/raid1/www/Hosts/bankrupt/TCR_Public/040105.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, January 5, 2004, Vol. 8, No. 2
Headlines
ACCLAIM ENTERTAINMENT: Shareholders' Meeting Convening on Jan 14
ACTUANT CORP: Schedules Annual Shareholders' Meeting for Friday
ADELPHIA BUSINESS: Court Confirms 3rd Amended Reorganization Plan
ADELPHIA COMMS: ABIZ, et al., Want to Cap DIP Claims at $1-Mill.
AIR CANADA: Union Members Demand Pension Plan Payments
AMERICAN CELLULAR: Closes Exchange Offer for 10% Senior Notes
AMERICA WEST: Pilots Ratify Three-Year Tentative Labor Agreement
ASCENT ASSURANCE: New Terms for Preferred Stock & CSFB-Held Notes
AURORA FOODS: Honoring and Paying Prepetition Shipping Charges
AVADO BRANDS: Won't Pay Bond Interest Within Grace Periods
AVITAR: Files Pro Forma Financials re Sale of Laboratory Unit
BANC OF AMERICA: Fitch Assigns Low-B Ratings to 2 Note Classes
BEAUTYCO INC: Case Summary & 20 Largest Unsecured Creditors
BROOKFIELD PROPERTIES: Completes C$200-Mil Preferred Share Issue
BULL RUN: Annual Shareholder Meeting Set for Wednesday in Atlanta
BUTLER MANUFACTURING: Sr. Noteholders Agree to Payment Deferrals
CENTIV INC: Falls Short of Nasdaq Minimum Listing Requirements
CHECKMATE STAFFING: Commences Chapter 11 Reorganization Process
CHECKMATE STAFFING: Case Summary & 20 Largest Unsecured Creditors
CLAREMONT TECH.: Completes Acquisition of Safe Cell Tab Inc.
CLEAN DIESEL: Closes Private Placement Sale of 1.28M Common Shares
CONGOLEUM CORP: Case Summary & 21 Largest Unsecured Creditors
COVANTA: Overview of Ogden's Second Joint Liquidating Plan
CROWN CASTLE: Prices Tender Offers for 9% & 9-1/2% Senior Notes
CSK AUTO: 12% Senior Note Tender Offer Will Expire on Jan. 15
DII INDUSTRIES: Will Honor Prepetition Ordinary Course Claims
DOBSON COMMS: Closes Exchange Offer For 8-7/8% Senior Notes
DOBSON COMMS: Repurchases $46 Million of 12-1/4% Sr. Preferreds
DWANGO NORTH AMERICA: Retains Eisner LLP as New Auditor
EL PASO CORP: Completes Petroleum Asset Sales Totaling $156-Mil.
EL PASO: Reports Results of Exchange Offer for Security Units
EL PASO: Enters into Purchase & Sale Agreement with Sunoco Inc.
EL PASO: Sunoco Gets FTC Nod to Acquire Eagle Point Refinery
EMAGIN CORP: Appoints Eisner LLP as New Independent Accountant
EMERCOR BLDG.: Creditors Will Foreclose on Defaulted Debentures
ENRON CORP: Court Okays Uniform PGE Asset Sale Bidding Protocol
EXIDE TECH: Extends Standstill Agreement to March 18, 2004
FEDERAL-MOGUL: Obtains Clearance for $4MM Brighton Property Sale
FFP OPERATING: Committee Signs-Up Whiteford Taylor as Co-Counsel
GAMET TECHNOLOGY: Case Summary & 40 Largest Unsecured Creditors
GARRETT-BECK CORP: Case Summary & 15 Largest Unsecured Creditors
GINGISS: Committee Looks to Mahoney Cohen for Financial Advice
HALSEY PHARMA.: Secures Interim Financing from Debentureholders
HOST MARRIOTT CORP: Intends to Repay $295 Million of Debt
INSCI CORP: 1-For-10 Reverse Stock Split Takes Effect Friday
INSCI CORP: Appoints Five New Directors, Expanding Board to 10
INSITE VISION: Completes ISV-403 Sale to Bausch & Lomb
INTERCOM SYSTEMS: Taps Weinberg to Replace Bederson as Auditor
IT GROUP: Classification & Treatment of Claims Under the Plan
KAISER: Court Grants Fifth Motion to Extend Exclusivity Periods
KINETIC CONCEPTS: Proposes $400-Million Initial Public Offering
LAIDLAW INC: Discloses Greyhound Pension Funding Requirements
LAND O'LAKES: Completes Sale of $175MM of 9% Sr. Secured Notes
LEVEL 3: Closes Midwest Fiber Optic Network Sale to CenturyTel
LUCENT TECHNOLOGIES: 1st-Quarter Conference Call Set for Jan. 21
MAGELLAN: Gets Nod to Make $5.5M Capital Contribution to Premier
MASTR ALTERNATIVE: Fitch Rates Class B-4 Notes at Low-B Level
MERCURY AIR GROUP: Final Fiscal 2003 Net Loss Tops $2.8 Million
MESABA AIRLINES: Pilots Sue Co. for Mishandling of 401(k) Funds
MESABA AVIATION: Expresses Disappointment with ALPA Lawsuit
METROPOLITAN MORTGAGE: Continuing Review of Alternative Options
MICRO INTERCONNECT: Edward Berg Sells Shares & Resigns from Post
MILLER INDUSTRIES: Completes Senior Credit Facility Workout
MIRANT CORP: Asks Court to Enforce Stay on MediaNews Group
NATIONAL EQUIPMENT: Shoos-Away PwC & Brings-In KPMG as Auditor
NATIONAL STEEL: Wants Court to Expunge & Disallow Various Claims
NATIONAL STEEL: Plan Declared Effective on December 19, 2003
NDCHEALTH: Inks Pact with ArcLight to Gain Data Tech. Assets
NET PERCEPTIONS: Board Rejects Obsidian's Exchange Offer
NEW FRONTIER: Case Summary & 20 Largest Unsecured Creditors
NEW WORLD PASTA: Lenders Extend and Amend Existing Credit Pact
NEXSTAR BROADCASTING: Completes Private Placement of 7% Sr. Notes
NEXSTAR BROADCASTING: Completes Purchase of Quorum Broadcast
NORTHWESTERN CORP: SEC Subpoenas Two Units to Produce Documents
NRG ENERGY: South Central & Northeast Debtors Emerge from Chap. 11
OLYMPUS REAL ESTATE: Hastings Hotel Shuts Down without Warning
OVERHILL FARMS: Sept. 28 Balance Sheet Upside-Down by $340,000
OXFORD INDUSTRIES: Look for Fiscal Q2 2004 Results on Wednesday
PACIFIC ENERGY: Amends Credit Agreement, Reducing Interest Rates
PHIBRO ANIMAL: Sells Prince Manufacturing Company to Palladium
PLYMOUTH RUBBER: Falls Below AMEX Continued Listing Standards
PROVIDENT FIN'L: Will Publish Q4 and FY 2003 Results on Jan. 21
REDBACK NETWORKS: Gets Nod to Hire Altman Group as Claims Agent
RELIANT RESOURCES: Fitch Sees No Change to Credit Ratings
RESIDENTIAL ACCREDIT: Fitch Rates Class B-1 & B-2 Notes at BB/B
RESPONSE BIOMEDICAL: Completes Private Placement of 4-Mil. Units
ROBOTIC VISION: Amends Credit Facility & Sam Zell Steps In
ROPER INDUSTRIES: Completes Acquisition of Neptune Technology
SECURITY CAPITAL: Units Sell Assets to Willitts for $5.9 Million
SEITEL INC: Negotiating with Equity Committee for Amended Plan
SHAW GROUP: Firms-Up Purchase of Energy Delivery Services Inc.
SOLUTIA INC: Turns to Gibson Dunn to Prosecute Chapter 11 Cases
SPIEGEL INC: Teleflora LLC Seeks Stay Relief to Collect Payment
SPIEGEL GROUP: Identifies 29 Eddie Bauer Stores to Close in 2004
SPORTS CLUB: Board Approves Amendment to Current Rights Agreement
SUMMIT SECURITIES: Continuing Review of Alternative Strategies
SWIFT & CO.: Will Hold Second-Quarter Conference Call on Jan. 12
TENET HEALTHCARE: Completes Sale of Twelve Oaks Medical Center
UBIQUITEL INC: Updates Financial Guidance for 4th Quarter 2003
ULTRASTRIP SYSTEMS: BDO Seidman Cuts-Off Professional Ties
UNITED ENERGY: Needs Additional Capital to Sustain Operations
UNIVERSAL COMM: Secures $300K Initial Order for Solar Products
US AIRWAYS: Will Furlough 552 Flight Attendants This Month
US AIRWAYS: Considering Appealing Court's Ruling on Pension Suit
VALENTIS INC: Raises $6.5MM from Common Stock and Warrants Issue
VENDALUX CORP: Signs-Up Child Sullivan as New Independent Auditor
VENTURA GROUP: Case Summary & 20 Largest Unsecured Creditors
VINTAGE PETROLEUM: Ends Talks to Acquire Uinta Basin Assets
VIRAGEN INC: Secures $4-Mill. via New Round of Equity Financing
WHISTLER INVESTMENTS: Board Okays Mason Russell as New Auditor
WICKES INC: Extends Senior Sub. Debt Exchange Offer Until Friday
WINSTAR COMMS: Court Reassigns Chapter 7 Case to Judge Rosenthal
WORLD AIRWAYS: Gets Final Nod for $27-Million Federal Guarantee
WORLDCOM INC: Judge Gonzalez Expunges 51 Accounts Payable Claims
WORLDCOM: Parker Prods Shareholders to Consider Legal Options
* BOND PRICING: For the week of January 5 - 9, 2004
*********
ACCLAIM ENTERTAINMENT: Shareholders' Meeting Convening on Jan 14
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The Annual Meeting of Stockholders of Acclaim Entertainment Inc.
will be held at 2:00 P.M., January 14, 2004, at Wyndham Windwatch
Hotel 1717 Motor Parkway, Hauppauge, NY 11788, for the purposes of
voting on:
1. Election of seven Directors to hold office for a one-year
term;
2. Authorize the issuance, upon the conversion of notes and the
exercise of warrants, of up to 32,000,000 shares of common
stock at a discount to the market price in accordance with the
Note Offering;
3. To authorize the Board of Directors, in the three month period
commencing with the date of the meeting, to issue at a
discount to the market price of the common stock, in
connection with potential capital raising transactions, (a) up
to 50,000,000 shares of common stock, or (b) preferred stock,
warrants, notes, securities or other rights convertible into
common stock, which, in the aggregate, after exercise or
conversion, equate to a maximum of 50,000,000 shares of the
Company's common stock. Any such issuance would be in excess
of the number of shares that NASDAQ's Rule 4350(i)(1)(D)
permits the Company to issue in such transactions without
prior stockholder approval. Issuance of all such 50,000,000
shares shall be for an aggregate consideration of not less
than $25,000,000 (or such proportionately lower amount
depending upon the number of securities actually issued by the
Company) and at an exercise price not less than 75% of the
market price of the common stock at the time of entering into
the transactions and upon such terms as the Board of Directors
shall have deemed to be in the best interests of the Company;
4. Approve an amendment to the Company's Certificate of
Incorporation to increase the number of authorized shares of
common stock of the Company from 200,000,000 to 300,000,000
shares;
5. Approve an increase from 15,442,143 to 25,442,143 the number
of shares with respect to which options or other awards may be
granted under the Company's 1998 Stock Incentive Plan;
6. Ratification of the issuance of 4,000,000 shares of Company
common stock to its Co-Chairmen in accordance with Nasdaq Rule
4350(i)(1)(a);
7. Approval of the issuance of shares of common stock to the
Acclaim Entertainment Employee Benefits Trust, for the benefit
of Rodney Cousens, Acclaim's new Chief Executive Officer, in
accordance with Nasdaq Rule 4350(i)(l)(a);
8. Ratification of the appointment of KPMG LLP as independent
auditors for fiscal year 2004; and
9. Any other matters that may properly come before the meeting.
Stockholders of record as of the close of business on
December 12, 2003 are entitled to notice of the meeting, to attend
and vote at the meeting.
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.
ACTUANT CORP: Schedules Annual Shareholders' Meeting for Friday
---------------------------------------------------------------
The Annual Meeting of Shareholders of ACTUANT CORPORATION, a
Wisconsin corporation, will be held at the offices of the Company,
6100 North Baker Road, Glendale, Wisconsin, on Friday, January 9,
2004, at 1:00 p.m., Central Time, for the following purposes:
1. To elect a Board of nine directors;
2. To consider and vote upon a proposal to adopt the Company's
2004 Employee Stock Purchase Plan;
3. To consider and vote upon a proposal to amend the Company's
Restated Articles of Incorporation to increase the number of
authorized shares of Class A Common Stock; and
4. To transact such other business as may properly come before
the Meeting or any adjournment thereof;
The Board of Directors has fixed the close of business on
November 18, 2003 as the record date for the determination of
shareholders entitled to receive notice of, and to vote at, the
Meeting or any adjournment thereof.
* * *
As previously reported in the Nov. 25, 2003, issue of the Troubled
Company Reporter, Standard & Poor's Ratings Services assigned its
'B+' rating to Actuant Corp.'s $150 million 2% convertible senior
subordinated debentures due Nov. 15, 2023, under Rule 144A with
registration rights.
At the same time, Standard & Poor's affirmed the 'BB' corporate
credit rating and other ratings on the firm. The outlook is
stable.
ADELPHIA BUSINESS: Court Confirms 3rd Amended Reorganization Plan
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U.S. Bankruptcy Court Justice Gerber finds that the Adelphia
Business Debtors' Third Amended Plan filed on December 8, 2003
satisfied the 13 requirements for confirmation under Section
1129(a) of the Bankruptcy Code:
(1) Pursuant to Section 1129(a)(1), a plan must comply with
the applicable provisions of the Bankruptcy Code.
Applicable legislative history and subsequent case law
indicate that this provision requires that a plan also
satisfy Sections 1122 and 1123, which govern the
classification of claims and the contents of the plan.
The Debtors' Plan sets forth the various classes of Claims
and Equity Interests as designated by the Plan. The
classification complies with Section 1122(a) because each
Class contains only Claims or Equity Interests that are
substantially similar to each other. In addition, the
Plan designate but do not classify Claims of the type
described in Sections 507(a)(1) and 507(a)(8). Because
the Debtors' cases were commenced as voluntary
Reorganization Cases, there are no claims of the kind
specified in Section 507(a)(2);
(2) The Plan Proponents satisfied Section 1129(a)(2) since:
(a) the Debtors are proper debtors under Section 109(d);
(b) the Plan Proponents complied with applicable
provisions of the Bankruptcy Code, except as otherwise
provided or permitted by Bankruptcy Court orders; and
(c) the Plan Proponents complied with the applicable
provisions of the Bankruptcy Code, the Bankruptcy
Rules and the Disclosure Statement Order in
transmitting the Disclosure Statement, the Second
Amended Plan and related documents and notices in
soliciting and tabulating votes on the Plan;
(3) The Plan was proposed in good faith, thereby, satisfying
Section 1129(a)(3). The Plan Proponents' good faith is
evident from the facts and records of the Cases, the
Disclosure Statement and the hearing thereon, and the
record of the Confirmation Hearing and other proceedings
held in the Cases. The Plan was proposed with the
legitimate and honest purpose of maximizing the value of
the Debtors' estates and to effectuate a successful
reorganization of the Debtors;
(4) Payments for Services or Costs and Expenses complies with
Section 1129(a)(4). Any payment made or to be made by
any of the Debtors for services or for costs and expenses
in or in connection with the Cases, or in connection with
the Plan and incident to the Cases, were approved by, or
is subject to the approval of, the Bankruptcy Court as
reasonable, thereby, satisfying Section 1129(a)(4);
(5) The Plan Proponents complied with Section 1129(a)(5).
The identity and affiliations of the persons proposed at
this time to serve as initial directors or officers of
the Reorganized Debtors and the procedure for the
appointment of the remaining directors or officers was
fully disclosed at the Confirmation Hearing and in the
Disclosure Statement, and the appointment to, or
continuance in, the offices of the persons is consistent
with the interests of holders of Claims against, and
Equity Interests in, the Debtors and with public policy.
The identity of any insider that will be employed or
retained by the Reorganized Debtors and the nature of the
insider's compensation were also fully disclosed;
(6) Section 1129(a)(6) requires that any regulatory commission
having jurisdiction over the rates charged by a
reorganized debtor in the operation of its business
approve any rate change provided for in a plan of
reorganization. The Plan does not provide for any changes
in the regulated rates that the Debtors charge their
customers and the Plan, therefore, satisfies
Section 1129(a)(6);
(7) The Plan is in the best interests of creditors and equity
interest holders pursuant to Section 1129(a)(7). The
liquidation analysis set forth in the Disclosure
Statement, and the Nevins Affidavit filed in support of
the Plan:
(a) are persuasive and credible;
(b) have not been controverted by other evidence; and
(c) establish that each holder of an impaired Claim or
Equity Interest either has accepted the Plan or will
receive or retain under the Plan, on account of the
Claim or Equity Interest, property of a value, as of
the Effective Date, that is not less than the amount
that the holder would receive or retain if the
Debtors were liquidated under Chapter 7 of the
Bankruptcy Code on the date;
(8) Section 1129(a)(8) requires that each class of claims or
interests that is impaired under the plan accept the plan.
Class 1, Class 2, Class 3, Class 4 and Class 12 are
Classes of unimpaired Claims that are conclusively
presumed to have accepted the Plan under Section 1126(f).
Classes 6, 7A, 7B, 7C, 7D and 8 each voted to accept the
Plan in accordance with Section 1126(c). Classes 5, 9,
10, 11 and 13 are not entitled to receive or retain any
property under the Plan and, therefore, are deemed to
reject the Plan pursuant to Section 1126(g).
Percentage of the Percentage of
dollar amount of the number of
Claims voting to Claims voting to
Class accept the Plan accept the Plan
----- ----------------- ----------------
Class 6 100% 100%
Class 7A 92.60% 90.51%
Class 7B 95.37% 92.00%
Class 7C 99.97% 98.11%
Class 7D 94.50% 85.19%
Class 8 100% 100%
Although Section 1129(a)(8) were not satisfied with
respect to the deemed rejecting Classes, the Plan is
confirmable because the Plan satisfies Section 1129(b)
with respect to the Classes;
(9) Treatment of Administrative, Priority Tax and Priority
Non-Tax Claims satisfies Section 1129(a)(9). The
treatment of Administrative Expense Claims and Priority
Non-Tax Claims satisfies the requirements of Sections
1129(a)(9)(A) and (B), and the treatment of Priority Tax
Claims satisfies the requirements of Section
1129(a)(9)(C);
(10) Section 1129(a)(10) requires the affirmative acceptance of
the Plan by at least one Class of impaired Claims,
"determined without including any acceptance of the plan
by any insider." Classes 6, 7A, 7B, 7C, 7D and 8 are all
impaired Classes and have voted to accept the Plan,
without including any acceptance of the Plan by any
insider;
(11) As required by Section 1129(a)(11), the Debtors' financial
projections illustrate the feasibility of the Plan and of
the Reorganized Debtors generally. The evidence
submitted, for feasibility purposes only, in the form of
affidavits or declarations, or adduced at the Confirmation
Hearing, including evidence with respect to the Debtors'
asserted set-offs and defenses to the asserted ACOM's
administrative claim:
(a) is persuasive and credible;
(b) were not successfully controverted by other evidence;
and
(c) establishes that confirmation of the Plan is not
likely to be followed by the liquidation, or the need
for further financial reorganization, of the
Reorganized Debtors.
Thus, the Plan satisfies the Section 1129(a)(11)
requirements, provided, however, that the feasibility
determination will not have any preclusive effect on the
Bankruptcy Court's future consideration of ACOM's alleged
administrative claims for allowance and distribution
purposes;
(12) Section 1129(a)(12) requires the payment of all fees
payable under 28 U.S.C. Section 1930. All fees payable
under Section 1930, as determined by the Bankruptcy Court,
have been paid or will be paid pursuant to the Plan, thus,
satisfying the requirements of Section 1129(a)(12); and
(13) Section 1129(a)(13) requires that all retiree benefits as
defined in Section 1114 be continued after the Effective
Date of the Plan. The Debtors do not, either as of the
Petition Date, or at any time during the Chapter 11
proceedings, have any plans, funds, or programs providing
or reimbursing retired employees and their spouses and
dependents for medical, surgical, or hospital care
benefits, or benefits in the event of sickness, accident,
disability, or death. Accordingly, the Section 1129(a)(13)
requirements are not relevant.
The Plan also satisfies other requirements:
(1) Proper Classification under Sections 1122 and 1123(a)(1).
In addition to Administrative Expense Claims and Priority
Tax Claims that need not be classified, the Plan
classifies 16 Classes of Claims and Equity Interests. The
Claims and Equity Interests placed in each Class are
substantially similar to other Claims and Equity
Interests, as the case may be, in each Class. Valid
business, factual, and legal reasons exist for separately
classifying the various Classes of Claims and Equity
Interests created under the Plan, and the Classes do not
unfairly discriminate between or among holders of Claims
and Equity Interests;
(2) Specified Unimpaired Classes under Section 1123(a)(2).
The Plan specifies that Classes 1, 2, 3, 4 and 12 are
unimpaired under the Plan;
(3) Specified Treatment of Impaired Classes pursuant to
Section 1123(a)(3). The Plan designates Classes 5, 6,
7A to 7D, 8, 9, 10, 11, and 13 as impaired. The Plan
specifies the treatment of all Claims and Equity Interests
under the Plan;
(4) No Discrimination under Section 1123(a)(4). The Plan
provides for the same treatment by the Debtors for each
Claim or Equity Interest in each Class;
(5) Implementation of Plan in accordance with Section
1123(a)(5). The Plan and the various documents and
agreements set forth in the Plan Supplement provide
adequate and proper means for the Plan's implementation;
(6) Non-voting Equity Securities under Section 1123(a)(6).
The Plan provides that the Amended By-Laws, the
Reorganized Subsidiaries By-Laws, the Amended Certificate
of Incorporation, and the Reorganized Subsidiaries
Certificate of Incorporation will prohibit the issuance of
non-voting equity securities;
(7) Designation of Directors and Officers pursuant to Section
1123(a)(7). The Plan contains provisions with respect to
the manner of appointment, or continuance, of the
directors and officers of the Reorganized Debtors that is
consistent with the interests of creditors, equity
security holders and public policy;
(8) Additional Plan Provisions in Section 1123(b)(6). The
Plan's provisions are appropriate and consistent with the
applicable provisions of the Bankruptcy Code;
(9) Rule 3016(a) of the Federal Rules of Bankruptcy Procedure.
The Plan reflects the date it was filed with the
Bankruptcy Court and identifies the entities submitting it
as co-plan proponents;
(10) Fair and Equitable and No Unfair Discrimination
requirements under Section 1129(b). Classes 5, 9, 10,
11 and 13 are not entitled to receive or retain any
property under the Plan and, therefore, are deemed to have
rejected the Plan pursuant to Section 1126(g). Based on
the Confirmation Affidavits and the evidence proffered,
adduced, or presented by the Plan Proponents at the
Confirmation Hearing, the Plan does not discriminate
unfairly and is fair and equitable with respect to the
Rejecting Classes, as required by Sections 1129(b)(1)
and (2). Specifically, pursuant to Section 1129(b)(2),
any holder of a Claim or Equity Interest that is junior to
the Rejecting Classes will not receive or retain under the
Plan on account of the junior Claim or Equity Interest any
property. Thus, the Plan may be confirmed notwithstanding
the Debtors' failure to satisfy Section 1129(a)(8). Upon
confirmation and the occurrence of the Effective Date, the
Plan will be binding on the members of the Rejecting
Classes;
(11) Principal Purpose of the Plan pursuant to Section 1129(d).
The principal purpose of the Plan, as evidenced by its
terms, is not the avoidance of taxes or the avoidance of
the application of Section 5 of the Securities Act of
1933; and
(12) Good Faith Solicitation as provided under Section 1125(e).
The Plan Proponents and their current members, directors,
officers, employees, shareholders, agents, advisors,
accountants, investment bankers, consultants, attorneys,
and other representatives acted in "good faith" within the
meaning of Section 1125(e) in compliance with the
applicable provisions of the Bankruptcy Code and
Bankruptcy Rules in connection with all their activities
relating to the solicitation of acceptances to the Plan
and their participation in the activities described in
Section 1125, and are entitled to the protections afforded
by Section 1125(e) and the exculpation provisions set
forth in the Plan.
Accordingly, Judge Gerber confirmed the Third Amended Plan on
December 19, 2003. Judge Gerber also approved the substantive
consolidation provision in the Plan. Judge Gerber held that the
Debtors operated as one integrated economic unit, and in the
absence of any credible or sustainable proof that any objecting
creditor relied upon the legal separateness of the Debtors in
making credit decisions when dealing with the Debtors, the deemed
substantive consolidation of the Debtors' estates for Plan
purposes only is appropriate.
All objections that that were not withdrawn, waived or settled,
and all reservations of rights pertaining to confirmation of the
Plan, are overruled on the merits.
A copy of the Third Amended Plan is available for free at:
http://bankrupt.com/misc/ABIZThirdAmendedPlan.pdf
The Debtors made non-material modifications to the Third Amended
Plan. A copy of the Modified Plan filed on December 18, 2003 is
available for free at:
http://bankrupt.com/misc/ABIZModifiedThirdAmendedPlan.pdf
Plan Is Feasible, Judge Gerber Says
After the confirmation hearing held on December 8 and 9, 2003,
Judge Gerber declared that the ABIZ Plan is feasible. Without
determining the amount due and owing to ACOM, Judge Gerber ruled
that the ABIZ Plan satisfied the feasibility requirements under
Section 1129. To go effective under the plan, however, Judge
Gerber says, ABIZ will have to put $2,740,000 into a reserve.
"[T]his amount does not exceed the $5,000,000 amount that I was
advised ABIZ has the wherewithal to deposit, and whose payment
would not render the ABIZ plan non-feasible," Judge Gerber
relates.
Judge Gerber expects to hold one or very possibly two separate
hearings on the matter of the amount of allowance of ACOM's
administrative expense claim, "as to which findings here will not
have res judicata or collateral estoppel effect."
In his 44-page bench decision dated December 12, 2003, Judge
Gerber noted that determining the allowability of ACOM's claim at
this time, and with the procedures ABIZ proposed, was
inconsistent with the procedural due process to which ACOM would
be entitled.
A free copy of Judge Gerber's bench decision is available at:
http://bankrupt.com/misc/ABIZConfirmationHearingBenchDecision.pdf
(Adelphia Bankruptcy News, Issue No. 47; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
ADELPHIA COMMS: ABIZ, et al., Want to Cap DIP Claims at $1-Mill.
----------------------------------------------------------------
The Adelphia Business Debtors, the Official Committee of Unsecured
Creditors and the Informal Committee of certain holders of the
12-1/4% Senior Secured Notes due 2004 issued by ABIZ ask the Court
pursuant to Section 502(c) of the Bankruptcy Code to estimate the
administrative expense claims of Adelphia Communications
Corporation and its subsidiaries to no more than $1,000,000 in
connection with the confirmation of their Joint Plan of
Reorganization.
Judy G.Z. Liu, Esq., at Weil, Gotshal & Manges LLP, in New York,
explains to the Court that the ABIZ Debtors do not have
sufficient cash to establish a reserve equal to the amount of
these purported claims, which, if not eliminated or greatly
reduced through estimation, threaten the feasibility of the Plan.
However, with respect to at least $17,000,000 of ACOM's
"ostensible" administrative claims -- those arising out of ACOM's
DIP loan -- the ABIZ Debtors not only have meritorious defenses
but also have valid set-off rights vastly amounting to in excess
of these claims. Moreover, the great bulk of the remaining
$52,000,000 of ACOM's anticipated administrative claims are
devoid of merit.
Ms. Liu recounts that on October 13, 2003, ACOM filed on behalf
of itself and its subsidiaries and affiliates, on a consolidated
basis, a prepetition proof of claim against the ABIZ Debtors for
$770,931,458.
Prior to the spin-off, there was "substantial confusion" as to
the assets, revenues and liabilities of ACOM and ABIZ.
Historically, the ABIZ Debtors' receipts were deposited into a
cash management system that was under ACOM's exclusive control,
and in which they were commingled with the funds of ACOM and
other affiliates. Withdrawals were made from the cash management
system to pay the ABIZ Debtors' obligations. Moreover, numerous
contracts and assets were shared among various ABIZ and ACOM
entities. Despite protracted discussions and negotiations over
the past year and a half, substantial uncertainty remains as to
the historical ownership of numerous assets.
In connection with the Spin-Off, ACOM failed to provide the ABIZ
Debtors with the necessary contractual arrangements typical in
spin-off transactions to facilitate the separation and untangling
of assets, interests, liabilities and contractual rights and
obligations relating to ACOM and the ABIZ Debtors. To the
contrary, ACOM spun ABIZ off precipitously, to satisfy its own
business needs, without providing ABIZ with access to many of the
assets that it historically needed to conduct its business.
According to Ms. Liu, in the 12 weeks between the Spin-Off and
ABIZ's Initial Petition Date, little was done to clarify or
further effectuate the operational separation of the ABIZ Debtors
and ACOM, or to untangle their assets and contractual rights and
obligations.
Over the past year and a half, the ABIZ Debtors made considerable
and persistent efforts to finalize their operational separation
from ACOM. For many months, ACOM thwarted these efforts by
linking the operational separation negotiations to other issues
-- particularly its desire to obtain a release of ABIZ's very
large prepetition claims against ACOM -- and, in an attempt to
maximize its leverage as to the prepetition claims, by delaying
completion of the separation through numerous ploys, including
repeatedly reopening issues that previously were mutually
resolved.
Ms. Liu notes that the Court repeatedly urged the ABIZ Debtors
and ACOM to proceed on an expeditious basis to resolve by
negotiation and agreement the issues necessary to effectuate a
definitive operational separation and the ABIZ Debtors' emergence
from Chapter 11. At a session on November 13, 2003, ACOM finally
reached an agreement in principle with ABIZ on the terms for an
operational separation.
The Court's insistence on a negotiated resolution of the
operational separation deprived ACOM of the ability to use those
issues as leverage to obtain a favorable settlement of ABIZ's
large prepetition claims against it. However, ACOM is attempting
to use its purported, but in fact meritless, administrative
claims against ABIZ to obtain similar leverage -- taking
advantage of ABIZ's need to resolve those administrative claims,
in addition to the operational separation issues, before it can
emerge from Chapter 11. Having repeatedly tried but thus far
failed to obtain a fair, negotiated resolution of ACOM's
purported administrative claims, ABIZ is now left with no choice
but to ask the Court to estimate those claims at no more than
$1,000,000.
ACOM's Purported Administrative Claims
As a result of extensive written and oral communications between
ABIZ and ACOM, including invoices that ACOM rendered to ABIZ, the
nature and extent of ACOM's ostensible administrative claims
against the ABIZ Debtors were made sufficiently clear, in advance
of the bar date for administrative claims, to warrant requesting
the Court to estimate the claim.
ABIZ anticipates that ACOM will file, on a consolidated basis for
itself and its subsidiaries, administrative claims in the
aggregate amount of $69,000,000, consisting of:
(1) $17,000,000 in claims arising from the debtor-in-
possession financing that ACOM provided to the ABIZ
Debtors pursuant to an interim order entered prior to
ACOM's own petition date; and
(2) $52,000,000 in claims allegedly arising from the
operational intertwining of the ABIZ Debtors and ACOM.
ACOM's DIP Lending Claim Should Be Estimated at Zero
ACOM indicated that its administrative claims will include a
claim for the $15,000,000 that it advanced under its DIP Credit
Agreement. The addition of $2,000,000 in unpaid interest would
give ACOM a total claim under its DIP Credit Agreement of
$17,000,000.
This claim should be estimated at zero, Ms. Liu asserts. The
ABIZ Debtors have substantial defenses and counterclaims to
ACOM's DIP claims arising out of ACOM's breach of its obligation
to provide additional postpetition financing. However, the Court
need not address these defenses and counterclaims on the present
motion, because the ABIZ Debtors have other offsets against
ACOM's DIP claim that vastly exceed the amount of that claim even
as asserted.
According to Ms. Liu, it is black letter law that a debtor-in-
possession is entitled to set off against a creditor's
administrative claims any claims that the debtor has against that
creditor, regardless of whether the claims that are being set off
arose before or after the debtor's bankruptcy filing. Ms. Liu
argues that ACOM's claims against the ABIZ Debtors arising from
the ACOM DIP Credit Agreement arose before ACOM's petition date.
Therefore, there is no question that the ABIZ Debtors are
entitled to set off against those claims any claims of the ABIZ
Debtors against ACOM that similarly arose prior to ACOM's
petition date. The ABIZ Debtors' claims available for this
purpose include a claim in the amount of more than
$1,000,000,000, to pierce ABIZ's corporate veil so as to impose
liability on ACOM in favor of ABIZ's creditors. Additional
available offsets include, but are not limited to:
(1) claims to set aside as a fraudulent conveyance the
transfer by ABIZ to ACOM of the $87,000,000 of proceeds
from the December 2000 sale of ABIZ operating assets;
(2) claims to set aside as both a fraudulent conveyance and a
preference the transfer by ABIZ to ACOM of the
$141,000,000 of proceeds from the October 2001 sale of
ABIZ operating assets;
(3) claims in connection with ostensible borrowings by ABIZ
from Bank of America, including claims for breach of
fiduciary duty;
(4) claims arising from ACOM's misappropriation of proceeds
generated by PECO Hyperion Telecommunications, a joint
venture between a non-debtor subsidiary of ABIZ and an
unrelated third party, PHT Partners; and
(5) claims arising from ACOM's collection of excessive
management fees from ABIZ under a shared services
agreement between ACOM and ABIZ.
For present purposes, the Court needs to address only one claim
-- the ABIZ Debtors' claim to avoid, under Section 547 of the
Bankruptcy Code, a preferential transfer amounting to
$141,000,000 made to ACOM in connection with the October 2001
asset sale.
According to journal entries maintained by ACOM, ABIZ was
indebted to ACOM for $61,000,000 as of September 25, 2001. ABIZ
disputes the validity of this indebtedness on the ground that it
should be recharacterized as an equity investment by ACOM in
ABIZ. However, solely for purposes of the present motion, ABIZ
assumes arguendo that ABIZ was genuinely indebted to ACOM as of
September 25, 2001 for $61,000,000.
On October 1, 2001, ACOM -- which at the time controlled the vast
majority of ABIZ's voting stock -- caused certain of the ABIZ
Debtors to transfer to various ACOM subsidiaries substantial
operating assets relating to local telecommunications systems in
various communities in Upstate New York, Virginia and New
England. In exchange, ACOM purported to pay ABIZ consideration
totaling $141,000,000, consisting of:
(1) the paper transfer of $80,000,000 in funds to one of the
Debtors, Adelphia Business Solutions Atlantic, Inc.,
formerly known as ABS New York; and
(2) the satisfaction of ABIZ's purported indebtedness of
$61,000,000 to ACOM.
All but $5,000 of the $80,000,000 that ostensibly was paid to ABS
New York on October 1, 2001 was transferred back to an ACOM bank
account within 10 days after that payment and was characterized
as pay downs of additional advances that were made by ACOM to
ABIZ.
This transfer of $141,000,000 to ACOM in satisfaction of ABIZ's
ostensible indebtedness to ACOM was effectuated within one year
prior to the ABIZ Debtors' Petition Date, at a time when ACOM was
the controlling shareholder of ABIZ and when ABIZ was insolvent.
Unless avoided, this transfer enables ACOM to receive more than
it would receive if these cases were cases under Chapter 7 of the
Bankruptcy Code, the transfer were not made, and ACOM received
payment of the antecedent debts to the extent provided by the
Bankruptcy Code. Therefore, ABIZ is entitled to a judgment under
Section 547 avoiding and annulling the transfer of $141,000,000
to ACOM.
The ABIZ Debtors' $141,000,000 preference claim vastly exceeds
ACOM's $17,000,000 administrative claim allegedly arising from
its DIP Credit Agreement. Therefore, even if the ABIZ Debtors'
defenses and counterclaims arising from ACOM's DIP breach were
insufficient to defeat ACOM's DIP claim in its entirety, the set-
off of the $141,000,000 preference claim is more than sufficient
to eliminate ACOM's DIP claim and to warrant its estimation at
zero.
Additionally, ACOM's other administrative claims, as set forth in
ACOM's disputed invoices to ABIZ as well as in numerous oral
statements, amounts to $52,400,000:
Claim Claimed Amount
----- --------------
Use of network assets $40,000,000
Cost of insurance 6,700,000
Cost of information technology department 2,200,000
"Circuit refund" 2,000,000
Costs of motor vehicle fleet 1,500,000
-----------
Total $52,400,000
Ms. Liu asserts that ACOM's $40,000,000 claim for the use of
network assets is devoid of merit for multiple reasons.
Furthermore, ACOM's $12,400,000 in remaining non-DIP claims are
grossly inflated, reflecting genuine debts of only about
$4,000,000. Moreover, ABIZ has valid similar claims of its own
against ACOM -- unpaid invoices for ongoing services amounting to
$3,500,000 -- leaving a balance due to ACOM from ABIZ of only
$500,000.
The Network Asset Claims
The great bulk of ACOM's non-DIP anticipated administrative claim
-- $40,000,000 out of a total of $52,400,000 of the claims -- are
claims for compensation for the use of the very same network
assets of ABIZ and ACOM that were the subject of the recently
concluded operational separation negotiations. The ownership of
these shared assets were "murky, if not altogether opaque", from
the outset, according to Ms. Liu. As a result, ACOM and ABIZ
historically never billed each other for the use of these assets;
and in February 2003, ACOM and ABIZ agreed not to do so until
asset separation agreements addressing ownership and mutual
charges going forward could be concluded. ACOM's current claim
for the use of these assets represents a 180-degree about-face
both from its historical practice and from its February 2003
agreement, not to mention from the position it took as DIP lender
in early 2002. This claim lacks merit and should be estimated at
zero, Ms. Liu argues.
For one, the network assets do not belong to ACOM any more than
they belong to ABIZ. These assets were built by both parties in
circumstances where ownership of any particular component of the
systems was often far from clear. Portions were built by ABIZ
personnel, portions were built by ACOM personnel, portions were
built by ACOM and ABIZ personnel working together, and portions
were built by ABIZ or ACOM personnel working with third parties,
with little attention given to which entity owned which
component.
In addition, ACOM and ABIZ agreed, in February 2003, not to bill
each other for the historical use of shared network assets.
Moreover, Ms. Liu states that ACOM's belated assertion of the
claim is barred by the doctrine of equitable estoppel. As the
Court will recall, at the time ACOM entered into its DIP Credit
Agreement with ABIZ in March 2002, ABIZ prepared an operating
budget, which ACOM approved in its capacity as DIP lender. The
Court, in turn, authorized ABIZ to borrow from ACOM on the terms
and conditions set forth in the DIP Credit Agreement -- including
the condition that ABIZ's expenditures not materially exceed
those permitted by the budget ACOM approved. Notably, this
budget did not provide for the payment by ABIZ to ACOM of any
charges for the use of network assets, let alone charges of the
magnitude that ACOM is now asserting averaging $2,200,000 per
month. ACOM's approval of this budget not only evidences its
contemporaneous understanding that neither party was entitled to
bill the other party for the use of network assets; it also
creates an estoppel that bars ACOM from now claiming that it is
entitled to payment for the use of those assets. The estoppel is
all the clearer when one also considers ACOM's other conduct,
including:
(1) its failure to bill for the use of shared network assets
until May 2003; and
(2) its February 2003 agreement not to bill for the use of the
assets.
ACOM claims $2,200,000 as an allocation to ABIZ of the capital
and operating costs of a shared information technology department
in the period between the ABIZ Debtors' Petition Date through May
2002. ABIZ repeatedly asked ACOM to provide it with support for
its claim, and ACOM repeatedly failed to provide sufficient
documentation to justify the claim. ACOM's continued failure to
provide the support suggests that the $2,200,000 figure that ACOM
unilaterally allocated to ABIZ may lack merit. Moreover, when,
in the spring of 2002, the two sides divided the information
technology department between themselves, only a little more than
one-third of that portion of the department's staff previously
allotted to ABIZ actually joined ABIZ. While ABIZ is prepared to
concede, for purposes of estimation, that one-half of this claim,
amounting to $1,100,000 may be valid, the balance of the claim
lacks merit.
ACOM claims $2,000,000 as a "circuit refund" under a capacity use
agreement that was entered into with ABS New York at the time of
the October 2001 transfer of assets. This claim has no validity,
because it is based on an agreement by which, on the eve of the
October 2001 asset sale by ABIZ to ACOM, to bring the transaction
into compliance with covenants to lenders, certain regional
assets were transferred to ABS New York in anticipation of their
billed use by ABS New York to certain ABIZ and ACOM subsidiaries.
Because the October 2001 asset transfer is voidable both as a
preferential transfer and a fraudulent conveyance, the agreement
at issue should be avoided and disregarded. This particular
claim merely represents an effort by ACOM to manufacture an
offset against its liabilities to ABIZ for telecommunications
services that ABIZ were providing to ACOM. Therefore, Ms. Liu
argues, this component of ACOM's claims should be estimated at
zero.
ACOM claims that ABIZ owes $1,500,000 in postpetition costs that
appear to be attributable to:
(1) the subleasing by ABIZ of certain motor vehicles leased by
ACOM under two ACOM master leases in the period from the
summer of 2002 to early 2003; and
(2) insurance and other ancillary costs allegedly related to
these vehicles.
This particular claim is significantly inflated. Based on its
review of supporting documentation thus far ACOM provided, ABIZ
expects to establish that this component of ACOM's claims should
be valued at no more than $600,000.
In sum, a fair estimation of ACOM's administrative claims arising
from operational issues, rather than the ACOM DIP Credit
Agreement, indicates that the value of these claims does not
exceed $4,000,000. Moreover, ABIZ has valid offsets against
these claims for $3,500,000. At the same time that ACOM was
billing ABIZ for a variety of services other than use of the
shared network assets, ABIZ was billing ACOM for a variety of
telecommunications-related services that it continues to provide
to ACOM, as it provided the services to its other customers. At
present, more than $3,5000,000 of invoices sent by ABIZ to
ACOM for the services -- including $2,300,000 for circuits and
$700,000 for switched services, among other charges -- remain
outstanding and unpaid. ACOM refused to pay these invoices
pending resolution of the ACOM claims. Reducing ACOM's
$4,000,000 of unpaid valid invoices by $3,500,000 leaves a
balance due to ACOM from ABIZ of $500,000. (Adelphia Bankruptcy
News, Issue No. 47; Bankruptcy Creditors' Service, Inc., 215/945-
7000)
AIR CANADA: Union Members Demand Pension Plan Payments
------------------------------------------------------
The National Automobile, Aerospace, Transportation and General
Workers Union of Canada asks the Superior Court of Justice in
Canada to direct Air Canada and its affiliated CCAA Applicants to
make the necessary contributions into the Air Canada Pension Plan
and the Pension Plan for CAW Members Employed by Canadian Airlines
International Limited, equal to the 2003 current service costs for
each plan -- less employee contributions -- as required by the
most recently filed actuarial valuation report for each plan.
CAW also wants the Applicants to file the July 1, 2003 valuation
of the CAIL Pension Plan with the Office of the Superintendent of
Financial Institutions and remit all special solvency payments
that are due and owing as a result of the filing of the July 1,
2003 valuation.
CAW represents 7,500 Air Canada employees. Half of those members
were employed by CAIL before Air Canada purchased the airline in
January 2000.
The Air Canada Pension Plan is a defined benefit pension plan,
which covers all CAW members employed by Air Canada. The Plan is
a contributory plan -- meaning, plan members make contributions
to the plan, as does the employer.
The CAIL Pension Plan is also a defined benefit pension plan for
CAW members that formerly work with CAIL and now work with Air
Canada. The Plan is also a contributory plan.
The merger of the Air Canada Pension Plan and the CAIL Pension
Plan is ongoing. As a result, while former CAIL employees have
been accruing service in the Air Canada Plan since June 3, 2000,
they continue to have pension entitlements, which accrued before
June 3, 2000, in the CAIL Plan. The contributions of former CAIL
employees continue to be remitted to the CAIL Plan.
Doug LeFaive, Esq., at Sack Goldblatt Mitchell, in Toronto,
Ontario, tells Mr. Justice Farley that the Pension Benefits
Standards Act, 1985, require actuarial valuations to be filed
with the OSFI at least once every three years. The last
valuation of the CAIL Plan filed with OSFI was dated July 1,
2000. At that time, there was a surplus of more than $9,000,000
in the CAIL Plan.
"The July 1, 2003 valuation for the CAIL Pension Plan must now be
filed with the OSFI. However, it is my understanding and belief
that Air Canada has yet to file this statutorily-required
valuation with OSFI. I believe that the July 1, 2003 valuation
of the CAIL Pension Plan will reveal a significant solvency
deficiency," Mr. LeFaive says.
The Pension Benefit Standards Act requires the remittance of
special payments to a pension plan to resolve any solvency
deficiency over a five-year period. As the valuation of the CAIL
Plan was after April 1, 2003, the special payments triggered by
the July 1, 2003 valuation constitute a post-filing debt which is
now due and owing. Mr. LeFaive reports that Air Canada refused
to make these special payments despite its statutory and
fiduciary obligations to do so.
Mr. LeFaive asserts that the Collective Agreements between the
Applicants and CAW require that the Applicants maintain the Air
Canada Pension Plan and the CAIL Pension Plan until the CAIL Plan
is merged with the Air Canada Plan. By implication, Mr. LeFaive
says, the Collective Agreements also require the Applicants to
adequately fund these pension plans. However, the Applicants
failed to pay their portion of the current service costs of these
pension plans in 2003.
Mr. LeFaive relates that, in May 2003, CAW and the other unions
representing employees of Air Canada and its various
subsidiaries, engaged in difficult negotiations, which resulted
in a package of substantial wage and benefit concessions which
were required to assist Air Canada's restructuring efforts. On
June 1, 2003, Air Canada and CAW entered into a Memorandum of
Understanding, which significantly reduced the wages and benefits
of employees covered by the CAW Collective Agreements. The MOU
extended the terms of the Collective Agreements until June 4,
2006 and provided for both wage freezes and wage rollbacks. The
MOU also provided that in 2006 the Collective Agreement will be
extended for a further three years and that the only item which
may be negotiated in 2006 is the wage rates which will apply
until May 31, 2009. The MOU reduced vacation entitlement and
overtime wage rates and eliminated premium wage rates.
The package of concessions also reduced or eliminated many of the
other benefits previously enjoyed by CAW bargaining unit members
and relaxed the work rules, which have in turn resulted in
further substantial cost savings for the Applicants. CAW
estimates that the concessions save $150,000,000 per year for Air
Canada. The negotiations also eliminated 2,600 full-time
equivalencies in CAW's Air Canada bargaining units. This
resulted in the loss of employment for 3,000 CAW members.
However, Mr. LeFaive points out that the MOU made no changes to
the collective agreement provisions regarding pension
contributions and did not in any way relieve Air Canada from its
obligations regarding the funding of the CAIL Pension Plan.
Rather, the MOU provides that:
"The Company commits that no changes to the existing
rules of the Air Canada Pension Plan will be made
arising out of this process and the Union commits to
cooperate with the Company in representations to the
OSFI and the federal government regarding appropriate
policy decisions respecting funding of the Plan deficit."
* * *
Mr. Justice Farley directs the Applicants to make the required
contributions under the Air Canada Pension Plan and CAIL Pension
Plan. (Air Canada Bankruptcy News, Issue No. 23; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
AMERICAN CELLULAR: Closes Exchange Offer for 10% Senior Notes
-------------------------------------------------------------
American Cellular Corporation reported that, as of 5:00 p.m., New
York City time, on December 30, 2003, $900 million principal
amount, representing all of American Cellular's outstanding 10%
Senior Notes due 2011, have been tendered in exchange for new 10%
Senior Notes due 2011, which have been registered under the
Securities Act of 1933. American Cellular has accepted all tenders
of its 10% Senior Notes.
American Cellular is a wholly owned, indirect subsidiary of Dobson
Communications Corporation (Nasdaq:DCEL).
At June 30, 2003, the company's balance sheet shows a working
capital deficit of about $1.5 million. Net capital deficit for the
same period tops $531 million.
AMERICA WEST: Pilots Ratify Three-Year Tentative Labor Agreement
----------------------------------------------------------------
Almost four years since the opening of negotiations, the pilots at
America West Airlines have ratified a new contract. Of the 1,505
pilots eligible to vote, 96.35 percent participated with 771
pilots, or 53.17 percent voting for the proposed three-year
agreement.
Captain Terry Stadler, chairman of the America West Airlines
pilots' Master Executive Council, part of the Air Line Pilots
Association, International (ALPA), issued the following statement
today.
"We are pleased that the pilot group voted in favor of this
contract, which serves as the foundation for our future. While
most of our objectives were met, it is clear that we need to
continue working to bring this pilot group up to a position of
parity with our industry peers. However, we see this new contract
as a step in the right direction and will continue our efforts to
better the wages and working conditions for the America West
pilots."
This is the third tentative agreement voted on by the AWA pilots
this year. Earlier this month, the pilot group rejected a
proposal by a 725 to 720 vote. The ALPA pilots and AWA management
agreed on a proposal in October while in Washington, D.C. at the
National Mediation board. The two parties resumed negotiations in
September after the National Mediation Board suspended
negotiations with the pilot group and management in March, after
pilots overwhelmingly rejected a tentative agreement the two sides
had reached in December 2002. Contract talks had begun in
February 2000, and the NMB assigned a federal mediator to
facilitate negotiations in May 2001. The NMB temporarily
suspended talks after the September 11, 2001 terrorist attacks.
Founded in 1931, ALPA is the world's oldest and largest pilot
union, representing 66,000 members at 42 airlines in the United
States and Canada, including nearly 1,700 pilots at America West
Airlines. Visit the ALPA Web site at http://www.alpa.org/
As previously reported, Fitch Ratings initiated coverage of
America West Airlines, Inc., a subsidiary of America West Holdings
Corp., and assigned a rating of 'CCC' to the company's senior
unsecured debt. The Rating Outlook for America West is Stable.
ASCENT ASSURANCE: New Terms for Preferred Stock & CSFB-Held Notes
-----------------------------------------------------------------
Ascent Assurance, Inc. (OTC Bulletin Board: AASR) completed a
restructuring of the terms of the $37.5 million in preferred stock
and $15.3 million in notes held by affiliates of Credit Suisse
First Boston, resulting in an extension of their maturity dates
from early 2004 until March 24, 2010.
Prior to the restructuring, CSFB was the Company's largest
stockholder, owning approximately 49% of the common stock
outstanding and approximately 74.5% on an as-converted, fully-
diluted basis.
Patrick J. Mitchell, Chairman and CEO of Ascent, said, "We are
very pleased with the results of the transaction to extend the
terms of the CSFB securities. These extensions provide the
Company with the needed flexibility to continue forward with our
business plan."
As part of the restructuring, the CSFB affiliates will receive a
new series of 5.5% convertible preferred stock in exchange for the
shares of 10.25% convertible preferred stock currently held by
them. As a result of the exchange, the CSFB affiliates will own,
on an as-converted, fully-diluted basis, 93% of the outstanding
common stock and the public stockholders will retain a 7% equity
interest in the Company. Upon approval by Company stockholders of
a Board-recommended amendment of the Company's certificate of
incorporation to authorize additional shares of common stock
necessary to permit the conversion of the new convertible
preferred stock in full, the new convertible preferred stock will
automatically convert into the underlying common stock and no
preferred stock will remain outstanding. It is expected that a
meeting of stockholders will be called to approve this amendment
early next year.
In addition to the extension of the maturity date of the notes
currently held by the CSFB affiliates, the interest rate of the
notes has been reduced from 12% to 6% per annum. Also, a $1.5
million facility fee that would have been payable upon maturity
has been waived.
The seven member Board of Directors of the Company has been
reconstituted, and two of its members will be required to be
independent of both CSFB and management until such time as the
Company no longer has any public stockholders. During this
period, independent director approval will be required for
transactions between CSFB or its affiliates and the Company,
except that such approval will not be required for a short-form
merger in which the public stockholders receive cash in exchange
for their shares in an amount that reflects fair value as
reasonably determined by the controlling stockholder and, if the
transaction occurs prior to January 1, 2005, the price received by
the public stockholders cannot be less than $.40 per share. The
public stockholders would also have appraisal rights under
Delaware law in connection with any short-form merger.
The restructuring of CSFB's interests in the Company has been
negotiated and approved by a Special Committee of the Board of
Directors consisting exclusively of directors independent of CSFB
and management. The Special Committee has received an opinion
from Houlihan, Lokey, Howard & Zukin, Inc. that the restructuring
transaction is fair, from a financial point of view, to the
Company and the public stockholders not affiliated with CSFB.
Ascent Assurance, Inc. -- http://www.ascentassurance.com/-- is an
insurance holding company primarily engaged in the development,
marketing, underwriting and administration of medical-surgical
expense, supplemental health, life and disability insurance
products to self-employed individuals and small business owners.
Marketing is achieved primarily through the career agency force of
its marketing subsidiary. The Company's goal is to combine the
talents of its employees and agents to market competitive and
profitable insurance products and provide superior customer
service in every aspect of operations.
The Company's September 30, 2003 balance sheet shows that its net
capitalization dwindled to about $441,000 from about $2.3 million
nine months ago.
* * *
CSFB Financing
In its Form 10-Q filed with Securities and Exchange Commission,
the Company reported:
"Ascent received debt financing to fund an $11 million capital
contribution to FLICA in April 2001 from Credit Suisse First
Boston Management Corporation, which is an affiliate of Special
Situations Holdings, Inc. - Westbridge (Ascent's largest
stockholder). The credit agreement relating to that loan provided
Ascent with total loan commitments of $11 million, all of which
were drawn in April 2001. The loan bears interest at a rate of 12%
per annum and matures in April 2004. Absent any acceleration
following an event of default, Ascent may elect to pay interest in
kind by issuance of additional notes. During the three months
ended June 30, 2003, Ascent issued $427,000 in additional notes
for payment of interest in kind which increased the notes payable
balance to CSFB at June 30, 2003 to approximately $14.4 million.
Terms of the CSFB Credit Agreement are equivalent to terms that
exist in arm's-length credit transactions. Ascent must obtain
additional financing to retire the note payable when it matures in
April 2004 or restructure the terms of the note. Failure of Ascent
to successfully refinance the note payable would have a material
adverse impact on Ascent's liquidity, capital resources and
results of operations.
"The Company has authorized 40,000 shares of non-voting preferred
stock. At June 30, 2003, 35,654 shares of preferred stock were
outstanding, all of which are owned by Special Situations
Holdings, Inc. - Westbridge, which is Ascent's largest common
stockholder and is also an affiliate of CSFB. Dividends on
Ascent's preferred stock are payable in cash or through issuance
of additional shares of preferred stock at the option of Ascent.
On June 30, 2003, preferred stock dividends accrued in the second
quarter of 2003 were paid through the issuance of 890 shares of
preferred stock.
"The preferred stock is mandatorily redeemable in cash on March
24, 2004 in an amount equal to the stated value per share plus all
accrued and unpaid dividends thereon to the date of redemption.
Ascent must obtain additional financing to retire the preferred
stock when due or restructure the terms of the preferred stock.
Failure of Ascent to successfully refinance the preferred stock
would have a material adverse impact on Ascent's liquidity,
capital resources and results of operations."
AURORA FOODS: Honoring and Paying Prepetition Shipping Charges
--------------------------------------------------------------
In the ordinary course of their businesses, the Aurora Foods,
Inc., Debtors use certain third-party shippers, haulers, common
carriers, and other transporters, to deliver goods to their
facilities and to customers. Although the Debtors deal directly
with some Shippers, most of their shipping and transportation
matters are handled by a few major transportation brokers or
Shipping Agents.
Eric M. Davis, Esq., at Skadden, Arps, Slate, Meagher & Flom,
LLP, in Wilmington, Delaware, relates that the Shipping Agents
provide transportation management functions, including, among
other things, arranging transportation services via third party
Shippers, freight bill auditing and payment, and other
administrative traffic duties. The Debtors pay the Shipping
Charges to either:
(1) the Shipping Agents, who in turn pay the Shipping Charges
to the Shippers with whom it deals; or
(2) the Shipper with whom the Debtors deal directly.
Distribution Charges
The Debtors also pay for the Distribution Charges, together with
the Shipping Charges, of independent operators of regional and
pooled distribution centers and public warehousemen to store the
goods, as necessary, during the distribution process. The
Debtors have contracts with certain of their Shippers,
Distributors, and Warehousemen for the services provided, which
provide for the tariffs and payment terms. These contracts are
generally terminable for any reason upon short notice.
Shippers, Distributors, and Warehousemen will periodically
invoice the Debtors or the Shipping Agents for Distribution
Charges on account of services previously rendered. As of the
Petition Date, the Debtors estimate that the outstanding
prepetition Distribution Charges total $5,900,000.
Brokers' Fees
The Debtors employ several independent brokers who sell certain
of the Debtors' products to the Debtors' customers. The Debtors
have entered into contracts with the Independent Brokers, which
are generally terminable by either party for any reason upon
compliance with certain notice requirements. Under these
contracts, the Debtors generally pay the Independent Brokers on
commission basis after receipt of full payment from the customer.
The Debtors are generally current on these monthly commission
payments. The Debtors estimate that the outstanding prepetition
Brokers' Fees reach $2,000,000.
The Debtors believe that, if the prepetition Brokers' Fees are
not paid, the Independent Brokers will attempt to terminate their
contracts with the Debtors or otherwise drastically curtail their
selling efforts on the Debtors' behalf. Thus, Mr. Davis argues
that payment of the prepetition Brokers' Fees is necessary to
avoid the potential harm to the Debtors through the loss of
future sales.
Imported Goods
In the ordinary course of their businesses, the Debtors purchase
goods from abroad from various foreign vendors. Many of these
Imported Goods are critical to the continued production of the
Debtors' products.
Virtually all Imported Goods are subject to customs import duties
imposed by the laws of the United States. In addition to the
Customs Duties, the Debtors may be required to pay certain other
charges relating to the importation of goods, including:
-- general order penalties;
-- ocean freight;
-- air freight;
-- trucking charges;
-- brokerage fees;
-- detention and demurrage fees;
-- surety bond premiums;
-- consolidation and deconsolidation charges; and
-- other similar obligations.
These charges are vital to effectuate the release of the Imported
Goods to the Debtors. In some cases, freight forwarders or other
entities, which were engaged by the Debtors to take all actions
necessary on the Debtors' behalf to obtain possession of the
Imported Goods, pay the Import Obligations.
Generally, when the Debtors import materials used in the
production of their products, their international vendors pay
most of the Import Obligations on the imported materials, and the
Debtors take responsibility for payment of shipping duties once
the Imported Goods clear customs. However, occasionally the
Debtors pay international shipping and customs charges directly.
As of the Petition Date, the Debtors estimate that they owe
$100,000 in Import Obligations.
Obligations Must Be Paid
Accordingly, the Debtors sought and obtained the Court's
authority to pay their prepetition Shipping, Warehousing, and
Distribution Charges, Brokers' Fees, and Import Obligations.
Judge Walrath permits the Debtors to make an $8,000,000 payment,
which will include:
(a) $5,900,000 as Distribution Charges, inclusive of payments
to the:
(1) Shippers for the delivery of the Debtors' goods;
(2) Shipping Agents for transport management functions
plus freight bill payment to Shippers; and
(3) Independent Operators of regional and pooled
distribution centers, and public warehousemen for
charges to store the goods, as necessary;
(b) $2,000,000 as Independent Brokers' Fees for the sale of
certain of the Debtors' products to the Debtors'
customers; and
(c) up to $100,000, relating to the Import Obligations.
Judge Walrath rules that all payments made will be in accordance
with these terms and conditions:
(a) The Debtors, in their sole discretion, will determine
which parties, if any, are entitled to payment;
(b) If a party accepts payment, the party is deemed to have
agreed to continue to provide services to the Debtors, on
as good or better terms and conditions (including credit
terms) that existed 120 days before the Petition Date as
Customary Terms, during the pendency of these Chapter 11
cases;
(c) In the event the relationship between the party accepting
payment, and the Debtors does not extend to 120 days
before the Petition Date, the Customary Terms will mean
the terms that the party generally extends to its
customers or the terms as are acceptable to the Debtors in
the reasonable exercise of their business judgment;
(d) If a party accepts payment and thereafter does not
continue to provide goods and services on at least the
Customary Terms during the pendency of these Chapter 11
cases, then:
(1) any payment on a prepetition claim received by the
party will be deemed to be an unauthorized voidable
postpetition transfer under Section 549 of the
Bankruptcy Code and, therefore, recoverable by the
Debtors in cash upon written request; and
(2) upon the recovery by the Debtors, the prepetition
claim will be reinstated as if the payment had not
been made; and
(e) Before making a payment to a party, the Debtors may, in
their absolute discretion, settle all or some of the
prepetition claims of the party for less than their face
amount without further notice or hearing.
Judge Walrath emphasizes that the total payments must not exceed
$8,000,000.
Should the Debtors seek to recover payments under the Lien
Claims, Judge Walrath says, the Court will not preclude a party
from contesting the action by making a written request to the
Debtors to schedule a hearing. The hearing on the Request will
be at least 30 days after the Debtors receive the Request. The
Debtors will then provide notice of the hearing to the party
making the Request and other interested parties in accordance
with the Bankruptcy Code and the Court's order.
In addition, the Court authorizes and directs all banks and other
financial institutions to:
(1) receive, process, honor, and pay any and all checks
issued or authorized to be paid; and
(2) rely on the representations of the Debtors as to which
checks are issued or authorized to be paid. (Aurora Foods
Bankruptcy News, Issue No. 3; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
AVADO BRANDS: Won't Pay Bond Interest Within Grace Periods
----------------------------------------------------------
Avado Brands, Inc. (OTC Bulletin Board: AVDO), parent company of
Don Pablo's Mexican Kitchen and Hops Grillhouse & Brewery, will
not make either the December 1, 2003 interest payment on its
9-3/4% Senior Notes or the December 15, 2003 interest payment on
its 11-3/4% Senior Subordinated Notes within the 30 day no-default
grace periods for those payments, which will trigger an event of
default under its secured credit facility and the indentures of
both series of Notes.
Avado Brands reported that it is in discussions with its lenders
with the goal of reaching forbearance agreements as well as a
joint approach to restructuring the Company's financial
obligations.
"We expect to finalize a forbearance agreement shortly with our
secured lenders that will help Avado Brands to continue business
as usual, including making payments to our vendors and business
partners," said Avado Brands' chief financial officer Louis J.
(Dusty) Profumo.
Avado Brands has not yet filed its third quarter Form 10-Q for the
period ended September 28, 2003 and anticipates that it will file
its Form 10-Q on or before January 9, 2004. The Company, which
had earlier announced that it expected to file its third quarter
Form 10-Q on or before December 31, 2003, said that the Form 10-Q
will be issued pending completion of the company's and the
auditor's review of the first three quarters of 2003.
Avado Brands has previously disclosed that it has suffered from
recurring losses from operations, has an accumulated deficit and
has failed to meet certain financial covenant requirements,
thereby incurring an event of default under its secured credit
facility which matures on March 24, 2004. These factors, outlined
in detail in the Company's second quarter SEC Form 10-Q, have
raised substantial doubt about the Company's ability to continue
as a going concern. There can be no assurance that Avado Brands'
financial obligations can be restructured.
Avado Brands (S&P, D Corporate Credit Rating) owns and operates
two proprietary brands comprised of 108 Don Pablo's Mexican
Kitchens and 63 Hops Grillhouse & Breweries.
AVITAR: Files Pro Forma Financials re Sale of Laboratory Unit
-------------------------------------------------------------
Avitar, Inc. (Amex: AVR) filed with the SEC unaudited pro forma
financial information related to the sale of substantially all the
assets of a subsidiary, United States Drug Testing Laboratories,
Inc.
As previously reported on December 16, 2003, the assets of USDTL
were sold for a total purchase price of $1 million, $500,000 of
which was paid upon closing.
The pro forma financial information prepared by the Company is
based upon assumptions deemed appropriate by it and unaudited
Fiscal Year 2003 information. The pro forma condensed
consolidated financial statements are not necessarily indicative
of the future financial position or results of operations or
actual results that would have occurred had the transaction been
in effect as of the dates presented. These unaudited statements
should be read in conjunction with the Company's historical
financial statements and related notes.
Furthermore, the amounts as of September 30, 2003 and for the year
then ended are unaudited and therefore are subject to further
adjustment upon finalization of the Company's year-end audit. It
is expected that audited financial statements for Fiscal Year 2003
will be filed with the SEC in early January 2004.
Avitar, Inc. develops, manufactures and markets innovative and
proprietary products in the oral fluid diagnostic market, disease
and clinical testing market, and customized polyurethane
applications used in the wound dressing industry. Oral fluid
diagnostics includes the estimated $1.5 billion drugs-of-abuse
testing market, which encompasses the corporate workplace and
criminal justice markets. Avitar's products include
ORALscreen(TM), the world's first non-invasive, rapid, onsite oral
fluid test for drugs-of-abuse. Additionally, Avitar manufactures
and markets HYDRASORB(TM) an absorbent topical dressing for
moderate to heavy exudating wounds. In the estimated $25 billion
in vitro diagnostics market, Avitar is developing diagnostic
strategies for disease and clinical testing. Some examples include
influenza, diabetes and pregnancy. For more information, see
Avitar's Web site at http://www.avitarinc.com/
Avitar, Inc.'s June 30, 2003 balance sheet shows a working capital
deficit of about $2.4 million, and a total shareholders' equity
deficit of about $1.4 million.
BANC OF AMERICA: Fitch Assigns Low-B Ratings to 2 Note Classes
--------------------------------------------------------------
Banc of America Mortgage Securities, Inc.'s mortgage pass-through
certificates, series 2003-L, are rated by Fitch Ratings as
follows:
-- $446,891,100 classes 1-A-1 - 1-A-3, 1-A-LR, 1-A-R, 2-A-1,
2-A-2 and 3-A-1 senior certificates 'AAA';
-- class B-1 $6,692,000 'AA';
-- class B-2 $2,999,000 'A';
-- class B-3 $1,846,000 'BBB';
-- class B-4 $1,153,000 'BB';
-- class B-5 $693,000 'B'.
The class B-6 certificate is not rated by Fitch.
The 'AAA' rating on the senior certificates reflects the 3.15%
subordination provided by the 1.45% class B-1, 0.65% class B-2,
0.40% class B-3, 0.25% privately offered class B-4, 0.15%
privately offered class B-5 and 0.25% privately offered class B-6.
The ratings on classes B-1, B-2, B-3, B-4 and B-5 reflect the
amount of its respective subordination.
The ratings also reflect the quality of the underlying mortgage
collateral, the capabilities of Bank of America Mortgage, Inc. as
servicer (rated 'RPS1' by Fitch), and Fitch's confidence in the
integrity of the legal and financial structure of the transaction.
The transaction comprises three groups of mortgage loans, secured
by first liens on one- to four-family properties, with a total of
886 loans and an aggregate principal balance of $461,427,794. The
three loan groups are cross-collateralized.
Group 1 consists of 3/1 hybrid adjustable-rate mortgage loans.
After the initial fixed interest rate period of three years, the
interest rate will adjust annually based on the One-Year LIBOR
index plus a gross margin. The group has an aggregate principal
balance of approximately $73,153,836 as of the cut-off date (Dec.
1) and a weighted average remaining term to maturity of 357
months. The weighted average original loan-to-value ratio for the
mortgage loans is approximately 70.35%. Rate/Term and cashout
refinances account for 42.54% and 14.65% of the loans in Group 1,
respectively. The weighted average FICO credit score for the group
is 728. Second home and investor-occupied properties comprise
5.53% and 1.67% of the loans in Group 1, respectively. The states
that represent the largest geographic concentration are California
(61.02%), Illinois (6%) and Florida (5.99%). All other states
represent less than 5% of the outstanding balance of the pool.
Group 2 consists of 5/1 hybrid ARMs. After the initial fixed
interest rate period of five years, the interest rate will adjust
annually based on the One-Year LIBOR index plus a gross margin.
Approximately 29.76% of Group 2 loans are Net 5 mortgage loans,
which require interest-only payments until the month following the
first adjustment date. The group has an aggregate principal
balance of approximately $363,094,273 as of the cut-off date and a
WAM of 358 months. The weighted average OLTV for the mortgage
loans is approximately 70.56%. Rate/Term and cashout refinances
account for 34.84% and 12.05% of the loans in Group 2,
respectively. The weighted average FICO credit score for the group
is 735. Second home and investor-occupied properties comprise
6.35% and 0.81% of the loans in Group 2, respectively. The state
that represents the largest geographic concentration is California
(64.87%). All other states represent less than 5% of the
outstanding balance of the pool.
Group 3 consists of 7/1 hybrid ARMs. After the initial fixed
interest rate period of seven years, the interest rate will adjust
annually based on the One-Year LIBOR index plus a gross margin.
The group has an aggregate principal balance of approximately
$25,179,685 as of the cut-off date and a WAM of 359 months. The
weighted average OLTV for the mortgage loans is approximately
69.32%. Rate/Term and cashout refinances account for 35.14% and
11.49% of the loans in Group 3, respectively. The weighted average
FICO credit score for the group is 727. Second home and investor-
occupied properties comprise 6.03% and 1.92% of the loans in Group
3, respectively. The states that represent the largest geographic
concentration are California (55.38%), Texas (8.37%), and Maryland
(7.64%). All other states represent less than 5% of the
outstanding balance of the pool.
Banc of America Mortgage Securities, Inc. deposited the loans in
the trust, which issued the certificates, representing undivided
beneficial ownership in the trust. For federal income tax
purposes, elections will be made to treat the trust as two
separate real estate mortgage investment conduits. Wells Fargo
Bank Minnesota, National Association will act as trustee.
BEAUTYCO INC: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Lead Debtor: Beautyco, Inc.
2600 S. Meridian
Oklahoma City, Oklahoma 73108
Bankruptcy Case No.: 03-07621
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Beautyco Investments, Ltd. 03-07622
Type of Business: The Debtor is one of the leading retailers of
professional beauty supplies in the United
States. See http://www.beautyco.com/for more
information.
Chapter 11 Petition Date: December 31, 2003
Court: Northern District of Oklahoma (Tulsa)
Judge: Terrence L. Michael
Debtors' Counsels: Neal Tomlins, Esq.
Ronald E. Goins, Esq.
Tomlins & Goins
Utica Plaza Building
2100 South Utica Avenue, Suite 300
Tulsa, OK 74114-1438
Tel: 918-747-6500
Total Assets Total Debts
------------ -----------
Beautyco, Inc. $3,309,400 $8,703,200
Beautyco Investments, Ltd. $5,250,000 $50,000
Debtor's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Helen of Troy Corp. Trade Debt $319,990
1 Helen of Troy Plaza
El Paso, TX 79912
Lee Rizzuto, Jr. Trade Debt $106,298
Naturelle, Inc. Trade Debt $105,776
American International Trade Debt $76,295
Proctor & Gamble Trade Debt $70,553
Piidea, Inc. Trade Debt $68,146
L'Oreal - Professional Trade Debt $68,135
Salesone, Inc. Trade Debt $65,081
Orly International Trade Debt $52,258
Locke Lidell & Sapp LLP Trade Debt $49,230
Worldwide Cosmetics Trade Debt $48,942
Lamaur Professional Trade Debt $46,998
Globe Color Press Trade Debt $38,641
Oklahoma County Treasurer Trade Debt $33,807
Thai Magic Co., Inc. Trade Debt $32,046
Rucci, Inc. Trade Debt $28,965
Advanced Research Trade Debt $22,909
Jordana Cosm Corp. Trade Debt $22,482
Intuition Trade Debt $19,619
Tweezerman Trade Debt $18,145
BROOKFIELD PROPERTIES: Completes C$200-Mil Preferred Share Issue
----------------------------------------------------------------
Brookfield Properties Corporation (BPO: NYSE/TSX) completed its
previously-announced Class AAA Series I preference share issue in
the amount of C$200 million.
Brookfield issued 8 million Class AAA Preference Shares, Series I,
at a price of C$25 per share with a yield of 5.2% per annum
including 2 million shares issued on the exercise of an option
granted to the underwriting syndicate. The net proceeds will be
utilized for general corporate purposes including the repayment of
corporate debt. The Series I Preference Shares will commence
trading on the Toronto Stock Exchange on December 31, 2003 under
the symbol BPO.PR.I.
Brookfield Properties Corporation, with a stock market value of
over US$9 billion in assets, owns, develops and manages premier
North American office properties. The Brookfield portfolio
comprises 47 commercial properties and development sites totaling
46 million square feet, including landmark properties such as the
World Financial Center in New York City and BCE Place in Toronto.
Brookfield is inter-listed on the New York and Toronto Stock
Exchanges under the symbol BPO. For more information, visit the
Brookfield Properties Web site at
http://www.brookfieldproperties.com/
* * *
As previously reported, Standard & Poor's Ratings Services
assigned its 'P-3(High)' Canadian national scale and 'BB+' global
scale preferred share ratings to Brookfield Properties Corp.'s
C$150 million (with an underwriters' option of up to an additional
C$50 million) 5.20% cumulative class AAA redeemable preferred
shares, series I. At the same time, the ratings outstanding on the
company, including the 'BBB' long-term corporate credit rating,
were affirmed. The outlook is stable.
RATINGS ASSIGNED
Brookfield Properties Corp.
Class Rating Amount (mil. C$)
AAA P-3(High) (Canadian scale) $150
BB+ (global scale)
RATINGS AFFIRMED
Corporate credit rating BBB/Stable/--
Preferred shares
Canadian scale P-3(High)
Global scale BB+
BULL RUN: Annual Shareholder Meeting Set for Wednesday in Atlanta
-----------------------------------------------------------------
The Annual Meeting of Stockholders of Bull Run Corporation, a
Georgia corporation, will be held at 10:00 a.m., local time, on
January 7, 2004, at the offices of Bull Run, 4370 Peachtree Road,
N.E., Atlanta, Georgia, for the following purposes:
1. To elect directors.
2. To authorize the past and future issuance of shares of Bull
Run common stock to the Company's Chairman and his
affiliates as compensation for his personal guarantee of
the Company's bank loans and as payment of annual dividends
on investments in the Company's preferred stock.
3. To ratify the selection of PricewaterhouseCoopers LLP as
Bull Run's independent auditors for its fiscal year ending
August 31, 2004.
4. To consider and act upon such other business as may
properly come before the meeting.
The Board of Directors has fixed the close of business on
October 31, 2003 as the record date for determining the holders of
common stock having the right to receive notice of, and to vote
at, the meeting. Only holders of record of common stock at the
close of business on such date are entitled to notice of, and to
vote at, the meeting.
At August 31, 2003, Bull Run's balance sheet shows a working
capital deficit of about $12 million, and a total shareholders'
equity deficit of about $27 million.
BUTLER MANUFACTURING: Sr. Noteholders Agree to Payment Deferrals
----------------------------------------------------------------
Butler Manufacturing Company (NYSE: BBR) reached agreement with
its senior noteholders to defer the December 30, 2003 and
March 20, 2004 principal payments in the aggregate amount of $8.5
million on the company's long-term senior notes.
John Holland, chairman and chief executive officer, said, "We view
this accomplishment as a positive step in the right direction of
pursuing our previously announced strategic options initiative. As
announced on October 30, 2003, the board of directors authorized
management to explore various strategic alternatives, including
the solicitation of private investment capital, asset sales, and
the sale of the company. In conjunction with the company's pursuit
of these alternatives, the senior noteholders have deferred
principal payments on the company's outstanding senior notes. In
exchange, the company has agreed to satisfy certain milestones
including consummation of a transaction that provides for
repayment in full of its outstanding senior notes by April 30,
2004.
"The noteholders have not waived any rights and are free to
exercise all remedies during the term of this deferral agreement.
While there are no guarantees, the company and its advisors are
diligently pursuing the strategic process and in this regard are
satisfied that substantial progress has been made to date," Mr.
Holland concluded.
Butler Manufacturing Company is the world's leading producer of
pre-engineered building systems, a leading supplier of
architectural aluminum systems and components, and provides
construction and real estate services for the nonresidential
construction market.
* * *
Liquidity and Capital Resources
In its most recent Form 10-Q filed with Securities and Exchange
Commission, Butler Manufacturing reported:
"Since December 2002, cash and cash equivalents decreased $29
million to $47 million due to declines in cash flows from
operations and investing activities.
"Cash flow from operating activities for the first nine months of
2003 was an approximate $19 million outflow. Receivables increased
$33 million, primarily in the North American Building System
Segment due to seasonal demand and timing delays in billing caused
by the implementation of a new computer system and in the
International Building Systems Segment due to increased demand.
Inventories increased primarily due to the expansion of operations
in the International Building Systems Segment. Real estate
developments in progress declined primarily due to fewer
development projects and the reclassification of a real estate
project to a long-term asset classification from a current asset
due to its anticipated sale extending beyond one year. Investments
and other assets increased through the first nine months of 2003
due primarily to the real estate project reclass mentioned above
and an increase in noncurrent deferred tax assets due to losses
generated in the first nine months of 2003. Noncurrent tax assets
represent timing differences related to the deductibility of
expenses not expected to be realized in the near term. Net current
deferred tax assets primarily represent the U.S. tax effect of
book versus tax timing differences related to deductibility of
expenses, including bad debt provision and product warranty and
claims reserves. Deferred tax assets attributable to the income
tax benefit on the 2003 net operating loss were reclassified from
current to noncurrent assets during the second quarter. Though it
is more likely than not that deferred tax assets will be utilized
during periods of future earnings, it was determined that it would
be unlikely for these assets to be realized during the next 12
months. During the second quarter the company reclassified a $31
million pension liability from current liabilities to long-term
liabilities. Given the company's losses to date, it appeared
unlikely that the company would make excess cash contributions to
the pension funds sufficient to extinguish this liability during
the next 12 months.
"Cash from investing activities for the first nine months of 2003
was used primarily to fund $12 million in capital expenditures
projects. Capital expenditures were primarily incurred within the
North American Building Systems Segment for a metal buildings
operation, the introduction of a new panel product line, and for a
new enterprise resource planning computer system. Capital
expenditures also included the costs to complete the construction
of a second plant in China for the International Building Systems
Segment.
"Cash from financing activities was used for payment of dividends
and scheduled long-term debt payments, while cash was provided
from the issuance of short-term debt for the financing of real
estate development projects. The company decreased its quarterly
dividend in the second quarter to $.04 per share from $.18 per
share. Dividends paid totaled $2.5 million and $3.4 million in the
first nine months of 2003 and 2002, respectively. Due to the
losses incurred to date and the uncertain course of the economy
the company discontinued the quarterly cash dividend in the third
quarter. Because it was in default under the credit agreements and
note agreements as of September 30, 2003, the company is currently
prohibited from paying dividends under the terms of those
agreements.
"During the second quarter of 2003 a $4 million cash dividend was
declared and paid to the U.S. parent company from the company's
Chinese subsidiary to increase domestic cash resources. During the
third quarter of 2003, treasury stock purchases were immaterial.
"Cash paid for interest on debt totaled $1.7 million in the third
quarter and $7.8 million year to date at the end of September 30,
2003. The cash paid for taxes totaled $.7 million for the quarter
and $1.7 million through September 30, 2003, while the tax refunds
totaled $.1 million for the quarter and $8.4 million year to date
through nine months of 2003.
"Total backlog at September 30, 2003 was $314 million compared
with $275 million a year ago, excluding the Lester Building
Systems business. Higher margin product backlog was approximately
10% higher, while construction backlog increased 60% when compared
to the same period a year ago.
"In June 2001, the company entered into a $50 million bank credit
facility and issued $50 million of senior unsecured notes in a
private placement. The bank credit facility was subsequently
amended in December 2002 to a $35 million facility with sub-limits
of up to $30 million for letters of credit and $10 million for
cash advances. At September 30, 2003, the company had
approximately $24.4 million of standby letters of credit issued
under the bank credit facility. Commitments under the credit
facility expire on June 20, 2004, at which time any outstanding
advances are payable.
"For the nine months ended September 30, 2003, there were no
domestic short-term borrowings. After giving effect to all
amendments, interest on advances under the credit facility is
based on either (a) the banks' base rate, which is the higher of
the Federal Funds rate plus .50% or the prime rate, plus a margin
ranging from 1.0% to 1.25%, or (b) LIBOR plus a margin ranging
from 1.75% to 2.5%. During the occurrence of a default, interest
on advances is the otherwise applicable rate plus 2%. Interest on
base rate advances is payable quarterly and is payable on LIBOR
advances at the end of periods ranging from one to six months. The
credit facility provides for a commitment fee on unused advances
ranging from .20% to .30%. Commitments under the credit facility
expire on June 20, 2004, at which time any outstanding advances
are payable.
"Per the terms of the company's bank credit and note agreements,
and subject to certain limitations, the company may borrow up to
$35 million from other lenders to fund the Real Estate Segment's
project development activities. At September 30, 2003, $2.9
million had been borrowed to fund development projects.
"At September 30, 2003 there were outstanding $50 million
principal amount of the company's 2001 senior notes due 2016, $35
million of its 1998 senior notes due 2013 and $5 million of its
1994 senior notes due 2003. Interest on the 2001 and 1994 senior
notes is payable semiannually on June 30 and December 30 and
interest on the 1998 senior notes is payable semiannually on March
20 and September 20. Principal installments on the notes are
payable prior to their final maturity.
"During the first quarter of 2003, the company and its note
holders amended the senior notes to increase the interest rate for
each series by 1.5%, of which increase .25% is permanent, .5% is
applicable until the company has modified or replaced its bank
credit facility on a pari passu basis with the note agreements,
and .75% is applicable until the later of the time that the bank
credit facility is modified or replaced on a pari passu basis with
the note agreements and the fixed charge ratio as defined in the
notes exceeds 2.25 to 1 for two consecutive four trailing
quarters. In connection with this amendment, the company granted
the note holders and lenders under the credit facility a security
interest in its domestic accounts receivable, domestic inventory,
domestic subsidiary stock, certain foreign subsidiary stock and
certain other personal property. Upon a payment default under any
of the note agreements, the interest rate of the related notes
would increase to the greater of such rate plus 2% or that rate
which is 2% greater than the Bank of America's prime rate.
"Both the credit facility and the senior notes contain financial
covenants and operating covenants.
"The severe cyclical decline in the nonresidential construction
industry during the past three years has outstripped the savings
realized from cost reductions and capacity closures that the
company has implemented over this period. As a result, although
the company was current with all payments under its debt
agreements at September 30, 2003, it was not in compliance with
its financial covenants within the bank credit agreement and the
senior notes agreements related to the minimum EBITDA level, the
fixed charge coverage ratio and the leverage ratio. Also as a
result, the company was required under accounting standards to
reclassify the related long-term portion of this debt, $81.5
million, as a current liability on the September 30, 2003
consolidated balance sheet.
"As reported in the second quarter, the company has been in
discussions with the senior lenders to restructure its debt
agreements. These discussions are continuing, but have taken
longer than expected. Because the company was not in compliance
with the financial covenants, the senior lenders have the right to
require payment of $90 million of debt recorded on the company's
balance sheet, as well as require funding of the stand-by letters
of credit. The company's senior lenders have not accelerated the
company's payment obligations and have allowed the company to
remain in breach of these agreements, although they have the right
to declare such default at any time. If the senior lenders were to
exercise this right, the company does not believe it would have
the ability to fund these obligations immediately, and the senior
lenders could pursue other remedies. Pending resolution of these
discussions, the company does not believe it will receive
additional funds from its bank credit agreement. Although there
is no guarantee the company will be able to achieve a mutually
satisfactory long-term resolution, the company continues to work
closely with the senior lenders to develop an acceptable
restructuring plan.
"On September 30, 2003 the company's cash balance of $47 million
included $14 million of cash in its International Building Systems
Segment that was not immediately available for repatriation to the
parent company. Although there can be no assurance, management
believes the company's cash and cash flow from operations will be
sufficient to provide for normal operating needs. To the extent
that actual results or events differ from management's financial
projections or business plans, the company's liquidity may be
adversely affected by one or more of the following factors: weak
demand for the company's products, a loss of customer
relationships, elevated raw materials prices, inability to
negotiate amendments to loan covenants, changes in payment terms
by the company's suppliers and vendors, or the requirement by the
company's senior lenders to fund the outstanding debt obligations.
"As mentioned previously, discussions are continuing between the
company and its senior lenders to restructure its debt agreements.
Along with existing cash balances these credit arrangements are
the company's primary source of liquidity. Other possible sources
of liquidity beyond normal operating cash flows include additional
cash dividends from the company's International Building Systems
Segment; loan transactions utilizing the company's approximately
$30 million of unencumbered operating real estate assets; loans or
the early sale of approximately $21 million of project related
assets of the company's Real Estate Segment; and the proceeds, if
any, from the $29.6 million jury verdict awarded to the company
related to a lawsuit involving Louisiana-Pacific Corporation.
There is no assurance that the timing of availability of these
additional possible sources of liquidity would correspond with
future liquidity requirements. In addition, the board of directors
has authorized management to explore strategic options available
to the company. The company has engaged George K. Baum & Company
to serve as financial advisor to assist in this process. Among the
options that are under consideration are the solicitation of
private investment capital, asset sales, and the sale of the
company."
CENTIV INC: Falls Short of Nasdaq Minimum Listing Requirements
--------------------------------------------------------------
Centiv, Inc. (NASDAQ: CNTV), received notification from Nasdaq
that for 30 consecutive trading days, the Company's common stock
closed below the minimum closing bid price of $1.00 per share
requirement for continued listing on the Nasdaq SmallCap Market.
To return to compliance, the bid price of the Company's common
stock must close at or above $1.00 per share for at least 10
consecutive trading days by June 28, 2004. Failure to achieve
compliance may result in the Company's common stock ceasing to be
listed on the Nasdaq SmallCap Market.
The Centiv Board of Directors is evaluating various alternatives
to address this issue.
Centiv, Inc. (NASDAQ: CNTV), headquartered in Vernon Hills, IL,
offers solutions for helping its clients efficiently and
effectively manage their temporary point-of-purchase signage
processes. Using Centiv's Web-based system, Clients gain market
flexibility while greatly increasing the effectiveness of their P-
O-P spending. Centiv is a registered trademark in the U.S. Patent
and Trademark Office. Additional information regarding Centiv,
Inc., may be obtained by contacting Centiv headquarters, 998
Forest Edge Drive, Vernon Hills, IL 60061. For more information on
the Company, visit its Web site at http://www.centiv.com/
* * *
Going Concern Uncertainty
In its Form 10-Q filed with the Securities and Exchange
Commission, Centiv, Inc., reported:
"The [Company's] financial statements have been prepared in
conformity with accounting principles generally accepted in the
United States of America, which contemplate continuation of the
company as a going concern. As shown in the accompanying unaudited
financial statements, the Company sustained losses from operations
in 2002, and such losses have continued through the quarter ended
September 30, 2003.
"Recoverability of a substantial portion of the recorded asset
amounts shown in the accompanying balance sheet is dependent upon
the continued operations of the Company, which in turn is
dependent upon the Company's ability to obtain or generate
additional working capital.
"The financial statements do not include any adjustments relating
to the recoverability and classification of recorded asset amounts
and classification of liabilities that might be necessary should
the Company be unable to generate such additional working capital.
"The Company is currently evaluating all potential strategic
alternatives, including the sale of some or all of the business of
the Company, potential partnerships and the availability of
additional capital to fund operations. Depending on the results
of these evaluations, the Company might determine that certain of
its long-lived assets will require an impairment charge in a
future period."
CHECKMATE STAFFING: Commences Chapter 11 Reorganization Process
---------------------------------------------------------------
CheckMate Staffing, Inc., an Orange, Calif.-based temporary
staffing company, filed for Chapter 11 protection on December 29,
2003 in the U.S. Bankruptcy Court for the Central District of
California.
According to the Associated Press, the Company reports assets
totaling $38 million and debts amounting to $52 million in its
bankruptcy papers filed with the Court on Mon., Dec. 29, 2003.
About $15 million is owed to the Internal Revenue Service and the
Company reports it owes the State Compensation Insurance Fund
about $7 million. Press reports indicate a workers' compensation
fraud investigation continues.
Marc Winthrop, Esq., at Winthrop Couchot Professional Corporation,
represents the Company.
With 47 branch locations in California, Arizona, Nevada and Texas,
CheckMate will continue operations as a debtor-in-possession as
the Company attempts to restructure its debt obligations.
CHECKMATE STAFFING: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Lead Debtor: Checkmate Staffing Inc.
701 S. Parker Ave.
Orange, California 92868
Bankruptcy Case No.: 03-19318
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Checkmate Staffing West, Inc. 03-19319
Checkmate Staffing East, Inc. 03-19320
Checkmate Staffing National, Inc. 03-19321
Checkmate Transport, Inc. 03-19322
Checkmate Technical Services, Inc. 03-19323
Staffaide, Inc. 03-19324
Type of Business: The Debtor provides staffing services in the US
and abroad to clients such as Home Depot and JC
Penney. See http://www.checkmatestaffing.com/
for more information.
Chapter 11 Petition Date: December 29, 2003
Court: Central District of California (Santa Ana)
Judge: John E. Ryan
Debtors' Counsel: Marc J. Winthrop, Esq.
Winthrop Couchot
660 Newport Center Drive 4th Floor
Newport Beach, CA 92660
Tel: 949-720-4100
Estimated Assets: $10 Million to $50 Million
Estimated Debts: $50 Million to $100 Million
Debtors' 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
State Compensation Litigated Settlement $6,800,000
Insurance Fund
Attn: Corporate Officer
P.O. Box 420807
San Francisco, CA 94142
COATS Operating Exp $9,756
Equipment Direct Inc. Operating Exp $6,741
Lazer Graphics Business Operating Exp $4,608
Forms
Check-Em-Out, Inc. Operating Exp $4,365
Airborne Express Operating Exp $4,150
Verizon Operating Exp $4,109
J.J. Keller & Assoc. Operating Exp $2,783
SBC Operating Exp $2,736
Best Office Products Operating Exp $2,153
So Calif Edison Operating Exp $2,055
Cintas Corporation Operating Exp $1,754
FedEx Operating Exp $1,602
Aramark Uniform Services Operating Exp $981
BellSouth Operating Exp $938
ANG Newspaper Operating Exp $863
Simplex Office Solutions Operating Exp $643
Danone Waters of North Operating Exp $586
America
AT&T Operating Exp $463
SF Weekly Operating Exp $450
CLAREMONT TECH.: Completes Acquisition of Safe Cell Tab Inc.
------------------------------------------------------------
As reported to the Securities & Exchange Commission on
September 4, 2003, Claremont Technologies, Corp. completed
acquisition to acquire 100% of the issued and outstanding shares
of the common stock of Safe Cell Tab, Inc. in exchange for
8,480,000 un-issued shares of its common stock. As a result of
this exchange, Safe Cell Tab becomes a wholly owned subsidiary of
the Company on August 22, 2003, pursuant to a Share Exchange
Agreement between Claremont Technologies and the shareholders of
Safe Cell Tab.
The company's June 30, 2003, balance sheet shows a total
shareholders' equity deficit of about $121,000.
CLEAN DIESEL: Closes Private Placement Sale of 1.28M Common Shares
------------------------------------------------------------------
On December 1, 2003, Clean Diesel Technologies Inc., completed the
sale of 1,282,600 shares of its common stock, par $0.05, at
GBP 1.70 (approximately $2.89) per share, in an offshore private
placement pursuant to Regulation S under the Securities Act of
1933 to 17 investors principally located in the United Kingdom.
The estimated net proceeds of $3,550,000 from this placement are
to be used for the Company's general corporate purposes, including
the development and commercialization of its products.
At December 1, 2003, the Company's cash position including the
above proceeds, was approximately $7,000,000.
* * *
LIQUIDITY AND SOURCES OF CAPITAL
In its recent SEC filing, Clean Diesel reported:
"Prior to 2000, the Company was primarily engaged in research and
development and has incurred losses since inception aggregating
$24,183,000 (excluding the effect of the non-cash preferred stock
dividends). The Company expects to incur losses through the
foreseeable future as it further pursues its commercialization
efforts. Although the Company started selling limited quantities
of product in 1999 and licensing revenue in 2000 and 2001, sales
and revenue to date have been insufficient to cover operating
expenses, and the Company continues to be dependent upon sources
other than operations to finance its working capital
requirements."
"For the six months ended September 30, 2003 and 2002, the Company
used cash of $1,773,000 and $2,176,000 respectively, in operating
activities."
"At September 30, 2003 and December 31, 2002, the Company had
cash and cash equivalents of $3,994,000 and $2,083,000,
respectively. The increase in cash and cash equivalents in
2003 was the result of the issue of Common Stock as discussed in
the next paragraph. Offsetting some of this increase are expenses
relating the verification programs with EPA and CARB and the on-
going marketing and operation costs. The Company anticipates
incurring additional losses through at least the next 12 months as
it further pursues its commercialization efforts."
"In September 2003, Clean Diesel Technologies received $3.865
million (net of $39,000 in expenses) through a private placement
of 2,395,597 shares of its Common Stock. In conjunction with the
private placement, 230,240 ten year warrants with an exercise
price of $1.63 per share were issued."
"In October 2002, Clean Diesel Technologies received $1.356
million (net of $69,000 in expenses) through a private placement
of 704,349 shares of its Common Stock on the AIM (Alternative
Investment Market) London Stock Exchange."
"In November 2000, the Company secured a $1,000,000 privately
financed term loan facility. In December 2000, the Company drew
down $500,000 of the term loan facility and in March 2001 the
remaining $500,000 of the term loan was drawn down. As part of
the private placement stock transaction in December 2001, $750,000
of the outstanding term loan plus accrued interest was converted
to common stock. The remaining $250,000 plus accrued interest was
paid in cash in January 2002."
"As a result of the Company's recurring operating losses, the
Company has been unable to generate positive cash flow. In
management's opinion, the Company's cash balance at
September 30, 2003 will be sufficient to fund the Company's
operations through at least 2004. The Company may require
additional capital to fund its future operations. Although the
Company believes that it will be successful in its capital-raising
efforts, there is no guarantee that it will be able to raise such
funds on terms that will be satisfactory to the Company. The
Company will develop contingency plans in the event future
financing efforts are not successful. Such plans may include
reducing expenses and selling or licensing some of the Company's
technologies."
CONGOLEUM CORP: Case Summary & 21 Largest Unsecured Creditors
-------------------------------------------------------------
Lead Debtor: Congoleum Corporation
3500 Quakerbridge Road
Mercerville, New Jersey 08619-0127
Bankruptcy Case No.: 03-51524
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Congoleum Sales, Inc. 03-51525
Congoleum Fiscal, Inc. 03-51526
Type of Business: The Debtor manufactures and sells resilient
sheet and tile floor covering products with a
wide variety of product features, designs and
colors. The company also produces through-chip
inlaid products for both residential and
commercial markets. For more information, see
http://www.congoluem.com/
Chapter 11 Petition Date: December 31, 2003
Court: District of New Jersey (Trenton)
Judge: Kathryn C. Ferguson
Debtor's Counsel: Domenic Pacitti, Esq.
Saul Ewing, LLP
222 Delaware Avenue, 12th Floor
Wilmington, DE 19801
Tel: 302-421-6864
Fax: 302-421-5881
Total Assets: $187,126,000
Total Debts: $205,940,000
Debtor's 21 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Wachovia Bank, N A, as Bond Debt $100,000,000
Indenture Trustee
Two Commerce Square, #2700
20001 Market Street
Philadelphia, PA 19103
Occidental Chem. Corp. (PLT) Trade Debt $679,909
5005 LBJ Freeway
Dallas, TX 75244
Ferro Corporation Trade Debt $651,311
7050 Krick Road
Walton Hills, IL 44146
Mid Atlantic Storage Systems Trade Debt $175,688
Inc.
Mohawk Factoring, Inc. Trade Debt $121,101
Noveon Inc. Trade Debt $107,306
Albany Intl-Appleton Wire Trade Debt $91,732
CMH Flooring Products Inc. Trade Debt $90,717
Engineering America Inc. Trade Debt $71,844
Rumberger, Kirk & Caldwell Trade Debt $52,003
Marketing Alliance Group Inc Trade Debt $51,425
Mapei Corporation Trade Debt $46,888
Micro Solutions Plus, Inc. Trade Debt $46,051
AGI Schultz Merchandising, Trade Debt $44,860
Inc.
Lockwood's Electric Motor Trade Debt $42,085
Millennium Inorganic Trade Debt $37,825
Chemicals
BGE Commercial Building Trade Debt $35,427
Systems
Midland Products Trade Debt $34,299
Lenape Industries, Inc. Trade Debt $31,482
Exxon Chemical Americas Trade Debt $30,865
Air Products & Chemicals, Trade Debt $29,988
Inc.
COVANTA: Overview of Ogden's Second Joint Liquidating Plan
----------------------------------------------------------
Ogden New York Services, Inc., et al.'s Second Joint Plan of
Liquidation provides for the complete liquidation of the
Liquidating Debtors. During the course of the Debtors'
bankruptcy proceedings, substantially all of the Liquidation
Assets of the Liquidating Debtors have already been sold. The
Debtors have proposed that the Secured Bank Lenders and 9.25%
Debenture Holders contribute their Distributions, to which they
would otherwise be entitled under the Second Liquidation Plan, to
Reorganized Covanta. These Distributions consist of:
(a) the proceeds of certain postpetition asset sales; and
(b) certain other Claims of the Liquidating Debtors upon which
the Secured Bank Lenders and 9.25% Debenture Holders have
a first priority secured lien.
The Debtors further propose that up to $[_____] of the Cash
subject to the transfers be transferred to the Operating Reserve
and the Administrative Expense Claims Reserve, which will be used
by the Liquidating Trustee to fund the implementation of the
Second Liquidation Plan. The transfers to Reorganized Covanta
will assist the Reorganized Debtors in their reorganization.
Furthermore, to the extent that there are Liquidation Assets that
have not been sold or transferred to Reorganized Covanta, the
Second Liquidation Plan provides for the complete liquidation and
monetization or abandonment of the Residual Liquidation Assets
and the complete dissolution of the Liquidating Debtors pursuant
to applicable state law.
In accordance with Section 1141(d)(3) of the Bankruptcy Code,
confirmation of the Second Liquidation Plan does not discharge
the Liquidating Debtors from any Claims asserted against them.
The Second Joint Liquidation Plan also modifies the
Classification of Claims under the Debtors' ESOP Liquidation Plan
to remove Class 3C -- Allowed Covanta Tulsa Secured Claims.
(Covanta Bankruptcy News, Issue No. 44; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
CROWN CASTLE: Prices Tender Offers for 9% & 9-1/2% Senior Notes
---------------------------------------------------------------
Crown Castle International Corp. (NYSE: CCI) has determined the
consideration to be paid in connection with its cash tender offers
and consent solicitations relating to its outstanding 9% Senior
Notes due 2011 (CUSIP No.228227AC8) and its 9-1/2% Senior Notes
due 2011 (CUSIP No. 228227AH7).
The tender offers and consent solicitations are subject to the
terms and conditions set forth in the Company's Offer to Purchase
and Consent Solicitation Statement dated December 5, 2003.
Holders of the Senior Notes who tender prior to 5:00 p.m. (EST) on
January 6, 2004 will receive the tender offer consideration plus
the consent payment of $20.00 per $1,000 principal amount of
Senior Notes.
Under the terms of the tender offer for the 9% Notes, the
consideration for each $1,000 principal amount of 9% Notes
tendered was determined on the third business day prior to the
Expiration Date (December 31, 2003). The consideration was
calculated by taking (i) the present value as of the payment date
of (A) $1,045.00, which is the redemption price applicable to the
9% Notes on May 15, 2004, the first date on which the 9% Notes may
be redeemed, and (B) the present value of the interest that would
accrue on the 9% Notes so tendered from and including the payment
date up to, but not including, the earliest redemption date, in
each case determined on the basis of a yield to such date equal to
the sum of (x) the yield to maturity on the 3-1/4% U.S. Treasury
Note due May 31, 2004, plus (y) 50 basis points, plus (ii) accrued
and unpaid interest, if any, up to, but not including, the payment
date, minus (iii) the consent payment of $20.00 per $1,000
principal amount of 9% Notes. The total consideration per $1,000
principal amount payable to holders of 9% Notes who tender prior
to the Expiration Date is equal to $1,084.12, representing the sum
of the tender offer consideration and the consent payment of
$20.00 per $1,000 principal amount of 9% Notes. The assumed
payment date is January 7, 2004.
Under the terms of the tender offer for the 9-1/2% Notes, the
consideration for each $1,000 principal amount of 9-1/2% Notes
tendered was determined on the third business day prior to the
Expiration Date (December 31, 2003). The consideration was
calculated by taking (i) the present value as of the payment date
of (A) $1047.50, which is the redemption price applicable to the
9-1/2% Notes on August 1, 2004, the first date on which the 9-1/2%
Notes may be redeemed, and (B) the present value of the interest
that would accrue on the 9-1/2% Notes so tendered from and
including the payment date up to, but not including, the earliest
redemption date, in each case determined on the basis of a yield
to such date equal to the sum of (x) the yield to maturity on the
7-1/4% U.S. Treasury Note due August 15, 2004, plus (y) 50 basis
points, plus (ii) accrued and unpaid interest, if any, up to, but
not including, the payment date, minus (iii) the consent payment
of $20.00 per $1,000 principal amount of 9-1/2% Notes. The total
consideration per $1,000 principal amount payable to holders of
9-1/2% Notes who tender prior to the Expiration Date is equal to
$1,132.57, representing the sum of the tender offer consideration
and the consent payment of $20.00 per $1,000 principal amount of
9-1/2% Notes. The assumed payment date is January 7, 2004.
Morgan Stanley is acting as the Dealer Manager and Solicitation
Agent for the tender offers. Requests for documents may be
directed to MacKenzie Partners, Inc., the Information Agent, by
telephone at (800) 322-2885 (toll-free) or (212) 929-5500
(collect), or in writing at 105 Madison Avenue, New York, NY
10016, Attention: Steven C. Balet. Questions regarding the tender
offer may be directed to Morgan Stanley at (800) 624-1808 (toll-
free) or (212) 761-1897 (collect), or in writing at 1585 Broadway,
Second Floor, New York, NY 10036, Attention: Gordon Parker.
Crown Castle (S&P, B- Corporate Credit Rating, Stable Outlook) is
among the largest wireless tower operators in the industry, with
about 10,718 sites and 3,472 sites in the U.S. and U.K.,
respectively. The company derives more than 80% of its revenues
from the tower leasing business and the remainder from network
services.
CSK AUTO: 12% Senior Note Tender Offer Will Expire on Jan. 15
-------------------------------------------------------------
CSK Auto Corp. (NYSE: CAO), the parent company of CSK Auto Inc., a
specialty retailer in the automotive aftermarket, announced that
the consent date, in connection with the consent solicitation and
related cash tender offer of CSK Auto Inc., for all of its $280
million outstanding principal amount of 12% Senior Notes due 2006,
occurred at 5 p.m., New York City time, on December 31, 2003.
As of the said consent date, CSK Auto Inc. has received tenders of
notes and deliveries of related consents from holders of
approximately $265 million aggregate principal amount of notes.
The supplemental indenture relating to the notes has been executed
today by CSK Auto Inc. and the trustee under the indenture, but
will not become operative until after notes are accepted for
payment and purchase pursuant to the tender offer.
The tender offer will expire at 12 midnight, New York City time,
on Jan. 15, 2004, unless extended by CSK Auto Inc. Tenders of the
notes made at or prior to 5 p.m., New York City time, on
December 31, 2003, may no longer be validly withdrawn, except as
may be required by law. The consummation of the tender offer is
conditioned upon the successful completion of a replacement
financing consisting of a new note offering and the amendment of
the senior credit facility of CSK Auto Inc., among other
conditions.
The consideration for notes tendered was calculated as of 10 a.m.,
New York City time, on Jan. 2, 2004, based on a fixed-spread
pricing formula. The settlement date will be promptly following
the expiration date.
Credit Suisse First Boston LLC is the Dealer Manager and
Solicitation Agent for the tender offer and consent solicitation.
Questions regarding the tender offer may be directed to Credit
Suisse First Boston's Liability Management Group at 800-820-1653.
Request for documents may be directed to MacKenzie Partners Inc.,
the Information Agent, at 212-929-5500.
CSK Auto Corp. (S&P, B+ Corporate Credit Rating, Stable) is the
parent company of CSK Auto Inc., a specialty retailer in the
automotive aftermarket. As of May 4, 2003, the company operated
1,108 stores in 19 states under the brand names Checker Auto
Parts, Schuck's Auto Supply and Kragen Auto Parts.
DII INDUSTRIES: Will Honor Prepetition Ordinary Course Claims
-------------------------------------------------------------
DII Industries, LLC, and its debtor-affiliates believe that it is
fundamental to the success of the recovery plan they filed on the
Petition Date that disruption to their businesses be minimized to
the greatest extent possible and that the companies to everything
possible to maintain their existing relationships with their
customers and suppliers. The Debtors believe that satisfying in
full all non-contingent, liquidated, undisputed unsecured
prepetition claims against them and their non-debtor affiliates,
including claims of trade suppliers, vendors and landlords
incurred in the ordinary course of business, is what's necessary.
At the First Day Hearing, the Debtors sought and obtained the
Court's permission to pay and continue paying, in their sole
discretion, all prepetition claims in the ordinary course of
business. The Debtors are required to establish a separate
escrow account equal to all Ordinary Course Prepetition Payments.
The Court also requires the Debtors to invest the deposits in the
Escrow Account in short-term investment grade securities pursuant
to their standard investment practices and policies. That
reserve will be distributed on further Court order.
Normally, the Debtors owe $50,000,000 to 1,000 creditors each
week. As of September 30, 2003, the Debtors owed $40,000,000 to
1,000 Ordinary Course Creditors.
Judge Fitzgerald also permits Ordinary Course Creditors to
recoup, offset and deduct any chargebacks the Creditors processed
regardless of whether these arise prepetition or postpetition and
without regard to the date of the purchase, giving rise to the
chargeback or credit. All Ordinary Course Payments may be
recovered for the benefit of the Debtors' estates.
Jeffrey N. Rich, Esq., at Kirkpatrick & Lockhart LLP, in New
York, explains that the Debtors had discussions with a
significant number of their Ordinary Course Creditors to assure
them that the bankruptcy filing would not preclude the Debtors
from paying them what is owed in the ordinary course of business.
According to Mr. Rich, any failure by the Debtors to adhere to
this assurance could result in substantial detriment to their
reputation in the industries in which they compete. A default on
these assurances will likely create a major difficulty for the
Debtors to conduct business, as the Debtors will have breached
the good faith confidence of their Ordinary Course Creditors.
This would have a material adverse effect on the Debtors'
financial condition and ability to confirm the Plan.
To the extent they dispute a payment to an Ordinary Course
Creditor, the Debtors are authorized to settle the disputed
claims in the ordinary course, without further Court approval.
Asbestos Personal Injury Trust Claims and Silica Personal Injury
Trust Claims are not included in the request. (DII & KBR
Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
DOBSON COMMS: Closes Exchange Offer For 8-7/8% Senior Notes
-----------------------------------------------------------
Dobson Communications Corporation (Nasdaq:DCEL) reported that, as
of 12:00 p.m., midnight, New York City time, on December 30, 2003,
$650 million principal amount, representing all of its outstanding
8-7/8% Senior Notes due 2013, have been tendered in exchange for
new 8-7/8% Senior Notes due 2013, which have been registered under
the Securities Act of 1933. Dobson Communication has accepted all
tenders of its 8-7/8% Senior Notes.
Dobson Communications (S&P, CCC+ Senior Debt and B- Corporate
Credit Rating, Stable Outlook) is a leading provider of wireless
phone services to rural markets in the United States.
Headquartered in Oklahoma City, the Company owns wireless
operations in 16 states, with markets covering a population of
11.1 million. The Company serves 1.6 million customers. For
additional information on the Company and its operations, please
visit its Web site at http://www.dobson.net/
DOBSON COMMS: Repurchases $46 Million of 12-1/4% Sr. Preferreds
---------------------------------------------------------------
Dobson Communications Corporation (Nasdaq:DCEL) has completed the
repurchase in a private transaction of approximately $46.1 million
(liquidation preference amount) of its 12-1/4% Senior Exchangeable
Preferred Stock for $48.9 million. CUSIPs for the 12-1/4% Senior
Exchangeable Preferred Stock are 256 072 30 7 and 256 069 30 3.
The Company announced the planned repurchase last week.
Dobson Communications (S&P, CCC+ Senior Debt and B- Corporate
Credit Rating, Stable Outlook) is a leading provider of wireless
phone services to rural markets in the United States.
Headquartered in Oklahoma City, the Company owns wireless
operations in 16 states, with markets covering a population of
11.1 million. The Company serves 1.6 million customers. For
additional information on the Company and its operations, please
visit its Web site at http://www.dobson.net/
DWANGO NORTH AMERICA: Retains Eisner LLP as New Auditor
-------------------------------------------------------
On November 4, 2003, Dwango North America Corporation dismissed
Jones Simkins LLP as independent auditors for the Company. The
decision to dismiss Jones and to seek new accountants was
recommended by the Company's Board of Directors and approved by
the Audit Committee of the Company's Board of Directors.
The audit reports of Jones on the Company's financial statements
for the years ended December 31, 2001 and 2002 included a
reference to substantial doubt that exists regarding the Company's
ability to continue as a going concern.
On November 4, 2003, the Company engaged Eisner LLP to serve as
its independent auditors.
EL PASO CORP: Completes Petroleum Asset Sales Totaling $156-Mil.
----------------------------------------------------------------
El Paso Corporation (NYSE: EP) announced progress on three
petroleum asset sales totaling approximately $156 million.
The first transaction is the sale of its Coastal Unilube assets to
an affiliate of Warren Oil Company, Inc. for approximately $34
million, consisting of both cash and a note payable. The
transaction, which closed December 30, 2003, includes the
lubricant blending and packaging facility located in West Memphis,
Arkansas, and related inventory. The facility has an estimated
annual production capacity of 117 million gallons of lubricants
and automotive performance products. El Paso will also receive
approximately $45 million from related working capital reductions.
The company also sold its 50-percent interest in a Philippine
petroleum sales and marketing joint venture, as well as its rights
in the Subic terminal and Clark pipeline asset leases it held with
the Philippine Government. The total value of the transaction is
$77 million, which includes $35 million in proceeds for the 50-
percent interest in the joint venture, the rights to the terminal
and pipeline leases, and the release of a $42 million guarantee.
The Philippine business comprised of marketing, trading, storage,
and distribution of petroleum products within the Philippines.
The sales and marketing transaction closed on December 30, 2003,
and the assets transaction is expected to close by January 15,
2004.
These sales support El Paso's recently announced long-range plan
to reduce the company's total debt to approximately $15 billion by
year-end 2005. This will be achieved primarily through $3.3
billion to $3.9 billion of additional asset sales, the sale of
restructured power contracts, the recovery of $500 million to $600
million in working capital, the conversion of the company's 9.00-
percent equity security units ($575 million), free cash flow
generation, and actions already taken in the fourth quarter of
2003.
El Paso Corporation's (S&P, B Corporate Credit Rating, Negative
Outlook) purpose is to provide natural gas and related energy
products in a safe, efficient, dependable manner. The company
owns North America's largest natural gas pipeline system and one
of North America's largest independent natural gas producers. For
more information, visit http://www.elpaso.com/
EL PASO: Reports Results of Exchange Offer for Security Units
-------------------------------------------------------------
El Paso Corporation (NYSE: EP) announced the final results of its
exchange offer for up to 10,350,000 of its 9.00% Equity Security
Units, which expired at 5:00 p.m., New York City time, on Tuesday,
December 23, 2003.
Based on a final count, 6,057,953 Units were tendered for
exchange, representing approximately 53 percent of the outstanding
Units. In accordance with the terms of the exchange offer, El
Paso accepted all tendered Units without proration among those
tendering. El Paso exchanged an aggregate of 15,182,972 shares of
its common stock and $58,762,750 of cash, including cash paid in
lieu of fractional shares, for the accepted Units. The
consideration for the accepted Units will be delivered promptly.
El Paso Corporation's (S&P, B Corporate Credit Rating, Negative
Outlook) purpose is to provide natural gas and related energy
products in a safe, efficient, dependable manner. The company
owns North America's largest natural gas pipeline system and one
of North America's largest independent natural gas producers. For
more information, visit http://www.elpaso.com/
EL PASO: Enters into Purchase & Sale Agreement with Sunoco Inc.
---------------------------------------------------------------
El Paso Corporation (NYSE: EP) and its subsidiary Coastal Eagle
Point Oil Company have completed a purchase and sale agreement
with Sunoco, Inc. (NYSE: SUN) for the company's Eagle Point
refinery for $111 million plus fair market value for related
working inventories at time of closing.
The companies received approval of the transaction by the Federal
Trade Commission and anticipate closing by mid-January 2004.
Sunoco has the option to purchase various refined product
pipelines connecting the refinery to regional distribution
systems. The refinery, located in Westville, New Jersey across
the Delaware River from Philadelphia, has a rated capacity of
150,000 barrels per day.
This sale supports El Paso's recently announced long-range plan to
reduce the company's total debt to approximately $15 billion by
year-end 2005. This will be achieved primarily through $3.3
billion to $3.9 billion of additional asset sales, the sale of
restructured power contracts, the recovery of $500 million to $600
million in working capital, the conversion of the company's 9.00-
percent equity security units ($575 million), free cash flow
generation, and actions already taken in the fourth quarter of
2003.
El Paso Corporation's (S&P, B Corporate Credit Rating, Negative
Outlook) purpose is to provide natural gas and related energy
products in a safe, efficient, dependable manner. The company
owns North America's largest natural gas pipeline system and one
of North America's largest independent natural gas producers. For
more information, visit http://www.elpaso.com/
EL PASO: Sunoco Gets FTC Nod to Acquire Eagle Point Refinery
------------------------------------------------------------
Sunoco, Inc. (NYSE: SUN) has completed the regulatory review
process with the Federal Trade Commission and signed a purchase
and sale agreement with El Paso Corporation (NYSE: EP) for its
acquisition of the Eagle Point refinery.
The purchase price is $111 million plus the fair market value for
inventories and certain assumed liabilities at time of closing.
The companies expect to close the transaction by mid-January 2004.
The refinery, located in Westville, New Jersey across the Delaware
River from Sunoco's Philadelphia Refining Complex has a rated
capacity of 150,000 barrels per day. The purchase includes
certain logistics assets associated with the refinery which Sunoco
intends to make available for sale to Sunoco Logistics Partners,
L.P., its 75 percent owned master-limited partnership. Sunoco
also signed an option to purchase El Paso's share of the Harbor
pipeline, which connects the refinery to regional distribution
systems.
"We are pleased that we can now move ahead and complete this
acquisition," said Sunoco Chairman and Chief Executive Officer
John G. Drosdick. "The Eagle Point refinery will expand our total
refining capacity by 20 percent, integrate well with our other
Northeast Refining operations and should be positioned to make a
significant contribution to our results in 2004."
Sunoco expects to conduct a conference call to review the
acquisition in more detail upon final closing of the transaction.
Sunoco, Inc., headquartered in Philadelphia, PA, is a leading
manufacturer and marketer of petroleum and petrochemical products.
With 730,000 barrels per day of refining capacity, over 4,600
retail sites selling gasoline and convenience items, interests in
almost 11,000 miles of domestic crude oil and refined product
pipelines and 34 product terminals, Sunoco is one of the largest
independent refiner-marketers in the United States. Sunoco is a
growing force in petrochemicals with approximately six billion
pounds of annual sales, largely chemical intermediates used in the
manufacture of fibers, plastics, film and resins. Utilizing a
proprietary technology, Sunoco also manufactures two million tons
annually of high-quality blast furnace coke for use in the steel
industry. For additional information, visit Sunoco's Web site at
http://www.SunocoInc.com/
EMAGIN CORP: Appoints Eisner LLP as New Independent Accountant
--------------------------------------------------------------
eMagin Corporation (AMEX:EMA), the leading developer of active
matrix organic light emitting diode microdisplays, announced that
pursuant to the recommendation of its Audit Committee and its
Board of Directors, the Company has appointed Eisner LLP as its
independent auditors.
Eisner LLP, replaces Grant Thornton LLP, effective December 30,
2003 and will conduct the fiscal year 2003 audit.
The Management and Board of eMagin believe that the increasing
demands of both the Company's growth and external pressures from
regulatory changes require the Audit Committee and its newly
established Corporate Governance Committee to increase its levels
of interaction with independent auditors in as cost effective
manner as possible. The appointment of Eisner is expected to
increase the resources available for the Board and the Company.
The Company would like to thank Grant Thornton LLP for its service
as its public accounting firm during the past year.
The world leader in organic light emitting diode (OLED)-on-silicon
microdisplay technology, eMagin combines integrated circuits,
microdisplays, and optics to create a virtual image similar to the
real image of a computer monitor or large screen TV. eMagin
invented the award-winning SVGA+ and SVGA-3D OLED microdisplays,
the world's first single-chip color video OLED microdisplay and
embedded controller for advanced virtual imaging. eMagin's
microdisplay systems are expected to enable new mass markets for
wearable personal computers, wireless Internet appliances,
portable DVD-viewers, digital cameras, and other emerging
applications for consumer, industrial, and military applications.
eMagin has developed its own technology to create high performance
OLED-on-silicon microdisplays and related optical systems, and is
a licensee of Eastman Kodak's OLED technology. eMagin is the only
company to announce, publicly show and sell full-color active
matrix OLED-on-silicon microdisplays. eMagin's corporate
headquarters and microdisplay operations are co-located with IBM
on its campus in East Fishkill, N.Y. Optics and system design
facilities are located at its wholly owned subsidiary, Virtual
Vision, Inc., in Redmond, WA. Additional information is available
at http://www.emagin.com/
Eisner LLP is a leading regional accounting & business advisory
services firm in the Northeast and is ranked among the top 20
firms in the United States. Eisner has 400 employees, including 60
partners and principals, who work closely with both privately held
and public companies. The firm presently has 70 public companies.
Eisner is an independent member of Baker Tilly International, one
of the world's largest international associations of accounting
firms. The firm has offices in New York, New York and Florham
Park, New Jersey. www.eisnerllp.com
At June 30, 2003, eMagin's balance sheet shows a total
shareholders' equity deficit of about $6 million.
EMERCOR BLDG.: Creditors Will Foreclose on Defaulted Debentures
---------------------------------------------------------------
Emercor Building Systems Limited filed its audited financial
statements for the Year ended March 31, 2003 and the financial
results for its first quarter ending June 30, 2003 and its second
quarter ending September 30, 2003. This brings the Company current
on its financial reporting.
The Company also has been advised that its major creditors plan to
complete the foreclosure on the secured debentures currently in
default and to forgive certain debts outstanding effective as of
December 31, 2003. This transaction will result in the creditors
acquiring full ownership of Emercor Limited, EBSL's operating
subsidiary that the creditors plan to continue operating as a
private company. This transaction will also leave EBSL
substantially debt free and in a position to search for and
acquire another business subject to regulatory and all other
required approvals.
In contemplation of this major change in the Company's balance
sheet, the Company reviewed its position on the proposed reverse
take over announced previously and determined that the proposed
transaction was no longer in the best interests of the Company's
shareholders. As the Company was in a position to terminate this
agreement notwithstanding the receipt of a $50,000 non-refundable
deposit, the Company has notified the other party that the
agreement has been terminated.
It is management's intention to bring the Company back into good
standing with the relevant authorities and then undertake a
transaction that will leave the Company's shareholders with shares
that will have some value. There can be no assurance that the
Company can meet all of the demands of the relevant authorities to
bring it back into good standing. Further, there can be no
assurance that the company will be able to negotiate, obtain all
of the necessary approvals and close a transaction that will
preserve value for the shareholders.
For the year ending March 31, 2003, the Company lost $456,338 on
sales of $2,252, 599 as compared with a loss of $1,074,024 on
sales of $1,897,655 the previous year.
For the first quarter ending June 30, 2003 the Company lost
$40,655 on sales of $678,552 as compared with a loss of $227,284
on sales of $630,889 for the first quarter the previous year.
For the second quarter ending September 30, 2003 the Company lost
$76,802 on sales of $755,549 as compared with a loss of $48,495 on
sales of $564,404 for the second quarter the previous year. The
results for the second quarter this year were adversely impacted
by the dramatic change in the Canada -US foreign exchange rate and
by abnormally high costs for oriented strand board, one of the
Company's major component parts in its Emercor products line.
For the six months ended September 30, 2003 the Company had a net
loss of $117,457 on sales of $1,434,101 as compared with a loss of
$275,779 on sales of $1,195,293 for the same six-month period the
previous year.
ENRON CORP: Court Okays Uniform PGE Asset Sale Bidding Protocol
---------------------------------------------------------------
Prior to the Petition Date, Enron Corporation conducted a
marketing process for the sale of all of the issued and
outstanding shares, $3.75 par value per share, of Portland General
Electric Company. In 1999, Enron entered into an agreement to
sell the Shares to one party. However, Martin A. Sosland, Esq.,
at Weil, Gotshal & Manges LLP, in New York, reported that the
transaction did not close due to the purchaser's inability to
obtain financing. In 2001, Enron again entered into another
agreement for the sale of the Shares but the agreement was
terminated by mutual agreement of the parties.
After extensive and substantial arm's-length negotiations, Enron
reached an agreement to sell the Shares to Oregon Electric
Utility Company LLC, a newly formed entity financially backed by
investments funds managed by Texas Pacific Group. According to
Mr. Sosland, TPG is a top-tier private equity firm with
significant transaction experience. It is a private investment
partnership managing over $13,000,000 in assets.
The parties' purchase agreement is subject to bidding
protections, among others. Accordingly, Enron sought and obtained
the Court's approval to:
(a) establish procedures for the solicitation and
consideration of qualified proposals and for selection of
the highest or best bid to purchase the Shares;
(b) approve Enron's payment of a break-up fee and certain
other expenses to Oregon Electric on the conditions set
forth in the Purchase Agreement;
(c) authorize and schedule an auction at which higher and
better bids will be solicited on February 2, 2004; and
(d) schedule the Sale Hearing for February 5, 2004 on the
sale of the Shares free and clear of all liens, claims,
encumbrances and other interests with the Winning Bidder
after the conclusion of the Auction.
Bidding Procedures and Auction
To maximize the value of the Shares, Enron will implement this
competitive bidding process designed to generate a maximum
recovery for Enron:
A. Qualification as Bidder
Any entity that wishes to make a bid for the Shares must
provide Enron with sufficient and adequate information to
demonstrate, to Enron's satisfaction, upon consultation with
the Committee, that it has the financial wherewithal and
ability to consummate the transactions contemplated in the
purchase agreement submitted with its bid and the ability to
comply with all obligations under its purchase agreement.
B. Bid Requirements
(1) Same Terms. Enron, upon consultation with the Committee,
will entertain only those bids that are presented under a
contract substantially identical to the Purchase
Agreement, marked to redline any modifications made;
(2) Deposit. Each bid must be accompanied by a deposit at
least equal to the greater of $20,250,000 or 1.5% of the
bidder's proposed Purchase Price. Prior to the Bid
Deadline, the Earnest Money Deposit is to be delivered to
Enron in the form of a:
(a) wire transfer to:
JP Morgan Chase Bank
500 Stanton Christiana Road
Newark, DE 19713
ABA# 021000021
For Credit To: Weil, Gotshal & Manges LLP Special
Account
Acct# 0158-37-474
Reference: 43889.0003/PGE/M. Sosland; or
(b) cashier's check to:
Weil, Gotshal & Manges LLP
Attn: Norm LaCroix
Director of Accounting
767 Fifth Avenue
New York, New York 10153
Reference: 43889.0003/PGE/M. Sosland; or
(c) irrevocable letter of credit to the benefit of:
JP Morgan Chase, as Escrow Agent
500 Stanton Christina Road
Newark, Delaware 19713
(3) Escrow of Deposit. If a bidder submits the bid chosen as
the highest or best bid, then immediately upon execution
of a purchase agreement by Enron and the Winning Bidder,
the Winning Bidder will direct Weil, Gotshal & Manges to
transfer the Earnest Money Deposit into an escrow account
as required by the purchase agreement;
(4) Additional Requirements for Bids. Bids must be (a) in
writing, (b) signed by an individual authorized to bind
the prospective purchaser, and (c) received no later than
12:00 noon (New York Time) on January 28, 2004, by:
(a) Weil, Gotshal & Manges LLP
200 Crescent Court, Suite 300, Dallas, Texas 75201
Attn.: Martin A. Sosland, Esq.
E-mail: martin.sosland@weil.com
Facsimile: 212-310-8007
(b) Milbank, Tweed, Hadley & McCloy LLP
One Chase Manhattan Plaza, New York, New York 10005
Attn.: Luc A. Despins, Esq.
E-mail: ldespins@milbank.com
Facsimile: 212-530-5219
(c) Arnold & Porter
370 17th Street, Suite 4500, Denver, Colorado 80202
Attn.: Brian P. Leitch, Esq.
E-mail: Brian.Leitch@aporter.com
Facsimile: 303-832-0428
(d) Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza, New York, New York 10006
Attn.: Michael L. Ryan, Esq.
E-mail: Mryan@cgsh.com
Facsimile: 212-225-3999
(e) The Blackstone Group L.P.
345 Park Avenue, New York, New York 10154
Attn: Raffiq Nathoo
E-mail: Nathoo@blackstone.com
Facsimile: 212-583-5349
(5) No Conditions. Any bid must not be subject to due
diligence review or any board approval. Further, any bid
must not be subject to any conditions, or the receipt of
any consents, that are not otherwise required by the
Purchase Agreement;
(6) Initial Overbids. A bid must contain an initial overbid
that is at least $50,000,000 over and above the Base
Purchase Price in the Purchase Agreement;
(7) Qualified Competing Bid. Only a bid that meets the
set requirements will be considered a "Qualified
Competing Bid;" and
(8) Bankruptcy Court Approval. All bids, including that of
Oregon Electric's will be subject to approval of the
Bankruptcy Court.
C. Due Diligence
Any Qualified Bidder who desires to conduct due diligence
regarding the Shares should contact Raffiq Nathoo, The
Blackstone Group L.P., 345 Park Avenue, New York, New York
10154 (212) 583-5869, Financial Advisors to Enron, for the
due diligence procedures. Before a party will be allowed to
conduct due diligence, they must execute a Confidentiality
Agreement.
D. Auction
(1) Auction Date and Time. If there are any Qualified
Competing Bids, Enron will then conduct the Auction of
the Shares. The Auction will be held on February 2,
2004, commencing at 12:00 noon (New York Time) at the
offices of Weil, Gotshal & Manges LLP, 767 Fifth Avenue,
New York, New York 10153, or on other time and place as
may be agreed by Enron and the Committee, prior to the
Sale Hearing Date, for consideration of qualifying offers
that may be presented to Enron. Only Oregon Electric and
parties who have submitted Qualifying Competing Bids may
participate in the Auction;
(2) Adjournment of Auction. The Auction may be adjourned as
Enron, upon consultation with the Committee, deems
appropriate. Reasonable notice of adjournment and the
time and place for the resumption of the Auction will be
given to Oregon Electric, all Qualified Bidders, and the
Committee;
(3) Evaluation of Highest or Best Offer. Enron will,
immediately after the Bid Deadline and upon consultation
with the Committee: (i) evaluate all Qualified Competing
Bids received, and (ii) determine which Qualified
Competing Bid reflects the highest or best offer for the
Shares. During the course of the Auction, Enron will
inform each participant which Qualified Competing Bid
reflects, in Enron's view, upon consultation with the
Committee, the highest or best offer;
(4) Subsequent Bids. Any subsequent bid must be in an amount
at least $10,000,000 higher than the highest prior bid;
provided, however, that Enron, in consultation with the
Committee, may during the Auction reduce the amount
required for subsequent bids;
(5) Subsequent Purchaser Bids. Oregon Electric will have the
right to include the amount of the Break-up Fee in the
amount of any subsequent bid that it makes at the
Auction. If Oregon Electric is the Winning Bidder by
virtue of a subsequent bid in an amount that exceeds the
Preliminary Purchase Price plus the Initial Overbid,
Oregon Electric will be entitled to a credit against the
Purchase Price at Closing equal to the amount of the
Break-up Free that will not be required to be paid by
Enron;
(6) Other Terms. All Qualified Bids, the Auction, and the
Bidding Procedures are subject to other terms and
conditions as are announced by Enron, in consultation
with the Committee, not inconsistent with the Procedures
Order. Enron will, at the conclusion of the Auction,
announce its intention to either sell the Shares to
the Winning Bidder at the Auction or distribute the
Shares to creditors under a Chapter 11 plan;
(7) Irrevocability of Certain Bids. The bid of the Winning
Bidder will remain irrevocable in accordance with the
terms of the purchase agreement executed by the Winning
Bidder;
(8) Retention of Earnest Money Deposits. The Earnest Money
Deposit of the Winning Bidder will be retained by Enron
in accordance with the terms of the purchase agreement
executed by the Winning Bidder;
(9) Failure to Close. In the event a bidder is the Winning
Bidder and it fails to consummate the proposed
transaction by the contemplated closing date for any
reason, Enron (i) will retain the Earnest Money Deposit
of the bidder, to the extent provided in the purchase
agreement, (ii) maintain the right to pursue all
available remedies, whether legal or equitable available
to it and (iii) upon consultation with the Committee,
will be free to consummate the proposed transaction with
the next highest bidder at the highest price bid without
the need for an additional hearing or order of the Court;
and
(10) Non-Conforming Bids. Notwithstanding anything to the
contrary in the Procedures Order, Enron, in consultation
with the Committee, will have the right to entertain bids
for the Shares that do not conform to one or more
requirements specified herein and deem the bids Qualified
Competing Bids; provided, however, that a non-conforming
bid so entertained by Enron must meet each of these
conditions:
(i) a deposit must be made in the amount specified;
(ii) the Initial Overbid must meet the minimum
requirement specified; and
(iii) the identity of the party submitting the bid must
be adequately described to all participants at
the Auction, prior to the commencement of the
Auction.
E. Expenses
All bidders will bear their own expenses in connection with
the sale of the Shares, whether or not the sale is ultimately
approved, in accordance with the terms of the purchase
agreement. The Purchaser will recover expenses in accordance
with the provisions of the Purchase Agreement.
F. Conflict
Any conflict between the terms and provisions of the
Procedures Order and any purchase agreement executed by Enron
and the bidders will be resolved in favor of the Procedures
Order.
According to Mr. Sosland, the Initial Overbids and the Subsequent
Bids are beneficial to Enron's estate and creditors in that they
can provide the incentive required to induce a potential bidder
to submit or increase its bid prior to the Auction. To the
extent bids can be improved prior to the Auction, a higher floor
is established for further bidding. Thus, even if Oregon
Electric ultimately is not the successful bidder for the Shares,
Enron and its estate will have benefited from the higher floor
established by the improved bid.
Break-Up Fee and Expense Reimbursement
In the event the Shares are not sold to Oregon Electric, or if
Enron elects to distribute the Shares to its creditors, Oregon
Electric, as the stalking horse, will be entitled to a
$31,250,000 break-up fee to be paid as an administrative expense
claim under Section 503(b)(1)(A) of the Bankruptcy Code.
Moreover, if the Purchase Agreement is terminated due to Enron's
breach or its covenants, Enron will reimburse Oregon Electric for
its reasonable and documented third party fees and expenses
incurred in connection with the contemplated transactions up to
an aggregate amount equal to $3,500,000 plus $500,000 for each
30-day period that elapsed from the date of entry of the
Procedures Order until the termination of the Purchase Agreement.
(Enron Bankruptcy News, Issue No. 91; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
EXIDE TECH: Extends Standstill Agreement to March 18, 2004
----------------------------------------------------------
In connection with their Chapter 11 filing, the Exide Debtors
entered into a Standstill Agreement and Fifth Amendment to their
Credit and Guarantee Agreement with their prepetition Senior
Secured Global Credit Facility lenders. The Standstill Agreement
lenders agreed to forebear the collection of principal payments on
foreign borrowings under the Senior Secured Global Credit
Facility from subsidiaries not subject to the Debtors' Chapter 11
proceedings until December 18, 2003.
In a recent regulatory filing with the Securities and Exchange
Commission, Exide Technologies Chairman, President and Chief
Executive Officer, Craig H. Muhlhauser, discloses that the
Prepetition Lenders have agreed to extend the Standstill
Agreement until March 18, 2004, although the Debtors will
continue to pursue Bankruptcy Court approval and will implement
their Plan as soon as possible.
The principal events, which could result in an early termination
of the Standstill Agreement, are:
(a) non-payment of interest on the European tranche of the
Debtors' Senior Secured Global Credit Facility as and when
due;
(b) if any significant foreign subsidiaries commence any
winding up or liquidation proceeding;
(c) breach of financial and other customary negative
covenants; and
(d) default with respect to the European securitization
agreement and 9.125% Senior Notes -- Deutsche
Mark-denominated -- agreement.
As a result of the Standstill Agreement extension, the DIP
Facility is now set to expire on the earlier of the Plan
Effective Date or February 15, 2004.
A full-text copy of the Sixth Amendment to the Standstill
Agreement is available for free at:
http://www.sec.gov/Archives/edgar/data/813781/000119312503093633/dex434.htm
(Exide Bankruptcy News, Issue No. 36; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
FEDERAL-MOGUL: Obtains Clearance for $4MM Brighton Property Sale
----------------------------------------------------------------
The Federal-Mogul Corporation Debtors sought and obtained the
Bankruptcy Court's nod to sell its Brighton Property, located at
145 North Beacon Street in Brighton, Massachusetts, to 145 North
Beacon Street LLC for $4,000,000, free and clear of all liens,
claims and encumbrances, pursuant to a purchase and sale
agreement. Among the nine bids obtained, Beacon LLC's bid was the
highest bid that included the assumption of clean-up costs.
The Purchase Agreement provided that Beacon LLC will purchase the
Brighton Property for $4,000,000 in cash and assume the entire
amount of the clean-up costs. Beacon LLC will also provide the
Debtors with an irrevocable standby letter of credit for
$1,800,000, as security to its obligation to complete the clean-
up. Beacon LLC will also maintain a policy of environmental
liability insurance that names the Debtors as insured. Beacon
LLC will reimburse the Debtors for any clean-up costs they
incurred through the closing of the sale, up to a maximum of
$60,000.
Beacon LLC has already paid the Debtors two deposits totaling
$250,000 in cash. After the sale, the Debtors will receive an
additional $3,750,000 in cash and be released from the associated
clean-up costs.
Crystal and Guest Street Object
Crystal Transport, Inc. leases and Guest Street LLC owns a real
property located at 77A Guest Street in Boston, Massachusetts.
The Guest Street Property is down gradient and abutting to the
145 North Beacon Property. Crystal and Guest Street informed the
Court that the Guest Street property has been and continues to be
contaminated by the ongoing postpetition migration of various
contaminants from the 145 North Beacon Property onto the Guest
Street Property.
Crystal and Guest Street proposed that, if the Court approved the
sale of the 145 North Beacon Property, the Debtors be required to
place $355,000 in escrow from the sale proceeds to pay Crystal and
Guest Street's administrative expense claim. The Claim will serve
as reimbursement of Crystal and Guest Street's cost of cleaning up
the Debtors' postpetition contamination of the Guest Street
property.
* * *
In response to Crystal Transport, Inc. and Guest Street, LLC's
request, Judge Newsome rules that $355,000 of the sale proceeds
will be placed in an escrow account. The $355,000 will be
released upon agreement with the Debtors. (Federal-Mogul
Bankruptcy News, Issue No. 48; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
FFP OPERATING: Committee Signs-Up Whiteford Taylor as Co-Counsel
----------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in FFP
Operating Partners LP's chapter 11 case has hired Whiteford,
Taylor & Preston, LLP as its co-counsel.
The Committee, in the exercise of its business judgment and
consistent with its fiduciary duties, has determined that it needs
the advice and guidance of experienced legal counsel to carry out
its duties under Sec. 1103 of the Bankruptcy Code. Whiteford
Taylor, the Committee tells the U.S. Bankruptcy Court for the
Northern District of Texas, Forth Worth Division, provides both
the industry specific experience the Committee needs and the
efficiency of local representation.
Specifically, Whiteford Taylor is expected 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 Gardere
Wynne Sewell LLP 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.
Paul M. Nussbaum, Esq., a partner in Whiteford Taylor will lead
the engagement. Mr. Nusssbaum reports that his firm will bill the
Debtor at its current hourly rates:
Partners $330 to $375 per hour
Associates $240 to $290 per hour
Paralegals $115 to $130 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 represents 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.
GAMET TECHNOLOGY: Case Summary & 40 Largest Unsecured Creditors
---------------------------------------------------------------
Lead Debtor: Gamet Technology
50 West Liberty Street, Suite 400
Reno, Nevada 89501
Bankruptcy Case No.: 03-54225
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Lodging And Gaming Systems, Inc. 03-54226
Type of Business: A leading supplier of casino management,
banking and player tracking software to the
Casino Industry. The products include casino
banking, accounting, and player tracking
software and patented hardware and gaming
devices. It allows for the development of a
smart card-based eCasinoTM environment and
provide a seamless integration from a
bricks-and-mortar to Internet casino.
See http://www.gamet.com/for more information.
Chapter 11 Petition Date: December 29, 2003
Court: District of Nevada (Reno)
Judge: Gregg W. Zive
Debtors' Counsel: J. Craig Demetras, Esq.
Law Offices of Demetras & O'Neill
232 Court Street
Reno, Nevada 89501
Tel: 775-348-4600
Total Assets Total Debts
------------ -----------
Gamet Technology $2,090,698 $9,263,569
Lodging And Gaming Systems, Inc. $2,761,722 $801,082
A. Gamet Technology's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Urie, Steve $2,689,888
700 California Street
Reno, Nevada
Gilucy, C.W. $1,845,532
415 1st Street SE
Washington, DC 20003
Lodgenet $1,000,000
3900 W. Innovation
Sioux Falls, SD 57107
South Meadows Office Investors $772,000
9408 Double R. Boulevard Suite B
Reno, Nevada
Teuscher, Robert $600,000
c/o Tom Grossman
12413 North Woods Blvd.
Truckee, CA 96161
Grossman, Marti $350,000
260 Baypoint Drive
San Rafael, CA 94901
Lodging and Gaming Systems, Inc. $342,333
50 West Liberty Street Suite 400
Reno, Nevada 89501
Grossman, Tom $246,000
Internal Revenue Service $236,989
Internal Revenue Service $215,225
Robison, Belaustegui, Sharp & Low $206,979
Urie, Steve $102,501
Urie, Steve $97,851
Gilluly, C.W. $90,265
Gilluly, C.W. $85,615
Turnquist, Donald $50,000
Raymore, Margaret $43,000
American Express $30,429
Grossman, Tom $26,725
Liberty West Holdings $23,854
B. Lodging And Gaming Systems' 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Internal Revenue Service $190,188
Accrued 401k $153,252
Gamet Technology, Inc. $78,753
Liberty West Holdings $63,932
Disbrow, Lyn $61,707
Tom Grossman $54,000
IBM Corp. $43,000
Greenwood, Nick $21,000
Avcom $19,530
AT&T $8,750
Smith, Brian $8,346
Internal Revenue Service $7,093
Internal Revenue Service $6,951
Gallagher, Hugh $6,854
Washoe County Treasurer $6,252
Urie, Steve $5,913
Sherick, Connie $5,679
Gallagher, Hugh $5,000
Clark, Jennifer $4,718
Rule, Rob $4,526
GARRETT-BECK CORP: Case Summary & 15 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Garrett-Beck Corporation
1106 Park Street
Baytown, Texas 77520
Bankruptcy Case No.: 03-48181
Type of Business: The Debtor owns a nursing care center.
Chapter 11 Petition Date: December 30, 2003
Court: Southern District of Texas (Houston)
Judge: Karen K. Brown
Debtor's Counsel: Frank G. Waltermire, Esq.
608 North Front Street
Angleton, TX 77515
Tel: 979-864-4747
Total Assets: $1,306,330
Total Debts: $1,283,031
Debtor's 15 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Internal Revenue Service $359,307
U.S. Treasury Department
1919 Smith Street
STOP 5025 Hou
Houston, TX 77002
Internal Revenue Service $150,613
Goosecreek CISD $100,000
Internal Revenue Service $20,240
Sysco Food $15,000
Gulf South $10,625
American Pharmacy $9,137
Geriatric Associates of America $8,000
McKesson Medical $3,425
Elan Financial Services $2,533
Mike Pack $2,520
Symphony Mobiley $1,750
American Express $1,475
Physicians Reference Laboratories $602
Konica Minolta Business Solutions $410
GINGISS: Committee Looks to Mahoney Cohen for Financial Advice
--------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in the
chapter 11 cases involving The Gingiss Group, Inc., wants to
retain Mahoney Cohen & Co., CPA, PC, as its Accountants and
Financial Advisors.
Charles M. Berk, CPA, a Director of Mahoney Cohen assures the
Court that his firm does not represent any interest adverse to the
Debtors, or their estates, and is a "disinterested person" within
the meaning of Section 101(4) of the Bankruptcy Code.
Mahoney Cohen will:
a. become familiar with, and analyze, the business,
operations, properties, financial condition and
prospects of the Debtors, as we consider necessary;
b. manage or assist with any investigation into pre-
petition acts, conduct, property, liabilities and
financial condition of the Debtors, its management, its
financing institutions, its investors or its creditors,
including the operation of the Debtors' business, as we
consider necessary;
c. assist the Committee in its review of monthly statements
of operations to be submitted by the Debtors-in-
Possession or its accountants;
d. assist the Committee in its evaluation of cash flow
and/or other projections prepared by the Debtors-in-
Possession or its accountants;
e. monitor the Debtors' activities regarding cash
expenditures and general business operations subsequent
the filing of the petition under Chapter 11;
f. analyze transactions with vendors, insiders, related
and/or affiliated companies, subsequent and prior to the
date of the filing of the petition under Chapter 11, as
we consider necessary;
g. analyze transactions with the Debtors' financing
institutions, if applicable. Provide financial analysis
related to any debtor-in-possession financing, including
advising the Committee concerning such matters, as we
consider necessary;
h. assist the Committee or its counsel in any litigation
proceedings against the financing institution of the
Debtors, insiders and other potential adversaries;
including testimony, if necessary;
i. assist the Committee in its review of the financial
aspects of a plan of reorganization to be submitted by
the Debtors, or in arriving at a proposed plan of
reorganization. Assist the Committee in negotiating,
evaluating and qualifying any competing offers;
j. attend meetings with representatives of the Committee
and their counsel. Prepare presentations to the
Committee that provides analyses and updates on
diligence performed; and
k. perform any other services that we may deem necessary in
our role as accountants to the Committee or that may be
requested by counsel or the Committee.
Mahoney Cohen will bill at its standard hourly rates, which range
from:
Shareholders and Directors $325 to $450 per hour
Managers and Senior Managers $225 to $320 per hour
Senior Accountants and Staff $90 to $220 per hour
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.
HALSEY PHARMA.: Secures Interim Financing from Debentureholders
---------------------------------------------------------------
Halsey Pharmaceuticals (OTC.BB: HDGC) secured interim financing
from certain existing debentureholders. The Company estimates
that financing will fund the Company's operations through January
2004.
The Company is continuing its efforts to obtain long-term
financing. The Company estimates a funding requirement of
approximately $12.5 million to complete the previously announced
restructuring and to fund operations through 2004. In the absence
of additional funding by the Company's debentureholders or an
alternative third party investment, of which no assurance can be
given, the Company would be required to further scale back or
terminate operations, and/or seek protection under applicable
bankruptcy laws.
Halsey Pharmaceuticals, together with its subsidiaries, is an
emerging pharmaceutical company specializing in proprietary active
pharmaceutical ingredient and finished dosage form development.
For more information on Halsey Pharmaceuticals, visit its Web site
at http://www.halseydrug.com/
At September 30, 2003, Halsey's balance sheet shows a total
shareholders' equity deficit of about $39 million.
HOST MARRIOTT CORP: Intends to Repay $295 Million of Debt
---------------------------------------------------------
Host Marriott Corporation (NYSE: HMT) plans to repay approximately
$295 million of debt with the proceeds remaining from the
resolution of outstanding issues on the New York Marriott World
Trade Center and Financial Center Hotels announced on December 3,
2003 after repayment of the $65 million loan on the World Trade
Center Hotel.
The repayment will include the redemption by Host Marriott, L.P.
of the remaining $218 million of 8.45% Series C senior notes
due in 2008, a partial repayment of the mortgage debt secured by
the Company's four Canadian properties of approximately $33
million and a partial repayment of the mortgage debt secured by
two of the Company's Ritz-Carlton hotels located in the Buckhead
section of Atlanta, Georgia and Naples, Florida of approximately
$44 million. Repayment of this debt will result in an annual
reduction in interest expense of approximately $24 million.
The terms of the Series C notes require the payment of a premium
to the holders in exchange for the right to retire these notes in
advance of their maturity date. The date of redemption of the
Series C notes is January 30, 2004. All of the debt repayments
will trigger the acceleration of deferred financing fees. The
accelerated deferred financing fees and call premiums will total
approximately $12 million.
The partial repayment of the Canadian mortgage debt will result in
the related forward currency contracts hedge being deemed
ineffective for accounting purposes, resulting in a decrease in
net income and Adjusted EBITDA of approximately $19 million. The
currency contracts were entered into as a requirement of the
lenders at the origination of the loan.
As a result of these transactions, the Company will recognize an
increase in expenses of approximately $18 million (which
represents the loss on the hedge and the acceleration of deferred
financing fees for a certain portion of the Canadian loan less
minority interest) in 2003 and $11 million (which represents call
premiums and deferred financing fees less minority interest) in
2004. Accordingly, the Company is issuing the following updated
guidance for full year 2003:
* Net loss should decrease approximately $18 million to a
range of a net loss of $7 million to net income of $7
million;
* Diluted loss available to common shareholders per share
should decrease approximately $.07 to a range of $.15 to
$.10;
* FFO per diluted share should decrease approximately $.07 to
a range of $.94 to $.98; and
* Adjusted EBITDA should decrease approximately $19 million to
a range of $696 million to $711 million.
Host Marriott Corporation (S&P, B+ Corporate Credit Rating,
Stable) is a lodging real estate company, which owns 122 upscale
and luxury full-service hotel properties primarily operated under
Marriott, Ritz-Carlton, Four Seasons, Hyatt, Hilton and Swissotel
brand names. For further information on Host Marriott Corporation,
visit the Company's Web site at http://www.hostmarriott.com/
INSCI CORP: 1-For-10 Reverse Stock Split Takes Effect Friday
------------------------------------------------------------
INSCI Corp. (OTC Bulletin Board: INSS), a leading provider of
enterprise content management (ECM) solutions, announced the its
1:10 reverse split of outstanding shares of common stock became
effective on January 2, 2004.
The new trading symbol when assigned by NASDAQ will be announced
in a subsequent release.
INSCI Corp. (OTC Bulletin Board: INSS) is a leading provider of
solutions for the enterprise content management market. INSCI's
technology provides a strong foundation enabling companies to
manage the full spectrum of enterprise content, from documents to
e-mail, graphics and video. INSCI's ESP+ Solutions Suite enables
financial services companies, call centers, health insurance
organizations, utilities and government to provide Internet-based
access for virtually unlimited users to their banking and
financial statements, customer bills and similar content.
INSCI's WebWare Digital Asset Management products provide a
powerful media services platform for integrating rich media into
enterprise content management systems , marketing and
communication portals, web publishing systems, and e-commerce
portals. WebWare was named by eContent Magazine in its 2002
eContent 100 list of leading digital content industry companies,
and recently was named the 2003 Product of the Year for excellence
in information and communication technology by industry analysts
Frost & Sullivan. The award will be formally presented in 2004.
For more information about INSCI, visit http://www.insci.com/
At June 30, 2003, INSCI Corp.'s balance sheet shows a working
capital deficit of about $2 million, and a total shareholders'
equity deficit of about $3 million.
INSCI CORP: Appoints Five New Directors, Expanding Board to 10
--------------------------------------------------------------
INSCI Corp. (OTC Bulletin Board: INSS), a leading provider of
enterprise content management solutions, announced that, effective
immediately, the Company's Board has been strengthened with the
appointment of five new directors.
The new directors include Steven Morgenthal, George M. Calhoun,
Ph.D., Adi Raviv, Thomas G. Rebar and Amit Avnet. These
appointments filled three open positions and two vacancies created
by the resignation of Winston J. Churchill and Robert G.
Yablunsky. As a result, the size of the Board increased from
seven directors to 10 and the number of outside directors
increased to five.
INSCI also announced that its annual meeting of stockholders is to
be held Thursday, January 29, 2004, at 10:00 AM. The meeting will
be held at INSCI's corporate offices in Westborough, MA, and all
shareholders are invited to attend. The following proposals will
be voted on at the meeting: the election of 10 directors to serve
for the ensuing year; the ratification of the appointment of
Goldstein and Morris Certified Public Accountants as the Company's
independent public accountants, and the approval of a proposal to
increase the authorized number of stock options under the
Company's 1997 Equity Incentive Plan.
INSCI CEO Henry Nelson said, "We are pleased that these
individuals are joining the Board. Their financial, technological
and operational experience and expertise will be valuable in
helping to implement and execute our growth strategy. Our recent
acquisition of the assets of WebWare expanded our customer base
and product offerings. The counsel of these new Board members
will assist us in making the most of these new market
opportunities."
Morgenthal, 44, has more than 20 years of experience in the
management and facilitation of high-tech companies and is
currently an Executive-in-Residence with Selway Partners. Most
recently, he was President and CEO of Paramus, NJ-based Regenative
Network Management Systems, a developer of sophisticated network
and systems management solutions and a Selway Partners company.
Prior to that, Morgenthal held executive positions with a number
of high-tech companies in the product and services areas and has
been active in the venture investment communities. Morgenthal
began his career at AT&T Bell Labs.
Dr. Calhoun, 51, has spent 25 years in the high-tech segment of
the wireless communications industry and is an Executive-in-
Residence at Hoboken, NJ-based Stevens Institute of Technology,
where he teaches in the Undergraduate Program for Business &
Technology, at the Howe School of Technology Management. He is
one of the co-founders of King of Prussia, PA based InterDigital
Communications Corporation (Nasdaq: IDCC), where he was involved
for 12 years in the pioneering development of digital cellular
technology. Subsequently, he was Vice-Chairman of Debary,
FL-based Geotek Communications, and was Chairman of an engineering
joint venture based in Israel. Most recently, Dr. Calhoun was the
Chairman and CEO of Mount Prospect, IL-based ISCO International,
Inc. (Amex: ISO), a company focused on the application of high-
temperature superconducting materials and advanced
signal-processing techniques. He is also a Board member and Audit
Committee Chairman for Melbourne, FL-based Airnet Communications
(Nasdaq: ANCC), a smart antenna and software-defined radio
technology company. Dr. Calhoun holds one patent (on wireless
system architectures) and has published several books on wireless
communications.
Raviv, 48, is Executive Vice President and Chief Financial Officer
of US Wireless Data Inc. (OTC Bulletin Board: USWE). Prior to
that, he served as the Co-Chairman and CFO of New York City-based
THCG, Inc. (OTC: THCG), a technology merchant banking and
consulting company. Raviv also spent more than 14 years in
investment banking. He worked at Lehman Brothers from 1987-1993
and then served as the head of Global Investment Banking at Oscar
Gruss & Son Inc. from 1994-1996. From 1996-2001, Raviv was a
Managing Director of Tower Hill Securities, Inc., the successor of
the U.S. investment banking arm of Hambros Bank Limited.
Rebar, 40, is a partner of Wayne, PA-based SCP Private Equity
Partners II, LP and has been with the firm since its inception.
He has more than 15 years of experience in private equity,
investment banking, mergers and acquisitions and leveraged buyout
financing. Prior to joining SCP, Rebar was a Senior Vice
President at Charterhouse Inc., the U.S. investment banking arm of
Charterhouse PLC, a leading U.K. merchant bank. Before joining
Charterhouse, Rebar was a member of the corporate finance
department at Bankers Trust Company. He is a director of several
companies, including New York City-based Index Stock Imagery,
Inc., Westchester, PA based Vis.align, LLC, and Campbell, CA-based
Pentech Financial Services, Inc.
Avnet, 31, is a finance and management professional at SCP Private
Equity Partners II, LP. With more than 10 years of diverse
experience in corporate finance, merchant banking, venture capital
and strategic business development, Avnet has worked in a variety
of environments ranging from one of Israel's largest conglomerates
to merchant banking and venture capital activities with companies
in their earliest stages of development. Avnet currently serves
on the Board of Directors of Paramus, NJ-based Dvtel Inc. Former
positions include Vice President at THCG Inc., Financial Advisor
to the CEO at Ofer Brothers Group and Staff Officer at the Budget
Department of the Israeli Ministry of Defense.
INSCI Corp. (OTC Bulletin Board: INSS) is a leading provider of
solutions for the enterprise content management (ECM) market.
INSCI's technology provides a strong foundation enabling companies
to manage the full spectrum of enterprise content, from documents
to e-mail, graphics and video. INSCI's ESP+ Solutions Suite
enables financial services companies, call centers, health
insurance organizations, utilities and government to provide
Internet-based access for virtually unlimited users to their
banking and financial statements, customer bills and similar
content.
INSCI's WebWare ActiveMedia products provide a powerful platform
for integrating rich media into enterprise content management
systems, marketing and communication portals, web publishing
systems, and e-commerce portals. WebWare was named by eContent
Magazine in its 2002 eContent 100 list of leading digital content
industry companies, and recently was named the 2003 Product of the
Year for excellence in information and communication technology
by industry analysts Frost & Sullivan. The award will be formally
presented in 2004.
For more information about INSCI, visit http://www.insci.com/
At June 30, 2003, INSCI Corp.'s balance sheet shows a working
capital deficit of about $2 million, and a total shareholders'
equity deficit of about $3 million.
INSITE VISION: Completes ISV-403 Sale to Bausch & Lomb
------------------------------------------------------
InSite Vision Incorporated (Amex: ISV), an ophthalmic
therapeutics, diagnostics and drug-delivery company, completed a
previously announced transaction whereby InSite Vision has sold
its drug candidate ISV-403 for the treatment of ocular infections
to Bausch & Lomb.
Under the terms of the transaction, InSite Vision has received a
cash payment and reimbursement of certain ISV-403 product
development expenses, and will receive a percentage of future ISV-
403 product sales in all licensed countries. Bausch & Lomb is
assuming all future ISV-403 development and commercialization
expenses and, following a transfer period, will be responsible for
all development activities, with assistance from InSite Vision as
appropriate.
In addition, the August 2002 ISV-403 licensing agreement and the
related Series A-1 Preferred Stock purchase agreement between
Bausch & Lomb and InSite Vision has been terminated and Bausch &
Lomb has returned to InSite Vision for cancellation all shares of
the Series A-1 Preferred Stock previously issued.
ISV-403 combines a fourth-generation fluoroquinolone, SS734,
licensed from Japan's SSP, Co., Ltd., with InSite Vision's
patented drug delivery system, DuraSite(R). Preclinical studies
with ISV-403 indicated that this drug candidate is effective
against bacteria resistant to third generation fluoroquinolone
products.
InSite Vision -- whose September 30, 2003 balance sheet shows a
total shareholders' equity deficit of about $4 million -- is an
ophthalmic products company focused on glaucoma, ocular infections
and retinal diseases. In the area of glaucoma, the Company
conducts genomic research using TIGR and other genes. A portion
of this research has been incorporated into the Company's
OcuGene(R) glaucoma genetic test for disease management, as well
as ISV-205, its novel glaucoma therapeutic. ISV-205 uses InSite
Vision's proprietary DuraSite(R) drug-delivery technology, which
also is incorporated into the ocular infection products ISV-401
and ISV-403, and InSite Vision's retinal disease program.
Additional information can be found at
http://www.insitevision.com/
INTERCOM SYSTEMS: Taps Weinberg to Replace Bederson as Auditor
--------------------------------------------------------------
Effective November 24, 2003, Bederson & Company LLP resigned as
Intercom Systems, Inc.'s independent accountants. Bederson &
Company LLP decided not to continue to register with the Public
Accounting Oversight Board and therefore had to resign from its
public company accounts.
The reports of Bederson & Company LLP on the Company's audited
financial statements as of June 30, 2003 and June 30, 2002 was
qualified as to the Company's ability to continue as a going
concern.
The Company's Audit Committee did not participate in or approve
the decision to change independent accountants, as the independent
accountants resigned.
Intercom Systems engaged Weinberg & Company, P.A. as its new
independent accountants as of November 25, 2003.
IT GROUP: Classification & Treatment of Claims Under the Plan
-------------------------------------------------------------
In accordance with Section 1122 of the Bankruptcy Code, the Joint
Plan for The IT Group, Inc., and its debtor-affiliates provides
for the classification of Classes of claims and equity interests.
Pursuant to Section 1123(a)(1), Administrative Expense Claims and
Priority Tax Claims are not classified and the holders of these
Claims are deemed to vote in favor of the Plan because their
claims will be paid in full. All other Claims and Interests are
assigned to one of eight Classes:
* Class 1 - Priority Claims
* Class 2 - Non-Lender Scented Claims
* Class 3 - Lender Claims
* Class 4A - General Unsecured Claims
* Class 4B - Litigation Unsecured Claims
* Class 4C - Securities Litigation Claims
* Class 4D - Subordinated Claims
* Class 5 - Equity Interests
Although Non-Lender Secured Claims against each Debtor have been
placed in one class for purposes of convenience, each Non-Lender
Secured Claim will be treated as though in a separate class for
purposes of voting and receiving Distributions under the Plan.
Class 1 Claims are unimpaired, and the holders of the Claims are
conclusively presumed to have accepted the Plan. Classes 2, 3,
4A, and 4B are impaired under the Plan, and holders are entitled
to vote to accept or reject the Plan. Class 4C, 4D and Class 5
are likewise impaired, and the holders of the Claims and Equity
Interests will not receive a Distribution or retain any property
under the Plan and are deemed not to have accepted the Plan.
The Committee and the Debtors believe that this classification of
Claims and Equity Interests is appropriate and consistent with
applicable law.
In detail, the Claims are classified as:
Class Description Treatment
----- ------------ ---------
N/A Administrative Paid in cash, in full.
Claims
N/A Priority Tax Paid in cash, in full.
Claims
1 Priority Claims All legal, equitable and contractual
rights of the claimholders will be
fully reinstated and retained as
though the Chapter 11 case had not
been filed, except as provided in
Section 1124(2)(A)-(C) of the
Bankruptcy Code.
Holders of Allowed Priority Claims
will be paid in full in accordance
with the reinstated rights.
2 Non-Lender Pursuant to Section 1124 of the
Secured Claims Bankruptcy Code, either:
-- each Allowed Claimholder retains
its liens securing its Claim and
receives deferred cash payments
having a present value on the
Effective Date equal to the
amount of its Allowed Claim;
-- each Allowed Claim realizes the
"indubitable equivalent" of its
Claim; or
-- the property securing the Allowed
Claim is sold free and clear of
liens with the liens to attach to
the proceeds of the sale and the
treatment of the liens on
proceeds as provided.
3 Lender Claims In accordance with the Plan
Settlement, the Lender Claims
will be allowed in full under the
Plan. Each holder of an Allowed
Claim will receive in full and
complete satisfaction of the
Claims, its Pro Rata Share of:
-- 87.5 % of the Available
Proceeds;
-- 90% of the Shaw Stock;
-- 20% of Avoidance Action
Recoveries; and
-- 75 % of the first $10,000,000
of Estate Cause of Action
Recoveries, and 50% of Estate
Cause of Action Recoveries
thereafter.
4A General Unsecured Each holder will receive its
Claims Pro Rata Share of:
-- 12.5% of the Available
Proceeds;
-- the proceeds from the sale or
other disposition of 10% of
the Shaw Stock in accordance
with the Plan;
-- 80% of Avoidance Action
Recoveries; and
-- 25% of the first $10,000,000
of Estate Cause of Action
Recoveries and 50% of Estate
Cause of Action Recoveries
thereafter.
4B Litigation Each Litigation Unsecured Claim
Unsecured Claims will be liquidated and satisfied
pursuant to the Plan ADR and to
the extent any Claim becomes an
Allowed Litigation Unsecured
Claim, as provided in the Plan
ADR in excess of available
insurance proceeds (not of any
deductible or self-insured
retention payments) to pay the
Claim, if applicable, the
Claimholder will receive on the
Distribution Dates, its Pro Rata
Share of the Distributions to
holders of Allowed General
Unsecured Claims as provided in
the Plan.
4C Securities In accordance with Section 510(b)
Litigation Claims of the Bankruptcy Code, Allowed
Securities Litigation Claim will
be subordinated to all senior
classes. Accordingly, each
Allowed Claimholder will not
receive or retain any
distribution on account of the
Allowed Claim.
4D Subordinated Each holder of an Allowed Claim
Claims will not receive or retain any
Distribution on account of its
Allowed Subordinated Claim.
5 Equity Interests All Equity Interests in the
Debtors will be cancelled,
annulled and extinguished
on the Effective Date, and the
holders of the Equity Interests
will not receive or retain any
property under the Plan.
Insured Claims
Distributions under the Plan to each holder of an Allowed Insured
Claim against any Debtor will be in accordance with the treatment
provided under the Plan for the Class in which the Allowed
Insured Claim is classified. However, this is provided that any
Distribution under the Plan on account of an Allowed Insured
Claim will, for purposes of calculating the Allowed amount of the
Claim, deduct the amount of any insurance proceeds actually
received by the holder in respect of the Allowed Insured Claim.
Nothing will constitute a waiver of any claim, right or Cause of
Action the Debtors may hold against any Person, including the
Debtors' insurance carriers.
Nothing in the Plan will release or discharge any insurers from
any obligations to any third party under applicable law or any
policy of insurance under which a debtor is an insured or
beneficiary.
Expenses Incurred and
Claims of the Indenture Trustee
The reasonable unpaid fees and expenses of the Indenture Trustee
incurred in the performance of the Indenture Trustee's duties
under the Indentures through the Effective Date will be treated
as an Allowed Administrative Claim to be paid in accordance with
the Plan. From and after the Effective Date and subject to the
approval of the Oversight Committee, Reorganized IT Group will,
in the ordinary course of business and without the necessity of
approval by the Bankruptcy Court, pay the reasonable fees and
expenses of the Indenture Trustee related to implementation and
consummation of the Plan.
Third Party Agreements: Subordination
The Distributions to the various classes of Claims under the Plan
will be in full satisfaction of the right of any Person to levy,
garnish, attach, or employ any other legal process with respect
to the Distributions by reason of any claimed subordination
rights or otherwise.
On the Effective Date, all rights and any agreements relating
thereto will be cancelled and annulled and of no further force or
effect. A Claim arising from rescission of a purchase or sale of
a security of the Debtors or of an Affiliate of the Debtors, for
damages arising from the purchase or sale of such a security, or
for reimbursement or contribution allowed under Section 502 of
the Bankruptcy Code on account of the Claim, will be subordinated
to all Claims that are senior to or equal the Claim or Equity
Interest represented by the security, except that if the security
is common stock, the Claim has the same priority and treatment as
Class 5 -- Equity Interests.
Distribution
Pursuant to the Plan, the Reorganized IT Group will be acting as
the Disbursing Agent with respect to Distributions to holders of
Allowed Claims. The Disbursing Agent will make all Distributions
required under the Plan including costs, expenses, and
professional fees that are permitted to be deducted from the
amounts that would otherwise be available for Distribution.
Any Distribution to be made pursuant to the Plan will be deemed
to have been timely made if made within 10 days after the time
specified in the Plan. Whenever any Distribution to be made
under the Plan will be due on a day other than a Business Day,
the Distribution will instead be made, without interest, on the
immediately succeeding Business Day, but will be deemed to have
been made on the date due. For federal income tax purposes, a
Distribution will be allocated to the principal amount of a Claim
first and then, to the extent the Distribution exceeds the
principal amount of the Claim, to the portion of the Claim
representing seemed but unpaid interest.
All Cash necessary for the Disbursing Agent to make payments and
Distributions will be obtained from existing Cash balances, and
the disposition of and realization on the Assets pursuant to the
Plan. Furthermore, checks issued in respect of Allowed Claims
will be null and void if not negotiated within 180 days after the
date of issuance.
The holder of the Allowed Claim with respect to which the check
originally was issued will make requests for re-issuance of any
check directly to the Disbursing Agent. All Claims in respect of
void checks will be discharged and forever barred and the
unclaimed Distributions will revert to the Reorganized IT Group.
Following Plan Confirmation, the Plan will become effective on a
date selected by the Debtors and the Committee which is not later
than 30 days after the conditions precedent to the effectiveness
of the Plan have been satisfied or waived. (IT Group Bankruptcy
News, Issue No. 38; Bankruptcy Creditors' Service, Inc., 215/945-
7000)
KAISER: Court Grants Fifth Motion to Extend Exclusivity Periods
---------------------------------------------------------------
The Kaiser Aluminum Debtors needed another extension of their
exclusive periods to file and solicit acceptances of a
reorganization plan and to continue the ongoing efforts to resolve
various restructuring issues.
Accordingly, the Debtors sought and obtained Court approval to
further extend their exclusive periods for four more months. The
Court extended their Exclusive Plan Filing Period to February 29,
2004 and their Exclusive Solicitation Period to April 30, 2004.
(Kaiser Bankruptcy News, Issue No. 36; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
KINETIC CONCEPTS: Proposes $400-Million Initial Public Offering
---------------------------------------------------------------
Kinetic Concepts Inc., a global medical technology company with
leadership positions in advanced wound care and therapeutic
surfaces, filed a registration statement with the Securities and
Exchange Commission in connection with a proposed initial public
offering of its common stock.
The offering is expected to consist of up to $400 million of
common stock, consisting of newly issued shares offered by the
Company and secondary shares offered by selling shareholders. In
addition, the Company expects that the selling shareholders will
grant the underwriters an option to purchase from them an
additional $60 million of common stock to cover over-allotments,
if any.
The joint book-running managers of the offering are Merrill Lynch,
Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities
Inc. Credit Suisse First Boston LLC and Goldman, Sachs & Co. are
acting as joint lead managers. Citigroup Global Markets Inc.,
Deutsche Bank Securities Inc., Piper Jaffray & Co. and SG Cowen
Securities Corporation are acting as co-managers.
A registration statement relating to these securities has been
filed with the Securities and Exchange Commission but has not yet
become effective. These securities may not be sold, nor may offers
to buy be accepted, prior to the time the registration statement
becomes effective.
When available, copies of the offering prospectus may be obtained
by writing or calling the prospectus departments of either Merrill
Lynch, at 4 World Financial Center, New York, NY 10080, 212-449-
1000, or J.P. Morgan Securities Inc., at One Chase Manhattan
Plaza, Floor 5B, New York, NY 10081, 212-552-5164.
Kinetic Concepts, Inc., whose September 30, 2003 balance sheet
shows a total shareholders' equity deficit of about $580 million,
is principally engaged in the rental and sale of innovative
therapeutic systems and surfaces throughout the United States and
in 15 primary countries internationally.
LAIDLAW INC: Discloses Greyhound Pension Funding Requirements
-------------------------------------------------------------
Kevin E. Benson, President, Chief Executive Officer, and Director
of Laidlaw International Inc., relates that the Company
previously agreed with Pension Benefit Guaranty Corporation to
the economic terms relating to PBGC's claims regarding the
funding levels of the Greyhound U.S. Plans -- eight single
employer pension plans Greyhound maintained in the United States.
Under an agreement with the PBGC, upon the consummation of the
Plan on June 23, 2003, Laidlaw and its subsidiaries contributed
$50,000,000 in cash to the Greyhound U.S. Plans, and 3,800,000
shares of common stock equivalent to $50,000,000 to a Pension
Plan Trust. Mr. Benson reports that Laidlaw will contribute an
additional $50,000,000 in cash to the Greyhound U.S. Plans in
June 2004.
According to Mr. Benson, the trustee of the Pension Plan Trust
will sell the Common Stock to Laidlaw as soon as practicable, but
in no event later than December 31, 2004. All proceeds from the
Common Stock sales will be contributed directly to the Greyhound
U.S. Plans. If the proceeds from the Common Stock sales exceed
$50,000,000, the excess amount may be credited against any future
required minimum funding obligations of the Laidlaw group, but
will not reduce the June 2004 required contribution under the
PBGC Agreement.
If the proceeds from the Common Stock sales are less than
$50,000,000, Laidlaw will be required to contribute an amount
equal to the shortfall in cash in December 2004. Laidlaw will
also contribute an additional $50,000,000 in cash to the pension
plans in June 2004. These contributions and transfers will be in
addition to the minimum funding obligations to the pensions
plans, if any, required under current regulations.
Mr. Benson further notes that the PBGC has a second priority lien
on the assets of some of Laidlaw's operating subsidiaries, other
than Greyhound.
At August 31, 2003, all 3,800,000 shares of Laidlaw Common Stock
remained in the Pension Plan Trust. Based on the closing price
of the Common Stock on the over-the-counter market, the shares
had an aggregate market value of $45,200,000 at November 17,
2003.
Additionally, Mr. Benson reports that the ATU Plan, which is the
largest of the Greyhound U.S. Plans, represents 75% of the total
plan assets and benefit obligation as at August 31, 2003. Based
on current regulations and plan asset values at August 31, 2003,
and assuming annual investment returns exceed 3% and that the
contributions required under the PBGC Agreement are made along
the timeframe outlined, Laidlaw does not anticipate any
significant additional minimum funding requirements for the ATU
Plan over the next several years. However, Mr. Benson submits
that there is no assurance that the ATU Plan will be able to earn
the assumed rate of return, that new regulations may prescribe
changes in actuarial mortality tables and discount rates, or that
there will be market driven changes in the discount rates, which
would result in Laidlaw being required to make significant
additional minimum funding contributions in the future. (Laidlaw
Bankruptcy News, Issue No. 43; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
LAND O'LAKES: Completes Sale of $175MM of 9% Sr. Secured Notes
--------------------------------------------------------------
Land O'Lakes, Inc., recently completed the sale of $175 million in
aggregate principal amount of its 9% senior secured notes due
2010.
The notes are guaranteed on a senior basis by certain of the
Company's subsidiaries. In addition, the notes and guarantees are
secured on a second-priority basis by the Company's assets and
those of the guarantors that secure the obligations under the
Company's senior bank facilities. The Company used the proceeds of
the sale to repay borrowings under its outstanding term loans.
The notes have not been registered under the Securities Act of
1933 or any state securities laws. Unless so registered, the notes
may not be offered or sold in the United States except pursuant to
an exemption from the registration requirements of the Securities
Act and applicable state securities laws. The notes have been
offered and sold privately only to qualified institutional buyers
under Rule 144A of the Securities Act and to persons outside the
United States under Regulation S under the Securities Act.
Land O'Lakes -- http://www.landolakesinc.com/-- is a national,
farmer-owned food and agricultural cooperative, with annual sales
of approximately $6 billion. Land O'Lakes does business in all 50
states and more than 50 countries. It is a leading marketer of a
full line of dairy-based consumer, foodservice and food ingredient
products across the United States; serves its international
customers with a variety of food and animal feed ingredients; and
provides farmers and local cooperatives with an extensive line of
agricultural supplies (feed, seed, crop nutrients and crop
protection products) and services.
* * *
As previously reported in Troubled Company Reporter, Moody's
Investors Service downgraded the ratings on Land O'Lakes, Inc.
Outlook is stable.
Rating Action To From
Land O'Lakes, Inc.
* Senior implied rating B1 Ba2
* Senior secured rating B1 Ba2
* Senior unsecured issuer rating B2 Ba3
* $250 million Senior secured bank
facility, due 2004 B1 Ba2
* $291 million Senior secured term
loan A, due 2006 B1 Ba2
* $234 million Senior secured term
loan B, due 2008 B1 Ba2
* $350 million 8.75% Senior unsecured
guaranteed Notes, due 2011 B2 Ba3
Land O'Lakes Capital Trust I
* $191 million 7.45% Trust preferred
securities B3 Ba3
The lowered ratings reflect the company's weaker-than-expected
operating performance, giving rise to a constrained financial
flexibility and the deterioration of credit protection measures.
LEVEL 3: Closes Midwest Fiber Optic Network Sale to CenturyTel
--------------------------------------------------------------
Level 3 Communications, Inc. (Nasdaq: LVLT) completed the
previously announced sale of the Midwest Fiber Optic Network to
CenturyTel (NYSE: CTL).
MFON is a regional communications system that Level 3 acquired
through its transaction with Genuity, Inc. earlier this year.
CenturyTel purchased the stand-alone system, which serves as a
regional backbone for a number of carriers, including CenturyTel
itself, in Arkansas, Missouri and Illinois. Level 3 expects to
receive approximately $17 million from CenturyTel, including cash
consideration of approximately $16 million for the business and $1
million in accounts receivable. The purchase price is subject to
post-closing adjustments; however, those adjustments are not
expected to be material.
"We are pleased to have finalized the sale of this non-core
asset," said Sunit Patel, Level 3's chief financial officer. "The
geography and architecture of MFON did not offer us a cost-
effective way to integrate its operations into our own. As such,
we believe it made business sense to generate cash through this
transaction with CenturyTel."
The MFON purchase is highly complementary to both CenturyTel's
existing ILEC operations and its fiber transport subsidiary,
Lightcore. It provides transport cost efficiencies, and increased
fiber transport capacity in Missouri and Arkansas expanding the
network by 1,400 route miles and more than 100 additional points
of presence.
Level 3 (Nasdaq: LVLT) is an international communications and
information services company. The company operates one of the
largest Internet backbones in the world, is one of the largest
providers of wholesale dial-up service to ISPs in North America
and is the primary provider of Internet connectivity for millions
of broadband subscribers, through its cable and DSL partners. The
company offers a wide range of communications services over its
22,500 mile broadband fiber optic network including Internet
Protocol (IP) services, broadband transport and infrastructure
services, colocation services, and patented Softswitch managed
modem and voice services. Its Web address is
http://www.Level3.com/
The company offers information services through its subsidiaries,
Software Spectrum and (i)Structure. For additional information,
visit their respective Web sites at
http://www.softwarespectrum.com/ and http://www.i-structure.com/
CenturyTel, Inc. provides communications services including local,
long distance, Internet access and data services to more than 3
million customers in 22 states. The company, headquartered in
Monroe, Louisiana, is publicly traded on the New York Stock
Exchange under the symbol CTL, and is included in the S&P 500
Index. CenturyTel is the 8th largest local exchange telephone
company, based on access lines, in the United States. Visit
CenturyTel at http://www.centurytel.com/
* * *
As previously reported in Troubled Company Reporter, Standard &
Poor's Ratings Services assigned its 'CC' rating to Level 3
Communications Inc.'s shelf drawdown of $250 million convertible
senior notes due 2010. The outlook is negative.
Although cash proceeds improve Level 3's liquidity, Standard &
Poor's is still concerned about the company's ability to withstand
prolonged industry weakness, and risk from its acquisition
strategy.
LUCENT TECHNOLOGIES: 1st-Quarter Conference Call Set for Jan. 21
----------------------------------------------------------------
Lucent Technologies (NYSE: LU) invited investors and others to
listen to its quarterly results conference call to be broadcast
live over the Internet on Wednesday, Jan. 21, 2004, at 8:30 a.m.
EST.
What: Lucent Technologies First Fiscal Quarter 2004 Results
Conference Call
When: Wednesday, Jan. 21, 2004, at 8:30 a.m. EST
Where:
http://www.lucent.com/investor/conference/webcast040121.html/
How: Simply log on to the Web at the address above, then
click on the "audio" button
The call will be available for replay on Lucent's Web site through
Jan. 28, 2004, at
http://www.lucent.com/investor/conference/webcast040121.html/
Lucent Technologies (S&P, B- Corporate Credit Rating, Negative
Outlook), headquartered in Murray Hill, N.J., USA, designs and
delivers networks for the world's largest communications service
providers. Backed by Bell Labs research and development, Lucent
relies on its strengths in mobility, optical, data and voice
networking technologies as well as software and services to
develop next-generation networks. The company's systems, services
and software are designed to help customers quickly deploy and
better manage their networks and create new, revenue-generating
services that help businesses and consumers. For more information
on Lucent Technologies, visit its Web site at
http://www.lucent.com/
MAGELLAN: Gets Nod to Make $5.5M Capital Contribution to Premier
----------------------------------------------------------------
Magellan Health Services, Inc., provides behavioral health
services to the State of Tennessee through two entities, Tennessee
Behavioral Health, Inc., a wholly owned non-Debtor subsidiary, and
Premier Behavioral Systems of Tennessee, LLC.
Premier Behavioral is a 50/50 joint venture between Premier
Holdings, Inc., a Tennessee corporation and wholly owned Debtor
subsidiary of Magellan, and Columbia Behavioral Health of
Tennessee, LLC, an unaffiliated third party. Premier Behavioral
is operated pursuant to a September 1997 Amended and Restated
Operating Agreement, by and between Premier Holdings and
Columbia.
The State of Tennessee's existing service agreement with Premier
Behavioral expires on December 31, 2003. The State of Tennessee
agreed to extend the Existing Contract for a period of three
months until March 31, 2004, with a potential for additional
three-month extensions. However, the State of Tennessee agreed
to the extension only if a capital contribution of $5,500,000 is
made to Premier Behavioral to meet statutory minimum equity
requirements.
Columbia consented to the extension of the Existing Contract,
however, it is not willing to contribute to the Capital
Contribution required by the State of Tennessee. Therefore, for
Premier Behavioral to be able to enter into the extension of the
Existing Contract, Premier Holdings must make the Capital
Contribution. Without the Capital Contribution, Premier
Behavioral would not be able to enter into the extension and,
therefore, would lose the opportunity to continue its business
relationship with the State of Tennessee.
Pursuant to the Operating Agreement, Premier Behavioral makes
certain distributions to its members. As a condition to
Magellan's Capital Contribution, Magellan requires that the
Operating Agreement be amended further so that Premier Holdings
would be entitled to a priority distribution entitling Premier
Holdings to receive all amounts payable as distributions to any
member until the amount of the Capital Contribution is repaid.
In this way, the first $6,369,9271 that would otherwise be
distributed to Columbia under the Operating Agreement will be
distributed to Premier Holdings.
While any distributions from Premier to its members would require
the consent of the State of Tennessee under current regulations,
the Debtors anticipated that sufficient distributions would be
permitted so that Premier Holdings will recoup the Capital
Contribution made to Premier Behavioral, as well as any non-pro-
rata distributions made by Premier Behavioral.
Accordingly, the Debtors sought and obtained Court approval for
the Capital Contribution and the Operating Agreement Amendment.
(Magellan Bankruptcy News, Issue No. 20: Bankruptcy Creditors'
Service, Inc., 215/945-7000)
MASTR ALTERNATIVE: Fitch Rates Class B-4 Notes at Low-B Level
-------------------------------------------------------------
Fitch rates MASTR Alternative Loan Trust, series 2003-9, as
follows:
-- $454.2 million classes 1-A-1, 2-A-1, 3-A-1, 4-A-1, 5-A-1,
5-A-2, 6-A-1, 7-A-1, 7-A-2, 8-A-1, 8-A-2, 15-AX-1,
15-AX-2, 30-A-X, 15-PO, 30-PO, A-LR and
A-UR senior certificates 'AAA';
-- $7.5 million class B-1 'AA-';
-- $3.1 million class B-2 'A-';
-- $1.9 million class B-3 'BBB';
-- $1.9 million class B-4 'BB-'.
The 'AAA' rating on the senior certificates reflects the 3.50%
subordination provided by the 1.60% class B-1, 0.65% class B-2,
0.40% class B-3, 0.40% privately offered class B-4, 0.25%
privately offered class B-5(not rated by Fitch) and 0.20%
privately offered class B-6 (not rated by Fitch). Classes B-1
through B-4 are rated 'AA-', 'A-', 'BBB' and 'BB-', respectively,
based on their respective subordination.
Fitch believes the above credit enhancement will be adequate to
support mortgagor defaults as well as bankruptcy, fraud and
special hazard losses in limited amounts. In addition, the ratings
also reflect the quality of the underlying mortgage collateral,
strength of the legal and financial structures and the master
servicing capabilities of Wells Fargo Bank Minnesota, N.A. (rated
'RMS1' by Fitch).
The trust consists of 3,432 conventional, fully amortizing 15- to
30-year fixed-rate mortgage loans secured by first liens on one-
to four-family residential properties, with an aggregate scheduled
principal balance of $470,681,597. The average unpaid principal
balance of the aggregate pool as of the cut-off date (Dec. 1,
2003) is $137,145. The weighted average original loan-to-value
ratio is 61.87%. The weighted average credit score of the
borrowers is 727. Approximately 21.71% of the pool was originated
under a reduced (non Full/Alternative) documentation program.
Approximately 76.16% of the loans are investor properties. The
weighted average mortgage interest rate is 5.614% and the weighted
average remaining term to maturity is 236, with approximately
66.18% of the loans having remaining terms to maturity equal to or
less than 180 months. The states that represent the largest
portion of the aggregate mortgage loans are California (28.06%),
New York (7.45%) and New Jersey (7.40%).
The mortgage loans are divided into eight separate mortgage Loan
Groups. Each Loan Group's senior certificates will receive
interest and/or principal from its respective mortgage loan group.
In certain very limited circumstances relating to a pool's
experiencing either rapid prepayments or disproportionately high
realized losses, principal and interest collected from the other
pools may be applied to pay principal or interest, or both, to the
senior certificates of the pool experiencing such conditions. The
subordinate certificates will be cross-collateralized and will
receive interest and/or principal from available funds collected
in the aggregate from all mortgage pools.
None of the mortgage loans are 'high cost' loans as defined under
any local, state or federal laws.
MASTR, a special purpose corporation, deposited the loans into the
trust, which issued the certificates. Wachovia Bank, National
Association will act as trustee. For federal income tax purposes,
elections will be made to treat the trust fund as multiple real
estate mortgage investment conduits.
MERCURY AIR GROUP: Final Fiscal 2003 Net Loss Tops $2.8 Million
---------------------------------------------------------------
Mercury Air Group, Inc. (Amex: MAX; PCX) announced final operating
results for its fiscal year ended June 30, 2003 and restated its
financial results for fiscal 2002.
Upon the completion of the fiscal 2003 audit and the re-audit of
the fiscal 2002 and 2001 financial statements, the Company
reported a net loss for the fiscal year ended June 30, 2003 of
$2,798,000, or $0.86 per basic and diluted share, respectively.
This compares to the estimated net loss for fiscal 2003 of
$3,069,000, or $0.93 per basic and diluted share, respectively,
that the Company announced in its press release on December 2,
2003.
The Company also announced restated net earnings for the fiscal
year ended June 30, 2002 of $4,517,000, or $1.38 and $1.35 per
basic and diluted share, respectively. The restated results for
fiscal 2002 represent a reduction of $516,000, or $0.15 and $0.16
per basic and diluted share, respectively, from the results
reported last year. The restated results for fiscal 2002 compare
to the estimated restated fiscal 2002 net earnings of $4,387,000,
or $1.34 and $1.31 per basic and diluted share, respectively,
announced in the Company's press release on December 2, 2003.
The announcement of the restated operating results comes after the
Company's current independent accounting firm completed a re-audit
of its fiscal 2002 and 2001 financial statements, which were
previously audited by other independent auditors. The restatement
of fiscal 2002 net earnings was the result of the following items:
1) the recognition of a liability as of June 30, 2002 of $459,000
associated with a proposed rent increase retroactive to June 18,
2001 for one of the Company's Air Cargo warehouse facilities at
Los Angeles International Airport; 2) the recognition of
additional compensation expense in fiscal year 2002 of $430,000
associated with the 2002 Management Stock Purchase Program; and 3)
the reversal of the sale-leaseback accounting treatment applied to
the sale of a building housing the Company's corporate
headquarters in January 2002 and the consolidation of the entity
which acquired the building from the Company.
In addition, the Company adjusted opening retained earnings as of
July 1, 2000 by $363,000 to correct for income tax adjustments
that should have been recorded in years prior to fiscal 2001.
"With the completion of the re-audit of our fiscal 2002 and 2001
financial statements, we can now proceed with finalizing the
closing requirements and conclude the sale of our FBO business to
Allied Capital Corporation and refocus our efforts on our
remaining three businesses. After the completion of this sale,
combined with a new credit facility, I am more confident than
ever with respect to the financial position of our Company going
forward," said Joseph A. Czyzyk, President and Chief Executive
Officer of Mercury Air Group, Inc.
For fiscal 2003 revenue was $429,015,000, an increase of
$45,673,000, or 11.9%, from fiscal 2002 revenue of $383,342,000.
Gross margin for fiscal 2003 was $25,963,000, a decrease of
$1,850,000, or 6.7%, from the restated gross margin for fiscal
2002 of $27,813,000.
Revenue for the Air Centers business segment in fiscal 2003 was
$96,249,000 as compared to $94,417,000 for fiscal 2002,
representing an increase of $1,832,000, or 1.9%. Revenue for
fiscal 2002 includes $7,476,000 from the Bedford FBO, which the
Company sold at the end of June 2002. Excluding the revenue from
the Bedford FBO from fiscal 2002 results, revenue in fiscal 2003
increased $9,308,000, or 10.7%, from the fiscal 2002 revenue
for Air Centers' of $86,941,000. The Air Centers' gross margin in
fiscal 2003 was $12,854,000, a reduction of $691,000, or 5.1%,
from fiscal 2002 gross margin of $13,545,000, which includes
$1,791,000 from the Bedford FBO. Excluding the gross margin
contribution from the Bedford FBO from fiscal 2002 results, the
Air Centers' gross margin in fiscal 2003 increased $1,100,000, or
9.4%, from the gross margin in fiscal 2002. The Air Centers'
retail sales volume in fiscal 2003 was 33,800,000 gallons, a
decrease of 2,225,000 gallons, or 6.2% from fiscal 2002 retail
sales volume of 36,025,000 gallons, which includes 2,939,000
gallons from the Bedford FBO. Excluding the Bedford FBO sales
volume from fiscal 2002 results, retail sales volume increased
714,000 gallons in fiscal 2003.
Revenue for the MercFuel business segment in fiscal 2003 was
$280,136,000 as compared to $232,573,000 for fiscal 2002, an
increase of $47,563,000, or 20.5%, on sales volume of 286,873,000
gallons and 287,651,000 gallons for 2003 and 2002, respectively.
Revenue for fiscal 2003 and 2002 includes $24,728,000 and
$49,085,000, respectively, on sales volume of 28,966,000 gallons
and 68,704,000 gallons for 2003 and 2002, respectively, for fuel
sales to National Airlines, which ceased operations in November
2002. Excluding the sales to National Airlines from both years'
results, MercFuel's revenue in fiscal 2003 would have been
$255,408,000 on 257,907,000 gallons as compared to $183,488,000 on
sales volume of 218,947,000 gallons for fiscal 2002. MercFuel's
gross margin in fiscal 2003 was $5,926,000, a reduction of
$655,000, or 10%, from fiscal 2002 gross margin of $6,581,000.
The gross margin contribution from sales to National Airlines in
fiscal 2003 and 2002 was $406,000 and $939,000, respectively.
Excluding the gross margin contribution from sales to National
Airlines from both years' results, MercFuel's gross margin would
have been $5,520,000 and $5,642,000 in fiscal 2003 and 2002,
respectively. MercFuel's bad debt expense in fiscal 2003 was
$1,060,000, or 0.38% of total revenue as compared to $994,000 in
fiscal 2002 representing 0.43% of total revenue.
Revenue from Maytag Aircraft in fiscal 2003 was $24,421,000, a
decrease of $3,807,000, or 13.5% from fiscal 2002 revenue of
$28,228,000. The decline in revenue can be attributed to the non-
renewal of the government contract in Yokota, Japan, which expired
without an extension or renewal being awarded to the Company,
resulting in lower revenue of $1,396,000, and two refueling
contracts that also expired without a renewal being awarded to the
Company reducing revenue by $1,935,000. Maytag Aircraft's gross
margin in fiscal 2003 was $4,598,000, a reduction of $2,191,000
from fiscal 2002 gross margin of $6,789,000.
Revenue from Air Cargo was $32,691,000 in fiscal 2003,
representing an increase of $4,567,000, or 16.2%, from fiscal 2002
revenue of $28,124,000. Revenue in cargo handling increased
$2,554,000 in fiscal 2003 as a result of higher air cargo volume
due to the west coast dock strike in late 2002 and general
improvement in the worldwide economy. Air Cargo's gross margin in
fiscal 2003 was $2,585,000, representing an increase of $1,687,000
from the restated gross margin from fiscal 2002 of $898,000. The
increase is primarily due to improved results from the cargo
handling operations and improved margins from the space brokerage
operations.
Fiscal 2002 results include an after-tax gain of approximately
$5,450,000 from the sale of the Company's Bedford FBO in late June
2002. This gain contributed $1.66 and $1.62 to fiscal 2002 basic
and diluted earnings per share, respectively.
Selling, general and administrative expenses in fiscal 2003 were
$10,818,000 as compared to the restated expense for fiscal 2002 of
$11,771,000. Interest expense in fiscal 2003 increased to
$7,956,000 from $5,830,000 in fiscal 2002 primarily the result of
the accrual of premiums associated with the Senior Secured
Subordinated 12% Note of approximately $1,724,000. As announced
on October 23, 2003, Allied Capital Corporation acquired the
Senior Secured Subordinated 12% Note and waived many of the debt
premiums included in the amended note.
As a result of the Company's restructuring of its long term debt
during fiscal 2003, the Company recognized debt issuance costs in
the amount of $1,773,000 in fiscal 2003.
Los Angeles-based Mercury Air Group (Amex: MAX; PCX) provides
aviation petroleum products, air cargo services and
transportation, and support services for international and
domestic commercial airlines, general and government aircraft and
specialized contract services for the United States government.
Mercury Air Group operates four business segments worldwide:
Mercury Air Centers, Inc., MercFuel, Inc., Maytag Aircraft
Corporation and Mercury Air Cargo, Inc. For more information,
please visit http://www.mercuryairgroup.com/
MESABA AIRLINES: Pilots Sue Co. for Mishandling of 401(k) Funds
---------------------------------------------------------------
Mesaba Airlines pilots have filed a lawsuit against their employer
for the mishandling of contributions to their individual 401(k)
retirement plans.
According to documents filed with U.S. District court in
Minneapolis on December 31, 2003, the pilots allege Mesaba
withheld money from their paychecks that was earmarked for their
401(k)s, but never actually deposited the money into the pilots'
retirement accounts.
"Mesaba has been deducting money from our paychecks that was
supposed to go into our 401(k) accounts, but instead they've kept
the money in the company's coffers," said Kris Pierson, Mesaba
pilot and ALPA spokesman.
In addition, the lawsuit alleges that Mesaba failed to make all of
the matching contributions required under the plan, made certain
other contributions outside of the legal time limits, and did not
promptly rectify these errors which date back to at least 1996.
According to the lawsuit, Mesaba's failure to identify and
promptly fix the irregularities constitutes a breach of its
fiduciary duties. The court filing alleges that "Mesaba knew or
should have known" of its errors since under federal law Mesaba is
required to engage an independent qualified public accountant to
audit the plan. Mesaba is also required to publish an annual
report of the Plan that includes a financial statement of the
assets and liabilities of the plan.
The Air Line Pilots Association, International, the union that
represents Mesaba's pilots, learned of the funding shortfalls in
late September. ALPA initially believed that the retirement plan
problems could be resolved without resorting to litigation.
"Management has flatly refused to disclose even the government
filings related to this matter. Without any supporting data, our
pilots can not be assured that a full remedy will be provided,"
stated Pierson. "Moreover, we have reason to believe the funding
shortfalls affect most of Mesaba's pilots and many other Mesaba
employees. In some cases, pilots are owed several thousand
dollars." Mesaba had promised employees that it would pay at
least some of the monies owed by November 30, 2003, but it missed
its own deadline.
The lawsuit filing comes just days before a possible strike by
Mesaba pilots. Contract talks were declared to be at impasse by
the National Mediation Board earlier this month, setting a
contract-or-strike deadline of January 9, 2004 at 11:01 p.m. CST.
Retirement benefits are a sticking point in contract negotiations
for the Mesaba pilots who retire with 25-30 percent less in their
retirement than pilots at similar regional airlines. That issue
is compounded by the union's concern that Mesaba pilots have been
further disadvantaged by the contribution irregularities. "We
filed the lawsuit because we need to be certain that our pilots
will get back the money that they are entitled to -- and that they
will need when they retire," said Pierson. Half of Mesaba's 844
pilots earn less than $32,500, with starting pay less than
$17,000.
More details about the Mesaba pilot contract negotiations, and
this issue are available on the Mesaba pilots' public Web site
http://mesabapilots.alpa.org/
Mesaba Airlines operates as a Northwest Jet Airlink and Northwest
Airlink partner for Northwest Airlines. Mesaba serves 114 cities
in 30 states and Canada from Northwest's three major hubs:
Detroit, Minneapolis/St. Paul and Memphis. Mesaba employs 844
professional airline pilots who operate an advanced fleet of 103
regional jet and jet-prop aircraft.
Founded in 1931, ALPA is the world's largest pilot union
representing 66,000 pilots at 42 airlines in the U.S. and Canada.
Visit the ALPA Web site at http://www.alpa.org/
* * *
On April 11, 2003, the Troubled Company Reporter cited that
Mesaba Aviation, Inc., a subsidiary company of Mesaba Holdings,
Inc. (Nasdaq:MAIR), announced the elimination of 33 management
positions as a result of declining flight activity from Fiscal
Year 2003 to what is forecasted in Fiscal Year 2004. This
decline reflects the current economic conditions in the airline
industry and lower consumer demand.
The positions affected include both staffed and open positions.
The airline has reduced its management headcount to 312 from
345, a reduction of nearly 10 percent. All affected employees
were assisted through a package of severance pay, benefits and
outplacement services.
Mesaba plans to eliminate approximately 50 positions from its non-
management workforce over the next six months, through a
combination of furloughs and voluntary leaves. In addition,
Mesaba is also freezing all management base pay in Fiscal Year
2004, which began on April 1, 2003.
MESABA AVIATION: Expresses Disappointment with ALPA Lawsuit
-----------------------------------------------------------
Mesaba Aviation, Inc., a subsidiary company of MAIR Holdings, Inc.
(Nasdaq:MAIR), issued the following statement from its president
and chief operating officer John Spanjers, concerning the lawsuit
filed by the Air Line Pilots Association:
"Mesaba Airlines regrets the errors that occurred in certain
employees' 401(k) accounts, and we have disclosed these errors to
the IRS and the Department of Labor. We also have communicated to
all employees the nature of the errors and our plan for both
correcting them and preventing their recurrence. We believe this
lawsuit is unnecessary given our commitment to correcting the
errors.
"We are disappointed that ALPA deemed a lawsuit necessary at this
time, because since we self-disclosed these errors, we have worked
closely with ALPA to address the concerns of the Mesaba pilots --
and all Mesaba employees -- and to rectify the errors.
"In addition, the timing of this lawsuit adds another layer of
distraction as Mesaba approaches the Jan. 9 deadline in its pilot
negotiations."
Mesaba Aviation, Inc., d/b/a Mesaba Airlines, operates as a
Northwest Jet Airlink and Northwest Airlink partner under service
agreements with Northwest Airlines. Currently, Mesaba Aviation
serves 112 cities in 30 states and Canada from Northwest's and
Mesaba Aviation's three major hubs: Detroit, Minneapolis/St. Paul,
and Memphis. Mesaba Aviation operates an advanced fleet of 100
regional jet and jet-prop aircraft, consisting of the 69 passenger
Avro RJ85 and the 30-34 passenger Saab SF340.
MAIR Holdings, Inc. is traded under the symbol MAIR on the NASDAQ
National Market.
More information about Mesaba Airlines is available on the
Internet at: http://www.mesaba.com/
* * *
On April 11, 2003, the Troubled Company Reporter cited that
Mesaba Aviation, Inc., a subsidiary company of Mesaba Holdings,
Inc. (Nasdaq:MAIR), announced the elimination of 33 management
positions as a result of declining flight activity from Fiscal
Year 2003 to what is forecasted in Fiscal Year 2004. This
decline reflects the current economic conditions in the airline
industry and lower consumer demand.
The positions affected include both staffed and open positions.
The airline has reduced its management headcount to 312 from
345, a reduction of nearly 10 percent. All affected employees
were assisted through a package of severance pay, benefits and
outplacement services.
Mesaba plans to eliminate approximately 50 positions from its non-
management workforce over the next six months, through a
combination of furloughs and voluntary leaves. In addition,
Mesaba is also freezing all management base pay in Fiscal Year
2004, which began on April 1, 2003.
METROPOLITAN MORTGAGE: Continuing Review of Alternative Options
---------------------------------------------------------------
Metropolitan Mortgage & Securities Co., Inc. (Amex: MPD.pr) wants
to clarify certain information that appeared in an article in The
Spokesman Review on December 30, 2003.
The company's board of directors is continuing to review
alternative strategies for the Company, and has not made any
determination at this time with respect to a bankruptcy filing,
resumption of payments on its debt or otherwise. Any such
determinations, if any, made by the board will be appropriately
announced.
MICRO INTERCONNECT: Edward Berg Sells Shares & Resigns from Post
----------------------------------------------------------------
On November 4, 2003, N. Edward Berg agreed to sell 1,000,000
shares of the common stock of Micro Interconnect Technology, Inc.
owned by him to the Keating Reverse Merger Fund, LLC at a price of
$.165 per share.
In connection with this transaction, Mr. Berg resigned as a member
of the MITR's Board of Directors and as it President and nominated
Mr. Keating as his successor. Concurrently, the principal
executive office of the company was moved to Suite 2, 645
Beachland Boulevard, Vero Beach, FL 32963.
The Keating Reverse Merger Fund, LLC, owns 2,000,000 shares, or
80% of Micro Interconnect Technology's common stock and MITR's
other stockholders own 500,000 shares, or 20% of its common stock.
Mr. Berg has no continuing economic interest in the Company as
either stockholders or creditors.
As of September 30, 2003, the company's balance sheet discloses a
total shareholders' equity deficit of about $349k.
MILLER INDUSTRIES: Completes Senior Credit Facility Workout
-----------------------------------------------------------
Miller Industries, Inc. (NYSE: MLR) completed the restructuring of
its Senior Credit Facility.
William G. Miller, the Chairman of the Board and Co-Chief
Executive Officer of the Company, increased his previous $2
million participation in the existing Senior Credit Facility by an
additional $10 million. These funds, along with an increase in
the commitment of CIT Group Inc., to $20 million, were used to
satisfy the Company's obligations to two of the Company's existing
senior lenders, who were not interested in continuing to finance
the Company. The result is that CIT and Mr. Miller now constitute
the senior lenders to the Company, with CIT holding 62.5% of such
loan and Mr. Miller participating in 37.5% of the loan. In
addition, Mr. Miller agreed to subordinate his portion of the loan
to that of CIT.
As a result of Mr. Miller's increased participation and agreement
to subordinate to CIT, the loan was restructured and restated with
a maturity date of July 23, 2005. The loan comprises a $15
million revolving facility, a $12 million non-amortizing term
loan, and a $5 million term loan that will amortize at $167,000 a
month commencing in February 2004. Also, all previously existing
defaults under the Senior Credit Facility were waived, the
financial covenants were substantially relaxed, and availability
under the facility was increased by approximately $5 million.
As a condition of the new senior facility restructuring, the
Company entered into separate agreements with the two holders of
its subordinated debt pursuant to which each will extend until
July 31, 2005 the maturity date of approximately $9.7 million of
the principal amount of the outstanding subordinated debt they
hold, and will convert the remaining portion, estimated to be $7.0
million, into shares of the Company's Common Stock. The
subordinated debt holders also currently hold 186,000 warrants,
which were acquired in July of 2002 and 2003. The approximately
$7.0 million in subordinated debt will be converted to
approximately 1.2 million shares of Common Stock, and the 186,000
warrants will be converted to approximately 80,000 shares of
Common Stock, each based on a fourth quarter average price of the
Company's Common Stock, estimated to be $5.75.
The holder of approximately 44% of the subordinated debt is an
entity controlled by William G. Miller and owned by him, certain
officers and directors of the Company, and others. The conversion
by this entity of a portion of its subordinated debt and warrants
into shares of the Company's Common Stock is subject to
shareholder approval under the listing standards of the New York
Stock Exchange because it is owned partially by insiders of the
Company. The shareholders meeting at which this matter will be
considered is expected to be held during the first part of
February 2004. The exchange of subordinated debt and warrants of
the other holder is expected to close today.
Jeffrey I. Badgley, President and Co-Chief Executive Officer of
the Company said, "We are very pleased by the confidence that has
been demonstrated in our Company by the increased participation in
our Senior Credit Facility by CIT and Mr. Miller. We believe
finalizing this complete restructuring of our credit facilities is
a great start to 2004. Orders have been up substantially in the
last few months, and the $5 million in additional availability
should provide us with adequate working capital for the next two
years."
Bill Miller commented, "I am happy to have been able to
demonstrate my confidence in the future of Miller Industries by
providing the additional capital needed to fund the Company's
growth. The increased borrowing capacity that this restructuring
brings to the Company, together with the recent completion of the
sale of all of the RoadOne operations, should result in Miller
Industries being in a better position to focus all of our energies
on a return to profitability."
Miller Industries, Inc. is the world's largest manufacturer of
towing and recovery equipment. The Company markets its towing and
recovery equipment under a number of well-recognized brands,
including Century, Vulcan, Chevron, Holmes, Challenger, Champion
and Eagle.
* * *
Refinancing Efforts
As reported in Troubled Company Reporter's November 21, 2003
edition, the Company announced that on October 3, 2003, the
Company entered into a letter agreement with a large financial
institution pursuant to which such lender confirmed its interest
in providing up to $53 million of financing in order to refinance
the Senior Credit Facility and the Junior Credit Facility.
The agreement does not constitute a commitment or undertaking to
provide financing, and is subject to completion of due diligence
and other conditions. Thus, there can be no assurance that this
new credit facility will be consummated. The lender is continuing
its due diligence process and, if the transaction proceeds to
closing, the Company continues to anticipate the closing occurring
by year end 2003.
The Company is in the process of negotiating with Contrarian
Capital, Greenwich, Connecticut, the terms of an agreement under
which the holders of all of the subordinated notes of the Company
would convert all obligations under such notes in excess of
approximately $9.7 million into shares of common stock of the
Company. Such equity conversion would be at an exchange ratio
equal to the average closing prices of the Company's common stock
during the fourth quarter of 2003. Such conversion would occur
simultaneously with and be conditioned upon the closing of the
proposed new senior credit facility described above. This
reduction of debt is necessary for the new senior facility as
currently proposed to be adequate for the Company's borrowing
needs. The conversion into equity of approximately 44% of such
debt obligations is further conditioned upon approval of the
shareholders of the Company because these shares would be issued
to a partnership controlled by certain executive officers and
directors of the Company. It is contemplated that the
shareholders meeting to consider this matter will be held on
Tuesday, December 23, 2003. There is no definitive agreement
regarding this transaction at this time and there can be no
assurance that any such agreement will actually be entered into.
On October 31, 2003, William G. Miller, the Chairman of the Board
and Co-CEO of the Company, made a $2,000,000 loan to the Company
as a part of the existing senior credit facility. In conjunction
with such investment, the senior credit facility lender group
entered into a forbearance agreement with the Company where they
agreed to forebear from pursuing any remedies resulting from the
Company's default under the senior credit agreement through
December 31, 2003. As a result of Mr. Miller's additional
investment, the Company realized increased borrowing availability
under the senior credit agreement, the default interest rate was
lowered by 2% and certain monthly amortization payments were
deferred until December 31, 2003. In addition, the prepayment
penalty of 1% was waived in the event that refinancing was
completed before year-end December 31, 2003.
MIRANT CORP: Asks Court to Enforce Stay on MediaNews Group
----------------------------------------------------------
Mirant Americas Energy Marketing LP and MediaNews Group, Inc.,
are parties to an International Swap Dealers Association Master
Agreement dated March 17, 1998. Under the Swap Agreement,
Mirant, the floating price payer, and MediaNews, the fixed price
payer, agreed to exchange cash flows on a quarterly basis based
on the pricing of 48.8 Gram Newsprint. Monthly pricing under the
Swap Agreement is calculated on the date of publication of the
"Paper Trader" and payment is required to be tendered within five
business dates following the last pricing date in each quarter.
The floating price called for in the Swap Agreement, which
provides the basis for calculating payments, is based on an index
appearing in Paper Trader each month that provides the average
contract transaction price for 48.8 Gram Newsprint. The
calculation periods under the Swap Agreement commenced on May 1,
1998 and will end on April 30, 2005.
According to Meredyth A. Purdy, Esq., at Haynes and Boone LLP, in
Dallas, Texas, MediaNews most certainly had knowledge of the
commencement of the Debtors' Chapter 11 cases as they were
prominently reported in the national press. Despite the Debtors'
bankruptcy filing, MediaNews continued to operate under the Swap
Agreement and did not take any action regarding the Swap
Agreement. Furthermore, as had been the ordinary course of
business between the two parties for the past five years, the
calculation index governing payment and calculation of profits
under the Swap Agreement was issued in the Paper Trader at the
end of July. A second calculation index was issued at the end of
August.
Pursuant to the payment terms of the Swap Agreement, MediaNews'
next quarterly payment of over $700,000 was due five business
days after the end of the quarter, thereby making MediaNews'
payment to the Debtors due on September 8, 2003.
In August 2003, MediaNews contacted the Debtors and offered
$1,000,000 to exit the Swap Agreement and be relieved from its
obligations thereunder. MediaNews did not take the position that
the Chapter 11 filing affected the parties' contractual
relationship -- it simply wanted to exit the Swap Agreement prior
to its expiration, presumably because, it had been, and would
continue to be, obligated to make substantial quarterly payments
to the Debtors until April 31, 2005 and could likely secure a
more favorable pricing arrangement with a different trading
partner.
In response to MediaNews' Exit Offer, the Debtors advised
MediaNews that, based on projected payments that would come due
under the Swap Agreement, the Swap Agreement was worth at least
$3,000,000. Thus, the Debtors could not take the $1,000,000 Exit
Offer to creditors for their consideration.
Faced with the fact that it would be unable to exit the contract
for $1,000,000 as it had hoped, MediaNews then attempted to
terminate the Swap Agreement under the guise that the Debtors'
bankruptcy filing constitute an Event of Default, thereby
entitling it to terminate the Swap Agreement. In that regard, on
September 4, 2003, MediaNews sent a letter to the Debtors
informing them that it was terminating the Swap Agreement by
virtue of the Debtors' Event of Default under Section 5(a)(vii)
of the Swap Agreement.
On September 9, 2003, the Debtors advised MediaNews that its
attempt to terminate was ineffective given the unreasonable delay
in exercising its contractual right to terminate. The Debtors
further advised MediaNews that if it did not immediately withdraw
its notice of termination and pay all amounts currently due under
the Swap Agreement, the Debtors would be forced to seek a Court
order finding MediaNews in violation of the automatic stay.
However, MediaNews refused to comply with the Debtors' request to
withdraw its notice of termination and refused to pay the
$700,000 quarterly payment due on September 8, 2003.
Accordingly, the Debtors ask the Court to:
(a) enforce the automatic stay prohibiting MediaNews from
terminating the Swap Agreement and interfering with the
Debtors' right thereunder;
(b) hold MediaNews in civil contempt of the automatic stay;
and
(c) assess sanctions against MediaNews for at least the
amount of their attorneys' fees and costs, plus $50,000
per day until MediaNews complies with the stay, rescinds
its purported termination notice and ceases interfering
with the Debtors' rights under the Swap Agreement.
Ms. Purdy asserts that the Debtors' request should be granted
because:
(a) MediaNews' tardy submission of termination notice
occurred after it had clearly waived its contractual
right to terminate as it continued to perform under the
Swap Agreement for seven weeks despite its knowledge of
the bankruptcy filing;
(b) MediaNews was aware that an event of default occurred,
yet it did not take any action to terminate the contract
until much later;
(c) MediaNews' attempt to terminate lacks the causal
connection to the Debtors' Chapter 11 filing that would
make its termination notice effective under Section 560
of the Bankruptcy Code;
(d) the Swap Agreement's "No Waiver" clause does not save
MediaNews since it continued to operate under the Swap
Agreement for an extended period after the Petition Date;
(e) MediaNews' purported termination is an improper attempt
to defeat the Debtors' property rights under the Swap
Agreement and is an clear violation of the automatic
stay set forth in Section 362(a)(3);
(f) as a result of MediaNews' violation of the automatic
stay, MediaNews' purported attempt to terminate the Swap
Agreement is void;
(g) MediaNews has been aware of its violation of the
automatic stay since at least September 9, 2003, yet it
has taken no action to rescind its purported notice; and
(h) with MediaNews' willful violation of the automatic stay,
sanctions are warranted. (Mirant Bankruptcy News, Issue No.
17; Bankruptcy Creditors' Service, Inc., 215/945-7000)
NATIONAL EQUIPMENT: Shoos-Away PwC & Brings-In KPMG as Auditor
--------------------------------------------------------------
Since filing Chapter 11 on June 27, 2003, National Equipment
Services, Inc., entered into discussions with its independent
accountants, PricewaterhouseCoopers LLP, regarding their
employment and retention, including discussions regarding unpaid
fees for pre-petition services. The Company filed employment and
retention motions with the US Bankruptcy Court in October 2003 but
was unable to successfully complete the post-filing employment and
retention process.
On November 12, 2003, the Company communicated its intent to
replace PWC and engage KPMG LLP as its independent accountants.
The Company discussed the dismissal of PWC and appointment of KPMG
with its Audit Committee of the Board of Directors, agent to its
senior lender group, and counsel to the creditors' committee. The
Company has obtained the support of these parties regarding these
changes and will file an employment and retention motion with the
U.S. Bankruptcy Court in order to seek court approval for the KPMG
appointment.
PWC's report on the financial statements of the Company for the
years ended December 31, 2002 and 2001, contained an explanatory
paragraph that expressed significant doubt concerning the ability
of the Company to continue as a going concern. Other than as
mentioned in the previous sentence, PWC's report on the financial
statements of the Company for the years ended December 31, 2002
and 2001, did not contain an adverse opinion or a disclaimer of
opinion, nor was such report qualified or modified as to
uncertainty, audit scope, or accounting principles.
During the two most recent fiscal years ended December 31, 2002
and 2001, there were reportable events as to internal control
matters noted in one of the Company's operating units. These
matters were considered to be a material weakness related to the
financial statements for the year ended December 31, 2001, and
reportable conditions related to the financial statements for the
year ended December 31, 2002.
NATIONAL STEEL: Wants Court to Expunge & Disallow Various Claims
----------------------------------------------------------------
During their review process, the National Steel Corporation
Debtors determined that 152 proofs of claim, totaling $6,220,665,
are Duplicate Claims. The proofs of claim assert claims for a
single liability against different Debtors.
The Debtors tell the Court that the Claimants are not entitled to
multiple recoveries on a single liability. The Debtors also
argue that, based on National Steel's Books and Records, the
claims should be against National Steel and not against any other
affiliates or subsidiaries. Accordingly, as a bookkeeping
matter, the Debtors want to eliminate the Duplicate/Different
Debtor Claims from their claims register and have the claims
asserted against the appropriate Debtor.
The Debtors ask the Court to disallow and expunge the
Duplicate/Different Debtor Claims and retain the surviving
claims. The surviving claims are not allowed claims and will
remain subject to further review and possible objection.
The Duplicate/Different Debtor Claims include:
Disallowed Disallowed Surviving Surviving
Creditor Claim No. Amount Claim No. Amount
-------- ---------- ---------- --------- ---------
ADS Logistics 4081 $334,278 4089 $334,278
Caterpillar
World Trading 128 507,780 103 507,780
Enprotech Corp. 141 140,851 143 140,851
142 140,851 143 140,851
144 140,851 143 140,851
General Electric
Supply Co. 4057 101,053 4058 101,051
Harris, Alina
Child Survivor
Of James Harris 3628 500,000 3629 500,000
3630 500,000 3629 500,000
Pyro Industrial
Services Inc. 4092 303,265 4095 303,265
4093 303,265 4095 303,265
4094 303,265 4095 303,265
T&H Grinding Co. 3814 105,540 3813 105,540
Van Dorn, Eugene 2958 110,000 2959 110,000
2963 110,000 2959 110,000
Wilkinson, Robert 3697 250,000 3702 250,000
3699 250,000 3702 250,000
3700 250,000 3700 250,000
Wrong Debtor Claims
The Debtors determined that 210 claims, totaling $5,772,602, were
filed against the wrong subsidiaries and affiliates.
Accordingly, the Debtors ask the Court to reclassify the Wrong
Debtor Claims as claims against the correct Debtor.
The Wrong Debtor Claims include:
Claim Asserted Correct
Creditor Number Debtor Debtor
-------- ------ -------- -------
Allegheny Plastics 48 Midwest Steel National Steel
Inc. Corporation Corporation
American Disposal 541 National Steel National Steel
Corporation Pellet Company
Bach Systems, Inc. 2277 Granite City National Steel
Steel Company Corporation
Basler Electric 2762 Granite City National Steel
Steel Company Corporation
CAM LLC 1527 Granite City National Steel
Steel Company Corporation
Champion Inc. 1854 National Steel National Steel
Corporation Pellet Company
City Xpress 1479 Midwest Steel National Steel
Corporation Corporation
Detail Boring, Inc. 1986 Great Lakes National Steel
Steel Corp. Corporation
Erickson Truax 4088 National Steel National Steel
Corporation Pellet Company
GNB Industrial 1453 Granite City National Steel
Steel Company Corporation
Indian Trucking Co. 171 no debtor National Steel
Corporation
Janitorial Enterprises 504 National Steel NSL, Inc.
Corporation
Lincoln Tire, Inc. 2788 Great Lakes National Steel
Steel Corp. Corporation
Munger Co., Inc. 2231 Granite City National Steel
Steel Company Corporation
Promac Inc. 1708 Granite City National Steel
Steel Company Corporation
Shaw Industries 1847 no debtor National Steel
Corporation
Duplicative Claims
The Debtors found eight proofs of claim that assert duplicate
claims for a single liability. In certain cases, the claimants
filed identical proofs of claim asserting the same claim against
the Debtors. The Debtors ask the Court to disallow and expunge
the eight Duplicate Claims:
Disallowed Surviving Allowed
Creditor Claim Claim Amount
-------- ---------- --------- -------
Arm-S Electric, Inc. 5244 525 $880
Cummins & Barnard, Inc. 5320 2787 23,167
Direct Energy Marketing 5341 5333 1,220,584
H Trucking Inc. 5314 2426 7,241
H Trucking Inc. 5315 2033 173,000
H Trucking Inc. 5316 2434 11,043
MAAC Property Services 5306 2466 5,542
Maxim Technologies, Inc. 5345 5309 51,374
Amended, Superseded Claims
The Debtors discovered that 18 proofs of claim represent
duplicate claims or amendments to previously filed claims. The
Debtors ask the Court to disallow the Superseded Claims:
Disallowed Surviving Allowed
Creditor Claim Claim Amount
-------- ---------- --------- -------
Bordeaux, Leroy 5203 5307 $600,000
Commonwealth of PA
Dept. of Revenue 3844 5359 unliquidated
Cummins & Barnard, Inc. 2787 5321 23,165
General Electric
Capital Corporation 3885 5325 4,074,424
Great Lakes Recovery
Systems 4046 5319 7,555,720
Heller Financial 3884 5324 137,157
Icon Cheyenne, LLC 4350 5334 unliquidated
K&D Industrial Services 5199 5367 115,602
K&D Industrial Services 5367 5388 115,602
Maxim Technologies, Inc. 5080 5309 51,374
NKK Corporation 3837 5322 78,862
NKK Corporation 3843 5323 423,700
State of Indiana
Dept. of Revenue 3377 5305 418,164
State of Indiana
Dept. of Revenue 3378 5304 7,784
State of Indiana
Dept. of Revenue 5305 5439 436,869
State of Texas
Comptroller of
Public Accounts 2578 5370 129,084
U.S. Customs Service 4921 5353 unliquidated
Waldor Pump & Equip. 2916 5300 8,852
(National Steel Bankruptcy News, Issue No. 41; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
NATIONAL STEEL: Plan Declared Effective on December 19, 2003
------------------------------------------------------------
National Steel announced that the Effective Date of the First
Amended Joint Plan of Liquidation of National Steel Corporation
and its Affiliated Debtors and Debtors in Possession, as modified
occurred on December 19, 2003.
As previously reported, the United States Bankruptcy Court for the
Northern District of Illinois confirmed the Plan on October 23,
2003.
The Plan contemplates that all remaining assets will be disposed
of, all cash proceeds (net of expenses) will be distributed to
creditors, and that all administrative tasks required to complete
the wind-down of the debtors' estates and their ultimate
dissolution would be completed. In addition to providing for these
things, the Plan sets forth how net cash proceeds available for
distribution to various creditor constituencies will be allocated
and paid.
NDCHEALTH: Inks Pact with ArcLight to Gain Data Tech. Assets
------------------------------------------------------------
NDCHealth Corporation (NYSE: NDC) entered into an exclusive
license agreement with ArcLight Systems LLC, an information
management company owned by major participants in the pharmacy
industry, including Albertson's, Inc., CVS Corporation, Cardinal
Health, Inc., Kmart Corporation and Wal-Mart Stores, Inc.
Under terms of the agreement, NDCHealth will add ArcLight's data
suite and data receipt processes to enhance the accuracy and speed
of NDCHealth's existing base compensation and targeting products
for pharmaceutical manufacturers. The new information also will
couple with NDCHealth's emerging suite of Insight and Impact
products to create significant new levels of information and
advanced analysis.
By integrating its suite of Insight products with the ArcLight
data, NDCHealth will further help to improve the quality and
effectiveness of healthcare by providing information designed to
help with therapy compliance and persistency, and to provide a
better understanding of the effectiveness of drug treatments. It
also will improve our customers' revenue, margins and profits as
it will yield greater information and actionable data for
pharmaceutical manufacturers to better manage the entire product
life cycle, enhance pricing and formulary decisions and provide
more effective sales force targeting and compensation support.
As consideration for a seven-year license, NDCHealth issued to
ArcLight 381,098 shares of unregistered common stock, par value
$0.01 per share, and a five-year warrant to purchase 381,098
shares of NDCHealth common stock at an exercise price of $26.24
per share. If the agreement is extended an additional three years,
then ArcLight may receive an additional $10 million in either
cash or NDCHealth stock. In addition, ArcLight will share in
incremental NDCHealth revenues.
"Our customers are looking for deeper understanding to enable
faster, more informed decisions to set marketing strategies and
target their sales force to capture opportunity and growth in a
highly competitive market," said Walter M. Hoff, chairman and
chief executive officer, NDCHealth. "This agreement will yield
multiple benefits: precision targeting; better and more timely
understanding of market trends; more insight on compliance and
persistency, and a better understanding of the economics of the
pharmaceutical industry.
"This agreement with ArcLight also is consistent with our ongoing
strategy to help our customers improve the quality of healthcare
while we create opportunity to expand NDCHealth's position in the
market. ArcLight's enhanced data and data integrity processing, in
concert with NDCHealth's existing products and customer base, and
our new Insight solutions, will extend our capabilities to create
new revenue streams for both NDCHealth and our customers," Hoff
concluded.
ArcLight Systems LLC is a pharmacy data partnership comprised of
several retail pharmacies and a major healthcare product and
service company. ArcLight provides a fully developed syndicated
product suite, drawing upon common encryption for all members.
ArcLight also features a modernized data receipt and integrity
process.
NDCHealth (S&P, BB- Corporate Credit Rating, Stable) is a leading
provider of health information solutions to pharmacy, hospital,
physician, pharmaceutical and payer business. For more
information, visit http://www.ndchealth.com/
NET PERCEPTIONS: Board Rejects Obsidian's Exchange Offer
--------------------------------------------------------
Net Perceptions, Inc. (Nasdaq:NETP) said that after careful
consideration, including a thorough review with independent
financial and legal advisors, its board of directors has
unanimously determined that Obsidian Enterprises, Inc.'s
unsolicited exchange offer for all outstanding shares of Net
Perceptions common stock is financially inadequate and not in the
best interests of Net Perceptions' shareholders.
Accordingly, the Net Perceptions' board of directors urges
stockholders to reject Obsidian's offer and not tender their
shares.
In making its recommendation, Net Perceptions' board of directors
considered, among other things:
-- The opinion of its financial advisor, Candlewood Partners, LLC,
delivered to the board of directors on December 30, 2003, that,
as of that date, the consideration offered in the Exchange
Offer was inadequate from a financial point of view to the
Company's stockholders, other than Obsidian and its affiliates;
-- The liquidation analysis prepared by Candlewood Partners
reflecting estimated cash distributions pursuant to the plan of
liquidation in the range of $.41 to $.45 per share. In this
connection, the board unanimously concluded that, assuming
there were no developments, events or circumstances which would
result in an adverse change to the results of the Candlewood
liquidation analysis, and assuming the cash consideration
payable to the Company under the patent portfolio sale
agreement and the non-exclusive source code license agreement
referred to below is received by the Company as reflected in
Candlewood Partners' liquidation analysis, an initial
distribution estimated to be approximately $.40 per share could
be made to stockholders shortly after stockholder approval and
adoption of the plan of liquidation previously adopted by the
board of directors;
-- Candlewood's financial analysis of Obsidian and the exchange
offer;
-- In the view of Candlewood, the large number of shares of
Obsidian common stock that would be received by the Company's
stockholders if the exchange offer and proposed subsequent
merger were consummated, combined with the small average
trading volume of Obsidian common stock, highlights the
potential difficulty of selling the shares of Obsidian common
stock that would be received in the exchange offer and such
subsequent merger; and
-- The fact that Obsidian's exchange offer is highly conditional,
which results in significant uncertainty that the offer will be
consummated.
Additional information with respect to the board's decision and
its actions is contained in a Schedule 14D-9 which has been filed
with the Securities and Exchange Commission and will be mailed to
the Company's stockholders.
The Company said that its board of directors continues to believe
that implementing the plan of liquidation adopted by the board on
October 21, 2003 is the best available alternative at this time.
Accordingly, and in order to move forward with the SEC review
process so as to minimize further delay in providing liquidity to
stockholders, the Company expects to file with the SEC as soon as
practicable a revised preliminary proxy statement relating to a
special meeting of stockholders at which the plan of liquidation
would be voted upon. A new date for that meeting, which had
previously been scheduled for December 23, 2003, has not yet been
fixed. The Company also said that, while it intends to continue at
this time to pursue completion of the SEC review process and
stockholder approval of the plan of liquidation, it also expected
to continue discussions with potential acquirers who are willing
to promptly and diligently pursue, in a manner consistent with the
Company's objective of minimizing cash expenses, a definitive
agreement to acquire the Company on terms which would provide
substantial transaction certainty and higher realizable value to
stockholders than implementing the plan of liquidation.
Separately, the Company announced that it has entered into an
agreement with Thalveg Data Flow LLC to sell to Thalveg Net
Perceptions' patent portfolio for a purchase price of $1.8
million. The agreement includes a royalty-free license back to Net
Perceptions under the patents, patent licenses and pending patent
applications being transferred. The transaction does not involve
any other intellectual property rights or other assets of Net
Perceptions, including its proprietary software products, which
remain with Net Perceptions. Consummation of the transaction is
subject to stockholder approval as part of the previously
announced Plan of Complete Liquidation and Dissolution or
otherwise. A copy of the agreement was filed on December 31, 2003
with the SEC as an exhibit to a current report on Form 8-K, and
the foregoing description of the agreement is qualified in its
entirety by reference to such copy. Finally, the Company said that
it had granted to a software company a non-exclusive source code
license to a portion of the Company's intellectual property for a
cash payment of $325,000. Under the license agreement, the Company
will provide certain consulting and support services to the
licensee for additional cash payments totaling $75,000.
Additional Information About the Plan of Liquidation
and Where to Find It
In connection with the proposed plan of complete liquidation and
dissolution, on November 4, 2003, the Company filed with the
Securities and Exchange Commission preliminary forms of, and may
file with the SEC revised preliminary and definitive forms of, a
proxy statement and other relevant materials. SECURITY HOLDERS OF
THE COMPANY SHOULD READ THE APPLICABLE PROXY STATEMENT AND THE
OTHER RELEVANT MATERIALS BECAUSE THEY CONTAIN OR WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE COMPANY AND THE PLAN OF
LIQUIDATION. Investors and security holders may obtain a copy of
the applicable proxy statement and such other relevant materials
(when and if they become available), and any other documents filed
by the Company with the SEC, for free at the SEC's Web site at
http://www.sec.gov/or for free from the Company by directing a
request to: Net Perceptions, Inc., 7700 France Avenue South,
Edina, Minnesota 55435, Attention: President.
The Company and its executive officers and directors may be deemed
to be participants in the solicitation of proxies from the
Company's stockholders with respect to the proposed Plan of
Complete Liquidation and Dissolution. Information regarding the
direct and indirect interests of the Company's executive officers
and directors in the proposed Plan of Complete Liquidation and
Dissolution is included in the preliminary form of, and will be
included in any revised preliminary and definitive form of, the
proxy statement filed with the SEC in connection with such
proposed Plan.
* * *
Plan of Liquidation
In its latest Form 10-Q filed for period ended September 30, 2003,
Net Perceptions reported:
"The condensed consolidated financial statements were prepared on
the going concern basis of accounting, which contemplates
realization of assets and satisfaction of liabilities in the
normal course of business. On October 21, 2003, the Company
announced that its Board of Directors had unanimously approved a
Plan of Complete Liquidation and Dissolution which will be
submitted to the Company's stockholders for approval and adoption
at a special meeting of stockholders to be held as soon as
reasonably practicable. If the Company's stockholders approve the
Plan of Liquidation, the Company will adopt the liquidation basis
of accounting effective upon such approval. Inherent in the
liquidation basis of accounting are significant management
estimates and judgments. Under the liquidation basis of
accounting, assets are stated at their estimated net realizable
values and liabilities, including costs of liquidation, are stated
at their anticipated settlement amounts, all of which approximate
their estimated fair values. The estimated net realizable values
of assets and settlement amounts of liabilities will represent
management's best estimate of the recoverable values of the assets
and settlement amounts of liabilities.
"A preliminary proxy statement related to the Plan of Liquidation
was filed on Schedule 14A with the Securities and Exchange
Commission on November 4, 2003. The key features of the Plan of
Liquidation are (i) filing a Certificate of Dissolution with the
Secretary of State of Delaware and thereafter remaining in
existence as a non-operating entity for three years; (ii) winding
up our affairs, including selling remaining non-cash assets of the
Company, and taking such action as may be necessary to preserve
the value of our assets and distributing our assets in accordance
with the Plan; (iii) paying our creditors; (iv) terminating any of
our remaining commercial agreements, relationships or outstanding
obligations; (v) resolving our outstanding litigation; (vi)
establishing a contingency reserve for payment of the Company's
expenses and liabilities; and (vii) preparing to make
distributions to our stockholders."
NEW FRONTIER: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: New Frontier Construction, Inc.
6324 Starview Drive
Park City, Utah 84098
Bankruptcy Case No.: 03-41537
Type of Business: The Debtor is a Custom log house company of
building, remodelling and selling houses.
See http://www.newfrontierconst.com/for more
information.
Chapter 11 Petition Date: December 19, 2003
Court: District of Utah (Salt Lake City)
Judge: Glen E. Clark
Debtor's Counsel: Gregory J. Adams, Esq.
McKay, Burton & Thurman
#10 East South Temple Street #600
Salt Lake City, UT 84133
Tel: 801-521-4135
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Key Bank Cash Flow $99,934
Chrysler Financial Company Vehicle - $30,800
Pick-up
Key Bank Material $26,053
Scott Rasmussen Slate & Tile $17,691
George S. May International Consulting Fees $15,486
Frontier Lumber, Inc. Cash Flow $15,214
American Express Cash Flow $13,724
The Cabinet Company Cabinets Redhawk Lot-11 $9,240
Stock Building Supply Material Redhawk Lot-11 $8,625
Citi Card Cash Flow $7,867
Bank One NFF Cash Flow $7,809
Martin Garage Doors Garage Doors $5,984
Redhawk Lot-11
The Red Hawk Wildlife Homeowners Fees $4,715
Preserve Redhawk Lot-11
Belcher's Auto Cash Flow $4,000
Noel Williams Construction Concrete (Gypcrete) $3,240
Specialties Flooring Redhawk Lot-11
VM Electric Electrical Contractor $2,888
Redhawk Lot-11
BMW Stone Stone Masonry on $2,009
Redhawk Lot-11
Joy's Interiors Interior Decorating $1,105
Consulting
Redhawk Lot-11
Mirror Lake Service Fuel & Supplies $1,067
Free and Associates Appraisal $1,000
NEW WORLD PASTA: Lenders Extend and Amend Existing Credit Pact
--------------------------------------------------------------
New World Pasta Company said that a majority of the lenders under
its senior secured credit facility have approved an extension and
amendment to the Company's existing amended credit agreement which
permits New World Pasta to file its Annual Report for the fiscal
year ended December 31, 2002 by February 10, 2004, and to file its
2003 quarterly reports by April 1, 2004.
Previously, the Company's amended credit agreement required the
Company to file these reports by December 31, 2003.
"We are appreciative of the continued support we have received
from our bank group," stated Wynn Willard, New World Pasta's Chief
Executive Officer. "We have made excellent progress towards
finalizing our financial statements, and this timetable reflects
that. We are also appreciative of the support we have received
from all of our stakeholders, including our suppliers and
customers, that allows us to continue our focus on improving and
building our business and our brands."
"We recognize that there is a great deal of interest in our
Company as a result of the delayed filings of our financial
statements, and the issues that our Company has faced throughout
the past year or so," stated Ed Lyons, the Company's Senior Vice
President and Chief Financial Officer. "We look forward to
addressing these matters and issues over the next several months.
We appreciate the patience that our lenders, customers, suppliers
and others have shown over the past year, and we look forward to
continuing our efforts to work closely with all of our
stakeholders to improve our business and overcome the obstacles
that we face. Going forward, we will endeavor to provide as much
information as we reasonably can, when we can."
New World Pasta Company (S&P, CCC+ Corporate Credit and Senior
Secured Ratings, Negative) is a leading marketer and supplier of
dry pasta in the United States and Canada, with well-known brands
such as RONZONI, CREAMETTE, SAN GIORGIO, AMERICAN BEAUTY, SKINNER
and PRINCE. Headquartered in Harrisburg, Pennsylvania, New World
Pasta Company has over 1,200 employees in the United States,
Canada and Italy.
NEXSTAR BROADCASTING: Completes Private Placement of 7% Sr. Notes
-----------------------------------------------------------------
Nexstar Broadcasting Group, Inc. (Nasdaq: NXST) announced that its
wholly-owned subsidiary, Nexstar Broadcasting, Inc. (formerly
known as Nexstar Finance, Inc.), completed the private placement
of $125 million aggregate principal amount of 7% senior
subordinated notes due 2014 at par.
In conjunction with this transaction, Nexstar Broadcasting also
announced that it completed a new $275 million senior credit
facility, which replaces an existing $265 million senior credit
facility. The new facility was priced 75 basis points lower than
the former facility.
The completion of the private placement and new credit facility,
together with the Nexstar's initial public offering of common
stock on November 24, 2003, are part of a previously announced
recapitalization of the Company's finances. Proceeds from the $125
million Notes are being used to finance Nexstar's acquisition of
Quorum Broadcast Holdings, LLC, which was completed on
December 31, 2003 (See related story - Ed.).
"These transactions strengthen our capital structure while
lowering our cost of debt, which will enhance free cash flow in
2004 and provide the Company with extra flexibility to pursue
value-creating strategies in the year ahead," remarked Perry A.
Sook, President and CEO of Nexstar Broadcasting.
"The recapitalization positions Nexstar favorably for future
growth," continued Mr. Sook. "All of our debt instruments have
long-term maturities with no near-term amortization requirements,
and the revolver will have approximately $80 million of
availability once the sale of WTVW closes."
Nexstar Broadcasting Group (S&P, B+ Long-Term Corporate Credit
Rating, Stable Outlook) owns, operates, programs or provides
sales and other services to 42 television stations in 26 markets
in the states of Illinois, Indiana, Maryland, Missouri, Montana,
Texas, Pennsylvania, Louisiana, Arkansas, Alabama and New York.
Nexstar's television station group includes affiliates of NBC,
CBS, ABC, FOX and UPN, and reaches approximately 7% of all U.S.
television households.
NEXSTAR BROADCASTING: Completes Purchase of Quorum Broadcast
------------------------------------------------------------
Nexstar Broadcasting Group, Inc., (Nasdaq: NXST) completed the
acquisition of all the subsidiaries of Quorum Broadcast Holdings,
LLC, which own or operate 11 television stations (including WTVW,
which is under contract for sale) and provide management, sales or
other services to an additional 5 stations.
Giving effect to the transaction, Nexstar enters 9 new mid-size
markets, increasing the number of stations the Company owns,
operates or provides services to by 60 percent.
Under the terms of the definitive agreement announced on
September 12, 2003, Nexstar paid total consideration of
approximately $230 million through a combination of cash, shares
of its common stock and the assumption or refinancing of Quorum's
debt, net of expected proceeds from the sale of WTVW. Nexstar
financed the transaction with certain proceeds from the Company's
initial public offering of stock completed on November 24, 2003,
the private placement of $125.0 million aggregate principal amount
of senior subordinated notes by Nexstar Broadcasting, Inc.,
additional borrowings under the Company's amended senior credit
facility and cash on hand.
"The Quorum acquisition brings us a highly complimentary portfolio
of stations in terms of geographic reach, market size and a focus
on operating multiple stations in a market," remarked Perry A.
Sook, President and CEO of Nexstar Broadcasting. "Of the nine new
markets that we will enter, five will offer the revenue
opportunities and cost saving benefits of a duopoly market."
"We believe this purchase validates our disciplined acquisition
strategy and emphasis on opportunities that can offer our
shareholders a significant return on investment," continued Mr.
Sook. "We expect the acquisition to be accretive to our financial
results, and we have already begun harvesting substantial cost
savings at these stations since assuming day-to-day operating
responsibilities for them last fall."
Nexstar also reconfirmed its expectation that the previously
announced transactions to sell WTVW in Evansville, Indiana for
$43.0 million and acquire KPOM and KFAA in Fort Smith-
Fayetteville-Springdale-Rogers, Arkansas are both expected to be
completed during the first quarter of 2004.
Nexstar Broadcasting Group (S&P, B+ Long-Term Corporate Credit
Rating, Stable Outlook) owns, operates, programs or provides
sales and other services to 42 television stations in 26 markets
in the states of Illinois, Indiana, Maryland, Missouri, Montana,
Texas, Pennsylvania, Louisiana, Arkansas, Alabama and New York.
Nexstar's television station group includes affiliates of NBC,
CBS, ABC, FOX and UPN, and reaches approximately 7% of all U.S.
television households.
NORTHWESTERN CORP: SEC Subpoenas Two Units to Produce Documents
---------------------------------------------------------------
NorthWestern Corporation (Pinksheets: NTHWQ) reported that the
U.S. Securities and Exchange Commission has issued subpoenas to
Blue Dot Services Inc., and Expanets, Inc., requesting the
production of documents as part of a now formal investigation of
NorthWestern.
This follows the SEC's requests for information made in connection
with the previously announced SEC informal inquiry.
NorthWestern reported in April 2003 that it had been notified by
the SEC that it was conducting an informal inquiry relating to
questions regarding restatements and other accounting and
financial reporting matters. NorthWestern has been cooperating
fully with the SEC's inquiry, and it intends to provide the
requested information as expeditiously as possible.
NorthWestern filed for Chapter 11 reorganization in the U.S.
Bankruptcy Court in Delaware on Sept. 14, 2003. The filing did
not include Blue Dot, a heating, ventilation and air conditioning
services business, or Expanets, a communications services
business. As part of its restructuring, NorthWestern has been
selling its nonutility businesses and assets, including Expanets
and Blue Dot, to focus on its core utility operations.
On Nov. 26, 2003, NorthWestern completed the sale of substantially
all of Expanets' assets to Avaya, Inc. for $152 million in cash
and the assumption of specified liabilities, less certain post-
closing working capital adjustments and the payment of certain
excluded liabilities. As of Dec. 30, 2003, Blue Dot has sold 46
of its 63 business locations.
NorthWestern Corporation is one of the largest providers of
electricity and natural gas in the Upper Midwest and Northwest,
serving approximately 600,000 customers in Montana, South Dakota
and Nebraska. Further information about NorthWestern is available
on the Internet at http://www.northwestern.com/
NRG ENERGY: South Central & Northeast Debtors Emerge from Chap. 11
------------------------------------------------------------------
NRG Energy, Inc., reports that in accordance with the Plan of
Reorganization for NRG Northeast Generating LLC and NRG South
Central Generating LLC, the completion of its $2.7 billion
financing allows the operating subsidiaries to emerge from
bankruptcy, effective December 23, 2003. (NRG Energy Bankruptcy
News, Issue No. 19; Bankruptcy Creditors' Service, Inc., 215/945-
7000)
OLYMPUS REAL ESTATE: Hastings Hotel Shuts Down without Warning
--------------------------------------------------------------
Many hotel workers lost their jobs after the abrupt closing of the
Hastings Hotel and Conference Center in Hartford, Connecticut, the
Associated Press reported. Business tenants and guests were given
just a few hours to pack up their belongings Tuesday prior to the
midnight closing.
The owners, Dallas-based Olympus Real Estate Corp., moved to file
for chapter 7 bankruptcy protection because of "continued weak
market conditions."
The shutdown, which affected about 150 workers, was announced by
property manager Dolce International, which said in a prepared
statement that "the property will close for an indefinite period
of time, effective immediately." The hotel and conference center
will revert to Aetna, which holds the mortgage on the 271-room and
55,000-square-foot conference center, according to Aetna spokesman
Fred Laberge.
Olympus Real Estate owes Aetna more than $7.5 million on the
mortgage and is delinquent on the payments, Laberge said. (ABI
World, Dec. 31, 2003)
OVERHILL FARMS: Sept. 28 Balance Sheet Upside-Down by $340,000
--------------------------------------------------------------
Overhill Farms, Inc. (Amex: OFI), a value added supplier of high
quality frozen foods to foodservice, retail, airline, and weight
loss product customers, announced operating results for our fiscal
year ended September 28, 2003.
For the fiscal year ended September 28, 2003, our net revenues
decreased $1,951,000 (1.4%) to $136,950,000 from $138,901,000 for
the fiscal year ended September 29, 2002. This net revenue
decrease is represented by a decrease in airline sales of
$5,879,000 (16.7%) to $29,364,000 and in retail and other sales of
$3,472,000 (11.1%) to $27,783,000. These decreases were
substantially offset by increases of $7,400,000 (10.2%) to
$79,803,000 from other industries served.
Gross profit for the fiscal year ended September 28, 2003
decreased $2,077,000 (10.7%) to $17,371,000 from $19,448,000 for
the fiscal year ended September 29, 2002. Gross profit as a
percentage of net revenues for the fiscal year ended September 28,
2003 was 12.7% compared to 14.0% in the prior fiscal year. The
decrease in gross profit as a percentage of net revenues is due
largely to manufacturing-related inefficiencies encountered in
connection with the start-up of our new plant and the cost of
moving and consolidating our manufacturing operations into the new
facility in fiscal year 2003. Improvements in gross profit margins
are anticipated as we further realize the cost benefits of the
plant consolidation.
Selling, general and administrative expenses for the fiscal year
ended September 28, 2003 increased $3,365,000 to $15,515,000
(11.3% of net revenues) from $12,150,000 (8.7% of net revenues)
for the fiscal year ended September 29, 2002. Contributing
factors to this increase in SG&A were increases in professional
fees, including accounting, audit and one time consulting fees
related to the April 2003 refinancing, compensation and related
costs, bad debt expense due to the bankruptcy of United Airlines
and certain minor customers and new product demonstration costs
for our Chicago Brothers brand products for retail customers.
Our consolidation of certain home office, manufacturing,
warehousing, product development, marketing and quality control
functions into a single 170,000 square foot operating facility
located in Vernon, California has now been completed. We now
maintain only two plants, the new site, and an existing 49,000
square foot cooking facility also located in Vernon, California.
We also lease, on a month-to-month basis, 11,400 square feet of
dry goods storage space in Inglewood, California. Our management
believes that we should expect, as a result of this consolidation,
to achieve significant operating efficiencies as well as a
reduction of our dependence on outside cold storage facilities.
We have recently begun to realize cost savings attributable to the
consolidation, resulting from reduced cold storage and refrigerant
costs, a lower overall facility lease expense, together with
manpower and efficiency savings.
Other expenses for the fiscal year ended September 28, 2003 were
$11,631,000 as compared to $5,599,000 in the fiscal year ended
September 29, 2002, an increase of $6,032,000 (107.7%). This
increase consisted primarily of a $2,360,000 increase in interest
expense to $7,011,000, due to an increase in borrowings and
borrowing rates during the year primarily related to the April
2003 refinancing, and a $2,890,000 increase in amortization of
deferred financing costs to $3,539,000, related to the financing
costs incurred in the prior fiscal year and the bridge financing
and the refinancing of the bank debt during the current fiscal
year. Of the $2,360,000 increase in interest expense, $1,171,000
was non-cash interest related to the amortization of the original
issue discount associated with the April 2003 financing. Another
significant component of other expenses was the $662,000 cost of
refurbishing our vacated San Diego facility upon the expiration of
the lease.
For the fiscal year ended September 28, 2003 we recorded a tax
benefit of $3,353,000 as compared to a tax provision of $668,000
for the fiscal year ended September 29, 2002, representing 34.3%
and 39.4% of income (loss) before income taxes, respectively. Due
to operating losses for the fiscal year ended September 28, 2003,
we have recorded a tax benefit and a deferred tax asset,
classified as other assets on our balance sheet, of $3,256,000.
We have not recorded a valuation allowance against any of our
deferred tax assets, since we believe that such assets are more
likely than not to be recoverable through estimated future
profitable operations. If we fail to improve margins, grow
revenues and/or reduce future interest costs, and return to
profitable operating results in the near term, we will not realize
some or all of our deferred tax assets and we may be required to
record a valuation allowance against some or all of our deferred
tax assets, which could adversely affect our financial position
and results of operations.
We reported a net loss for the fiscal year ended September 28,
2003 of $6,422,000 ($0.53 per share) as compared to net income of
$1,030,000 ($0.09 per share, diluted) for the fiscal year ended
September 29, 2002.
The Company's September 28, 2003 balance sheet shows a total
shareholders' equity deficit of about $340,000.
In discussing the reported results, James Rudis, Overhill's
Chairman and Chief Executive Officer stated, "We have come through
a very challenging year. We struggled with an aggressive plant
consolidation plan on an accelerated schedule, we continue to see
erosion in airline sales and we have faced some unique California-
related problems, including increased workers' compensation
insurance costs and a prolonged grocery chain strike." Rudis
added, "On the positive side, we have refinanced our debt which,
should result in savings of approximately $1.5 million for fiscal
year 2004. The plant consolidation is virtually complete, and we
are seeing anticipated savings and increases in gross profits. In
addition, after the first quarter of fiscal year 2004, the charges
related to the refinancing, including consulting and professional
fees, which comprised a significant portion of our 2003 loss, will
be reduced or eliminated. Fiscal year 2004 should be far better
than fiscal year 2003."
OXFORD INDUSTRIES: Look for Fiscal Q2 2004 Results on Wednesday
---------------------------------------------------------------
PR Newswire Dec 30
Oxford Industries, Inc. (NYSE: OXM) will report its fiscal second
quarter 2004 financial results on Wednesday, January 7, 2004 after
the market close. The company will also hold a conference call
with senior management to discuss the financial results in detail
at 4:30 p.m. ET/1:30 p.m. PT.
A live Webcast of the conference call will be available on the
Company's Web site at http://www.oxfordinc.com/ Please visit the
Web site at least 15 minutes early to register for the
teleconference Webcast and download any necessary software.
A replay of the call will be available from January 7, 2004
through January 14, 2004. To access the telephone replay,
domestic participants should dial (877) 519-4471, international
participants should dial (973) 341-3080. The access code for the
replay is 4400004. A replay of the Webcast will also be available
following the conference call on Oxford Industries' corporate
Website.
Oxford Industries, Inc. (S&P, BB- Long-Term Corporate Credit
Rating, Stable) is a leading producer and marketer of branded and
private label apparel for men, women and children. Oxford provides
retailers and consumers with a wide variety of apparel products
and services to suit their individual needs. Oxford's brands
include Tommy Bahama(R), Indigo Palms(TM), Island Soft(TM), Ely &
Walker(R) and Oxford Golf(R). The Company also holds exclusive
licenses to produce and sell certain product categories under the
Tommy Hilfiger(R), Nautica(R), Geoffrey Beene(R), Slates(R),
Dockers(R) and Oscar de la Renta(R) labels. Oxford's customers are
found in every major channel of distribution including national
chains, specialty catalogs, mass merchants, department stores,
specialty stores and Internet retailers. The Company's common
stock has traded on the NYSE since 1964 under the symbol OXM. For
more information, visit its Web site at http://www.oxfordinc.com/
PACIFIC ENERGY: Amends Credit Agreement, Reducing Interest Rates
----------------------------------------------------------------
Pacific Energy Partners, L.P. (NYSE:PPX) announced that its
operating subsidiary, Pacific Energy Group LLC, has completed an
amendment to its credit facility with a syndicate of financial
institutions led by Fleet National Bank.
The amendment provides for an interest rate reduction of 0.50%, or
50 basis points, on its $225 million term loan. The new interest
rate on the term loan is LIBOR plus 2.25%. The interest rate on
the $200 million revolving credit facility, of which $73 million
is currently outstanding, will be reduced by 0.875%, or 87.5 basis
points. The new rate on the revolving credit facility is LIBOR
plus 1.375%. The amount of the reductions, and the new interest
rates, vary with the company's credit ratings, which are currently
"BBB-" by Standard & Poor's and "Ba2" by Moody's Investors
Service.
Annual interest expense savings as a result of this amendment is
expected to be approximately $1.8 million, or $0.07 per limited
partner unit.
The amendment also provides for an improvement to the leverage
ratio financial covenant. The maximum leverage ratio no longer
varies with the company's credit rating. It is now a fixed ratio,
with the exception that the credit facility provides for an
increase in the maximum permitted leverage ratio covenant for up
to nine months following an acquisition. This provides added
flexibility for the company to pursue acquisitions, which can then
be partially refinanced post-closing with the proceeds of an
equity offering. During the period prior to the refinancing,
interest rates on the term loan and the revolving credit facility
increase by approximately 0.50% depending on the company's credit
rating. The company continues to target a debt to total
capitalization ratio of approximately 50%.
The $200 million revolving credit facility matures in July 2007
and the $225 million term loan matures in July 2009.
Pacific Energy Partners, L.P. is a Delaware limited partnership
headquartered in Long Beach, California. Pacific Energy Partners
is engaged principally in the business of gathering, transporting,
storing, and distributing crude oil and other related products in
California and the Rocky Mountain region. Pacific Energy Partners
generates revenue primarily by charging tariff rates for
transporting crude oil on its pipelines and by leasing capacity in
its storage facilities. Pacific Energy Partners also buys, blends
and sells crude oil, activities that are complimentary to its
pipeline transportation business.
PHIBRO ANIMAL: Sells Prince Manufacturing Company to Palladium
--------------------------------------------------------------
Phibro Animal Health Corporation, formerly Philipp Brothers
Chemicals, Inc., completed the sale of the business and assets of
its Prince Manufacturing Company subsidiary on December 26, 2003
to a company formed by Palladium Equity Partners II, LP and
certain of its affiliates, and the related reduction of its
preferred stock held by the Palladium Investors.
In connection with such transaction, the preferred stock of the
Company owned by the Palladium Investors was reduced from $72.5
million to $16.6 million as of the closing date, and the Company
made a cash payment of $10 million to the Palladium Investors in
respect of a portion of such shares not purchased with the
business of PMC as well as satisfied the intercompany debt owed to
PMC and certain capital expenditure adjustments.
The final valuation of PMC will be subject to a post-closing
working capital adjustment. In the definitive agreements, the
Company agreed to pay or reimburse the Palladium Investors for
their out-of-pocket transaction expenses, and the Company made
representations, warranties and environmental and other
indemnities. Also, Palladium was paid a closing fee of $500,000,
payments by the buyer to the Company for central support services
for the next three years of $1 million, $500,000 and $200,000,
respectively, were pre-paid by the buyer and satisfied for the net
present value of such payments, the Company's Prince Agri Products
subsidiary entered into various supply and blending arrangements
with the buyer consistent with the historic PMC Prince Agri
relationship, and Prince Agri agreed to continue to provide the
buyer with certain laboratory, MIS and telephone services
substantially consistent with historical practices, and to rent to
buyer office space currently used by PMC in Quincy, Illinois.
The Company's Chairman, Jack Bendheim, commented, "This completes
the financing and restructuring contemplated in connection with
our recent issuance of $105 million of 13% senior secured notes
due 2007. It is part of a series of actions we have taken during
the last year to strengthen the Company, and reflects our
continuing efforts to focus on the animal health and nutrition
markets."
Company Description
Phibro Animal Health Corp. (formerly Philipp Brothers
Chemicals Inc.) (S&P, B- Corporate Credit Rating, Stable) is a
leading diversified global manufacturer and marketer of a broad
range of animal health and nutrition products, specifically
medicated feed additives and nutritional feed additives, which the
Company sells throughout the world predominantly to the poultry,
swine and cattle markets. MFAs are used preventively and
therapeutically in animal feed to produce healthy livestock. The
Company is also a specialty chemicals manufacturer and marketer,
serving numerous markets.
PLYMOUTH RUBBER: Falls Below AMEX Continued Listing Standards
-------------------------------------------------------------
Plymouth Rubber Company, Inc. (Amex: PLR.A - News, PLR.B - News)
received notification from the American Stock Exchange that the
Company's Class A Common Stock and Class B Common Stock are each
subject to delisting for having aggregate publicly held market
values of less than $1,000,000 for more than 90 consecutive days.
In order for the Company to maintain the listings of its Common
Stock, it must submit a plan, subject to acceptance by AMEX, by
January 26, 2004 advising the AMEX of actions to bring it into
compliance with continued listing standards by March 10, 2004.
The Company is considering the feasibility of such a plan of
compliance and expects to advise AMEX in a timely fashion whether
it will submit a compliance plan or pursue alternatives to
continued AMEX listing.
As previously announced, the AMEX had accepted a plan submitted by
the Company in June, 2003, to regain compliance by November 2004
with listing standards related to minimum shareholder equity and
losses in prior fiscal years.
Plymouth Rubber Company, Inc. manufactures and distributes plastic
and rubber products, including automotive tapes, insulating tapes,
and other industrial tapes and films. The Company's tape products
are used by the electrical supply industry, electric utilities,
and automotive and other original equipment manufacturers. Through
its Brite-Line Technologies subsidiary, Plymouth manufactures and
supplies highway marking products.
* * *
Liquidity and Capital Resources
Prior to December, 2002, the Company's term debt agreements had
contained various covenants specifying certain financial
requirements, including minimum tangible net worth, fixed charge
and EBITDA coverage ratios, working capital and maximum ratio of
total liabilities to net worth. In addition, the revolving
working capital credit facility and the real estate term loan
contain an acceleration provision, which can be triggered if the
lender determines that an event of default has occurred.
As of each quarter end from September 1, 2000 through August 30,
2002, the Company had been in violation of certain covenants of
its term debt facility and therefore, due to a cross default
provision, the Company had not been in compliance with a
covenant under its revolving working capital credit facility and
real estate term loan. As a result, all of the Company's term
loans (except for that of its Spanish subsidiary) had been
classified as current liabilities on the Company's Consolidated
Balance Sheet at the end of each fiscal quarter end. In
addition, during July 2002, the Company received a demand from
its primary term debt lender for the payment of their
outstanding loan balances in the amount of $8,658,000, which
represented the total of all future payments and accumulated
late fees, and a demand letter from a smaller equipment lender
for approximately $69,000 of payments due.
During 2002, the Company negotiated with these lenders and, in
November 2002, reached formal agreement to obtain relief from
their demands and to restructure existing term debt facilities.
Under the new arrangements, the term debt lenders accepted
significantly reduced principal payments over the next three
years, eliminated financial covenants, waived existing defaults
and rescinded demands for accelerated payment, in return for
enhanced collateral positions.
As of February 28, 2003, the Company had approximately $744,000
of unused borrowing capacity under its revolving line of credit
with its primary working capital lender, after consideration of
collateral limitations.
The Company's working capital position decreased from a negative
$2,339,000 at November 29, 2002 to a negative $3,600,000 at
February 28, 2003, due to a $1,846,000 increase in accounts
payable, a $822,000 decrease in accounts receivable, a $254,000
increase in the current portion of long term borrowings, a
$199,000 increase in short term debt, a $159,000 decrease in
prepaid and other current assets, and a $34,000 decrease in
cash, partially offset by a $1,283,000 increase in inventory,
and a $770,000 decrease in accrued expenses.
During the second quarter of 2002, the Company received a
funding waiver from the Internal Revenue Service for the
$855,000 payment due to its defined benefit plan for the year
ended November 30, 2001, conditioned on the Company satisfying
the minimum funding requirements for the plan years ending
November 30, 2002 and November 30, 2003. The Company had
notified the Pension Benefit Guarantee Corporation that the
Company intended to make the $1,262,000 contribution for the
plan year ending November 30, 2002 by the final due date of
August 15, 2003, instead of on a quarterly basis. During the
first quarter of 2003, the Company requested a partial funding
waiver from the Internal Revenue Service for $1,030,000 of the
$1,262,000 payment due for the plan year ending November 30,
2002.
The Company's financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and
the satisfaction of liabilities in the normal course of
business. The negative working capital position of $3,600,000,
the funding requirement for the defined benefit plan of
$1,262,000 for the plan year ending November 30, 2002, the lack
of sales growth, and the overall risks associated with the
fiscal 2003 plan may indicate that the Company will be unable to
continue as a going concern for a reasonable period of time.
PROVIDENT FIN'L: Will Publish Q4 and FY 2003 Results on Jan. 21
---------------------------------------------------------------
Provident Financial Group, Inc. (Nasdaq: PFGI) plans to release
its fourth quarter and full-year 2003 financial results prior to
market opening on Wednesday, January 21, 2004. A conference call
and webcast to discuss earnings will also be heldon
Wednesday, January 21, 2004 at 2:00 p.m. (ET).
What: Conference Call/Webcast to discuss Fourth Quarter
& Full-Year 2003 Financial Results
When: Wednesday, January 21, 2004 @ 2:00 p.m. (ET)
How: Call 1-800-404-1354 or go to Provident's Web site
@ http://www.provident-financial.com/
Follow the instructions at the Investor
Presentations & Webcasts link located within the
Investor Relations area of Provident's website.
Replay: A Replay of the call will be available from
5:00 p.m. Wednesday, January 21, 2004 through
Monday, January 26, 2004 at 11:59 p.m. by calling
1-800-642-1687 (passcode 476 56 82). The webcast
will be available for replay approximately one
hour after the call.
Questions: Contact Patricia Forsythe of Provident Financial
Group Investor Relations via e-mail @
IR@provident-financial.com or by phone
@ 1-800-851-9521
Provident Financial Group, Inc. (Nasdaq: PFGI) (S&P, BB+/B
Counterparty Credit Ratings, Negative) is a bank holding company
located in Cincinnati, Ohio. Its main subsidiary, The Provident
Bank, provides a diverse line of banking and financial products,
services and solutions through retail banking offices located in
Southwestern Ohio and Northern Kentucky, and through commercial
lending offices located throughout Ohio and surrounding states.
Customers have access to banking services 24-hours a day
through Provident's extensive network of ATMs, Telebank, a
telephone customer service center, and the internet at
http://www.providentbank.com/ Provident has served the financial
needs of its customers for over 100 years, and currently 3,400
associates serve approximately 500,000 customers. At September 30,
2003, Provident Financial Group had $9.0 billion in loans
outstanding, $10.8 billion in deposits, and assets of $17.6
billion.
REDBACK NETWORKS: Gets Nod to Hire Altman Group as Claims Agent
---------------------------------------------------------------
Redback Networks Inc., sought and obtained approval from the U.S.
Bankruptcy Court for the District of Delaware to appoint the
Altman Group, Inc., as Claims and Noticing Agent.
With the large number of creditors and equity holders that the
Debtor has identified, the Debtor believes it is in the best
interests of its estate and creditors to appoint Altman Group as
its claims and noticing agent. The Debtor estimates that there
are several hundred known creditors holding claims against the
Debtor's estate.
Altman Group is expected to:
a. prepare and serve required notices in these chapter 11
cases, including:
1) a notice of the commencement of these chapter 11
cases and the initial meeting of creditors under
section 34l(a) of the Bankruptcy Code;
2) a notice of the claims bar date;
3) notices of objections to claims;
4) notices of any hearings on a disclosure statement and
confirmation of a plan of reorganization; and
5) such other miscellaneous notices as the Debtors or
Court may deem necessary or appropriate for an
orderly administration of these chapter 11 cases;
b. file with the Clerk's Office a certificate or affidavit
of service that includes:
i) a copy of the notice served,
ii) an alphabetical list of persons on whom the notice
was served, along with their addresses, and
iii) the date and manner of service;
c. maintain copies of all proofs of claim and proofs of
interest filed in this case;
d. maintain official claims registers in this case by
docketing all proofs of claim and proofs of interest in
a claims database that includes these information:
1) the name and address of the claimant or interest
holder and any agent thereof, if the proof of claim
or proof of interest was filed by an agent;
2) the date the proof of claim or proof of interest was
received by Altman and/or the Court;
3) the claim number assigned to the proof of claim or
proof of interest; and
4) the asserted amount and classification of the claim.
e. implement necessary security measures to ensure the
completeness and integrity of the claims register;
f. transmit to the Clerk's Office a copy of the claims
register on a weekly basis, unless requested by the
Clerk's Office on a more or less frequent basis;
g. maintain an up-to-date mailing list for all entities
that have filed proofs of claim or proofs of interest
and make such list available upon request to the Clerk's
Office or any party in interest;
h. provide access to the public for examination of copies
of the proofs of claim or proofs of interest filed in
this case without charge during regular business hours;
i. record all transfers of claims pursuant to Federal Rule
of Bankruptcy Procedure 3001(e) and, if directed to do
so by the Court, provide notice of such transfers as
required by Rule 3001(e);
j. comply with applicable federal, state, municipal and
local statutes, ordinances, rules, regulations, orders
and other requirements;
k. provide temporary employees to process claims as
necessary;
l. promptly comply with such further conditions and
requirements as the Clerk's office or the Court may at
any nine prescribe; and
m. provide such other claims processing, noticing,
balloting and related administrative services, as may be
requested periodically by the Debtors.
Kenneth L. Altman, the President of Altman Group reports that the
current hourly rates of professionals are:
Senior Managing Director $275 per hour
Managing Director $250 per hour
Senior Bankruptcy Consultant $225 per hour
Bankruptcy Consultant $175 to $200 per hour
Senior Account Executive $150 to $175 per hour
Account Executive $125 to $150 per hour
Telephone Service Rep. $200 per hour
Headquartered in San Jose, California, Redback Networks, Inc., is
a leading provider of advanced telecommunications networking
equipment. The Company filed for chapter 11 protection on November
3, 2003 (Bankr. Del. Case No. 03-13359). Bruce Grohsgal, Esq.,
Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones
& Weintraub P.C., and G. Larry Engel, Esq., Jonathan N.P.
Gilliland, Esq., at Morgan Lewis & Bockius, LLP represent the
Debtor in its restructuring efforts. When the Company filed for
protection from its creditors, it listed $591,675,000 in total
assets and $652,869,000 in total debts.
RELIANT RESOURCES: Fitch Sees No Change to Credit Ratings
---------------------------------------------------------
Fitch Ratings anticipates no immediate change in Reliant
Resources, Inc.'s credit ratings or Rating Outlook based on the
announcement that RRI has prepaid a portion of its outstanding
debt, terminated a $300 million senior priority credit facility,
and reached an agreement with its bank group to allow the
potential acquisition of select generating assets in Texas.
RRI's ratings are as follows:
-- Senior secured debt 'B+';
-- Senior unsecured debt 'B';
-- Convertible senior subordinated notes 'B-';
-- Rating Outlook Stable.
On balance, Fitch views the prepayment and amendments to the
credit facility as a neutral to marginally positive development.
Related to this amendment, RRI prepaid a total of $917 million of
outstanding bank debt, consisting of a $784 million permanent
reduction to an outstanding term loan and a $133 million pay down
under RRI's $2.1 billion revolving credit facility. Proceeds for
the prepayment were principally derived from the recent sale of
certain wholesale generating assets, including RRI's European
business, and the prior sale of $275 million junior convertible
debt securities. The prepayment results in an initial reduction in
debt leverage and improved interest coverage ratios. In addition,
RRI has now satisfied all soft amortization targets under its bank
credit facility thus avoiding future step-up pricing and fees and
the vesting of warrants on RRI's common stock.
Although Fitch considers it unlikely that RRI will reverse its
public stance of Dec. 5, 2003 and exercise its Texas Genco
purchase option in January 2004, RRI has been given the ability by
its bank group to purchase up to $1 billion of individual TGN
assets to support its Texas retail business. Since RRI will be
permitted to finance such acquisitions with debt and/or junior
securities, the aforementioned reduction in debt leverage could
ultimately be temporary in nature. In addition, Fitch notes that
RRI's ability to execute the acquisition of certain TGN generating
plants would be contingent upon RRI's ability to raise new capital
as the company is not permitted to draw down on the amended
revolving credit facility for such purposes.
RESIDENTIAL ACCREDIT: Fitch Rates Class B-1 & B-2 Notes at BB/B
---------------------------------------------------------------
Fitch rates Residential Accredit Loans, Inc.'s mortgage pass-
through certificates, series 2003-QS23, as follows:
-- $150,347,299 classes A-1, A-P, A-V and R senior
certificates 'AAA';
-- class M-1 certificate $3,018,400 'AA';
-- class M-2 certificate $309,600 'A';
-- class M-3 certificate $464,200 'BBB';
-- privately offered class B-1 certificate $232,200 'BB';
-- privately offered class B-2 certificate $154,700 'B'.
In addition, the privately offered class B-3 certificate
($232,217) is not rated by Fitch.
The 'AAA' ratings on senior certificates reflect the 2.85%
subordination provided by the 1.95% class M-1, 0.20% class M-2,
0.30% class M-3, 0.15% privately offered class B-1, 0.10%
privately offered class B-2 and 0.15% privately offered class B-3
(not rated by Fitch). Fitch believes the above credit enhancement
will be adequate to support mortgagor defaults as well as
bankruptcy, fraud and special hazard losses in limited amounts. In
addition, the ratings reflect the quality of the mortgage
collateral, strength of the legal and financial structures, and
Residential Funding Corp.'s servicing capabilities (rated 'RMS1'
by Fitch) as master servicer.
As of the cut-off date (Dec. 1, 2003), the mortgage pool consists
of 1,117 conventional, fully amortizing, 15-year fixed-rate
mortgage loans secured by first liens on one- to four-family
residential properties, with an aggregate principal balance of
$154,758,616. The mortgage pool has a weighted average original
loan-to-value ratio of 68.41%. The pool has a weighted average
FICO score of 725, and approximately 52.91% and 3.15% of the
mortgage loans possess FICO scores greater than or equal to 720
and less than 660, respectively. Loans originated under a reduced
loan documentation program account for approximately 71.08% of the
pool, equity refinance loans account for 52.39%, and second homes
account for 2.08%. The average loan balance of the loans in the
pool is $138,548. The three states that represent the largest
portion of the loans in the pool are California (23.83%), Texas
(15.69%) and Florida (4.28%).
All of the mortgage loans were purchased by the depositor through
its affiliate, Residential Funding, from unaffiliated sellers
except in the case of 34.2% of the mortgage loans, which were
purchased by the depositor through its affiliate, Residential
Funding, from HomeComings Financial Network, Inc., a wholly-owned
subsidiary of the master servicer. Approximately 18.6% of the
mortgage loans were purchased from and are being subserviced by
National City Mortgage Company. No other unaffiliated seller sold
more than approximately 6.4% of the mortgage loans to Residential
Funding. Approximately 76.1% of the mortgage loans are being
subserviced by HomeComings Financial Network, Inc. (rated 'RPS1'
by Fitch).
None of the mortgage loans were subject to the Home Ownership and
Equity Protection Act of 1994. Furthermore, none of the mortgage
loans are generally referred to as 'high-cost' loans under
applicable state law that expressly provide for assignee
liability.
The mortgage loans were originated under GMAC-RFC's Expanded
Criteria Mortgage Program (Alt-A program). Alt-A program loans are
often marked by one or more of the following attributes: a non-
owner-occupied property; the absence of income verification; or a
loan-to-value ratio or debt service/income ratio that is higher
than other guidelines permit. In analyzing the collateral pool,
Fitch adjusted its frequency of foreclosure and loss assumptions
to account for the presence of these attributes.
Deutsche Bank Trust Company Americas will serve as trustee. RALI,
a special purpose corporation, deposited the loans in the trust,
which issued the certificates. For federal income tax purposes, an
election will be made to treat the trust fund as a real estate
mortgage investment conduit.
RESPONSE BIOMEDICAL: Completes Private Placement of 4-Mil. Units
----------------------------------------------------------------
Response Biomedical Corp. (RBM: TSX Venture Exchange), closed the
non-brokered private placement undertaken by the Company as
announced on October 6, 2003. The private placement was
oversubscribed, raising gross proceeds of $1,741,445.
The non-brokered private placement consisted of 4,049,873 units at
a price of $0.43 per unit. Each unit consisted of one common share
and one-half of one common share purchase warrant. Each whole
warrant shall entitle the holder thereof to purchase one common
share of the Company at a price of $0.55 per share for a period of
12 months from the closing date of the private placement. In
connection with the financing, the Company paid finder's fees
totaling $17,466 of which $13,403 was paid through the issuance of
27,923 common shares.
1,162,790 units of the private placement were subscribed for by
Menderes Holdings Ltd., an investment company owned by Mr. Hans
Moppert of Basel, Switzerland, who is an insider of the Company.
Inclusive of the private placement, Mr. Moppert, will hold
directly and indirectly through Menderes Holdings Ltd., 7,536,288
common shares of the Company, or 14.08% of the issued and
outstanding share capital. The units were purchased for investment
purposes only.
Capital raised from the private placement will be applied in part
to support sales and marketing of commercially available products,
and to the submission of troponin I and CK-MB clinical trial
results to the US Food and Drug Administration for regulatory
review. The Company is seeking 510(k) market clearance, prior to
launching its three cardiac marker tests for the early detection
of heart attack, expected early in 2004.
Response Biomedical develops, manufactures and markets rapid on-
site RAMP tests for medical and environmental applications
providing reliable information in minutes, anywhere, every time.
The RAMP System consists of a portable fluorescent Reader and
single-use, disposable Test Cartridges. RAMP tests are
commercially available for the early detection of heart attack,
environmental detection of West Nile virus, and biodefense
applications including the rapid on-site detection of anthrax,
smallpox, monkeypox, ricin and botulinum toxin.
Response Biomedical is a publicly traded company, listed on the
TSX Venture Exchange under the trading symbol "RBM". The Company
is also listed on Frankfurt Stock Exchange under the trading
symbol "RBQ". For further information, please visit the Company's
Web site at http://www.responsebio.com/
The company's September 30, 2003, balance sheet reports a working
capital deficit of about CDN$2.5 million. Net capital deficit for
the same period tops CDN$2 million.
ROBOTIC VISION: Amends Credit Facility & Sam Zell Steps In
----------------------------------------------------------
On November 26, 2003, Robotic Vision Systems Inc., entered into an
amendment and restatement of its credit facility.
The amended credit facility provides for two revolving credit
lines. The first is a two year credit line that allows for
borrowings of up to $10 million, to the extent that the Company
has sufficient eligible inventory and sufficient receivables
eligible to be guaranteed by the Export-Import Bank of the United
States. The second credit line is a three year facility that
allows for borrowings of up to $3 million, based in part on the
amount of the Company's eligible receivables. The first credit
line bears interest at a rate of 7% per year, the second bears
interest at a 17% annual rate, of which 12% is required to be paid
in cash and 5% may, at Company discretion, be added to the
principal of the loan. The credit facility is secured by a pledge
of substantially all of Robotic Vision Systems' assets. As of
November 26, 2003, the Company had outstanding $9.567 million of
borrowings under the terms of the credit facility.
In connection with this amendment and restatement, Robotic Vision
Systems replaced its original lender, PNC Bank, National
Association (which remains as administrative agent), with an
affiliate of Equity Group Investors, LLC. Equity Group Investors
is a Chicago-based private investment firm led by financier Sam
Zell. At the same time, the Company granted the new lender a
three-year warrant to purchase 2.2 million shares of Company
common stock (after giving effect to the one-for-five reverse
split completed on November 26, 2003, that reduced the number of
outstanding shares of its common stock to approximately 14.7
million).
At September 30, 2003, the Company's balance sheet shows a working
capital deficit of about $21 million and a total shareholders'
equity deficit of about $10 million.
ROPER INDUSTRIES: Completes Acquisition of Neptune Technology
-------------------------------------------------------------
Roper Industries, Inc. (NYSE: ROP) has completed the previously
announced acquisition of Neptune Technology Group Holdings Inc.
Roper also completed a public offering of 4.2 million shares of
its common stock for gross proceeds of $201.6 million, an offering
of 3.75% senior subordinated convertible notes for gross proceeds
of $230.0 million, and a new $625.0 million senior secured credit
facility consisting of a $400.0 million five-year term loan and a
$225.0 million three-year revolving credit facility. The credit
facility will initially be priced at LIBOR plus 200 basis points.
The Company had drawn $20.0 million on the revolving credit
facility upon closing of the acquisition of Neptune. The Company
has also granted the underwriters an option to purchase up to 0.6
million of additional shares to cover over-allotments.
Roper used the proceeds from the common stock offering, together
with borrowings under its new senior secured credit facility, to
fund the acquisition, repay a portion of its existing credit
facility and pay related fees and expenses. Roper used all of the
proceeds from the notes offering to redeem its outstanding senior
notes and to repay a portion of its existing credit facility.
The Company noted that the strength of demand for the convertible
notes and credit facility participation resulted in a reduction in
the final credit facility debt rates and convertible note coupons.
Roper Industries (S&P, BB+ Corporate Credit and Senior Secured
Bank Loan Ratings), is a diversified industrial growth company
providing engineered products and solutions for global niche
markets. Additional information about Roper Industries is
available on the Company's Web site at http://www.roperind.com/
SECURITY CAPITAL: Units Sell Assets to Willitts for $5.9 Million
----------------------------------------------------------------
On November 30, 2003, Possible Dreams, Ltd., a subsidiary of
Security Capital Corporation, sold all of its non-real estate
assets to Willitts Designs International, Inc. for $5,976,000 in
cash. The cash proceeds were used to pay down Possible Dreams'
senior bank indebtedness. This asset sale was approved by the
United States Bankruptcy Court for the Eastern Division of the
District of Massachusetts in a ruling under a single closed
bidding procedure previously filed with the court concurrent with
Possible Dreams' filing for protection under Chapter 11 of the
Bankruptcy Code in the United States Bankruptcy Court for the
Eastern Division of the District of Massachusetts. The Company
anticipates that the sale should not have a significant impact
upon the business, financial condition or results of operations of
the Company.
Willitts Designs International, Inc., is a collectibles, giftware
and home decor company based in Petaluma, California. Possible
Dreams is the Company's subsidiary which operates as a designer,
importer, and distributor of collectible and fine quality
figurines and, to a lesser extent, other specialty giftware.
As noted in the Company's financial statements for the quarter
ended September 30, 2003, Possible Dreams filed for protection
under Chapter 11 of the Bankruptcy Code in the United States
Bankruptcy Court for the Eastern Division of the District of
Massachusetts on October 22, 2003. That document further stated
that the Company was seeking buyers for the assets of Possible
Dreams, and there was a bidding procedure under Chapter 11 that
had been filed with the court. This procedure provided the steps
for any bidder to do the appropriate due diligence and to submit a
bid by November 18, 2003. Willitts Designs International, Inc.
submitted its bid through this process.
SEITEL INC: Negotiating with Equity Committee for Amended Plan
--------------------------------------------------------------
Seitel, Inc. (OTC Bulletin Board: SEIEQ; Toronto: OSL) is
negotiating with the Official Committee of Equity Security Holders
appointed in the Seitel Bankruptcy Case to file an amended plan of
reorganization.
If a definitive agreement is reached, the Company expects to file
an amended plan and a related amended disclosure statement on
or about January 14, 2004. The Bankruptcy Court has tentatively
scheduled a hearing with respect to approval of the Company's
amended disclosure statement on January 30, 2004.
It is currently contemplated that under the proposed amended plan,
Seitel's pre-petition creditors would be paid in full in cash with
post-petition interest. It is also intended that the amended plan
of reorganization would provide each of Seitel's equity holders,
as of a record date anticipated to be the effective date of the
amended plan, the right to maintain its percentage equity
ownership in Seitel (subject to dilution as set forth below)
through the exercise of warrants to be issued to such equity
holders. It is presently contemplated that the warrants would
have an exercise price of $.60 per share, subject to adjustment in
the event of a recapitalization of Seitel's common stock. The
Company anticipates that the warrants will be exercisable by
equity holders for a period of 30 days following Seitel's
emergence from Chapter 11. If all such warrants were to be
exercised in full, Seitel would receive $75 million in new equity
capital. Equity holders who do not exercise their warrants will
suffer approximately 84% dilution in their percentage equity
ownership of Seitel.
Mellon HBV Alternative Strategies LLC has agreed, subject to
execution of a definitive commitment letter, to act as a standby
purchaser for up to the entire $75 million of common stock to the
extent any such warrants are not exercised by equity holders.
Mellon presently holds approximately 8% of Seitel's common stock.
If Mellon were to exercise its standby purchase commitment for all
$75 million of common stock, it would own approximately 84% of the
common stock of reorganized Seitel. For acting as the standby
purchaser, Mellon would be issued an option to acquire up to an
additional 10% of the fully diluted shares of common stock of
reorganized Seitel, after giving effect to the exercise of the
warrants. The exercise price of the option is presently
anticipated to be $.72 per share, subject to adjustment in the
event of a recapitalization of Seitel's common stock.
Fred S. Zeidman, Chairman of Seitel, noted that to provide the
remaining funding of the amended plan, Seitel has been in
discussions with debt financing sources who, without any
commitment, have expressed confidence in their ability to raise
$180 million of high yield debt financing. In addition, Seitel
will use a portion of its cash on hand and also intends to seek
senior debt exit facility financing to supplement its working
capital following its emergence from Chapter 11.
Terms of the agreement are subject to approval by the Company's
Board of Directors, and all of the proposed terms discussed above
are subject to the execution of definitive documentation and such
Board approval. Any amended plan will be subject to a vote by
Seitel's equity holders and approval by the Bankruptcy Court.
There can be no assurance that the Company will file any such
amended plan containing the terms set forth above or that, if
filed, such plan will be confirmed by the Bankruptcy Court or
become effective.
Seitel markets its proprietary seismic information/technology to
more than 400 petroleum companies, licensing data from its library
and creating new seismic surveys under multi-client projects.
Statements in this release about the future outlook related to
Seitel involve known and unknown risks and uncertainties, which
may cause the Company's actual results to differ materially from
expected results. While the Company believes its forecasting
assumptions are reasonable, there are factors that are hard to
predict and influenced by economic and other conditions that are
beyond the Company's control. Among the other important factors
which could cause actual results to differ materially from those
in the forward-looking statements are potential changes in the
terms of the proposed amended plan of reorganization, the failure
of the Company's Board of Directors to approve such terms, the
failure of the Company to file an amended plan of reorganization,
the failure of the Bankruptcy Court to confirm the amended plan,
or the failure of the amended plan to otherwise become effective,
as well as other factors detailed in Seitel's filings with the
Securities and Exchange Commission, including its most recent Form
10-K Annual Report, a copy of which may be obtained from the
Company without charge.
SHAW GROUP: Firms-Up Purchase of Energy Delivery Services Inc.
--------------------------------------------------------------
The Shaw Group Inc. (NYSE: SGR) finalized its acquisition of
Energy Delivery Services, Inc., a business unit of Duke Energy
headquartered in Charlotte, North Carolina, for $22.5 million.
EDS, a provider of design, engineering, procurement, construction
and maintenance services for electrical transmission and
distribution systems primarily in North America, will become a
wholly-owned subsidiary of The Shaw Group Inc. and will be closely
affiliated with Shaw subsidiary, Shaw Power Technologies, Inc.
"The acquisition of EDS solidifies our commitment to building a
premier power services portfolio," stated J.M. Bernhard, Jr.,
Chairman and CEO of The Shaw Group. "With EDS' established EPC
capabilities and our renowned diagnostic and monitoring software
systems we are able to provide turnkey solutions at a critical
time for improving the power transmission and distribution
infrastructure in this country."
EDS provides competitive, high quality services for Duke Power
Company and other utility clients to design, install, upgrade and
maintain power transmission and distribution systems. For Duke
Power, EDS assists in maintaining a 12,700-mile transmission
system, 66,200 miles of primary distribution lines and 2,000
substations throughout a 22,000-square-mile service area. Shaw
intends to maintain EDS' headquarters in Charlotte, North
Carolina.
The Shaw Group Inc. (S&P, BB Corporate Credit Rating, Stable) is a
leading provider of consulting, engineering, construction,
remediation and facilities management services to government and
private sector clients in the environmental, infrastructure and
homeland security markets. Shaw is also a vertically integrated
provider of comprehensive engineering, consulting, procurement,
pipe fabrication, construction and maintenance services to the
power and process industries worldwide. The Company is
headquartered in Baton Rouge, Louisiana and employs approximately
14,800 people at its offices and operations in North America,
South America, Europe, the Middle East and the Asia-Pacific
region. Additional information on The Shaw Group is available at
http://www.shawgrp.com/
SOLUTIA INC: Turns to Gibson Dunn to Prosecute Chapter 11 Cases
---------------------------------------------------------------
Solutia, Inc., and its debtor-affiliates want to employ Gibson,
Dunn & Crutcher LLP as bankruptcy counsel to prosecute their
Chapter 11 cases and other necessary matters.
Gibson Dunn will:
(a) advise the Debtors of their rights, powers and duties as
debtors-in-possession under Chapter 11 of the Bankruptcy
Code;
(b) prepare, on behalf of the Debtors, all necessary and
appropriate applications, motions, proposed orders, other
pleadings, notices, schedules and other documents and
review all financial and other reports to be filed in
these Chapter 11 cases;
(c) advise the Debtors concerning, and prepare responses to,
applications, motions, other pleadings, notices and other
papers that may be filed and served;
(d) advise the Debtors with respect to, and assist in the
negotiation and documentation of, financing agreements and
related transactions;
(e) review the nature and validity of any liens asserted
against the Debtors' property and advise the Debtors
concerning the enforceability of the liens;
(f) advise the Debtors regarding their ability to initiate
actions to collect and recover property for the benefit of
their estates;
(g) counsel the Debtors in connection with the formulation,
negotiation and promulgation of a plan of reorganization
and related documents;
(h) advise and assist the Debtors in connection with any
potential property dispositions;
(i) advise the Debtors concerning executory contract and
unexpired lease assumptions, assignments and rejections
and lease restructurings and recharacterizations;
(j) assist the Debtors in reviewing, estimating and resolving
claims asserted against their estates;
(k) commence and conduct any and all litigation necessary or
appropriate to assert rights held by the Debtors, protect
assets of the Debtors' Chapter 11 estates or otherwise
further the goal of completing the Debtors' successful
reorganization;
(l) provide corporate, employee benefit, environmental,
litigation, tax and other general non-bankruptcy services
to the extent asked by the Debtors; and
(m) perform all other necessary or appropriate legal services.
Jeffry N. Quinn, Solutia Inc.'s Senior Vice President, General
Counsel and Chief Restructuring Officer, asserts that the Debtors
require a knowledgeable counsel to provide these essential
professional services. Gibson Dunn fits the bill.
Gibson Dunn has substantial bankruptcy and restructuring,
corporate, employee benefits, environmental, finance,
intellectual property, labor and employment, litigation, real
estate, securities and tax expertise. Gibson Dunn's attorneys
have played significant roles in many large and complex cases
under the Bankruptcy Code, including the Chapter 11 cases of The
FINOVA Group Inc., FLAG Telecom Holdings Limited, American Pad
and Paper Company, House2Home, Inc., Convergent Communications,
Inc., Medscape, Inc., Microage, Inc., Money's Foods, TBS Shipping
Inc., CollegeClub.com, Asbestos Claims Management Services,
Zales, Financial News Network, ICH and Resorts International.
Gibson Dunn is intimately familiar with the Debtors' businesses
and financial affairs. Since April 2003, Gibson Dunn provided
the Debtors with a wide array of services in connection with
their restructuring and reorganization efforts, including
assistance in the Debtors':
(a) prepetition restructuring negotiations with their primary
constituencies;
(b) refinancing of their then-existing bank credit facility;
(c) review and analysis of the legacy liabilities from the
spin-off from Monsanto Company, including extensive review
of environmental, retiree, litigation, contractual and
employee benefit obligations; and
(d) preparation of these Chapter 11 cases.
Gibson Dunn's professionals worked closely with the Debtors'
management and other professionals.
The Debtors propose to compensate Gibson Dunn for its legal
services on an hourly basis in accordance with the firm's
ordinary and customary hourly rates, plus reimbursement of actual
and necessary out-of-pocket expenses. The Firm does not disclose
its hourly billing rates.
In connection with the firm's prepetition engagement, Mr. Quinn
discloses that, on May 15, 2003, the Debtors provided Gibson Dunn
with a $1,000,000 "evergreen" retainer, which was increased by
agreement among the parties to $1,500,000 on December 9, 2003.
The Retainer, adjusted for any accrued unpaid prepetition fees
and expenses, will be held as security for Gibson Dunn's
postpetition services and related expenses. Since May 2003, the
Debtors paid $10,898,799 to Gibson Dunn:
Date of Invoice Date of Payment Amount
--------------- --------------- ------
Retainer 05/15/03 $1,000,000
05/20/03 06/16/03 303,510
06/16/03 06/18/03 634,028
07/02/03 07/14/03 823,175
08/17/03 08/19/03 1,112,493
09/22/03 09/25/03 1,030,678
10/12/03 10/16/03 1,480,996
11/10/03 11/25/03 1,619,767
12/06/03 12/09/03 1,459,152
Retainer 12/09/03 500,000
12/10/03 12/11/03 935,000
Gibson Dunn does not believe that any of the Prepetition Payments
are avoidable as a preference under Section 547 of the Bankruptcy
Code.
Richard Cieri, a partner at Gibson Dunn, assures the Court that
the firm is a "disinterested person," as that term is defined in
Section 101(14) of the Bankruptcy Code. Mr. Cieri is confident
that Gibson Dunn does not hold or represent any interest adverse
to the Debtors' estates. Mr. Cieri discloses that Gibson Dunn
provide services to certain interested parties in matters
unrelated to the Debtors' cases:
(a) Pharmacia Corporation (Old Monsanto Company): From
July 24, 1974 to October 27, 1999, Gibson Dunn represented
Old Monsanto in several corporate and litigation matters.
Gibson Dunn's representation of Old Monsanto on all of
these matters concluded on October 27, 1999.
(b) Pfizer Inc.: On April 16, 2003, Pfizer acquired all of
the stock of Pharmacia Corporation. Gibson Dunn
represents or has represented Pfizer in a number of
matters unrelated to the Debtors or their Chapter 11
cases, including a review of the credit arrangements of
Pharmacia Corporation following its acquisition by Pfizer.
(c) Flexsys: Gibson Dunn represented certain Flexsys entities
with regard to actual and potential corporate antitrust
investigations, actions and proceedings and related
matters involving the rubber chemicals industry.
(d) Akzo: Before the Petition Date, Gibson Dunn represented
Akzo Nobel N.V. and certain of its affiliates, in
connection with corporate and litigation matters,
including certain antitrust litigation and governmental
investigations relating to Flexsys.
(e) Astaris LLC: From October 28, 2002 to February 28,
2003, Gibson Dunn represented Astaris on a limited basis
by providing corporate advice with respect to filing
potential anti-dumping actions.
(f) FMC Corporation: Before the Petition Date, Gibson Dunn
represented FMC as trade counsel with respect to
outstanding antidumping and countervailing duty orders on
imports of industrial phosphoric acid from Belgium and
Israel and in certain labor matters.
(g) Deloitte & Touche LLP: Before the Petition Date, Gibson
Dunn represented Deloitte & Touche and its affiliates
Deloitte Consulting LP and Deloitte Touche Tohmatsu
International in a number of corporate, litigation and
labor and employment matters.
(h) Wells Fargo Foothill Inc.: Gibson Dunn represented
Wells Fargo & Company and several of its affiliates in a
number of corporate, litigation and real estate matters.
(i) Kasowitz, Benson, Torres & Friedman LLP: Kasowitz serves
as the escrow agent for certain litigation plaintiffs with
whom the Debtors, Old Monsanto (Pharmacia) and New
Monsanto (Monsanto) entered into a settlement agreement
before the Petition Date. Under the settlement agreement,
the Debtors have $25,000,000 in remaining obligations for
which Pharmacia and Monsanto Company are jointly and
severely liable. A Gibson Dunn associate who will work on
the Debtors' Chapter 11 cases previously was employed by
Kasowitz and performed less than 50 hours of work with
respect to the litigation. The associate did not receive
any confidential information concerning any of the parties
to the litigation, and the work is outdated as a result of
the Debtors' bankruptcy filing and the settlement of the
litigation.
* * *
Judge Beatty authorizes the Debtors to employ Gibson Dunn as
counsel on an interim basis. Objections are due on
January 9, 2004. If no objections are timely filed, the
Application will be deemed granted on a final basis without
further notice or hearing. (Solutia Bankruptcy News, Issue No. 3;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
SPIEGEL INC: Teleflora LLC Seeks Stay Relief to Collect Payment
---------------------------------------------------------------
Pursuant to certain agreements, Teleflora, L.L.C., advertised its
products in The Spiegel Group Debtors' websites, catalogs,
mailings, billing inserts and other media. The Debtors' customers
would then be able to purchase directly from Teleflora, paying for
their purchases either with a major credit card or the Debtors'
former proprietary credit card. The laws of the State of Illinois
consistently govern the relationship of parties, pursuant to
unambiguous choice of law clauses in the governing documents.
Steven E. Fox, Esq., at Traub, Bonacquist & Fox LLP, tells the
Court that the terms of Teleflora's dealings with the Debtors are
set forth in these documents:
(1) Letter agreements dated September 1, 1998 and
June 1, 2001;
(2) The "Spiegel Catalog, Inc. eMarket Merchant Program
Agreement" executed on October 19 and 23, 2000 by The
Flower Club, a division of Teleflora and the Debtors;
and
(3) The "Spiegel Reverse Syndication Program Guidebook"
incorporated by reference into the Merchant Program
Agreement.
Mr. Fox relates that the Letter Agreements set forth the terms of
the relationship between the parties to the Debtors' Third Party
Marketing Program, which involves the dissemination of
promotional media to the mailing list of the Debtors' customers.
Pursuant to the Letter Agreements, Teleflora agreed to mail its
Spiegel-approved media to 1,500,000 Spiegel Card users on July 1,
2001. In exchange for using the Debtors' mailing list, Teleflora
agreed to pay Spiegel a fee equal to 15% of its net sales
resulting from that effort, including shipping and handling, in
accordance with the Third Party Program Guidebook.
Like the Merchant Program Agreement, Mr. Fox explains, the Letter
Agreements provides that the Debtors will not be "deemed to be
involved in any transaction of any kind" between Teleflora and
its customers. Because the Spiegel Card was one available method
of payment, the Letter Agreements set forth guidelines for the
Debtors' involvement insofar as they facilitated Spiegel Card
payments, in exchange for which they became entitled to the fee.
The Letter Agreements also state that any payments owed to
Teleflora will be made in accordance with the Spiegel Payment
Schedule.
The Merchant Program Agreement provides that Teleflora's products
would be advertised for sale through the Debtors' proprietary
website via hyperlink to Teleflora's own website, and sets forth
the terms by which Teleflora could market and sell its products
in this manner. When a Spiegel customer purchased a Teleflora
product through either the Big Book or the Spiegel website's
hyperlink to Teleflora's own website, that customer would deal
directly with Teleflora, and paid for purchases with the Spiegel
Card or another major credit card. This transaction would
generate a right to a "revenue share," also governed by the
Merchant Program Agreement. The Revenue Share is 17.5% of gross
merchandise sales excluding taxes, shipping & handling.
Mr. Fox informs the Court that before the Petition Date,
Teleflora sold $270,000 in goods to customers using the Spiegel
Card, for which it has not received payment from the Debtors.
Teleflora believes that the Debtors, which acted as a credit card
company in these transactions, have included the proceeds of
these sales in their estates, and have to date refused to
surrender the proceeds, despite Teleflora's demand and repeated
contractual assertion that it will not be deemed any part of the
underlying transactions.
Mr. Fox argues that the Debtors have no right to the payments
received because they played no role in the transaction other
than to facilitate payment, as a conduit for payments intended
for Teleflora. The Debtors' role in providing Teleflora with its
customer lists under the Merchant Program Agreement, resulted in
a 17.5% commission on the Teleflora Sales and nothing more. The
balance of any proceeds collected constitutes property of
Teleflora, in which the Debtors have no interest.
In sum, customers purchased and received products from Teleflora
and paid money for those products. However, Teleflora has not
received the proceeds from these sales because the Debtors have
wrongfully withheld payment. To allow the Debtors' inclusion of
those payments as estate assets is to sanction overreaching and
inequity.
Mr. Fox emphasizes that the Debtors have no legal title to the
payments on the Teleflora Sales. Therefore, those payments fall
outside the statutory definition of property of the estate.
Moreover, with no legal or equitable right in the payments for
the Teleflora Sales, the Debtors have no equity in those
payments.
Mr. Fox asserts that the Debtors held the payments in trust for
the Teleflora's benefit under Illinois law. The law clearly
requires the Debtors to surrender Teleflora's property because:
* in accepting payments on Teleflora's behalf, the Debtors
owed Teleflora a fiduciary duty; and
* the Debtors subsequently breached that fiduciary duty by
refusing to turn over Teleflora's payments as agreed, and by
including those payments in the assets of the estate.
While a fiduciary relationship alone will not give rise to a
constructive trust, Mr. Fox notes, abuse of that relationship
will. Equitable principles would be violated if the Debtors were
permitted to retain the proceeds of the Teleflora Sales, solely
because they sought relief under the Bankruptcy Code. Thus, the
legal and beneficial interest in the payments for the goods and
services supplied by Teleflora but retained by the Debtors
clearly rests with Teleflora, not the Debtors. Mr. Fox argues
that the Debtors hold the amounts under a constructive trust
relationship, and should be compelled to turn over the funds to
Teleflora.
Accordingly, Teleflora asks the Court to lift the automatic stay
so it can take possession of the payments under its transactions
with the Debtors. (Spiegel Bankruptcy News, Issue No. 17;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
SPIEGEL GROUP: Identifies 29 Eddie Bauer Stores to Close in 2004
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The Spiegel Group announced the location of 29 Eddie Bauer stores
it intends to close in 2004, 16 of which involve natural lease
expirations.
These store closings are part of the company's ongoing efforts to
improve the productivity of its store portfolio. The company
filed a motion with the Bankruptcy Court (the Court) on
December 5, 2003, seeking approval of its store-closing plan. In
November, the Court, in response to a separate motion filed by the
company, approved the opening of up to 17 Eddie Bauer stores in
2004.
Store-closing sales are expected to begin on or about January 9,
2004, subject to Court approval of the December 5, 2003 motion
filed by the company. The stores will remain open for business, on
a store-by-store basis, until the related store-closing inventory
sales are completed. The company will assess inventory
writedowns, if any, associated with these store closings on a
going forward basis.
Fabian Mansson, president and chief executive officer of Eddie
Bauer stated, "We continue to focus on improving the productivity
of our store base. We have made progress this year in our efforts
to position Eddie Bauer as the rugged outdoor American lifestyle
brand by refining our product offer and reshaping our store
portfolio."
Eddie Bauer currently operates 469 stores in the United States and
Canada, including 330 apparel stores, 36 home stores and 103
outlet stores. A list of the stores scheduled for closure
follows. The list includes 25 apparel stores and four outlet
stores, located throughout the United States.
The Spiegel Group is a leading international specialty retailer
marketing fashionable apparel and home furnishings to customers
through catalogs, specialty retail and outlet stores, and e-
commerce sites, including eddiebauer.com, newport-news.com and
spiegel.com. The Spiegel Group's businesses include Eddie Bauer,
Newport News and Spiegel Catalog. Investor relations information
is available on The Spiegel Group Web site at
http://www.thespiegelgroup.com/
EDDIE BAUER STORES SCHEDULED FOR CLOSURE
STORE NAME CITY ST TYPE
---------- ---- -- ----
Shattuck Avenue Berkeley CA Apparel
Los Cerritos Center Cerritos CA Apparel
Del Monte Monterey CA Apparel
Chapel Hills Mall Colorado Springs CO Apparel
Meriden Square Meriden CT Apparel
North Point Mall Alpharetta GA Apparel
Stratford Square Bloomingdale IL Apparel
Ford City North Chicago IL Outlet
Montgomery Bethesda MD Apparel
Fairlane Dearborn MI Apparel
Oakland Mall Troy MI Apparel
Cary Village Cary NC Apparel
Southpark Charlotte NC Apparel
Monmouth Mall Eatontown NJ Apparel
Newport Jersey City NJ Apparel
Fashion Outlet of Las Vegas Primm NV Outlet
Bridgehampton Bridgehampton NY Apparel
45th and 3rd Avenue New York NY Apparel
Gresham Station Gresham OR Outlet
Salem Centre Salem OR Apparel
Columbiana Center Columbia SC Apparel
Columbia Mall Columbia SC Apparel
Vista Ridge Mall Lewisville TX Apparel
South Plains Lubbock TX Apparel
Bandera Pointe San Antonio TX Outlet
Z.C.M.I. Salt Lake City UT Apparel
Southhill Mall Puyallup WA Apparel
Vancouver Vancouver WA Apparel
Bayshore Shopping Center Milwaukee WI Apparel
SPORTS CLUB: Board Approves Amendment to Current Rights Agreement
-----------------------------------------------------------------
On November 25, 2003, the Special Committee of the Board of
Directors which was created to address any "going private"
proposal in which one or more of the Principal Shareholders might
participate, approved an amendment to The Sports Club Company
Inc.'s Rights Agreement adopted on September 29, 1998, as amended
by (a) First Amendment to Rights Agreement dated as of February
18, 1999, (b) Second Amendment to Rights Agreement dated as of
July 2, 1999, (c) Third Amendment to Rights Agreement dated as of
April 27, 2000, (d) Fourth Amendment to Rights Agreement dated as
of June 27, 2001, (e) Fifth Amendment to Rights Agreement dated
as of September 6, 2002, (f) Sixth Amendment to Rights Agreement
dated as of March 5, 2003, (g) Seventh Amendment to Rights
Agreement dated as of April 14, 2003, (h) Eighth Amendment to
Rights Agreement dated as of May 30, 2003, (i) Ninth Amendment to
Rights Agreement dated as of July 30, 2003, and (j) Tenth
Amendment to Rights Agreement dated as of September 30, 2003.
The Amendment provides that until February 29, 2004, the Rights
Plan will not be triggered as a result of any non-binding
negotiations or understandings between and among the Principal
Shareholders (as defined in the Amendment as "certain of
Millennium Entertainment Partners, L.P., D. Michael Talla, Rex A.
Licklider and Kayne Anderson Capital Advisors, and their
respective Affiliates") regarding the Proposed Transaction or any
modification thereof (even if such modified transaction does not
result in a "going private" transaction), so long as such
negotiations or understandings relate to a transaction that has
been, or is intended to be, proposed to the Special Committee.
* * *
Moody's Investors Service downgraded the ratings for Sports Club
Company, Inc.
Downgraded Ratings
To From
* $100 million 11.375% Senior Secured Notes Caa2 B3
due 3/15/2006
* Senior Implied rating Caa2 B3
* Senior Unsecured Issuer Rating Caa3 Caa1
Outlook is negative.
The ratings downgrade mirrors the company's tight liquidity and
high leverage, compounded by a $5.7 million interest payment due
March 2004. The company is pursuing various capital options to
resolve to these concerns.
SUMMIT SECURITIES: Continuing Review of Alternative Strategies
--------------------------------------------------------------
Summit Securities, Inc. (Amex: SGM.pr) wants to clarify certain
information that appeared in an article in The Spokesman Review on
December 30, 2003.
The company's board of directors is continuing to review
alternative strategies for the Company, and has not made any
determination at this time with respect to a bankruptcy filing,
resumption of payments on its debt or otherwise. Any such
determinations, if any, made by the board will be appropriately
announced.
* * *
As widely reported, American Stock Exchange advised Summit
Securities Inc. (AMEX:SGM.pr) on Dec. 15 that trading in the
company's preferred stock had been suspended indefinitely,
expressing concerns about the closure of Metropolitan Investment
Securities Inc. and about the concerns expressed by the National
Association of Securities Dealers with respect to the sales
practices of Metropolitan Investment in the acceptance, waiver and
consent between the NASD and Metropolitan Investment.
In addition, AMEX intends to conduct a review of the company's
annual report on Form 10-K, which has not yet been filed.
Summit Securities Inc. and Metropolitan Mortgage & Securities Co.
Inc. are subsidiary companies of the Metropolitan Financial Group
of Companies.
Old Standard Life Insurance Co. and its sister company Old West
Annuity & Life Insurance Co., subsidiary companies of Summit
Securities Inc., and Western United Life Assurance Co., a
subsidiary of Metropolitan Mortgage & Securities Co. Inc., have
been placed under voluntary administrative supervision by the
insurance departments of Idaho, Arizona and Washington,
respectively.
Under administrative supervision, the companies and their
policyholders will be protected from problems at their respective
parent companies.
SWIFT & CO.: Will Hold Second-Quarter Conference Call on Jan. 12
----------------------------------------------------------------
Swift & Company will conduct a conference call for investors and
media to report financial results for the Second Quarter of FY04
on Jan. 12, 2004, at 8:30 a.m. MST (10:30 a.m. EST). Callers
should dial 800-475-3716 followed by confirmation code 371720.
International callers should dial 719-457-2728 followed by
confirmation code 371720.
A replay of the call will be available at 12:00 p.m. MST on
Jan. 12, 2004, through 11:00 p.m. MST Jan. 14, 2004. Callers
should dial 888-203-1112 and enter pass code 371720. International
callers should dial 719-457-0820 and enter pass code 371720.
Swift & Company (S&P, BB- Corporate Credit and B+ Senior Unsecured
Debt Ratings) is one of the world's leading beef and pork
processing companies - processing, preparing, packaging,
marketing, and delivering fresh, further processed and value-added
beef and pork products to customers in the United States and in
international markets. For more information, please visit
http://www.swiftbrands.com/
TENET HEALTHCARE: Completes Sale of Twelve Oaks Medical Center
--------------------------------------------------------------
Business Wire Dec 31
Tenet Healthcare Corporation (NYSE: THC) said a company subsidiary
has completed the sale of Twelve Oaks Medical Center, a
two-campus, 524-bed facility in Houston, Texas, to Hospital
Partners of America Inc.
Gross proceeds from the sale of the hospital are estimated at
$19.4 million for property, plant and equipment. Total net
proceeds for the transaction, including an estimated $11 million
tax benefit and transaction costs, will be approximately $30
million.
Twelve Oaks Medical Center is among 14 hospitals that the company
announced in March it would divest or consolidate. With today's
announcement, Tenet has completed the sale of 11 of the 14
facilities. Total net proceeds for the sale of the 11 facilities
completed to date, after taxes and transaction costs, will be
approximately $623 million, including working capital. Two of the
14 hospitals have closed and negotiations for the sale of the
remaining hospital are ongoing.
Tenet Healthcare Corporation (Fitch, BB Senior Unsecured and Bank
Facility Ratings, Negative), through its subsidiaries, owns and
operates 101 acute care hospitals with 25,293 beds and numerous
related health care services. Tenet and its subsidiaries employ
approximately 107,500 people serving communities in 15 states.
Tenet's name reflects its core business philosophy: the importance
of shared values among partners - including employees, physicians,
insurers and communities - in providing a full spectrum of health
care. Tenet can be found on the World Wide Web at
http://www.tenethealth.com/
UBIQUITEL INC: Updates Financial Guidance for 4th Quarter 2003
--------------------------------------------------------------
UbiquiTel Inc. (Nasdaq: UPCS), a PCS Affiliate of Sprint,
announced updated financial and operating guidance for the fourth
quarter 2003 and that the company will participate in the
fourteenth annual Smith Barney Citigroup Entertainment, Media and
Telecommunications conference to be held in Phoenix, Arizona from
January 4 to January 7, 2004.
UbiquiTel currently expects EBITDA (earnings before interest,
taxes, depreciation and amortization) for the quarter ending
December 31, 2003 to be $9 million to $11 million, an increase
from the previously guided range of $5 million to $7 million.
UbiquiTel also expects subscriber net additions, excluding
resellers, for the fourth quarter 2003 to be 21,000 to 23,000, or
the high end of the previously guided range of 15,000 to 25,000.
Based on the company's experience to date, wireless number
portability, which became effective on November 24, 2003 in
approximately 25% of the company's markets, is expected to have an
immaterial impact on its operating performance in 2003.
Don Harris, the Chairman, President and CEO of UbiquiTel is
scheduled to participate in the Regional/Affiliate Wireless Panel
at the conference at 3:45 p.m. Mountain Time tomorrow. The Panel
discussion is expected to last 45 minutes and will be broadcast
live over the Internet. Investors and interested parties may
listen to the webcast through UbiquiTel's Web site at
http://www.ubiquitelpcs.com/ The webcast will be archived on the
site for 30 days.
UbiquiTel (S&P, CCC Corporate Credit Rating, Developing) is the
exclusive provider of Sprint digital wireless mobility
communications network products and services under the Sprint
brand name to midsize markets in the Western and Midwestern United
States that include a population of approximately 10.0 million
residents and cover portions of California, Nevada, Washington,
Idaho, Wyoming, Utah, Indiana and Kentucky.
ULTRASTRIP SYSTEMS: BDO Seidman Cuts-Off Professional Ties
----------------------------------------------------------
On November 14, 2003, Ultrastrip Systems Inc., was advised by its
certifying accountant for the fiscal years ended December 31, 2002
and December 31, 2001, BDO Seidman, LLP, that they were resigning
as the certifying accountant. The Company's Audit Committee is
presently preparing to interview other accounting firms to audit
its financial statements for the fiscal year ended
December 31, 2003.
The accountants' reports on the financial statements of the
Company for the fiscal years ended December 31, 2002 and 2001
contained an explanatory paragraph in which BDO expressed
substantial doubt as to Ultrastrip Systems' ability to continue as
a going concern.
BDO made the decision to resign and Ultrastrip Systems' Audit
Committee and Board of Directors did not participate in their
decision.
During the period of BDO's engagement and through November 14,
2003, BDO issued two management letters to Ultrastrip Systems
advising the Company that it noted several matters involving
internal control that it considered to be material weaknesses,
including the lack of a member in the Company's accounting
department with professional certification in accounting
experience and background, the need for a staff person who is
capable of maintaining internal accounting controls and preparing
the Company's financial statements, and the lack of written
policies to set forth accounting policies, internal controls and
safeguarding of corporate assets. In connection with the issuance
of the management letter BDO reviewed the findings with both the
Audit Committee of the Board of Directors and with the CEO. The
Company will authorize BDO to review the findings with the new
certifying accountant if so requested by that new accountant.
UNITED ENERGY: Needs Additional Capital to Sustain Operations
-------------------------------------------------------------
During the past two fiscal years ended March 31, 2003 and 2002,
United Energy Corporation has recorded aggregate losses from
operations of $4,194,000 and has incurred total negative cash flow
from operations of $3,034,000 for the same two-year period. During
the six months ended September 30, 2003 the Company experienced a
net loss from operations of $1,290,265 and negative cash flow from
operating activities of $1,097,823. The Company does not currently
have an operating line of credit. These matters raise substantial
doubt about the Company's ability to continue as a going concern.
The Company's continued existence is dependent upon several
factors, including increased sales volume, collection of existing
receivables and the ability to achieve profitability from the sale
of the Company's product lines. In order to increase its cash
flow, the Company is continuing its efforts to stimulate sales and
cut back expenses not directly supporting its sales and marketing
efforts. The Company is currently investigating with certain major
shareholders to provide for additional sources of capital.
UNIVERSAL COMM: Secures $300K Initial Order for Solar Products
--------------------------------------------------------------
Universal Communication Systems Inc. (OTCBB:UCSY) subsidiary,
Millennium Electric TOU Limited company president Ami Elazari
issued this corporate statement:
"Through our contacts we have secured a major export purchase
order for 2 container loads of a wide range of our Photo Voltaic
Solar Products to a Mid East Nation. This first substantial export
order is a major breakthrough for the company, and opens new
opportunities for us to market our range of Photo Voltaic Solar
products and systems to the entire Middle East. The value of this
first export purchase order is in excess of $300,000."
Company chairman Michael J. Zwebner said: "This is just a further
vindication of our new business and its global growth. 2003 was a
year of corporate consolidation, and the acquisition and set up of
our two major operating subsidiaries, namely our entrance to the
AirWater industry, and into the global business of Photo Voltaic
Solar panels and systems. With operations now moving forwards and
onwards in many countries, the company will continue to grow and
report substantial revenues over the next year. I take this
opportunity on behalf of all our employees, directors and
management to wish all of our shareholders and investors as well
as all associated with our company, a Happy, Healthy and
Prosperous New Year."
For further detailed information, visit the Company's Web address
at http://www.ucsy.com/
Universal Communication Systems' June 30, 2003, balance sheet
reports a net capital deficit of about $6 million.
US AIRWAYS: Will Furlough 552 Flight Attendants This Month
----------------------------------------------------------
US Airways Group will lay off 552 flight attendants, most of them
in Philadelphia, this month after hundreds of others returned from
voluntary leave, which was intended to help the airline weather
its bankruptcy and spiraling finances, according to a Dow Jones
newswire report.
Company and union officials said the Arlington, Virginia-based
airline will lay off the flight attendants on Jan. 15, 2004, based
on seniority. The layoffs seemingly mark the end of voluntary
furloughs that the nation's seventh-largest airline offered its
employees to stave off job cuts.
"The company is saying, now they have to crack heads. This is a
way to eliminate more heads from the property," said Theodora
"Teddy" Xidas, president of the Association of Flight Attendants
Local 40 in Pittsburgh. "The company will not offer voluntary
furloughs again." Flight attendants in Boston, Charlotte, N.C.,
Washington, D.C., and New York's LaGuardia will also be cut. (ABI
World, Dec. 31, 2003)
US AIRWAYS: Considering Appealing Court's Ruling on Pension Suit
----------------------------------------------------------------
US Airways Inc. (Nasdaq: UAIR), issued this statement, following
the decision of Judge Stephen S. Mitchell of the U.S. Bankruptcy
Court for the Eastern District of Virginia, on the pension
dispute:
"We respectfully disagree with the Court's decision, as we believe
we used a prudent calculation methodology for the unfunded
liability of the pilot pension plan. Over the next week, we will
be analyzing the decision and evaluating our appeal alternatives.
"It is important to note that this ruling does not alter the fact
that the PBGC and the Bankruptcy Court had previously determined
that the pilot pension plan met the rigorous standards for a
distress termination. Furthermore, the company has no financial
exposure related to this decision, because if this ruling stands,
the result will be that the PBGC will receive payment in the form
of stock awarded to the unsecured creditors under the plan of
reorganization."
* * *
Judge Stephen S. Mitchell of the U.S. Bankruptcy Court for the
Eastern District of Virginia has overruled US Airways' objection
to Pension Benefit Guaranty Corp.'s calculation of the pension-
fund shortfall.
According to a Dow Jones report, citing PBGC, the Court's decision
will require pension recoveries of a little over $2 billion, as
opposed to the airlines' asserted amount of $894 million.
VALENTIS INC: Raises $6.5MM from Common Stock and Warrants Issue
----------------------------------------------------------------
Valentis, Inc. (Nasdaq: VLTS) raised approximately $6.5 million in
a private placement of the Company's common stock and warrants to
purchase its common stock.
Several new investors participated in the placement in addition
to certain current investors, including Perseus-Soros
Biopharmaceutical Fund, LP. The Company issued approximately 3.2
million shares of common stock at a purchase price of $2.05 per
share and five-year warrants exercisable for approximately 1.3
million additional shares of common stock at an exercise price of
$3.00 per share.
The Company intends to use the net proceeds from this private
placement to complete the ongoing Phase II clinical trial of its
lead product, DELTAVASC(TM). Results from the trial are expected
in the third quarter of 2004. DELTAVASC(TM) is a novel
cardiovascular product designed to grow new blood vessels in
patients suffering from peripheral arterial disease. The product
is a formulation of the angiogenesis gene Del-1 with a polymer
delivery vehicle.
The securities sold in this private placement have not been
registered under the Securities Act of 1933, as amended, and may
not be offered or sold in the United States in the absence of an
effective registration statement under the Securities Act and
applicable state securities laws or exemption from those
registration requirements. The Company has agreed to file a
registration statement covering the resale of the shares of common
stock acquired by these investors and shares of common stock
issuable upon exercise of the warrants acquired by these
investors.
Valentis is creating innovative cardiovascular therapeutics. The
company begins its product development at the stage of a validated
target and applies its expertise in formulation, manufacturing,
clinical development and regulatory affairs to create products
that fill unmet medical needs.
Additional information about Valentis can be found at
http://www.valentis.com/
* * *
Liquidity and Going Concern Uncertainty
In a Form 10-Q filed with the Securities and Exchange Commission,
Valentis reported:
"As of September 30, 2003, Valentis had $7.0 million in cash, cash
equivalents and investments compared to $3.3 million at June 30,
2003. The increase of $3.7 million in cash, cash equivalents and
investments balances relates primarily to the $6.5 million license
fee received from ALZA Corporation/Johnson & Johnson under a
license and settlement agreement, partially offset by funding of
ongoing operations. Our capital expenditures were $5,000 and
$4,000 for the quarters ended September 30, 2003 and 2002,
respectively. Valentis expects its capital expenditures to remain
at current spending levels.
"As discussed in our Form 10-K filed with the Securities and
Exchange Commission for the year ended June 30, 2003, we have
received a report from our independent auditors covering the
consolidated financial statements for the fiscal year ended June
30, 2003 that includes an explanatory paragraph stating that the
financial statements have been prepared assuming Valentis will
continue as a going concern. The explanatory paragraph states the
following conditions which raise substantial doubt about our
ability to continue as a going concern: (i) we have incurred
recurring operating losses since inception, including a net loss
of $14.9 million for the year ended June 30, 2003, and our
accumulated deficit was $207.1 million at June 30, 2003 and (ii)
our cash and cash equivalents balance at June 30, 2003 was $3.3
million.
"Since its inception, we have financed our operations principally
through public and private issuances of its common and preferred
stock and funding from collaborative arrangements. We have used
the net proceeds from the sale of the common and preferred stock
for general corporate purposes, which may include funding
research, development and product manufacturing, increasing our
working capital, reducing indebtedness, acquisitions or
investments in businesses, products or technologies that are
complementary to our own, and capital expenditures. We expect
that proceeds received from any future issuance of stock will be
used for similar purposes.
"Valentis leases its facilities under operating leases. These
leases expire between December 2004 and October 2007 with renewal
options at the end of the initial terms of the facilities leases.
"We will need to raise additional funds to continue our
operations. We will have insufficient working capital to fund our
near term cash needs unless we are able to raise additional
capital in the near future. We may not be able to obtain
additional financing on acceptable terms, or at all. Any failure
to obtain an adequate and timely amount of additional capital on
commercially reasonable terms will have a material adverse effect
on our business, financial condition and results of operations,
including our viability as an enterprise. As a result of these
concerns, we are pursuing strategic alternatives, which may
include the sale of securities, the sale or merger of our
business, the sale of certain assets or other actions.
"The Company will be required to seek additional sources of
funding to complete development and commercialization of its
products. Based upon the Company's current operating plan, it
anticipates that its cash, cash equivalents and investments as of
September 30, 2003 will enable it to maintain its current and
planned operations at least through March 31, 2004, in the absence
of additional financial resources. In an effort to seek additional
sources of financing, the Company may have to relinquish greater
or all rights to products at an earlier stage of development or on
less favorable terms than it would otherwise seek to obtain.
"The Company is currently seeking additional collaborative
agreements and licenses with corporate partners and may seek
additional funding through public or private equity or debt
financing or merger of its business. The Company may not be able
to enter into any such agreements, however, or if entered into,
any such agreements may not reduce or eliminate the Company's
requirements to seek additional funding. Additional financing to
meet the Company's funding requirements may not be available on
acceptable terms or at all. If the Company raises additional funds
by issuing equity securities, substantial dilution to existing
stockholders may result.
"The accompanying consolidated financial statements have been
prepared assuming that the Company will continue as a going
concern. The financial statements do not include any adjustments
to reflect the possible future effects on the recoverability and
classification of assets or the amounts and classification of
liabilities that may result from the matters discussed above."
VENDALUX CORP: Signs-Up Child Sullivan as New Independent Auditor
-----------------------------------------------------------------
On September 22, 2003, Vendalux Corporation, a Delaware
corporation, was informed by its auditor, David T. Thomson, P.C.,
that it would no longer be engaged in auditing public companies
and it was therefore resigning as auditor of Vendalux as of
September 22, 2003.
Accordingly, on November 5, 2003, Vendalux engaged Child, Sullivan
& Company to act as Vendalux's independent certified public
accountant. Child and Sullivan will begin reviewing Vendalux's
quarterly accounting and 10QSB filings starting with the
September 30, 2003, quarter and handle the audit for the
March 31, 2004, fiscal year.
In the Auditors Report concerning the financial statements during
the past two fiscal years, David T. Thomson, P.C. included an
explanatory paragraph discussing an uncertainty as to the
Company's ability to continue as a going concern.
The change in auditors has been approved by Vendalux's Board of
Directors on November 5, 2003. Vendalux has not consulted with
Child, Sullivan & Company on any particular accounting issues.
VENTURA GROUP: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Ventura Group Inc.
1585 Sycamore Avenue
Bohemia, New York 11716
Bankruptcy Case No.: 8-03-88382
Type of Business: The Debtor is a commercial printer.
Chapter 11 Petition Date: December 29, 2003
Court: Eastern District of New York (Central Islip)
Judge: Stan Bernstein
Debtor's Counsel: Marc A Pergament, Esq.
Weinberg, Kaley, Gross, & Pergament LLP
400 Garden City Plaza
Garden City, NY 11530
Tel: 516-877-2424
Total Assets: $2,272,320
Total Debts: $4,246,829
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Smurfit-Stone $176,315
Apec Millwork $131,991
R I T Printing $113,776
United Parcel Service $95,000
Edison Lithographing and Printing Corp. $88,315
Roosevelt Paper Co. $36,225
Laird Plastics $34,106
Federal Express $27,641
Center Island Electric Corp. $20,795
Arma Container Corp. $19,802
Graphic Paper N.Y., Inc. $18,380
Kinkade Studios, LLC $16,976
HSW Enterprises $13,422
Triumph Container, Inc. $13,140
BCI Book Covers, Inc. $13,031
Henkel Adhesives $12,679
EFC Edge Finisher Co. $10,087
Island Litho $10,040
Titan Adhesives Co., Inc. $9,944
PC Mall Business Sol. $8,480
VINTAGE PETROLEUM: Ends Talks to Acquire Uinta Basin Assets
-----------------------------------------------------------
Vintage Petroleum, Inc. (NYSE:VPI) announced that negotiations
which extended beyond the scheduled closing date for the $52.5
million acquisition of producing properties in the Uinta basin of
Utah from subsidiaries of El Paso Corporation have ended. Diligent
efforts did not allow the parties to reach an agreement regarding
certain matters to be resolved prior to closing and the agreement
has been terminated by both parties.
"We pride ourselves on our ability to close acquisitions once we
enter into negotiations and I cannot recall any other instance in
Vintage's long acquisition history when we have been a party to an
acquisition agreement and closing has not occurred," stated S.
Craig George, CEO. "We remain committed to growth both through
acquisitions and the drillbit and will continue to be a
significant player in the acquisition marketplace with a focus on
opportunities where we can add value."
2004 Targets Revised
In the Company's press release of November 10, 2003, announcing
the acquisition agreement, it was estimated that net production
attributable to the 80 percent operated working interest in fields
primarily in Duchesne and Uintah counties in Utah was 2,000
barrels of oil and natural gas liquids per day and 920 thousand
cubic feet per day. In addition to the property interests, Vintage
was to acquire the majority interest and operational control of
certain gas plants which would have increased Vintage's natural
gas gathering and processing income.
Vintage Petroleum, Inc. (S&P, BB- Debt Rating, Negative) is an
independent energy company engaged in the acquisition,
exploitation, exploration and development of oil and gas
properties and the gathering and marketing of natural gas and
crude oil. Company headquarters are in Tulsa, Oklahoma, and its
common shares are traded on the New York Stock Exchange under the
symbol VPI.
For additional information visit the company Web site at
http://www.vintagepetroleum.com/
VIRAGEN INC: Secures $4-Mill. via New Round of Equity Financing
---------------------------------------------------------------
Viragen, Inc. (Amex: VRA) announced that the biotechnology Company
received approximately $4.2 million in a sale of its common stock
and warrants completed with a group of new and returning
institutional investors.
The Company intends to use the proceeds to commercialize its lead
drug, Multiferon(TM), and further the research and development of
its portfolio of healthcare technologies.
"I expect to report that our calendar year-`end balance sheet has
significantly improved," stated Dennis W. Healey, Viragen's Chief
Financial Officer. "Based on Senior Management's efforts to cut
overhead and operating costs this year, this funding strengthens
our cash position to provide working capital into 2005 as we
execute our business plan. Also, I believe our financial position
has been further strengthened this quarter through the conversions
of all outstanding debentures related to previous financings thus
eliminating that debt. Our solidified financial foundation should
prove advantageous as we continue to seek to attract new partners
and investors."
The complete terms of financing will be filed via a Form 8-K with
the Securities and Exchange Commission. The document will be
available at the SEC's Web site at http://www.sec.gov/and
Viragen's Web site at http://www.Viragen.com/
Viragen (Amex: VRA) is a biotechnology company specializing in the
research, development and commercialization of natural and
recombinant protein-based drugs designed to treat a broad range of
viral and malignant diseases. These protein-based drugs include
natural human alpha interferon, monoclonal antibodies, peptide
drugs and therapeutic vaccines. Viragen's strategy also includes
the development of Avian Transgenic Technology for the large-
scale, cost-effective manufacturing of its portfolio of protein-
based drugs, as well as offering Contract Manufacturing for the
biopharmaceutical industry.
* * *
Needs New Financing to Continue Beyond June 30, 2004
In a Form 10-Q filed with the Securities and Exchange Commission,
Viragen reported, thus:
"As of September 30, 2003, we had on-hand approximately $8,382,000
in cash. As of September 30, 2003, we had working capital of
approximately $9,384,000 compared to working capital of
approximately $2,475,000 as of June 30, 2003. The increase in
working capital of approximately $6,909,000 compared to the
previous fiscal year end balance was due primarily to
approximately $6,077,000 raised through private equity placements
and exercises of private placement warrants which were offset in
part by the use of cash to fund operating activities totaling
approximately $3,497,000, capital expenditures totaling
approximately $44,000 and the repayment of convertible debentures,
short term borrowings and long term debt of approximately
$237,000.
"We have experienced losses and a negative cash flow from
operations since inception. During the quarter ended September 30,
2003, we incurred a loss of approximately $3,903,000. For the
fiscal years ended June 30, 2003, 2002 and 2001 we incurred losses
of approximately $17,349,000, $11,089,000, and $11,008,000,
respectively. At September 30, 2003 we had an accumulated deficit
of approximately $106,194,000. Management anticipates additional
future losses as it commercializes its natural human alpha
interferon product and conducts additional research activities and
clinical trials to obtain additional regulatory approvals.
Management believes we have enough cash to support operations
through June 30, 2004. However, we will require substantial
additional funding to support our operations subsequent to
June 30, 2004. Management's plans include obtaining additional
capital through equity and debt financings. No assurance can be
given that additional capital will be available when required or
upon terms acceptable to us.
"Our future capital requirements are dependent upon many factors,
including: revenue generated from the sale of our natural human
alpha interferon product, progress with future and ongoing
clinical trials; the costs associated with obtaining regulatory
approvals; the costs involved in patent applications; competing
technologies and market developments; and our ability to establish
collaborative arrangements and effective commercialization
activities. For all of fiscal 2004, we anticipate the need of
approximately $8.5 to $9.0 million for operating activities, $1.5
million for investing activities and $2.5 million to service our
financing obligations assuming that the outstanding convertible
debentures are repaid in cash and are not converted into common
stock by our investors.
"Manufacturing of our natural human alpha interferon at our leased
facility in Umea, Sweden, has been suspended since March 31, 2003.
This planned break in routine manufacturing was necessary to allow
for certain steps of the production process to be segregated and
transferred to our owned facility which is also located in Umea,
Sweden. The need for the renovation of our owned facility has been
discussed with the Swedish Medical Product Authority and it has
been agreed that this is a mandatory requirement. We remain in
communication with the MPA on the final design of this facility
and on the implementation of production activities. Renovation of
this facility commenced in 2003 and is in line with our plan to
expand our productive capacity of our natural human alpha
interferon. The estimated total cost of this initial phase is $1.2
million and it is scheduled to be completed during 2004. We
believe that our current inventory levels are sufficient to meet
our current sales forecasts during the period which routine
production is planned to be suspended. We plan to expand the use
of our owned facility in phases based on product demand and
available financing. Maximum expansion, if warranted, could cost
up to an additional $10 million
"On September 29, 2003, we sold approximately 22.7 million shares
of our common stock to institutional investors at $0.224 per share
for an aggregate amount of approximately $4.775 million, net of
finder's fees and related expenses. In connection with this
transaction, we also issued approximately 4.46 million common
stock purchase warrants with exercise prices ranging from $0.224
to $0.28. The exercise prices these warrants are subject to
adjustment downward depending upon future equity transactions.
"During the three months ended September 30, 2003, we issued
approximately 8.97 million shares of our common stock upon the
exercise of common stock purchase warrants at prices ranging from
$0.056 to $0.1722 resulting in net proceeds to us of approximately
$1.3 million. Subsequent to September 30, 2003 and through
November 7, 2003, we have issued approximately 2.9 million shares
of our common stock upon the exercise of common stock purchase
warrants at prices ranging from $0.0625 to $0.224 per share,
resulting in net proceeds to us of approximately $600,000."
WHISTLER INVESTMENTS: Board Okays Mason Russell as New Auditor
--------------------------------------------------------------
On November 20, 2003, Whistler Investments Inc.'s Board of
Directors approved the appointment on November 20, 2003 of Mason
Russell West, LLC as its independent auditors for the fiscal year
ending January 31, 2004, and accepted the resignation of Lancaster
& David Chartered Accountants, which had audited the Company's
financial statements for the last three fiscal years ended
January 31, 2003, 2002 and 2001, respectively.
Whistler Investments' Board of Directors believes that the
appointment of MRW to review the Form 10-QSB to be filed for the
fiscal quarter ended October 31, 2003 and to audit the Company's
consolidated financial statements for the fiscal year ending
January 31, 2004, and thereafter, is more consistent with the
requirements of the Securities and Exchange Commission and in the
best interests of the Company and its shareholders at this point
in the development of its business.
The reports of L&D on the Company's financial statements contained
a modification as to an uncertainty about Whistler Investments'
ability to continue as a going concern.
WICKES INC: Extends Senior Sub. Debt Exchange Offer Until Friday
----------------------------------------------------------------
Wickes Inc. (OTCBB:WIKS.OB), a leading distributor of building
materials and manufacturer of value-added building components,
announced that (i) it has extended the expiration date of the
exchange offer to 5:00 p.m., New York City time, on Friday,
January 9, 2004, and (ii) the Company is engaged in discussions
with Imagine Investments and its lending syndicate led by Merrill
Lynch Capital regarding financing for the Company's exchange offer
if holders of less than $20,067,000 of senior subordinated notes
(the currently required minimum amount) are validly tendered and
not withdrawn prior to the expiration date.
"It is imperative for holders of our senior subordinated notes to
act promptly on our exchange offer", commented James A. Hopwood,
Wickes' Chief Financial Officer, "While the company is working to
finalize arrangements which would permit us to complete the
exchange offer even if holders of less than $20,067,000 principal
amount of senior subordinated notes tender their notes, our
lenders have not indicated that they expect to make additional
funds available to enable us to pay principal and interest owed to
non-tendering note holders."
Mr. Hopwood also noted that if the exchange offer is completed,
the Company intends to make the required cash payments to
tendering holders with funds borrowed from its lenders on a senior
secured basis. As a result, if the Company were subsequently
liquidated in a bankruptcy proceeding, it is anticipated the asset
values remaining for non-tendering holders of senior subordinated
notes would be less than the liquidation values described in our
offering memorandum dated November 4, 2003.
Finally, Mr. Hopwood indicated that the Company is exploring all
available options in the event it is unable to close the exchange
offer for any reason.
On December 16, 2003 the Company amended its exchange offer to
allow tendering note holders to elect to receive for each $1,000
principal amount of senior subordinated notes tendered, either (i)
$500 in cash and $250 principal amount of new 10% Convertible
Notes due 2007, (ii) $1,250 principal amount of new convertible
notes, or (iii) $650 in cash. In any case, if the exchange offer
is completed, tendering note holders will also receive accrued and
unpaid interest on the subordinated notes at the existing coupon
rate from June 16, 2003 through the closing date of the exchange
offer.
To date, holders of $10,922,000, or approximately 51.7 percent, of
the outstanding principal amount of senior subordinated notes have
tendered their notes for exchange. This amount includes $3,549,515
principal amount of senior subordinated notes tendered by the
largest holder of notes, Barry Segal of Bradco Supply,
representing approximately 16.8 percent of the outstanding senior
subordinated notes.
The Company encourages note holders to communicate directly with
Wickes senior management. Please contact James A. Hopwood, Chief
Financial Officer, toll free at (800) 360-9457, or direct dial at
(847) 367-3552 to discuss this time sensitive matter.
WICKES INC. -- whose September 27, 2003 balance sheet shows a
total shareholders' equity deficit of about $12.7 million -- is a
leading distributor of building materials and manufacturer of
value-added building components in the United States, serving
primarily building and remodeling professionals. The Company
distributes materials nationally and internationally, operating
building centers in the Midwest, Northeast and South. The
Company's building component manufacturing facilities produce
value-added products such as roof trusses, floor systems, framed
wall panels, pre-hung door units and window assemblies. Wickes
Inc.'s web site, http://www.wickes.com,offers a full range of
valuable services about the building materials and construction
industry.
WINSTAR COMMS: Court Reassigns Chapter 7 Case to Judge Rosenthal
----------------------------------------------------------------
Judge Walrath reassigns Winstar Communications, Inc.'s Chapter 7
cases to the Honorable Joel B. Rosenthal. Judge Lloyd King
previously presided over by the Debtors' bankruptcy cases.
(Winstar Bankruptcy News, Issue No. 51; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
WORLD AIRWAYS: Gets Final Nod for $27-Million Federal Guarantee
---------------------------------------------------------------
World Airways, Inc. (Nasdaq: WLDA) obtained final approval from
the Air Transportation Stabilization Board (ATSB) for a $27.0
million federal loan guarantee in support of a $30.0 million term
loan.
The full loan was funded on December 30, 2003.
Simultaneously, World Airways has terminated its existing credit
facility with Wells Fargo Foothill, Inc. The Company will use the
balance of the loan proceeds for working capital purposes.
In connection with the closing of the ATSB federal loan guarantee,
the Company issued $25.5 million aggregate principal amount of new
8.0% Convertible Senior Subordinated Debentures due 2009 in
exchange for $22.5 million aggregate principal amount of its
outstanding 8.0% Convertible Senior Subordinated Debentures due
2004 and $3 million in cash. The Company also called for
redemption the remainder, or $18 million aggregate principal
amount, of its outstanding existing debentures, and notified the
holders that these debentures will be redeemed on January 28,
2004.
As noted in the Company's 10-Q Report filed November 14, 2003,
World Airways will be taking an adjustment to record a non-cash
loss on debt extinguishment. The charge is the difference between
the fair market value of the new debentures and the carrying
amount of the old debentures extinguished. The charge, which will
be taken in the fourth quarter of 2003, is approximately $4
million.
World Airways issued to the ATSB warrants to purchase common stock
as additional compensation for the federal loan guarantee. These
warrants represent in aggregate 10% of the outstanding shares of
the Company's common stock and 10% of the number of shares
underlying certain convertible securities and outstanding
warrants.
Hollis Harris, chairman and CEO of World Airways, said, "The ATSB
loan represents an important milestone for World Airways, as we
continue to strengthen our balance sheet and improve our operating
performance. The financial stability provided by this federally
guaranteed financing will allow us to continue to build on the
positive momentum we have seen in 2003."
He added, "We thank the ATSB for its flexibility and support this
past year, as we've worked to close this loan. We look forward to
working with the new lenders in building a strong financial future
for the Company."
Utilizing a well-maintained fleet of international range, widebody
aircraft, World Airways has an enviable record of safety,
reliability and customer service spanning more than 55 years. The
Company is a U.S. certificated air carrier providing customized
transportation services for major international passenger and
cargo carriers, the United States military and international
leisure tour operators. Recognized for its modern aircraft,
flexibility and ability to provide superior service, World Airways
meets the needs of businesses and governments around the globe.
For more information, visit the Company's Web site at
http://www.worldairways.com/
At September 30, 2003, the company's balance sheet is upside down
by $13.7 million.
WORLDCOM INC: Judge Gonzalez Expunges 51 Accounts Payable Claims
----------------------------------------------------------------
Worldcom Inc. and its debtor-affiliates reviewed 79 proofs of
claim amounting to $29,900,855. Subsequently, the Debtors
concluded that one or more of these objections apply to each of
the 79 Claims:
(a) There is insufficient documentation attached to
the claim to support the validity of the claim;
(b) The claim does not qualify for priority treatment under
Section 507(a) of the Bankruptcy Code;
(c) The claim does not qualify for administrative expense
claim status pursuant to Sections 507(a) and 503(b);
(d) The claim fails to identify the alleged collateral
securing the debt asserted, does not attach evidence that
the alleged secured claim is properly perfected, or does
not set the value of the alleged collateral;
(e) There is no enforceable agreement between the Debtor and
the Creditor and therefore the claim should be disallowed
under Section 502(b)(1);
(f) The claim has been paid in full;
(g) The Creditor failed to fully or properly perform its
obligations to the Debtor;
(h) The Creditor did not provide the services or goods
claimed;
(i) The Creditor's claim is subject to the Debtor's offset;
(j) The Creditor's claim was not timely filed;
(k) The Creditor's claim is in an amount for which the Debtor
disputes it owes; and
(l) The Debtor's records do not indicate that any amount is
owing to the Creditor.
After due consideration, Judge Gonzalez disallows and expunges 51
claims amounting to $19,008,063. Ten of the expunged claims are:
Claimant Claim No. Claim Amount
-------- --------- ------------
State of Florida
Department of Revenue 17094 $3,007,145
Fulton County
Commission GA 10675 2,992,405
California Public
Utilities Commission 21576 1,874,141
State of Iowa
Iowa Department of
Revenue & Finance 7244 1,813,748
California Public
Utilities Commission 21579 1,650,305
State of Michigan
Department of Treasury
Revenue Division 1362 843,208
State of Florida
Department of Revenue
Bankruptcy Section 420 821,913
North Dakota Office
of State Tax
Commissioner 9192 817,445
Municipal Revenue
Collection Center 9830 456,805
The Court will continue the hearing on the Debtors' objection to
the remaining claims. Among the largest continued claims are:
Claimant Claim No. Claim Amount
-------- --------- ------------
Deutsche, Inc. 27573 $3,006,367
Intecom, Inc. 17938 1,691,136
Progressive Financial
Services, Inc. 22186 1,114,960
Verisign, Inc. 13001 936,646
Verisign, Inc. 34669 936,646
Kaiser Foundation
Health Plan - Colorado 27007 880,354
Alabama Transition
Fund, Gulf 30937 712,427
Verisign, Inc. 22789 659,811
Verisign, Inc. 34671 659,811
Kaiser Foundation
Health Plan - Mid
Atlantic States, Inc. 27006 634,470
Judge Gonzalez further rules that:
-- Claim No. 20257 filed by Wallace Computer Services, Inc. is
allowed as a prepetition, non-priority, unsecured claim for
$410,397 against Debtor MCI WorldCom Network Services,
Inc.;
-- Mellilio Consulting Inc.'s Claim No. 4950, which is now
held by Longacre Master Fund, Ltd., is allowed for
$244,170;
-- Claim No. 33844 filed by Communicating Arts Credit Union is
expunged as duplicative of Claim No. 21902;
-- Claim No. 23681 filed by Golden State Utility Co. is
allowed as an unsecured claim for $217,982; and
-- Claim No. 10302 filed by Pro Link Services, L.L.C. is
allowed as a prepetition, non-priority, unsecured claim for
$245,586. (Worldcom Bankruptcy News, Issue No. 45;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
WORLDCOM: Parker Prods Shareholders to Consider Legal Options
-------------------------------------------------------------
On Dec. 11, 2003, Judge Cote of the Southern District of New York
issued a deadline for current and former MCI and WorldCom (Pink
Sheets: WCOEQ, MCWEQ, MCIAV) shareholders to "opt-out" of the
WorldCom shareholder class action. Current and former shareholders
must opt out of the class action by Feb. 20, 2004, if they desire
to pursue individual claims against the defendants including
Salomon Smith Barney, now operating as Citigroup Global Markets, a
unit of Citigroup Inc. (NYSE: C).
Parker & Waichman is encouraging current and former shareholders
to explore their legal options before the opt-out deadline
expires. Current and former WorldCom and MCI shareholders who do
not specifically "opt out" of the class action are automatically
included in that lawsuit. Parker & Waichman has established a Web
site at http://www.worldcomstockfraud.com/to assist current and
former shareholders in their decision-making process. Free
evaluations are offered at this site.
Parker & Waichman and associated counsel are currently
representing hundreds of current and former WorldCom and MCI
shareholders. Parker & Waichman believes that shareholders that
sustained financial losses as a result of their WorldCom
securities holdings may be better served by filing an individual
claim against the defendants rather than participating in the
class action.
Recently, the United States Bankruptcy Court approved MCI's Plan
of Reorganization, which paves the way for the company to emerge
from Chapter 11 bankruptcy. As a result of MCI's pending emergence
from Chapter 11, it is likely that shares of MCI traded under the
symbols WCOEQ and MCWEQ will be cancelled, leaving existing
shareholders with a mere fraction of their initial investment.
The complaints already filed by Parker & Waichman and associated
counsel charge Salomon Smith Barney with violations of Section 15c
of the Securities Exchange Act of 1934, as well as various state
statutes, for issuing fraudulent research reports and for
violating NYSE Rules 401, 472 and 476(a)(6), and NASD Rules 2110
and 2210, for issuing research reports that were not based on
principles of fair dealing and good faith, did not provide a sound
basis for evaluating facts, contained exaggerated or unwarranted
claims about the covered companies, and/or contained opinions for
which there were no reasonable basis. The misconduct of Salomon
Smith Barney was detailed in the settlement announced earlier this
year by securities regulators and state securities officials.
For more information on Parker & Waichman, LLP, please visit
http://www.yourlawyer.com/or call 800-LAW-INFO. Current and
former shareholders are also encouraged to visit
http://www.injurytalk.com/
* BOND PRICING: For the week of January 5 - 9, 2004
---------------------------------------------------
Issuer Coupon Maturity Price
------ ------ -------- -----
Adelphia Communications 3.250% 05/01/21 42
Adelphia Communications 6.000% 02/15/06 41
American & Foreign Power 5.000% 03/01/30 68
AnnTaylor Stores 0.550% 06/18/19 73
Burlington Northern 3.200% 01/01/45 55
Comcast Corp. 2.000% 10/15/29 34
Cox Communications Inc. 2.000% 11/15/29 33
Cummins Engine 5.650% 03/01/98 72
Finova Group 7.500% 11/15/09 59
Gulf Mobile Ohio 5.000% 12/01/56 71
Inland Fiber 9.625% 11/15/07 52
Internet Capital 5.500% 12/21/04 74
Levi Strauss 7.000% 11/01/06 66
Levi Strauss 11.625% 01/15/08 66
Mirant Corp. 2.500% 06/15/21 61
Mirant Corp. 5.750% 07/15/07 62
Missouri Pacific Railroad 4.750% 01/01/30 73
Northern Pacific Railway 3.000% 01/01/47 54
Universal Health Services 0.426% 06/23/20 66
Worldcom Inc. 6.250% 08/15/03 33
Worldcom Inc. 6.400% 08/15/05 33
*********
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 2004. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $675 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each. For subscription information, contact Christopher
Beard at 240/629-3300.
*** End of Transmission ***