in
Toronto, serving as a Councillor for the City of North York and an
Alderman before his appointment as Chairman of the Municipality of
Metropolitan Toronto in 1973, a position he held for a record 11
years.
Professor Daniels, a distinguished legal academic, is the Dean of
the Faculty of Law at the University of Toronto, where he has
taught and written extensively in the areas of corporate and
securities law, regulation and government reform. He has served as
Chair of the Ontario Task Force on Securities Regulation, a member
of the Toronto Stock Exchange Committee on Corporate Governance,
Chair of the Ontario Electricity Market Design Committee and
Special Advisor to the Ontario Government on Reform of Public
Accounting Regulation. Currently, Professor Daniels is Chair of
the Ontario Provincial Government's Panel on the Future of
Government. Professor Daniels is serving this year as a Visiting
Professor at the Yale Law School. He also serves on several
corporate boards.
CanWest Global Communications Corp. (S&P, B+ Long-Term Corporate
Credit and Senior Unsecured Ratings, Stable) (NYSE: CWG; TSX:
CGS.S and CGS.A) -- http://www.canwestglobal.com/-- is an
international media company. CanWest, Canada's largest publisher
of daily newspapers, owns, operates and/or holds substantial
interests in newspapers, conventional television, out-of-home
advertising, specialty cable channels, radio networks and web
sites in Canada, New Zealand, Australia, Ireland and the United
Kingdom. The Company's program production and distribution
division operates in several countries throughout the world.
CE GENERATION: S&P Affirms Low-B Debt Rating After SCE Upgrade
--------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB-' rating on CE
Generation LLC's $400 million bonds due 2018.
The rating action follows the rating upgrade on Dec. 3, 2003 of
Southern California Edison Co. (SCE; BBB/Stable/A-2), the offtaker
of Salton Sea Funding Corp. (BB+/Stable), to 'BBB' from 'BB' and
Standard & Poor's review of the project.
Salton Sea is the company's largest cash contributor over the term
of the notes. The outlook is stable.
"We expect that the CE Generation projects will continue to
perform well and provide sufficient cash flow to service the CE
Generation debt through the fixed price period at Salton Sea,"
said Standard & Poor's credit analyst Scott Taylor.
"However, the rating is suppressed at a level below Salton Sea
because of the potential for cash to be trapped at Salton Sea if
the short-run avoided cost is low after May 2007 and, furthermore,
the greater reliance upon Salton Sea Funding if merchant cash
flows are not forthcoming following expiration of the qualifying
facility contract at Saranac in 2009," said Mr. Taylor.
Standard & Poor's also said that greater certainty in energy
pricing over the long term at Salton Sea could lead to a higher
rating.
CE Generation, which is owned 50% by MidAmerican Energy Holdings
Co. (MEHC; BBB-/Positive/--) and 50% by TransAlta Corp. (BBB-
/Stable/-), is the holding company for MEHC's interests in its
U.S. qualifying facilities.
CENTENNIAL COMMS: Red Ink Continued to Flow in Second Quarter
-------------------------------------------------------------
Centennial Communications Corp., (Nasdaq: CYCL) announced results
for the quarter ended November 30, 2003.
Consolidated revenues grew 12% from the same quarter last year to
$202.9 million. Net loss was $12.7 million for the second quarter
as compared to a net loss of $13.5 million for the same quarter
last year. Adjusted operating income was $79.7 million, a 13%
increase from the same quarter last year. Adjusted operating
income is net income (loss) before interest, taxes, depreciation,
amortization, loss (gain) on disposition of assets, minority
interest in (income) loss of subsidiaries, income from equity
investments and other non-operating income (expense).
Significant events occurring during and after the quarter ended
November 30, 2003 include:
-- Centennial Communications activated its one millionth wireless
subscriber during the month of December. The Company has
demonstrated four consecutive quarters of solid subscriber
growth across both of its wireless segments along with an
improving mix of postpaid customers and stronger retail
financial results due to our disciplined focus on profitable
customers.
-- The Company launched its global system for mobile
communications network in its Midwest cluster ahead of schedule
and within budget. We began receiving GSM roaming traffic in
late November and are now offering GSM service features and
phones to our retail customers in select markets. Our Midwest
GSM network overlay matches our time division multiple access
coverage in the region on a one-to-one basis as measured by
cell sites. The Company expects to launch GSM in its Southeast
cluster by the end of calendar year 2004.
-- In November, 10 million shares of the Company's common stock
were sold at $5.50 per share for total gross proceeds of $55.0
million. The offering included seven million primary shares
sold by Centennial and three million shares sold by affiliates
of The Blackstone Group. Proceeds to Centennial (after
underwriting commissions) of approximately $36.8 million were
used to pay down a portion of Centennial's unsecured
subordinated notes due 2009 which are currently accruing paid-
in-kind interest at a rate of 13%. The transaction almost
doubled the public float of our stock.
The Company's wireless subscribers at November 30, 2003 were
997,200, compared to 896,800 on the same date last year, an
increase of 11%. U.S. Wireless subscribers increased 2,400 from
the prior quarter, aided by national rate plans which helped
offset the decline in prepaid subscribers. Caribbean Wireless
subscribers increased 23,300 as compared to the prior quarter, due
primarily to strong growth of postpaid subscribers in both Puerto
Rico and the Dominican Republic. Caribbean Broadband switched
access lines reached 45,100 and dedicated access line equivalents
were 230,000 at November 30, 2003, up 22% and 35%, respectively,
from November 30, 2002. Cable television subscribers were 75,000
at November 30, 2003, down 6,600 from the same quarter last year.
"The addition of our one millionth wireless customer is a
significant milestone for the Company resulting from our continued
commitment to building the Centennial brand. We are equally
pleased by the rate of growth in our wireless portfolio in which
subscribers grew by 11% and revenues grew by 12% year over year,"
said Michael J. Small, chief executive officer.
For the quarter, U.S. Wireless revenues were $90.1 million and
U.S. Wireless adjusted operating income was $35.4 million. U.S.
Wireless adjusted operating income decreased by 11% from the same
quarter last year primarily due to reduced roaming revenue of
approximately $6.8 million. Retail revenue per subscriber
increased to $47 from $42 in the prior year, primarily due to the
introduction of national rate plans.
For the quarter, total Caribbean (consisting of the Caribbean
Wireless and Caribbean Broadband segments) revenues were $112.8
million and total Caribbean adjusted operating income was $44.3
million. Total Caribbean adjusted operating income for the quarter
was up 42% from the same quarter last year. Caribbean Wireless
revenues for the quarter reached $76.2 million, an increase of 23%
from the same quarter last year. Caribbean Wireless adjusted
operating income for the quarter was $30.8 million, an increase of
35% from the same quarter last year. Caribbean Broadband revenues
for the quarter were $39.8 million and Caribbean Broadband
adjusted operating income reached $13.5 million, up 14% and 63%
from the same quarter last year, respectively.
Consolidated capital expenditures for the quarter ended
November 30, 2003 were $35.6 million or 18% of revenue. Net debt
at November 30, 2003 was $1,646.8 million as compared to $1,712.0
million at November 30, 2002.
For the quarter, the Company's net loss of $12.7 million includes
a tax provision of $16.0 million. The Company's effective tax rate
is unusually high due to book losses generated in the Dominican
Republic for which, in management's judgment, it is more likely
than not that a tax benefit will not be realized, state taxes net
of federal tax benefit, certain interest expense related to the
Company's Mezzanine Debt that is not deductible for U.S. income
tax purposes and certain foreign taxes for which a foreign tax
credit cannot be claimed.
Centennial (S&P, B- Corporate Credit Rating, Negative) is one of
the largest independent wireless telecommunications service
providers in the United States and the Caribbean with
approximately 17.1 million Net Pops and approximately 929,700
wireless subscribers. Centennial's U.S. operations have
approximately 6.0 million Net Pops in small cities and rural
areas. Centennial's Caribbean integrated communications operation
owns and operates wireless licenses for approximately 11.1 million
Net Pops in Puerto Rico, the Dominican Republic and the U.S.
Virgin Islands, and provides voice, data, video and Internet
services on broadband networks in the region. Welsh, Carson
Anderson & Stowe and an affiliate of the Blackstone Group are
controlling shareholders of Centennial. For more information
regarding Centennial, visit its Web sites at
http://www.centennialcom.com/ and http://www.centennialpr.com/
CHI-CHI'S: Committee Taps Ernst & Young for Financial Advice
------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in Chi-
Chi's Inc.'s chapter 11 cases, wants to retain Ernst & Young LLP
as the Committee's Financial Advisor.
The Committee selected Ernst & Young because of the Firm's
qualification to represent it in these cases in a most cost-
effective, efficient, and timely manner. In its capacity, Ernst &
Young will provide services including:
a) analysis of the Debtors' tax position including
potential tax attributes available and the availability
of any refund opportunities;
b) forensic investigation work to evaluate historic
transactions and their validity;
c) performing or reviewing enterprise evaluations in
connection with the analysis of the Debtors' financial
projections and business plan;
d) performing or reviewing valuations, as appropriate and
necessary, of Debtors' corporate assets;
e) attending and advising at meetings with the Committee,
its counsel and representatives of the Debtors;
f) rendering testimony in connection with its services; and
g) providing such other services, as requested by the
Committee and agreed by Ernst & Young.
Gary Cole, a Partner of Ernst & Young reports the firm's hourly
rates are:
Partners and Principals $550 - $650 per hour
Senior Managers $475 - $545 per hour
Managers $375 - $440 per hour
Senior Consultants $320 - $340 per hour
Consultants $275 per hour
Client Service Associates $140 per hour
Headquartered in Irvine, California, Chi-Chi's Inc., and its
debtor-affiliates are all direct or indirect operating subsidiary
of Prandium and FRI-MRD Corporation and each engages in the
restaurant business. The Company filed for chapter 11 protection
on October 8, 2003 (Bank. Del. Case No. 03-13063). Bruce Grohsgal,
Esq., and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl,
Young, Jones & Weintraub represent the Debtors in their
restructuring efforts.
COMPASS MINERALS: Completes IPO of 16.675 Million Shares
--------------------------------------------------------
Compass Minerals International Inc. (NYSE: CMP) has completed its
initial public offering of 16,675,000 shares of common stock,
which includes 2,175,000 shares of common stock sold to the
underwriters in connection with the exercise of their over-
allotment option.
The stock commenced trading on December 12, 2003.
Goldman, Sachs & Co. and Credit Suisse First Boston led the
offering. The shares were sold by selling stockholders of the
company, which included Apollo Management Inc., IMC Global Inc.
(NYSE: IGL) and employees of the company and its subsidiaries. The
company did not receive any of the proceeds from the sale of
shares by the selling stockholders.
A copy of the prospectus relating to this offering may be obtained
from Goldman, Sachs & Co., 85 Broad Street, New York, New York,
10004, Attn: Prospectus Department, or Credit Suisse First Boston
LLC, One Madison Avenue, New York, New York 10010 (212-325-2580),
Attn.: Prospectus Department.
The company's listing application includes additional information
upon which the New York Stock Exchange relied to list the company.
This information is available to the public upon request to the
NYSE.
A registration statement relating to these securities was filed
with and declared effective by the Securities and Exchange
Commission. The public offering is being made by means of a
prospectus.
Compass is the largest producer of rock, or highway deicing, salt
in North America and the United Kingdom and operates the largest
highway deicing salt mines in these regions. The company is also
the third largest producer of general trade salt in North America
and the second largest in the United Kingdom, serving major
retailers, agricultural cooperatives and food producers. In
addition, Compass is the largest producer of sulfate of potash in
North America, which is used in the production of specialty
fertilizers.
As previously reported, Standard & Poor's Ratings Services lowered
its corporate credit rating on Compass Minerals Group Inc., and on
its parent, Salt Holdings Corporation, to 'B+' from 'BB-'.
In addition, Standard & Poor's assigned its 'B-' rating to Salt
Holding's $179.6 million senior subordinated discount notes due
2013. Proceeds from the proposed notes will be distributed to
the company's shareholders. Compass' total debt (pro forma for
the new debt and preferred stock at the Salt Holdings) will be
approximately $599 million. The outlook is stable.
CORDOVA FUNDING: S&P Lowers Debt Rating to B on El Paso Exposure
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on Cordova
Funding Corp.'s $225 million series A senior secured bonds due
2019 to 'B' from 'B+'. The outlook is negative.
The downgrade reflects the project's reliance on a tolling
agreement with El Paso Merchant Energy Co. that expires in 2019.
El Paso Corp. (B/Negative/--) guarantees the obligations of El
Paso Merchant Energy. Standard & Poor's recently lowered the
rating on El Paso to 'B' from 'B+'.
CFC is the funding vehicle that issued debt and subsequently
loaned the proceeds to its affiliate, Cordova Energy Co. LLC,
which guarantees CFC's payment obligations.
Cordova exercised an option under the power purchase agreement to
call back 50% of the project output for sales to others for the
contract years ending on or prior to May 14, 2004. Cordova
subsequently entered into a power purchase agreement with
MidAmerican Energy Co. (MEC; A/Stable/A-1), whereby MEC will
purchase 50% of the capacity and energy from Cordova until
May 14, 2004.
"However, there can be no assurances that Cordova will continue to
exercise this option, in which case 100% of the capacity would be
under contract with El Paso," said Standard & Poor's credit
analyst Scott Taylor.
Standard & Poor's also said that the negative outlook on CFC
reflects the negative outlook on El Paso as the tolling agreement
guarantor.
Cordova, which is wholly owned by MidAmerican Energy Holdings Co.
(BBB-/Positive/--), completed the 537 MW natural gas-fired,
combined-cycle power plant located in Rock Island County, Ill. in
June 2001.
COTT CORP: Closes Secondary Offering of 7.5 Mill. Common Shares
---------------------------------------------------------------
Cott Corporation (TSX:BCB and NYSE:COT) closes on its previously
announced secondary offering of 7.5 million common shares of
the Company by parties related or affiliated with Thomas H. Lee
Partners, L.P., at an offering price of US$25.25 per Common Share,
representing aggregate gross proceeds to Thomas Lee of
US$189,375,000.
The Company did not receive any proceeds from the sale of the
Common Shares.
The securities offered have not been registered under the U.S.
Securities Act of 1933, as amended, and may not be offered or sold
in the United States or to U.S. persons absent registration or an
applicable exemption from the registration requirements.
Cott Corporation (S&P, BB Long-Term Corporate Credit and BB+
Senior Secured Debt Ratings), is the world's largest retailer
brand soft drink supplier, with the leading take home carbonated
soft drink market shares in this segment in its core markets of
the United States, Canada and the United Kingdom.
COVANTA: Wants DHC Disclosure Statement Hearing Set for Jan. 14
---------------------------------------------------------------
Notwithstanding the filing of the Covanta Energy Debtors' First
Amended Joint Plan of Reorganization and the Debtors' First
Amended Joint Plan of Liquidation, and the mailing of solicitation
packages for the purposes of soliciting votes on the Initial
Plans, the Debtors have continued to consider proposals for
alternative plans of reorganization.
James L. Bromley, Esq., at Cleary, Gottlieb, Steen & Hamilton, in
New York, points out that the continued consideration of
alternative plans was explicitly contemplated by the Initial
Plans and the First Disclosure Statement. In large part, the
Debtors' ongoing effort in this regard has been at the request of
its creditor constituencies.
The Debtors have spent a significant amount of time engaging in
extensive discussions and negotiations with representatives of
Danielson Holding Corporation and D.E. Shaw Laminar Portfolios,
LLC, regarding a potential alternative transaction, which would
serve as the basis for alternative plans of reorganization and
liquidation. As a result of the discussions and negotiations,
Covanta and DHC have entered into an Investment and Purchase
Agreement, dated December 2, 2003.
Mr. Bromley tells Judge Blackshear that the Debtors and DHC are
currently working on the preparation of a new plan of
reorganization and a revised plan of liquidation that would be
premised on the implementation of the Purchase Agreement. In
contrast to the ESOP structure contemplated under the First
Amended Reorganization Plan, the Purchase Agreement provides for
an equity investment by DHC and a concomitant deleveraging of the
Reorganized Debtors. The Debtors anticipate that they will file:
(a) the DHC Proposed Plans;
(b) a new disclosure statement with respect to the DHC
Proposed Plans; and
(c) a new short-form disclosure statement with respect to the
DHC Proposed Plans.
The Debtors believe that the DHC Proposed Plans, if filed, would
contain sufficient material modifications to the prior Initial
Plans to require, pursuant to Section 1127 of the Bankruptcy Code
and Rule 3019 of the Federal Rules of Bankruptcy Procedure, a
hearing to consider approval of the DHC Disclosure Statement as
well as subsequent solicitation of votes with respect to the DHC
Proposed Plans.
Thus, the Debtors ask the Court to establish January 14, 2004 at
2:00 p.m. as the date and time for the DHC Disclosure Statement
Hearing. (Covanta Bankruptcy News, Issue No. 43; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
COWHEY MATERIALS: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Cowhey Materials & Fuel Co.
5310 West Ainslie Street
Chicago, Illinois 60630
Bankruptcy Case No.: 03-50375
Type of Business: Supplier of concrete materials.
Chapter 11 Petition Date: December 15, 2003
Court: Northern District of Illinois (Chicago)
Judge: Carol A. Doyle
Debtor's Counsel: G. Robert Vlach, Esq.
6904 West Cermak Road
Berwyn, IL 60402
Tel: 708-795-4400
Total Assets: $99,500
Total Debts: $5,555,339
CTC COMMS: Emerges from Chapter 11 & Completes Asset Sale to CVC
----------------------------------------------------------------
CTC Communications Group, Inc., the largest competitive local
exchange carrier in New England with over 10,000 customers and
over 370,000 access line equivalents, announced that its Second
Amended Joint Plan of Reorganization has become effective and that
its acquisition by Washington-based Columbia Ventures Corporation
(CVC) has been completed.
As previously announced, the Plan was accepted by an overwhelming
majority of CTC's creditors and was confirmed by the United States
Bankruptcy Court for the District of Delaware on November 24,
2003.
Kenneth D. Peterson, Jr., CVC's Chairman and the new President of
CTC Communications stated, "I am very pleased to welcome CTC
Communications to the Columbia Ventures family of companies. I am
certain that CTC's IP-based PowerPath(R) Network, coupled with
some of the best employees in the industry and a very strong
balance sheet, will enable CTC to expand its position as a
preeminent competitive telecommunications provider in the
Northeast and Mid-Atlantic regions."
Peterson added, "We wish to thank all of CTC's customers for their
ongoing commitment during the past 15 months and look forward to
expanding CTC's customer base and providing all of its customers
with CTC's industry leading customer service and a comprehensive
suite of fixed line products and services ."
Michael Katzenstein, CTC's outgoing Interim CEO and a principal of
restructuring and turnaround manager CXO, L.L.C., said, "CTC's
turn-around was the result of the efforts of all involved -- CTC's
dedicated employees, its creditors, its investment banker, Miller,
Buckfire, Lewis & Ying, and the professionals from CXO, L.L.C.
Katzenstein added, "It's been a pleasure working with CTC's Board
and management and with new owner Columbia Ventures. With its
valuable customer base, world-class network, strong team - and new
sponsorship - I am confident of CTC's future success."
CTC is a "next generation" integrated communications carrier
utilizing advanced technology and providing its customers with
converged voice, data, Internet and video services on a broadband,
packet-based network, called the PowerPath(R) Network. The Company
serves medium and larger business customers from Virginia to
Maine, which includes the most robust telecommunications region in
the world -- the Washington D.C. to Boston corridor. CTC's Cisco
Powered IP+ATM packet network and its top-tier sales and service
teams provide contiguous marketing and technology coverage
throughout the Northeast and Mid-Atlantic States. The Company,
through its dedicated commitment to exceptional customer service,
has achieved an industry-leading market share in the Northeast.
CTC can be found on the web at http://www.ctcnet.com/
Columbia Ventures Corporation owns and operates telecommunications
and industrial businesses, including Hibernia Atlantic, a
transatlantic fiber optic network with landing stations in Boston,
Halifax, Liverpool and Dublin. The Hibernia Atlantic system
includes a fully protected terrestrial system linking Boston via
New York City. CVC also operates a fiber optic metropolitan
network in Spokane, Washington and is the largest shareholder in
Og Vodafone, the second largest telecommunications provider in
Iceland. The industrial businesses of CVC include Nordural, an
aluminum smelter developed and constructed by CVC in Iceland, as
well as aluminum manufacturing and fabrication operations in the
United States ands Mexico. CVC and its related businesses began
operations in 1987. The company's headquarters are located in
Vancouver, Washington.
DII INDUSTRIES: Insurers Seek Dismissal of Chapter 11 Proceeding
----------------------------------------------------------------
An army of lawyers from the law firms of Wilmer Cutler &
Pickering; Meckler, Bulger & Tilson; Hogan & Hartson L.L.P.;
Picadio Sneath Miller & Norton, P.C.; and Sonnenschein Nath &
Rosenthal LLP, led by Samuel R. Grego, Esq., and Vinita K. Sinha,
Esq., at DKW Law Group LLC in Pittsburgh; marched to the
Bankruptcy Court Tuesday at the request of their clients:
* Appalachian Insurance Company,
* First State Insurance Company,
* Hartford Accident and Indemnity Company,
* Hartford Casualty and Insurance Company,
* New England Insurance Company,
* Twin City Fire Insurance Company,
* Zurich American Insurance Company,
* Zurich Insurance Company (Switzerland), and
* Zurich International (Bermuda), Ltd.
The insurers want Judge Fitzgerald to dismiss the DII Industries,
LLC and Kellogg, Brown & Root, Inc.'s Chapter 11 proceedings. The
insurers argue that these are bad faith bankruptcy filings and
should be dismissed for the same reasons SGL Carbon Corp.'s
graphite electrode antitrust litigation-driven cases were ordered
dismissed by the U.S. Court of Appeals for the Third Circuit in
1999. See 200 F.3d 154.
Abuse and Misuse
The DII and KBR Chapter 11 cases are a new and abusive kind of
bankruptcy, the Insurance Companies say. They serve no
reorganizational purpose and they have the potential to do
substantial harm to both creditors and the integrity of the
bankruptcy system.
The DII and KBR bankruptcy cases, the Insurers charge, were
orchestrated by Halliburton in order to raise HAL's stock price
and gain a litigation advantage. HAL's already told the insurers
that it intends to do everything it can to recoup every dollar it
pays to settle claims by tapping into $3,000,000,000 of insurance
proceeds underlying a series of insurance policies written from
1972 to 1985. HAL's objective is to escape from its liability at
no cost. While HAL will advance funds to the trust, it will then
turn around and collect from the Insurance Companies.
The Insurers give three reasons why dismissal is appropriate:
(A) The Debtors have no need to reorganize. They are
solvent, profitable and fully capable of satisfying all
of their liabilities -- asbestos, silica and commercial
-- now and in the future.
(B) The Proposed Plan is inconsistent with the purposes of
the bankruptcy code, violates the absolute priority rule,
and misuses the asbestos trust provisions in Section
524(g).
(C) The Plan's proposed channeling injunction points future
claimants to an artificially limited trust fund for
payment of their claims and that raises a serious
constitutional problem.
These Chapter 11 cases are not about reorganizing a failing
business, the Insurers say. No jobs or employee benefits are at
stake. No creditor is at risk of nonpayment. No business
operations are impaired. No contracts need to be rejected or
renegotiated. Instead, the Insurers complain, these cases are
solely about boosting HAL's stock price at the expense of future
claimants and insurers.
Future Claimants Suffer
The settlement, the Insurers calculate, delivers 7-1/2 the
Debtors' historical average settlement cost per claim. That, the
Insurers say, is what bought the votes supporting the Plan. In
return for these inflated payments, present claimants are
unfairly impairing the ability of future claimants to collect.
If the trust goes bust, future claimants are out of luck if the
Plan's confirmed. Future claimants would be better off without
the Plan, the Insurers tell the Court.
Ignore the Insurers
The Insurers, Jeffrey N. Rich, Esq., at Kirkpatrick & Lockhart
LLP, tells the Court in a Preliminary Response, do not have
standing in these Chapter 11 cases. The DII and KBR
restructuring proceeding do not affect the Insurers because:
(1) The Debtors, without contribution from any insurer, are
funding the Asbestos PI Trust and Silica PI Trust;
(2) The Plan does not assign Debtors insurance rights -- in
fact, the Debtors retain such rights and the insurance
coverage disputes will be resolved in litigation
separate and apart from these Reorganization Cases; and
(3) The Plan contains an express "super-preemptory
provision" ensuring that nothing in the Plan impairs the
rights of any party to an insurance policy.
The Debtors ask Judge Fitzgerald to consider the Insurers'
standing in these cases as quickly as possible and rule that they
cannot participate.
The Plan negotiation process has lasted for more than 18 months
so far. The resulting Plan has been met with overwhelming
support (over 98% of asbestos claimants, and over 99% of silica
claimants) from the only creditors who are impaired under the
Plan -- the holders of Asbestos Unsecured PI. Delay is not what
these cases need; the Debtors want to emerge from bankruptcy in
the first quarter of next year, not another year or more from
now. (DII & KBR Bankruptcy News, Issue No. 1; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
DIRECTV LATIN: Provides Chapter 11 Plan Summary and Overview
------------------------------------------------------------
DirecTV Latin America LLC's Plan is the product of the effort by
the Debtor's management and its professional advisers to
critically assess all facets of the Debtor's operations and
structure. The Plan contemplates that, after the Effective Date,
the Debtor will continue to exist as a Delaware limited liability
company whose members will be:
(a) Hughes Electronics, which will receive distributions of
Reorganized Debtor equity on account of its claims; and
(b) Darlene Investments LLC, which will also receive
distributions of Reorganized Debtor equity in
consideration of certain contributions it will make to the
Reorganized Debtor.
Reorganized DirecTV will own 100% of the equity of its principal
operating companies. The equity in those Operating Companies
currently owned by Hughes and Darlene will be contributed to
Reorganized DirecTV pursuant to the terms of a Contribution
Agreement in exchange for member units or equity. In addition,
Reorganized DirecTV will have an option under the Contribution
Agreement to purchase any or all of Darlene's interests in the
Tier II Operating Companies, namely, Galaxy Ecuador, S.A., Direct
Vision, S.A., Servicios Directos de Satelites, S.A., and Galaxy
Nicaragua, S.A., for $1.
The primary benefits of the Roll-Up Transactions are:
(i) streamlining the operations of Reorganized DirecTV by
centralizing management of the Operating Companies and
the uplink facilities;
(ii) reducing the funding requirements for the business by
increasing the efficiency of capital allocations among
Operating Companies;
(iii) facilitating private and public financing transactions
for Reorganized DirecTV as a result of a simplified
capital structure;
(iv) aligning the interests of all entities involved in the
production and distribution of the Programming; and
(v) improving cash flow by eliminating significant debt
obligations.
The cash distributions to be made pursuant to the Plan will be
funded by Reorganized DirecTV from the proceeds of the DIP
Facility or an exit funding. The Exit Funding will be provided
by Hughes or its affiliate and will be used by Reorganized
DirecTV to fund its ongoing business expenses after the Plan
Effective Date.
Hughes Contributions
The Official Committee of Unsecured Creditors actively
participated in the negotiation of the Plan's terms. The
Committee also conducted an investigation of the Debtor's
business, business plan, the valuation of the Debtor and
Reorganized DirecTV and the Debtor's reorganization alternatives.
The Debtor and the Committee each concluded that the Debtor's
ability to reorganize is dependent on Hughes' willingness to make
additional contributions provided for in the Plan, including
providing the Exit Funding.
Hughes' contributions and considerations include:
(a) its willingness to accept equity in Reorganized DirecTV
in satisfaction of its allowed DIP Facility claims,
estimated to be at least $148,000,000, on the Effective
Date;
(b) its agreement to provide, or cause to be provided, Exit
Funding, to Reorganized DirecTV;
(c) its willingness to accept equity in Reorganized DirecTV
in satisfaction of its prepetition claims against the
Debtor and agree to a plan providing for cash
distributions to the Debtor's other unsecured creditors
from the proceeds of its financing;
(d) its agreement to contribute its interest in certain
companies to be sold, and conveyed to the Reorganized
Debtor as part of the Roll-Up Transaction and waive all
of its and its Affiliates' claims against the Transferred
Companies; and
(e) its agreement to waive its claims against SurFin, Ltd. and
CBC and to cause SurFin to waive its claims against the
Debtor.
Hughes' willingness to make additional contribution is dependent
on the allowance of its claims as non-subordinated unsecured
claims and receiving the releases provided for under the Plan.
Based on its review of the Debtor, its Business Plan and its
investigation of Hughes, the Committee concluded that the Plan
provides a fair and reasonable resolution of all potential claims
held by the Debtor's estate against Hughes and provides a
distribution to unsecured creditors that exceeds the amounts the
creditors would likely receive under any attainable alternative
to the Plan.
5-Year Business Plan and Financial Forecast
The Debtor and its advisors conducted a thorough review of its
business operations, results, and the business model on which its
operations were based. Together, they developed a business plan
that addresses the issues that ultimately caused the Debtor to
file for Chapter 11.
The Debtor's management developed pro-forma projections for 2003
and a five-year business plan and from that Business Plan, a set
of financial projections extending from 2003 to 2008 for
Reorganized DirecTV. The Projections assume that Reorganized
DirecTV's post-emergence cash requirement is $300,000,000 to
$350,000,000. The amount includes payments to creditors in
accordance with the Plan, which are expected to be $180,000,000,
of which some portion may be paid in 2003. Reorganized DirecTV
expects to reach operational cash flow break-even in 2005 with an
estimate of 2,000,000 subscribers. Region-wide subscribers are
expected to increase from 1,500,000 at the end of 2003 to around
3,000,000 at the end of 2008. Reduced Programming and Satellite
Communications costs and reduced interest expense are projected
to result in improved earnings and cash flow.
Financial Projections for Reorganized DirecTV
($ in Millions)
2003 2004 2005
Pro-Forma Forecast Forecast
--------- -------- --------
Revenue $628 $595 $789
Programming (301) (222) (224)
Satellite Capacity (62) (54) (54)
Uplinking and Broadcasting
Operation (24) (20) (21)
Subscriber Services (78) (108) (95)
Bad Debt (23) (16) (14)
(Gain)/Loss on Disposition
of Assets (29) - -
Translation 2 (19) 3
G&A (86) (77) (84)
--------- -------- --------
Total Operating Expenses (214) (221) (190)
Subscriber Acquisition Costs (64) (64) (74)
Revenue Taxes/other (51) (43) (52)
Operating Profit before interest
Depreciation & Amortization (89) (29) 174
Interest (78) (25) (26)
Restructuring Fees (15) (13) -
Taxes (50) (32) (35)
Working Capital 101 (136) 13
Total CapEx (80) (81) (151)
--------- -------- --------
Net Cash Available/
(Funding Required) ($210) ($316) ($25)
========= ======== ========
2006 2007 2008
Forecast Forecast Forecast
-------- -------- --------
Revenue $1,008 $1,198 $1,355
Programming (264) (306) (341)
Satellite Capacity (54) (54) (54)
Uplinking and Broadcasting
Operations (22) (22) (22)
Subscriber Services (113) (129) (142)
Bad Debt (18) (22) (25)
(Gain)/Loss on Disposition
of Assets - - -
Translation (3) (3) (4)
G&A (88) (90) (93)
--------- -------- --------
Total Operating Expenses (222) (243) (264)
Subscriber Acquisition Costs (83) (86) (87)
Revenue Taxes/other (64) (76) (83)
Operating Profit before interest
Depreciation & Amortization 299 411 503
Interest (26) (16) (4)
Restructuring Fees - - -
Taxes (37) (56) (98)
Working Capital 15 17 12
Total CapEx (174) (185) (144)
--------- -------- --------
Net Cash Available/
(Funding Required) $78 $191 $286
========= ======== ========
The Projections are based on subscriber projections:
Reorganized DirecTV Subscriber Projections
($ in Thousands)
2002A 2003F 2004F 2005F 2006F 2007F 2008F
----- ----- ----- ----- ----- ----- -----
BOP Subscribers 1,610 1,582 1,495 1,629 1,970 2,342 2,692
Gross Additions 656 466 569 758 854 899 907
Churn (684) (553) (435) (417) (482) (548) (613)
----- ----- ----- ----- ----- ----- -----
Net Sub Additions (28) (86) 134 341 372 350 294
EOP Subscribers 1,582 1,495 1,629 1,970 2,342 2,692 2,986
Churn % 43% 36% 28% 24% 22% 22% 22%
===== ===== ===== ===== ===== ===== =====
Summary of Valuation Results
The Debtor engaged AP Services, LLC to prepare a valuation
analysis. The Valuation Team used the Business Plan as the basis
for creating a 10-year cash flow projection. The Valuation Team
assumed that:
(a) the Debtor would be able to obtain the necessary funding
to emerge from Chapter 11 and that funding would be
available for projected operating losses through the
period required for the consolidated "rolled up" entity to
achieve cash break-even; and
(b) the Effective Date would be February 23, 2004.
The Plan anticipates that portions of debt owed by certain
Operating Companies to the Debtor will remain unpaid at the end
of the 10-year projection period, and for operating companies in
Brazil and Argentina, the balances owed to the Debtor are not
collectible. The Operating Companies in Argentina and Brazil are
assumed to have zero equity value. Throughout the projection
period, these Operating Companies make current payments to the
Debtor, and therefore contribute to the enterprise value as a
result.
As part of the Plan, Hughes consents to convert its DIP Facility
Claims into member units in Reorganized DirecTV with no
conversion premium. The valuation was completed before the
conversion. As a result, the cash flow projections for the
Debtor used in the valuation include interest payments on the
borrowings under the DIP Facility. This assumption is different
from the Business Plan, which includes no interest payments
because it assumes conversion of the DIP Facility Claims.
The Debtor's Business Plan includes about $150,000,000 in
payments to general unsecured creditors that will be required
upon emergence from Chapter 11 to satisfy cures for assumed
contracts and claims of over $603,000,000. These payments are in
addition to the $31,000,000 that was paid to certain creditors in
late 2003 to cure programming contracts. The valuation does not
include the payments to be made upon emergence but does include
those payments already made to creditors during 2003.
The equity value of Consolidated DirecTV, before the conversion
of the DIP Facility Claims and before payments made to creditors
pursuant to the Plan, includes:
(a) the "stand alone" value of the Debtor, which is derived
largely from the stream of payments received from each of
the Operating Companies; and
(b) the values of equity interests in each of the Operating
Companies owned by the Debtor.
To determine the total value to be distributed upon emergence
pursuant to the Plan, the value associated with the conversion of
the DIP Facility Claims is added to the equity value. The values
are:
Ownership % Value
----------- ------------
Equity Value of Debtor - "Stand Alone" 100.0% $260,700,000
Equity in Argentina Operating Company 51.0% 0.0
Equity in Brazil Operating Company,
Consolidated 100.0% 0.0
Equity in Columbia Operating Company 90.9% 2,100,000
Equity in 100% Owned Tier II Operating
Companies 100.0% 6,200,000
------------
Equity Value of Consolidated DirecTV 100.0% $269,000,000
Add back of value equal to the
DIP Loan balance 148,000,000
------------
Distributable Value prior to
Conversion of DIP Facility and
Roll-Up Transactions $417,000,000
============
Distribution of Value of the Debtor
Hughes and the Committee underwent extensive negotiations to
determine the appropriate amount and type of consideration to be
distributed to the creditors so as to satisfy claims and to
compensate parties for contributions necessary to successfully
reorganize, emerge from bankruptcy, and operate post-emergence.
The Plan provides that the Debtor will distribute cash to the
Claimholders in the Priority Class, the Secured Class and the
General Unsecured Class. In exchange for its Contributions, 100%
of Reorganized DirecTV equity will be distributed to:
(1) Hughes or its designee to the extent of the Class 3 Share:
(a) in full and final satisfaction of the Allowed DIP
Facility Claims;
(b) in consideration of the Additional Hughes
Contributions; and
(c) to the extent there is any remaining value
attributable to the Class 3 Share, in full and final
satisfaction of the Allowed Class 3 Hughes Claims; and
(2) Darlene.
The distribution of the value of the Debtor in accordance with
the Plan is:
Value
------------
Value paid to Creditors in cash pursuant to the
Plan in consideration of cures and general
Unsecured claims $150,000,000
Value of Reorganized DirecTV Member Units
Provided to Hughes in satisfaction of
Administrative DIP Facility Claims and Allowed
Class 3 Hughes Claims and in partial
Consideration of the Exit 267,000,000
------------
Total Distributable Value under the Plan prior
To the Roll-Up Transactions $417,000,000
============
The value of the Debtor, Consolidated DirecTV, and Reorganized
DirecTV can only be achieved if sufficient funding is available
to meet the cash flow requirements after emergence from Chapter
11. Absent the Roll-Up Transactions and the related debt
forgiveness, the funding needs of the various entities that
comprise the enterprise would be over $1,000,000,000 by 2006.
The Debtor believes that the levels of funding would not be
available, thus preventing a successful reorganization.
To increase the viability of Reorganized DirecTV, Hughes agreed
to accept member units in full satisfaction of the Allowed DIP
Facility Claims. This conversion will reduce the cash
requirements of Reorganized DirecTV.
To further strengthen Reorganized DirecTV, Hughes, DirecTV Latin
America Holdings, Inc., DirecTV International, Inc., and Darlene,
pursuant to the Roll-Up Transactions and as part of the Plan,
agreed to convert (i) a $57,000,000 debt from CBC and (ii) a
$534,000,000 debt from SurFin into Reorganized Debtor equity.
Vesting of Assets and Roll-Up Transaction Consummation
On the Effective Date, these transactions will occur:
(a) the Roll-Up transactions;
(b) the Class 3 share and the Darlene share of the Reorganized
Debtor member units;
(c) all of the old DirecTV membership interests will cease to
be outstanding and be canceled and retired without
payment; and
(d) all Estate property will vest in Reorganized DirecTV
free and clear of all Claims, liens, charges or other
encumbrances.
On the Effective Date, Reorganized DirecTV will effect the
distributions and related transactions required pursuant to the
Plan, including the issuance and distribution of Reorganized
DirecTV member units.
Issuance of New Securities
On the Effective Date, the Hughes Notes, the Original Lender
Claims, the Original Credit Agreement Documents, the DIP Facility
Claims and the DIP Loan Documents and other related transactions,
will be cancelled, retired and deemed terminated and will cease
to exist. Reorganized DirecTV will issue member units, which
will be distributed as provided in the Plan. Reorganized DirecTV
will execute and deliver any other agreements, documents and
instruments as are required. Each recipient of member units will
be deemed to be a party to Reorganized DirecTV.
Feasibility Requirement
The Court needs to determine that the confirmation of the Plan is
not likely to be followed by liquidation or the need for further
financial reorganization. To determine whether the Plan meets
this requirement, the Debtor analyzed its ability to meet its
obligations under the Plan and meet the continuing obligations to
be incurred in the ordinary course of its continuing business.
This analysis includes a forecast of Reorganized DirecTV's
financial performance from and after the Effective Date of the
Plan. Based on the forecast set forth in the Projections, the
Debtor believes that it will have the financial capability to
satisfy its obligations following the Effective Date.
Best Interests of Creditors Test
To confirm the Plan, the Debtor must satisfy the "best interest"
test, which requires that the Plan provide each holder with a
recovery having a value at least equal to the distribution value
if the Debtor were to liquidate under Chapter 7 of the Bankruptcy
Code.
Due to the numerous uncertainties and time delays associated with
liquidation under Chapter 7, it is not possible to predict with
certainty the outcome of liquidation or the timing of any
distribution to creditors. The Debtor, however, projects that
any liquidation under Chapter 7 would result in no greater
distributions that those provided for in the Plan.
After considering the effects that Chapter 7 liquidations would
have on the ultimate proceeds available for distribution to
creditors in the Chapter 11 Case, including (i) the increased
costs and expenses of liquidations under Chapter 7 arising from
fees payable to trustees in bankruptcy and professional advisers
to the trustees, (ii) the erosion in value of assets in Chapter 7
case in the context of the expeditious liquidation required under
a Chapter 7 case, and (iii) the substantial increases in Claims
that would be satisfied on a priority basis or on a parity with
creditors in the Chapter 11 Case, the Debtor believes that the
confirmation of the Plan will provide each Holder of an Allowed
Claim or Interest with a recovery that is not less than what the
Holder would receive under a Chapter 7 liquidation.
Reorganization Beats Liquidation
The Debtor's management, with the assistance of its professional
advisors, prepared a hypothetical Chapter 7 liquidation analysis
to assist Holders of Impaired Claims and Interests to reach a
determination as to whether to accept or reject the Plan. The
liquidation analysis provides a summary of the liquidation values
of the Debtor's assets assuming Chapter 7 liquidations in which a
trustee appointed by the Bankruptcy Court would liquidate the
assets of the Debtor's Estate.
The Debtor believes, based on reasonable assumptions, that
neither its creditors nor members would receive a distribution on
account of their Claims or interests in the event of a
liquidation of the Debtor's assets of a value greater than the
value contemplated in the distributions under the Plan.
Therefore, the value of the distributions offered to the Holders
of Claims in each class of Impaired Claims under the Plan will be
substantially greater than the distribution the creditors would
receive under a Chapter 7 liquidation.
($ in thousands)
Orderly
Balance at Liquidation
07/31/2003 Recovery % Value
---------- ---------- -----------
ASSETS
Cash $10,052 100.0% $10,052
Accounts Receivable 706,268 0.0 -
Allowance For
Doubtful Accounts (21,798) 0.0% -
-------- --------
Net Receivables 684,469 0.0% -
Prepaid Expenses 5,383 17.0% 916
-------- --------
Total Current Assets 699,904 1.6% 10,968
Machinery & Equipment, Net 34,029 0.6% 207
Automotive Equipment, Net - NA -
Furniture and Fixtures, Net 296 10.0% 30
Office Machines, Net 7,657 10.0% 766
Leasehold Improvements, Net 84 0.0% -
Construction in progress 10,562 0.0% -
-------- --------
Property, Plant & Equipment 52,629 1.9% 1,002
Invest in Stock of
Affiliate Companies (331,753) NM 2,302
Miscellaneous Other Assets 75,610 0.0% -
Intercompany Deferred Charges 3,950 0.0% -
-------- --------
Investments & Other Assets (252,193) NM 2,302
Total Proceeds Available
for Closing Costs &
Distributions to Claim
Holders 14,273
========
Amount of Secured
Administrative DIP Loan 148,000
Amount Available for Other
Administrative Expense
Claims 0
========
The Debtor approached the liquidation analysis on an asset
liquidation basis because there can be no assurance that the
Debtor could effect a roll-up of its critical operating
subsidiaries or otherwise force a sale of the operating
subsidiaries upon a conversion of the Chapter 11 case to a
Chapter 7 case, thus eliminating the possibility that the Debtor
could continue operating or be sold as a "going concern" or
"going concerns." The liquidation analysis assumes that the
Debtor's assets would be broken up and sold by a Chapter 7
trustee irrespective of their current use. Some of the Debtor's
assets when broken up may not be able to be sold or may realize
minimal proceeds.
If the Plan is not confirmed and consummated, the alternatives
include:
(i) a Chapter 7 liquidation; and
(ii) the preparation and presentation of an alternative
reorganization plan.
If no Chapter 11 plan can be confirmed, the Chapter 11 case may
be converted to a case under Chapter 7 in which a trustee would
be elected or appointed to liquidate the Debtor's assets. As
stated, a Chapter 7 liquidation results in smaller distributions,
if any, being made to creditors, additional expenses and claims,
and the failure to realize the greater, going concern value of
all the Debtor's assets.
If the Plan is not confirmed, the Debtor or any other party-in-
interest could attempt to formulate a different Reorganization
Plan. The Debtor believes that the proposed Plan enables it to
emerge from Chapter 11 expeditiously and allows creditors to
realize highest recoveries. The Debtor believes that a failure
to confirm the Plan will lead to a liquidation of its assets.
(DirecTV Latin America Bankruptcy News, Issue No. 16; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
DLJ MORTGAGE: Fitch Takes Rating Actions on 3 Securitizations
-------------------------------------------------------------
Fitch Ratings has taken rating actions on the following DLJ
Mortgage Acceptance Corp mortgage pass-through certificates:
DLJ Mortgage Acceptance Corp, mortgage pass-through certificate,
series 1992-A
-- Class A affirmed at 'AAA'.
DLJ Mortgage Acceptance Corp, mortgage pass-through certificate,
series 1993-14
-- Classes A and M1 affirmed at 'AAA';
-- Class M2 upgraded to 'AAA' from 'AA';
-- Class B1 upgraded to 'AA' from 'A';
-- Class B2 upgraded to 'A' from 'BBB';
-- Class B3 upgraded to 'BB+' from 'BB'.
DLJ Mortgage Acceptance Corp, mortgage pass-through certificate,
series 1993-19
-- Class A affirmed at 'AAA';
-- Class M affirmed at 'AAA';
-- Class B1 affirmed at 'AA+';
-- Class B2 affirmed at 'BBB+';
-- Class B3 affirmed at 'BB+';
-- Class B4 affirmed at 'B'.
The upgrades are being taken as a result of low delinquencies and
losses, as well as increased credit support levels. The
affirmations reflect credit enhancement consistent with future
loss expectations.
DOMAN IND.: CCAA Monitor KPMG Files December Report in Canada
-------------------------------------------------------------
Doman Industries Limited announces that KPMG Inc., the Monitor
appointed by the Supreme Court of British Columbia under the
Companies Creditors Arrangement Act, has filed with the Court its
report for the period ending December 17, 2003.
The Monitor's report, a copy of which may be obtained by accessing
the Company's Web site -- http://www.domans.com/-- or the
Monitor's Web site -- http://www.kpmg.ca/doman/-- also contains
selected unaudited financial information prepared by the Company
for the period.
EAGLEPICHER: Prelim. Q4 & FY 2003 Results are Available Online
--------------------------------------------------------------
EaglePicher Holdings, Inc. (S&P, D Preferred Share Rating)
announces the posting of preliminary unaudited fourth quarter and
full fiscal year 2003 financial results and 2004 outlook guidance
on its Web site
at
http://www.eaglepicher.com/EaglePicherInternet/About_EaglePicher/InvestorRel
ations.htm/
EaglePicher Incorporated, founded in 1843 and headquartered in
Phoenix, Arizona, is a diversified manufacturer and marketer of
innovative, advanced technology and industrial products and
services for space, defense, environmental, automotive, medical,
filtration, pharmaceutical, nuclear power, semiconductor and
commercial applications worldwide. The company has 4,000 employees
and operates more than 30 plants in the United States, Canada,
Mexico, the U.K. and Germany. Additional information on the
company is available on the Internet at
http://www.eaglepicher.com/
ENRON CORP: Bankr. Court Approves Enbridge Settlement Agreement
---------------------------------------------------------------
Enron Corporation and Enron North America Corporation obtained the
Court's approval of a settlement and release agreement between
Enron Corp., ENA, Enron Canada Corporation, on one hand, and
Enbridge Distribution, Inc., on the other hand.
Backgrounder
On May 19, 1995, Enron Canada and Enbridge entered into an ISDA
Agreement pursuant to which Enron Canada and Enbridge negotiated
and entered into financial transactions concerning natural gas.
Pursuant to the Agreement, on November 13, 2001, ENA paid
$1,000,000 to Enbridge as Cash Collateral to secure Enron Canada's
outstanding financial transactions with Enbridge.
On November 30, 2001, the Agreement was terminated and Enbridge
agreed to refund the Cash Collateral, plus accrued interest.
Given that ENA and Enron Canada may have rights to the Cash
Collateral, Enbridge required Enron and ENA to execute a release
before it pays the Cash Collateral. ENA and Enron Canada agreed
to arrange for Enbridge to pay the Cash Collateral into an escrow
account for their benefit. The Cash Collateral will be released
from the escrow upon the earlier of a signed consent on behalf of
the Creditors Committee or a Court order.
Enron and ENA will release Enbridge of any and all manners of
action, causes of action, suits, dues, claims, sums of money and
demands whatsoever at law or in equity, which Enron or ENA had,
has or may have and which may arise as a result of, or are in any
way related to, the Cash Collateral. (Enron Bankruptcy News, Issue
No. 90; Bankruptcy Creditors' Service, Inc., 215/945-7000)
EQUIFIN INC: Secures $3 Million in Sub-Debt from Laurus Funds
-------------------------------------------------------------
EquiFin, Inc.(AMEX:II and II,WS), an early stage, commercial
finance company which provides a range of capital solutions to
small and mid-size business enterprises, has secured for its 81%
owned subsidiary, Equinox Business Credit Corp., a $3,000,000 sub-
debt facility from Laurus Funds.
Laurus is a financial institution that makes direct, secured
investments to small and micro-cap public companies.
EquiFin, principally through Equinox, provides first position
asset-based loans of $500,000 to $3,000,000 to small and mid-size
companies throughout the United States. The Laurus Funds loan is
for three years and bears interest at 7% per annum. Payments of
principal and interest on the loan are convertible into EquiFin's
common stock at the prevailing price of EquiFin's common stock as
traded on the American Stock Exchange. The conversion price is
determined based on the market price at the time each tranche
under the $3,000,000 facility is drawn. In making the Loan, Eugene
Grin, funds manager for Laurus Funds, commented that, "We are
impressed by the company's management team and look forward to
building a long-term relationship with EquiFin." EquiFin's
President, Walter Craig, said, "The ability to initiate this
relationship with Laurus provides attractively priced sub-debt
capital for the continued expansion of our asset-based finance
business. The Laurus sub-debt will enable Equinox to fully
utilize, through the making of additional loans, its $20,000,000
senior credit facility from Wells Fargo Foothill, which facility
is currently utilized for approximately $12,000,000."
* * *
Going Concern Uncertainty
In a previous Form 10-KSB filing, Equifin Inc. reported:
"Equinox Business Credit Corp. (81% owned subsidiary) did not
meet the tangible net worth requirement of $3,000,000 under its
credit facility at December 31, 2002. The lender has waived the
defaults and amended the credit facility to provide for a
tangible net worth requirement of $2,600,000 through May 31,
2003 and $3,900,000 effective June 30, 2003. The operating
results for Equinox will not be adequate to establish this net
worth requirement during the last half of 2003 and, accordingly,
further capital contributions by EquiFin to cover such
deficiency will be required. In addition to the agreement to
have a specific net worth which has required capital
contributions from EquiFin, Equinox has, through March 31, 2003,
operated as a negative cash flow business. EquiFin has provided
operating cash to Equinox to cover such cash shortfalls.
EquiFin is continuing its capital formation efforts so that it
will be in a position to continue to provide Equinox with
capital for its operating needs and net worth coverage, however
there can be no assurances that such efforts will be successful.
"If EquiFin is unable to raise capital on a timely basis, or
liquidate any of its other assets on a timely basis to meet
Equinox' net worth and/or cash flow needs, Equinox would be
required to attempt to negotiate a waiver with the lender on the
net worth requirement of its Credit Facility. There can be no
assurance the lender would consent to this request. If
sufficient cash is not timely available for Equinox' operating
needs, a reduction in operating expenses or a liquidation of
certain assets would be required to continue Equinox'
operations. Equinox also does not expect to meet the interest
coverage requirement in April 2003. Accordingly, these matters
raise substantial doubt about the Company's ability to continue
as a going concern."
EQUISTAR CHEMICALS: Arranges New $450-Million Credit Facility
-------------------------------------------------------------
Equistar Chemicals, LP announced the completion of a new $450
million, four-year, accounts receivable sales facility and a new
$250 million, four-year, inventory-based revolving credit
facility. These facilities replace Equistar's previous $100
million accounts receivable sales agreement as well as a $354
million revolving credit facility. Equistar believes that the new
facilities will have the advantages of providing more liquidity,
more financial flexibility and lower-cost funding than the
previous credit facility.
Had these facilities been in place as of September 30, 2003, the
aggregate amount of funds available under these facilities would
have been approximately $540 million versus the $454 million
provided under the previous agreements. The average interest rates
on these new facilities are modestly less than those of the
previous revolving credit facility.
With the completion of these actions, Equistar is no longer
subject to the quarterly financial ratio covenant tests required
under the previous credit facility. However, after March 30, 2005
there will be one ratio test which, if not met, would reduce
availability under the new facilities by $25 million versus the
availability prior to that date. Additionally, the remaining
covenants under the new facilities are generally no more
restrictive than those contained in Equistar's previous credit
facility, and there are no ratings triggers in either of the new
facilities.
Equistar Chemicals, LP (S&P, BB Corporate Credit Rating, Negative
Outlook), headquartered in Houston, Texas, is a joint venture
between Lyondell Chemical Company (NYSE: LYO) and Millennium
Chemicals Inc. (NYSE: MCH) and combines their olefins, polymers
and oxygenated chemicals businesses. Equistar is one of the
world's largest producers of ethylene, propylene and polyethylene
and a leading producer of ethylene oxide, ethylene glycol,
specialty polymers, wire and cable resins, and polyolefin powders.
Equistar was formed in December 1997 and has 16 manufacturing
sites located primarily along the U.S. Gulf Coast and in the
Midwest.
FAO INC: Evaluating Proposals Offering to Acquire FAO Schwarz
-------------------------------------------------------------
FAO, Inc., is reviewing term sheet proposals offering to purchase
certain assets related to its FAO Schwarz business.
The Company stated that is pursuing discussions to finalize terms
and prepare definitive documentation that it could then present to
the Bankruptcy Court together with procedures for other interested
bidders to make offers. The Company stated that it is also
discussing the offers with the Official Committee representing its
unsecured creditors. The Company noted that these developments do
not change its earlier view that it does not expect any recovery
would be available to its common stockholders in connection with
its bankruptcy.
FAO, Inc. owns a family of high quality, developmental,
educational and care brands for infants, toddlers and children and
is a leader in children's specialty retailing. FAO, Inc. owns and
operates the renowned children's toy retailer FAO Schwarz(R); The
Right Start(R), the leading specialty retailer of developmental,
educational and care products for infants and toddlers; and Zany
Brainy(R), the leading retailer of developmental toys and
educational products for kids.
On December 4, 2003, FAO, Inc., filed voluntary petitions under
Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for
the District of Delaware for itself and its operating subsidiaries
ZB Company, Inc. and FAO Schwarz, Inc.
For additional information on FAO, Inc. or its family of brands,
visit online at http://www.irconnect.com/faoo/
FASTNET CORP: Completes Sale of Assets to US LEC Corp.
------------------------------------------------------
FASTNET(R) Corporation (OTC Bulletin Board: FSSQE.OB) and its
affiliated debtors, have completed the sale of substantially all
of their assets, including their Broadband and Dial-Up Internet
Access, Co-location, and Managed Hosting business units, to US LEC
Corp. for an estimated $8.5 million plus the assumption of certain
liabilities.
The $8.5 million consisted of $6.0 million in cash, $1.5 million
in a promissory note and $1.0 million in Class A Common Stock of
US LEC Corp. This sale was completed pursuant to the provisions of
the United States Bankruptcy Code, and the sale procedures
established by the Bankruptcy Court, including an auction process.
An order approving such sale was issued by the United States
Bankruptcy Court for the Eastern District of Pennsylvania, Case
No. 03-23143, on December 4. The transaction does not include
assets associated with the Companies' Web Development and Wireless
Access businesses, which the Companies hope to sell in the next 60
days. Following such asset sales, the Companies anticipate filing
a plan of liquidation with the Bankruptcy Court and winding up
their affairs.
It is not anticipated that there will be any funds available for
distribution to shareholders.
FFP OPERATING: Committee Signs-Up Gardere Wynne as Co-Counsel
-------------------------------------------------------------
The Official Committee of Unsecured Creditors of FFP Operating
Partners, LP, wants to employ Gardere Wynne Sewell LLP as Co-
Counsel.
Since the Petition Date, there have been several circumstances in
which the Committee has needed legal counsel concerning issues
that have arisen in this case. As a result, the Committee
considered it necessary to immediately engage Gardere Wynne to
represent its interests effective as of November 1, 2003.
The Committee signed-up Gardere Wynne, along with its co-counsel
Whiteford, Taylor & Preston, LLP, to:
a. advise the Committee with respect to its powers and
duties;
b. prepare any necessary applications, motions, pleadings,
orders, reports and other legal papers, and appearing on
the Committee's behalf in proceedings instituted by,
against, or involving the Debtor, the Committee or these
Chapter 11 proceedings;
c. assist the Committee in the investigation of the acts,
liabilities and financial condition of the Debtor, the
Debtor's assets and business operations, the disposition
of the Debtor's assets, and any other matter relevant to
these case and the interests of unsecured creditors;
d. assist the Committee in coordinating its efforts to
maximize distributions;
e. perform legal services for the Committee as may be
necessary or desirable in the interest of the Debtor's
unsecured creditors; and
f. coordinate its services with those provided by Whiteford
Taylor and such other professionals as the Committee may
employ so as to accomplish the Committee's goals with
optimum efficiency and without duplication of effort.
The attorneys and paralegals that may be designated to represent
the Committee and their current, standard hourly rates are:
Holland Neff O'Neil Partner $400 per hour
Jason N. Bramlett Associate $195 per hour
Kristi Williams Paralegal $128 per hour
Headquartered in Fort Worth, Texas, FFP Operating Partners, LP,
together with other subsidiaries of FFP Partners, L.P., owns and
operates convenience stores, truck stops, and self-service motor
fuel outlets over a twelve state area. The Company filed for
chapter 11 protection on October 23, 2003 (Bankr. N.D. Tex. Case
No. 03-90171). Mark Joseph Petrocchi, Esq., at Colvin and
Petrocchi represent the Debtor in its restructuring efforts. When
the Company filed for protection from its creditors, it listed
over $10 million in assets and debts of over $50 million.
FPL ENERGY CAITHNESS: S&P Raises Rating on $150M Debt to BBB-
-------------------------------------------------------------
Standard & Poor's Ratings Services raised its rating on FPL Energy
Caithness Funding Corp.'s $150 million debt due 2018 to 'BBB-'
from 'BB'.
The rating action follows the rating upgrade on Dec. 3, 2003 of
primary offtaker Southern California Edison Co.,
(SCE;BBB/Stable/A-2) to 'BBB' from 'BB', and Standard & Poor's
review of the project's current and expected performance.
The outlook is stable.
"Rating stability reflects our expectation of continued stable
performance due to the coverage of debt service by capacity
payments," said Standard & Poor's credit analyst Scott Taylor.
"Currently above-market costs and a history of contract challenges
by SCE limit the potential for any upgrades in the near term,"
added Mr. Taylor.
The rating action on SCE reflected expectations of sound financial
performance at SCE and SCE's completion of the collection of $3.6
billion of historical power procurement expenses that it was
barred from recovering when the expenses were incurred in 2000 and
2001.
The upgrade also reflected recent decisions of the California
Supreme Court that strongly suggest that the federal appeal
challenging SCE's right to recover historical power procurement
expenses will be resolved in SCE's favor and statutory provisions
that, in spite of ambiguities and short-lived effective dates,
should protect SCE against the recurrence of a financial meltdown
like the one experienced in 2000 and 2001.
The projects are each 80 MW net SEGS located in the Mojave Desert,
California FPL Energy LLC and Caithness Energy LLC own the issuer.
LSP VIII and LSP IX own the project assets.
FRUIT OF THE LOOM: Trust Wants to Pay $2.2 Million to Bank Agent
----------------------------------------------------------------
Before the Petition Date, Fruit of the Loom provided a $65,000,000
loan guaranty to William F. Farley. The beneficiaries of the
guaranty were certain financial institutions that extended credit
to Mr. Farley. Among the obligations guaranteed was a letter of
credit issued by the Bank Agent for the benefit of a third party.
As of the Effective Date, the Letter of Credit was undrawn and
outstanding with $2,200,000 available. The Letter of Credit
expired in August 2003.
Pursuant to the Plan, the Farley Lenders assigned certain of their
direct claims against Mr. Farley to the FOL Liquidation Trust.
The FOL Trust established an Escrow Account for the benefit of the
Farley Lenders. After the Effective Date, the FOL Trust deposited
$2,200,000 in the Escrow Account. As a result of the interest
earned, at December 31, 2003, the Escrow Account is projected to
have a $2,237,612 balance.
Pursuant to the Court-approved Farley Settlement, Mr. Farley
agreed to replace the Letter of Credit before it expired on
August 31, 2003. On October 21, 2003, the Letter of Credit was
drawn for $2,205,535, which included related fees and expenses.
Mr. Farley is currently in default on his obligations under the
Farley Settlement and, as a result, the FOL Trust commenced a suit
against him.
Pursuant to the Plan, the FOL Trust is required, upon a draw from
the Letter of Credit, to make an equal payment from the Escrow
Account to the Bank Agent. Any funds remaining in the Escrow
Account will be released to the FOL Trust as FTL Liquidation
Proceeds.
Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy, in New
York City, explains that after making the payment to the Bank
Agent, $30,277 will remain in the Escrow Account. Since all the
funds remaining in the Escrow Account will be released to the FOL
Trust and constitute FTL Liquidation Proceeds, the FOL Trust
intends to (i) release the funds and (ii) close the Escrow
Account.
Mr. Despins says that the Plan clearly instructs the FOL Trust to
complete the transactions. However, out of an abundance of
caution, the Trust seeks Judge Walsh's permission to:
(i) pay $2,205,535 to the Bank Agent from the Escrow
Account, which equals the Letter of Credit Draw
plus related fees and expenses;
(ii) release the balance of the escrowed funds in the
Escrow Account; and
(iii) close the Escrow Account. (Fruit of the Loom Bankruptcy
News, Issue No. 70; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
GALEY & LORD: Chairman and CEO Arthur C. Wiener Retiring
--------------------------------------------------------
Arthur C. Wiener, Chairman and CEO of Galey & Lord, Inc. (OTC
Bulletin Board: GYLDQ) announced his forthcoming retirement.
Mr. Wiener said, "The Company has filed its plan of reorganization
and should be exiting from bankruptcy by the end of February. With
that event, I plan to retire. The Company will emerge with a
strong balance sheet, poised to go forward, and execute its near
and long term goals as a premier worldwide supplier of denim,
cotton casuals, and uniform fabrics. I believe in the company's
future and its ability to execute its strategy.
I wish the company and all of its employees that I have worked
with these many years the successful future they deserve."
The Company believes it is the market leader in producing
innovative woven sportswear fabrics as a result of its expertise
in sophisticated and diversified finishing. Fabrics are designed
in close partnership with a diversified base of customers to
capture a large share of the middle and high end of the
bottomweight woven market. The Company also believes it is one of
the world's largest producers of differentiated and value-added
denim products. The Company and its foreign subsidiaries employ
approximately 3,500 employees in the United States and in wholly
owned foreign operations. The Company and its joint venture
interests operate in the US, Canada, Mexico, Asia, Europe and
North Africa.
The Company's current trading symbol on the OTC BB is GYLDQ.
GAYLORD ENTERTAINMENT: Credit Facility Increased to $100 Million
----------------------------------------------------------------
Gaylord Entertainment Company (NYSE:GET) has entered into an
amendment to its revolving credit facility that increases the
amount available for borrowing from $65 million to $100 million.
Borrowings may be used for general corporate purposes.
"The expansion of our revolver gives us increased liquidity and
the financial flexibility to actively pursue growth opportunities
as they present themselves," said David Kloeppel, chief financial
officer of Gaylord Entertainment. "We are pleased to have the
confidence and support of our creditors as we continue to execute
our strategy to enhance the Gaylord franchise."
The credit facility has an interest rate equal to, at Gaylord's
election, (i) one-, two-, three-month LIBOR plus 3.50% or (ii) the
lead bank's prime rate plus 2.25%. The credit facility is secured
by a first-priority leasehold mortgage on the Gaylord Palms Resort
& Convention Center in Kissimmee, Fla., and is guaranteed by the
Company's subsidiaries that are guarantors of Gaylord's senior
notes. The credit facility matures on May 22, 2006.
Gaylord Entertainment (NYSE:GET), a leading hospitality and
entertainment company based in Nashville, Tenn., owns and operates
three industry-leading brands -- Gaylord Hotels --
http://www.gaylordhotels.com/-- its network of upscale, meetings-
focused resorts, ResortQuest International --
http://www.resortquest.com/-- the nation's largest vacation
rental property management company, the Grand Old Opry --
http://www.opry.com/-- the weekly showcase of country music's
finest performers for 78 consecutive years. The Company's
entertainment brands and properties include the Radisson Hotel
Opryland, Ryman Auditorium, General Jackson Showboat, Springhouse
Golf Club, Wildhorse Saloon and WSM-AM. For more information about
the Company, visit http://www.gaylordentertainment.com/
* * *
Likely Default Under Loan Agreements
In its Form 10-Q filed with the Securities and Exchange
Commission, Gaylord reported:
"During May of 2003, the Company finalized a $225 million credit
facility with Deutsche Bank Trust Company Americas, Bank of
America, N.A., CIBC Inc. and a syndicate of other lenders. The
2003 Loans consist of a $25 million senior revolving facility, a
$150 million senior term loan and a $50 million subordinated term
loan. The 2003 Loans are due in 2006. The senior loan bears
interest of LIBOR plus 3.5%. The subordinated loan bears interest
of LIBOR plus 8.0%. The 2003 Loans are secured by the Gaylord
Palms assets and the Gaylord Texas Hotel. At the time of closing
the 2003 Loans, the Company engaged LIBOR interest rate swaps
which fixed the LIBOR rates of the 2003 Loans at 1.48% in year one
and 2.09% in year two. The Company is required to pay a commitment
fee equal to 0.5% per year of the average daily unused portion of
the 2003 Loans. At the end of the second quarter, the Company had
100% borrowing capacity of the $25 million revolver. Proceeds of
the 2003 Loans were used to pay off the Term Loan of $60 million
as discussed below and the remaining net proceeds of approximately
$134 million were deposited into an escrow account for the
completion of the construction of the Texas hotel. At June 30,
2003 the unamortized balance of the 2003 Loans deferred financing
costs were $2.6 million in current assets and $4.9 million in
long-term assets. The provisions of the 2003 Loans contain
covenants and restrictions including compliance with certain
financial covenants, restrictions on additional indebtedness,
escrowed cash balances, as well as other customary restrictions.
As of June 30, 2003, the Company was in compliance with all
covenants under the 2003 loans.
"During 2001, the Company entered into a three-year delayed-draw
senior term loan of up to $210.0 million with Deutsche Banc Alex.
Brown Inc., Salomon Smith Barney, Inc. and CIBC World Markets
Corp. During May 2003, the Company used $60 million of the
proceeds from the 2003 Loans to pay off the Term Loan. Concurrent
with the payoff of the Term Loan, the Company expensed the
remaining, unamortized deferred financing costs of $1.5 million
related to the Term Loan. The $1.5 million is recorded as interest
expense in the accompanying condensed consolidated statement of
operations. Proceeds of the Term Loan were used to finance the
construction of Gaylord Palms and the initial construction phases
of the Gaylord hotel in Texas as well as for general operating
purposes. The Term Loan was primarily secured by the Company's
ground lease interest in Gaylord Palms.
"During the first three months of 2002, the Company sold Word's
domestic operations, which required a prepayment on the Term Loan
in the amount of $80.0 million. As required by the Term Loan, the
Company used $15.9 million of the net cash proceeds, as defined
under the Term Loan agreement, received from the 2002 sale of the
Opry Mills investment to reduce the outstanding balance of the
Term Loan. In addition, the Company used $25.0 million of the net
cash proceeds, as defined under the Term Loan agreement, received
from the 2002 sale of Acuff-Rose Music Publishing to further
reduce the outstanding balance of the Term Loan. Excluding the
payoff amount of $60 million discussed above, the Company made
principal payments of approximately $0 and $4.1 million during
2003 and 2002, respectively, under the Term Loan. Net borrowings
under the Term Loan for 2003 and 2002 were $0 and $85.0 million,
respectively. As of June 30, 2003 and December 31, 2002, the
Company had outstanding borrowings of $0 million and $60 million,
respectively, under the Term Loan.
"The terms of the Term Loan required the Company to purchase an
interest rate instrument which capped the interest rate paid by
the Company. This instrument expired in the fourth quarter of
2002. Due to the expiration of the interest rate instrument, the
Company was out of compliance with the terms of the Term Loan.
Subsequent to December 31, 2002, the Company obtained a waiver
from the lenders whereby this event of non-compliance was waived
as of December 31, 2002 and also removed the requirement to
maintain such instruments for the remaining term of the Term Loan.
"In 2001, the Company, through wholly owned subsidiaries, entered
into two loan agreements, a $275.0 million senior loan and a
$100.0 million mezzanine loan with affiliates of Merrill Lynch &
Company acting as principal. The Senior Loan is secured by a first
mortgage lien on the assets of Gaylord Opryland Resort and
Convention Center and is due in March 2004. Amounts outstanding
under the Senior Loan bear interest at one-month LIBOR plus
approximately 1.02%. The Mezzanine Loan, secured by the equity
interest in the wholly-owned subsidiary that owns Gaylord
Opryland, is due in April 2004 and bears interest at one-month
LIBOR plus 6.0%. At the Company's option, the Senior and Mezzanine
Loans may be extended for two additional one-year terms beyond
their scheduled maturities, subject to Gaylord Opryland meeting
certain financial ratios and other criteria. The Company currently
anticipates meeting the financial ratios and other criteria and
exercising the option to extend the Senior Loan. However, based on
the Company's projections and estimates at June 30, 2003, the
Company does not anticipate meeting the financial ratios to extend
the Mezzanine Loan. The Company expects to refinance or replace
the Mezzanine Loan through a future debt instrument. Therefore,
the Company has recorded the outstanding balance of the Mezzanine
Loan of $66 million as current portion of long-term debt in the
accompanying condensed consolidated balance sheet as of June 30,
2003. There can be no assurance that the Company will be
successful in obtaining replacement financing on acceptable terms.
The Nashville Hotel Loans require monthly principal payments of
$0.7 million during their three-year terms in addition to monthly
interest payments. The terms of the Senior Loan and the Mezzanine
Loan required the Company to purchase interest rate hedges in
notional amounts equal to the outstanding balances of the Senior
Loan and the Mezzanine Loan in order to protect against adverse
changes in one-month LIBOR. Pursuant to these agreements, the
Company had purchased instruments that cap its exposure to one-
month LIBOR at 7.5%. The Company used $235.0 million of the
proceeds from the Nashville Hotel Loans to refinance the Interim
Loan discussed below. At closing, the Company was required to
escrow certain amounts, including $20.0 million related to future
renovations and related capital expenditures at Gaylord Opryland.
The net proceeds from the Nashville Hotel Loans after refinancing
of the Interim Loan and paying required escrows and fees were
approximately $97.6 million. At June 30, 2003 and December 31,
2002, the unamortized balance of the deferred financing costs
related to the Nashville Hotel Loans was $4.3 million and $7.3
million, respectively. The weighted average interest rates for the
Senior Loan for the six months ended June 30, 2003 and 2002,
including amortization of deferred financing costs, were 4.3% and
4.5%, respectively. The weighted average interest rates for the
Mezzanine Loan for the six months ended June 30, 2003 and 2002,
including amortization of deferred financing costs, were 10.8% and
10.2%, respectively.
The terms of the Nashville Hotel Loans require that the Company
maintain certain escrowed cash balances and comply with certain
financial covenants, and impose limits on transactions with
affiliates and indebtedness. The financial covenants under the
Nashville Hotel Loans are structured such that noncompliance at
one level triggers certain cash management restrictions and
noncompliance at a second level results in an event of default.
Based upon the financial covenant calculations at December 31,
2002, the cash management restrictions were in effect which
requires that all excess cash flows, as defined, be escrowed and
may be used to repay principal amounts owed on the Senior Loan. As
of June 30, 2003, the noncompliance level which triggered cash
management restrictions was cured and the cash management
restrictions were lifted. During 2002, the Company negotiated
certain revisions to the financial covenants under the Nashville
Hotel Loans and the Term Loan. After these revisions, the Company
was in compliance with the covenants under the Nashville Hotel
Loans in which the failure to comply would result in an event of
default at June 30, 2003 and December 31, 2002. There can be no
assurance that the Company will remain in compliance with the
covenants that would result in an event of default under the
Nashville Hotel Loans. The Company believes it has certain other
possible alternatives to reduce borrowings outstanding under the
Nashville Hotel Loans which would allow the Company to remedy any
event of default. Any event of noncompliance that results in an
event of default under the Nashville Hotel Loans would enable the
lenders to demand payment of all outstanding amounts, which would
have a material adverse effect on the Company's financial
position, results of operations and cash flows."
GINGISS GROUP: US Trustee Appoints Official Creditors' Committee
----------------------------------------------------------------
The United States Trustee for Region 3 appointed 7 creditors to
serve on an Official Committee of Unsecured Creditors in The
Gingiss Group, Inc.'s Chapter 11 cases:
1. Black Tie Ltd.
Attn: Herbert L Sperber
7065 E. Foothill Dr., Paradise Valley
Arizona 85253
Phone: 480-991-6993, Fax: 480-991-1115;
2. After Six, Inc.
Attn: William D. Hines
240 Collins Ind. Drive, Athens
Georgia 30601
Phone: 706-543-5286, Fax: 706-548-4522;
3. Simon Property Group
Attn: Ronald M. Tucker, Esquire
115 West Washington Street
Indianapolis, Indiana 46204
Phone: 317-243-2346, Fax: 317-263-7901;
4. V.D.M., Inc.
Attn: Alan A. Horwits
940 Hawk Hill Trail, Palm Desert
California 92211
Phone: 760-345-6407, Fax: 760-345-6408;
5. CSS Trading Co., Inc.
Attn: Robby Conley, 15580 E. Hinsdale Circle,
Englewood, Colorado 80112
Phone: 303-690-2068, Fax: 303-539-0740;
6. Fabian Couture Group Int'l.
Attn: Maurice F. Doran
205 Chubb Ave., Lyndhurst, New Jersey 07071
Phone: 201-460-7776 ext. 111, Fax: 201-460-0343; and
7. St. Louis Formal Wear, Inc.
Attn: Stephen Rafferty
6185 Delmar, St. Louis, Missouri 63112
Phone: 314-721-4750, Fax: 314-721-4983.
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtors'
expense. They may investigate the Debtors' business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent. Those
committees will also attempt to negotiate the terms of a
consensual chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest. If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee. If the Committee concludes reorganization
of the Debtors is impossible, the Committee will urge the
Bankruptcy Court to convert the Chapter 11 cases to a liquidation
proceeding.
Headquartered in 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). James E. O'Neill, Esq., and Laura Davis Jones, Esq.,
at Pachulski Stang Ziehl Young Jones & Weintraub represent the
Debtors in their restructuring efforts. The Debtors listed debts
of over $50 million in their petition.
HAWAIIAN AIRLINES: Proofs of Claim & Interest Due by Jan. 26
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Hawaii fixes
January 26, 2003, as the deadline for Creditors and Shareholders
of Hawaiian Airlines, Inc., to file their proofs of claim and
interest against the Debtor.
Parties are required to file one original claim with all the
necessary attachments and one copy of the claim without
attachments.
Proofs of claim must be sent to and received before 4:00 p.m.
Hawaii time on Jan. 26., by:
The United States Bankruptcy Court
Hawaiian Airlines Claims
1132 Bishop Street
Suite 250-L
Honolulu, Hawaii, 96813
Hawaiian Airlines Incorporated provides primarily scheduled
transportation of passengers, cargo and mail. Flights operate
within the South Pacific and to points on the west coast as well
as Las Vegas. The Company filed for chapter 11 protection on
March 21, 2003 (Bankr. Hawaii Case No. 03-00817). Lisa G.
Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP represent
the Debtor in its restructuring efforts. When the Company filed
for protection from its creditors, it listed debts and assets of
more than $100 million each.
HOLIDAY RV: Committee Brings-In Lowenstein Sandler as Counsel
-------------------------------------------------------------
The Official Committee of Unsecured Creditors of Holiday RV
Superstores, Inc., seeks approval from the U.S. Bankruptcy Court
for the District of Delaware, to employ Lowenstein Sandler PC as
its counsel.
Kenneth A. Rosen, a member of Lowenstein Sandler, has advised the
Committee that the firm does not hold or represent any other
entity having an adverse interest in connection with the Debtor's
Chapter 11 case and does not have any connections with the United
States Trustee or any person employed by the Office of the United
States Trustee.
The professional services that Lowenstein Sandler will provide to
the Committee include:
a) providing legal advice as necessary with respect to the
Committee's powers and duties as an official committee
appointed under Section 1102 of the Bankruptcy Code;
b) assisting the Committee in investigating the acts,
conduct, assets, liabilities, and financial condition of
the Debtor, the operation of the Debtor's business,
potential claims, and any other matters relevant to the
case or to the formulation of a plan of reorganization;
c) participating in the formulation of the Plan;
d) providing legal advice as necessary with respect to any
disclosure statement and plan filed in this case and
with respect to the process for approving or
disapproving disclosure statements and confirming or
denying confirmation of the Plan;
e) preparing on behalf of the Committee, as necessary,
applications, motions, complaints, answers, orders,
agreements and other legal papers;
f) appearing in Court to present necessary motions,
applications, and pleadings, and otherwise protecting
the interests of those represented by the Committee;
g) assisting the Committee in requesting the appointment of
a Trustee or Examiner, should such action be necessary;
and
h) performing such other legal services as may be required
and be in the interest of the Committee and creditors.
Lowenstein Sandler's hourly rates are:
Partners $285 to $525 per hour
Counsel $225 to $375 per hour
Associates $140 to $250 per hour
Legal Assistants $ 70 to $140 per hour
Headquartered in Ft. Lauderdale, Florida, Holiday RV Superstores,
Inc., owns real property which is leased to an RV dealership. The
Company filed for chapter 11 protection on October 20, 2003
(Bankr. Del. Case No. 03-13221). Mark J. Packel, Esq., at Blank
Rome LLP represent the Debtor in its restructuring efforts. When
the Company filed for protection from its creditors, it listed
$3,221,137 in total assets and $15,368,975 in total debts.
IMMTECH INT'L: Names Lawrence Potempa Chief Scientific Officer
--------------------------------------------------------------
Immtech International, Inc. (Amex: IMM) that Lawrence A. Potempa,
Ph.D., has been named the Company's Chief Scientific Officer.
Dr. Potempa has over 25 years of experience in medical research
and drug development, primarily in areas of biochemistry,
microbiology and immunology. Dr. Potempa will be responsible for
working with the Company's Scientific Consortium comprised of 12
university research groups to accelerate drug discoveries into
human clinical trials.
"Immtech has a pharmaceutical technology platform from which many
drugs may be developed to treat a number of infectious diseases.
My responsibilities include working with my colleagues from
Immtech, the Scientific Consortium and foundations that support
our efforts to advance needed drugs to market safely and quickly.
I am very happy to see increased foundation support toward solving
global health problems. Increases in international travel and
population migration cause new and challenging health threats that
our drug candidates are in studies to address," stated Dr.
Potempa.
Dr. Potempa added, "According to Reuters New Service ("Southern
Africa, North Korea top Red Cross Appeal," December 16, 2003), the
International Federation of the Red Cross and Red Crescent
Societies target granting 217.7 million Swiss francs (U.S.$172
million) to groups fighting infectious diseases. The federation
said it aimed to widen its focus from its traditional mission of
providing relief following natural disasters to fighting
infectious diseases, particularly HIV and AIDS, malaria and
tuberculosis, because, while 24,500 people died from natural
disasters last year, around 13 million people die each year from
infectious diseases. Infectious diseases cost developed and
emerging nations millions of dollars annually due to treatment
costs and losses in productivity. Providing effective and
economical treatments for infectious diseases will increase world
stability and prosperity. Immtech's drug development pipeline
contains compounds that have demonstrated to be effective against
diverse forms of infections."
Dr. Potempa holds a Ph.D. in Biochemistry from Northwestern
University Medical School and gained extensive experience in
clinical research in immunology and microbiology while on staff at
Rush University Medical Center in Chicago. His research has
focused on development of drug substances that boost the human
immune system and strengthen body defenses against infections
and cancers. He has published extensively and has received
numerous grants and awards for excellence in medical research and
discovery.
Immtech International, Inc., is a pharmaceutical company focused
on
the commercialization of oral treatments for infectious diseases
such as pneumonia, fungal infections, Malaria, Tuberculosis,
Hepatitis and tropical diseases such as African sleeping sickness
and Leishmaniasis. The Company has worldwide, exclusive rights to
commercialize a dicationic pharmaceutical platform from which a
pipeline of products may be developed to target large, global
markets. For further information, please visit Immtech's Web site
at http://www.immtech.biz/
* * *
Going Concern Uncertainty
In its Form 1O-Q filed recently with the Securities and Exchange
Commission, the Company reported:
"The [Company's] condensed consolidated financial statements have
been prepared by Immtech International, Inc. and its subsidiaries
pursuant to the rules and regulations of the Securities and
Exchange Commission and, in the opinion of the Company, include
all adjustments necessary for a fair statement of results for each
period shown (unless otherwise noted herein, all adjustments are
of a normal recurring nature). Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with accounting principles generally accepted in the
United States of America have been condensed or omitted pursuant
to such SEC rules and regulations. The Company believes that the
disclosures made are adequate to prevent the financial information
given from being misleading. It is suggested that these financial
statements be read in conjunction with the financial statements
and notes thereto included in the Company's latest Annual Report
on Form 10-K/A.
"Immtech International, Inc., and its subsidiaries are
pharmaceutical companies focused on the development and
commercialization of oral drugs to treat infectious diseases. The
Company has development programs that include treatments for
fungal infections, Malaria, Tuberculosis, Hepatitis C, diabetes,
Pneumocystis carinii pneumonia and tropical medicine diseases
including African sleeping sickness (a parasitic disease also
known as Trypanosomiasis) and Leishmaniasis (a parasitic disease
that destroys the liver). The Company holds worldwide patents,
patent applications, licenses and rights to license worldwide
patents and technologies from a scientific consortium and
exclusive rights to commercialize products from those patents and
licenses that are integral to the Company. The Company is a
development stage enterprise and since its inception on
October 15, 1984, has engaged in research and development
programs, expanding its network of scientists and scientific
advisors, licensing technology agreements, and advancing the
commercialization of its dication technology platform. The
Company uses the expertise and resources of strategic partners and
third parties in a number of areas, including: (i) laboratory
research, (ii) pre-clinical and human clinical trials and (iii)
manufacture of pharmaceutical drugs. The Company has licensing and
exclusive commercialization rights to a dicationic pharmaceutical
platform and is developing drugs intended for commercial use based
on that platform.
"The Company does not have any products currently available for
sale, and no products are expected to be commercially available
for sale until after March 31, 2004, if at all.
"Since inception, the Company has incurred accumulated losses of
approximately $51,114,000. Management expects the Company to
continue to incur significant losses during the next several years
as the Company continues its commercialization, research and
development activities and clinical trial efforts. In addition,
the Company has various research and development agreements with
third parties and is dependent upon their ability to perform under
these agreements. There can be no assurance that the Company's
continued research will lead to the development of commercially
viable products. The Company's operations to date have consumed
substantial amounts of cash. The negative cash flow from
operations is expected to continue in the foreseeable future. The
Company will require substantial additional funds to commercialize
its product candidates. The Company's cash requirements may vary
materially from those now planned due to the results of research
and development efforts, results of pre-clinical and clinical
testing, responses to grant requests, relationships with strategic
partners, changes in the focus and direction of the Company's
research and development programs, competitive and technological
advances, the regulatory process, and other factors. In any of
these circumstances, the Company may require substantially more
funds than are currently available or than management intends to
raise.
"The Company believes its existing unrestricted cash and cash
equivalents, and the grants the Company has received or has been
awarded and is awaiting disbursement of, will be sufficient to
meet the Company's planned expenditures through at least the next
twelve months, although there can be no assurance the Company will
not require additional funds. Management may seek to satisfy
future funding requirements through public or private offerings of
securities, by collaborative or other arrangements with
pharmaceutical or biotechnology companies or from other sources.
"The Company's ability to continue as a going concern is dependent
upon its ability to generate sufficient funds to meet its
obligations as they become due and, ultimately, to obtain
profitable operations. Management's plans for the forthcoming
year, in addition to normal operations, include continuing their
efforts to obtain additional equity and/or debt financing and to
obtain additional research grants and entering into research and
development agreements with other entities."
IMPERIAL PETROLEUM: Closes Sale of Stake in Powder River Basin Gas
------------------------------------------------------------------
Imperial Petroleum, Inc., (OTCBB:IPTM) has completed the sale of
control of Powder River Basin Gas Corp. (OTCBB:PRVB), a subsidiary
of the Company, to Renard Resources, Inc.
The Company sold 23,885,000 shares of the common stock of Powder
River and retained 1,500,000 shares in exchange for $175,000 in
cash (less broker's fees of 10%); a note payable to the Company in
the amount of $47,884.47; a 12.5% carried working interest in the
leasehold of PRVB; cancellation of the management agreement
between the Company and PRVB; elimination of accrued expenses due
the Company; a commitment from Renard to provide new development
capital to PRVB to develop its oil and gas leases of at least
$750,000 and a commitment from Renard to acquire the convertible
notes of PRVB in the amount of $315,000.
Jeffrey T. Wilson, President of Imperial said, "We have been
seeking a development partner for the PRVB leases in an effort to
secure additional capital prior to the expiration of the primary
lease terms beginning early next year. We believe that Renard has
the financial ability to expeditiously begin development of the
key properties and begin to generate revenue for PRVB. In addition
another key component to the transaction with Renard is the
retirement of convertible notes outstanding in PRVB, that at
current market prices for PRVB could result in substantial future
dilution for its shareholders."
Imperial, through its subsidiaries and affiliates, is active in
crude oil and natural gas production, gold mining. Imperial is
headquartered in Evansville, IN.
At April 30, 2003, Imperial Petroleum's balance sheet shows a
working capital deficit of about $1.8 million, and a total
shareholders' equity deficit of about $75,000.
INT'L STEEL: S&P Revises Outlook to Positive After $531-Mil. IPO
----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
integrated steel manufacturer International Steel Group Inc., to
positive from developing.
Standard & Poor's at the same time affirmed its 'BB' corporate
credit rating and 'BB+' senior secured bank loan rating on the
company.
"These actions follow the company's recently completed initial
public offering for $531 million," said Standard & Poor's credit
analyst Paul Vastola. Pro forma for the transaction, the
Richfield, Ohio-based company's total debt will be about $625
million.
The rating on International Steel Group's senior secured bank loan
is 'BB+', one notch higher than its corporate credit rating. The
facility consists of a $350 million revolving credit facility due
2006; a $250 million term loan A facility due 2005 and; a $400
million term loan B facility due 2007. Using proceeds from the
recent IPO, the company is expected to pay off its term loan A and
reduce its term loan B by about $130 million. The facilities are
secured by a first-priority perfected lien on substantially all
tangible and intangible assets of the borrower and all its
operating subsidiaries except its Columbus Coating subsidiary.
The facility is also guaranteed on a senior secured basis by the
company's subsidiaries. Some operating subsidiaries are co-
borrowers of the facility on a joint and several basis.
The outlook revision reflects the significant improvement in ISG's
financial profile, because it plans to use the bulk of the
proceeds from the offering to pay down debt and enhance its
liquidity. Standard & Poor's also expects ISG's financial
performance to improve in 2004 as head-count reductions totaling
$250 million annually will be fully realized. Nevertheless,
concerns remain regarding the company's ability to execute its
integration plans and realize expected improvements from its
planned efficiency initiatives. The ratings on International Steel
Group Inc. (ISG) reflect the improved cost position of this newly
combined integrated steel producer, because of omission of
burdensome legacy expenses (retiree healthcare and pension
benefits) and reduced employee staffing. However, the ratings also
reflect the meaningful challenges the company faces in
transitioning and integrating these operations and establishing
its contractual relationships with key customers and improving its
product mix, as well as volatile steel industry conditions.
ISTAR FINANCIAL: Selling 5 Million Shares via Public Offering
-------------------------------------------------------------
iStar Financial Inc. (NYSE: SFI) has agreed to sell 5.0 million
shares of its common stock in an underwritten public offering.
Lehman Brothers Inc. is the sole underwriter of the offering.
iStar Financial intends to use the net offering proceeds of
approximately $191.1 million to repay secured indebtedness.
iStar Financial (Fitch, BB Preferred Share Rating, Stable Outlook)
is the leading publicly traded finance company focused on the
commercial real estate industry. The Company provides custom-
tailored financing to high-end private and corporate owners of
real estate nationwide, including senior and junior mortgage debt,
senior, mezzanine and subordinated corporate capital, and
corporate net lease financing. The Company, which is
taxed as a real estate investment trust, seeks to deliver a strong
dividend and superior risk-adjusted returns on equity to
shareholders by providing innovative and value-added financing
solutions to its customers. Additional information on iStar
Financial is available on the Company's Web site at
http://www.istarfinancial.com/
KMART CORP: Creditor Trust Sues PwC and Six Former Officers
-----------------------------------------------------------
Julian C. Day, Kmart Holding Corporation President and CEO,
relates that on November 18, 2003, the Kmart Creditor Trust filed
a lawsuit before the Oakland County (Michigan) Circuit Court
against six former Kmart executives and PricewaterhouseCoopers
LLP, its former independent auditor.
In a regulatory filing with the Securities and Exchange
Commission on December 5, 2003, Mr. Day discloses that the
allegations against the Officer Defendants include, among other
things, violations of their fiduciary duty, their duty of good
faith and loyalty, and their duty of care, and breach of contract
related to the Officer Defendants' employment agreements with
Kmart. Allegations against PwC include, among other things,
breach of duty of care owed to Kmart and breach of contract
arising out of Kmart's consulting agreements with PwC. Kmart is
not a defendant in this litigation. (Kmart Bankruptcy News, Issue
No. 66; Bankruptcy Creditors' Service, Inc., 215/945-7000)
KROLL INC: S&P Assigns Lower-B Level Sub. Note & Credit Ratings
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' rating to
Kroll Inc.'s privately placed, Rule 144A $150 million convertible
subordinated notes due 2014. Proceeds are expected to be used for
general corporate purposes, including future acquisitions, as well
as the repurchase of about 2.8 million shares of Kroll's common
stock for roughly $69 million.
At the same time, Standard & Poor's assigned its 'BB-' corporate
credit rating to the company. New York, N.Y.-based Kroll is a
leading provider of financial and security consulting services.
Total debt, pro forma for the issuance of the convertible
subordinated notes, was $185 million as of Sept. 30, 2003. The
ratings outlook is stable.
"The ratings reflect the challenges inherent in managing the
company's fast growth, its active acquisition orientation, and its
lack of a recent track record with all acquisitions integrated,"
said Standard & Poor's credit analyst Hal Diamond. The company has
grown dramatically during the past 18 months through acquisitions
that have expanded its size, service offerings, and geographic
scope. The company has good positions in corporate restructuring
advisory, background screening, data recovery, security
consulting, and investigative services. Key business risks include
Kroll's ability to integrate acquisitions, manage a global
infrastructure, and retain both employees and clients as it
integrates the acquired businesses. Standard & Poor's estimates
that more than three-fourths of EBITDA is derived from businesses
that Kroll did not own prior to June 2002. Additionally, the
company's goal to generate 12%-15% growth in internal revenue
during the next three years poses challenges and uncertainties.
Kroll's operating performance prior to the August 2001 sale of its
armored car division had been inconsistent, due to prior
management's strategies and unabsorbed overhead associated with
discontinued businesses. However, the company has improved its
operating performance over the past seven quarters, implementing
the strategies of a new management team. The company enjoys long-
term diversified relationships with most of its clients, though
the majority of its business is conducted without long-term
contracts. Growth prospects are good over the near term due to the
large number of corporate restructurings and increased demand for
security consulting services, but Standard & Poor's expects
revenue growth to remain somewhat cyclical.
LES BOUTIQUES: Commences Restructuring Under CCAA in Canada
-----------------------------------------------------------
Les Boutiques San Francisco Incorporees, Les Ailes de la Mode
Incorporees and Les Editions San Francisco Incorporees have
obtained a court order from the Superior Court of the Province of
Quebec under the Companies' Creditors Arrangement Act to ensure
that a restructuring plan is implemented in an orderly fashion for
the benefit of all stakeholders.
The Court has appointed Richter & Associates Inc. as monitor for
the restructuring. Requests for information related to this file
can be submitted to Richter (tel.: (514) 934-3550; fax: (514) 934-
3504; Internet: http://www.richter.ca/; e-mail: bsf@richter.ca )
LTV CORP: Copperweld Emerges from Chapter 11 Proceedings
--------------------------------------------------------
Copperweld Corporation announced that its Plan of Reorganization,
previously confirmed by the U.S. Bankruptcy Court in Youngstown,
Ohio, became effective yesterday.
The Pittsburgh-based steel tubular products and bimetallic
products company, in bankruptcy since its parent company, LTV
Corporation, filed for Chapter 11 protection on December 29, 2000,
will operate as an independent company and will have its own Board
of Directors.
"We are emerging much stronger financially," said Dennis McGlone,
Copperweld's President and Chief Operating Officer. "We have less
debt, a stronger balance sheet and have streamlined our
organization to eliminate redundancies and reduce both fixed and
variable costs."
Mr. McGlone explained that underperforming operating units have
been shut down or sold and operations have been realigned to make
maximum use of the company's best equipment and facilities.
"We're out to grow our businesses and create value for our
stakeholders," said Mr. McGlone. "We have strong financial backing
and the focus we've placed on operations and restructuring will
enable us to be even more responsive to customer needs and to
operate more efficiently."
Copperweld has been restructured into four business units -
mechanical tubing, structural tubing, automotive and bimetallic
products. The business units operate 11 tubular products plants in
the U.S. and Canada and two bimetallics facilities in the U.S. and
the United Kingdom. Neither the Canadian nor U.K. facilities were
part of the bankruptcy proceedings.
Each of the business units is headed by a Vice-President and
General Manager. They are: mechanical tubing - James R. Baske;
structural tubing - David W. Seeger; automotive - Douglas J. Hahn;
and bimetallic products - Steven E. Levy.
The company's corporate officers include Mr. McGlone; the heads of
the four business units; Eugene R. Pocci, Vice President, Human
Resources; William F. Morgan, Vice President and Chief Information
Officer; Dale B. Mikus, Vice President and Chief Financial
Officer; and Robert L. Janesko, Treasurer.
The company is emphasizing in messages to customers, employees and
suppliers that this is, "The New Copperweld," and is positioning
itself using the phrase: Strength, Speed and Agility.
Two GE Commercial Finance businesses acted as the agents for
Copperweld's term and revolving debt.
Copperweld Corporation was founded in 1915 to produce copper clad
steel wire and strand. It expanded into the mechanical and
structural tubing business in the 1950s and into the automotive
components business in the 1990s. In late 1999 it was acquired by
LTV and combined with another acquisition, Welded Tube Co. of
America, and LTV's existing tubular products business, became the
largest producer of steel tubular products in North America and
the largest producer of bimetallic products in the world.
Copperweld will continue to be headquartered in Pittsburgh and
employs 2,300 people in North America and the U.K.
MCDERMOTT INT'L: Shareholders Approve Proposed B&W Settlement
-------------------------------------------------------------
McDermott International Inc. (NYSE:MDR) announced the results from
the special meeting of shareholders held Wednesday in New Orleans.
The purpose of the special meeting was for McDermott shareholders
to vote on a resolution relating to the proposed settlement of the
Chapter 11 bankruptcy proceeding involving The Babcock and Wilcox
Company and certain of its affiliates, unconsolidated subsidiaries
of McDermott. Of the 48,186,394 votes received, approximately 97.6
percent voted in favor of the resolution. The votes in favor of
the resolution constitute a majority of all the shares of common
stock outstanding and entitled to vote as of the record date.
The shareholders' approval of the resolution is conditioned upon
the McDermott Board of Directors' subsequent approval to enter
into the settlement, as indicated in the Company's proxy statement
relating to the special meeting. In order for the plan of
reorganization and related settlement agreement to become
effective, the Board's approval is required to be given within 30
days prior to the effective date. The Board's decision will be
made after consideration of any developments that might occur
prior to the effective date, including any changes in the status
of the Fairness in Asbestos Injury Resolution legislation pending
in the U.S. Senate.
Additionally, based on documents filed with the United States
Bankruptcy Court in the Eastern District of Louisiana, the
asbestos personal injury claimants have voted in favor of the
proposed B&W plan of reorganization, with approximately 89 percent
of the votes cast being in favor of the plan.
McDermott International Inc. (S&P, CCC+ Corporate Credit Rating,
Positive), is a leading worldwide energy services company. The
Company's subsidiaries provide engineering, fabrication,
installation, procurement, research, manufacturing, environmental
systems, project management and facility management services to a
variety of customers in the energy and power industries, including
the U.S. Department of Energy.
MESA AIR GROUP: SEC Declares Registration Statement Effective
-------------------------------------------------------------
Mesa Air Group, Inc. (Nasdaq: MESA) announced that the
Registration Statement (Registration No. 333-108490) registering
the resale of the previously issued 6.25% Senior Convertible Notes
due 2023 and the shares of common stock into which the Notes are
convertible was declared effective by the U.S. Securities
and Exchange Commission on November 20, 2003.
If you are a beneficial holder of Notes and wish to be listed as a
selling security holder in the above-referenced Registration
Statement, you must provide the Company with a completed Selling
Security holder Notice and Questionnaire. A copy of the
Questionnaire may be obtained from the Company by contacting Mr.
Brian Gillman by mail at 410 N. 44th Street Suite 700, Phoenix,
Arizona 85008 or fax (602) 685-4352.
Mesa currently operates 152 aircraft with 975 daily system
departures to 153 cities, 40 states, the District of Columbia,
Canada, Mexico and the Bahamas. It operates in the West and
Midwest as America West Express; the Midwest and East as US
Airways Express; in Denver as Frontier Jet Express and United
Express; in Kansas City with Midwest Express and in New Mexico and
Texas as Mesa Airlines. The Company, which was founded in New
Mexico in 1982, has approximately 4,000 employees. Mesa is a
member of the Regional Airline Association and Regional Aviation
Partners.
METALLURG INC: Fin'l Concerns Prompt S&P to Further Junk Ratings
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on New
York, New York-based Metallurg, Inc. and its parent Metallurg
Holdings Inc. to CCC-/Neg/-- from CCC+/Neg/--.
"The downgrade reflects continued weak end markets and potential
covenant violations and limited liquidity, heightening concerns
about the company's ability to move funds up stream to its parent,
Metallurg Holdings Inc. to make Metallurg Holding's Jan. 15, 2004,
interest payment of approximately $1.5 million to holders of its
12.75% discount notes, as well as service the interest of $5.5
million on its 11% senior notes due on June 1, 2004," said
Standard & Poor's credit analyst Dominick D'Ascoli.
The ratings reflect Metallurg Inc.'s below-average business
position as a global producer and marketer of metal alloys used by
manufacturers of steel, aluminum, and superalloys; its aggressive
financial policy; poor financial performance; and declining
liquidity.
Standard & Poor's believes there is a high probability that
Metallurg could miss its Jan. 15, 2004, or June 1, 2004, scheduled
interest payments unless it is successful in augmenting liquidity,
or if Safeguard International Fund contributes funds, or if the
company obtains a waiver of covenants under the credit facility.
MICRON TECHNOLOGY: Acknowledges Plea by Former Sales Employee
-------------------------------------------------------------
Micron Technology, Inc., acknowledged that a former employee,
Alfred Censullo, has agreed to plead guilty to a single count of
obstruction of justice in connection with a Department of Justice
investigation.
Mr. Censullo was charged with altering and withholding personal
notes requested by the Department of Justice in its investigation.
Although earlier characterized as a Micron executive, Mr. Censullo
actually worked for a period of time as one of approximately fifty
regional sales managers within Micron's sales organization of
around 300 individuals.
Steve Appleton, Micron's Chairman, CEO and President, commented,
"The charges against Mr. Censullo relate to his personal actions
in the course of the Department of Justice investigation and do
not pertain to Micron. Micron takes compliance with the law very
seriously and requires all employees to follow instructions with
respect to legal proceedings. Mr. Censullo's actions were contrary
to the company's instructions. We have fully and actively
cooperated with the Department of Justice since the inception of
their investigation and will continue to do so."
Micron Technology, Inc. (S&P, B+ Corporate Credit Rating, Stable),
is one of the world's leading providers of advanced semiconductor
solutions. Through its worldwide operations, Micron manufactures
and markets DRAMs, Flash memory, CMOS image sensors, other
semiconductor components and memory modules for use in leading-
edge computing, consumer, networking, and mobile products.
Micron's common stock is traded on the New York Stock Exchange
(NYSE) under the MU symbol. To learn more about Micron Technology,
Inc., visit its Web site at http://www.micron.com/
MILK PALACE DAILY: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Milk Palace Dairy LLC
HC 1 Box 14
Syracuse, Kansas 67878
Bankruptcy Case No.: 03-16743
Type of Business: Milk and Dairy farm products.
Chapter 11 Petition Date: December 15, 2003
Court: District of Kansas (Wichita)
Judge: Robert E. Nugent
Debtor's Counsel: W. Thomas Gilman, Esq.
Redmond & Nazar, L.L.P.
Ninth Floor, Olive Garvey Building
200 West Douglas
Wichita, KS 67202-3089
Tel: 316-262-8361
Estimated Assets: $0 to $50,000
Estimated Debts: $10 Million to $50 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Metlife $10,000,000
Eric M. Hatterty
513 Garden City KS 67846
Amarillo National Bank $9,000,000
Plaza One Box 1
Amarillo TX 79105
Kit Carson State Bank $950,000
P.O. Box 220
Cheyenne Wells CO 80180
Friesen Commercial Harvesting $200,000
Westeman Farms Ltd. $100,000
Monsanto Co. Dairy Business $83,420
Lexton Animal Health $72,832
Hughs Livestock $70,000
Green Leaf Bagging LLC $68,993
Cargill $62,500
Steve Mackey Dairy Farms $50,600
Grady Cook $50,000
Marty Cook $50,000
C&D Straw Co. $42,695
Mike Wischkaemper $40,000
Kansas Dept. of Health & Environment $40,000
Garst Seed Co. $36,341
SOO Trucking Co. $35,805
Sullivan Inc. $34,719
Pioneer Electric $31,170
MIRANT CORP: Asks Court to Approve Unitil Settlement Agreements
---------------------------------------------------------------
Pursuant to Sections 105(a) and 365 of the Bankruptcy Code and
Rule 9019 of the Federal Rules of Bankruptcy Procedure, the
Mirant Debtors ask the Court to approve their:
(a) Settlement Agreement with Unitil Power Corporation
and Unitil Energy Systems, Inc., both are Unitil
Corporation wholly owned subsidiaries; and
(b) Settlement Agreement with Fitchburg Gas and Electric
Light Company, a subsidiary of Unitil Corp.
Unitil Settlement Agreement
Mirant Americas Energy Marketing LP and the Unitil Creditors are
parties to a Portfolio Sale and Assignment and Transition Service
and Default Service Supply Agreement, dated February 25, 2003,
whereby:
(i) Unitil Power agreed to sell, or sell and assign, to MAEM,
and MAEM agreed to purchase, or purchase and take
assignment, from Unitil Power of its entitlements under
certain power supply agreements; and
(ii) MAEM agreed to sell and deliver to Unitil Energy and
Unitil Energy agreed to buy and receive from MAEM,
wholesale power supplies to enable Unitil Energy to meet
its obligations to its retail customers.
Under the Unitil Agreement, Michelle C. Campbell, Esq., at White
& Case LLP, in Miami, Florida, reports that MAEM acquires
entitlements from Unitil Power and pays the power suppliers
directly for power purchased from the Suppliers. If MAEM fails
to pay the Suppliers, Unitil Power remains obligated to pay the
amounts.
According to Ms. Campbell, Unitil Power is asserting a claim
against MAEM, estimated to be $5,312,722, as a result of MAEM's
failure to pay Suppliers for their prepetition deliveries of
electric power. As a result, Unitil Power withheld about
$560,000 of the amounts owed to MAEM under the Unitil Agreement
for the prepetition period on account of its Claim. Unitil Power
asserts a right to set off the Holdback against its Claim.
Similarly, Unitil Energy asserts a right to offset amounts it
owed to MAEM against amounts it will be required to pay Unitil
Power on account of MAEM's failure to pay the UPC Suppliers. Ms.
Campbell informs the Court that Unitil Energy withheld $4,752,712
of amounts owed to MAEM for the prepetition period. Unitil
Energy asserts that it has a right to withhold the UES Holdback
based on its obligations to Unitil Power under a System Agreement
dated October 1, 1986, between Unitil Power and Unitil Energy, as
amended. MAEM disputes Unitil Energy's right to withhold and
offset the UES Holdback.
MAEM and the Unitil Creditors wish to resolve their differences
by entering into a Settlement Agreement, which contains these
pertinent terms:
(a) MAEM will assume the Unitil Agreement pursuant to Section
365. Unitil Energy will return to MAEM $3,600,000 of the
UES Holdback in immediately available funds;
(b) The Unitil Creditors will be allowed to apply as partial
cure $1,712,712 of the remaining UPC Holdback and the UES
Holdback against the UPC Claim, adjusted for any
reconciliations -- the Set-off Payment. In addition,
MAEM and the Unitil Creditors agree that, upon approval
of the Unitil Settlement, Unitil Power is authorized to
withhold from amounts otherwise due MAEM under the Unitil
Agreement and apply as the remaining cure payments
$900,000 per month for the four months immediately
following the assumption of the Unitil Agreement by MAEM
-- the Withholding Payments;
(c) MAEM and the Unitil Creditors agree that the amount of
the UPC Claim was based on estimates of amounts owed to
Suppliers for prepetition deliveries of electric power,
and that the estimates should be reconciled with the
actual amounts billed. Based on the reconciliations to
date, the Unitil Creditors agree to immediately pay MAEM
the difference between the estimated UPC Claim and the
amounts paid by Unitil Power to Suppliers for prepetition
deliveries of electric power. MAEM and the Unitil
Creditors agree that further reconciliations may be
required to reflect revised billings for amounts owed to
Suppliers for the prepetition period and that the
reconciliations will be reflected as credits or charges
on future billing invoices;
(d) MAEM and the Unitil Creditors agree that the Set-off
Payment and the Withholding Payments together satisfy the
requirement under Section 365 that MAEM cure all defaults
under the Unitil Agreement prior to assumption thereof;
(e) MAEM and the Unitil Creditors agree that, as adequate
assurance of future performance and notwithstanding
Section 8.3(e) of the Unitil Agreement, in the event that
MAEM subsequently defaults under the Unitil Agreement,
Unitil Energy and Unitil Power will have the right to
effect a triangular netting of the amounts due to either
Unitil Energy or Unitil Power by MAEM against the amounts
due from either Unitil Energy or Unitil Power to MAEM.
In exchange, the Unitil Creditors will waive and release
any and all rights, including, but not limited to, common
law, bankruptcy or UCC rights to request adequate
assurances in connection with the Unitil Agreement until
May 1, 2006, or so long as Unitil Energy and Unitil Power
will have the ability to effect a triangular netting of
the amount due to either Unitil Energy or Unitil Power by
MAEM against amounts due from either Unitil Energy or
Unitil Power to MAEM; and
(f) The Unitil Creditors will waive and release their rights,
if any, to terminate the Unitil Agreement based on the
filing of MAEM's Chapter 11 case and retain all rights
and security thereunder in the event of any subsequent
default by MAEM.
The Fitchburg Gas Settlement
MAEM and Fitchburg are parties to a Base Contract for Short-Term
Sale and Purchase of Natural Gas, dated June 1, 1998. Due to
MAEM's Chapter 11 filing, Fitchburg declared a default and
terminated the FG&E Agreement in accordance with Section 556 of
the Bankruptcy Code. In addition, Fitchburg asserted that it was
entitled to withhold payments otherwise due to MAEM under the
FG&E Agreement based on the FG&E Agreement, which provides that
"if an Event of Default occurs with respect to a party (the
"Defaulting Party") . . . the other party . . . may . . .
withhold any payments due to Defaulting Party in respect of any
transactions" -- the One-way Termination Provision. MAEM
disputes the enforceability of the One-way Termination Provision
and asserts that it is owed $125,212 from Fitchburg as a result
of the termination of the FG&E Agreement.
MAEM and Fitchburg wish to resolve the Termination Payment
Dispute by entering into a Settlement Agreement with these terms:
(a) Fitchburg will pay MAEM $75,000 as a cash termination
payment in immediately available funds;
(b) Fitchburg agrees to enter into certain agreements with
MAEM -- the Enabling Agreements -- substantially in the
form of:
(1) the most recent standard North American Energy
Standards Board Base Contract for Sale and Purchase
of Natural Gas; and
(2) the Edison Electric Institute Master Power Purchase
and Sale Agreement, including special provisions
under either agreement as may be mutually acceptable
to both parties, pursuant to which Fitchburg agrees
to make a good faith effort to facilitate new
transactions; and
(c) The Parties agree that the FG&E Agreement is duly
terminated and fully remises, releases, acquits,
satisfies and forever discharges the other party and its
Releasees, of and from all, and all manner of action,
suits, debts, dues and claims which the Releasors ever had
or may have by reason of any claims arising under or
related to the FG&E Agreement.
Settlements Should be Approved
Ms. Campbell contends that the Settlement Agreements are fair and
reasonable on these grounds:
(i) The Debtors determined that the Unitil Agreement is a
profitable contract and, if provided with certain
concessions from the Unitil Creditors, assumption of the
Unitil Contract at this time would be warranted;
(ii) The Unitil Settlement expressly reserves the Debtors'
right to further assign the contract in the event that
the circumstances surrounding the Debtors' business
change;
(iii) Although no litigation currently exists with respect to
the Fitchburg dispute, the threat of litigation exists in
light of Fitchburg's assertions that it is entitled to
withhold certain payments; and
(iv) Fitchburg agreed to use good faith efforts to facilitate
new transactions with MAEM, which may result in an added
benefit to MAEM prospectively. (Mirant Bankruptcy News,
Issue No. 16; Bankruptcy Creditors' Service, Inc., 215/945-
7000)
NAT'L CENTURY: Files Second Amended Plan & Disclosure Statement
---------------------------------------------------------------
National Century Financial Enterprises, Inc. and its debtor-
subsidiaries delivered to the Court their Second Amended Joint
Plan of Liquidation and Disclosure Statement on December 8, 2003.
The Court will continue the hearing on the adequacy of the
Disclosure Statement on December 18, 2003.
David J. Coles, NCFE President, Secretary and Treasurer,
relates that the Second Amended Plan of Liquidation includes
these modifications:
A. General Terms
The Second Amended Plan provides for, among other things:
(1) the deemed substantive consolidation of all of the Debtors
other than NPF VI and NPF XII; and
(2) the issuance of the interests in the Trusts to the holders
of Claims in Classes C-2, C-3 and C-6.
The Plan embodies a proposed compromise and settlement of all
Claims against and Interests in the Debtors. The Plan also
approves the Intercompany Settlement Agreement, which embodies
a compromise and settlement of NPF VI Class A Noteholder
Claims, NPF XII Class A Noteholder Claims and Intercompany
Claims between NPF VI and NPF XII.
The Effective Date is assumed to occur on February 29, 2004.
B. Special Provisions Regarding Fee and Expense Claims of MetLife
and Lloyds
In full satisfaction of the Claims filed by MetLife and Lloyds
for the reasonable fees and expenses incurred in connection
with the Bankruptcy Cases, including reasonable attorneys'
fees, MetLife and Lloyds will receive from the Debtors or the
VI/XII Collateral Trust on the Effective Date, cash equal to
the amount of the Claims. Notwithstanding any other provision
of the Plan, any payments in respect of amounts estimated to
be incurred prior to the Effective Date will not exceed the
lesser of the estimate provided to the Debtors or the actual
amount incurred as reflected in appropriate supporting
documentation submitted to the VI/XII Collateral Trust within
30 days after the Effective Date.
No later than January 15, 2004, MetLife and Lloyds will
submit to the Debtors, the Creditors' Committee
and each of the Subcommittees, appropriate documentation in
support of their Claims for fees and expenses incurred or
estimated to be incurred through the Effective Date. The
amount of these fees and expenses will be reported to the
Bankruptcy Court at the Confirmation Hearing. Any objection
to the Claims for fees and expenses must be filed and served
on MetLife and Lloyds no later than five Business Days prior
to the Confirmation Hearing. In the event that an objection
is filed and served, the disputed portion of the fees and
expenses will be subject to review for reasonableness by the
Bankruptcy Court.
C. Substantive Consolidation
The Plan provides that, pursuant to the Confirmation Order,
the Bankruptcy Court will approve the deemed substantive
consolidation of the NCFE Consolidated Debtors. Pursuant to
the substantive consolidation:
(a) all assets and liabilities of the NCFE Consolidated
Debtors will be deemed merged;
(b) all guarantees by one NCFE Consolidated Debtor of the
obligations of any other NCFE Consolidated Debtor will
be deemed eliminated so that any Claim against any NCFE
Consolidated Debtor and any guarantee executed by any
other NCFE Consolidated Debtor and any joint or several
liability of any of the NCFE Consolidated Debtors will
be deemed to be one obligation of the consolidated NCFE
Consolidated Debtors; and
(c) each and every Claim filed or deemed filed by or on
behalf of a single creditor in a single Class of Claims
against any of the NCFE Consolidated Debtors will be
deemed a single Claim filed against the NCFE
Consolidated Debtors.
The substantive consolidation will not affect the legal and
corporate structures of the NCFE Consolidated Debtors, subject
to the right of the NCFE Consolidated Debtors to effect the
Restructuring Transactions as provided in the Plan.
A full-text copy of National Century's Second Amended Plan is
available for free at:
http://bankrupt.com/misc/natlcent_2ndamendedplan.pdf
A full-text copy of National Century's Second Amended Disclosure
Statement is available for free at:
http://bankrupt.com/misc/natlcent_2ndamenddisclosurestatement.pdf
(National Century Bankruptcy News, Issue No. 28; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
NEXSTAR BROADCASTING: Launches Senior Subordinated Note Offering
----------------------------------------------------------------
Nexstar Broadcasting Group, Inc. (Nasdaq:NXST) (S&P, B+ Long-Term
Corporate Credit Rating, Stable Outlook) announced that its wholly
owned subsidiary, Nexstar Finance, Inc., plans to offer $125
million aggregate principal amount of senior subordinated notes in
a private placement. Net proceeds from the offering will be used
to finance the Company's pending acquisition of Quorum Broadcast
Holdings, LLC.
The senior subordinated notes will rank equally with all of the
Company's other existing and future senior subordinated
indebtedness, and will be junior to the Company's senior
indebtedness, including debt under the Company's senior secured
credit facility. The senior subordinated notes will be guaranteed
by all of the Company's existing subsidiaries that are guarantors
under the Company's senior secured credit facility and outstanding
senior subordinated indebtedness.
The offering will be a private placement under Rule 144A of the
Securities Act of 1933 and will be made only to qualified
institutional buyers and to certain persons in offshore
transactions in reliance on Regulation S under the Securities Act
of 1933. The senior subordinated notes will not be registered
under the Securities Act and may not be offered or sold in the
United States absent registration or an applicable exemption from
the registration requirements.
NORTHSTAR CBO: Fitch Drops & Affirms Ratings for 3 Note Classes
---------------------------------------------------------------
Fitch Ratings has taken the following rating actions on Northstar
CBO 1997-2 Limited:
The following class of Northstar CBO has been downgraded:
-- $77,998,358 class A-2 notes to 'BB-' from 'A'.
The following classes of Northstar CBO have been affirmed:
-- $90,000,000 class A-3 notes 'CC';
-- $33,300,000 class B notes 'C'.
Northstar CBO, a collateralized bond obligation, is managed by ING
Pilgrim Investments Inc. The CBO was established in July 1997 to
issue debt and equity securities and to use the proceeds to
purchase high yield bond collateral. The CBO's revolving period
ended in July of 2002.
According to the Dec. 2, 2003 trustee report, Northstar CBO's
collateral currently includes a par amount of $54.843 million
(39.19%) in defaulted assets. The class A overcollateralization
test is failing at 65.30% with a trigger of 135% and the class B
OC test is failing at 53.94% with a trigger of 115%.
Fitch has reviewed the credit quality of the individual assets
comprising the portfolio, including discussions with ING Pilgrim.
In addition, Fitch has conducted cash flow modeling using various
default timing and interest rate scenarios.
Fitch will continue to monitor Northstar CBO.
NORTHSTAR CBO: S&P Rating on Class A-2 Notes Cut to Junk Level
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its rating on the class
A-2 notes issued by Northstar CBO 1997-1 Ltd., a high-yield CBO
transaction originated in January 1997.
The lowered rating reflects factors that have negatively affected
the credit enhancement available to support the class A-2 notes
since the transaction was last reviewed, in July 2001. Chief among
these factors is a sharp increase in the number of defaults in the
collateral pool securing the notes. Standard & Poor's noted that
cumulative defaults of collateral securities increased to $207.2
million from $103.7 million since the last rating action.
As a result of asset defaults and the sale of credit risk assets,
the class A-2 overcollateralization ratio has dropped
significantly, and now stands at 59.3%. This contrasts with a
ratio of 90.5% when the notes were last downgraded, and is well
below their minimum requirement, which equaled 119.0% at the time
of the last rating action, but has now stepped up to 141.0%.
Including defaulted securities, $115.4 million (or approximately
72.7% of the collateral pool's par value) come from obligors now
rated in the 'CCC' range or lower.
RATING LOWERED
Northstar CBO 1997-1 Ltd.
Rating Balance (mil. $)
Class To From Orig. Current
A-2 CC CCC- 285.0 189.4
TRANSACTION INFORMATION
Issuer: Northstar CBO 1997-1 Ltd.
Co-issuer: Northstar CBO 1997-1 (Delaware) Corp.
Manager: ING Investments LLC
Underwriter: Bear Stearns Cos. Inc. (The)
Trustee: US Bank
Transaction type: High-yield arbitrage CBO
TRANCHE INITIAL LAST CURRENT
INFORMATION REPORT ACTION ACTION
Date (MM/YYYY) 01/1997 07/2001 12/2003
A-2 note rating A- CCC- CC
Class A-2 OC ratio N.A. 90.5% 59.3%
Class A-2 OC ratio min. 114.0% 119.0% 141.0%
A-2 note bal. $285.0mm $246.3mm $189.4mm
PORTFOLIO BENCHMARKS CURRENT
S&P Wtd. Avg. Rtg. (excl. defaulted) B-
S&P Default Measure (excl. defaulted) 7.88%
S&P Variability Measure (excl. defaulted) 5.58%
Obligors Rated 'BB-' and Above 12.45%
Obligors Rated 'B+' and Above 18.43%
Obligors Rated 'B' and Above 27.34%
Obligors Rated 'B-' and Above 27.34%
Obligors Rated in 'CCC' Range 22.48%
Obligors Rated 'SD' or 'D' 50.18%
S&P RATED LAST CURRENT
OC (ROC) RATING ACTION RATING ACTION
Class A-2 N.A. (CCC-) N.A. (CC)
NRG ENERGY: S&P Lowers Bank Loan Rating over Increased Facility
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its senior secured bank
loan rating on NRG Energy's first priority senior secured term
loan and revolving credit facility due 2010 and 2006,
respectively, to 'BB-' from 'BB'.
Standard & Poor's affirmed its 'B+' corporate credit rating on
NRG. The outlook is stable.
"The downgrade of the bank loan reflects the fact that NRG has
executed an option to increase the total size of the facility by
$250 million," said Standard & Poor's credit analyst Arleen
Spangler.
"Although the increased size worsens the recovery prospects for
the first priority lien holders vis a vis other creditors, the
recovery rating remains unchanged at '1', which indicates a high
expectation of full recovery," added Ms. Spangler.
Standard & Poor's also said that ratings stability reflects its
view that NRG's credit quality should not significantly
deteriorate in the short term.
"There is little room for a ratings upgrade in the near term based
on the high business risk of operating as predominantly a merchant
generator where cash flows may be volatile," said Ms. Spangler.
NRG, previously a 100% owned subsidiary of Xcel Energy Inc., filed
for bankruptcy protection on May 14, 2003. NRG emerged from
bankruptcy as a separate, reorganized company on Dec. 5, 2003.
NRG is engaged in the ownership and operation of U.S. merchant
power generating facilities, thermal production and resource
recovery facilities, and various international independent power
producers.
NUTRAQUEST: Wants Nod to Hire Catalina as Litigation Counsel
------------------------------------------------------------
Nutraquest, Inc., seeks permission from the U.S. Bankruptcy Court
for the District of New Jersey to retain Catalina & Associates, a
professional corporation, as Special Intellectual Property &
Litigation Counsel.
The Debtor wants to retain the law firm of Catalina & Associates,
to represent it as special intellectual property and litigation
counsel in this case, effective as of October 16, 2003, the date
of filing.
The professional services of Catalina include:
A. Continuation in litigating cases and prosecuting and
defending opposition, unfair competition, cancellation
and/or advertising proceedings in which the Debtor, as
Plaintiff and/or Counterclaimant, is attempting to
enforce, preserve, protect and enhance the integrity of
its intellectual property rights, including its rights
in and to any and all trademarks, trade dress and
related intellectual property, and any and all
registrations and applications for registration in the
United States and internationally, inclusive of the
United States Patent and Trademark Office and the
patent, trademark or industrial property office of each
respective country and territory;
B. Concluding the process of assigning the Debtor's
interests in its trademarks, trade dress and related
intellectual property, including any and all
registrations and applications for registration, in the
United States and internationally, from assignor
Cytodyne Technologies, Inc., as prior owner, registrant
and applicant of said intellectual property, to Debtor,
as assignee, as required by certain Asset Purchase
Agreement(s) dated as of May 23, 2003 between CTI and
third parties Cytodyne, LLC or Cytodyne I, LLC;
C. Retaining the services of local counsel from countries
and/or territories outside the United States, as needed,
for the limited purposes of:
1) facilitating the transfers or assignments of
international registrations and/or applications for
registration of all such trademarks from CTI to
Debtor,
2) continuing the prosecution of applications for
registration of all such trademarks on behalf of
Debtor,
3) prosecuting and defending, as is and as may be
required, opposition, unfair competition, and/or
cancellation proceedings on behalf of Debtor, and
4) prosecuting the renewal and maintenance of each and
every registration obtained by Debtor with regard to
each such trademark;
D. Continuation in litigating cases of unfair competition,
false advertising, false designation of origin and
counterfeiting brought under the Lanham Trademark Act,
15 U.S.C. Section 1051 et seq. and other applicable
State and international statutes and common law to
enforce, preserve, protect and enhance the integrity of
Debtor's name, brand and good will; and
E. Providing legal advice to the Debtor on intellectual
property and advertising issues that are expected to
arise in the development of its new products and product
lines.
At the time of the bankruptcy filing, there were several
litigations pending in which Catalina, PC was representing the
Debtor as plaintiff, inclusive of numerous opposition,
cancellation and unfair competition proceedings at an
international level pursuant to local trademark law and the Paris
Convention:
a. Nutraquest, Inc. v. Arnet Pharmaceutical Corp., et al.,
Civil Action No. 03-669(DRD) pending in the United States
District Court, District of New Jersey;
b. Nutraquest, Inc. and Cytodyne, LLC v. Nutri-Force
Nutrition, Civil Action No. 03-4418(DRD) pending in the
United States District Court, District of New Jersey;
d. Nutraquest, Inc. and Cytodyne, LLC, v. Spectrum Nutrition,
LLC, et al., Civil Action No. 03-04589 (DRD), pending in
the United States District Court, District of New Jersey;
and
e. Leiner Health Products, LLC v. Nutraquest, Inc. and
Cytodyne, LLC, Civil Action No. 03-6331 pending in the
United States District Court, Central District of
California.
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.
OBSIDIAN ENT.: Commences Offer for Net Perceptions Shareholders
---------------------------------------------------------------
Obsidian Enterprises, Inc. (OTC Bulletin Board: OBSD), a holding
company headquartered in Indianapolis, has formally commenced an
offer that will provide shareholders of Net Perceptions, Inc.
(Nasdaq: NETP) the opportunity to receive two shares of Obsidian
common stock for each share of Net Perceptions common stock.
Obsidian filed an S-4 Registration Statement and Tender Offer
Schedule with the Securities and Exchange Commission on
December 15, 2003 and an amendment to each on December 17, 2003.
The offer is scheduled to expire at 5:00 PM, New York City time,
on February 20, 2004, unless the offer is extended. The offer is
subject to certain conditions, including that:
- Net Perceptions takes appropriate action to cause their
poison pill to not be applicable to the offer;
- we are satisfied that Section 203 of the Delaware General
Corporation Law will not be applicable to the contemplated
second-step merger; and
- stockholders tender at least 51% of the outstanding shares
of common stock of Net Perceptions.
The Exchange Agent for the exchange offer is StockTrans, Inc., 44
West Lancaster Avenue, Ardmore, Pennsylvania 19003. The
Information Agent for the exchange offer is Innisfree M&A
Incorporated, 501 Madison Avenue, 20th Floor, New York, New York
10022.
Obsidian -- whose July 31, 2003 balance sheet shows a total
shareholders' equity deficit of about $1.8 million -- is a holding
company headquartered in Indianapolis, Indiana. It conducts
business through five subsidiaries: Pyramid Coach, Inc., a leading
provider of corporate and celebrity entertainer coach leases;
United Trailers, Inc., and its sister company, Southwest Trailers,
manufacturers of steel-framed cargo, racing ATV and specialty
trailers; U.S. Rubber Reclaiming, Inc., a butyl-rubber reclaiming
operation; and Danzer Industries, Inc., a manufacturer of service
and utility truck bodies and accessories. More information on each
of these companies can be found online at
http://www.obsidianenterprises.com/
O-CEDAR HLDGS: General Claims Bar Date Set for January 12, 2004
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware sets
January 12, 2003, at 5:00 p.m. Eastern Time, as the deadline for
creditors of O-Cedar Holdings, Inc., and its debtor-affiliates, to
file their proofs of claim against the company.
Signed original proofs of claim must be submitted to the Debtors'
Claims and Noticing Agent. If filed by mail, claims must be sent
to:
Delaware Claims Agency, LLC
Attn: O-Cedar Claims Processing
PO Box 515
Wilmington, DE 19899
If by overnight courier, to:
Delaware Claims Agency, LLC
Attn: O-Cedar Claims Processing
103 West 7th Street
3rd Floor
Wilmington, DE 19801
Four categories of claims not required to file proofs of claim at
this time are:
1. claims already properly filed with the Bankruptcy
Court;
2. claims identified in the Schedules and not listed as
disputed, contingent or unliquidated; and
3. claims previously allowed by Order of the Court; and
4. intercompany claims.
Headquartered in Springfield, Ohio, O-Cedar Holdings, Inc.,
through its debtor-affiliate, manufactures brooms, mops, and scrub
brushes for household and industrial use. The Company filed for
chapter 11 protection on August 25, 2003 (Bankr. Del. Case No. 03-
12667). John Henry Knight, Esq., at Richards, Layton & Finger,
P.A., and Adam C. Harris, Esq., at O'Melveny & Myers LLP represent
the Debtors in their restructuring efforts. When the Company filed
for protection from its creditors, it listed over $50 million in
both assets and debts.
OLYMPIC WORLD: Files for Chapter 11 Restructuring in Honolulu
-------------------------------------------------------------
Royal Olympic Cruise Lines, Inc., (Nasdaq: ROCLF) announced that
two out of its eight ship-owning companies, Olympic World Cruises,
Inc., the owner of the vessel Olympia Voyager, and Royal World
Cruises, Inc. the owner of the vessel Olympia Explorer, have filed
for reorganization under Chapter 11 of the United States
bankruptcy code.
The company has been in discussion with the lenders to these
subsidiaries regarding a potential restructuring of $250.0 million
in loans incurred to finance the acquisition of the two vessels.
Discussions have not to date produced an agreement and the lenders
have delivered a notice of acceleration of the loans. These loans
are secured by mortgages on the two vessels and have been
guaranteed by Royal Olympic Cruise Lines, the parent company.
Neither Royal Olympic Cruise Lines, nor any other subsidiary has
filed for Chapter 11 protection and are conducting business in the
ordinary course. The company intends to continue discussions with
the lenders.
Commenting on the filing, CEO Yiannos Pantazis said: "Like others
in the leisure and transportation industries, we have experienced
very difficult operating conditions due to the effects on tourism
of the September 11 events, the conflict in the Middle East, the
SARS crisis, the Afghanistan and Iraq wars, the international
economic situation and other events. We will continue discussions
with our subsidiaries' lenders and remain committed to maintaining
all operations and our standards during this period. Filing for
reorganization under Chapter 11 may provide sufficient time for
the discussions with the lenders to come to a positive conclusion,
without disrupting the Company's operations, in a year when the
Company's revenues are expected to be at increased levels due in
part to the Olympic Games being held in Athens."
OLYMPIC WORLD: Case Summary & 19 Largest Unsecured Creditors
------------------------------------------------------------
Lead Debtor: Royal World Cruises Inc.
80 Broad Street
Monrovia, Liberia
Bankruptcy Case No.: 03-03643
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Olympia World Cruises Inc. 03-03645
Type of Business: The Debtor owns and operates state-of-the-art
cruise ships.
Chapter 11 Petition Date: December 16, 2003
Court: District of Hawaii (Honolulu)
Judge: Robert J. Faris
Debtors' Counsel: Jerrold K. Guben, Esq.
Reinwald O'Connor & Playdon
733 Bishop Street, Floor 24
Honolulu, HI 96813
Tel: 808-524-8350
Fax: 808-531-8628
Estimated Assets: more than $100 Million
Estimated Debts: more than $100 Million
Debtor's 19 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Eko Elda Abee Trade Debt $2,725,434
87 Akti Misouli
Piracus, Greece, 18538
Besso International Trade Debt $676,358
8-11 Crescent
London UK EC3N2LY
Louis Duty Free Shops Ltd. Trade Debt $650,000
Amphipoleos 20
Nicosis, Cyprus PO BOX 21301
Orient Deniz Tur. Sanayi Ve Trade Debt $463,434
Ticaret - D-A
Meclisi Mebusan Cad. 145
Kat 5 Findikli
Istanbul Turkey 80040
Tormena Trade Debt EURO 229,829
Hermis Charisiades Trade Debt EURO 225,843
Mantouvalos Brothers Trade Debt EURO 221,327
HSBC Insurance Brokers Trade Debt $235,324
Global Entertainment Trade Debt EURO 187,058
Productions
Headed Cambiaso Risso & Co. Trade Debt $215,318
Amphitron Holidays AE Trade Debt EURO 173,997
Orient Deniz Tur. Sanayi Ve Trade Debt $204,137
Mavrokos Imports SA Trade Debt EURO 154,490
Conor SRL Trade Debt EURO 148,621
Pac Electric, V. Angistriotis EURO 145,644
Angistriotis, V. Papadopoulos
O.E
Gulf Marine & Industrial Trade Debt $174,313
Suppl. Inc/N. Orleans
Ainos Transit AEE Trade Debt EURO 119,346
Evag. Pagakis LLC Trade Debt EURO 95,001
Aktina AE Trade Debt EURO 92,370
PACIFIC GAS: Fitch Says TURN Compromise Won't Affect Ratings
------------------------------------------------------------
Fitch's ratings and Rating Watch Positive status for Pacific Gas &
Electric Company are unchanged following the utility's announced
compromise with The Utility Reform Network (TURN). Nevertheless,
the joint comment filed by PG&E and TURN with the California
Public Utilities Commission supporting a compromise bankruptcy
plan is a constructive event that removes a potential adversary to
the proceedings and strengthens Fitch's view that a compromise
acceptable to the relevant parties will be reached. Fitch rates
PG&E's senior secured debt and preferred securities 'BB-' and
'DDD', respectively.
The PG&E-TURN joint comment supports a modified version of CPUC
President Peevey's preferred alternate decision (Peevey2)
incorporating a potential transaction to monetize the $2.21
billion regulatory asset. The securitization of the dedicated rate
component would only be implemented by the company contingent upon
its emergence from bankruptcy and passage of enabling legislation
satisfactory to the CPUC, TURN and PG&E. The DRC would provide
incremental rate reductions to consumers, in addition to the
anticipated 2004 rate reduction included in Peevey2.
In order for a consensus solution to succeed it would require not
only the majority support of the five-member CPUC but also
acceptance by the relevant parties to the original settlement
agreement and the bankruptcy court. On Friday, Dec. 12, 2003, the
bankruptcy court approved the joint plan of reorganization based
on the June 2003 settlement reached by the CPUC staff, PG&E and
PG&E Corp., which is currently before the commission as President
Peevey's first proposed alternate decision. Fitch expects that the
bankruptcy court would approve an amended plan of reorganization
should the CPUC approve the PG&E-TURN proposal or similar plan
acceptable to all relevant parties to the proceeding. Fitch
believes this scenario would allow PG&E to emerge from bankruptcy
around mid-2004. Currently, the Peevey2 proposed decision, if
approved by the CPUC as is, would create a regulatory asset of
$2.21 billion to be amortized over nine years, while recognizing
the ability of the commission to enter into contractual
arrangements to bind future commissions and the jurisdiction of
the bankruptcy court over the plan of reorganization and
implementation of the bankruptcy plan. In addition, Peevey2
supports a CPUC commitment to investment grade ratings, while
clarifying that the CPUC is not obligated to guarantee such a
rating if causes other than regulatory affairs threaten the
utility's investment grade rating.
PILGRIM AMERICA: Fitch Affirms Junk Ratings for Cl. B & C Notes
---------------------------------------------------------------
Fitch Ratings has affirmed the ratings of three classes of notes
issued by Pilgrim America CBO I Ltd., a collateralized bond
obligation backed by high yield bonds.
The following classes have been affirmed:
-- $101,061,894 class A notes 'BBB-';
-- $41,000,000 class B notes 'C';
-- $41,000,000 class C notes 'C'.
According to its November 2003 trustee report, the Pilgrim CBO
portfolio collateral includes a par amount of $31.05 million
(20.8%) of defaulted assets. The deal also contains 22.2% of
assets rated 'CCC-' or below, excluding defaults. The class A and
class B overcollateralization tests are failing at 129.65% and
92.23%, versus their triggers of 135% and 118%, respectively. The
total OC test is also failing at 71.57% versus a trigger of 107%.
The reinvestment period has ended causing principal payments from
collateral to amortize the class A notes. Fitch believes this
provides the appropriate protection for the class A notes to
maintain their rating.
As a result of failure of the class A OC test, the class B notes
have not received current interest on several recent payment dates
causing them to capitalize nearly $10.9 million. Fitch expects a
total recovery on the class B notes between 40%-85%. As a result
of failures to both the class A and class B OC tests, the class C
notes have capitalized $20.2 million of unpaid interest. Fitch
expects a total recovery on the class C notes below 40%.
In determining this rating action, a credit committee reviewed the
results of cash flow model runs, incorporating several different
default and interest rate stress scenarios. Also, Fitch discussed
with Prudential Securities, Inc., the portfolio manager, their
expectations and opinions of the portfolio.
PLAINS ALL AMERICAN: Proposes 2 Million Common Units Offering
-------------------------------------------------------------
Plains All American Pipeline, L.P. (NYSE: PAA) plans to sell
2,000,000 common units pursuant to an effective shelf registration
statement on Form S-3 previously filed with the Securities and
Exchange Commission. The underwriters have the option to purchase
up to 300,000 additional units to cover over-allotments, if any.
The Partnership intends to use the net proceeds from the offering
to repay indebtedness under its revolving credit facilities and
for general partnership purposes, which may include the funding of
pending or future acquisitions. The Partnership filed a Report on
Form 8-K today describing a material pending acquisition. The
Form 8-K includes important historical and forward-looking
information about the acquisition and financial performance of the
business to be acquired.
UBS Securities LLC will act as book-running lead manager of the
offering. In addition, A.G. Edwards & Sons, Inc., Goldman, Sachs &
Co. and Wachovia Capital Markets, LLC have been named as co-
managing underwriters.
A copy of the prospectus supplement and related base prospectus
relating to this offering may be obtained from UBS Securities LLC
at 1285 Avenue of the Americas, New York, NY 10019, Telephone 1-
212-713-8802 or from any of the other underwriters.
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.
RADIO UNICA: Plan and Disclosure Statement Hearing on Tuesday
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
schedules the combined hearing to consider approval of Radio Unica
Communications' Disclosure Statement and confirmation of the
Liquidating Chapter 11 Plan.
As previously reported in the Troubled Company Reporter's
November 11, 2003 issue, the Debtor filed its Prepackaged Chapter
11 Plan with the Court.
In this connection, the court fixes 2:00 p.m. of December 23, 2003
to hold the hearing to consider approval of the Disclosure
Statement at Courtroom 601 of the United States Bankruptcy Court
for the Southern District of New York, Alexander Hamilton Custom
House, One Bowling Green, New York, New York 10004, before the
Honorable Cornelius Blackshear. Thereafter a hearing to consider
Plan Confirmation will follow.
During the combined hearing, the Court shall consider the adequacy
of the Disclosure Statement to provide ample information for all
creditors to decide whether to accept or reject the Plan.
Headquartered in Miami, Florida, Radio Unica Communications Corp.,
the only national Spanish-language AM radio network in the U.S.,
broadcasting 24-hours a day, 7-days a week, filed for chapter 11
protection on October 31, 2003 (Bankr. S.D. N.Y. Case No. 03-
16837). Bennett Scott Silverberg, Esq., and J. Gregory Milmoe,
Esq., at Skadden Arps Slate Meagher & Flom, LLP represent the
Debtors in their restructuring efforts. When the Company filed for
protection from its creditors, it listed $152,731,759 in total
assets and $183,254,159 in total debts.
RAINIER CBO: Fitch Affirms Three Note Ratings at Lower-B Level
--------------------------------------------------------------
Fitch Ratings has affirmed Rainier CBO I, Ltd.:
-- $88,549,059 class A-1L notes 'AAA';
-- $137,000,000 class A-2L notes 'AAA';
-- $62,000,000 class A-3L notes 'A+';
-- $35,000,000 class A-4C notes 'BB+';
-- $13,000,000 class B-1L notes 'B+';
-- $8,000,000 class B-2 notes 'B-'.
Rainier CBO, a collateralized bond obligation, is managed by
Centre Pacific, LLC,. The CBO was established in July of 2000 to
issue debt and equity securities and to use the proceeds to
purchase high yield bond collateral. with a 21% exposure to
manufactured housing residential mortgage backed securities. The
potential for recoveries on these assets, which represent
approximately 4% of the portfolio's assets, is extremely low.
Since July 2003, the transaction has been in a technical event of
default when the aggregate principal balance of the collateral
debt securities fell below the aggregate balance of rated notes.
The governing documents provide several rights and remedies under
the event of default. These include, but are not limited to,
acceleration of payment and liquidation.
According to the Nov. 17, 2003 trustee report, Rainier CBO's
collateral currently includes a par amount of $14.367 million
(4.04%) in defaulted assets. The senior class A
overcollateralization test and the class A OC test are passing at
124.7% and 110.6%, with triggers of 117% and 106%, respectively.
The class B OC test is failing at 102.4%, with a trigger of
103%.Furthermore, in March, 2003 the class C-1 and class C-2 notes
began to capitalize unpaid interest payments or pay-in-kind (PIK).
Fitch has reviewed the credit quality of the individual assets
comprising the portfolio, including discussions with Centre
Pacific, LLC. In addition, Fitch has conducted cash flow modeling
using various default timing and interest rate scenarios. Based on
the modeling results and the stable performance of the underlying
collateral, Fitch has affirmed all of the rated liabilities issued
by Rainier CBO.
Fitch will continue to monitor Rainier CBO., Ltd. to ensure its
ratings are accurate.
REPUBLIC ENGINEERED: Court Allows Asset Sale to Perry Strategic
---------------------------------------------------------------
Republic Engineered Products LLC has secured Bankruptcy Court
approval to sell its assets to Perry Strategic Capital Inc.
Republic and PAV Republic Inc., a new entity formed by Perry,
expect to complete the sale by the end of the year.
The transaction is valued at $277.5 million. It was approved
Tuesday by a court order from U.S. Bankruptcy Court Judge Marilyn
Shea-Stonum in Akron, Ohio, just two months after Republic filed
for Chapter 11 bankruptcy protection.
"This is the best Christmas present we could receive," said Joseph
F. Lapinsky, president and chief executive officer at Republic.
"This transaction assures a stable source of quality steel for our
customers and provides job security for our employees.
"The competitive auction process and Perry's pursuit of this
transaction against bids from other groups demonstrates Perry's
commitment and the viability of our business. We are grateful for
the strong support we received in the past two months from our
customers, the United Steelworkers of America and the elected
officials who advocated the preservation of Republic. In addition,
we appreciate that the various parties of interest, the bank
lenders, the noteholders, the unsecured creditors committee and
the Steelworkers, were able to reach an agreement that all could
support to the court."
The purchase will transfer Republic's assets to a new company that
keeps the Republic Engineered Products name and other assets,
including the plants in Canton, Lorain and Massillon, Ohio;
Lackawanna, N.Y.; and Gary, Ind. The new company is also taking
steps to acquire Republic Technologies International's plant in
Hamilton, Ont., from RTI's bankruptcy estate.
Republic's labor agreement with the United Steelworkers union will
remain in place.
"Republic is North America's leading producer of special bar
quality steel, making it a jewel of the industry," said Paul Leff,
senior managing director at Perry Strategic Capital. "We believe
strongly that Republic will emerge as a thriving company, and are
committed to its management, its workforce, and its bright future.
We look forward to completing the purchase by the end of the
year."
The deal is structured to include $102.5 million in cash, $21
million in new notes to be issued to the bank group, the
assumption of $80 million in existing notes due 2009, and the
assumption of $74 million in other liabilities, including a $5
million loan from the State of Ohio and various other obligations.
As part of the agreement, the $80 million in existing notes are
callable by Perry at 75% on June 30, 2004, at 77.5% on
September 30, 2004, and at par value after that time.
Perry Strategic Capital is the private equity arm of Perry
Capital, a private investment firm formed in 1988 to focus on
alternative investments. Perry manages more than $5 billion in
assets, including publicly traded equity and debt securities,
private equity, and real estate. The firm manages dedicated
industry-focused portfolios and seeks to develop strong
relationships with management of companies in which it invests.
Perry employs more than 75 professionals and support staff at
offices in New York and London.
Republic Engineered Products LLC is North America's leading
supplier of special bar quality (SBQ) steel, a highly engineered
product used in axles, drive trains, suspensions and other
critical components of automobiles, off-highway vehicles and
industrial equipment. With headquarters in Fairlawn, Ohio, the
company operates steelmaking centers in Canton and Lorain, Ohio,
and value-added rolling and finishing facilities in Canton, Lorain
and Massillon, Ohio; Lackawanna, N.Y.; and Gary, Ind., Republic
employs more than 2,300 people.
RURAL/METRO CORP: Appoints Robert Wilson to Board of Directors
--------------------------------------------------------------
Rural/Metro Corporation (Nasdaq:RURL) announced the appointment of
Robert E. Wilson to its Board of Directors.
Wilson, whose experience in public accounting spans more than
three decades, also has joined the Board's Audit Committee. The
Board has been expanded to eight members.
Cor Clement, Chairman of the Board, said, "Bob brings a long and
diverse career in audit and assurance experience as well as
valuable knowledge in SEC reporting matters. We look forward to
his involvement and contributions as a member of our Board and
Audit Committee and believe he will be an important asset to our
company and its stockholders."
Wilson was employed with Arthur Andersen LLP from 1972 to 2001,
becoming a partner in 1986. He also served as a member of the
firm's national healthcare industry business turnaround practice.
Since September 2001, he has periodically provided commercial
litigation and financial due diligence consultation services
through FTI Consulting Inc., a national consulting firm.
Wilson holds a Bachelor's Degree in business administration from
the University of Washington and a Master's of Business
Administration from California State University-Los Angeles. He is
a Certified Public Accountant in the state of Washington.
Rural/Metro Corporation provides emergency and non-emergency
medical transportation, fire protection, and other safety services
in 24 states and more than 400 communities throughout the United
States. For more information, visit the company's Web site at
http://www.ruralmetro.com/
At June 30, 2003, Rural/Metro Corp.'s balance sheet shows a total
shareholders' equity deficit of about $209 million.
SAFETY-KLEEN CORP: Resolves Admin Claim Dispute with Cendian
------------------------------------------------------------
Cendian Corporation asks Judge Walsh to compel the Safety-Kleen
Debtors to pay its administrative claim for $4,335,319, plus
additional amounts due or subsequently becoming due.
Christopher D. Loizides, Esq., in Wilmington, Delaware, tells the
Court that Safety-Kleen entered into agreements with Cendian by
which Cendian would transport and handle the Debtors' chemicals
and waste materials, including waste originating from the Debtors'
customers. To do that, Cendian plans, procures and manages the
logistics and transportation services necessary to transport
chemicals and hazardous waste materials. Under the Agreement,
Cendian is entitled to an administrative claim for the amounts
due. Currently, Safety-Kleen owes Cendian $4,335,319. Cendian
wants the sum paid immediately.
Parties Stipulate
The Safety-Kleen Debtors dispute the Claim amount. The Debtors
believe that they have advanced payments to Cendian. To settle
the matter, the parties stipulate and agree that the Debtors have
paid more than $2,600,000 of the Cendian Claim. The parties agree
to continue their efforts to reconcile the invoices making up the
balance of the Claim. The parties agree that any formal response
to the request can be delayed until January 15, 2004. (Safety-
Kleen Bankruptcy News, Issue No. 70; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
SALTON SEA: SCE's Rating Prompt S&P to Up Debt Rating to BB+
------------------------------------------------------------
Standard & Poor's Ratings Services raised its rating on Salton Sea
Funding Corp.'s $592 million senior secured bonds series B, C, E,
and F to 'BB+' from 'BB'.
The rating action follows the rating upgrade on Dec. 3, 2003 of
primary offtaker Southern California Edison Co.,
(SCE; BBB/Stable/A-2) to 'BBB' from 'BB' and Standard & Poor's
full review of the project.
The outlook is stable.
"The ratings stability reflects our expectation of continued
stable operations and reasonably low break-even prices during the
critical period of 2007 to 2010," said Standard & Poor's credit
analyst Scott Taylor.
"Further increases in operating expenses or deteriorating
operational performance could lead to a lower rating. However,
continued strong operations coupled with greater certainty in
energy pricing in 2007 through 2010 could lead to a higher
rating," added Mr. Taylor.
Salton Sea is a project-funding vehicle that financed the purchase
and construction of a portfolio of geothermal power projects in
Southern California. The total capacity of the projects is about
327 net MW.
Salton Sea Funding is a wholly owned subsidiary of Magma Power
Co., which, in turn, is wholly owned by CE Generation LLC, which
is owned 50% by MidAmerican Energy Holdings Co. and 50% by
TransAlta Corp.
SCARBOROUGH-ST JAMES: Case Summary & 10 Largest Unsec. Creditors
----------------------------------------------------------------
Lead Debtor: Scarborough-St James Corporation
150 East 57th Street
New York, New York 10022
Bankruptcy Case No.: 03-17966
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
First Richborough Realty Corporation 03-17967
Type of Business: The Debtor is engaged in the Real Estate
business.
Chapter 11 Petition Date: December 17, 2003
Court: Southern District of New York (Manhattan)
Judge: Cornelius Blackshear
Debtors' Counsel: Michael T. Conway, Esq.
Lazare Potter Giacovas & Kranjac, LLP
950 Third Avenue
New York, New York 10022
Tel: 212-758-9300
Fax: 212-888-0919
Total Assets: $10 Million to $50 Million
Total Debts: $10 Million to $50 Million
Debtors' 10 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Jacobson-Stewart Richmond Promissory Note Unknown
Properties Partnership
Richmond Realty Limited Rent Unknown
Partnership
Beeding Legal Group, P.C. Legal Fees Unknown
K-Mart Corporation Security Deposit Unknown
Arbor Drugs, Inc. Security Deposit Unknown
Susan's Hallmark Security Deposit Unknown
Grondin's Hair Centers Security Deposit Unknown
Richmond Interiors Security Deposit Unknown
Circle G. Leather Security Deposit Unknown
Radio Shack Security Deposit Unknown
SCOTTISH RE GROUP: Will Host Investor Day on January 14 in NYC
--------------------------------------------------------------
Scottish Re Group Limited (NYSE:SCT) will host an Investor Day on
Wednesday, January 14, 2004 in New York City.
The Company will present an informative series of presentations
regarding its business for current and prospective shareholders
and research analysts. In addition, this event will allow the
participants to meet many of the members of the management team.
The event will be held at the Four Seasons Hotel, 57 East 57th
Street, New York, commencing at Noon EST and running through 5:00
PM. Space is limited, so interested parties are invited to confirm
attendance by sending an email to investors@scottishre.com. In
addition, a simultaneous Web cast, as well as an on-demand replay,
of the conference will be available at the Company's Web site at
http://www.scottishre.com/investorday/commencing at 1:00 PM on
January 14, 2004.
Scottish Re Group Limited is a global life reinsurance specialist.
Scottish Re Group Limited has operating companies in Bermuda,
Charlotte, North Carolina, Dublin, Ireland, Grand Cayman, and
Windsor, England. Its flagship operating subsidiaries include
Scottish Annuity & Life Insurance Company (Cayman) Ltd. and
Scottish Re (U.S.), Inc., which are rated A- (excellent) by A.M.
Best, A (strong) by Fitch Ratings, A3 (good) by Moody's and A-
(strong) by Standard & Poor's, and Scottish Re Limited, which is
rated A- (excellent) by A.M. Best, A (strong) by Fitch Ratings and
A- (strong) by Standard & Poor's. Additional information about
Scottish Re Group Limited can be obtained from its Web site at
http://www.scottishre.com/
On Dec. 10, 2003, Standard & Poor's Ratings Services assigned its
'BB' preferred stock rating to the $115 million of hybrid capital
units (mandatory convertible preferred stock) being issued by
Scottish Re Group Ltd. (NYSE:SCT).
SIDA OF HAWAII INC: Voluntary Chapter 7 Case Summary
----------------------------------------------------
Debtor: Sida of Hawaii, Inc.
P.O. Box 29420
Honolulu, Hawaii 96820
Bankruptcy Case No.: 03-03625
Type of Business: Taxi services
Chapter 7 Petition Date: December 15, 2003
Court: District of Hawaii (Honolulu)
Judge: Robert J. Faris
Debtor's Counsel: William L. Goo, Esq.
Suzuki & Goo
1188 Bishop Street, Suite 1805
Honolulu, HI 96813
Tel: 808-521-2661
Fax: 808-521-2663
Estimated Assets: $0 to $50,000
Estimated Debts: $1 Million to $10 Million
SK GLOBAL: Sovereign Wants SK Corp. Directors Ousted in March
-------------------------------------------------------------
On November 20, 2003, Sovereign Asset Management Ltd. sought
minority shareholders' support, to vote out some of SK Corp.'s
directors in March. Sovereign asserts that SK Corp.'s three
directors, who were convicted of fraud charges, should at least
resign.
Bloomberg News' Young-Sam Cho says Sovereign may also increase
its stake in SK Corp. from the current 14.99%. To recall, SK
Corp. shares tripled in the past six months on speculation
that foreign shareholders may buy more stock to win the vote in
March, when six out of 10 board seats come up for election.
Sovereign contends that the SK Corp.'s future is in the hands of
Korean minority shareholders, and that the March shareholders'
meeting is the appropriate time for change. (SK Global Bankruptcy
News, Issue No. 9; Bankruptcy Creditors' Service, Inc., 215/945-
7000)
SOLUTIA: S&P Drops Credit Rating to D After Chapter 11 Filing
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on Solutia Inc. to 'D' from 'CCC,' citing the company's
Chapter 11 filing. At the same time, Standard & Poor's raised its
rating on the 6.25% notes issued by Solutia Europe S.A./N.V. to
'CCC+' from 'CCC-' and placed the notes on CreditWatch with
positive implications.
St. Louis, Missouri-based Solutia is a manufacturer and marketer
of industrial and specialty chemical products, including nylon
fibers and polymers, and has about $1 billion of debt (excluding
the capitalization of operating leases).
"The downgrade reflects Solutia's decision to file for
reorganization under Chapter 11 of the U.S. Bankruptcy Code," said
Standard & Poor's credit analyst Peter Kelly. The company
indicates that it has received commitments for up to $500 million
in debtor-in-possession financing, subject to approval by the
bankruptcy court. The upgrade of the Solutia Europe notes reflects
the recent elimination of a cross default provision and the
assumption that Solutia Europe will not be pulled into the
bankruptcy proceedings. Up until recently, the rating on these
notes had reflected the default risk of the parent company given
the cross default provision. Standard & Poor's will follow
developments with regards to these notes to determine if their
rating should be raised further.
Solutia was created as a spin-off of Monsanto Co.'s (A/CreditWatch
Neg/A2) industrial chemicals businesses in 1997. Major businesses
include nylon fibers and polymers, performance films (including
plastic interlayer products), and assorted specialty chemical
products. The business profile reflects a dependence on the
commodity nylon business, which has yet to recover from difficult
market conditions. Earnings and cash flow have been constrained by
high and more volatile raw material and energy costs and generally
sluggish global economic conditions.
SOLUTIA INC: Fitch Yanks Sr. Sec. & Unsecured Ratings to DDD/D
--------------------------------------------------------------
Fitch Ratings has downgraded Solutia Inc.'s senior secured credit
facility rating to 'DDD' from 'B-' and the ratings on the senior
secured and senior unsecured notes to 'D' from 'CCC'. The senior
secured note rating applies to the 11.25% notes and the Euro
Notes. The senior unsecured note rating applies to the 6.72% and
7.375% debentures. The Negative Rating Watch has been removed.
The ratings downgrade reflects Solutia's recent Chapter 11
bankruptcy filing and continued weak operating performance. The
senior secured credit facility rating is two notches above the
senior secured and unsecured notes rating, reflecting the credit
facility's collateral and potential recovery position. Fitch
expects the existing credit facility to be fully repaid by debtor-
in-possession financing pending bankruptcy court approval. The
Euro Note holders have agreed to modify their agreement with
Solutia to eliminate cross-default provisions and extend maturity
to 2008. The required percentage of Euro Note holders adopted
resolutions which eliminate through Jan. 30, 2004 the ability to
accelerate and default the Euro Notes due to Chapter 11 filing by
Solutia; the second step of this Euro Note agreement will be
implemented in a second meeting of Euro Note holders no later than
Jan. 29, 2004. Fitch believes the amended Euro Notes constitute
distressed debt exchange since Solutia negotiated the amendment to
avoid default and the note holders will experience delayed
principal recovery. Although polychlorinated biphenyl-related
litigation had been recently settled, Solutia continues to
struggle through poor profitability during the cyclical downturn.
For the trailing twelve-month period ended Sept. 30, 2003,
EBITDA/revenue was 5.8%, EBITDA-to-interest incurred was 1.4
times, and total debt-to-EBITDA was 7.4x.
Solutia is a specialty chemical company with $2.2 billion in sales
in 2002. The company produces interlayer and window films, and
nylon plastics and fibers for domestic and international markets.
Some of Solutia's products are name brands, such as Saflex plastic
interlayer for windows and Wear-Dated carpet fibers. End-use
markets for Solutia's products include construction and home
furnishings, automotive, aviation/transportation, electronics, and
pharmaceuticals.
SOLUTIA INC: Monsanto Discloses Exposure to Company's Bankruptcy
----------------------------------------------------------------
Monsanto Chairman, President and Chief Executive Officer Hugh
Grant said that the company is fully prepared to manage potential
liabilities that may come to it as a result of Solutia Inc.'s
filing for reorganization under Chapter 11 bankruptcy protection.
"Given our contractual obligations to Pharmacia related to
Solutia, we have been closely monitoring this situation. We are
familiar with the major areas of potential liability, and we've
developed plans to deal with these possibilities," Grant said.
"We remain focused on our primary business -- agriculture -- and
on running our business to maximize value for our customers and
shareowners."
Solutia was formed in September 1997 when Pharmacia (now a
subsidiary of Pfizer), then known as the former Monsanto Company,
spun it off as an independent entity. When present-day Monsanto
was established in 2000, it agreed to indemnify Pharmacia for
certain liabilities assumed by Solutia at their spinoff to the
extent that Solutia fails to pay, perform or discharge those
liabilities.
"We recognize our indemnification obligations; however, we do not
intend to take on any obligations that are not our responsibility
during this process," said Terry Crews, Monsanto's chief financial
officer. "We will make decisions at the appropriate time that are
in the best interest of our shareowners, employees, customers and
bondholders throughout these proceedings."
The major categories of potential liability stemming from
Solutia's decision to file for bankruptcy protection include:
certain post-retirement benefit costs, environmental remediation
expenses, and costs associated with litigation.
Monsanto Company, which was created in 2000, is a leading global
provider of technology-based solutions and agricultural products
that improve farm productivity and food quality.
MONSANTO BACKGROUNDER:
Major Categories of Potential Liability
Regarding Solutia's Chapter 11 Filing
As described in this release, the major categories of potential
liability stemming from Solutia's decision to file for bankruptcy
protection include: certain post-retirement benefit costs,
environmental remediation expenses, and costs associated with
litigation. The financial estimates in this backgrounder were
referenced in or derived from Solutia's public filings. Monsanto
has not performed an independent assessment of these Solutia
estimates.
Potential Post-Retirement Benefit Costs: Solutia has publicly
disclosed that as of Sept. 30, 2003, it had recorded estimated
liabilities of approximately $475 million for post-retirement
liabilities attributable to the provision of benefits (including
retiree health care, life insurance and disability benefits)
relating to pre-spin retirees and disabled individuals. Solutia
has also publicly disclosed that it has incurred an average cash
cost of roughly $60 million per year to provide these benefits.
Solutia is legally required to continue to honor its post-
retirement benefit responsibilities unless and until a court rules
otherwise.
Monsanto believes it has no liability with respect to Solutia's
tax qualified pension plan. That plan relates to Solutia's post-
retirement obligation and was fully funded at the time of the 1997
spinoff.
Potential Environmental Remediation Expenses: Solutia has
publicly disclosed that in 2002 it spent $26 million to perform
environmental remediation activities. Solutia has also disclosed
that it expects to spend $30 million to $40 million annually in
the future for environmental remediation. During its Chapter 11
proceedings, Solutia -- as an owner and operator of many plants
with ongoing remediation activities -- retains this cleanup
responsibility and would be required to continue with this work,
and all other legally mandated environmental activity, unless and
until a court modifies Solutia's responsibility.
Potential Costs Associated with Litigation: The bankruptcy court
will automatically stay all litigation to which Solutia is a named
party, and Monsanto anticipates that the court will decide quickly
whether and to what degree to extend that stay to cases Solutia is
defending in which Pharmacia or former Monsanto are the named
parties. At this time, it is unclear whether or to what extent
Monsanto or Pharmacia will incur any additional litigation costs
during Solutia's reorganization, but Monsanto believes any such
costs would be manageable.
SUMMITVILLE TILES: Files for Chapter 11 Protection in Ohio
----------------------------------------------------------
On December 12, 2003, Summitville Tiles, one of the last remaining
family-owned producers of ceramic tile in the U.S., filed for
Chapter 11 protection in the U.S. Bankruptcy Court for the
Northern District of Ohio (in Youngstown). In its petition, the
Company reported assets of $15 million, and liabilities totaling
about $24 million.
According to a report by Knight-Ridder/Tribune Business News,
Judge William Bodoh approved the Company's 'first day' motions,
allowing the Company to continue paying employees' wages and
benefits, utility bills and other business expenses to customers,
shippers and warehousers.
Based on state Route 644 in Summitville, the Company manufactures
tile and installation products including a complete line of
grouts, mortars, epoxies, furan, latex, water proofing and tile
care products. It owns and operates a tile manufacturing plant in
Pekin, Ohio, and has other facilities in Summitville, Minerva, and
Morganton, N.C.
Summitville Tile employs 255 hourly and salaried workers, the
report said.
SUMMITVILLE TILES: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Summitville Tiles, Inc.
15364 State Route 644
Summitville, Ohio 43962
Bankruptcy Case No.: 03-46341
Type of Business: Manufacturer of tile and installation products
including a complete line of grouts, mortars,
epoxies, furan, latex, water proofing and tile
care products.
Chapter 11 Petition Date: December 12, 2003
Court: Northern District of Ohio (Youngstown)
Judge: William T. Bodoh
Debtor's Counsels: Matthew A Salerno, Esq.
Shawn M Riley, Esq.
McDonald, Hopkins, Burke & Haber Co LPA
2100 Bank One Center
600 Superior Avenue, East
Cleveland, OH 44114
Tel: 216-348-5400
Estimated Assets: $10 Million to $50 Million
Estimated Debts: $10 Million to $50 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Interstate Gas Supply Supplier of $273,022
5020 Bradenlon Avenue natural gas
Dublin, OH 43017
Sebring Container Corp. Supplier of cardboard $140,131
Saloni Ceramica Supplier of ceramic tile $135,798
Prologis Trust Landlord for Orlando and $129,701
Tampa Facilities
Apavisa Supplier of ceramic tile $124,473
Ohio Attorney General Workers' Compensation $113,960
Premiums
Maryland Wire Belts Belt for Fast Fire Kiln $110,092
Casa Dolce Casa Supplier of ceramic tile $104,277
Industrial Properties Landlord $102,783
Brown Printing Advertising $101,234
National Starch and Chemical Supplier of materials $100,113
Co.
Burke County Tax Collector Taxes-Morganton facility $93,236
Columbiana Co. Treasurer Taxes-Summitville $86,321
facility
Mapei Corporation Supplier of $85,427
related products
Ferro Corporation Supplier of materials $78,810
Industrial Properties Landlord $77,812
Palmer Holland, Inc. Supplier of materials $77,398
AC Products Company Supplier of $75,592
Related Products
Carroll County Treasurer Taxes-Minerva facility $68,994
R&L Carriers Transportation $67,742
SUNRISE SR. LIVING: Stronger Profile Spurs S&P to Up Ratings
------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on assisted living and senior housing facility operator
Sunrise Senior Living Inc., to 'BB-' from 'B+', and the
subordinated debt rating on the company to 'B' from 'B-'. The
outlook is stable. Sunrise, based in McLean, Virginia, had about
$263 million of debt outstanding as of Sept. 30, 2003.
The company's upgrade reflects a stronger business profile
highlighted by a larger, more diversified portfolio and greater
revenue stability and predictability due to the company's now-
predominant management contract business. The upgrade also
reflects the company's improved financial profile after repaying
debt with the proceeds of asset sales.
"The speculative-grade ratings on Sunrise Senior Living Inc.
reflect the risks associated with the company's evolution to a
business model focusing more on senior living property management,
rather than ownership," said Standard & Poor's credit analyst
David Peknay. "The ratings also reflect the challenges and risks
of an active property development program, despite the fact that
the properties involved are eventually owned by third parties or
joint venture partnerships."
As part of its strategy, Sunrise has sold a large amount of its
previously owned real estate, entering into long-term management
contracts with a diverse group of buyers for the properties, and
adding to its portfolio by establishing management contracts with
additional senior living properties. However, Sunrise is expected
to continue to maintain a modest level of owned properties
(currently 37), leased properties (29), and minority interests in
a growing number of joint ventures (currently 117). The company's
property portfolio growth was boosted by the acquisition in early
2003 of contracts to manage the former Marriott Senior Living
business. A separate, unrelated company acquired the real estate
of these properties. This transaction also boosted to 29 Sunrise's
portfolio of leased facilities and considerably increased its
lease obligations.
Sunrise's revenues for 2003 have doubled from 2002 as a result of
the Marriott acquisition and other additions to its property
management portfolio. The company used much of the proceeds from
its asset sales to repay debt.
TUPPERWARE: S&P Cuts Corp. Credit Rating to Speculative Level
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term corporate
credit and senior unsecured debt ratings on consumer products
direct seller Tupperware Corp. and affiliates to 'BB+' from
'BBB-', and lowered the short-term corporate credit and commercial
paper ratings on the company to 'B' from 'A-3'. The ratings were
removed from CreditWatch, where they were placed Sept. 25, 2003.
The outlook is negative.
Total debt outstanding at Sept. 27, 2003, was about $305 million.
The downgrade reflects Tupperware's weakened operating and
financial performance and Standard & Poor's expectation that the
company will continue to struggle as it attempts to restore its
core food storage party business, primarily in the U.S. While
Tupperware has announced plans to deal with its U.S. operational
shortfalls through a restructuring plan, management will be
challenged to improve profit margins while continuing to expand
into alternative distribution channels.
"The ratings reflect the risks of direct-sales distribution,
Tupperware's participation in the highly competitive cosmetics
industry, and its weakened financial profile," said Standard &
Poor's credit analyst Jean C. Stout. "These factors are somewhat
mitigated by the company's well-known brand name and premium
product position within the mature molded-plastic storage
category."
Tupperware is a global direct seller of consumer food storage,
preparation, and serving items. The company also participates in
the cosmetics industry through its BeautiControl operations, a
manufacturer and direct seller of skin care, cosmetics, and
related products that Tupperware acquired in October 2000.
Despite the company's past efforts, primarily in the U.S., to
diversify its distribution channels into the Internet, kiosks,
direct mail, and television shopping, Tupperware's core food
storage party business continues to represent a substantial amount
of its revenues. In addition, the focus on alternate channels of
distribution has significantly affected its core food storage
party business in the U.S. during 2003. Moreover, the company's
participation in the rapidly changing, lower margin, and
competitive cosmetics industry has increased Tupperware's already
below-average business risk. Thus, the company's credit protection
measures need to be above those for the rating median.
UNITEDGLOBALCOM: Exchange Offer for UGC Europe Shares Approved
--------------------------------------------------------------
UnitedGlobalCom, Inc. (Nasdaq: UCOMA) announced that in a special
meeting held Wednesday, stockholders voted to approve the issuance
of United's Class A common stock in its exchange offer for all of
the outstanding publicly held shares of UGC Europe, Inc. (Nasdaq:
UGCE). Accordingly, the condition to the exchange offer requiring
such stockholder approval has been satisfied.
United's registration statement on Form S-4 relating to the
exchange offer was declared effective by the Securities and
Exchange Commission on Friday, December 12, 2003. Accordingly,
the condition to the exchange offer requiring such registration
statement to be effective has been satisfied.
The exchange offer remains subject to the other conditions
included in the offer described in the offering documents filed
with the SEC and mailed to the stockholders of UGC Europe. The
exchange offer is scheduled to expire at 5:00 p.m., New York City
time, on Thursday, December 18, 2003.
Notice For UGC Europe Stockholders
United has filed with the SEC an amendment to its Registration
Statement on Form S-4 (File No. 333-109496), and Europe
Acquisition, Inc., its wholly-owned subsidiary which is offering
to exchange the shares of UGC Europe, has filed with the SEC an
amendment to its Schedule TO. The Registration Statement was
declared effective by the SEC on December 12, 2003. UGC EUROPE
STOCKHOLDERS AND OTHER INTERESTED PARTIES ARE URGED TO READ THESE
DOCUMENTS AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC BECAUSE
THEY CONTAIN IMPORTANT INFORMATION. Materials filed with the SEC
are available electronically without charge at an Internet site
maintained by the SEC. The address of that site is
http://www.sec.gov/
Documents filed with the SEC may be obtained from United without
charge by directing a request to Richard Abbott, Vice President of
Finance, UnitedGlobalCom, Inc., 4643 S. Ulster Street, Suite 1300,
Denver, CO 80237.
UnitedGlobalCom -- whose June 30, 2003 balance sheet shows a total
shareholders' equity deficit of about $2.7 billion -- is the
largest international broadband communications provider of video,
voice, and Internet services with operations in numerous
countries. Based on the Company's operating statistics at June 30,
2003, United's networks reached approximately 12.6 million homes
passed and 8.9 million RGUs, including approximately 7.4 million
video subscribers, 704,200 voice subscribers, and 825,600 high
speed Internet access subscribers. United's major operating
subsidiaries include UGC Europe, a leading pan-European
broadband communications company; VTR GlobalCom, the largest
broadband communications provider in Chile; as well as several
strategic ventures in video and broadband businesses around the
world.
Visit http://www.unitedglobal.com/for further information about
the company.
US AIR: Court Allows Two Claims for Distribution Reserve Purpose
----------------------------------------------------------------
At the Reorganized US Airways Debtors' request, the U.S.
Bankruptcy Court allow two claims for purposes of the Distribution
Reserve, in these amounts:
Claimant Claim No. Amount
-------- --------- ------
Allegheny County Airport Authority 5486 $211,000,000
Rolls Royce Canada Limited 4322 106,363,896
------------
Total 317,363,896
(US Airways Bankruptcy News, Issue No. 44; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
US TIMBERLANDS: Interest Payment Spurs S&P to Up Ratings to CCC
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit and
senior unsecured debt ratings on U.S. Timberlands Klamath Falls
LLC to 'CCC' from 'CC'. The outlook is negative.
"The upgrade was prompted by the company's payment on Dec. 15 of
interest on its $225 million 9.625% senior unsecured notes due
2007, within the 30-day grace period allowed under the bond's
indenture," said Standard & Poor's credit analyst Dominick
D'Ascoli.
The ratings reflect the significant deterioration in the volume of
merchantable timber on U.S. Timberlands Klamath Falls LLC's
properties during the past few years. This has occurred as a
result of aggressive harvest levels and transfers of property and
cutting rights to an affiliate, U.S. Timberlands Yakima LLC.
The company's principal operations consist of growing and
harvesting timber and selling logs and standing timber to third-
party wood processors. Log prices have fallen sharply during the
past few years despite a high level of housing construction and
remodeling. Price weakness can be traced to customer
consolidation, technological improvements in sawmilling resulting
in higher log yields, and an increase in low-cost imported logs
and wood products. Consequently, in order to generate cash flow to
meet the interest expense on its heavy debt load, the company has
needed to harvest at levels well above the timber growth rate and
its original harvest plans.
USG CORP: Creditors' Committee Wants to Recuse Judge Wolin
----------------------------------------------------------
The Official Committee of Unsecured Creditors of the USG
Corporation Debtors believes that a substantial appearance of
impropriety exists because the District Court has been taking ex
parte advice from Court-appointed consultants who are elsewhere
advocating a partisan position directly at odds with their
purported role in the Debtors' cases as neutrals. Consultants
David R. Gross and C. Judson Hamlin also engaged in ex parte
communications with various constituencies in the Debtors' cases
and are in a position to communicate their extra-judicial
knowledge and opinions of the facts to the Court ex parte.
Michael R. Lastowski, Esq., at Duane Morris LLP, in Wilmington,
Delaware, contends that the legal disputes in the various
asbestos bankruptcies, including the G-I Holdings bankruptcy
case, in which Messrs. Gross and Hamlin are partisan advocates,
involve the same legal and factual issues that are presented in
the Debtors' cases. These issues include:
(1) the establishment of a bar date for future claimants;
(2) the manner in which future claims are estimated for plan
confirmation purposes;
(3) whether individuals with only pleural changes have been
harmed;
(4) what levels of exposure are necessary to establish an
asbestos-induced disease;
(5) whether and to what extent future asbestos claims or
"demands" are "claims" for the purposes of the Bankruptcy
Code;
(6) the applicability of the discharge to future claims; and
(7) the role of the future claims representative.
The valuation of a debtor's asbestos-related liability is a
"fundamental" issue that lies at the heart of the asbestos
bankruptcies.
Mr. Lastowski says that many of the future claimants whom Messrs.
Gross and Hamlin represent in G-I Holdings are also claimants in
the Debtors' cases -- and this is most troubling. Accordingly,
there is no other conclusion but that Messrs. Gross and Hamlin
and their G-I Holdings constituency have material interests in
the outcome of the Debtors' cases in terms of:
* the legal precedents the Court has established and will
continue to establish in the future;
* the testimony of expert witnesses and the development of the
factual record; and
* the relief that the Court may award future tort claimants.
According to Mr. Lastowski, it cannot be disputed that Messrs.
Gross and Hamlin have actively and materially participated as
"consultants" in the Debtors' asbestos cases and in four other
cases. Messrs. Gross and Hamlin's time records disclose that
they have spent hundreds of hours consulting privately and ex
parte with the Court and other parties to the bankruptcy cases,
performed legal and factual research for the Court, attended
hearings and assisted the Court in preparing for hearings, met
with party representatives, and engaged in other tasks that may
have a material impact on the manner in which the cases are
administered and the results that will be achieved. Messrs.
Gross and Hamlin had been paid more than $260,000 for their
services in the Court through early 2003, the last day that time
records are available.
In this regard, the Committee asks the Court to recuse Judge
Wolin from participating in any proceedings in connection with
the Debtors' Chapter 11 cases, pursuant to Section 455 of the
Judicial Code and Canon 3C of the Code of Conduct for United
States Judges.
Messrs. Gross and Hamlin's dual roles in the Debtors' cases and
in the G-I Holdings' case created potential and actual conflicts
of interest and, at the very least, the appearance of impropriety
or bias. Mr. Lastowski explains that Messrs. Gross and Hamlin
have participated actively and materially in the Debtors' cases
for nearly two years and their removal alone will not clear the
taint of partiality that now exists. Under the plain terms of
Section 455, Judge Wolin's immediate recusal is required.
It matters not whether, in fact, the District Court's
impartiality actually has been affected in this case, Mr.
Lastowski says. Rather, what matters is, as a result of Messrs.
Gross and Hamlin's dual and conflicting roles, a reasonable
person might perceive partiality or bias to exist. Mr. Lastowski
maintains that it cannot be rationally disputed that the mere
fact of their incompatible positions in their dual roles creates
an "appearance" of impropriety. The mere appearance of the
conflict alone is grounds for disqualification. (USG Bankruptcy
News, Issue No. 57; Bankruptcy Creditors' Service, Inc., 215/945-
7000)
WEIRTON STEEL: Bankr. Court Adjourns Plan Confirmation Hearing
--------------------------------------------------------------
The U.S. Bankruptcy Court, overseeing Weirton Steel's chapter 11
proceedings, adjourns the confirmation hearing on the Debtor's
First Amended Plan of Reorganization dated November 13, 2003 to a
future date to be determined.
A new date for the Confirmation Hearing and the solicitation
procedures with respect to the First Amended Plan will be
established at the Debtor's request.
The deadlines for creditors and parties-in-interest to vote on or
object to the First Amended Plan are extended to the future dates
as may be established by the Debtor. (Weirton Bankruptcy News,
Issue No. 16; Bankruptcy Creditors' Service, Inc., 215/945-7000)
WESTERN GAS RESOURCES: Will Redeem 800K Conv. Preferred Shares
--------------------------------------------------------------
Western Gas Resources, Inc. (NYSE: WGR) has called for redemption
of 800,000 shares of its $2.625 Cumulative Convertible Preferred
Stock, $0.10 par value, less any shares called for redemption
which have been converted by the holders thereof prior to the
Redemption Date.
The redemption date of the Preferred Stock will be January 21,
2004, and the redemption price will be $50.2625 per share of
Preferred Stock, plus accrued and unpaid dividends, up to, but
excluding, the Redemption Date (i.e., the total redemption price
will be $50.7438 per share of Preferred Stock). The partial
redemption of the Preferred Stock is being effected pursuant to
Section 5 of the Certificate of Designation of the Preferred
Stock.
Holders of Preferred Stock being redeemed (apart from any other
disposition of such stock) may elect to convert their shares of
Preferred Stock into whole shares of common stock, par value $.10
per share, together with the Series A Junior Participating
Preferred Stock purchase rights associated therewith prior to the
close of business on January 20, 2004, at a conversion price per
share of Common Stock of $39.75, surrender the portion of
Preferred Stock called for redemption at the total redemption
price of $50.7438 per share, or convert a portion and redeem a
portion of the Preferred Stock called for redemption.
The Company completed its previously announced redemption of
700,000 shares of its $2.625 Cumulative Convertible Preferred
Stock on Thursday, December 11, 2003. Of the 700,000 shares of
Preferred Stock called for redemption, holders electively
converted 676,344 shares prior to the redemption date and Western
redeemed 23,656 shares on the redemption date. Western has issued
approximately 850,700 shares of its Common Stock for the 676,344
shares of Preferred Stock tendered for conversion and has paid the
amount of approximately $1.2 million for the shares of Preferred
Stock redeemed.
Following the redemption previously completed on December 11,
2003, and as of December 16, 2003, a total of 2,060,000 shares of
the Preferred Stock were outstanding. Upon redemption or
conversion of the 800,000 shares of Preferred Stock called for
redemption by the Company today, 1,260,000 shares of such
Preferred Stock will remain outstanding. If all holders elect to
convert the entire portion of the Preferred Stock subject to
mandatory redemption rather than being redeemed, the Company as a
result of such conversion would issue approximately 1,006,000
shares of Common Stock. If holders of Preferred Stock do not
elect to convert any of the shares of Preferred Stock subject to
redemption, the total cost to the Company of redeeming the 800,000
of Preferred Stock would be approximately $40.6 million.
The Preferred Stock called for redemption will be redeemed, as to
registered holders, on a pro rata basis, as nearly as practicable.
Holders who hold shares of Preferred Stock through the Depository
Trust Company will be redeemed in accordance with the Depository
Trust Company's random and impartial lottery procedures. On or
before the Redemption Date, the funds necessary for the redemption
of the 800,000 shares of Preferred Stock, less any shares called
for redemption which have been converted by the holders prior to
the Redemption Date, will have been set aside by the Company in
trust for the benefit of the holders thereof. Subject to
applicable escheat laws, any moneys set aside by the Company and
unclaimed at the end of two years from the Redemption Date will
revert to the general funds of the Company, after which reversion
the holders of the shares of the Preferred Stock called for
redemption may look only to the general funds of the Company for
the payment of the Redemption Price.
Shares of Preferred Stock surrendered for conversion into Common
Stock prior to the close of business on the next dividend payment
record date of December 31, 2003 will not be eligible to receive
the dividend payment payable on the corresponding dividend payment
date of February 15, 2004. However, if holders of shares of
Preferred Stock that have been called for redemption were the
holders of record on the December 31, 2003 dividend payment record
date and elect to convert such shares after the December 31, 2003
dividend payment record date but before the Conversion Election
Deadline, such holders will be entitled to receive the regular
dividend payment for the dividend period ending February 15, 2004,
notwithstanding such conversion.
The reported last sale price of the Common Stock on the New York
Stock Exchange on December 16, 2003, was $44.67 per share. As
long as the market price of the Company's Common Stock remains at
or above $40.35 per share, the holders of Preferred Stock who
elect to convert will receive upon conversion Common Stock having
a greater current market value than the amount of cash receivable
upon redemption.
Notwithstanding that any certificates representing the Preferred
Stock called for redemption have not been surrendered for
cancellation, on and after the Redemption Date such Preferred
Stock will no longer be deemed to be outstanding, dividends on
such Preferred Stock will cease to accrue, and all rights of the
holders in respect of such Preferred Stock being redeemed,
including the conversion rights, will cease, except for the right
to receive the Redemption Price, without interest thereon, upon
surrender of the Certificates.
Holders of Preferred Stock need take no action with respect to
their shares of Preferred Stock not being called for redemption.
The notice of redemption and related materials will be mailed to
registered holders of the Preferred Stock called for redemption on
or about December 17, 2003. Shares of the Preferred Stock called
for redemption or conversion are to be surrendered to EquiServe
Trust Company, N.A., as redemption and conversion agent, for
payment of the Redemption Price or conversion into shares of
Common Stock, by mail, by hand or by overnight delivery at the
addresses set forth in the letter of transmittal that will
accompany the notice of redemption. Questions relating to, and
requests for additional copies of, the notice of redemption and
the related materials should be directed to EquiServe Trust
Company, N.A., at 800-736-3001.
Western Gas Resources (Fitch, BB+ Senior Subordinated Debt and BB
Preferred Share Ratings, Stable) is an independent natural gas
explorer, producer, gatherer, processor, transporter and energy
marketer providing a broad range of services to its customers from
the wellhead to the sales delivery point. The Company's producing
properties are located primarily in Wyoming, including the
developing Powder River Basin coal bed methane play, where Western
is a leading acreage holder and producer. The Company also
designs, constructs, owns and operates natural gas gathering,
processing and treating facilities in major gas-producing basins
in the Rocky Mountain, Mid-Continent and West Texas regions of the
United States. For additional Company information, visit
Western's Web site at http://www.westerngas.com/
* New Chubb Insurance Policy Adds Layer of Protection for D&O's
---------------------------------------------------------------
A new insurance policy from the Chubb Group of Insurance Companies
can help protect the personal assets of directors and officers
when their company is unable, unwilling or legally prohibited from
funding indemnification.
Chubb's D&O Elite(SM) is a nonrescindable and noncancelable policy
that offers directors and officers a dedicated limit of liability
that is not shared with the corporate entity. By contrast,
traditional D&O policies offer an aggregate limit that is often
shared between the directors and officers and the company.
This coverage comes at a time when corporate scandals, financial
restatements and bankruptcies have created a litigious D&O
liability environment and financial uncertainty. In some cases,
the financial losses of shareholders exceed the limits of D&O
liability insurance, exposing directors and officers and their
personal assets to litigation.
"Corporate board members are worried about losing their homes and
savings if their companies' directors and officers insurance fails
to protect them from lawsuits," said Anthony S. Galban, a vice
president of Chubb & Son and directors and officers liability
insurance underwriting manager for Chubb. "Chubb's new D&O Elite
policy provides additional peace of mind for directors, officers
and their family members, either as primary coverage or as excess
to a standard D&O policy."
Highlights of Chubb's D&O Elite include:
-- Nonrescindable--Even when misrepresentations are made in the
application, Chubb will not rescind coverage to insured
individuals who did not know the facts that were not truthfully
and accurately disclosed;
-- Noncancelable--The policy will not be canceled by Chubb as long
as the premium is paid;
-- Fully severable--Knowledge possessed by one board member cannot
be imputed to another;
-- Comprehensive coverage--No exclusions for pollution, errors and
omissions, failure to maintain insurance or libel/slander or
defamation;
-- Choice of defense counsel--Policy allows the insured
individuals to choose defense counsel; and
-- Spousal/domestic partner and estates coverage--Protection for
executives, their spouses or domestic partners and heirs or
estates if they are named as co-defendants.
Trends in corporate governance are also fueling the need for this
coverage, Galban said. The 2002 passage of the Sarbanes-Oxley Act
dramatically increased the level of responsibility and
accountability for directors of public companies, especially those
serving on audit committees.
D&O policy limits for bankrupt companies are being seized as an
asset by a debtor's bankruptcy estate and, therefore, are not
available to help protect individual directors and officers. Also,
policies are being increasingly rescinded by insurers who argue
that they have been defrauded by the officers signing the
insurance applications for coverage, thereby leaving some
directors and officers potentially uninsured.
A recent study by Korn/Ferry International and Corporate Board
Member magazine showed that nearly half of the 908 board members
surveyed were concerned about their D&O liability coverage.
According to the study, 48% said they have turned down a board
position because they felt the risk of being sued was too great.
And 49% said D&O insurance was a very important factor in their
decision to join particular boards.
The D&O Elite policy is the latest in a long line of products
offered by Chubb to help protect directors and officers. Chubb
offers D&O liability insurance for public, private and not-for-
profit companies, health care organizations and financial
institutions. Chubb also offers Personal Director's Liability
insurance for individual independent directors who serve on one or
more boards.
The member insurers of the Chubb Group of Insurance Companies form
a multi-billion dollar organization providing property and
casualty insurance for personal and commercial customers worldwide
through 8,000 independent agents and brokers. Chubb's global
network includes branches and affiliates in North America, Europe,
Latin America, Asia and Australia.
* BOOK REVIEW: Landmarks in Medicine - Laity Lectures
of the New York Academy of Medicine
-----------------------------------------------------
Introduction by James Alexander Miller, M.D.
Publisher: Beard Books
Softcover: 355 pages
List Price: $34.95
Review by Henry Berry
Order your own personal copy today at
http://www.amazon.com/exec/obidos/ASIN/1587980770/internetbankrupt
As the subtitle points out, the seven lectures reproduced in this
collection are meant especially for general readers with an
interest in medicine, including its history and the cultural
context it works within. James Miller, president of the New York
Academy of Medicine which sponsored the lectures, states in his
brief "Introduction" that this leading medical organization "has
long recognized as an obligation the interpretation of the
progress of medical knowledge to the public." The lectures
collected here succeed admirably in fulfilling this obligation.
The authors are all doctors, most specialists in different areas
of medicine. Lewis Gregory Cole, whose lecture is "X-ray Within
the Memory of Man," is a consulting roentgenologist at New York's
Fifth Avenue Hospital. Harrison Stanford Martland is a professor
of forensic medicine at New York University College of Medicine.
Many readers will undoubtedly find his lecture titled "Dr. Watson
and Mr. Sherlock Holmes" the most engrossing one. Other doctor-
authors are more involved in academic areas of medicine and
teaching. Reginald Burbank is the chairman of the Section of
Historical and Cultural Medicine at the New York Academy of
Medicine. He lectured on "Medicine and the Progress of
Civilization." Raymond Pearl, whose selection is "The Search for
Longevity," is a professor of biology at Johns Hopkins University.
The authors' high professional standing and involvement in
specialized areas do not get in the way of their aim to speak to a
general audience. They are all skilled writers and effective
communicators. As the titles of some of the lectures noted in the
previous paragraph indicate, the seven selections of "Landmarks in
Medicine" focus on the human-interest side of medicine rather than
the scientific or technological. Even the two with titles which
seem to suggest concern with technical aspects of medicine show
when read to take up the human-interest nature of these topics.
"The Meaning of Medical Research", by Dr. Alfred E. Cohn of the
Rockefeller Institute for Medical Research, is not so much about
methods, techniques, and equipment of medical research, but is
mostly about the interinvolvement of medical research, the
perennial concern of individuals with keeping and recovering good
health, and social concerns and pressures of the day. "The meaning
of medical research must regard these various social and personal
aspects," Cohn writes. In this essay, the doctor does answer the
questions of what is studied in medical research and how it is
studied. And he answers the related question of who does the
research. But his discussion of these questions leads to the final
and most significant question "for what reason does the study take
place?" His answer is "to understand the mechanisms at play and to
be concerned with their alleviation and cure." By "mechanisms,"
Cohn means the natural--i. e., biological--causes of disease and
illness. The lay person may take it for granted that medical
research is always principally concerned with finding cures for
medical problems. But as Cohn goes into in part of his lecture,
competition for government grants or professional or public
notoriety, the lure of novel experimentation, or research mainly
to justify a university or government agency can, and often do,
distract medical researchers and their associates from what Cohn
specifies should be the constant purpose of medical research. Such
purpose gives medicine meaning to humankind.
The second lecture with a title sounding as if it might be about a
technical feature of medicine, "X-ray Within the Memory of Man,"
is a historical perspective on the beginnings of the use of x-ray
in medicine. Its author Lewis Cole was a pioneer in the
development of x-rays in the late 1800s and early1900s. He mostly
talks about the development of x-ray within his memory. In doing
so, he also covers the work of other pioneers, notably William
Konrad Roentgen and Thomas Edison. Roentgen was a "pure scientist"
who discovered x-rays almost by accident and at first resented the
application of his discovery to practical uses such as medical
diagnosis. Edison, the prodigious inventor who was interested only
in the practical application of scientific discoveries, and his
co-worker Clarence Dally enthusiastically investigated the
practical possibilities of the discoveries in the new field of
radiation. Dally became so committed to his work in this field
that he shortly developed an illness and died. At the time, no on
knew about the dangers of prolonged exposure to x-rays. But
sensing some connection between his co-worker's untimely death and
his work with x-rays, Edison stopped his own investigations.
Cole himself became involved in work with x-rays during his
internship at Roosevelt Hospital in New York City in 1898 and
1899. His contribution to this important field was in the area of
interpretation of what were at the time primitive x-rays and
diagnosis of ailments such as tuberculosis and kidney stones. Cole
writes in such a way that the reader feels she or he is right with
him in the steps he makes in improving the use of x-rays. He adds
drama and human interest to the origins of this important medical
technology. The lecture "Dr. Watson and Mr. Sherlock Holmes" uses
the popular mystery stories of Arthur Conan Doyle to explore the
role of medicine in solving crimes, particularly murder. In some
cases, medical tests are required to figure out if a crime was
even committed. This lecture in particular demonstrates the
fundamental role played by medicine in nearly all major areas of
society throughout history. The seven collected lectures have
broad appeal. All of them are informative and educational in an
engaging way. Each is on an always interesting topic taken up by a
professional in the field of medicine obviously skilled in
communicating to the general reader. The authors seem almost mind
readers in picking out the most fascinating aspects of their
subjects which will appeal to the lay readers who are their
intended audience. While meant mainly for lay persons, the
lectures will appeal as well to doctors, nurses, and other
professionals in the field of medicine for putting their work in a
broader social context and bringing more clearly to mind the
interests, as well as the stake, of the public in medicine.
*********
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
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